Document:

Exhibit 10.2

 

$100,000,000

CREDIT
AGREEMENT

dated as
of September 18, 2006,

among

SCIELE
PHARMA, INC.,

as the US Borrower,

SCIELE
PHARMA CAYMAN LTD.,

as the Cayman Borrower

THE OTHER
GUARANTORS PARTY HERETO,

as Guarantors,

THE
LENDERS PARTY HERETO

and

UBS
SECURITIES LLC,

as Joint Lead Arranger and Bookmanager,

LASALLE
BANK NATIONAL ASSOCIATION,

as Joint Lead Arranger and Syndication Agent

and

UBS AG,
STAMFORD BRANCH,

as Issuing Bank, Administrative Agent and Collateral Agent,

REGIONS
BANK, 

FIFTH THIRD BANK, and

BANK OF AMERICA, N.A. 

as Co-Documentation Agents

and

UBS LOAN
FINANCE LLC,

as Swingline Lender

Latham
& Watkins LLP

885 Third Avenue, Suite 1000

New York, NY 10022-4834

 

 

 

TABLE OF CONTENTS

	
  Section

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE I

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  DEFINITIONS

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION
  1.01

  	
   

  	
  Defined Terms

  	
   

  	
  1

  	
   

  
	
  SECTION
  1.02

  	
   

  	
  Classification of Loans
  and Borrowings

  	
   

  	
  33

  	
   

  
	
  SECTION
  1.03

  	
   

  	
  Terms Generally

  	
   

  	
  34

  	
   

  
	
  SECTION
  1.04

  	
   

  	
  Accounting Terms; GAAP

  	
   

  	
  34

  	
   

  
	
  SECTION
  1.05

  	
   

  	
  Resolution of Drafting
  Ambiguities

  	
   

  	
  34

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE II

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  THE CREDITS

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION
  2.01

  	
   

  	
  Commitments

  	
   

  	
  34

  	
   

  
	
  SECTION
  2.02

  	
   

  	
  Loans

  	
   

  	
  35

  	
   

  
	
  SECTION
  2.03

  	
   

  	
  Borrowing Procedure

  	
   

  	
  36

  	
   

  
	
  SECTION
  2.04

  	
   

  	
  Evidence of Debt;
  Repayment of Loans

  	
   

  	
  37

  	
   

  
	
  SECTION
  2.05

  	
   

  	
  Fees

  	
   

  	
  38

  	
   

  
	
  SECTION
  2.06

  	
   

  	
  Interest on Loans

  	
   

  	
  39

  	
   

  
	
  SECTION
  2.07

  	
   

  	
  Termination and
  Reduction of Commitments

  	
   

  	
  40

  	
   

  
	
  SECTION
  2.08

  	
   

  	
  Interest Elections

  	
   

  	
  40

  	
   

  
	
  SECTION
  2.09

  	
   

  	
  [Intentionally Deleted]

  	
   

  	
  41

  	
   

  
	
  SECTION
  2.10

  	
   

  	
  Optional and Mandatory
  Prepayments of Loans

  	
   

  	
  41

  	
   

  
	
  SECTION
  2.11

  	
   

  	
  Alternate Rate of
  Interest

  	
   

  	
  43

  	
   

  
	
  SECTION
  2.12

  	
   

  	
  Yield Protection

  	
   

  	
  44

  	
   

  
	
  SECTION
  2.13

  	
   

  	
  Breakage Payments

  	
   

  	
  45

  	
   

  
	
  SECTION
  2.14

  	
   

  	
  Payments Generally; Pro
  Rata Treatment; Sharing of Setoffs

  	
   

  	
  45

  	
   

  
	
  SECTION
  2.15

  	
   

  	
  Taxes

  	
   

  	
  47

  	
   

  
	
  SECTION
  2.16

  	
   

  	
  Mitigation Obligations;
  Replacement of Lenders

  	
   

  	
  49

  	
   

  
	
  SECTION
  2.17

  	
   

  	
  Swingline Loans

  	
   

  	
  50

  	
   

  
	
  SECTION
  2.18

  	
   

  	
  Letters of Credit

  	
   

  	
  53

  	
   

  
	
  SECTION
  2.19

  	
   

  	
  Increase in Commitments

  	
   

  	
  64

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE III

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  REPRESENTATIONS
  AND WARRANTIES

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION
  3.01

  	
   

  	
  Organization; Powers

  	
   

  	
  66

  	
   

  
	
  SECTION
  3.02

  	
   

  	
  Authorization;
  Enforceability

  	
   

  	
  66

  	
   

  
	
  SECTION
  3.03

  	
   

  	
  No Conflicts

  	
   

  	
  66

  	
   

  
	
  SECTION
  3.04

  	
   

  	
  Financial Statements;
  Projections

  	
   

  	
  66

  	
   

  
	
  SECTION
  3.05

  	
   

  	
  Properties

  	
   

  	
  67

  	
   

  
	
  SECTION
  3.06

  	
   

  	
  Intellectual Property

  	
   

  	
  68

  	
   

  
	
  SECTION 3.07

  	
   

  	
  Equity Interests and Subsidiaries

  	
   

  	
  68

  	
   

  

 

 i
 

 

 

	
  Section

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION
  3.08

  	
   

  	
  Litigation; Compliance
  with Laws

  	
   

  	
  69

  	
   

  
	
  SECTION
  3.09

  	
   

  	
  Agreements

  	
   

  	
  69

  	
   

  
	
  SECTION
  3.10

  	
   

  	
  Federal Reserve
  Regulations

  	
   

  	
  69

  	
   

  
	
  SECTION
  3.11

  	
   

  	
  Investment Company Act

  	
   

  	
  70

  	
   

  
	
  SECTION
  3.12

  	
   

  	
  Use of Proceeds

  	
   

  	
  70

  	
   

  
	
  SECTION
  3.13

  	
   

  	
  Taxes

  	
   

  	
  70

  	
   

  
	
  SECTION
  3.14

  	
   

  	
  No Material
  Misstatements

  	
   

  	
  70

  	
   

  
	
  SECTION
  3.15

  	
   

  	
  Labor Matters

  	
   

  	
  70

  	
   

  
	
  SECTION
  3.16

  	
   

  	
  Solvency

  	
   

  	
  71

  	
   

  
	
  SECTION
  3.17

  	
   

  	
  Employee Benefit Plans

  	
   

  	
  71

  	
   

  
	
  SECTION
  3.18

  	
   

  	
  Environmental Matters

  	
   

  	
  71

  	
   

  
	
  SECTION
  3.19

  	
   

  	
  Insurance

  	
   

  	
  73

  	
   

  
	
  SECTION
  3.20

  	
   

  	
  Security Documents

  	
   

  	
  73

  	
   

  
	
  SECTION
  3.21

  	
   

  	
  Anti-Terrorism Law

  	
   

  	
  74

  	
   

  
	
  SECTION
  3.22

  	
   

  	
  Convertible Bond
  Documents

  	
   

  	
  75

  	
   

  
	
  SECTION
  3.23

  	
   

  	
  Foreign Subsidiaries

  	
   

  	
  75

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE IV

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CONDITIONS TO
  CREDIT EXTENSIONS

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION
  4.01

  	
   

  	
  Conditions to Initial
  Credit Extension

  	
   

  	
  76

  	
   

  
	
  SECTION
  4.02

  	
   

  	
  Conditions to All
  Credit Extensions

  	
   

  	
  79

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE V

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  AFFIRMATIVE
  COVENANTS

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION
  5.01

  	
   

  	
  Financial Statements,
  Reports, etc.

  	
   

  	
  80

  	
   

  
	
  SECTION
  5.02

  	
   

  	
  Litigation and Other
  Notices

  	
   

  	
  82

  	
   

  
	
  SECTION
  5.03

  	
   

  	
  Existence; Businesses
  and Properties

  	
   

  	
  83

  	
   

  
	
  SECTION
  5.04

  	
   

  	
  Insurance

  	
   

  	
  83

  	
   

  
	
  SECTION
  5.05

  	
   

  	
  Obligations and Taxes

  	
   

  	
  84

  	
   

  
	
  SECTION
  5.06

  	
   

  	
  Employee Benefits

  	
   

  	
  85

  	
   

  
	
  SECTION
  5.07

  	
   

  	
  Maintaining Records;
  Access to Properties and Inspections; Annual Meetings

  	
   

  	
  85

  	
   

  
	
  SECTION
  5.08

  	
   

  	
  Use of Proceeds

  	
   

  	
  86

  	
   

  
	
  SECTION
  5.09

  	
   

  	
  Compliance with
  Environmental Laws; Environmental Reports

  	
   

  	
  86

  	
   

  
	
  SECTION
  5.10

  	
   

  	
  Accounts

  	
   

  	
  86

  	
   

  
	
  SECTION
  5.11

  	
   

  	
  Additional Collateral;
  Additional Guarantors

  	
   

  	
  86

  	
   

  
	
  SECTION
  5.12

  	
   

  	
  Security Interests;
  Further Assurances

  	
   

  	
  88

  	
   

  
	
  SECTION
  5.13

  	
   

  	
  Information Regarding
  Collateral

  	
   

  	
  88

  	
   

  
	
  SECTION
  5.14

  	
   

  	
  Affirmative Covenants
  with Respect to Leases

  	
   

  	
  89

  	
   

  
	
  SECTION 5.15

  	
   

  	
  Post-Closing Collateral Matters

  	
   

  	
  89

  	
   

  

 

 ii
 

 

 

	
  Section

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE VI

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NEGATIVE
  COVENANTS

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION
  6.01

  	
   

  	
  Indebtedness

  	
   

  	
  89

  	
   

  
	
  SECTION
  6.02

  	
   

  	
  Liens

  	
   

  	
  90

  	
   

  
	
  SECTION
  6.03

  	
   

  	
  Sale and Leaseback
  Transactions

  	
   

  	
  93

  	
   

  
	
  SECTION
  6.04

  	
   

  	
  Investment, Loan and
  Advances

  	
   

  	
  93

  	
   

  
	
  SECTION
  6.05

  	
   

  	
  Mergers and
  Consolidations

  	
   

  	
  94

  	
   

  
	
  SECTION
  6.06

  	
   

  	
  Asset Sales

  	
   

  	
  94

  	
   

  
	
  SECTION
  6.07

  	
   

  	
  Acquisitions and
  Licenses

  	
   

  	
  95

  	
   

  
	
  SECTION
  6.08

  	
   

  	
  Dividends

  	
   

  	
  96

  	
   

  
	
  SECTION
  6.09

  	
   

  	
  Transactions with
  Affiliates

  	
   

  	
  96

  	
   

  
	
  SECTION
  6.10

  	
   

  	
  Financial Covenants

  	
   

  	
  97

  	
   

  
	
  SECTION
  6.11

  	
   

  	
  Prepayments of Other
  Indebtedness; Modifications of Organizational Documents and Other Documents,
  etc.

  	
   

  	
  97

  	
   

  
	
  SECTION
  6.12

  	
   

  	
  Limitation on Certain
  Restrictions on Subsidiaries

  	
   

  	
  98

  	
   

  
	
  SECTION
  6.13

  	
   

  	
  Limitation on Issuance
  of Capital Stock

  	
   

  	
  98

  	
   

  
	
  SECTION
  6.14

  	
   

  	
  Limitation on Creation
  of Subsidiaries

  	
   

  	
  99

  	
   

  
	
  SECTION
  6.15

  	
   

  	
  Business

  	
   

  	
  99

  	
   

  
	
  SECTION
  6.16

  	
   

  	
  Limitation on
  Accounting Changes

  	
   

  	
  99

  	
   

  
	
  SECTION
  6.17

  	
   

  	
  Fiscal Year

  	
   

  	
  99

  	
   

  
	
  SECTION
  6.18

  	
   

  	
  Lease Obligations

  	
   

  	
  99

  	
   

  
	
  SECTION
  6.19

  	
   

  	
  No Further Negative
  Pledge

  	
   

  	
  99

  	
   

  
	
  SECTION
  6.20

  	
   

  	
  Anti-Terrorism Law;
  Anti-Money Laundering

  	
   

  	
  100

  	
   

  
	
  SECTION
  6.21

  	
   

  	
  Embargoed Person

  	
   

  	
  100

  	
   

  
	
  SECTION
  6.22

  	
   

  	
  Convertible Bond
  Indenture

  	
   

  	
  100

  	
   

  
	
  SECTION
  6.23

  	
   

  	
  Foreign Subsidiaries

  	
   

  	
  101

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE VII

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  GUARANTEE

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION
  7.01

  	
   

  	
  The Guarantees

  	
   

  	
  101

  	
   

  
	
  SECTION
  7.02

  	
   

  	
  Obligations
  Unconditional

  	
   

  	
  102

  	
   

  
	
  SECTION
  7.03

  	
   

  	
  Reinstatement

  	
   

  	
  103

  	
   

  
	
  SECTION
  7.04

  	
   

  	
  Subrogation;
  Subordination

  	
   

  	
  103

  	
   

  
	
  SECTION
  7.05

  	
   

  	
  Remedies

  	
   

  	
  104

  	
   

  
	
  SECTION
  7.06

  	
   

  	
  Instrument for the
  Payment of Money

  	
   

  	
  104

  	
   

  
	
  SECTION
  7.07

  	
   

  	
  Continuing Guarantee

  	
   

  	
  105

  	
   

  
	
  SECTION
  7.08

  	
   

  	
  General Limitation on
  Guarantee Obligations

  	
   

  	
  105

  	
   

  
	
  SECTION
  7.09

  	
   

  	
  Release of Guarantors

  	
   

  	
  105

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE VIII

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  EVENTS OF
  DEFAULT

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION
  8.01

  	
   

  	
  Events of Default

  	
   

  	
  105

  	
   

  
	
  SECTION 8.02

  	
   

  	
  Application of Proceeds

  	
   

  	
  108

  	
   

  

 

 iii
 

 

 

	
  Section

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE IX

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  THE
  ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION
  9.01

  	
   

  	
  Appointment and
  Authority

  	
   

  	
  110

  	
   

  
	
  SECTION
  9.02

  	
   

  	
  Rights as a Lender

  	
   

  	
  110

  	
   

  
	
  SECTION
  9.03

  	
   

  	
  Exculpatory Provisions

  	
   

  	
  110

  	
   

  
	
  SECTION
  9.04

  	
   

  	
  Reliance by Agent

  	
   

  	
  111

  	
   

  
	
  SECTION
  9.05

  	
   

  	
  Delegation of Duties

  	
   

  	
  112

  	
   

  
	
  SECTION
  9.06

  	
   

  	
  Resignation of Agent

  	
   

  	
  112

  	
   

  
	
  SECTION
  9.07

  	
   

  	
  Non-Reliance on Agent
  and Other Lenders

  	
   

  	
  112

  	
   

  
	
  SECTION
  9.08

  	
   

  	
  No Other Duties, etc

  	
   

  	
  113

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE X

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  MISCELLANEOUS

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION
  10.01

  	
   

  	
  Notices

  	
   

  	
  113

  	
   

  
	
  SECTION
  10.02

  	
   

  	
  Waivers; Amendment

  	
   

  	
  115

  	
   

  
	
  SECTION
  10.03

  	
   

  	
  Expenses; Indemnity;
  Damage Waiver

  	
   

  	
  118

  	
   

  
	
  SECTION
  10.04

  	
   

  	
  Successors and Assigns

  	
   

  	
  120

  	
   

  
	
  SECTION
  10.05

  	
   

  	
  Survival of Agreement

  	
   

  	
  122

  	
   

  
	
  SECTION
  10.06

  	
   

  	
  Counterparts;
  Integration; Effectiveness

  	
   

  	
  123

  	
   

  
	
  SECTION
  10.07

  	
   

  	
  Severability

  	
   

  	
  123

  	
   

  
	
  SECTION
  10.08

  	
   

  	
  Right of Setoff

  	
   

  	
  123

  	
   

  
	
  SECTION
  10.09

  	
   

  	
  Governing Law;
  Jurisdiction; Consent to Service of Process

  	
   

  	
  124

  	
   

  
	
  SECTION
  10.10

  	
   

  	
  Waiver of Jury Trial

  	
   

  	
  124

  	
   

  
	
  SECTION
  10.11

  	
   

  	
  Headings

  	
   

  	
  124

  	
   

  
	
  SECTION
  10.12

  	
   

  	
  Treatment of Certain
  Information; Confidentiality

  	
   

  	
  124

  	
   

  
	
  SECTION
  10.13

  	
   

  	
  USA PATRIOT Act Notice

  	
   

  	
  125

  	
   

  
	
  SECTION
  10.14

  	
   

  	
  Interest Rate
  Limitation

  	
   

  	
  125

  	
   

  
	
  SECTION
  10.15

  	
   

  	
  Lender Addendum

  	
   

  	
  126

  	
   

  
	
  SECTION
  10.16

  	
   

  	
  Obligations Absolute

  	
   

  	
  126

  	
   

  
	
  SECTION 10.17

  	
   

  	
  Designated Senior Indebtedness

  	
   

  	
  126

  	
   

  

 

	
  ANNEXES

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Annex I

  	
   

  	
  Applicable Margin

  
	
   

  	
   

  	
   

  
	
  SCHEDULES

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 1.01(a)

  	
   

  	
  Refinancing Indebtedness
  to Be Repaid

  
	
  Schedule 3.03

  	
   

  	
  Governmental Approvals;
  Compliance with Laws

  
	
  Schedule 3.06(b)

  	
   

  	
  Third-Party Use of
  Copyrights, Patents or Trademarks

  
	
  Schedule 3.06(c)

  	
   

  	
  Violations or
  Proceedings

  
	
  Schedule 3.09

  	
   

  	
  Material Agreements

  
	
  Schedule 3.18

  	
   

  	
  Environmental Matters

  
	
  Schedule 3.19

  	
   

  	
  Insurance

  

 

 iv
 

 

 

	
  Schedule 4.01(g)

  	
   

  	
  Local Counsel

  
	
  Schedule 4.01(n)(iii)

  	
   

  	
  Landlord Access
  Agreements

  
	
  Schedule 4.02(e)

  	
   

  	
  Existing Intercompany
  Loans

  
	
  Schedule 6.01(b)

  	
   

  	
  Existing Indebtedness

  
	
  Schedule 6.02(c)

  	
   

  	
  Existing Liens

  
	
  Schedule 6.04(b)

  	
   

  	
  Existing Investments

  
	
  Schedule 5.15

  	
   

  	
  Post-Closing Matters

  
	
   

  	
   

  	
   

  
	
  EXHIBITS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit A

  	
   

  	
  Form of Administrative
  Questionnaire

  
	
  Exhibit B

  	
   

  	
  Form of Assignment and
  Assumption

  
	
  Exhibit C

  	
   

  	
  Form of Borrowing
  Request

  
	
  Exhibit D

  	
   

  	
  Form of Compliance
  Certificate

  
	
  Exhibit E

  	
   

  	
  Form of Interest
  Election Request

  
	
  Exhibit F

  	
   

  	
  Form of Joinder
  Agreement

  
	
  Exhibit G

  	
   

  	
  Form of Landlord Lien
  Waiver, Access Agreement and Consent

  
	
  Exhibit H-1

  	
   

  	
  Form of Cayman LC
  Request

  
	
  Exhibit H-2

  	
   

  	
  Form of US LC Request

  
	
  Exhibit I

  	
   

  	
  Form of Lender Addendum

  
	
  Exhibit J-1

  	
   

  	
  Form of Cayman Share
  Charge

  
	
  Exhibit J-2

  	
   

  	
  Form of Cayman Deed of
  Charge

  
	
  Exhibit J-3

  	
   

  	
  Form of Cayman Security
  Agreement

  
	
  Exhibit K-1(A)

  	
   

  	
  Form of Cayman
  Revolving Note

  
	
  Exhibit K-2(A)

  	
   

  	
  Form of Cayman
  Swingline Note

  
	
  Exhibit K-1(B)

  	
   

  	
  Form of US Revolving
  Note

  
	
  Exhibit K-2(B)

  	
   

  	
  Form of US Swingline
  Note

  
	
  Exhibit L-1

  	
   

  	
  Form of Perfection Certificate

  
	
  Exhibit L-2

  	
   

  	
  Form of Perfection
  Certificate Supplement

  
	
  Exhibit M

  	
   

  	
  Form of Security
  Agreement

  
	
  Exhibit N

  	
   

  	
  Form of Opinion of
  Company Counsel

  
	
  Exhibit O

  	
   

  	
  Form of Solvency
  Certificate

  
	
  Exhibit P

  	
   

  	
  Form of Intercompany
  Note

  
	
  Exhibit Q

  	
   

  	
  Form of Non-Bank Certificate

  

 

 

 v

 

CREDIT AGREEMENT

THIS CREDIT AGREEMENT
(this “Agreement”) dated as of September 18,
2006, among SCIELE PHARMA, INC., a Delaware corporation (“US Borrower”),
SCIELE PHARMA CAYMAN LTD., an exempted company incorporated under Cayman
Islands law (“Cayman Borrower”; and together
with the US Borrower, “Borrowers”, and
each individually a “Borrower”), the
Guarantors (such term and each other capitalized term used but not defined
herein having the meaning given to it in Article I), the Lenders,
UBS SECURITIES LLC and LASALLE BANK NATIONAL ASSOCIATION, as joint lead
arrangers (in such capacity, “Arrangers”),
LASALLE BANK NATIONAL ASSOCIATION as syndication agent (in such capacity, “Syndication Agent”), and UBS LOAN FINANCE LLC, as swingline
lender (in such capacity, “Swingline Lender”),
and UBS AG, STAMFORD BRANCH, as issuing bank (in such capacity, “Issuing Bank”), as administrative agent (in such capacity, “Administrative Agent”) for the Lenders and as collateral
agent (in such capacity, “Collateral Agent”)
for the Secured Parties and the Issuing Bank.

WITNESSETH:

WHEREAS,
each of the Borrowers has requested the Lenders to extend credit in the form
of Revolving Loans at any time and from time to time prior to the Final
Maturity Date, in an aggregate principal amount at any time outstanding to both
Borrowers not in excess of $100,000,000.

WHEREAS,
each of the Borrowers has requested the Swingline Lender to make Swingline
Loans, at any time and from time to time prior to the Final Maturity Date, in
an aggregate principal amount at any time outstanding to both Borrowers not in
excess of $5,000,000.

WHEREAS,
each of the Borrowers has requested the Issuing Bank to issue letters of
credit, in an aggregate face amount at any time outstanding for both Borrowers
not in excess of $5,000,000, to support payment obligations incurred in the
ordinary course of business by the Borrowers and their respective Subsidiaries.

WHEREAS,
the proceeds of the Loans are to be used in accordance with Section 3.12.

NOW, THEREFORE,
the Lenders are willing to extend such credit to each of the Borrowers and the
Issuing Bank is willing to issue such letters of credit for the account of each
Borrower, on the terms and subject to the conditions set forth herein.  Accordingly, the parties hereto agree as
follows:

ARTICLE I

DEFINITIONS

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

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

“ABR Borrowing”
shall mean a Borrowing comprised of ABR Revolving Loans.

 

“ABR Revolving Loan”
shall mean any Revolving Loan bearing interest at a rate determined by reference
to the Alternate Base Rate in accordance with the provisions of Article II.

“Acquisition Consideration”
shall mean the license or purchase consideration for any Permitted Acquisition
and all other payments by a Borrower or any of its Subsidiaries in exchange
for, or as part of, or in connection with, any Permitted Acquisition, whether
paid in cash or by exchange of Equity Interests or of properties or otherwise
and whether payable at or prior to the consummation of such Permitted Acquisition
or deferred for payment at any future time, whether or not any such future
payment is subject to the occurrence of any contingency, and includes any and
all payments representing the purchase price and any assumptions of
Indebtedness, “earn-outs” and other agreements to make any payment the amount
of which is, or the terms of payment of which are, in any respect subject to or
contingent upon the revenues, income, cash flow or profits (or the like) of any
person or business; provided that
(a) any such future payment that is subject to a contingency shall be
considered Acquisition Consideration only to the extent of the reserve, if any,
required under GAAP at the time of such sale to be established in respect
thereof by such Borrower or Subsidiary, and (b) in the case of a license of
Intellectual Property, such future payment shall be considered Acquisition
Consideration only to the extent it is payable within two years after
commencement of such license.

“Adjusted LIBOR Rate”
shall mean, with respect to any Eurodollar Borrowing for any Interest Period,
(a) an interest rate per annum (rounded upward, if necessary, to the
nearest 1/100th of 1%) determined by the Administrative Agent to be equal to
the LIBOR Rate for such Eurodollar Borrowing in effect for such Interest Period
divided by (b) 1 minus the
Statutory Reserves (if any) for such Eurodollar Borrowing for such Interest
Period.

“Administrative Agent”
shall have the meaning assigned to such term in the preamble hereto and includes
each other person appointed as the successor pursuant to Article X.

“Administrative Agent Fee”
shall have the meaning assigned to such term in Section 2.05(b).

“Administrative
Questionnaire” shall mean an Administrative Questionnaire in substantially
the form of Exhibit A.

“Affiliate”
shall mean, when used with respect to a specified person, another person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the person specified; provided, however, that,
for purposes of Section 6.09, the term “Affiliate” shall also
include (i) any person that directly or indirectly owns more than 10% of
any class of Equity Interests of the person specified or (ii) any person
that is an executive officer or director of the person specified.

“Agents” shall
mean the Administrative Agent and the Collateral Agent; and “Agent” shall mean any of them.

“Agreement”
shall have the meaning assigned to such term in the preamble hereto.

“Alternate Base Rate”
shall mean, for any day, a rate per annum (rounded upward, if necessary, to the
nearest 1/100th of 1%) equal to the greater of (a) the Base Rate in effect
on such day and (b) the Federal Funds Effective Rate in effect on such day
plus 0.50%.  If the Administrative Agent shall have
determined (which determination shall be conclusive absent manifest error) that
it is unable to 

 2
 

 

ascertain the Federal Funds Effective Rate for any
reason the Alternate Base Rate shall be determined without regard to
clause (b) of the preceding sentence until the circumstances giving rise
to such inability no longer exist.  Any
change in the Alternate Base Rate due to a change in the Base Rate or the Federal
Funds Effective Rate shall be effective on the effective date of such change in
the Base Rate or the Federal Funds Effective Rate, respectively.

“Anti-Terrorism Laws”
shall have the meaning assigned to such term in Section 3.21.

“Applicable Fee”
shall mean, for any day, with respect to any Commitment, the applicable percentage
set forth in Annex I under the caption “Applicable Fee”.

“Applicable Margin”
shall mean, for any day, with respect to any Revolving Loan, the applicable
percentage set forth in Annex I under the appropriate caption.

“Applicable Percentage”
shall mean, with respect to any Lender, the percentage of the total Loans
and Commitments represented by such Lender’s Loans and Commitments.

“Approved Fund”
shall mean 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.

“Arrangers”
shall have the meaning assigned to such term in the preamble hereto.

“Asset Sale”
shall mean (a) any conveyance, sale, lease, sublease, assignment, transfer
or other disposition (including by way of merger or consolidation and including
any Sale and Leaseback Transaction) of any property (including any Intellectual
Property and including any conveyance, sale, lease, sublease, assignment,
transfer or other disposition from one Company to another Company) but excluding
sales of inventory and dispositions of cash and cash equivalents, in each case,
in the ordinary course of business, by any Borrower or any of its Subsidiaries
and (b) any issuance or sale of any Equity Interests of any Subsidiary of
any Borrower, in each case, to any person other than (i) a Borrower,
(ii) any Guarantor or (iii) other than for purposes of Section
6.06, any other Subsidiary.

“Assignment and Assumption”
shall mean 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
10.04(b)), and accepted by the Administrative Agent, in substantially the
form of Exhibit B, or any other form approved by the Administrative
Agent.

“Attributable Indebtedness”
shall mean, when used with respect to any Sale and Leaseback Transaction, as at
the time of determination, the present value (discounted at a rate equivalent
to the relevant Borrower’s then-current weighted average cost of funds for
borrowed money as at the time of determination, compounded on a semi-annual
basis) of the total obligations of the lessee for rental payments during the
remaining term of the lease included in any such Sale and Leaseback Transaction.

“Bailee Letter”
shall have the meaning assigned thereto in the Security Agreement.

“Base Rate”
shall mean, for any day, a rate per annum that is equal to the corporate base
rate of interest established by the Administrative Agent from time to time;
each change in the Base Rate shall be effective on the date such change is
effective.  The corporate base rate is
not necessarily the lowest rate charged by the Administrative Agent to its
customers.

 3
 

 

“Board” shall
mean the Board of Governors of the Federal Reserve System of the United States.

“Board of Directors”
shall mean, with respect to any person, (a) in the case of any corporation,
the board of directors of such person, (b) in the case of any limited
liability company, the board of managers of such person, (c) in the case
of any partnership, the Board of Directors of the general partner of such
person and (d) in any other case, the functional equivalent of the foregoing.

“Borrower” and “Borrowers” shall have the meanings assigned to such terms in
the preamble hereto.

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

“Borrowing Request”
shall mean a request by the US Borrower or the Cayman Borrower, as the case may
be, in accordance with the terms of Section 2.03 and substantially
in the form of Exhibit C, or such other form as shall be approved
by the Administrative Agent.

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

“Capital Assets” shall mean,
with respect to any person, all equipment, fixed assets and Real Property or
improvements thereof , or replacements or substitutions therefor or additions
thereto, that, in accordance with GAAP, have been or should be reflected as
additions to property, plant or equipment on the balance sheet of such person.

“Capital Expenditures”
shall mean, for any period, without duplication, all expenditures made directly
or indirectly by the US Borrower and its Subsidiaries during such period for
Capital Assets (whether paid in cash or other consideration, financed by the
incurrence of Indebtedness or accrued as a liability), but excluding  any portion of such increase attributable
solely to acquisitions of property, plant and equipment in Permitted
Acquisitions.  For purposes of this
definition, the purchase price of equipment or other fixed assets that are
purchased simultaneously with the trade-in of existing assets or with insurance
proceeds shall be included in Capital Expenditures only to the extent of the
gross amount by which such purchase price exceeds the credit granted by the
seller of such assets for the assets being traded in at such time or the amount
of such insurance proceeds, as the case may be.

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

“Cash Equivalents”
shall mean, as to any person, (a) securities issued, or directly, unconditionally
and fully guaranteed or insured, by the United States or any agency or
instrumentality thereof (provided that
the full faith and credit of the United States is pledged in support thereof)
having maturities of not more than one year from the date of acquisition by
such person; (b) time deposits and 

 4
 

 

certificates of deposit of any Lender or any
commercial bank having, or which is the principal banking subsidiary of a bank
holding company organized under the laws of the United States, any state
thereof or the District of Columbia having, capital and surplus aggregating in
excess of $500.0 million and a rating of “A” (or such other similar equivalent
rating) or higher by at least one nationally recognized statistical rating
organization (as defined in Rule 436 under the Securities Act) with maturities
of not more than one year from the date of acquisition by such person;
(c) repurchase obligations with a term of not more than 30 days for
underlying securities of the types described in clause (a) above entered
into with any bank meeting the qualifications specified in clause (b)
above, which repurchase obligations are secured by a valid perfected security
interest in the underlying securities; (d) commercial paper issued by any
person incorporated in the United States rated at least A-1 or the equivalent
thereof by Standard & Poor’s Rating Service or at least P-1 or the
equivalent thereof by Moody’s Investors Service Inc., and in each case maturing
not more than one year after the date of acquisition by such person;
(e) investments in money market funds substantially all of whose assets
are comprised of securities of the types described in clauses (a) through
(d) above; and (f) demand deposit accounts maintained in the ordinary
course of business.

“Cash Interest Expense”
shall mean, for any period, Consolidated Interest Expense for such period, less the sum of (a) interest on any debt paid by the
increase in the principal amount of such debt including by issuance of
additional debt of such kind, (b) items described in clause (c) or,
other than to the extent paid in cash, clause (g) of the definition of “Consolidated
Interest Expense” and (c) gross interest income of the US Borrower and its
Subsidiaries for such period.

“Casualty Event”
shall mean any involuntary loss of title, any involuntary loss of, damage to or
any destruction of, or any condemnation or other taking (including by any
Governmental Authority) of, any property of the US Borrower or any of its
Subsidiaries.  “Casualty
Event” shall include but not be limited to any taking of all or any
part of any Real Property of any person or any part thereof, in or by condemnation
or other eminent domain proceedings pursuant to any Requirement of Law, or by
reason of the temporary requisition of the use or occupancy of all or any part
of any Real Property of any person or any part thereof by any Governmental
Authority, civil or military, or any settlement in lieu thereof.

“Cayman Borrower”
shall have the meaning assigned to such term in the preamble hereto.

“Cayman Charged Property”
shall mean the Charged Property (as defined in the Cayman Share Charge) and all other property pledged or granted as collateral
pursuant to the Cayman Share Charge.

“Cayman Deed of Charge” shall
mean a Deed of Charge substantially in the form of Exhibit J-2 among the Cayman
Borrower and Collateral Agent for the benefit of the Secured Parties.

“Cayman LC
Disbursement” shall mean a payment or disbursement made by the Issuing
Bank pursuant to a drawing under a Cayman Letter of Credit.

“Cayman LC Exposure”
shall mean at any time the sum of (a) the aggregate undrawn amount of all
outstanding Cayman Letters of Credit at such time plus (b) the aggregate principal amount of all Cayman
Reimbursement Obligations outstanding at such time.  The Cayman LC Exposure of any Revolving
Lender at any time shall mean its Pro Rata Percentage of the aggregate Cayman
LC Exposure at such time.

 5
 

 

“Cayman LC Participation
Fee” shall have the meaning assigned to such term in Section 2.05(c).

“Cayman LC Request”
shall mean a request by the Cayman Borrower in accordance with the terms of Section 2.18(A)(b)
and substantially in the form of Exhibit H-1, or such other form as
shall be approved by the Administrative Agent.

“Cayman Letter of
Credit” shall mean any (i) Standby Letter of Credit and
(ii) Commercial Letter of Credit, in each case, issued or to be issued by
an Issuing Bank for the account of the Cayman Borrower pursuant to Section 2.18(A).

“Cayman Notes”
shall mean any notes evidencing the Cayman Revolving Loans or Cayman Swingline
Loans issued pursuant to this Agreement, if any, substantially in the form of Exhibit K-1(A)
or K-2(A).

“Cayman Obligations”
shall mean (a) obligations of the Cayman Borrower and the other Foreign
Loan Parties from time to time arising under or in respect of the due and
punctual payment of (i) the principal of and premium, if any, and interest
(including interest accruing during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding) on the Cayman Revolving Loans, when and as due,
whether at maturity, by acceleration, upon one or more dates set for prepayment
or otherwise, (ii) each payment required to be made by the Cayman Borrower
and the other Foreign Loan Parties under this Agreement in respect of any
Cayman Letter of Credit, when and as due, including payments in respect of
Cayman Reimbursement Obligations, interest thereon and obligations to provide
cash collateral and (iii) all other monetary obligations, including
Foreign Guaranteed Obligations and fees, costs, expenses and indemnities,
whether primary, secondary, direct, contingent, fixed or otherwise (including monetary
obligations incurred during the pendency of any bankruptcy, insolvency, receivership
or other similar proceeding, regardless of whether allowed or allowable in such
proceeding), of the Cayman Borrower and the other Foreign Loan Parties under
this Agreement and the other Loan Documents, and (b) the due and punctual
performance of all covenants, agreements, obligations and liabilities of the
Cayman Borrower and the other Foreign Loan Parties under or pursuant to this
Agreement and the other Loan Documents.

“Cayman
Reimbursement Obligations” shall mean the Cayman Borrower’s obligations
under Section 2.18(A)(e) to reimburse Cayman LC Disbursements.

“Cayman Revolving
Loan” shall mean a Loan made by the Lenders to the Cayman Borrower
pursuant to Section 2.01(a). 
Each Cayman Revolving Loan shall either be an ABR Revolving Loan or a
Eurodollar Revolving Loans.

“Cayman Revolving Exposure”
shall mean, with respect to any Lender at any time, the aggregate principal
amount at such time of all outstanding Cayman Revolving Loans of such Lender, plus the aggregate amount at such time of such Lender’s
Cayman LC Exposure, plus the aggregate
amount at such time of such Lender’s Cayman Swingline Exposure.

“Cayman Security Agreement”
shall mean a Security Agreement substantially in the form of Exhibit J-3
among the Cayman Borrower and Collateral Agent for the benefit of the Secured
Parties.

 6
 

 

“Cayman Share Charge”
shall mean a Share Charge and Mortgage substantially in the form of Exhibit J-1
between the US Borrower and Collateral Agent for the benefit of the Secured Parties.

“Cayman Swingline Exposure”
shall mean at any time the aggregate principal amount at such time of all
outstanding Cayman Swingline Loans.  The
Cayman Swingline Exposure of any Revolving Lender at any time shall equal its
Pro Rata Percentage of the aggregate Cayman Swingline Exposure at such time.

“Cayman Swingline
Loan” shall mean any loan made by the Swingline Lender pursuant to Section 2.17(A)(a).

“CERCLA” shall
mean the Comprehensive Environmental Response, Compensation, and Liability Act
of 1980, as amended, 42 U.S.C. § 9601 et seq. and all
implementing regulations.

“Change in Control”
shall mean the occurrence of one or more of the following events:

(a)           any
sale, lease, exchange or other transfer (in one transaction or a series of related
transactions), directly or indirectly, of all or substantially all of the
assets of either of the Borrowers or the Companies taken as a whole, to any
person or group of related persons, as defined in Section 13(d) of the Exchange
Act (a “Group”) other than a sale, transfer,
lease, conveyance or other disposition of all or substantially all of the
property of assets that falls within the description contained in clause (b)
below; or

(b)           there
occurs any transaction or event or any series of transactions or events
(whether by means of an exchange offer, liquidation, tender offer,
consolidation, merger, combination, reclassification, recapitalization, asset
sale, lease of assets or otherwise) in connection with which all or
substantially all of the US Borrower’s common stock is exchanged for, converted
into, acquired for or constitutes solely, the right to receive stock, other
securities, other property, assets or cash, unless either:

(i)            the
persons that “beneficially owned,” directly or indirectly, the shares of the US
Borrower’s voting stock immediately prior to such transaction, “beneficially
owns ,” directly or indirectly, immediately after such transaction, shares of
the surviving or continuing entity’s voting Equity Interests representing at
least a majority of the total voting power of all outstanding classes of voting
Equity Interests of the surviving or continuing person; or

(ii)           at
least 90% of the consideration (other than cash payments for fractional shares
or pursuant to statutory appraisal rights) in such transaction consists of
common stock, ordinary shares or American Depository Shares, and any associated
rights, traded on a United States national securities exchange or quoted on the
Nasdaq National Market (or that will be so traded or quoted when issued or
exchanged in connection with such transaction); or

(c)           the
approval by the holders of either Borrower’s capital stock of any plan or proposal
for such Borrower’s liquidation or dissolution, whether or not otherwise in
compliance with this Agreement or any other indenture or agreement governing
Indebtedness of such Borrower; or

(d)           any
person or Group shall become the beneficial owner (as defined in Rule 13d-3
under the Exchange Act) of shares representing more than 50% of the aggregate
ordinary voting power represented by the US Borrower’s issued and outstanding
voting stock; or

 7
 

 

(e)           the
first day on which a majority of the members of the US Borrower’s Board of
Directors are not Continuing Directors; or

(f)            the
US Borrower shall at any time cease to own one hundred percent (100%) of the
issued and outstanding Equity Interest in the Cayman Borrower.

For purposes of this definition, a person shall not be
deemed to have beneficial ownership of Equity Interests subject to a stock
purchase agreement, merger agreement or similar agreement until the
consummation of the transactions contemplated by such agreement.

“Change in Law”
shall mean the occurrence, after the date of this Agreement, of any of the
following:  (a) the adoption or
taking into effect of any law, treaty, order, policy, rule or regulation,
(b) any change in any law, treaty, order, policy, rule or regulation or in
the administration, interpretation or application thereof by any Governmental
Authority or (c) the making or issuance of any request, guideline or
directive (whether or not having the force of law) by any Governmental
Authority.

“Charges” shall
have the meaning assigned to such term in Section 10.14.

“Class,” when
used in reference to any Loan or Borrowing, refers to whether such Loan, or the
Loans comprising such Borrowing, are Revolving Loans or Swingline Loans and,
when used in reference to any Commitment, refers to whether such Commitment is
a Revolving Commitment or Swingline Commitment, in each case, under this
Agreement as originally in effect or pursuant to Section 2.19, of which
such Loan, Borrowing or Commitment shall be a part.

“Closing Date”
shall mean September 18, 2006.

“Code” shall
mean the Internal Revenue Code of 1986, as amended.

“Collateral”
shall mean, collectively, all of the Security Agreement Collateral, the Mortgaged
Property, the Cayman Charged Property and all other property of whatever kind
and nature subject or purported to be subject from time to time to a Lien under
any Security Document.

“Collateral Agent”
shall have the meaning assigned to such term in the preamble hereto.

“Commercial Letter of
Credit” shall mean any letter of credit or similar instrument issued
hereunder for the purpose of providing credit support in connection with the
purchase of materials, goods or services by a Borrower or any of its
Subsidiaries in the ordinary course of their businesses.

“Commitment”
shall mean, with respect to any Lender, such Lender’s Revolving Commitment, and
any Commitment to make Revolving Loans of a new Class extended by such Lender
as provided in Section 2.19.

“Commitment Fee”
shall have the meaning assigned to such term in Section 2.05(a).

“Companies”
shall mean the US Borrower and its Subsidiaries (including, without limitation,
the Cayman Borrower); and “Company” shall
mean any one of them.

“Compliance Certificate”
shall mean a certificate of a Financial Officer substantially in the form of Exhibit D.

 8
 

 

“Confidential Information
Memorandum” shall mean that certain confidential information memorandum
dated as of July 2006.

“Consolidated Amortization
Expense” shall mean, for any period, the amortization expense of the
US Borrower and its Subsidiaries for such period, determined on a consolidated
basis in accordance with GAAP.

“Consolidated Current
Assets” shall mean, as at any date of determination, the total assets
of the US Borrower and its Subsidiaries which may properly be classified as
current assets on a consolidated balance sheet of the US Borrower and its
Subsidiaries in accordance with GAAP.

“Consolidated Current
Liabilities” shall mean, as at any date of determination, the total
liabilities of the US Borrower and its Subsidiaries which may properly be
classified as current liabilities (other than the current portion of any Loans)
on a consolidated balance sheet of the US Borrower and its Subsidiaries in accordance
with GAAP.

“Consolidated Depreciation
Expense” shall mean, for any period, the depreciation expense of the
US Borrower and its Subsidiaries for such period, determined on a consolidated
basis in accordance with GAAP.

“Consolidated EBITDA”
shall mean, for any period, Consolidated Net Income for such period, adjusted
by (x) adding thereto, in each case only to the
extent (and in the same proportion) deducted in determining such Consolidated
Net Income and without duplication (and with respect to the portion of
Consolidated Net Income attributable to any Subsidiary of the US Borrower only
if a corresponding amount would be permitted at the date of determination to be
distributed to the US Borrower by such Subsidiary without prior approval (that
has not been obtained) pursuant to the terms of its Organizational Documents
and all agreements, instruments and Requirements of Law applicable to such
Subsidiary or its equityholders):

(a)           Consolidated
Interest Expense for such period,

(b)           Consolidated
Amortization Expense for such period,

(c)           Consolidated
Depreciation Expense for such period,

(d)           Consolidated
Tax Expense for such period, and

(e)           the
aggregate amount of all other non-cash charges (including non-cash charges
related to the accounting of grant of stock options to personnel of the US
Borrower) reducing Consolidated Net Income (excluding any non-cash charge that
results in an accrual of a reserve for cash charges in any future period) for
such period, and

(y) subtracting therefrom
the aggregate amount of all non-cash items increasing Consolidated Net Income
(other than the accrual of revenue or recording of receivables in the ordinary
course of business) for such period.

Consolidated EBITDA shall be calculated on a Pro Forma
Basis to give effect to any Permitted Acquisition and Asset Sales (other than
any dispositions in the ordinary course of business) consummated at any time on
or after the first day of the Test Period thereof as if each such Permitted 

 9
 

 

Acquisition had been effected on the first day of such
period and as if each such Asset Sale had been consummated on the day prior to
the first day of such period.

“Consolidated Fixed Charge
Coverage Ratio” shall mean, for any Test Period, the ratio of
(a) Consolidated EBITDA for such Test Period to (b) Consolidated
Fixed Charges for such Test Period.

“Consolidated Fixed Charges”
shall mean, for any period, the sum, without duplication, of

(a)           Consolidated
Interest Expense for such period;

(b)           the
aggregate amount of Capital Expenditures for such period;

(c)           all
cash payments in respect of income taxes made during such period (net of any
cash refund in respect of income taxes actually received during such period);

(d)           the
principal amount of all scheduled amortization payments on all Indebtedness
(including the principal component of all Capital Lease Obligations) of the US
Borrower and its Subsidiaries for such period (as determined on the first day
of the respective period);

(e)           the
product of (i) all dividend payments on any series of Disqualified Capital
Stock of the US Borrower or any of its Subsidiaries (other than, in the case of
a Subsidiary, dividend payments to the US Borrower or any of its Subsidiaries) multiplied by (ii) a fraction, the numerator of which
is one and the denominator of which is one minus then current combined federal,
state and local statutory tax rate of the US Borrower and its Subsidiaries, expressed
as a decimal; and

(f)            the
product of (i) all cash dividend payments on any Preferred Stock (other
than Disqualified Capital Stock) of the US Borrower or any of its Subsidiaries
(other than dividend payments to the US Borrower or any of its Subsidiaries) multiplied by (ii) a fraction, the numerator of which
is one and the denominator of which is one minus then current combined federal,
state and local statutory tax rate of the US Borrower and its Subsidiaries,
expressed as a decimal.

“Consolidated Indebtedness”
shall mean, as at any date of determination, the aggregate amount of all
Indebtedness and all US LC Exposure of the US Borrower and its Domestic
Subsidiaries and all Cayman LC Exposure of the Cayman Borrower and its
Subsidiaries, determined on a consolidated basis.

“Consolidated Interest
Expense” shall mean, for any period, the total consolidated interest
expense of the US Borrower and its Subsidiaries for such period determined on a
consolidated basis in accordance with GAAP plus, without
duplication:

(a)           imputed
interest on Capital Lease Obligations and Attributable Indebtedness of the US
Borrower and its Subsidiaries for such period;

(b)           commissions,
discounts and other fees and charges owed by the US Borrower or any of its
Subsidiaries with respect to letters of credit securing financial obligations,
bankers’ acceptance financing and receivables financings for such period;

 

 10

 

 

(c)           amortization
of debt issuance costs, debt discount or premium and other financing fees and expenses
incurred by the US Borrower or any of its Subsidiaries for such period;

(d)           cash
contributions to any employee stock ownership plan or similar trust made by the
US Borrower or any of its Subsidiaries to the extent such contributions are
used by such plan or trust to pay interest or fees to any person (other than
the US Borrower or a Wholly Owned Subsidiary) in connection with Indebtedness
incurred by such plan or trust for such period;

(e)           all
interest paid or payable with respect to discontinued operations of the US Borrower
or any of its Subsidiaries for such period;

(f)            the
interest portion of any deferred payment obligations of the US Borrower or any of
its Subsidiaries for such period; and

(g)           all
interest on any Indebtedness of the US Borrower or any of its Subsidiaries of
the type described in clause (f) or (k) of the definition of “Indebtedness”
for such period.

Consolidated Interest Expense shall be calculated on a
Pro Forma Basis to give effect to any Indebtedness incurred, assumed or
permanently repaid or extinguished during the relevant Test Period in
connection with any Permitted Acquisitions and Asset Sales (other than any
dispositions in the ordinary course of business) as if such incurrence,
assumption, repayment or extinguishing had been effected on the first day of
such period.

“Consolidated Net Income”
shall mean, for any period, the consolidated net income (or loss) of the US
Borrower and its Subsidiaries determined on a consolidated basis in accordance
with GAAP; provided that there shall be excluded
from such net income (to the extent otherwise included therein), without duplication:

(a)           the
net income (or loss) of any person (other than a Subsidiary of the US Borrower)
in which any person other than the US Borrower and its Subsidiaries has an
ownership interest, except to the extent that cash in an amount equal to any
such income has actually been received by the US Borrower or (subject to
clause (b) below) any of its Subsidiaries during such period;

(b)           the
net income of any Subsidiary of the US Borrower during such period to the
extent that the declaration or payment of dividends or similar distributions by
such Subsidiary of that income is not permitted by operation of the terms of
its Organizational Documents or any agreement, instrument or Requirement of Law
applicable to that Subsidiary during such period, except that the US Borrower’s
equity in net loss of any such Subsidiary for such period shall be included in
determining Consolidated Net Income;

(c)           any
gain (or loss), together with any related provisions for taxes on any such gain
(or the tax effect of any such loss), realized during such period by the US
Borrower or any of its Subsidiaries upon any Asset Sale (other than any
dispositions in the ordinary course of business) by the US Borrower or any of
its Subsidiaries;

(d)           gains
and losses due solely to fluctuations in currency values and the related tax
effects determined in accordance with GAAP for such period;

 11
 

 

(e)           earnings
resulting from any reappraisal, revaluation or write-up of assets;

(f)            unrealized
gains and losses with respect to Hedging Obligations for such period; and

(g)           any
extraordinary gain (or extraordinary loss), together with any related provision
for taxes on any such gain (or the tax effect of any such loss), recorded or
recognized by the US Borrower or any of its Subsidiaries during such period.

For purposes of this definition of “Consolidated Net
Income,” Consolidated Net Income shall be reduced (to the extent not already
reduced thereby) by the amount of any payments to or on behalf of the Borrowers
made pursuant to Sections 6.08(c) and (d).

“Consolidated Tax Expense”
shall mean, for any period, the tax expense of the US Borrower and its Subsidiaries,
for such period, determined on a consolidated basis in accordance with GAAP.

“Contested Collateral Lien
Conditions” shall mean, with respect to any Permitted Lien of the
type described in clauses (a), (b), (e) and (f) of Section 6.02,
the following conditions:

(a)           the
relevant Company shall cause any proceeding instituted contesting such Lien to
stay the sale or forfeiture of any portion of the Collateral on account of such
Lien;

(b)           at
the option and at the request of the Administrative Agent, to the extent such
Lien is in an amount in excess of $100,000, the appropriate Loan Party shall
maintain cash reserves in an amount sufficient to pay and discharge such Lien
and the Administrative Agent’s reasonable estimate of all interest and penalties
related thereto; and

(c)           such
Lien shall in all respects be subject and subordinate in priority to the Lien
and security interest created and evidenced by the Security Documents, except
if and to the extent that the Requirement of Law creating, permitting or
authorizing such Lien provides that such Lien is or must be superior to the
Lien and security interest created and evidenced by the Security Documents.

“Contingent Obligation”
shall mean, as to any person, any obligation, agreement, understanding or arrangement
of such person guaranteeing or intended to guarantee any Indebtedness, leases,
dividends or other obligations (“primary obligations”)
of any other person (the “primary obligor”)
in any manner, whether directly or indirectly, including any obligation of such
person, whether or not contingent, (a) to purchase any such primary
obligation or any property constituting direct or indirect security therefor;
(b) to advance or supply funds (i) for the purchase or payment of any
such primary obligation or (ii) to maintain working capital or equity
capital of the primary obligor or otherwise to maintain the net worth or solvency
of the primary obligor; (c) to purchase property, securities or services
primarily for the purpose of assuring the owner of any such primary obligation
of the ability of the primary obligor to make payment of such primary
obligation; (d) with respect to bankers’ acceptances, letters of credit
and similar credit arrangements, until a reimbursement obligation arises (which
reimbursement obligation shall constitute Indebtedness); or (e) otherwise
to assure or hold harmless the holder of such primary obligation against loss
in respect thereof; provided, however, that the term “Contingent Obligation” shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business or any product warranties.  The
amount of any Contingent Obligation 

 12
 

 

shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Contingent Obligation is made (or, if less, the maximum amount of such primary
obligation for which such person may be liable, whether singly or jointly,
pursuant to the terms of the instrument evidencing such Contingent Obligation)
or, if not stated or determinable, the maximum reasonably anticipated liability
in respect thereof (assuming such person is required to perform thereunder) as
determined by such person in good faith.

“Continuing Director” means any
member of the US Borrower’s Board of Directors who (a) was a member of such
Board of Directors on the date of this Agreement, or (b) was nominated for
election or elected to such Board of Directors with the approval of a majority
of the Continuing Directors who were members of such Board at the time of such
nomination or election.

“Control” shall
mean the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of a person, whether through the
ownership of voting securities, by contract or otherwise, and the terms “Controlling” and “Controlled”
shall have meanings correlative thereto.

“Control Agreement”
shall have the meaning assigned to such term in the Security Agreement.

“Convertible Bond Indenture”
means that certain Indenture dated as of May 3, 2006 between the US Borrower
and Deutsche Bank Trust Company Americas, as Trustee, as the same may be
amended, supplemented or otherwise modified from time to time.

“Convertible Bond Documents”
means the Convertible Bond Indenture, the Convertible Bonds and any other
instrument, document or agreement delivered pursuant thereto or in connection
therewith.

“Convertible Bonds”
means the US Borrower’s New 1.75% Contingent Convertible Senior Subordinated
Notes Due 2024 issued pursuant to the terms of the Convertible Bond Indenture.

“Credit Extension”
shall mean, as the context may require, (i) the making of a Loan by a Lender or
(ii) the issuance of any Letter of Credit, or the amendment, extension or
renewal of any existing Letter of Credit, by the Issuing Bank.

“Cyprus Sciele”
shall mean Sciele Pharma Cyprus, Ltd., an entity organized under the laws of
Cyprus.

“Debt Issuance”
shall mean the incurrence by a Borrower or any of its Subsidiaries of any
Indebtedness after the Closing Date (other than as permitted by Section 6.01).

“Debt Service”
shall mean, for any period, Cash Interest Expense for such period plus
scheduled principal amortization of all Indebtedness for such period.

“Default” shall
mean any event, occurrence or condition which is, or upon notice, lapse of time
or both would constitute, an Event of Default.

“Default Rate”
shall have the meaning assigned to such term in Section 2.06(c).

 13
 

 

“Disqualified Capital Stock”
shall mean any Equity Interest which, by its terms (or by the terms of any
security into which it is convertible or for which it is exchangeable), or upon
the happening of any event, (a) matures (excluding any maturity as the
result of an optional redemption by the issuer thereof) or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable
at the option of the holder thereof, in whole or in part, on or prior to the
first anniversary of the Final Maturity Date, (b) is convertible into or
exchangeable (unless at the sole option of the issuer thereof) for
(i) debt securities or (ii) any Equity Interests referred to in (a)
above, in each case at any time on or prior to the first anniversary of the
Final Maturity Date, or (c) contains any repurchase obligation which may
come into effect prior to payment in full of all Obligations; provided, however, that
any Equity Interests that would not constitute Disqualified Capital Stock but
for provisions thereof giving holders thereof (or the holders of any security
into or for which such Equity Interests is convertible, exchangeable or exercisable)
the right to require the issuer thereof to redeem such Equity Interests upon
the occurrence of a change in control or an asset sale occurring prior to the
first anniversary of the Final Maturity Date shall not constitute Disqualified
Capital Stock if such Equity Interests provide that the issuer thereof will not
redeem any such Equity Interests pursuant to such provisions prior to the
repayment in full of the Obligations.

“Dividend” with
respect to any person shall mean that such person has declared or paid a
dividend or returned any equity capital to the holders of its Equity Interests
or authorized or made any other distribution, payment or delivery of property
(other than Qualified Capital Stock of such person) or cash to the holders of
its Equity Interests as such, or redeemed, retired, purchased or otherwise
acquired, directly or indirectly, for consideration any of its Equity Interests
outstanding (or any options or warrants issued by such person with respect to
its Equity Interests), or set aside any funds for any of the foregoing
purposes, or shall have permitted any of its Subsidiaries to purchase or
otherwise acquire for consideration any of the Equity Interests of such person
outstanding (or any options or warrants issued by such person with respect to
its Equity Interests).  Without limiting
the foregoing, “Dividends” with respect to any
person shall also include all payments made or required to be made by such
person with respect to any stock appreciation rights, plans, equity incentive
or achievement plans or any similar plans or setting aside of any funds for the
foregoing purposes.

“dollars” or “$” shall mean lawful money of the United States.

“Domestic Guarantor”
shall mean the US Borrower, Sciele Sales and any other Person that is organized
or existing under the laws of the United States, any state thereof or the
District of Columbia that is or becomes a party to this Agreement pursuant to Section 5.11
and which provides a guarantee pursuant to Section 7.01(b)

“Domestic Loan Parties” shall mean the US
Borrower and the other Domestic Guarantors.

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

“Earn-Outs” shall mean unsecured obligations that have
been or may be incurred or are owing or may become owing to one or more
sellers or licensors to make any
payment, the amount of which is, or the terms of payment of which are, subject
to or contingent upon the revenues, income, cash flow, or profits or other
result of operations of, or product development, regulatory approval or other
activities necessary to place product in commerce relating to, any business or
product that has been 

 14
 

 

licensed or purchased, whether to be satisfied by
payment in cash or by exchange of Equity Interests or of properties.

“Eligible Assignee”
shall mean (i) any Revolving Lender, (ii) an Affiliate of any
Revolving Lender, (iii) an Approved Fund of a Revolving Lender and
(iv) any other person approved by the Administrative Agent, the Issuing
Bank, the Swingline Lender and the US Borrower (each such approval not to be
unreasonably withheld or delayed); provided that
(x) no approval of the US Borrower shall be required during the continuance of
a Default or prior to the completion of the primary syndication of the
Commitments and Loans (as determined by the Arrangers) and (y) “Eligible Assignee” shall not include any Borrower or any of
its Affiliates or Subsidiaries or any natural person.

“Embargoed Person”
shall have the meaning assigned to such term in Section 6.21.

“Engagement Letter”
shall mean the confidential Engagement Letter, dated July 20, 2006, among the
US Borrower, LaSalle Bank National Association and UBS Securities  LLC.

“Environment”
shall mean ambient air, indoor air, surface water and groundwater (including
potable water, navigable water and wetlands), the land surface or subsurface
strata, natural resources, the workplace or as otherwise defined in any
Environmental Law.

“Environmental Claim”
shall mean any claim, notice, demand, order, action, suit, proceeding or other
communication alleging liability for or obligation with respect to any
investigation, remediation, removal, cleanup, response, corrective action,
damages to natural resources, personal injury, property damage, fines,
penalties or other costs resulting from, related to or arising out of
(i) the presence, Release or threatened Release in or into the Environment
of Hazardous Material at any location or (ii) any violation or alleged
violation of any Environmental Law, and shall include any claim seeking
damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from, related to or arising out of the presence, Release
or threatened Release of Hazardous Material or alleged injury or threat of
injury to health, safety or the Environment.

“Environmental Law”
shall mean any and all present and future treaties, laws, statutes, ordinances,
regulations, rules, decrees, orders, judgments, consent orders, consent
decrees, code or other binding requirements, and the common law, relating to
protection of public health or the Environment, the Release or threatened
Release of Hazardous Material, natural resources or natural resource damages,
or occupational safety or health, and any and all Environmental Permits.

“Environmental Permit”
shall mean any permit, license, approval, registration, notification,
exemption, consent or other authorization required by or from a Governmental
Authority under Environmental Law.

“Equipment”
shall have the meaning assigned to such term in the Security Agreement.

“Equity Interest”
shall mean, with respect to any person, any and all shares, interests, participations
or other equivalents, including membership interests (however designated,
whether voting or nonvoting), of equity of such person, including, if such
person is a partnership, partnership interests (whether general or limited) and
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 property of,
such partnership, whether outstanding on the date hereof or issued after the
Closing Date, but excluding debt securities convertible or exchangeable into
such equity.

 15
 

 

“ERISA” shall
mean the Employee Retirement Income Security Act of 1974, as the same may be
amended from time to time.

“ERISA Affiliate”
shall mean, with respect to any person, any trade or business (whether or not
incorporated) that, together with such person, is treated as a single employer
under Section 414 of the Code.

“ERISA Event”
shall mean (a) any “reportable event,” as defined in Section 4043 of
ERISA or the regulations issued thereunder, with respect to a Plan (other than an
event for which the 30-day notice period is waived by regulation); (b) the
existence with respect to any Plan of an “accumulated funding deficiency” (as
defined in Section 412 of the Code or Section 302 of ERISA), whether
or not waived; (c) the failure to make by its due date a required installment
under Section 412(m) of the Code with respect to any Plan or the failure
to make any required contribution to a Multiemployer Plan; (d) the filing
pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of
an application for a waiver of the minimum funding standard with respect to any
Plan; (e) the incurrence by any Company or any of its ERISA Affiliates of
any liability under Title IV of ERISA with respect to the termination of any
Plan; (f) the receipt by any Company or any of its ERISA Affiliates from
the PBGC or a plan administrator of any notice relating to the intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan, or
the occurrence of any event or condition which could reasonably be expected to
constitute grounds under ERISA for the termination of, or the appointment of a
trustee to administer, any Plan; (g) the incurrence by any Company or any
of its ERISA Affiliates of any liability with respect to the withdrawal from
any Plan or Multiemployer Plan; (h) the receipt by any Company or its
ERISA Affiliates of any notice, concerning the imposition of Withdrawal
Liability or a determination that a Multiemployer Plan is, or is expected to
be, insolvent or in reorganization, within the meaning of Title IV of ERISA;
(i) the “substantial cessation of operations” within the meaning of
Section 4062(e) of ERISA with respect to a Plan; (j) the making of any
amendment to any Plan which could result in the imposition of a lien or the
posting of a bond or other security; and (k) the occurrence of a nonexempt
prohibited transaction (within the meaning of Section 4975 of the Code or
Section 406 of ERISA) which could reasonably be expected to result in
liability to any Company.

“Eurodollar Borrowing”
shall mean a Borrowing comprised of Eurodollar Loans.

“Eurodollar Loan”
shall mean any Eurodollar Revolving Loan.

“Eurodollar Revolving
Borrowing” shall mean a Borrowing comprised of Eurodollar Revolving
Loans.

“Eurodollar Revolving Loan”
shall mean any Revolving Loan bearing interest at a rate determined by
reference to the Adjusted LIBOR Rate in accordance with the provisions of Article II.

“Event of Default”
shall have the meaning assigned to such term in Section 8.01.

“Excess Amount”
shall have the meaning assigned to such term in Section 2.10(c).

“Exchange Act”
shall mean the Securities Exchange Act of 1934, as amended.

“Excluded Taxes”
shall mean, with respect to the Administrative Agent, any Lender, the Issuing
Bank or any other recipient of any payment to be made by or on account of any
obligation of any Borrower hereunder, (a) taxes imposed on or measured by
its overall net income (however denominated), franchise taxes imposed on it (in
lieu of net income taxes) and branch profits taxes imposed on it, by a 

 16
 

 

jurisdiction (or any political subdivision thereof) as
a result of the recipient being organized or having its principal office or, in
the case of any Lender, its applicable lending office in such jurisdiction and
(b) in the case of a Foreign Lender, any U.S. federal withholding tax that (i)
is imposed on amounts payable to such Foreign Lender at the time such Foreign
Lender becomes a party hereto (or designates a new lending office), except (x)
to the extent that such Foreign Lender (or its assignor, if any) was entitled,
at the time of designation of a new lending office (or assignment), to receive
additional amounts from any Borrower with respect to such withholding tax
pursuant to Section 2.15(a) or (y) if such Foreign Lender is an assignee
pursuant to a request by a Borrower under Section 2.16; provided that this subclause (b)(i) shall
not apply to any Tax imposed on a Lender in connection with an interest or
participation in any Loan or other obligation that such Lender was required to
acquire pursuant to Section 2.14(d), or (ii) is attributable to such
Foreign Lender’s failure to comply with Section 2.15(e).

“Executive Order” shall have the meaning assigned to such
term in Section 3.21.

“Existing Intercompany Loan” shall
mean, on any date of determination, that portion of any loan or advance made by
the US Borrower to the Cayman Borrower prior to the Closing Date which is set
forth on Schedule 4.02(e) that remains outstanding on such date of
determination (expressly excluding any refinancings thereof).

“Existing Lien”
shall have the meaning assigned to such term in Section 6.02(c).

“Federal Funds Effective
Rate” shall mean, for any day, the weighted average of the rates on
overnight federal funds transactions with members of the Federal Reserve System
of the United States arranged by federal funds brokers, as published on the
next succeeding Business Day by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day that is a Business Day, the average of
the quotations for the day for such transactions received by the Administrative
Agent from three federal funds brokers of recognized standing selected by it.

“Fee Letter” shall have the
meaning assigned to such term in the Engagement Letter.

“Fees” shall
mean the Commitment Fees, the Administrative Agent Fees, the LC Participation
Fees and the Fronting Fees.

“Final Maturity Date”
shall mean September 17, 2011 (or, if such date is not a Business Day, the
first Business Day thereafter).

“Financial Officer”
of any person shall mean the chief financial officer, principal accounting officer,
treasurer or controller of such person.

“FIRREA” shall
mean the Federal Institutions Reform, Recovery and Enforcement Act of 1989, as
amended.

“Foreign Guaranteed
Obligations” shall have the meaning assigned to such term in Section 7.01(a).

“Foreign Guarantor” shall mean Irish
Sciele, Netherlands Sciele and Cyprus Sciele and any other Person that is organized
under the laws of a jurisdiction other than the United States or any state
thereof or the District of Columbia that is or becomes a party to this
Agreement pursuant to Section 5.11 and which provides a guarantee
pursuant to Section 7.01(a).

 17
 

 

“Foreign Lender”
shall mean any Lender that is not, for United States federal income tax
purposes, (i) an individual who is a citizen or resident of the United
States, (ii) a corporation, partnership or other entity treated as a
corporation or partnership created or organized in or under the laws of the
United States, or any political subdivision thereof, (iii) an estate whose
income is subject to U.S. federal income taxation regardless of its source or
(iv) a trust if a court within the United States is able to exercise
primary supervision over the administration of such trust and one or more
United States persons have the authority to control all substantial decisions
of such trust.

“Foreign Loan Parties” shall mean the
Cayman Borrower and the Foreign Guarantors.

“Foreign Plan”
shall mean any employee benefit plan, program, policy, arrangement or agreement
maintained or contributed to by any Company with respect to employees employed
outside the United States.

“Foreign Subsidiary”
shall mean a Subsidiary that is organized under the laws of a jurisdiction
other than the United States or any state thereof or the District of Columbia.

“Fronting Fee”
shall have the meaning assigned to such term in Section 2.05(c).

“Fund” shall
mean any 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 of its business.

“GAAP” shall
mean generally accepted accounting principles in the United States applied on a
consistent basis.

“Governmental Authority”
shall mean the government of the United States, Cayman Islands or any other
nation, or of any political subdivision thereof, whether state, provincial or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government (including any supra-national bodies such as the European Union or
the European Central Bank).

“Governmental Real Property
Disclosure Requirements” shall mean any Requirement of Law of any
Governmental Authority requiring notification of the buyer, lessee, mortgagee,
assignee or other transferee of any Real Property, facility, establishment or
business, or notification, registration or filing to or with any Governmental
Authority, in connection with the sale, lease, mortgage, assignment or other
transfer (including any transfer of control) of any Real Property, facility,
establishment or business, of the actual or threatened presence or Release in
or into the Environment, or the use, disposal or handling of Hazardous Material
on, at, under or near the Real Property, facility, establishment or business to
be sold, leased, mortgaged, assigned or transferred.

“Guaranteed Obligations”
shall have the meaning assigned to such term in Section 7.01(b).

“Guarantees”
shall mean the guarantees issued pursuant to Article VII by the
Guarantors.

“Guarantors”
shall mean Foreign Guarantors and Domestic Guarantors; and “Guarantor” shall mean any one of them.

 18
 

 

“Hazardous Materials”
shall mean the following:  hazardous
substances; hazardous wastes; polychlorinated biphenyls (“PCBs”)
or any substance or compound containing PCBs; asbestos or any
asbestos-containing materials in any form or condition; radon or any other
radioactive materials including any source, special nuclear or by-product
material; petroleum, crude oil or any fraction thereof; and any other pollutant
or contaminant or chemicals, wastes, materials, compounds, constituents or substances,
subject to regulation or which can give rise to liability under any Environmental
Laws.

“Hedging Agreement”
shall mean any swap, cap, collar, forward purchase or similar agreements or arrangements
dealing with interest rates, currency exchange rates or commodity prices,
either generally or under specific contingencies.

“Hedging Obligations”
shall mean obligations under or with respect to Hedging Agreements.

“Increase Effective Date”
shall have the meaning assigned to such term in Section 2.19(a).

“Increase Joinder”
shall have the meaning assigned to such term in Section 2.19(c).

“Indebtedness”
of any person shall mean, without duplication, (a) all obligations of such
person for borrowed money or advances; (b) all obligations of such person
evidenced by bonds, debentures, notes or similar instruments; (c) all
obligations of such person upon which interest charges are customarily paid or
accrued; (d) all obligations of such person under conditional sale or
other title retention agreements relating to property purchased by such person;
(e) all obligations of such person issued or assumed as the deferred
purchase price of property or services (excluding trade accounts payable and accrued
obligations incurred in the ordinary course of business on normal trade terms
and not overdue by more than 90 days); (f) all Indebtedness of others
secured by any Lien on property owned or acquired by such person, whether or
not the obligations secured thereby have been assumed, but limited to the fair
market value of such property; (g) all Capital Lease Obligations, Purchase
Money Obligations and synthetic lease obligations of such person; (h) all
Hedging Obligations to the extent required to be reflected on a balance sheet
of such person; (i) all Attributable Indebtedness of such person;
(j) all obligations of such person for the reimbursement of any obligor in
respect of letters of credit, letters of guaranty, bankers’ acceptances and
similar credit transactions; and (k) all Contingent Obligations of such
person in respect of Indebtedness or obligations of others of the kinds
referred to in clauses (a) through (j) above.  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 (other than in the case of general partner liability) to the
extent that terms of such Indebtedness expressly provide that such person is
not liable therefor.

“Indemnified Taxes”
shall mean all Taxes other than Excluded Taxes.

“Indemnitee”
shall mean the Administrative Agent (and any sub-agent thereof), the Collateral
Agent (and any sub-agent thereof) each Lender and the Issuing Bank, and each Related
Party of any of the foregoing persons.

“Information”
shall have the meaning assigned to such term in Section 10.12.

 19
 

 

“Insurance Policies”
shall mean the insurance policies and coverages required to be maintained by
each Loan Party which is an owner of Mortgaged Property with respect to the
applicable Mortgaged Property pursuant to Section 5.04 and all
renewals and extensions thereof.

“Insurance Requirements”
shall mean, collectively, all provisions of the Insurance Policies, all requirements
of the issuer of any of the Insurance Policies and all orders, rules,
regulations and any other requirements of the National Board of Fire
Underwriters (or any other body exercising similar functions) binding upon each
Loan Party which is an owner of Mortgaged Property and applicable to the
Mortgaged Property or any use or condition thereof.

“Intellectual Property”
shall mean any patent, patent application, trademark, trade name, service mark,
copyright, technology, trade secret, proprietary information, domain name,
know-how and process, and any license or distribution agreements with, or covenants
not to sue, any other party with respect to any of the foregoing.

“Intercompany Note”
shall mean a promissory note substantially in the form of Exhibit P.

“Interest Election Request”
shall mean a request by a Borrower to convert or continue a Revolving Borrowing
in accordance with Section 2.08(b), substantially in the form of Exhibit E.

“Interest Payment Date”
shall mean (a) with respect to any ABR Revolving Loan (including Swingline
Loans), the last Business Day of each March, June, September and December to
occur during any period in which such Loan is outstanding, (b) with
respect to any Eurodollar Loan, the last day of the Interest Period applicable
to the Borrowing of which such Loan is a part and, in the case of a Eurodollar
Loan with an Interest Period of more than three months’ duration, each day
prior to the last day of such Interest Period that occurs at intervals of three
months’ duration after the first day of such Interest Period, and (c) the
Final Maturity Date or such earlier date on which the Revolving Commitments are
terminated.

“Interest Period”
shall mean, with respect to any Eurodollar Borrowing, the period commencing on
the date of such Borrowing and ending on the numerically corresponding day in
the calendar month that is one, two, three or six months (or, if each affected
Lender so agrees, nine months) thereafter, as the relevant Borrower may elect; provided that (a) if any Interest Period would end on a
day other than a Business Day, such Interest Period shall be extended to the
next succeeding Business Day unless such next succeeding Business Day would
fall in the next calendar month, in which case such Interest Period shall end
on the next preceding Business Day, and (b) any Interest Period that
commences on the last Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the last calendar month of such
Interest Period) shall end on the last Business Day of the last calendar month
of such Interest Period.  For purposes
hereof, the date of a Borrowing initially shall be the date on which such
Borrowing is made and thereafter shall be the effective date of the most recent
conversion or continuation of such Borrowing.

“Investments”
shall have the meaning assigned to such term in Section 6.04.

“Irish Sciele”
shall mean Sciele Pharma Ireland, Ltd., an entity organized under the laws of
Ireland.

 

 20

 

“Issuing Bank”
shall mean, as the context may require, (a) UBS AG, Stamford Branch, in
its capacity as issuer of Letters of Credit issued by it; (b) any other
Lender that may become an Issuing Bank pursuant to Sections 2.18(A)(j)
and (k) and Sections 2.18(B)(j) and (k) in its
capacity as an issuer of Letters of Credit issued by such Lender; or
(c) collectively, all of the foregoing.

“Joinder Agreement”
shall mean a joinder agreement substantially in the form of Exhibit F.

“Landlord Access Agreement”
shall mean a Landlord Lien Waiver, Access Agreement and Consent, substantially
in the form of Exhibit G, or such other form as may reasonably be
acceptable to the Administrative Agent.

“LC Commitment”
shall mean the commitment of the Issuing Bank to issue Letters of Credit pursuant
to Section 2.18.  The amount
of the LC Commitment shall initially be $5,000,000, but in no event exceed the
Revolving Commitment.

“LC Disbursement”
shall mean a payment or disbursement made by the Issuing Bank pursuant to a
drawing under a Letter of Credit.

“LC Exposure”
shall mean at any time the sum of (a) the aggregate undrawn amount of all
outstanding Letters of Credit at such time plus
(b) the aggregate principal amount of all Reimbursement Obligations
outstanding at such time.  The LC Exposure
of any Revolving Lender at any time shall mean its Pro Rata Percentage of the
aggregate LC Exposure at such time.

“Leases” shall
mean any and all leases, subleases, tenancies, options, concession agreements,
rental agreements, occupancy agreements, franchise agreements, access
agreements and any other agreements (including all amendments, extensions,
replacements, renewals, modifications and/or guarantees thereof), whether or
not of record and whether now in existence or hereafter entered into, affecting
the use or occupancy of all or any portion of any Real Property.

“Lender Addendum”
shall mean with respect to any Lender on the Closing Date, a lender addendum in
the form of Exhibit I, to be executed and delivered by such Lender
on the Closing Date as provided in Section 10.15.

“Lenders” shall
mean (a) the financial institutions that have become a party hereto pursuant
to a Lender Addendum and (b) any financial institution that has become a
party hereto pursuant to an Assignment and Assumption, other than, in each
case, any such financial institution that has ceased to be a party hereto
pursuant to an Assignment and Assumption. 
Unless the context clearly indicates otherwise, the term “Lenders” shall
include the Swingline Lender.

“Letter of Credit”
shall mean  Cayman Letters of Credit and
US Letters of Credit, or any one of them.

“Letter of Credit
Expiration Date” shall mean the date which is fifteen days prior to
the Final Maturity Date.

“LIBOR Rate”
shall mean, with respect to any Eurodollar Borrowing for any Interest Period,
the rate per annum determined by the Administrative Agent to be the arithmetic
mean of the offered rates for deposits in dollars with a term comparable to
such Interest Period that appears on the Page BBAM (as defined below) at
approximately 11:00 a.m., London, England time, on the second full 

 21
 

 

Business Day preceding the first day of such Interest
Period; provided, however,
that (i) if no comparable term for an Interest Period is available, the
LIBOR Rate shall be determined using the weighted average of the offered rates
for the two terms most nearly corresponding to such Interest Period and
(ii) if there shall at any time no longer exist a Page BBAM, “LIBOR Rate”
shall mean, with respect to each day during each Interest Period pertaining to
Eurodollar Borrowings comprising part of the same Borrowing, the rate per annum
equal to the rate at which the Administrative Agent is offered deposits in
dollars at approximately 11:00 a.m., London, England time, two Business Days
prior to the first day of such Interest Period in the London interbank market
for delivery on the first day of such Interest Period for the number of days comprised
therein and in an amount comparable to its portion of the amount of such
Eurodollar Borrowing to be outstanding during such Interest Period.  “Page BBAM” shall
mean the display designated as Page BBAM on the Bloomberg Terminal (or such
other page as may replace such page on such service for the purpose of
displaying the rates at which dollar deposits are offered by leading banks in
the London interbank deposit market).

“Lien” shall
mean, with respect to any property, (a) any mortgage, deed of trust, lien,
pledge, encumbrance, claim, charge, assignment, hypothecation, security
interest or encumbrance of any kind or any arrangement to provide priority or
preference or any filing of any financing statement under the UCC or any other
similar notice of lien under any similar notice or recording statute of any
Governmental Authority, including any easement, right-of-way or other
encumbrance on title to Real Property, in each of the foregoing cases whether
voluntary or imposed by law, and any agreement to give any of the foregoing;
(b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement (or any financing lease
having substantially the same economic effect as any of the foregoing) relating
to such property; and (c) in the case of securities, any purchase option,
call or similar right of a third party with respect to such securities.

“Loan Documents”
shall mean this Agreement, the Letters of Credit, the Notes (if any), the
Engagement Letter, the Fee Letters and the Security Documents.

“Loan Parties”
shall mean the Domestic Loan Parties and the Foreign Loan Parties; and “Loan Party” shall mean any one of them.

“Loan” shall
mean, as the context may require, a Revolving Loan or a Swingline Loan.

“Margin Stock”
shall have the meaning assigned to such term in Regulation U.

“Material Adverse Effect”
shall mean (a) a material adverse effect on the business, property,
results of operations, prospects or condition, financial or otherwise, or
material agreements of the US Borrower and its Subsidiaries, taken as a whole;
(b) material impairment of the ability of the Loan Parties to fully and
timely perform any of their obligations under any Loan Document;
(c) material impairment of the rights of or benefits or remedies available
to the Lenders or the Collateral Agent under any Loan Document other than those
impairments which result solely from any act or omission of the Lenders or the
Agents; or (d) a material adverse effect on the Collateral or the Liens in
favor of the Collateral Agent (for its benefit and for the benefit of the other
Secured Parties) on the Collateral or the priority of such Liens.

“Maximum Rate”
shall have the meaning assigned to such term in Section 10.14.

“Mortgage” shall
mean an agreement, including, but not limited to, a mortgage, deed of trust or
any other document, creating and evidencing a Lien on a Mortgaged Property,
which shall be 

 22
 

 

substantially in the form of Exhibit J or
other form reasonably satisfactory to the Collateral Agent, in each case, with
such schedules and including such provisions as shall be necessary to conform
such document to applicable local or foreign law or as shall be customary under
applicable local or foreign law.

“Mortgaged Property”
shall mean (a) each Real Property identified as a Mortgaged Property on Schedule 8(a)
to the Perfection Certificate dated the Closing Date and (b) each Real Property,
if any, which shall be subject to a Mortgage delivered after the Closing Date
pursuant to Section 5.11(c).

“Multiemployer Plan”
shall mean a multiemployer plan within the meaning of Section 4001(a)(3)
or Section 3(37) of ERISA (a) to which any Company or any ERISA Affiliate
is then making or accruing an obligation to make contributions; (b) to
which any Company or any ERISA Affiliate has within the preceding five plan
years made contributions; or (c) with respect to which any Company could
incur liability.

“Net Working Capital”
shall mean, at any time, Consolidated Current Assets at such time minus Consolidated
Current Liabilities at such time.

“Netherlands Sciele”
shall mean First Horizon Pharmaceutical B.V, an entity organized under the laws
of The Netherlands (to be renamed Sciele Pharma B.V.).

“Notes”
shall mean Cayman Notes and US Notes, or any one of them.

“Obligations”
shall mean Cayman Obligations and US Obligations.

“OFAC” shall
have the meaning assigned to such term in Section 3.21.

“Officers’ Certificate”
shall mean a certificate executed by the chairman of the Board of Directors (if
an officer), the chief executive officer or the president and one of the
Financial Officers, each in his or her official (and not individual) capacity.

“Organizational Documents”
shall mean, with respect to any person, (i) in the case of any corporation,
the certificate of incorporation and by-laws (or similar documents) of such
person, (ii) in the case of any limited liability company, the certificate
of formation and operating agreement (or similar documents) of such person,
(iii) in the case of any limited partnership, the certificate of formation
and limited partnership agreement (or similar documents) of such person,
(iv) in the case of any general partnership, the partnership agreement (or
similar document) of such person and (v) in any other case, the functional
equivalent of the foregoing.

“Other Taxes”
shall mean all present or future stamp or documentary taxes or any other excise
or property taxes, charges or similar levies arising from any payment made hereunder
or under any other Loan Document or from the execution, delivery or enforcement
of, or otherwise with respect to, this Agreement or any other Loan Document.

“Participant”
shall have the meaning assigned to such term in Section 10.04(d).

“PBGC” shall
mean the Pension Benefit Guaranty Corporation referred to and defined in ERISA.

 23
 

 

“Perfection Certificate”
shall mean a certificate in the form of Exhibit L-1 or any other form
approved by the Collateral Agent, as the same shall be supplemented from time
to time by a Perfection Certificate Supplement or otherwise.

“Perfection Certificate
Supplement” shall mean a certificate supplement in the form of Exhibit L-2
or any other form approved by the Collateral Agent.

“Permitted Acquisition”
shall mean any transaction or series of related transactions for the direct or
indirect (a) license or acquisition of specific Intellectual Property of
any person and related contract rights (each, an “IP
Acquisition”); (b) acquisition of all or substantially all of the
property of any person, or of any business or division of any person;
(c) acquisition of more than 50% of the Equity Interests of any person or
otherwise causing such person to become a Subsidiary of such person; or
(d) merger or consolidation or any other combination with any person, in
each of the foregoing cases, if each of the following conditions is met:

(i)     no
Default then exists or would result therefrom;

(ii)     after
giving effect to such transaction on a Pro Forma Basis, the Borrowers shall be
in compliance with Section 3.12 and all covenants set forth in Section 6.10
as of the most recent Test Period (assuming, for purposes of Section 6.10,
that such transaction, and all other Permitted Acquisitions consummated since
the first day of the relevant Test Period for each of the financial covenants
set forth in Section 6.10 ending on or prior to the date of such
transaction, had occurred on the first day of such relevant Test Period);

(iii)    no Company shall, in connection with any such
transaction, assume or remain liable with respect to any Indebtedness or other
liability (including any material tax or ERISA liability) of the related seller
or the business, person or properties acquired, except (A) to the extent
permitted under Section 6.01 and (B) obligations not
constituting Indebtedness incurred in the ordinary course of business and
necessary or desirable to the continued operation of the underlying properties,
and any other such liabilities or obligations not permitted to be assumed or
otherwise supported by any Company hereunder shall be paid in full or released
as to the business, persons or properties being so acquired on or before the
consummation of such acquisition;

(iv)    the person or business to be acquired (if applicable)
shall be, or shall be engaged in, a business of the type that the Borrowers and
the Subsidiaries are permitted to be engaged in under Section 6.15
and the property licensed or acquired in connection with any such transaction
shall be free and clear of any Liens other than Permitted Collateral Liens and,
except to the extent expressly precluded by the terms of any license of
Intellectual Property included in such transaction, which shall be excluded from
being subject to a Lien under the applicable Security Document only the extent
provided in such Security Document, the Collateral Agent will have a perfected
Lien on and security interest in such property;

(v)    such transaction shall be consensual and, except in
the case of an IP Acquisition, the Board of Directors of the person to be
acquired shall have approved such transaction and shall not have indicated
publicly its opposition to the consummation of such acquisition (which
opposition has not been publicly withdrawn);

 24
 

 

(vi)          all transactions in connection
therewith shall be consummated in accordance with all applicable Requirements
of Law;

(vii)         with respect to any transaction
involving Acquisition Consideration of more than $50.0 million or with respect
to which any Company would otherwise be required to file a report on Form 8-K
with the Securities and Exchange Commission, the Borrowers shall have provided
the Administrative Agent and the Lenders with (A) except in the case of an
IP Acquisition, historical financial statements for the last three fiscal years
(or, if less, the number of years since formation) of the person or business to
be acquired (audited if available without undue cost or delay) and unaudited
financial statements thereof for the most recent interim period which are
available, (B) reasonably detailed projections for the succeeding five
years pertaining to the person or business to be acquired (if applicable) and
updated projections for the Borrowers after giving effect to such transaction,
(C) a reasonably detailed description of all material information relating
thereto and copies of all material documentation pertaining to such
transaction, and (D) all such other information and data relating to such
transaction or the Intellectual Property, person or business to be licensed or
acquired as may be reasonably requested by the Administrative Agent or the
Required Lenders; and

(viii)        (A) with respect to any transaction
involving Acquisition Consideration of more than $50.0 million or with respect
to which any Company would otherwise be required to file a report on Form 8-K
with the Securities and Exchange Commission, at least 3 Business Days prior to
the proposed date of consummation of the transaction, the Borrowers shall have
delivered to the Agents and the Lenders an Officers’ Certificate certifying
that (1) such transaction complies with this definition and otherwise with
the provisions of Section 6.07 (which shall have attached thereto reasonably
detailed backup data and calculations showing such compliance), and
(2) such transaction could not reasonably be expected to result in a
Material Adverse Effect; and

(B) with respect to any
other transaction, at least 3 Business Days prior to the proposed date of
consummation of the transaction, the Borrowers shall have delivered to the
Agents and the Lenders a written description of the person, business or assets
to be licensed or acquired and an Officer’s Certificate certifying that upon
consummation, the Collateral Agent will have a perfected Lien on and security
interest in such assets under the Security Documents in accordance with the
provisions of Section 5.11 or Section 5.12, as
applicable, except to the extent precluded by the terms of any Intellectual
Property licenses, which shall be excluded from being subject to a Lien under
the applicable Security Document only the extent provided in such Security
Document.

“Permitted Collateral Liens”
means (a) in the case of Collateral other than Mortgaged Property, the Liens
described in clauses (a), (b), (c), (d), (e), (f), (g), (h), (j), (k), (l), (m)
and (n) of Section 6.02 and (b) in the case of Mortgaged Property, “Permitted
Collateral Liens” shall mean the Liens described in clauses (a), (b), (d), (e),
(g) and (l) of Section 6.02; provided, however, on the Closing Date or upon the date of delivery of
each additional Mortgage under Section 5.11 or 5.12,
Permitted Collateral Liens shall mean only those Liens set forth in Schedule B
to the applicable Mortgage.

“Permitted Liens”
shall have the meaning assigned to such term in Section 6.02.

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

 25
 

 

“Plan” shall
mean any employee pension benefit plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the Code
or Section 302 of ERISA which is maintained or contributed to by any
Company or its ERISA Affiliate or with respect to which any Company could incur
liability (including under Section 4069 of ERISA).

“Post-Increase Revolving
Lenders” shall have the meaning assigned to such term in Section
2.19(d).

“Pre-Increase Revolving
Lenders” shall have the meaning assigned to such term in Section
2.19(d).

“Preferred Stock”
shall mean, with respect to any person, any and all preferred or preference
Equity Interests (however designated) of such person whether now outstanding or
issued after the Closing Date.

“Preferred Stock Issuance”
shall mean the issuance or sale by the US Borrower or any of its Subsidiaries
(including, without limitation, the Cayman Borrower) of any Preferred Stock
after the Closing Date (other than as permitted by Section 6.01).

“Premises” shall
have the meaning assigned thereto in the applicable Mortgage.

“Pro Forma Basis”
shall mean on a basis in accordance with GAAP and Regulation S-X and otherwise
reasonably satisfactory to the Administrative Agent.

“Pro Rata Percentage”
of any Revolving Lender at any time shall mean the percentage of the total Revolving
Commitments of all Revolving Lenders represented by such Lender’s Revolving
Commitment.

“property” shall
mean any right, title or interest in or to property or assets of any kind whatsoever,
whether real, personal or mixed and whether tangible or intangible and
including Equity Interests or other ownership interests of any person and
whether now in existence or owned or hereafter entered into or acquired,
including all Real Property.

“Property Material Adverse
Effect” shall have the meaning assigned thereto in the Mortgage.

“Purchase Money Obligation”
shall mean, for any person, the obligations of such person in respect of
Indebtedness (including Capital Lease Obligations) incurred for the purpose of
financing all or any part of the purchase price of any property (including
Equity Interests of any person) or the cost of installation, construction or
improvement of any property and any refinancing thereof; provided, however, that (i) such Indebtedness is incurred within one
year after such acquisition, installation, construction or improvement of such
property by such person and (ii) the amount of such Indebtedness does not
exceed 100% of the cost of such acquisition, installation, construction or
improvement, as the case may be.

“Qualified Capital Stock”
of any person shall mean any Equity Interests of such person that are not Disqualified
Capital Stock.

“Real Property”
shall mean, collectively, all right, title and interest (including any
leasehold, mineral or other estate) in and to any and all parcels of or
interests in real property owned, 

 26
 

 

leased or operated by any person, whether by lease,
license or other means, together with, in each case, all easements,
hereditaments and appurtenances relating thereto, all improvements and
appurtenant fixtures and equipment, all general intangibles and contract rights
and other property and rights incidental to the ownership, lease or operation
thereof.

“Refinancing”
shall mean the repayment in full and the termination of any commitment to make
extensions of credit under all of the outstanding indebtedness listed on Schedule 1.01(a)
of the US Borrower or any of its Subsidiaries.

“Register” shall
have the meaning assigned to such term in Section 10.04(c).

“Regulation D”
shall mean Regulation D of the Board as from time to time in effect and all
official rulings and interpretations thereunder or thereof.

“Regulation S-X”
shall mean Regulation S-X promulgated under the Securities Act.

“Regulation T” shall
mean Regulation T of the Board as from time to time in effect and all official
rulings and interpretations thereunder or thereof.

“Regulation U”
shall mean Regulation U of the Board as from time to time in effect and all
official rulings and interpretations thereunder or thereof.

“Regulation X”
shall mean Regulation X of the Board as from time to time in effect and all
official rulings and interpretations thereunder or thereof.

“Reimbursement
Obligations” shall mean Cayman Reimbursement Obligations and US
Reimbursement Obligations.

“Related Parties”
shall mean, with respect to any person, such person’s Affiliates and the
partners, directors, officers, employees, agents and advisors of such person
and of such person’s Affiliates.

“Release” shall
mean any spilling, leaking, seepage, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, leaching, dumping, disposing, depositing, dispersing,
emanating or migrating of any Hazardous Material in, into, onto or through the
Environment.

“Required Class Lenders”
shall mean with respect to Revolving Loans, Required Revolving Lenders.

“Required Lenders”
shall mean Lenders having more than 50% of the sum of all Loans outstanding, LC
Exposure and unused Revolving Commitments, in the aggregate.

“Required Revolving Lenders”
shall mean Lenders having more than 50% of all Revolving Commitments or, after
the Revolving Commitments have terminated, more than 50% of all Revolving Exposure,
in the aggregate.

“Requirements of Law”
shall mean, collectively, any and all requirements of any Governmental Authority
including any and all laws, judgments, orders, decrees, ordinances, rules,
regulations, statutes or case law.

 27
 

 

“Response” shall
mean (a) ”response” as such term is defined in CERCLA, 42 U.S.C.
§ 9601(24), and (b) all other actions required by any Governmental
Authority or voluntarily undertaken to (i) clean up, remove, treat, abate
or in any other way address any Hazardous Material in the Environment;
(ii) prevent the Release or threat of Release, or minimize the further
Release, of any Hazardous Material; or (iii) perform studies and
investigations in connection with, or as a precondition to, or to determine the
necessity of the activities described in, clause (i) or (ii) above.

“Responsible Officer”
of any person shall mean any executive officer or Financial Officer of such
person and any other officer or similar official thereof with responsibility
for the administration of the obligations of such person in respect of this
Agreement.

“Revolving Availability Period”
shall mean the period from and including the Closing Date to but excluding the
earlier of (i) the Business Day preceding the Final Maturity Date and
(ii) the date of termination of the Revolving Commitments.

“Revolving Borrowing”
shall mean a Borrowing comprised of Revolving Loans.

“Revolving Commitment”
shall mean, with respect to each Lender, the commitment, if any, of such Lender
to make Revolving Loans hereunder up to the amount set forth on Schedule I
to the Lender Addendum executed and delivered by such Lender or by an Increase
Joinder, or in the Assignment and Assumption pursuant to which such Lender
assumed its Revolving Commitment, as applicable, as the same may be
(a) reduced from time to time pursuant to Section 2.07 and
(b) reduced or increased from time to time pursuant to assignments by or
to such Lender pursuant to Section 10.04.  The aggregate amount of the Lenders’
Revolving Commitments on the Closing Date is $100.0 million.

“Revolving Exposure”
shall mean, with respect to any Lender at any time, the aggregate principal
amount at such time of all outstanding Revolving Loans of such Lender, plus the aggregate amount at such time of such Lender’s LC
Exposure, plus the aggregate amount at such time
of such Lender’s Swingline Exposure.

“Revolving Lender”
shall mean a Lender with a Revolving Commitment.

“Revolving Loan”
shall mean a Cayman Revolving Loan and a US Revolving Loan, or either of them.

“Sale and Leaseback
Transaction” has the meaning assigned to such term in Section 6.03.

“Sarbanes-Oxley Act”
shall mean the United States Sarbanes-Oxley Act of 2002, as amended, and all
rules and regulations promulgated thereunder.

“Sciele Sales” shall mean Sciele Pharma Sales, Inc., a Delaware corporation.

“Secured Cayman Obligations”
shall mean (a) the Cayman Obligations, (b) the due and punctual payment and
performance of all obligations of the Cayman Borrower and the other Foreign
Loan Parties under each Hedging Agreement entered into with any counterparty
that is a Secured Party and (c) the due and punctual payment and performance
of all obligations of the Cayman Borrower and the other Foreign Loan Parties
(including overdrafts and related liabilities) under each Treasury Services
Agreement entered into with any counterparty that is a Secured Party.

 

 28

 

“Secured Obligations”
shall mean the Secured Cayman Obligations and the Secured US Obligations.

“Secured Parties”
shall mean, collectively, the Administrative Agent, the Collateral Agent, each
other Agent, the Lenders and each counterparty to a Hedging Agreement or
Treasury Services Agreement if at the date of entering into such Hedging
Agreement or Treasury Services Agreement such person was a Lender or an
Affiliate of a Lender and such person executes and delivers to the Administrative
Agent a letter agreement in form and substance acceptable to the Administrative
Agent pursuant to which such person (i) appoints the Collateral Agent as
its agent under the applicable Loan Documents and (ii) agrees to be bound
by the provisions of Sections 10.03 and 10.09 as if it were
a Lender.

“Secured US Obligations”
shall mean (a) the US Obligations, (b) the due and punctual payment and
performance of all obligations of the US Borrower and the other Domestic Loan
Parties under each Hedging Agreement entered into with any counterparty that is
a Secured Party and (c) the due and punctual payment and performance of
all obligations of the US Borrower and the other Domestic Loan Parties
(including overdrafts and related liabilities) under each Treasury Services
Agreement entered into with any counterparty that is a Secured Party.

“Securities Act”
shall mean the Securities Act of 1933, as amended.

“Securities Collateral”
shall have the meaning assigned to such term in the Security Agreement.

“Security Agreement”
shall mean a Security Agreement substantially in the form of Exhibit M
among the Domestic Loan Parties and Collateral Agent for the benefit of the
Secured Parties.

“Security Agreement
Collateral” shall mean all property pledged or granted as collateral
pursuant to the Security Agreement (a) on the Closing Date or (b) thereafter
pursuant to Section 5.11.

“Security Documents”
shall mean the Security Agreement, the Mortgages, the Cayman Share Charge, the
Cayman Deed of Charge, the Cayman Security Agreement and each other security
document or pledge agreement delivered in accordance with applicable local or
foreign law to grant a valid, perfected security interest in any property as
collateral for the Secured Obligations, and all UCC or other financing
statements or instruments of perfection required by this Agreement, the
Security Agreement, any Mortgage or any other such security document or pledge
agreement to be filed with respect to the security interests in property and
fixtures created pursuant to the Security Agreement or any Mortgage and any
other document or instrument utilized to pledge or grant or purport to pledge
or grant a security interest or lien on any property as collateral for the
Secured Obligations.

“Seller” shall
have the meaning assigned to such term in the first recital hereto.

“Standby Letter of Credit”
shall mean any standby letter of credit or similar instrument issued for the
purpose of supporting (a) workers’ compensation liabilities of a Borrower
or any of its Subsidiaries, (b) the obligations of third-party insurers of
a Borrower or any of its Subsidiaries arising by virtue of the laws of any
jurisdiction requiring third-party insurers to obtain such letters of credit,
(c) performance, payment, deposit or surety obligations of a Borrower or
any of its Subsidiaries if 

 29
 

 

required by a Requirement of Law or in accordance with
custom and practice in the industry or (d) Indebtedness of a Borrower or
any of its Subsidiaries permitted to be incurred under Section 6.01.

“Statutory Reserves”
shall mean for any Interest Period for any Eurodollar Borrowing, the average
maximum rate at which reserves (including any marginal, supplemental or
emergency reserves) are required to be maintained during such Interest Period
under Regulation D by member banks of the United States Federal Reserve System
in New York City with deposits exceeding one billion dollars against “Eurocurrency
liabilities” (as such term is used in Regulation D).  Eurodollar Borrowings shall be deemed to
constitute Eurodollar liabilities and to be subject to such reserve
requirements without benefit of or credit for proration, exceptions or offsets
which may be available from time to time to any Lender under Regulation D.

“Subordinated Indebtedness”
shall mean Indebtedness of a Borrower or any Guarantor that is by its terms
subordinated in right of payment to the Obligations of a Borrower and such
Guarantor, as applicable.

“Subsidiary”
shall mean, with respect to any person (the “parent”)
at any date, (i) any person the accounts of which would be consolidated
with those of the parent in the parent’s consolidated financial statements if
such financial statements were prepared in accordance with GAAP as of such
date, (ii) any other corporation, limited liability company, association
or other business entity of which securities or other ownership interests
representing more than 50% of the voting power of all Equity Interests entitled
(without regard to the occurrence of any contingency) to vote in the election
of the Board of Directors thereof are, as of such date, owned, controlled or
held by the parent and/or one or more subsidiaries of the parent,
(iii) any partnership (a) the sole general partner or the managing
general partner of which is the parent and/or one or more subsidiaries of the
parent or (b) the only general partners of which are the parent and/or one
or more subsidiaries of the parent and (iv) any other person that is
otherwise Controlled by the parent and/or one or more subsidiaries of the
parent.  Unless the context requires otherwise,
“Subsidiary” refers to a Subsidiary of a Borrower.

“Survey” shall
mean a survey of any Mortgaged Property (and all improvements thereon) which is
(a) (i) prepared by a surveyor or engineer licensed to perform surveys in
the jurisdiction where such Mortgaged Property is located, (ii) dated (or
redated) not earlier than six months prior to the date of delivery thereof
unless there shall have occurred within six months prior to such date of
delivery any exterior construction on the site of such Mortgaged Property or
any easement, right of way or other interest in the Mortgaged Property has been
granted or become effective through operation of law or otherwise with respect
to such Mortgaged Property which, in either case, can be depicted on a survey,
in which events, as applicable, such survey shall be dated (or redated) after
the completion of such construction or if such construction shall not have been
completed as of such date of delivery, not earlier than 20 days prior to
such date of delivery, or after the grant or effectiveness of any such
easement, right of way or other interest in the Mortgaged Property,
(iii) certified by the surveyor (in a manner reasonably acceptable to the
Administrative Agent) to the Administrative Agent, the Collateral Agent and the
Title Company, (iv) complying in all respects with the minimum detail
requirements of the American Land Title Association as such requirements are in
effect on the date of preparation of such survey and (v) sufficient for
the Title Company to remove all standard survey exceptions from the title
insurance policy (or commitment) relating to such Mortgaged Property and issue
the endorsements of the type described in the definition of the term “Title
Policy” or (b) otherwise acceptable to the Collateral Agent.

“Swingline Commitment”
shall mean the commitment of the Swingline Lender to make loans pursuant to Section 2.17,
as the same may be reduced from time to time pursuant to Section 2.07
or 

 30
 

 

Section 2.17.  The amount of the Swingline Commitment shall
initially be $5.0 million, but shall in no event exceed the Revolving Commitment.

“Swingline Exposure”
shall mean at any time the aggregate principal amount at such time of all outstanding
Swingline Loans.  The Swingline Exposure
of any Revolving Lender at any time shall equal its Pro Rata Percentage of the
aggregate Swingline Exposure at such time.

“Swingline Lender”
shall have the meaning assigned to such term in the preamble hereto.

“Swingline Loan”
shall mean a Cayman Swingline Loan and a US Swingline Loan, or either of them.

“Syndication Agent”
shall have the meaning assigned to such term in the preamble hereto.

“Tax Return”
shall mean all returns, statements, filings, attachments and other documents or
certifications required to be filed in respect of Taxes.

“Taxes” shall
mean all present or future taxes, levies, imposts, duties, deductions, withholdings,
assessments, fees or other charges imposed by any Governmental Authority,
including any interest, additions to tax or penalties applicable thereto.

“Test Period” shall
mean, at any time, the four consecutive fiscal quarters of the US Borrower then
last ended (in each case taken as one accounting period) for which financial
statements have been or are required to be delivered pursuant to Section 5.01(a)
or (b).

“Title Company”
shall mean any title insurance company as shall be retained by a Borrower and
reasonably acceptable to the Administrative Agent.

“Title Policy”
shall mean a policy of title insurance (or marked up title insurance commitment
having the effect of a policy of title insurance) insuring the Lien of such
Mortgage as a valid first mortgage Lien on the Mortgaged Property and fixtures
described therein in the amount equal to not less than 115% of the fair market
value of such Mortgaged Property and fixtures, which policy (or such marked-up
commitment) shall (A) be issued by the Title Company, (B) to the
extent necessary, include such reinsurance arrangements (with provisions for
direct access, if necessary) as shall be reasonably acceptable to the Collateral
Agent, (C) contain a “tie-in” or “cluster” endorsement, if available under
applicable law (i.e., policies which insure
against losses regardless of location or allocated value of the insured
property up to a stated maximum coverage amount), (D) have been supplemented
by such endorsements (or where such endorsements are not available, opinions of
special counsel, architects or other professionals reasonably acceptable to the
Collateral Agent) as shall be reasonably requested by the Collateral Agent
(including endorsements on matters relating to usury, first loss, last dollar,
zoning, contiguity, revolving credit, doing business, non-imputation, public
road access, survey, variable rate, environmental lien, subdivision, mortgage
recording tax, separate tax lot, revolving credit, and so-called comprehensive
coverage over covenants and restrictions), and (E) contain no exceptions
to title other than exceptions acceptable to the Collateral Agent.

“Total Leverage Ratio”
shall mean, at any date of determination, the ratio of Consolidated
Indebtedness on such date to Consolidated EBITDA for the Test Period then most
recently ended.

 

 31
 

 

“Transactions”
shall mean, collectively, the transactions to occur on or prior to the Closing
Date pursuant to the Loan Documents, including (a) the execution, delivery
and performance of the Loan Documents and the initial borrowings hereunder;
(b) the Refinancing; and (c) the payment of all fees and expenses to
be paid on or prior to the Closing Date and owing in connection with the foregoing.

“Transferred Guarantor”
shall have the meaning assigned to such term in Section 7.09.

“Treasury Services
Agreement” shall mean any agreement relating to treasury, depositary
and cash management services or automated clearinghouse transfer of funds.

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

“UCC” shall mean
the Uniform Commercial Code as in effect from time to time (except as otherwise
specified) in any applicable state or jurisdiction.

“United States”
shall mean the United States of America.

“US Borrower”
shall have the meaning assigned to such term in the preamble hereto.

“US LC Disbursement”
shall mean a payment or disbursement made by the Issuing Bank pursuant to a
drawing under a US Letter of Credit.

“US LC Exposure”
shall mean at any time the sum of (a) the aggregate undrawn amount of all
outstanding US Letters of Credit at such time plus
(b) the aggregate principal amount of all US Reimbursement Obligations
outstanding at such time.  The US LC
Exposure of any Revolving Lender at any time shall mean its Pro Rata Percentage
of the aggregate US LC Exposure at such time.

“US LC Participation Fee”
shall have the meaning assigned to such term in Section 2.05(d).

“US LC Request”
shall mean a request by the US Borrower in accordance with the terms of Section 2.18(B)(b)
and substantially in the form of Exhibit H-2, or such other form as
shall be approved by the Administrative Agent.

“US Letter of Credit”
shall mean any (i) Standby Letter of Credit and (ii) Commercial
Letter of Credit, in each case, issued or to be issued by an Issuing Bank for
the account of the US Borrower pursuant to Section 2.18(B).

“US Notes”
shall mean any notes evidencing the US Revolving Loans or US Swingline Loans
issued pursuant to this Agreement, if any, substantially in the form of Exhibit K-1(B)
or K-2(B).

“US Obligations”
shall mean (a) obligations of the US Borrower and the other Domestic Loan
Parties from time to time arising under or in respect of the due and punctual
payment of (i) the principal of and premium, if any, and interest
(including interest accruing during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or allowable
in such proceeding) on the US Revolving Loans, when and as due, whether at
maturity, by acceleration, upon one or more dates set for prepayment or
otherwise, (ii) each payment required to be made by the US Borrower and
the other Domestic Loan Parties under this Agreement in respect of any 

 32
 

 

US Letter of Credit, when and as due, including
payments in respect of US Reimbursement Obligations, interest thereon and obligations
to provide cash collateral and (iii) all other monetary obligations,
including Guaranteed Obligations and fees, costs, expenses and indemnities,
whether primary, secondary, direct, contingent, fixed or otherwise (including
monetary obligations incurred during the pendency of any bankruptcy,
insolvency, receivership or other similar proceeding, regardless of whether
allowed or allowable in such proceeding), of the US Borrower and the other
Domestic Loan Parties under this Agreement and the other Loan Documents, and
(b) the due and punctual performance of all covenants, agreements,
obligations and liabilities of the US Borrower and the other Domestic Loan
Parties under or pursuant to this Agreement and the other Loan Documents.

“US Reimbursement
Obligations” shall mean the US Borrower’s obligations under Section 2.18(B)(e)
to reimburse US LC Disbursements.

“US Revolving Loan”
shall mean a Loan made by the Lenders to the US Borrower pursuant to Section 2.01(b).  Each US Revolving Loan shall either be an ABR
Revolving Loan or a Eurodollar Revolving Loan.

“US Revolving Exposure”
shall mean, with respect to any Lender at any time, the aggregate principal
amount at such time of all outstanding US Revolving Loans of such Lender, plus the aggregate amount at such time of such Lender’s US
LC Exposure, plus the aggregate amount at such
time of such Lender’s US Swingline Exposure.

“US Swingline Exposure”
shall mean at any time the aggregate principal amount at such time of all
outstanding US Swingline Loans.  The US
Swingline Exposure of any Revolving Lender at any time shall equal its Pro Rata
Percentage of the aggregate US Swingline Exposure at such time.

“US Swingline Loan”
shall mean any loan made by the Swingline Lender pursuant to Section 2.17(b).

“Voting Stock”
shall mean, with respect to any person, any class or classes of Equity Interests
pursuant to which the holders thereof have the general voting power under
ordinary circumstances to elect at least a majority of the Board of Directors
of such person.

“Wholly Owned Subsidiary”
shall mean, as to any person, (a) any corporation 100% of whose capital
stock (other than directors’ qualifying shares) is at the time owned by such
person and/or one or more Wholly Owned Subsidiaries of such person and
(b) any partnership, association, joint venture, limited liability company
or other entity in which such person and/or one or more Wholly Owned Subsidiaries
of such person have a 100% equity interest at such time.

“Withdrawal Liability”
shall mean liability to a Multiemployer Plan as a result of a complete or
partial withdrawal from such Multiemployer Plan, as such terms are defined in
Part I of Subtitle E of Title IV of ERISA.

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

 33
 

 

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

SECTION 1.04     Accounting Terms; GAAP.  Except as otherwise expressly provided
herein, all financial statements to be delivered pursuant to this Agreement
shall be prepared in accordance with GAAP as in effect from time to time and
all terms of an accounting or financial nature shall be construed and
interpreted in accordance with GAAP, as in effect on the date hereof unless
otherwise agreed to by the US Borrower and the Required Lenders.

SECTION 1.05     Resolution of Drafting
Ambiguities.  Each Loan
Party acknowledges and agrees that it was represented by counsel in connection
with the execution and delivery of the Loan Documents to which it is a party,
that it and its counsel reviewed and participated in the preparation and
negotiation hereof and thereof and that any rule of construction to the effect
that ambiguities are to be resolved against the drafting party shall not be employed
in the interpretation hereof or thereof.

ARTICLE
II

THE
CREDITS

SECTION 2.01     Commitments.

(a)           Subject to the terms and conditions and relying upon the
representations and warranties herein set forth, each Lender agrees, severally
and not jointly, to make Cayman Revolving Loans to the Cayman Borrower, at any
time and from time to time on or after the Closing Date until the earlier of the
Final Maturity Date and the termination of the Revolving Commitment of such
Lender in accordance with the terms hereof, in an aggregate principal amount at
any time outstanding that will not result in such Lender’s Revolving Exposure
exceeding such Lender’s  Revolving
Commitment.  Within the limits set forth
above in this Section 2.01(a) and subject to the terms, conditions and
limitations set forth herein, the Cayman Borrower may borrow, pay or prepay and
reborrow Cayman Revolving Loans.

 34
 

 

(b)           Subject
to the terms and conditions and relying upon the representations and warranties
herein set forth, each Lender agrees, severally and not jointly, to make US
Revolving Loans to the US Borrower, at any time and from time to time on or
after the Closing Date until the earlier of the Final Maturity Date and the
termination of the Revolving Commitment of such Lender in accordance with the
terms hereof, in an aggregate principal amount at any time outstanding that
will not result in such Lender’s Revolving Exposure exceeding such Lender’s
Revolving Commitment.  Within the limits
set forth above in this Section 2.01(b) and subject to the terms,
conditions and limitations set forth herein, the US Borrower may borrow, pay or
prepay and reborrow US Revolving Loans.

SECTION
2.02     Loans.

(a)           Each
Loan (other than a  Swingline Loan) shall
be made as part of a Borrowing consisting of Loans made by the Lenders ratably
in accordance with their applicable Commitments; provided
that the failure of any Lender to make its Loan shall not in itself relieve any
other Lender of its obligation to lend hereunder (it being understood, however,
that no Lender shall be responsible for the failure of any other Lender to make
any Loan required to be made by such other Lender).  Except for Loans deemed made pursuant to Section 2.18(A)(e)(ii)
or Section 2.18(B)(e)(ii), (x) ABR Revolving Loans comprising any
Borrowing shall be in an aggregate principal amount that is (i) an
integral multiple of $1.0 million and not less than $5.0 million or
(ii) equal to the remaining available balance of the applicable Commitments
and (y) the Eurodollar Loans comprising any Borrowing shall be in an
aggregate principal amount that is (i) an integral multiple of $1.0
million and not less than $5.0 million or (ii) equal to the remaining
available balance of the applicable Commitments.

(b)           Subject
to Sections 2.11 and 2.12, each Borrowing shall be comprised
entirely of ABR Revolving Loans or Eurodollar Loans as a Borrower may request
pursuant to Section 2.03. 
Each Lender may at its option make any Eurodollar Loan by causing any
domestic or foreign branch or Affiliate of such Lender to make such Loan; provided that any exercise of such option shall not affect
the obligation of any Borrower to repay such Loan in accordance with the terms
of this Agreement or the obligations of such Lender to make such Loan in
accordance with the terms of this Agreement. 
Borrowings of more than one Type may be outstanding at the same time; provided that neither of the Borrowers shall be entitled to
request any Borrowing that, if made, would result in more than five Eurodollar
Borrowings outstanding hereunder at any one time for all Loans.  For purposes of the foregoing, Borrowings
having different Interest Periods, regardless of whether they commence on the
same date, shall be considered separate Borrowings.

(c)           Except
with respect to Loans deemed made pursuant to Section 2.18(A)(e)(ii)
or Section 2.18(B)(e)(ii), each Lender shall make each Loan to be made
by it hereunder on the proposed date thereof by wire transfer of immediately
available funds to such account in New York City as the Administrative Agent
may designate not later than 11:00 a.m., New York City time, and the
Administrative Agent shall promptly credit the amounts so received to an
account as directed by the relevant Borrower in the applicable Borrowing
Request maintained with the Administrative Agent or, if a Borrowing shall not occur
on such date because any condition precedent herein specified shall not have
been met, return the amounts so received to the respective Lenders.

(d)           Unless
the Administrative Agent shall have received notice from a Lender prior to the
date of any Borrowing that such Lender will not make available to the
Administrative Agent such Lender’s portion of such Borrowing, the
Administrative Agent may assume that such Lender has made such portion
available to the Administrative Agent on the date of such Borrowing in
accordance with paragraph (c) above, and the Administrative Agent may, in
reliance upon such assumption, make 

 35
 

 

available to the relevant Borrower on such date a corresponding
amount.  If the Administrative Agent
shall have so made funds available, then, to the extent that such Lender shall
not have made such portion available to the Administrative Agent, each such
Lender and the relevant Borrower severally agrees to repay to the
Administrative Agent forthwith on demand such corresponding amount together
with interest thereon, for each day from the date such amount is made available
to the relevant Borrower until the date such amount is repaid to the
Administrative Agent at (i) in the case of a Borrower, the interest rate
applicable at the time to the Loans comprising such Borrowing and (ii) in
the case of such Lender, the greater of the Federal Funds Effective Rate and a
rate determined by the Administrative Agent in accordance with banking industry
rules on interbank compensation.  If such
Lender shall repay to the Administrative Agent such corresponding amount, such
amount shall constitute such Lender’s Loan as part of such Borrowing for
purposes of this Agreement, and the relevant Borrower’s obligation to repay the
Administrative Agent such corresponding amount pursuant to this Section 2.02(d)
shall cease.

(e)           Notwithstanding
any other provision of this Agreement, no Borrower shall be entitled to
request, or to elect to convert or continue, any Borrowing if the Interest
Period requested with respect thereto would end after the Final Maturity Date.

SECTION 2.03     Borrowing Procedure.  To request a Revolving Borrowing, the
relevant Borrower shall deliver, by hand delivery or telecopier, a duly
completed and executed Borrowing Request to the Administrative Agent
(i) in the case of a Eurodollar Borrowing, not later than 11:00 a.m., New
York City time, three Business Days before the date of the proposed Borrowing
or (ii) in the case of an ABR Borrowing, not later than 9:00 a.m., New
York City time, on the date of the proposed Borrowing.  Each Borrowing Request shall be irrevocable
and shall specify the following information in compliance with Section 2.02:

(a)           the
aggregate amount of such Borrowing;

(b)           the
date of such Borrowing, which shall be a Business Day;

(c)           whether
such Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing;

(d)           in
the case of a Eurodollar Borrowing, the initial Interest Period to be
applicable thereto, which shall be a period contemplated by the definition of
the term “Interest Period”;

(e)           the
location and number of the relevant Borrower’s account to which funds are to be
disbursed, which shall comply with the requirements of Section 2.02(c);
and

(f)            that
the conditions set forth in Sections 4.02(b)-(d) have been
satisfied as of the date of the notice.

If no election as to the Type of Borrowing is
specified, then the requested Borrowing shall be an ABR Borrowing.  If no Interest Period is specified with
respect to any requested Eurodollar Borrowing, then the relevant Borrower shall
be deemed to have selected an Interest Period of one month’s duration.  Promptly following receipt of a Borrowing
Request in accordance with this Section, the Administrative Agent shall advise
each Lender of the details thereof and of the amount of such Lender’s Loan to
be made as part of the requested Borrowing.

 36
 

 

SECTION
2.04     Evidence of Debt;
Repayment of Loans.

(a)           Cayman
Borrower Promise to Repay.  The
Cayman Borrower hereby unconditionally promises to pay (i)  to the
Administrative Agent for the account of each Revolving Lender, then unpaid
principal amount of each Cayman Revolving Loan of such Revolving Lender on the
Final Maturity Date and (ii) to the Swingline Lender, then unpaid
principal amount of each Cayman Swingline Loan on the earlier of the Final
Maturity Date and the first date after such Cayman Swingline Loan is made that
is the 15th or last day of a calendar month and is at least two Business Days
after such Cayman Swingline Loan is made; provided that
on each date that a Revolving Borrowing is made, the Cayman Borrower shall
repay all Cayman Swingline Loans that were outstanding on the date such
Borrowing was requested.  Once a payment
is made by the Cayman Borrower to the Administrative Agent for the account of
each Revolving Lender, no Revolving Lender shall have any recourse against the
Cayman Borrower for the amount so paid.

(b)           US
Borrower Promise to Repay.  The US
Borrower hereby unconditionally promises to pay (i)  to the Administrative
Agent for the account of each Revolving Lender, then unpaid principal amount of
each US Revolving Loan of such Revolving Lender on the Final Maturity Date and
(ii) to the Swingline Lender, then unpaid principal amount of each US
Swingline Loan on the earlier of the Final Maturity Date and the first date
after such US Swingline Loan is made that is the 15th or last day of a calendar
month and is at least two Business Days after such US Swingline Loan is made; provided that on each date that a Revolving Borrowing is
made, the US Borrower shall repay all US Swingline Loans that were outstanding
on the date such Borrowing was requested. 
Once a payment is made by the US Borrower to the Administrative Agent
for the account of each Revolving Lender, no Revolving Lender shall have any recourse
against the US Borrower for the amount so paid.

(c)           Lender
and Administrative Agent Records. 
Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the Indebtedness of each Borrower to such Lender
resulting from each Cayman Revolving Loan and US Revolving Loan, as the case
may be, made by such Lender from time to time, including the amounts of
principal and interest payable and paid to such Lender from time to time under
this Agreement.  The Administrative Agent
shall maintain accounts in which it will record (i) the amount of each
Cayman Revolving Loan and US Revolving Loan made hereunder, the Type and Class
thereof and the Interest Period applicable thereto; (ii) the amount of any
principal or interest due and payable or to become due and payable from each
Borrower to each Lender hereunder; and (iii) the amount of any sum received
by the Administrative Agent hereunder for the account of the Lenders and each
Lender’s share thereof.  The entries made
in the accounts maintained pursuant to this paragraph shall be prima facie, but rebuttable, evidence of the existence and
amounts of the obligations therein recorded; provided
that the failure of any Lender or the Administrative Agent to maintain such
accounts or any error therein shall not in any manner affect the obligations of
any Borrower to repay the Loans in accordance with their terms.

(d)           Promissory
Notes.  Any Lender by written notice
to the relevant Borrower (with a copy to the Administrative Agent) may request
that Loans of any Class made by it be evidenced by a promissory note.  In such event, the relevant Borrower shall prepare,
execute and deliver to such Lender a promissory note payable to the order of
such Lender (or, if requested by such Lender, to such Lender and its registered
assigns) in the form of Exhibit K-1, K-2(A), K-1(B)
or K-2(A), as the case may be. 
Thereafter, the Loans evidenced by such promissory note and interest
thereon shall at all times (including after assignment pursuant to Section 10.04)
be represented by one or more promissory notes in such form payable to the
order of the payee named therein (or, if such promissory note is a registered
note, to such payee and its registered assigns).

 

 37

 

(e)           Currency.  All Loans made hereunder shall be made in
dollars, and each repayment thereof and any other payment in respect of the
Obligations shall be made in dollars.

SECTION
2.05     Fees.

(a)           Commitment
Fee.  The US Borrower agrees to pay
to the Administrative Agent for the account of each Lender a commitment fee (a “Commitment Fee”) equal to the Applicable
Fee per annum on the average daily unused amount of each Commitment of such
Lender during the period from and including the date hereof to but excluding
the date on which such Commitment terminates. 
Accrued Commitment Fees shall be payable in arrears (A) on the last
Business Day of March, June, September and December of each year, commencing on
the first such date to occur after the date hereof, and (B) on the date on
which such Commitment terminates. 
Commitment Fees shall be computed on the basis of a year of
360 days and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day).  For purposes of computing Commitment Fees
with respect to Revolving Commitments, a Revolving Commitment of a Lender shall
be deemed to be used to the extent of the outstanding Revolving Loans and LC
Exposure of such Lender (and the Swingline Exposure of such Lender shall be disregarded
for such purpose).

(b)           Administrative
Agent Fees.  Each Borrower agrees to
pay to the Administrative Agent, for its own account, the administrative fees
payable in the amounts and at the times separately agreed upon between such
Borrower and the Administrative Agent (the “Administrative
Agent Fees”).

(c)           Cayman
LC and Cayman Fronting Fees.  The
Cayman Borrower agrees to pay (i) to the Administrative Agent for the
account of each Revolving Lender a participation fee (“Cayman LC Participation Fee”) with respect
to its participations in Cayman Letters of Credit, which shall accrue at a rate
equal to the Applicable Margin from time to time used to determine the interest
rate on Eurodollar Revolving Loans pursuant to Section 2.06 on the
average daily amount of such Lender’s Cayman LC Exposure (excluding any portion
thereof attributable to Cayman Reimbursement Obligations) during the period
from and including the Closing Date to but excluding the later of the date on
which such Lender’s Revolving Commitment terminates and the date on which such
Lender ceases to have any Cayman LC Exposure, and (ii) to the Issuing Bank
a fronting fee (“Cayman Fronting Fee”),
which shall accrue at the rate of 0.125% per annum on the average daily amount
of the Cayman LC Exposure (excluding any portion thereof attributable to Cayman
Reimbursement Obligations) during the period from and including the Closing
Date to but excluding the later of the date of termination of the Revolving Commitments
and the date on which there ceases to be any Cayman LC Exposure, as well as the
Issuing Bank’s customary fees with respect to the issuance, amendment, renewal
or extension of any Cayman Letter of Credit or processing of drawings
thereunder.  Accrued Cayman LC
Participation Fees and Cayman Fronting Fees shall be payable in arrears
(i) on the last Business Day of March, June, September and December of
each year, commencing on the first such date to occur after the Closing Date,
and (ii) on the date on which the Revolving Commitments terminate.  Any such fees accruing after the date on
which the Revolving Commitments terminate shall be payable on demand.  Any other fees payable to the Issuing Bank
pursuant to this paragraph shall be payable within 10 days after demand
therefor.  All Cayman LC Participation
Fees and Cayman Fronting Fees shall be computed on the basis of a year of
360 days and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day).

(d)           US
LC and US Fronting Fees.  The US
Borrower agrees to pay (i) to the Administrative Agent for the account of
each Revolving Lender a participation fee (“US
LC Participation Fee”) with respect to its participations in US
Letters of Credit, which shall accrue at a rate 

 38
 

 

equal to the Applicable Margin from time to time used to determine the
interest rate on Eurodollar Revolving Loans pursuant to Section 2.06
on the average daily amount of such Lender’s US LC Exposure (excluding any
portion thereof attributable to US Reimbursement Obligations) during the period
from and including the Closing Date to but excluding the later of the date on
which such Lender’s Revolving Commitment terminates and the date on which such
Lender ceases to have any US LC Exposure, and (ii) to the Issuing Bank a
fronting fee (“US Fronting Fee”),
which shall accrue at the rate of 0.125% per annum on the average daily amount
of the US LC Exposure (excluding any portion thereof attributable to US
Reimbursement Obligations) during the period from and including the Closing
Date to but excluding the later of the date of termination of the Revolving
Commitments and the date on which there ceases to be any US LC Exposure, as
well as the Issuing Bank’s customary fees with respect to the issuance,
amendment, renewal or extension of any US Letter of Credit or processing of
drawings thereunder.  Accrued US LC
Participation Fees and US Fronting Fees shall be payable in arrears (i) on
the last Business Day of March, June, September and December of each year,
commencing on the first such date to occur after the Closing Date, and
(ii) on the date on which the Revolving Commitments terminate.  Any such fees accruing after the date on
which the Revolving Commitments terminate shall be payable on demand.  Any other fees payable to the Issuing Bank pursuant
to this paragraph shall be payable within 10 days after demand
therefor.  All US LC Participation Fees
and US Fronting Fees shall be computed on the basis of a year of 360 days
and shall be payable for the actual number of days elapsed (including the first
day but excluding the last day).

(e)           All
Fees.  All Fees shall be paid on the
dates due, in immediately available funds in dollars, to the Administrative
Agent for distribution, if and as appropriate, among the Lenders, except that
the Cayman Borrower shall pay the Cayman Fronting Fees directly to the Issuing
Bank and the US Borrower shall pay the US Fronting Fees directly to the Issuing
Bank.  Once paid, none of the Fees shall
be refundable under any circumstances.

SECTION
2.06     Interest on Loans.

(a)           ABR
Loans.  Subject to the provisions of Section 2.06(c),
the Revolving Loans comprising each ABR Borrowing, including each Swingline
Loan, shall bear interest at a rate per annum equal to the Alternate Base Rate plus the Applicable Margin in effect from time to time.

(b)           Eurodollar
Loans.  Subject to the provisions of Section 2.06(c),
the Loans comprising each Eurodollar Borrowing shall bear interest at a rate
per annum equal to the Adjusted LIBOR Rate for the Interest Period in effect
for such Borrowing plus the
Applicable Margin in effect from time to time.

(c)           Default
Rate.  Notwithstanding the foregoing,
during an Event of Default, all Obligations shall, to the extent permitted by applicable
law, bear interest, after as well as before judgment, at a per annum rate equal
to (i) in the case of principal of or interest on any Loan, 2% plus the rate otherwise applicable to such Loan as provided
in the preceding paragraphs of this Section 2.06 or (ii) in
the case of any other amount, 2% plus the rate
applicable to ABR Revolving Loans as provided in Section 2.06(a)
(in either case, the “Default Rate”).

(d)           Interest
Payment Dates.  Accrued interest on
each Loan shall be payable in arrears on each Interest Payment Date for such
Loan; provided that (i) interest accrued
pursuant to Section 2.06(c) shall be payable on demand,
(ii) in the event of any repayment or prepayment of any Loan (other than a
prepayment of an ABR Revolving Loan or a Swingline Loan without a permanent
reduction in Revolving Commitments), accrued interest on the principal amount
repaid or prepaid shall be payable 

 39
 

 

on the date of such repayment or prepayment and (iii) in the event
of any conversion of any Eurodollar Loan prior to the end of the current
Interest Period therefor, accrued interest on such Loan shall be payable on the
effective date of such conversion.

(e)           Interest
Calculation.  All interest hereunder
shall be computed on the basis of a year of 360 days, except that interest
computed by reference to the Alternate Base Rate shall be computed on the basis
of a year of 365 days (or 366 days in a leap year), and in each case
shall be payable for the actual number of days elapsed (including the first day
but excluding the last day).  The
applicable Alternate Base Rate or Adjusted LIBOR Rate shall be determined by
the Administrative Agent in accordance with the provisions of this Agreement
and such determination shall be conclusive absent manifest error.

SECTION
2.07     Termination and
Reduction of Commitments.

(a)           Termination
of Commitments.  The Revolving
Commitments, the Swingline Commitment and the LC Commitment shall automatically
terminate on the Final Maturity Date.

(b)           Optional
Terminations and Reductions.  At its
option, the US Borrower may at any time terminate, or from time to time
permanently reduce, the Commitments of any Class; provided
that (i) each reduction of the Commitments of any Class shall be in an
amount that is an integral multiple of $1.0 million and not less than $5.0
million and (ii) the Revolving Commitments shall not be terminated or
reduced if, after giving effect to any concurrent prepayment of the Revolving
Loans in accordance with Section 2.10, the aggregate amount of
Revolving Exposures would exceed the aggregate amount of Revolving Commitments.

(c)           Borrower
Notice.  The US Borrower shall notify
the Administrative Agent in writing of any election to terminate or reduce the
Commitments under Section 2.07(b) at least three Business Days
prior to the effective date of such termination or reduction, specifying such election
and the effective date thereof.  Promptly
following receipt of any notice, the Administrative Agent shall advise the
Lenders of the contents thereof.  Each
notice delivered by the US Borrower pursuant to this Section shall be
irrevocable; provided that a notice of
termination of the Commitments delivered by the US Borrower may state that such
notice is conditioned upon the effectiveness of other credit facilities, in
which case such notice may be revoked by the US Borrower (by notice to the
Administrative Agent on or prior to the specified effective date) if such
condition is not satisfied.  Any
termination or reduction of the Commitments of any Class shall be
permanent.  Each reduction of the
Commitments of any Class shall be made ratably among the Lenders in accordance
with their respective Commitments of such Class.

SECTION
2.08     Interest Elections.

(a)           Generally.  Each Revolving Borrowing initially shall be
of the Type specified in the applicable Borrowing Request and, in the case of a
Eurodollar Borrowing, shall have an initial Interest Period as specified in
such Borrowing Request.  Thereafter, the
relevant Borrower may elect to convert such Borrowing to a different Type or to
continue such Borrowing and, in the case of a Eurodollar Borrowing, may elect
Interest Periods therefor, all as provided in this Section.  The relevant Borrower may elect different
options with respect to different portions of the affected Borrowing, in which
case each such portion shall be allocated ratably among the Lenders holding the
Loans comprising such Borrowing, and the Loans comprising each such portion
shall be considered a separate Borrowing. 
Notwithstanding anything to the contrary, no Borrower shall be entitled
to request any conversion or continuation that, if made, would result in more
than five Eurodollar Borrowings outstanding hereunder at 

 40
 

 

any one time for all Loans.  This
Section shall not apply to Swingline Borrowings, which may not be converted or
continued.

(b)           Interest
Election Notice.  To make an election
pursuant to this Section, the relevant Borrower shall deliver, by hand delivery
or telecopier, a duly completed and executed Interest Election Request to the
Administrative Agent not later than the time that a Borrowing Request would be
required under Section 2.03 if the relevant Borrower were
requesting a Revolving Borrowing of the Type resulting from such election to be
made on the effective date of such election. 
Each Interest Election Request shall be irrevocable.  Each Interest Election Request shall specify
the following information in compliance with Section 2.02:

(i)      the Borrowing to which such Interest
Election Request applies and, if different options are being elected with
respect to different portions thereof, or if outstanding Borrowings are being
combined, allocation to each resulting Borrowing (in which case the information
to be specified pursuant to clauses (iii) and (iv) below shall be
specified for each resulting Borrowing);

(ii)     the effective date of the election made
pursuant to such Interest Election Request, which shall be a Business Day;

(iii)    whether the resulting Borrowing is to be an
ABR Borrowing or a Eurodollar Borrowing; and

(iv)    if the resulting Borrowing is a Eurodollar
Borrowing, the Interest Period to be applicable thereto after giving effect to
such election, which shall be a period contemplated by the definition of the
term “Interest Period”.

If any such Interest Election Request requests a
Eurodollar Borrowing but does not specify an Interest Period, then the relevant
Borrower shall be deemed to have selected an Interest Period of one month’s
duration.

Promptly following receipt of an Interest Election
Request, the Administrative Agent shall advise each Lender of the details
thereof and of such Lender’s portion of each resulting Borrowing.

(c)           Automatic
Conversion to ABR Borrowing.  If an
Interest Election Request with respect to a Eurodollar Borrowing is not timely
delivered prior to the end of the Interest Period applicable thereto, then,
unless such Borrowing is repaid as provided herein, at the end of such Interest
Period such Borrowing shall be converted to an ABR Borrowing.   Notwithstanding any contrary provision
hereof, if an Event of Default has occurred and is continuing, the Administrative
Agent or the Required Lenders may require, by notice to the US Borrower, that
(i) no outstanding Borrowing may be converted to or continued as a
Eurodollar Borrowing and (ii) unless repaid, each Eurodollar Borrowing
shall be converted to an ABR Borrowing at the end of the Interest Period applicable
thereto.

SECTION 2.09      [Intentionally
Deleted].

SECTION 2.10      Optional and
Mandatory Prepayments of Loans.

(a)           Optional
Prepayments.  The Borrowers shall
have the right at any time and from time to time to prepay any Borrowing, in
whole or in part, subject to the requirements of this Section 2.10;
provided that each partial prepayment
shall be in an amount that is an integral multiple of 

 41
 

 

$1.0 million and not less than $5.0 million or, if less, the outstanding
principal amount of such Borrowing.

(b)           Revolving Loan Prepayments.

(i)      In the event of the termination of all the Revolving
Commitments the Borrowers shall, on the date of such termination, repay or
prepay all of their outstanding Revolving Borrowings and all outstanding
Swingline Loans and replace all outstanding Letters of Credit or cash collateralize
all outstanding Letters of Credit in accordance with the procedures set forth
in Section 2.18(i).

(ii)     In the event of any partial reduction of
the Revolving Commitments, then (x) at or prior to the effective date of
such reduction, the Administrative Agent shall notify the Borrowers and the
Revolving Lenders of the sum of the Revolving Exposures after giving effect
thereto and (y) if the sum of the Revolving Exposures would exceed the
aggregate amount of Revolving Commitments after giving effect to such
reduction, then each of the relevant Borrowers shall, on the date of such reduction,
first, repay or prepay Swingline Loans, second, repay or prepay Revolving Borrowings and third, replace outstanding Letters of Credit or cash
collateralize outstanding Letters of Credit in accordance with the procedures
set forth in Section 2.18(A)(i) and Section 2.18(B)(i), in
an aggregate amount sufficient to eliminate such excess.

(iii)    In the event that the sum of all Lenders’
Revolving Exposures exceeds the Revolving Commitments then in effect, then each
of the relevant Borrowers shall, without notice or demand, immediately first, repay or prepay Swingline Loans, second,
repay or prepay Revolving Borrowings, and third, replace
outstanding Letters of Credit or cash collateralize outstanding Letters of
Credit in accordance with the procedures set forth in Section 2.18(A)(i)
and Section 2.18(B)(i), in an aggregate amount sufficient to eliminate
such excess.

(iv)    In the event that the aggregate LC Exposure
exceeds the LC Commitment then in effect, then each of the relevant Borrowers
shall, without notice or demand, immediately replace outstanding Letters of
Credit or cash collateralize outstanding Letters of Credit in accordance with
the procedures set forth in Section 2.18(A)(i) and Section
2.18(B)(i), in an aggregate amount sufficient to eliminate such excess.

(v)     In the event that the sum of all Lenders’
Swingline Exposure exceeds the Swingline Commitment then in effect, then each
of the relevant Borrowers shall, without notice or demand, immediately repay or
prepay Swingline Loans in an aggregate amount sufficient to eliminate such
excess.

(c)           Application
of Prepayments.  Prior to any
prepayment hereunder, the relevant Borrower shall select the Borrowing or
Borrowings to be prepaid and shall specify such selection in the notice of such
prepayment pursuant to Section 2.10(d), subject to the provisions
of this Section 2.10(c).  
Amounts to be applied pursuant to this Section 2.10 to the
prepayment of Revolving Loans shall be applied, as applicable, first to reduce
outstanding ABR Revolving Loans.  Any
amounts remaining after each such application shall be applied to prepay
Eurodollar Revolving Loans.  Notwithstanding
the foregoing, if the amount of any prepayment of Loans required under this Section 2.10
shall be in excess of the amount of the ABR Revolving Loans at the time
outstanding (an “Excess Amount”),
only the portion of the amount of such prepayment as is equal to the amount of
such outstanding ABR Revolving 

 42
 

 

Loans shall be immediately prepaid and, at the election of the US
Borrower, the Excess Amount shall be either (A) deposited in an escrow account
on terms satisfactory to the Collateral Agent and applied to the prepayment of
Eurodollar Loans on the last day of then next-expiring Interest Period for
Eurodollar Loans; provided that (i) interest
in respect of such Excess Amount shall continue to accrue thereon at the rate
provided hereunder for the Loans which such Excess Amount is intended to repay
until such Excess Amount shall have been used in full to repay such Loans and
(ii) at any time while a Default has occurred and is continuing, the
Administrative Agent may, and upon written direction from the Required Lenders
shall, apply any or all proceeds then on deposit to the payment of such Loans
in an amount equal to such Excess Amount or (B) prepaid immediately,
together with any amounts owing to the Lenders under Section 2.13.

(d)           Notice
of Prepayment.  The Borrowers shall
notify the Administrative Agent (and, in the case of prepayment of a Swingline
Loan, the Swingline Lender) by written notice of any prepayment hereunder
(i) in the case of prepayment of a Eurodollar Borrowing, not later than
11:00 a.m., New York City time, three Business Days before the date of
prepayment, (ii) in the case of prepayment of an ABR Borrowing, not later
than 11:00 a.m., New York City time, one Business Day before the date of prepayment
and (iii) in the case of prepayment of a Swingline Loan, not later than 11:00
a.m., New York City time, on the date of prepayment.  Each such notice shall be irrevocable; provided that, if a notice of prepayment is given in
connection with a conditional notice of termination of the Commitments as contemplated
by Section 2.07, then such notice of prepayment may be revoked if
such termination is revoked in accordance with Section 2.07.  Each such notice shall specify the prepayment
date, the principal amount of each Borrowing or portion thereof to be prepaid
and, in the case of a mandatory prepayment, a reasonably detailed calculation
of the amount of such prepayment. 
Promptly following receipt of any such notice (other than a notice relating
solely to Swingline Loans), the Administrative Agent shall advise the Lenders
of the contents thereof.  Each partial
prepayment of any Borrowing shall be in an amount that would be permitted in
the case of a Credit Extension of the same Type as provided in Section 2.02,
except as necessary to apply fully the required amount of a mandatory prepayment.  Each prepayment of a Borrowing shall be
applied ratably to the Loans included in the prepaid Borrowing and otherwise in
accordance with this Section 2.10. 
Prepayments shall be accompanied by accrued interest to the extent required
by Section 2.06.

SECTION 2.11     Alternate Rate of Interest.  If prior to the commencement of any Interest
Period for a Eurodollar Borrowing:

(a)           the
Administrative Agent determines (which determination shall be final and
conclusive absent manifest error) that adequate and reasonable means do not
exist for ascertaining the Adjusted LIBOR Rate for such Interest Period; or

(b)           the
Administrative Agent is advised in writing by the Required Lenders that the
Adjusted LIBOR Rate for such Interest Period will not adequately and fairly
reflect the cost to such Lenders of making or maintaining their Loans included
in such Borrowing for such Interest Period;

then the Administrative Agent shall give written
notice thereof to the Borrowers and the Lenders as promptly as practicable thereafter
and, until the Administrative Agent notifies Borrowers and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective
and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such
Borrowing shall be made as an ABR Borrowing.

 

 43
 

 

SECTION 2.12     Yield Protection.

(a)           Increased Costs Generally. If any Change in Law shall:

(i)      impose, modify or deem applicable any reserve, special deposit,
compulsory loan, insurance charge or similar requirement against assets of,
deposits with or for the account of, or credit extended or participated in, by
any Lender (except any reserve requirement reflected in the Adjusted LIBOR
Rate) or the Issuing Bank;

(ii)     subject any Lender or the Issuing Bank to
any tax of any kind whatsoever with respect to this Agreement, any Letter of
Credit, any participation in a Letter of Credit or any Eurodollar Loan made by
it, or change the basis of taxation of payments to such Lender or the Issuing
Bank in respect thereof (except for Indemnified Taxes or Other Taxes covered by
Section 2.15 and the imposition of, or any change in the rate of, any
Excluded Tax payable by such Lender or the Issuing Bank); or

(iii)    impose on any Lender or the Issuing Bank or
the London interbank market any other condition, cost or expense affecting this
Agreement or Eurodollar Loans made by such Lender or any Letter of Credit or
participation therein;

and the result of any of the foregoing shall be to
increase the cost to such Lender of making or maintaining any Eurodollar Loan
(or of maintaining its obligation to make any such Loan), or to increase the
cost to such Lender, the Issuing Bank or such Lender’s or the Issuing Bank’s
holding company, if any, of participating in, issuing or maintaining any Letter
of Credit (or of maintaining its obligation to participate in or to issue any
Letter of Credit), or to reduce the amount of any sum received or receivable by
such Lender or the Issuing Bank hereunder (whether of principal, interest or
any other amount), then, upon request of such Lender or the Issuing Bank, the
US Borrower will pay to such Lender or the Issuing Bank, as the case may be, in
accordance with Section 2.12(c), such additional amount or amounts as
will compensate such Lender or the Issuing Bank, as the case may be, for such
additional costs incurred or reduction suffered.

(b)           Capital
Requirements.  If any Lender or the
Issuing Bank determines (in good faith, but in its sole absolute discretion)
that any Change in Law affecting such Lender or the Issuing Bank or any lending
office of such Lender or such Lender’s or the Issuing Bank’s holding company,
if any, regarding capital requirements has or would have the effect of reducing
the rate of return on such Lender’s or the Issuing Bank’s capital or on the capital
of such Lender’s or the Issuing Bank’s holding company, if any, as a
consequence of this Agreement, the Commitments of such Lender or the Loans made
by, or participations in Letters of Credit held by, such Lender, or the Letters
of Credit issued by the Issuing Bank, to a level below that which such Lender
or the Issuing Bank or such Lender’s or the Issuing Bank’s holding company
could have achieved but for such Change in Law (taking into consideration such
Lender’s or the Issuing Bank’s policies and the policies of such Lender’s or
the Issuing Bank’s holding company with respect to capital adequacy), then from
time to time the US Borrower will pay to such Lender or the Issuing Bank, as
the case may be, in accordance with Section 2.12(c), such additional
amount or amounts as will compensate such Lender or the Issuing Bank or such
Lender’s or the Issuing Bank’s holding company for any such reduction suffered.

(c)           Certificates
for Reimbursement.  A certificate of
a Lender or the Issuing Bank setting forth the amount or amounts necessary to
compensate such Lender or the Issuing Bank or its holding company, as the case
may be, as specified in paragraph (a) or (b) of this Section 2.12
and 

 44
 

 

delivered to the US Borrower shall be conclusive absent manifest
error.  The US Borrower shall pay such
Lender or the Issuing Bank, as the case may be, the amount shown as due on any
such certificate within 10 days after receipt thereof.

(d)           Delay
in Requests.  Failure or delay on the
part of any Lender or the Issuing Bank to demand compensation pursuant to this Section
2.12 shall not constitute a waiver of such Lender’s or the Issuing Bank’s
right to demand such compensation; provided that
the Borrowers shall not be required to compensate a Lender or the Issuing Bank
pursuant to this Section for any increased costs incurred or reductions
suffered more than nine months prior to the date that such Lender or the
Issuing Bank, as the case may be, notifies the Borrowers of the Change in Law
giving rise to such increased costs or reductions and of such Lender’s or the
Issuing Bank’s intention to claim compensation therefor (except that, if the
Change in Law giving rise to such increased costs or reductions is retroactive,
then the nine-month period referred to above shall be extended to include the
period of retroactive effect thereof).

SECTION 2.13     Breakage Payments.  In the event of (a) the payment or
prepayment, whether optional or mandatory, of any principal of any Eurodollar
Loan earlier than the last day of an Interest Period applicable thereto (including
as a result of an Event of Default), (b) the conversion of any Eurodollar
Loan earlier than the last day of the Interest Period applicable thereto,
(c) the failure to borrow, convert, continue or prepay any Revolving Loan
on the date specified in any notice delivered pursuant hereto or (d) the
assignment of any Eurodollar Loan earlier than the last day of the Interest Period
applicable thereto as a result of a request by a Borrower pursuant to Section 2.16(b),
then, in any such event, the US Borrower, in the case such Eurodollar Loan is a
US Revolving Loan, and the Cayman Borrower, in the case such Eurodollar Loan is
a Cayman Revolving Loan, shall compensate each Lender for the loss, cost and
expense attributable to such event.  In
the case of a Eurodollar Loan, such loss, cost or expense to any Lender shall
be deemed to include an amount determined by such Lender to be the excess, if
any, of (i) the amount of interest which would have accrued on the
principal amount of such Loan had such event not occurred, at the Adjusted
LIBOR Rate that would have been applicable to such Loan, for the period from
the date of such event to the last day of then current Interest Period therefor
(or, in the case of a failure to borrow, convert or continue, for the period
that would have been the Interest Period for such Loan), over (ii) the
amount of interest which would accrue on such principal amount for such period
at the interest rate which such Lender would bid were it to bid, at the commencement
of such period, for dollar deposits of a comparable amount and period from
other banks in the Eurodollar market.  A
certificate of any Lender setting forth in reasonable detail any amount or
amounts that such Lender is entitled to receive pursuant to this Section 2.13
shall be delivered to the relevant Borrower (with a copy to the Administrative
Agent) and shall be conclusive and binding absent manifest error.  The relevant Borrower shall pay such Lender
the amount shown as due on any such certificate within 5 days after receipt
thereof.

SECTION 2.14     Payments Generally; Pro Rata
Treatment; Sharing of Setoffs.

(a)           Payments Generally. 
Each Borrower shall make each payment required to be made by it
hereunder or under any other Loan Document (whether of principal, interest,
fees or Reimbursement Obligations, or of amounts payable under Section 2.12,
2.13, 2.15 or 10.03, or otherwise) on or before the time
expressly required hereunder or under such other Loan Document for such payment
(or, if no such time is expressly required, prior to 2:00 p.m., New York City
time), on the date when due, in immediately available funds, without setoff,
deduction or counterclaim.  Any amounts
received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon.  All such payments shall be made to the
Administrative Agent at its offices at 677 Washington Boulevard, 

 45
 

 

Stamford, Connecticut, except payments to be
made directly to the Issuing Bank or Swingline Lender as expressly provided
herein and except that payments pursuant to Sections 2.12, 2.13,
2.15 and 10.03 shall be made directly to the persons entitled
thereto and payments pursuant to other Loan Documents shall be made to the
persons specified therein.  The
Administrative Agent shall distribute any such payments received by it for the
account of any other person to the appropriate recipient promptly following
receipt thereof.  If any payment under
any Loan Document shall be due on a day that is not a Business Day, unless
specified otherwise, the date for payment shall be extended to the next
succeeding Business Day, and, in the case of any payment accruing interest,
interest thereon shall be payable for the period of such extension.  All payments under each Loan Document shall
be made in dollars, except as expressly specified otherwise.

(b)           Pro
Rata Treatment.  Each payment by each
Borrower of interest in respect of the Loans shall be applied to the amounts of
such obligations owing to the Lenders pro rata
according to the respective amounts then due and owing to the Lenders.

(c)           Insufficient
Funds.  If at any time insufficient
funds are received by and available to the Administrative Agent to pay fully
all amounts of principal, Reimbursement Obligations, interest and fees then due
hereunder, such funds shall be applied (i) first,
toward payment of interest and fees then due hereunder, ratably among the
parties entitled thereto in accordance with the amounts of interest and fees
then due to such parties, and (ii) second, toward
payment of principal and Reimbursement Obligations then due hereunder, ratably
among the parties entitled thereto in accordance with the amounts of principal
and Reimbursement Obligations then due to such parties.

(d)           Sharing
of Set-Off.  If any Lender (and/or
the Issuing Bank, which shall be deemed a “Lender” for purposes of this Section
2.14(d)) shall, by exercising any right of setoff or counterclaim or
otherwise, obtain payment in respect of any principal of or interest on any of
its Loans or other Obligations resulting in such Lender’s receiving payment of
a proportion of the aggregate amount of its Loans and accrued interest thereon
or other Obligations greater than its pro  rata share thereof as provided herein, then the Lender
receiving such greater proportion shall (a) notify the Administrative
Agent of such fact, and (b) purchase (for cash at face value)
participations in the Loans and such other obligations of the other Lenders, or
make such other adjustments as shall be equitable, so that the benefit of all
such payments shall be shared by the Lenders ratably in accordance with the
aggregate amount of principal of and accrued interest on their respective Loans
and other amounts owing them, provided that:

(i)      if any such participations are purchased
and all or any portion of the payment giving rise thereto is recovered, such
participations shall be rescinded and the purchase price restored to the extent
of such recovery, without interest; and

(ii)     the provisions of this paragraph shall not
be construed to apply to (x) any payment made by any Borrower pursuant to
and in accordance with the express terms of this Agreement or (y) any
payment obtained by a Lender as consideration for the assignment of or sale of
a participation in any of its Loans or participations in Cayman LC Disbursements
or US LC Disbursements to any assignee or participant, other than to the
relevant Borrower or any Subsidiary thereof (as to which the provisions of this
paragraph shall apply).

Each Loan Party consents to the foregoing and agrees,
to the extent it may effectively do so under applicable Requirements of Law,
that any Lender acquiring a participation pursuant to the foregoing arrangements
may exercise against such Loan Party rights of setoff and counterclaim with
respect to such participation as fully as if such Lender were a direct creditor
of such Loan Party in the amount of such 

 46
 

 

participation. 
If under applicable bankruptcy, insolvency or any similar law any
Secured Party receives a secured claim in lieu of a setoff or counterclaim to
which this Section 2.14(d) applies, such Secured Party shall to the
extent practicable, exercise its rights in respect of such secured claim in a
manner consistent with the rights to which the Secured Party is entitled under
this Section 2.14(d) to share in the benefits of the recovery of
such secured claim.

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

(f)            Lender
Default.  If any Lender shall fail to
make any payment required to be made by it pursuant to Section 2.02(c),
2.14(e), 2.17(d), 2.18(d), 2.18(e) or 10.03(c),
then the Administrative Agent may, in its discretion (notwithstanding any
contrary provision hereof), apply any amounts thereafter received by the
Administrative Agent for the account of such Lender to satisfy such Lender’s
obligations under such Sections until all such unsatisfied obligations are
fully paid.

SECTION
2.15     Taxes.

(a)           Payments
Free of Taxes.  Any and all payments
by or on account of any obligation of the Loan Parties hereunder or under any
other Loan Document shall be made free and clear of and without reduction or
withholding for any Indemnified Taxes or Other Taxes; provided
that if the Loan Parties shall be required by applicable Requirements of Law to
deduct any Indemnified Taxes (including any Other Taxes) from such payments,
then (i) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section) the Administrative Agent, Lender or Issuing
Bank, as the case may be, receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the applicable Loan Party
shall make such deductions and (iii) the applicable Loan Party shall
timely pay the full amount deducted to the relevant Governmental Authority in
accordance with applicable Requirements of Law.

(b)           Payment
of Other Taxes by Borrowers.  Without
limiting the provisions of paragraph (a) above, the US Borrower shall timely
pay any Other Taxes to the relevant Governmental Authority in accordance with
Requirements of Law that apply to it, and the Cayman Borrower shall timely pay
any Other Taxes to the relevant Governmental Authority in accordance with
Requirements of Law that apply to it.

(c)           Indemnification
by Borrowers.

(i)      The US Borrower shall indemnify the
Administrative Agent, each Lender and the Issuing Bank, within 10 days after
demand therefor, for the full amount of any Indemnified Taxes or Other Taxes
(including Indemnified Taxes 

 47
 

 

or Other Taxes
imposed or asserted on or attributable to amounts payable under this Section)
paid on its behalf by the Administrative Agent, such Lender or the Issuing
Bank, as the case may be, and any penalties, interest and reasonable expenses
arising therefrom or with respect thereto, whether or not such Indemnified
Taxes or Other Taxes were correctly or legally imposed or asserted by the
relevant Governmental Authority.  A
certificate as to the amount of such payment or liability delivered to the
US Borrower by a Lender or the Issuing Bank (with a copy to the
Administrative Agent), or by the Administrative Agent on its own behalf or on
behalf of a Lender or the Issuing Bank, shall be conclusive absent manifest
error.

(ii)     The Cayman Borrower shall indemnify the
Administrative Agent, each Lender and the Issuing Bank, within 10 days after
demand therefor, for the full amount of any Indemnified Taxes or Other Taxes
(including Indemnified Taxes or Other Taxes imposed or asserted on or attributable
to amounts payable under this Section) paid on its behalf by the Administrative
Agent, such Lender or the Issuing Bank, as the case may be, and any penalties,
interest and reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes or Other Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such
payment or liability delivered to the Cayman Borrower by a Lender or the
Issuing Bank (with a copy to the Administrative Agent), or by the
Administrative Agent on its own behalf or on behalf of a Lender or the Issuing
Bank, shall be conclusive absent manifest error.

(d)           Evidence
of Payments.  As soon as practicable
after any payment of Indemnified Taxes or Other Taxes by a Borrower to a
Governmental Authority, the relevant Borrower shall deliver to the
Administrative Agent the original or a certified copy of a receipt issued by
such Governmental Authority evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably satisfactory
to the Administrative Agent.

(e)           Status
of Lenders.  Any Foreign Lender
shall, to the extent it may lawfully do so, 
deliver to the US Borrower and the Administrative Agent (in such number
of copies as shall be requested by the recipient) on or prior to the date on
which such Foreign Lender becomes a Lender under this Agreement (and from time
to time thereafter upon the request of the US Borrower or the Administrative Agent,
but only if such Foreign Lender is legally entitled to do so), whichever of the
following is applicable:

(i)      duly completed copies of Internal Revenue
Service Form W-8BEN claiming eligibility for benefits of an income tax treaty
to which the United States of America is a party,

(ii)     duly completed copies of Internal Revenue
Service Form W-8ECI,

(iii)    in the case of a Foreign Lender claiming the
benefits of the exemption for portfolio interest under Section 881(c) of the
Code, (x) a certificate, in substantially the form of Exhibit Q, or
any other form approved by the Administrative Agent, to the effect that such
Foreign Lender is not (A) a “bank” within the meaning of Section 881(c)(3)(A)
of the Code, (B) a “10 percent shareholder” of the US Borrower within the
meaning of Section 881(c)(3)(B) of the Code, or (C) a “controlled foreign
corporation” described in Section 881(c)(3)(C) of the Code and (y) duly
completed copies of  Internal Revenue
Service Form W-8BEN, or

 

 48

 

(iv)    any other form prescribed by applicable
Requirements of Law as a basis for claiming exemption from or a reduction in
United States Federal withholding tax duly completed together with such
supplementary documentation as may be prescribed by applicable Requirements of
Law to permit the US Borrower to determine the withholding or deduction
required to be made.

(f)            Treatment
of Certain Refunds.  If the
Administrative Agent, a Lender or the Issuing Bank determines, in its sole
discretion, that it has received a refund of any Indemnified Taxes or Other
Taxes as to which it has been indemnified by a Borrower or with respect to
which a Borrower has paid additional amounts pursuant to this Section, it shall
pay to such Borrower an amount equal to such refund (but only to the extent of
indemnity payments made, or additional amounts paid, by such Borrower under
this Section with respect to the Indemnified Taxes or Other Taxes giving rise
to such refund), net of all out-of-pocket expenses of the Administrative Agent,
such Lender or the Issuing Bank, as the case may be, and without interest
(other than any interest paid by the relevant Governmental Authority with
respect to such refund); provided that
the relevant Borrower, upon the request of the Administrative Agent, such
Lender or the Issuing Bank, agrees to repay the amount paid over to the
relevant Borrower (plus any penalties,
interest or other charges imposed by the relevant Governmental Authority) to
the Administrative Agent, such Lender or the Issuing Bank in the event the
Administrative Agent, such Lender or the Issuing Bank is required to repay such
refund to such Governmental Authority. 
This paragraph shall not be construed to require the Administrative
Agent, any Lender or the Issuing Bank to make available its tax returns (or any
other information relating to its taxes that it deems confidential) to any
Borrower or any other person. 
Notwithstanding anything to the contrary, in no event will any Lender be
required to pay any amount to any Borrower the payment of which would place
such Lender in a less favorable net after-tax position than such Lender would
have been in if the additional amounts giving rise to such refund of any Indemnified
Taxes or Other Taxes had never been paid.

SECTION
2.16     Mitigation Obligations;
Replacement of Lenders.

(a)           Designation
of a Different Lending Office.  If
any Lender requests compensation under Section 2.12, or requires
either of the Borrowers to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.15,
then such Lender shall use reasonable efforts to designate a different lending
office for funding or booking its Loans hereunder or to assign its rights and
obligations hereunder to another of its offices, branches or affiliates, if, in
the judgment of such Lender, such designation or assignment (i) would
eliminate or reduce amounts payable pursuant to Section 2.12 or 2.15,
as the case may be, in the future and (ii) would not subject such Lender
to any unreimbursed cost or expense and would not otherwise be disadvantageous
to such Lender.

(b)           Replacement
of Lenders.   If any Lender requests
compensation under Section 2.12, or if a Borrower is required to
pay any additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 2.15, or if any Lender
defaults in its obligation to fund Loans hereunder, or if a Borrower exercises
its replacement rights under Section 10.02(d), then the relevant
Borrower may, at its sole expense and effort, upon notice to such Lender and
the Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in, and
consents required by, Section 10.04), all of its interests, 

 49
 

 

rights and obligations under this Agreement and the other Loan
Documents to an Eligible Assignee that shall assume such obligations (which
assignee may be another Lender, if a Lender accepts such assignment); provided that:

(i)      the relevant Borrower shall have paid to
the Administrative Agent the processing and recordation fee specified in Section
10.04(b);

(ii)     such Lender shall have received payment of
an amount equal to the outstanding principal of its Loans and participations in
LC Disbursements and Swingline Loans, accrued interest thereon, accrued
fees and all other amounts payable to it hereunder and under the other Loan
Documents (including any amounts under Section 2.13), from the assignee
(to the extent of such outstanding principal and accrued interest and fees) or
a Borrower (in the case of all other amounts);

(iii)    in the case of any such assignment resulting
from a claim for compensation under Section 2.12 or payments
required to be made pursuant to Section 2.15, such assignment will
result in a reduction in such compensation or payments thereafter; and

(iv)    such assignment does not conflict with
applicable Requirements of Law.

A Lender shall not be required to make any such
assignment or delegation if, prior thereto, as a result of a waiver by such
Lender or otherwise, the circumstances entitling a Borrower to require such
assignment and delegation cease to apply.

SECTION 2.17     Swingline Loans.

A.            Cayman Swingline Loans

(a)           Cayman Swingline Commitment.  Subject to the terms and conditions set forth
herein, the Swingline Lender agrees to make Cayman Swingline Loans to the
Cayman Borrower from time to time during the Revolving Availability Period, in
an aggregate principal amount at any time outstanding that will not result in
(i) the aggregate principal amount of outstanding Cayman Swingline Loans
exceeding $5.0 million less the aggregate principal amount of US
Swingline Loans then outstanding or (ii) the sum of the total Revolving
Exposures exceeding the total Revolving Commitments; provided
that the Cayman Swingline Lender shall not be required to make a Cayman
Swingline Loan to refinance an outstanding Swingline Loan.  Within the foregoing limits and subject to
the terms and conditions set forth herein, the Cayman Borrower may borrow,
repay and reborrow Swingline Loans.

(b)           Cayman
Swingline Loans.  To request a Cayman
Swingline Loan, the Cayman Borrower shall deliver, by hand delivery or
telecopier, a duly completed and executed Cayman Borrowing Request to the
Administrative Agent and the Swingline Lender, not later than 2:00 p.m., New
York City time, on the day of a proposed Swingline Loan.  Each such notice shall be irrevocable and
shall specify the requested date (which shall be a Business Day) and the amount
of the requested Cayman Swingline Loan. 
Each Cayman Swingline Loan shall be an ABR Revolving Loan.  The Swingline Lender shall make each Cayman
Swingline Loan available to the Cayman Borrower to an account as directed by
the Cayman Borrower in the applicable Cayman Borrowing Request maintained with
the Administrative Agent (or, in the case of a Swingline Loan made to finance
the reimbursement of an Cayman LC Disbursement as provided in Section 2.18(A)(e),
by remittance to the Issuing Bank) by 3:00 p.m., New York City time, on the
requested date of such Swingline Loan. 
The Cayman Borrower shall not request a Cayman Swingline Loan if at the
time of or immediately after giving effect to the Extension of Credit contemplated
by such request a Default has occurred and is continuing or would result
therefrom.  Cayman Swingline Loans shall
be made in minimum amounts of $1.0 million and integral multiples of $500,000
above such amount.

 50
 

 

(c)           Prepayment.  The Cayman Borrower shall have the right at
any time and from time to time to repay any Cayman Swingline Loan, in whole or
in part, upon giving written notice to the Swingline Lender and the
Administrative Agent before 12:00 (noon), New York City time, on the proposed
date of repayment.

(d)           Participations.  The Swingline Lender may at any time within
two (2) Business Days after funding a Cayman Swingline Loan in its discretion
by written notice given to the Administrative Agent (provided
such notice requirement shall not apply if the Swingline Lender and the
Administrative Agent are the same entity) not later than 11:00 a.m., New York
City time, on the next succeeding Business Day following such notice require
the Revolving Lenders to acquire participations on such Business Day in all or
a portion of the Swingline Loans then outstanding.  Such notice shall specify the aggregate
amount of Cayman Swingline Loans in which Revolving Lenders will
participate.  Promptly upon receipt of
such notice, the Administrative Agent will give notice thereof to each
Revolving Lender, specifying in such notice such Lender’s Pro Rata Percentage
of such Cayman Swingline Loan or Loans. 
Each Revolving Lender hereby absolutely and unconditionally agrees, upon
receipt of notice as provided above, to pay to the Administrative Agent, for
the account of the Cayman Swingline Lender, such Lender’s Pro Rata Percentage
of such Cayman Swingline Loan or Loans. 
Each Revolving Lender acknowledges and agrees that its obligation to
acquire participations in Swingline Loans pursuant to this paragraph is
absolute and unconditional and shall not be affected by any circumstance
whatsoever, including the occurrence and continuance of a Default or reduction
or termination of the Commitments, and that each such payment shall be made
without any offset, abatement, withholding or reduction whatsoever (so long as
such payment shall not cause such Lender’s Revolving Exposure to exceed such
Lender’s Revolving Commitment).  Each
Revolving Lender shall comply with its obligation under this paragraph by wire
transfer of immediately available funds, in the same manner as provided in Section 2.02(c)
with respect to Loans made by such Lender (and Section 2.02 shall
apply, mutatis mutandis, to the payment obligations
of the Revolving Lenders), and the Administrative Agent shall promptly pay to
the Swingline Lender the amounts so received by it from the Revolving
Lenders.  The Administrative Agent shall
notify the Cayman Borrower of any participations in any Cayman Swingline Loan
acquired by the Revolving Lenders pursuant to this paragraph, and thereafter
payments in respect of such Cayman Swingline Loan shall be made to the
Administrative Agent and not to the Swingline Lender.  Any amounts received by the Swingline Lender
from the Cayman Borrower (or other party on behalf of the Cayman Borrower) in respect
of a Cayman Swingline Loan after receipt by the Swingline Lender of the
proceeds of a sale of participations therein shall be promptly remitted to the
Administrative Agent.  Any such amounts
received by the Administrative Agent shall be promptly remitted by the
Administrative Agent to the Revolving Lenders that shall have made their
payments pursuant to this paragraph, as their interests may appear.  The purchase of participations in a Cayman
Swingline Loan pursuant to this paragraph shall not relieve the Cayman Borrower
of any default in the payment thereof.

B.            US Swingline Loans

(a)           US
Swingline Commitment.  Subject to the
terms and conditions set forth herein, the Swingline Lender agrees to make US
Swingline Loans to the US Borrower from time to time during the Revolving
Availability Period, in an aggregate principal amount at any time outstanding
that will not result in (i) the aggregate principal amount of outstanding
Cayman Swingline Loans exceeding $5.0 million less the aggregate principal
amount of US Swingline Loans then outstanding or (ii) the sum of the total
Revolving Exposures exceeding the total Revolving Commitments; provided that the US Swingline Lender shall not be required
to make a Swingline Loan to refinance an outstanding US Swingline Loan.  Within the foregoing limits and subject to
the terms and conditions set forth herein, the US Borrower may borrow, repay
and reborrow US Swingline Loans.

 51
 

 

(b)           US
Swingline Loans.  To request a US
Swingline Loan, the US Borrower shall deliver, by hand delivery or telecopier,
a duly completed and executed US Borrowing Request to the Administrative Agent
and the Swingline Lender, not later than 2:00 p.m., New York City time, on the
day of a proposed Swingline Loan.  Each
such notice shall be irrevocable and shall specify the requested date (which
shall be a Business Day) and the amount of the requested US Swingline
Loan.  Each US Swingline Loan shall be an
ABR Revolving Loan.  The Swingline Lender
shall make each US Swingline Loan available to the US Borrower to an account as
directed by the US Borrower in the applicable US Borrowing Request maintained
with the Administrative Agent (or, in the case of a Swingline Loan made to
finance the reimbursement of an US LC Disbursement as provided in Section 2.18(B)(e),
by remittance to the Issuing Bank) by 3:00 p.m., New York City time, on the
requested date of such Swingline Loan. 
the US Borrower shall not request a US Swingline Loan if at the time of
or immediately after giving effect to the Extension of Credit contemplated by
such request a Default has occurred and is continuing or would result
therefrom.  US Swingline Loans shall be
made in minimum amounts of $1.0 million and integral multiples of $500,000
above such amount.

(c)           Prepayment.  The US Borrower shall have the right at any
time and from time to time to repay any US Swingline Loan, in whole or in part,
upon giving written notice to the Swingline Lender and the Administrative Agent
before 12:00 (noon), New York City time, on the proposed date of repayment.

(d)           Participations.  The Swingline Lender may at any time within
two (2) Business Days after funding a US Swingline Loan in its discretion by
written notice given to the Administrative Agent (provided
such notice requirement shall not apply if the Swingline Lender and the
Administrative Agent are the same entity) not later than 11:00 a.m., New York
City time, on the next succeeding Business Day following such notice require
the Revolving Lenders to acquire participations on such Business Day in all or
a portion of the Swingline Loans then outstanding.  Such notice shall specify the aggregate
amount of US Swingline Loans in which Revolving Lenders will participate.  Promptly upon receipt of such notice, the
Administrative Agent will give notice thereof to each Revolving Lender,
specifying in such notice such Lender’s Pro Rata Percentage of such US
Swingline Loan or Loans.  Each Revolving
Lender hereby absolutely and unconditionally agrees, upon receipt of notice as
provided above, to pay to the Administrative Agent, for the account of the US
Swingline Lender, such Lender’s Pro Rata Percentage of such US Swingline Loan
or Loans.  Each Revolving Lender
acknowledges and agrees that its obligation to acquire participations in US
Swingline Loans pursuant to this paragraph is absolute and unconditional and
shall not be affected by any circumstance whatsoever, including the occurrence
and continuance of a Default or reduction or termination of the Commitments,
and that each such payment shall be made without any offset, abatement,
withholding or reduction whatsoever (so long as such payment shall not cause
such Lender’s Revolving Exposure to exceed such Lender’s Revolving
Commitment).  Each Revolving Lender shall
comply with its obligation under this paragraph by wire transfer of immediately
available funds, in the same manner as provided in Section 2.02(c)
with respect to Loans made by such Lender (and Section 2.02 shall apply,
mutatis mutandis, to the payment
obligations of the Revolving Lenders), and the Administrative Agent shall
promptly pay to the Swingline Lender the amounts so received by it from the
Revolving Lenders.  The Administrative
Agent shall notify the US Borrower of any participations in any US Swingline
Loan acquired by the Revolving Lenders pursuant to this paragraph, and
thereafter payments in respect of such US Swingline Loan shall be made to the
Administrative Agent and not to the Swingline Lender.  Any amounts received by the Swingline Lender
from the US Borrower (or other party on behalf of the US Borrower) in respect
of a US Swingline Loan after receipt by the Swingline Lender of the proceeds of
a sale of participations therein shall be promptly remitted to the Administrative
Agent.  Any such amounts received by the
Administrative Agent shall be promptly remitted by the Administrative Agent to
the Revolving Lenders that shall have made their 

 52
 

 

payments pursuant to this paragraph, as their interests may
appear.  The purchase of participations
in a US Swingline Loan pursuant to this paragraph shall not relieve the US
Borrower of any default in the payment thereof.

SECTION 2.18     Letters of Credit.

A.            Cayman Letters of Credit

(a)           General.  Subject to the terms and conditions set forth
herein, the Cayman Borrower may request the Issuing Bank, and the Issuing Bank
agrees, to issue Letters of Credit for its own account or the account of its
Subsidiary in a form reasonably acceptable to the Administrative Agent and the
Issuing Bank, at any time and from time to time during the Revolving
Availability Period (provided that
the Cayman Borrower shall be a co-applicant, and be jointly and severally
liable, with respect to each Letter of Credit issued for the account of its
Subsidiary).  The Issuing Bank shall have
no obligation to issue, and the Cayman Borrower shall not request the issuance
of, any Letter of Credit at any time if after giving effect to such issuance,
the LC Exposure would exceed the LC Commitment or the total Revolving Exposure
would exceed the total Revolving Commitments. 
In the event of any inconsistency between the terms and conditions of
this Agreement and the terms and conditions of any form of letter of credit
application or other agreement submitted by the Cayman Borrower to, or entered
into by the Cayman Borrower with, the Issuing Bank relating to any Letter of
Credit, the terms and conditions of this Agreement shall control.

(b)           Request
for Issuance, Amendment, Renewal, Extension; Certain Conditions and Notices.  To request the issuance of a Cayman Letter of
Credit or the amendment, renewal or extension of an outstanding Cayman Letter
of Credit, the Cayman Borrower shall deliver, by hand or telecopier (or
transmit by electronic communication, if arrangements for doing so have been
approved by the Issuing Bank), a Cayman LC Request to the Issuing Bank and the
Administrative Agent not later than 11:00 a.m. on the third Business Day preceding
the requested date of issuance, amendment, renewal or extension (or such later
date and time as is acceptable to the Issuing Bank).

A request for an initial issuance of a Cayman Letter
of Credit shall specify in form and detail satisfactory to the Issuing Bank:

(i)      the proposed issuance date of the
requested Cayman Letter of Credit (which shall be a Business Day);

(ii)     the amount thereof;

(iii)    the expiry date thereof (which shall not be
later than the close of business on the Letter of Credit Expiration Date);

(iv)    the name and address of the beneficiary
thereof;

(v)     whether the Cayman Letter of Credit is to
be issued for its own account or for the account of one of its Subsidiaries (provided that the Cayman Borrower shall be a co-applicant,
and therefore jointly and severally liable, with respect to each Cayman Letter
of Credit issued for the account of its Subsidiary);

(vi)    the documents to be presented by such
beneficiary in connection with any drawing thereunder;

 53
 

 

(vii)   the full text of any certificate to be
presented by such beneficiary in connection with any drawing thereunder; and

(viii)  such other matters as the Issuing Bank may
require.

A request for an amendment, renewal or extension of
any outstanding Cayman Letter of Credit shall specify in form and detail
satisfactory to the Issuing Bank:

(i)      the Cayman Letter of Credit to be amended,
renewed or extended;

(ii)     the proposed date of amendment, renewal or
extension thereof (which shall be a Business Day);

(iii)    the nature of the proposed amendment,
renewal or extension; and

(iv)    such other matters as the Issuing Bank may
require.

If requested by the Issuing Bank, the Cayman Borrower
also shall submit a letter of credit application on the Issuing Bank’s standard
form in connection with any request for a Cayman Letter of Credit.  A Cayman Letter of Credit shall be issued,
amended, renewed or extended only if (and, upon issuance, amendment, renewal or
extension of each Cayman Letter of Credit, the Cayman Borrower shall be deemed
to represent and warrant that), after giving effect to such issuance,
amendment, renewal or extension, (i) the LC Exposure shall not exceed the
LC Commitment, (ii) the total Revolving Exposures shall not exceed the
total Revolving Commitments and (iii) the conditions set forth in Article IV
in respect of such issuance, amendment, renewal or extension shall have been
satisfied.  Unless the Issuing Bank shall
agree otherwise, no Cayman Letter of Credit shall be in an initial amount less
than $100,000, in the case of a Commercial Letter of Credit, or $500,000, in
the case of a Standby Letter of Credit.

Upon the issuance of any Cayman Letter of Credit or
amendment, renewal, extension or modification to a Letter of Credit, the
Issuing Bank shall promptly notify the Administrative Agent, who shall promptly
notify each Revolving Lender, thereof, which notice shall be accompanied by a
copy of such Cayman Letter of Credit or amendment, renewal, extension or
modification to a Cayman Letter of Credit and the amount of such Lender’s
respective participation in such Cayman Letter of Credit pursuant to Section 2.18(A)(d).  On the first Business Day of each calendar
month, the Issuing Bank shall provide to the Administrative Agent a report
listing all outstanding Cayman Letters of Credit and the amounts and beneficiaries
thereof and the Administrative Agent shall promptly provide such report to each
Revolving Lender.

(c)           Expiration
Date.  Each Cayman Letter of Credit
shall expire at or prior to the close of business on the earlier of (i) in
the case of a Standby Letter of Credit, (x) the date which is one year
after the date of the issuance of such Standby Letter of Credit (or, in the
case of any renewal or extension thereof, one year after such renewal or
extension) and (y) the Letter of Credit Expiration Date and (ii) in
the case of a Commercial Letter of Credit, (x) the date that is
180 days after the date of issuance of such Commercial Letter of Credit
(or, in the case of any renewal or extension thereof, 180 days after such
renewal or extension) and (y) the Letter of Credit Expiration Date.

(d)           Participations.  By the issuance of a Cayman Letter of Credit
(or an amendment to a Letter of Credit increasing the amount thereof) and
without any further action on the part of the Issuing Bank or the Lenders, the
Issuing Bank hereby irrevocably grants to each Revolving Lender, and each Revolving
Lender hereby acquires from the Issuing Bank, a participation in such Cayman
Letter of 

 

 54
 

 

Credit equal to such Revolving Lender’s Pro Rata Percentage of the
aggregate amount available to be drawn under such Cayman Letter of Credit.  In consideration and in furtherance of the
foregoing, each Revolving Lender hereby absolutely and unconditionally agrees
to pay to the Administrative Agent, for the account of the Issuing Bank, such
Revolving Lender’s Pro Rata Percentage of each Cayman LC Disbursement made by
the Issuing Bank and not reimbursed by the Cayman Borrower on the date due as
provided in Section 2.18(e), or of any reimbursement payment
required to be refunded to the Cayman Borrower for any reason.  Each Revolving Lender acknowledges and agrees
that its obligation to acquire participations pursuant to this paragraph in
respect of Cayman Letters of Credit is absolute and unconditional and shall not
be affected by any circumstance whatsoever, including any amendment, renewal or
extension of any Cayman Letter of Credit or the occurrence and continuance of a
Default or reduction or termination of the Commitments, or expiration,
termination or cash collateralization of any Cayman Letter of Credit and that
each such payment shall be made without any offset, abatement, withholding or
reduction whatsoever.

(e)           Reimbursement.

(i)      If the Issuing Bank shall make any Cayman
LC Disbursement in respect of a Cayman Letter of Credit, the Cayman Borrower
shall reimburse such LC Disbursement by paying to the Issuing Bank an amount
equal to such Cayman LC Disbursement not later
than 3:00 p.m., New York City time, on the date that such Cayman LC
Disbursement is made if the Cayman Borrower shall have received notice of such
Cayman LC Disbursement prior to 11:00 a.m., New York City time, on such date,
or, if such notice has not been received by the Cayman Borrower prior to such
time on such date, then not later than 3:00 p.m., New York City time, on the
Business Day immediately following the day that the Cayman Borrower receives
such notice; provided that the Cayman Borrower
may, subject to the conditions to borrowing set forth herein, request in
accordance with Section 2.03 that such payment be financed with ABR
Revolving Loans or Swingline Loans in an equivalent amount and, to the extent
so financed, the Cayman Borrower obligation to make such payment shall be
discharged and replaced by the resulting ABR Revolving Loans or Swingline
Loans.

(ii)     If the Cayman Borrower fails to make such
payment when due, the Issuing Bank shall notify the Administrative Agent and
the Administrative Agent shall notify each Revolving Lender of the applicable
Cayman LC Disbursement, the payment then due from the Cayman Borrower in
respect thereof and such Revolving Lender’s Pro Rata Percentage thereof.  Each Revolving Lender shall pay by wire
transfer of immediately available funds to the Administrative Agent not later
than 2:00 p.m., New York City time, on such date (or, if such Revolving Lender
shall have received such notice later than 12:00 noon, New York City time, on
any day, not later than 11:00 a.m., New York City time, on the immediately
following Business Day), an amount equal to such Revolving Lender’s Pro Rata
Percentage of the unreimbursed Cayman LC Disbursement in the same manner as
provided in Section 2.02(c) with respect to Revolving Loans made by
such Revolving Lender, and the Administrative Agent will promptly pay to the
Issuing Bank the amounts so received by it from the Revolving Lenders.  The Administrative Agent will promptly pay to
the Issuing Bank any amounts received by it from the Cayman Borrower pursuant
to the above paragraph prior to the time that any Revolving Lender makes any
payment pursuant to the preceding sentence and any such amounts received by the
Administrative Agent from the Cayman Borrower thereafter will be promptly
remitted by the Administrative Agent to the Revolving Lenders that shall have
made such payments and to the Issuing Bank, as appropriate.

 

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(iii)    If any Revolving Lender shall not have made
its Pro Rata Percentage of such LC Disbursement available to the Administrative
Agent as provided above, each of such Revolving Lender and the Cayman Borrower
severally agrees to pay interest on such amount, for each day from and
including the date such amount is required to be paid in accordance with the
foregoing to but excluding the date such amount is paid, to the Administrative
Agent for the account of the Issuing Bank at (i) in the case of the Cayman
Borrower, the rate per annum set forth in Section 2.18(A)(h) and
(ii) in the case of such Lender, at a rate determined by the Administrative
Agent in accordance with banking industry rules or practices on interbank
compensation.

(f)            Obligations
Absolute.  The Cayman Reimbursement
Obligation of the Cayman Borrower as provided in Section 2.18(A)(e)
shall be absolute, unconditional and irrevocable, and shall be paid and
performed strictly in accordance with the terms of this Agreement under any and
all circumstances whatsoever and irrespective of (i) any lack of validity
or enforceability of any Letter of Credit or this Agreement, or any term or provision
therein; (ii) any draft or other document presented under a Letter of
Credit being proved to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any respect;
(iii) payment by the Issuing Bank under a Letter of Credit against
presentation of a draft or other document that fails to comply with the terms
of such Cayman Letter of Credit; (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section 2.18(A), constitute a legal or
equitable discharge of, or provide a right of setoff against, the obligations
of the Cayman Borrower hereunder; (v) the fact that a Default shall have
occurred and be continuing; or (vi) any material adverse change in the
business, property, results of operations, prospects or condition, financial or
otherwise, of the Cayman Borrower and its Subsidiaries.  None of the Agents, the Lenders, the Issuing
Bank or any of their Affiliates shall have any liability or responsibility by
reason of or in connection with the issuance or transfer of any Cayman Letter
of Credit or any payment or failure to make any payment thereunder
(irrespective of any of the circumstances referred to in the preceding
sentence), or any error, omission, interruption, loss or delay in transmission
or delivery of any draft, notice or other communication under or relating to
any Cayman Letter of Credit (including any document required to make a drawing thereunder),
any error in interpretation of technical terms or any consequence arising from
causes beyond the control of the Issuing Bank; provided
that the foregoing shall not be construed to excuse the Issuing Bank from
liability to the Cayman Borrower to the extent of any direct damages (as opposed
to consequential damages, claims in respect of which are hereby waived by the
Cayman Borrower to the extent permitted by applicable Requirements of Law)
suffered by the Cayman Borrower that are caused by the Issuing Bank’s failure
to exercise care when determining whether drafts and other documents presented
under a Cayman Letter of Credit comply with the terms thereof.  The parties hereto expressly agree that, in
the absence of gross negligence or willful misconduct on the part of the
Issuing Bank (as finally determined by a court of competent jurisdiction), the
Issuing Bank shall be deemed to have exercised care in each such determination.  In furtherance of the foregoing and without
limiting the generality thereof, the parties agree that, with respect to
documents presented which appear on their face to be in substantial compliance
with the terms of a Cayman Letter of Credit, the Issuing Bank may, in its sole
discretion, either accept and make payment upon such documents without
responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of such
Cayman Letter of Credit.

(g)           Disbursement
Procedures.  The Issuing Bank shall,
promptly following its receipt thereof, examine all documents purporting to
represent a demand for payment under a Cayman Letter of Credit.  The Issuing Bank shall promptly give written
notice to the Administrative Agent and the Cayman Borrower of such demand for
payment and whether the Issuing Bank has made or will make a Cayman LC
Disbursement thereunder; provided that
any failure to give or delay in giving such notice shall not 

 56
 

 

relieve the Cayman Borrower of its Reimbursement Obligation to the
Issuing Bank and the Revolving Lenders with respect to any such LC Disbursement
(other than with respect to the timing of such Reimbursement Obligation set
forth in Section 2.18(A)(e)).

(h)           Interim
Interest.  If the Issuing Bank shall
make any LC Disbursement, then, unless the Cayman Borrower shall reimburse such
Cayman LC Disbursement in full in accordance with Section 2.18(A)(e)(i), the unpaid
amount thereof shall bear interest payable on demand, for each day from and
including the date such Cayman LC Disbursement is made to but excluding the
date that the Cayman Borrower reimburses such Cayman LC Disbursement, at the
rate per annum determined pursuant to Section 2.06(c).  Interest accrued pursuant to this paragraph
shall be for the account of the Issuing Bank, except that interest accrued on
and after the date of payment by any Revolving Lender pursuant to Section 2.18(A)(e)
to reimburse the Issuing Bank shall be for the account of such Lender to the
extent of such payment.

(i)            Cash
Collateralization.  If any Event of
Default shall occur and be continuing, on the Business Day that the Cayman
Borrower receives notice from the Administrative Agent or the Required Lenders
(or, if the maturity of the Loans has been accelerated, Revolving Lenders with
LC Exposure representing greater than 50% of the total LC Exposure with respect
to Cayman Letters of Credit) demanding the deposit of cash collateral pursuant
to this paragraph, the Cayman Borrower shall deposit on terms and in accounts
reasonably satisfactory to the Collateral Agent, in the name of the Collateral
Agent and for the benefit of the Revolving Lenders, an amount in cash equal to
the LC Exposure with respect to Cayman Letters of Credit as of such date plus
any accrued and unpaid interest thereon; provided that
the obligation to deposit such cash collateral shall become effective
immediately, and such deposit shall become immediately due and payable, without
demand or other notice of any kind, upon the occurrence of any Event of Default
with respect to the Cayman Borrower described in Section 8.01(g) or (h).  Funds so deposited shall be applied by the
Collateral Agent to reimburse the Issuing Bank for Cayman LC Disbursements for
which it has not been reimbursed and, to the extent not so applied, shall be
held for the satisfaction of outstanding Cayman Reimbursement Obligations or,
if the maturity of the Loans has been accelerated (but subject to the consent
of Revolving Lenders with LC Exposure representing greater than 50% of the
total LC Exposure), be applied to satisfy other Obligations of the Cayman
Borrower under this Agreement.  If the
Cayman Borrower is required to provide an amount of cash collateral hereunder
as a result of the occurrence of an Event of Default, such amount plus any accrued interest or realized profits with respect
to such amounts (to the extent not applied as aforesaid) shall be returned to
the Cayman Borrower within three Business Days after all Events of Default have
been cured or waived.

(j)            Additional
Issuing Banks.  The Cayman Borrower
may, at any time and from time to time, designate one or more additional
Revolving Lenders to act as an issuing bank under the terms of this Agreement,
with the consent of the Administrative Agent (which consent shall not be unreasonably
withheld), the Issuing Bank and such Revolving Lender(s).  Any Lender designated as an issuing bank pursuant
to this paragraph (j) shall be deemed (in addition to being a Revolving
Lender) to be the Issuing Bank with respect to Cayman Letters of Credit issued
or to be issued by such Revolving Lender, and all references herein and in the
other Loan Documents to the term “Issuing Bank” shall, with respect to such
Cayman Letters of Credit, be deemed to refer to such Revolving Lender in its
capacity as Issuing Bank, as the context shall require.

(k)           Resignation
or Removal of the Issuing Bank.  The
Issuing Bank may resign as Issuing Bank hereunder at any time upon at least
30 days’ prior notice to the Lenders, the Administrative Agent and the
Cayman Borrower.  The Issuing Bank may be
replaced at any time by written agreement 

 57
 

 

among the Cayman Borrower, each Agent, the replaced Issuing Bank and
the successor Issuing Bank.  The
Administrative Agent shall notify the Lenders of any such replacement of the
Issuing Bank or any such additional Issuing Bank.  At the time any such resignation or
replacement shall become effective, the Cayman Borrower shall pay all unpaid
fees accrued for the account of the replaced Issuing Bank pursuant to Section 2.05(c).  From and after the effective date of any such
resignation or replacement or addition, as applicable, (i) the successor
or additional Issuing Bank shall have all the rights and obligations of the
Issuing Bank under this Agreement with respect to Cayman Letters of Credit to
be issued by it thereafter and (ii) references herein to the term “Issuing
Bank” shall be deemed to refer to such successor or such addition or to any
previous Issuing Bank, or to such successor or such addition and all previous
Issuing Banks, as the context shall require. 
After the resignation or replacement of an Issuing Bank hereunder, the
replaced Issuing Bank shall remain a party hereto and shall continue to have
all the rights and obligations of an Issuing Bank under this Agreement with
respect to Cayman Letters of Credit issued by it prior to such resignation or
replacement, but shall not be required to issue additional Cayman Letters of
Credit.  If at any time there is more
than one Issuing Bank hereunder, the Cayman Borrower may, in its discretion,
select which Issuing Bank is to issue any particular Cayman Letter of Credit.

(l)            Other.  The Issuing Bank shall be under no obligation
to issue any Cayman 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 the Issuing Bank from issuing such Cayman Letter of Credit, or any
Requirement of Law applicable to the Issuing Bank or any request or directive
(whether or not having the force of law) from any Governmental Authority with
jurisdiction over the Issuing Bank shall prohibit, or request that the Issuing
Bank refrain from, the issuance of letters of credit generally or such Cayman
Letter of Credit in particular or shall impose upon the Issuing Bank with
respect to such Cayman Letter of Credit any restriction, reserve or capital requirement
(for which the Issuing Bank is not otherwise compensated hereunder) not in
effect on the Closing Date, or shall impose upon the Issuing Bank any
unreimbursed loss, cost or expense which was not applicable on the Closing Date
and which the Issuing Bank in good faith deems material to it; or

(ii)     the issuance of such Cayman Letter of
Credit would violate one or more policies of the Issuing Bank.

The Issuing Bank shall be under no obligation to amend
any Cayman Letter of Credit if (A) the Issuing Bank would have no
obligation at such time to issue such Cayman Letter of Credit in its amended
form under the terms hereof, or (B) the beneficiary of such Cayman Letter
of Credit does not accept the proposed amendment to such Cayman Letter of
Credit.

B.            US Letters of Credit

(a)           General.  Subject to the terms and conditions set forth
herein, the US Borrower may request the Issuing Bank, and the Issuing Bank
agrees, to issue Letters of Credit for its own account or the account of its
Subsidiary in a form reasonably acceptable to the Administrative Agent and the
Issuing Bank, at any time and from time to time during the Revolving
Availability Period (provided that
the US Borrower shall be a co-applicant, and be jointly and severally liable,
with respect to each Letter of Credit issued for the account of its
Subsidiary).  The Issuing Bank shall have
no obligation to issue, and the US Borrower shall not request the issuance of,
any Letter of Credit at any time if after giving effect to such issuance, the
LC Exposure would exceed the LC Commitment or the total Revolving Exposure 

 58
 

 

would exceed the total Revolving Commitments.  In the event of any inconsistency between the
terms and conditions of this Agreement and the terms and conditions of any form
of letter of credit application or other agreement submitted by the US Borrower
to, or entered into by the US Borrower with, the Issuing Bank relating to any
Letter of Credit, the terms and conditions of this Agreement shall control.

(b)           Request
for Issuance, Amendment, Renewal, Extension; Certain Conditions and Notices.  To request the issuance of a US Letter of
Credit or the amendment, renewal or extension of an outstanding US Letter of
Credit, the US Borrower shall deliver, by hand or telecopier (or transmit by
electronic communication, if arrangements for doing so have been approved by
the Issuing Bank), a US LC Request to the Issuing Bank and the Administrative
Agent not later than 11:00 a.m. on the third Business Day preceding the requested
date of issuance, amendment, renewal or extension (or such later date and time
as is acceptable to the Issuing Bank).

A request for an initial issuance of a US Letter of
Credit shall specify in form and detail satisfactory to the Issuing Bank:

(i)      the proposed issuance date of the
requested US Letter of Credit (which shall be a Business Day);

(ii)     the amount thereof;

(iii)    the expiry date thereof (which shall not be later
than the close of business on the Letter of Credit Expiration Date);

(iv)    the name and address of the beneficiary
thereof;

(v)     whether the US Letter of Credit is to be
issued for its own account or for the account of one of its Subsidiaries (provided that the US Borrower shall be a co-applicant, and
therefore jointly and severally liable, with respect to each US Letter of
Credit issued for the account of its Subsidiary);

(vi)    the documents to be presented by such
beneficiary in connection with any drawing thereunder;

(vii)   the full text of any certificate to be
presented by such beneficiary in connection with any drawing thereunder; and

(viii)  such other matters as the Issuing Bank may
require.

A request for an amendment, renewal or extension of
any outstanding US Letter of Credit shall specify in form and detail
satisfactory to the Issuing Bank:

(i)      the US Letter of Credit to be amended,
renewed or extended;

(ii)     the proposed date of amendment, renewal or
extension thereof (which shall be a Business Day);

(iii)    the nature of the proposed amendment,
renewal or extension; and

(iv)    such other matters as the Issuing Bank may
require.

 59

 

If requested by the Issuing Bank, the US Borrower also
shall submit a letter of credit application on the Issuing Bank’s standard form
in connection with any request for a US Letter of Credit.  A US Letter of Credit shall be issued,
amended, renewed or extended only if (and, upon issuance, amendment, renewal or
extension of each US Letter of Credit, the US Borrower shall be deemed to
represent and warrant that), after giving effect to such issuance, amendment,
renewal or extension, (i) the LC Exposure shall not exceed the LC
Commitment, (ii) the total Revolving Exposures shall not exceed the total
Revolving Commitments and (iii) the conditions set forth in Article IV
in respect of such issuance, amendment, renewal or extension shall have been
satisfied.  Unless the Issuing Bank shall
agree otherwise, no US Letter of Credit shall be in an initial amount less than
$100,000, in the case of a Commercial Letter of Credit, or $500,000, in the
case of a Standby Letter of Credit.

Upon the issuance of any US Letter of Credit or
amendment, renewal, extension or modification to a Letter of Credit, the
Issuing Bank shall promptly notify the Administrative Agent, who shall promptly
notify each Revolving Lender, thereof, which notice shall be accompanied by a
copy of such US Letter of Credit or amendment, renewal, extension or
modification to a US Letter of Credit and the amount of such Lender’s
respective participation in such US Letter of Credit pursuant to Section 2.18(B)(d).  On the first Business Day of each calendar month,
the Issuing Bank shall provide to the Administrative Agent a report listing all
outstanding US Letters of Credit and the amounts and beneficiaries thereof and
the Administrative Agent shall promptly provide such report to each Revolving
Lender.

(c)           Expiration
Date.  Each US Letter of Credit shall
expire at or prior to the close of business on the earlier of (i) in the
case of a Standby Letter of Credit, (x) the date which is one year after
the date of the issuance of such Standby Letter of Credit (or, in the case of
any renewal or extension thereof, one year after such renewal or extension) and
(y) the Letter of Credit Expiration Date and (ii) in the case of a
Commercial Letter of Credit, (x) the date that is 180 days after the
date of issuance of such Commercial Letter of Credit (or, in the case of any
renewal or extension thereof, 180 days after such renewal or extension)
and (y) the Letter of Credit Expiration Date.

(d)           Participations.  By the issuance of a US Letter of Credit (or
an amendment to a Letter of Credit increasing the amount thereof) and without
any further action on the part of the Issuing Bank or the Lenders, the Issuing
Bank hereby irrevocably grants to each Revolving Lender, and each Revolving
Lender hereby acquires from the Issuing Bank, a participation in such US Letter
of Credit equal to such Revolving Lender’s Pro Rata Percentage of the aggregate
amount available to be drawn under such US Letter of Credit.  In consideration and in furtherance of the
foregoing, each Revolving Lender hereby absolutely and unconditionally agrees
to pay to the Administrative Agent, for the account of the Issuing Bank, such
Revolving Lender’s Pro Rata Percentage of each US LC Disbursement made by the
Issuing Bank and not reimbursed by the US Borrower on the date due as provided
in Section 2.18(e), or of any reimbursement payment required to be
refunded to the US Borrower for any reason. 
Each Revolving Lender acknowledges and agrees that its obligation to
acquire participations pursuant to this paragraph in respect of US Letters of
Credit is absolute and unconditional and shall not be affected by any circumstance
whatsoever, including any amendment, renewal or extension of any US Letter of
Credit or the occurrence and continuance of a Default or reduction or
termination of the Commitments, or expiration, termination or cash
collateralization of any US Letter of Credit and that each such payment shall
be made without any offset, abatement, withholding or reduction whatsoever.

 

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(e)           Reimbursement.

(i)      If the Issuing Bank shall make any US LC
Disbursement in respect of a US Letter of Credit, the US Borrower shall
reimburse such LC Disbursement by paying to the Issuing Bank an amount equal to
such US LC Disbursement not later
than 3:00 p.m., New York City time, on the date that such US LC Disbursement is
made if the US Borrower shall have received notice of such US LC Disbursement
prior to 11:00 a.m., New York City time, on such date, or, if such notice has
not been received by the US Borrower prior to such time on such date, then not
later than 3:00 p.m., New York City time, on the Business Day immediately
following the day that the US Borrower receives such notice; provided that the US Borrower may, subject to the conditions
to borrowing set forth herein, request in accordance with Section 2.03
that such payment be financed with ABR Revolving Loans or Swingline Loans in an
equivalent amount and, to the extent so financed, the US Borrower obligation to
make such payment shall be discharged and replaced by the resulting ABR
Revolving Loans or Swingline Loans.

(ii)     If the US Borrower fails to make such
payment when due, the Issuing Bank shall notify the Administrative Agent and
the Administrative Agent shall notify each Revolving Lender of the applicable
US LC Disbursement, the payment then due from the US Borrower in respect
thereof and such Revolving Lender’s Pro Rata Percentage thereof.  Each Revolving Lender shall pay by wire
transfer of immediately available funds to the Administrative Agent not later
than 2:00 p.m., New York City time, on such date (or, if such Revolving Lender
shall have received such notice later than 12:00 noon, New York City time, on
any day, not later than 11:00 a.m., New York City time, on the immediately
following Business Day), an amount equal to such Revolving Lender’s Pro Rata
Percentage of the unreimbursed US LC Disbursement in the same manner as
provided in Section 2.02(c) with respect to Revolving Loans made by
such Revolving Lender, and the Administrative Agent will promptly pay to the
Issuing Bank the amounts so received by it from the Revolving Lenders.  The Administrative Agent will promptly pay to
the Issuing Bank any amounts received by it from the US Borrower pursuant to
the above paragraph prior to the time that any Revolving Lender makes any
payment pursuant to the preceding sentence and any such amounts received by the
Administrative Agent from the US Borrower thereafter will be promptly remitted
by the Administrative Agent to the Revolving Lenders that shall have made such
payments and to the Issuing Bank, as appropriate.

(iii)    If any Revolving Lender shall not have made
its Pro Rata Percentage of such LC Disbursement available to the Administrative
Agent as provided above, each of such Revolving Lender and the US Borrower
severally agrees to pay interest on such amount, for each day from and
including the date such amount is required to be paid in accordance with the
foregoing to but excluding the date such amount is paid, to the Administrative
Agent for the account of the Issuing Bank at (i) in the case of the US
Borrower, the rate per annum set forth in Section 2.18(B)(h) and
(ii) in the case of such Lender, at a rate determined by the
Administrative Agent in accordance with banking industry rules or practices on
interbank compensation.

(f)            Obligations
Absolute.  The US Reimbursement
Obligation of the US Borrower as provided in Section 2.18(B)(e)
shall be absolute, unconditional and irrevocable, and shall be paid and performed
strictly in accordance with the terms of this Agreement under any and all
circumstances whatsoever and irrespective of (i) any lack of validity or
enforceability of any Letter of Credit or this Agreement, or any term or provision
therein; (ii) any draft or other document presented under a Letter of
Credit being proved to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any respect;
(iii) payment by the Issuing Bank under a Letter of Credit 

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against presentation of a draft or other document that fails to comply
with the terms of such US Letter of Credit; (iv) any other event or
circumstance whatsoever, whether or not similar to any of the foregoing, that
might, but for the provisions of this Section 2.18(B), constitute a
legal or equitable discharge of, or provide a right of setoff against, the
obligations of the US Borrower hereunder; (v) the fact that a Default
shall have occurred and be continuing; or (vi) any material adverse change
in the business, property, results of operations, prospects or condition,
financial or otherwise, of the US Borrower and its Subsidiaries.  None of the Agents, the Lenders, the Issuing
Bank or any of their Affiliates shall have any liability or responsibility by
reason of or in connection with the issuance or transfer of any US Letter of
Credit or any payment or failure to make any payment thereunder (irrespective
of any of the circumstances referred to in the preceding sentence), or any
error, omission, interruption, loss or delay in transmission or delivery of any
draft, notice or other communication under or relating to any US Letter of
Credit (including any document required to make a drawing thereunder), any
error in interpretation of technical terms or any consequence arising from
causes beyond the control of the Issuing Bank; provided
that the foregoing shall not be construed to excuse the Issuing Bank from
liability to the US Borrower to the extent of any direct damages (as opposed to
consequential damages, claims in respect of which are hereby waived by the US
Borrower to the extent permitted by applicable Requirements of Law) suffered by
the US Borrower that are caused by the Issuing Bank’s failure to exercise care
when determining whether drafts and other documents presented under a US Letter
of Credit comply with the terms thereof. 
The parties hereto expressly agree that, in the absence of gross
negligence or willful misconduct on the part of the Issuing Bank (as finally
determined by a court of competent jurisdiction), the Issuing Bank shall be
deemed to have exercised care in each such determination.  In furtherance of the foregoing and without
limiting the generality thereof, the parties agree that, with respect to
documents presented which appear on their face to be in substantial compliance
with the terms of a US Letter of Credit, the Issuing Bank may, in its sole
discretion, either accept and make payment upon such documents without
responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of such
US Letter of Credit.

(g)           Disbursement
Procedures.  The Issuing Bank shall,
promptly following its receipt thereof, examine all documents purporting to
represent a demand for payment under a US Letter of Credit.  The Issuing Bank shall promptly give written
notice to the Administrative Agent and the US Borrower of such demand for
payment and whether the Issuing Bank has made or will make a US LC Disbursement
thereunder; provided that any failure to give or
delay in giving such notice shall not relieve the US Borrower of its
Reimbursement Obligation to the Issuing Bank and the Revolving Lenders with respect
to any such LC Disbursement (other than with respect to the timing of such
Reimbursement Obligation set forth in Section 2.18(B)(e)).

(h)           Interim
Interest.  If the Issuing Bank shall
make any LC Disbursement, then, unless the US Borrower shall reimburse such US
LC Disbursement in full in accordance with Section 2.18(B)(e)(i), the
unpaid amount thereof shall bear interest payable on demand, for each day from
and including the date such US LC Disbursement is made to but excluding the
date that the US Borrower reimburses such US LC Disbursement, at the rate per
annum determined pursuant to Section 2.06(c).  Interest accrued pursuant to this paragraph
shall be for the account of the Issuing Bank, except that interest accrued on
and after the date of payment by any Revolving Lender pursuant to Section 2.18(B)(e)
to reimburse the Issuing Bank shall be for the account of such Lender to the
extent of such payment.

(i)            Cash
Collateralization.  If any Event of
Default shall occur and be continuing, on the Business Day that the US Borrower
receives notice from the Administrative Agent or the Required Lenders (or, if
the maturity of the Loans has been accelerated, Revolving Lenders with LC
Exposure 

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representing greater than 50% of the total LC Exposure with respect to
US Letters of Credit) demanding the deposit of cash collateral pursuant to this
paragraph, the US Borrower shall deposit on terms and in accounts reasonably
satisfactory to the Collateral Agent, in the name of the Collateral Agent and
for the benefit of the Revolving Lenders, an amount in cash equal to the LC
Exposure with respect to US Letters of Credit as of such date plus any accrued
and unpaid interest thereon; provided that
the obligation to deposit such cash collateral shall become effective
immediately, and such deposit shall become immediately due and payable, without
demand or other notice of any kind, upon the occurrence of any Event of Default
with respect to the US Borrower described in Section 8.01(g) or (h).  Funds so deposited shall be applied by the
Collateral Agent to reimburse the Issuing Bank for US LC Disbursements for
which it has not been reimbursed and, to the extent not so applied, shall be
held for the satisfaction of outstanding US Reimbursement Obligations or, if
the maturity of the Loans has been accelerated (but subject to the consent of Revolving
Lenders with LC Exposure representing greater than 50% of the total LC
Exposure), be applied to satisfy other Obligations of the US Borrower under
this Agreement.  If the US Borrower is required
to provide an amount of cash collateral hereunder as a result of the occurrence
of an Event of Default, such amount plus any accrued
interest or realized profits with respect to such amounts (to the extent not
applied as aforesaid) shall be returned to the US Borrower within three
Business Days after all Events of Default have been cured or waived.

(j)            Additional
Issuing Banks.  The US Borrower may,
at any time and from time to time, designate one or more additional Revolving
Lenders to act as an issuing bank under the terms of this Agreement, with the
consent of the Administrative Agent (which consent shall not be unreasonably
withheld), the Issuing Bank and such Revolving Lender(s).  Any Lender designated as an issuing bank pursuant
to this paragraph (j) shall be deemed (in addition to being a Revolving
Lender) to be the Issuing Bank with respect to US Letters of Credit issued or
to be issued by such Revolving Lender, and all references herein and in the
other Loan Documents to the term “Issuing Bank” shall, with respect to such US
Letters of Credit, be deemed to refer to such Revolving Lender in its capacity
as Issuing Bank, as the context shall require.

(k)           Resignation
or Removal of the Issuing Bank.  The
Issuing Bank may resign as Issuing Bank hereunder at any time upon at least
30 days’ prior notice to the Lenders, the Administrative Agent and the US
Borrower.  The Issuing Bank may be
replaced at any time by written agreement among the US Borrower, each Agent,
the replaced Issuing Bank and the successor Issuing Bank.  The Administrative Agent shall notify the
Lenders of any such replacement of the Issuing Bank or any such additional
Issuing Bank.  At the time any such
resignation or replacement shall become effective, the US Borrower shall pay
all unpaid fees accrued for the account of the replaced Issuing Bank pursuant
to Section 2.05(c).  From and
after the effective date of any such resignation or replacement or addition, as
applicable, (i) the successor or additional Issuing Bank shall have all
the rights and obligations of the Issuing Bank under this Agreement with
respect to US Letters of Credit to be issued by it thereafter and
(ii) references herein to the term “Issuing Bank” shall be deemed to refer
to such successor or such addition or to any previous Issuing Bank, or to such
successor or such addition and all previous Issuing Banks, as the context shall
require.  After the resignation or replacement
of an Issuing Bank hereunder, the replaced Issuing Bank shall remain a party
hereto and shall continue to have all the rights and obligations of an Issuing
Bank under this Agreement with respect to US Letters of Credit issued by it
prior to such resignation or replacement, but shall not be required to issue
additional US Letters of Credit.  If at
any time there is more than one Issuing Bank hereunder, the US Borrower may, in
its discretion, select which Issuing Bank is to issue any particular US Letter
of Credit.

(l)            Other.  The Issuing Bank shall be under no obligation
to issue any US Letter of Credit if

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

(ii)     the issuance of such US Letter of Credit
would violate one or more policies of the Issuing Bank.

The Issuing Bank shall be under no obligation to amend
any US Letter of Credit if (A) the Issuing Bank would have no obligation
at such time to issue such US Letter of Credit in its amended form under the
terms hereof, or (B) the beneficiary of such US Letter of Credit does not
accept the proposed amendment to such US Letter of Credit.

SECTION 2.19           Increase
in Commitments.

(a)           Borrower
Request.  The US Borrower may by
written notice to the Administrative Agent elect to request prior to the Final
Maturity Date, an increase to the existing Revolving Commitments by an amount
not in excess of $75.0 million in the aggregate and not less than $10.0 million
individually; provided, however, that the US
Borrower may not make more than three (3) such increase requests during the term
of this Agreement.  Each such notice
shall specify (i) the date (each, an “Increase Effective Date”)
on which the US Borrower proposes that the increased or new Commitments shall
be effective, which shall be a date not less than 10 Business Days after the
date on which such notice is delivered to the Administrative Agent and (ii) the
identity of each Eligible Assignee to whom the US Borrower proposes any portion
of such increased or new Commitments be allocated and the amounts of such allocations;
provided that any existing Lender
approached to provide all or a portion of the increased or new Commitments may
elect or decline, in its sole discretion, to provide such increased or new
Commitment.

(b)           Conditions.  The increased or new Commitments shall become
effective, as of such Increase Effective Date; provided
that:

(i)      each of the conditions set forth in Section
4.02 shall be satisfied;

(ii)     no Default shall have occurred and be
continuing or would result from the borrowings to be made on the Increase Effective
Date;

(iii)    after giving pro forma effect to the
borrowings to be made on the Increase Effective Date and to any change in
Consolidated EBITDA and any increase in Indebtedness resulting from the
consummation of any Permitted Acquisition concurrently with such borrowings as
of the date of the most recent financial statements delivered pursuant to Section
5.01(a) or (b), the Borrowers shall be in compliance with each of
the covenants set forth in Section 6.10;

 

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(iv)    Borrowers shall make any payments required
pursuant to Section 2.13 in connection with any adjustment of Revolving
Loans pursuant to Section 2.19(d); and

(v)     Borrowers shall deliver or cause to be
delivered any legal opinions or other documents reasonably requested by the
Administrative Agent in connection with any such transaction.

(c)           Terms
of New Loans and Commitments.  The
terms and provisions of Loans made pursuant to the new Commitments shall be
identical to the terms and provisions of Revolving Loans made pursuant to Commitments
as in effect prior to an Increase Effective Date.

The increased or new Commitments shall be effected by
a joinder agreement (the “Increase Joinder”)
executed by the Borrowers, the Administrative Agent and each Lender making such
increased or new Commitment, in form and substance satisfactory to each of
them.  The Increase Joinder may, without
the consent of any other Lenders, effect such amendments to this Agreement and
the other Loan Documents as may be necessary or appropriate, in the opinion of
the Administrative Agent, to effect the provisions of this Section 2.19.  In addition, unless otherwise specifically
provided herein, all references in Loan Documents to Revolving Loans shall be
deemed, unless the context otherwise requires, to include references to Revolving
Loans made pursuant to new Commitments.

(d)           Adjustment
of Revolving Loans.  Each of the
Revolving Lenders prior to the relevant Increase Effective Date (the “Pre-Increase Revolving Lenders”) shall assign to any Revolving Lender which is acquiring a
new or additional Revolving Commitment on the Increase Effective Date (the “Post-Increase Revolving Lenders”), and such
Post-Increase Revolving Lenders shall purchase from each Pre-Increase Revolving
Lender, at the principal amount thereof, such interests in the Revolving Loans
and participation interests in LC Exposure and Swingline Loans outstanding on
such Increase Effective Date as shall be necessary in order that, after giving
effect to all such assignments and purchases, such Revolving Loans and participation
interests in LC Exposure and Swingline Loans will be held by Pre-Increase
Revolving Lenders and Post-Increase Revolving Lenders ratably in accordance
with their Revolving Commitments after giving effect to such increased Revolving
Commitments.

(e)           Equal
and Ratable Benefit.  The Loans and
Commitments established pursuant to this paragraph shall constitute Loans and
Commitments under, and shall be entitled to all the benefits and subject to all
of the liabilities afforded and imposed by, this Agreement and the other Loan
Documents, and shall, without limiting the foregoing, benefit equally and
ratably from the Guarantees and security interests created by the Security
Documents.  The Loan Parties shall take
any actions reasonably required by the Administrative Agent to ensure and/or
demonstrate that the Lien and security interests granted by the Security
Documents continue to be perfected under the UCC or otherwise after giving
effect to the establishment of any such new Commitments.

ARTICLE
III

REPRESENTATIONS
AND WARRANTIES

Each Domestic Loan Party represents and warrants to
the Administrative Agent, the Collateral Agent, the Issuing Bank and each of
the Lenders (with references to the Companies being references thereto after
giving effect to the Transactions unless otherwise expressly stated) with
respect to all Companies, and each Foreign Loan Party represents and warrants
to the Administrative Agent, the Collateral Agent, the Issuing Bank and each of
the Lenders (with references to the Companies being 

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references thereto after giving effect to the
Transactions unless otherwise expressly stated) only with respect to all
Foreign Loan Parties that:

SECTION 3.01     Organization; Powers.  Each Company (a) is duly organized and
validly existing under the laws of the jurisdiction of its organization,
(b) has all requisite power and authority to carry on its business as now
conducted and to own and lease its property and (c) is qualified and in
good standing (to the extent such concept is applicable in the applicable
jurisdiction) to do business in every jurisdiction where such qualification is
required, except in such jurisdictions where the failure to so qualify or be in
good standing, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.  There is no existing default under any
Organizational Document of any such Company or any event which, with the giving
of notice or passage of time or both, would constitute a default by any party
thereunder.

SECTION 3.02     Authorization; Enforceability.  The Transactions to be entered into by each
such Loan Party are within such Loan Party’s powers and have been duly
authorized by all necessary action on the part of such Loan Party.  This Agreement has been duly executed and
delivered by each such Loan Party and constitutes, and each other Loan Document
to which any such Loan Party is to be a party, when executed and delivered by
such Loan Party, will constitute, a legal, valid and binding obligation of such
Loan Party, enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors’ rights generally and subject to general principles of equity,
regardless of whether considered in a proceeding in equity or at law.

SECTION 3.03     No Conflicts.  Except as set forth on Schedule 3.03,
the Transactions (a) do not require any consent or approval of, registration
or filing with, or any other action by, any Governmental Authority, except
(i) such as have been obtained or made and are in full force and effect,
(ii) filings necessary to perfect Liens created by the Loan Documents and
(iii) consents, approvals, registrations, filings, permits or actions the
failure to obtain or perform which could not reasonably be expected to result
in a Material Adverse Effect, (b) will not violate the Organizational
Documents of any such Company, (c) will not violate any Requirement of Law,
(d) will not violate or result in a default or require any consent or
approval under any indenture, agreement or other instrument binding upon any
such Company or its property, or give rise to a right thereunder to require any
payment to be made by any such Company, except for violations, defaults or the
creation of such rights that could not reasonably be expected to result in a
Material Adverse Effect, and (e) will not result in the creation or imposition
of any Lien on any property of any such Company, except Liens created by the
Loan Documents and Permitted Liens.

SECTION
3.04     Financial Statements;
Projections.

(a)           Historical
Financial Statements.  US Borrower
has heretofore delivered to the Lenders the consolidated balance sheets and
related statements of income, stockholders’ equity and cash flows of Borrowers
(i) as of and for the fiscal years ended December 31, 2003, 2004 and 2005,
audited by and accompanied by the unqualified opinion of Borrowers’ independent
public accountants at such dates, and (ii) as of and for the six-month
period ended June 30, 2006 and for the comparable period of the preceding
fiscal year, in each case, certified by the chief financial officer of
Borrowers.  Such financial statements and
all financial statements delivered pursuant to Sections 5.01(a), (b)
and (c) have been prepared in accordance with GAAP and present fairly
and accurately the financial condition and results of operations and cash flows
of Borrowers as of the dates and for the periods to which they relate.

 

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(b)           No
Liabilities.  Except as set forth in
the financial statements referred to in Section 3.04(a), there are no
liabilities of any Company of any kind, whether accrued, contingent, absolute,
determined, determinable or otherwise, which could reasonably be expected to
result in a material adverse change in the business, property, results of
operations, prospects or condition, financial or otherwise, of such Company,
and there is no existing condition, situation or set of circumstances which
could reasonably be expected to result in such a liability, other than
liabilities under the Loan Documents. 
Since March 31, 2006, there has been no event, change, circumstance or
occurrence that, individually or in the aggregate, has had or could reasonably
be expected to result in a material adverse change in the business, property,
results of operations, prospects or condition, financial or otherwise, of such
Company.

(c)           Forecasts.  The forecasts of financial performance of the
US Borrower and its Subsidiaries furnished to the Lenders have been prepared in
good faith by such Borrowers and based on assumptions believed by the US Borrower
to be reasonable.

SECTION
3.05     Properties.

(a)           Generally.  Each Company has good title to, or valid leasehold
interests in, all its property material to its business, free and clear of all
Liens except for, in the case of Collateral, Permitted Collateral Liens and, in
the case of all other material property, Permitted Liens and minor
irregularities or deficiencies in title that, individually or in the aggregate,
do not interfere with its ability to conduct its business as currently conducted
or to utilize such property for its intended purpose.  The property of such Companies (including,
without limitation, those licensed, leased, or which, by contract, the
Companies are entitled to utilize), taken as a whole, (i) is in good
operating order, condition and repair (ordinary wear and tear excepted) and
(ii) constitutes all the property which is required for the business and
operations of such Companies as presently conducted.

(b)           Real
Property.  Schedules 8(a) and 8(b)
to the Perfection Certificate dated the Closing Date contain a true and
complete list of each interest in Real Property (i) owned by any such Company
as of the date hereof and describes the type of interest therein held by such
Company and whether such owned Real Property is leased by such Company to a
Person and if leased whether the underlying Lease contains any option to
purchase all or any portion of such Real Property or any interest therein or
contains any right of first refusal relating to any sale of such Real Property
or any portion thereof or interest therein and (ii) leased, subleased or
otherwise occupied or utilized by any such Company, as lessee, sublessee,
franchisee or licensee, as of the date hereof and describes the type of
interest therein held by such Company and, in each of the cases described in
clauses (i) and (ii) of this Section 3.05(b), whether any Lease
requires the consent of the landlord or tenant thereunder, or other party
thereto, to the Transactions.

(c)           No
Casualty Event.  No such Company has
received any notice of, nor has any knowledge of, the occurrence or pendency or
contemplation of any Casualty Event affecting all or any portion of its
property.  No Mortgage encumbers improved
Real Property that is located in an area that has been identified by the
Secretary of Housing and Urban Development as an area having special flood
hazards within the meaning of the National Flood Insurance Act of 1968 unless
flood insurance available under such Act has been obtained in accordance with Section
5.04.

(d)           Collateral.  Each such Company owns or has rights to use
all of the Collateral and all rights with respect to any of the foregoing used
in, necessary for or material to each such Company’s business as currently conducted.  The use by each Company of such Collateral
and all such rights with respect to the foregoing do not infringe on the rights
of any person other than such 

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infringement which could not, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect.  No claim has been made and remains outstanding
that any such Company’s use of any Collateral does or may violate the rights of
any third party that could, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Effect.

SECTION
3.06     Intellectual Property.

(a)           Ownership/No
Claims.  Each such Loan Party owns,
or is licensed to use, all Intellectual Property necessary for the conduct of
its business as currently conducted, except for those the failure to own or license
which, individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect.  No
claim has been asserted and is pending by any person challenging or questioning
the use of any such Intellectual Property or the validity or effectiveness of
any such Intellectual Property, nor does any such Loan Party know of any valid
basis for any such claim.  The use of
such Intellectual Property by each Loan Party does not infringe the rights of
any person, except for such claims and infringements that, individually or in
the aggregate, could not reasonably be expected to result in a material adverse
change in the business, property, results of operations, prospects or
condition, financial or otherwise, of such Company.

(b)           Registrations.  Except pursuant to licenses and other user
agreements entered into by each Loan Party in the ordinary course of business
that are listed in Schedule 12(a) or 12(b) to the Perfection
Certificate, on and as of the date hereof (i) except as set forth in Schedule
3.6(b), each such Loan Party owns and possesses the right to use, and has
done nothing to authorize or enable any other person that is not an Affiliate
of such Loan Party to use, any copyright, patent or trademark (as such terms
are defined in the Security Agreement) listed in Schedule 12(a) or 12(b)
to the Perfection Certificate and (ii) all registrations listed in Schedule
12(a) or 12(b) to the Perfection Certificate are valid and in full
force and effect.

(c)           No
Violations or Proceedings.  To each such
Loan Party’s knowledge, on and as of the date hereof, there is no material
violation by others of any right of such Loan Party with respect to any
copyright, patent or trademark listed in Schedule 12(a) or 12(b)
to the Perfection Certificate, pledged by it under the name of such Loan Party
except as may be set forth on Schedule 3.06(c).

SECTION
3.07     Equity Interests and
Subsidiaries.

(a)           Equity
Interests.  Schedules 1(a) and
10(a) to the Perfection Certificate dated the Closing Date set forth a
list of (i) all the Subsidiaries of the US Borrower and their
jurisdictions of organization as of the Closing Date and (ii) the number
of each class of its Equity Interests authorized, and the number outstanding,
on the Closing Date and the number of shares covered by all outstanding
options, warrants, rights of conversion or purchase and similar rights at the
Closing Date.  All Equity Interests of
each Company are duly and validly issued and are fully paid and non-assessable,
and, other than the Equity Interests of the US Borrower, are owned by the US
Borrower, directly or indirectly through Wholly Owned Subsidiaries.  Each Loan Party is the record and beneficial
owner of, and has good and marketable title to, the Equity Interests pledged by
it under the Security Agreement, free of any and all Liens, rights or claims of
other persons, except the security interest created by the Security Agreement,
and there are no outstanding warrants, options or other rights to purchase, or
shareholder, voting trust or similar agreements outstanding with respect to, or
property that is convertible into, or that requires the issuance or sale of,
any such Equity Interests.

 

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(b)           No
Consent of Third Parties Required. 
No consent of any person including any other general or limited partner,
any other member of a limited liability company, any other shareholder or any
other trust beneficiary is necessary or reasonably desirable (from the
perspective of a secured party) in connection with the creation, perfection or
first priority status of the security interest of the Collateral Agent in any
Equity Interests pledged to the Collateral Agent for the benefit of the Secured
Parties under the Security Agreement or the exercise by the Collateral Agent of
the voting or other rights provided for in the Security Agreement or the
exercise of remedies in respect thereof.

(c)           Organizational
Chart.  An accurate organizational
chart, showing the ownership structure of the US Borrower and each Subsidiary
on the Closing Date, and after giving effect to the Transactions, is set forth
on Schedule 10(a) to the Perfection Certificate dated the Closing Date.

SECTION 3.08     Litigation; Compliance with Laws.  There are no actions, suits or proceedings at
law or in equity by or before any Governmental Authority now pending or, to the
knowledge of any such Company, threatened against or affecting any such Company
or any business, property or rights of any Company (i) that involve any
Loan Document or any of the Transactions or (ii) as to which there is a
reasonable possibility of an adverse determination and that, if adversely
determined, could reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Effect. 
Except for matters covered by Section 3.18, no such Company
or any of its property is in violation of, nor will the continued operation of
its property as currently conducted violate, any Requirements of Law (including
any zoning or building ordinance, code or approval or any building permits) or
any restrictions of record or agreements affecting any such Company’s Real
Property or is in default with respect to any Requirement of Law, where such
violation or default, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect.

SECTION 3.09     Agreements.  No such Company is a party to any agreement
or instrument or subject to any corporate or other constitutional restriction
that has resulted or could reasonably be expected to result in a Material
Adverse Effect.  No such Company is in
default in any manner under any provision of any indenture or other agreement
or instrument evidencing Indebtedness, or any other agreement or instrument to
which it is a party or by which it or any of its property is or may be bound,
where such default could reasonably be expected to result in a Material Adverse
Effect, and no condition exists which, with the giving of notice or the lapse
of time or both, would constitute such a default.  Schedule 3.09 accurately and
completely lists all material agreements (other than leases of Real Property
set forth on Schedule 8(a) or 8(b) to the Perfection Certificate
dated the Closing Date) to which any such Company is a party which are in
effect on the date hereof in connection with the operation of the business
conducted thereby and the Borrowers have delivered to the Administrative Agent
complete and correct copies of all such material agreements, including any
amendments, supplements or modifications with respect thereto, and all such
agreements are in full force and effect.

SECTION 3.10     Federal Reserve Regulations.  No such Company is engaged principally, or as
one of its important activities, in the business of extending credit for the
purpose of buying or carrying Margin Stock. 
No part of the proceeds of any Loan or any Letter of Credit will be
used, whether directly or indirectly, and whether immediately, incidentally or
ultimately, for any purpose that entails a violation of, or that is
inconsistent with, the provisions of the regulations of the Board, including
Regulation T, U or X.  The pledge of the
Securities Collateral pursuant to the Security Agreement does not violate such
regulations.

 

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SECTION 3.11     Investment Company Act.  No Company is an “investment company” or a
company “controlled” by an “investment company,” as defined in, or subject to
regulation under, the Investment Company Act of 1940, as amended.

SECTION 3.12     Use of Proceeds.  The Borrowers will use the proceeds of the
Revolving Loans and Swingline Loans on and after the Closing Date for general
corporate purposes, including, without limitation, (a) to effect Permitted
Acquisitions, and (b) to pay for any put of the Convertible Bonds; provided, however, that if proceeds of any Loan are used, in
whole or in part, for any transaction described in the foregoing clause (a) or
(b), after giving Pro Forma effect to such transaction and to such Loan, the
sum of (i) the Companies’ cash and Cash Equivalents plus (ii) the excess of the
total Revolving Commitments then in effect over the total Revolving Exposure
shall be greater than or equal to 20% of the total Revolving Commitments then
in effect.

SECTION 3.13     Taxes.  Each such Company has (a) timely filed
or caused to be timely filed all federal Tax Returns and all material state,
local and foreign Tax Returns or materials required to have been filed by it
and all such Tax Returns are true and correct in all material respects and
(b) duly and timely paid, collected or remitted or caused to be duly and
timely paid, collected or remitted all Taxes (whether or not shown on any Tax
Return) due and payable, collectible or remittable by it and all assessments
received by it, except Taxes (i) that are being contested in good faith by
appropriate proceedings and for which such Company has set aside on its books
adequate reserves in accordance with GAAP and (ii) which could not,
individually or in the aggregate, have a Material Adverse Effect.  Each such Company has made adequate provision
in accordance with GAAP for all Taxes not yet due and payable.  Each such Company is unaware of any proposed
or pending tax assessments, deficiencies or audits that could be reasonably
expected to, individually or in the aggregate, result in a Material Adverse
Effect.  No such Company has ever been a
party to any understanding or arrangement constituting a “tax shelter” within
the meaning of Section 6111(c), Section 6111(d) or Section 6662(d)(2)(C)(iii)
of the Code, or has ever “participated” in a “reportable transaction” within
the meaning of Treasury Regulation Section 1.6011-4, except as could not be
reasonably expected to, individually or in the aggregate, result in a Material
Adverse Effect.

SECTION 3.14     No Material Misstatements.  No information, report, financial statement,
certificate, Borrowing Request, LC Request, exhibit or schedule furnished by or
on behalf of any such Company to the Administrative Agent or any Lender in
connection with the negotiation of any Loan Document or included therein or
delivered pursuant thereto, taken as a whole, or the Confidential Information
Memorandum contained or contains any material misstatement of fact or omitted
or omits to state any material fact necessary to make the statements therein,
in the light of the circumstances under which they were or are made, not
misleading as of the date such information is dated or certified; provided that to the extent any such information, report,
financial statement, exhibit or schedule was based upon or constitutes a
forecast or projection, each such Company represents only that it acted in good
faith and utilized reasonable assumptions and due care in the preparation of
such information, report, financial statement, exhibit or schedule.

SECTION 3.15     Labor Matters.  As of the Closing Date, there are no strikes,
lockouts or slowdowns against any such Company pending or, to the knowledge of
any such Company, threatened.  The hours
worked by and payments made to employees of any such Company have not been in
violation of the Fair Labor Standards Act of 1938, as amended, or any other
applicable federal, state, local or foreign law dealing with such matters in
any manner which could reasonably be expected to result in a Material Adverse
Effect.  All payments due from any
Company, or for which any claim may be made against any Company, on account of
wages and employee health and welfare insurance and other 

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benefits, have been paid or accrued as a liability on
the books of such Company except where the failure to do so could not reasonably
be expected to result in a Material Adverse Effect.  The consummation of the Transactions will not
give rise to any right of termination or right of renegotiation on the part of
any union under any collective bargaining agreement to which any such Company
is bound.

SECTION 3.16     Solvency.  Immediately after the consummation of the
Transactions to occur on the Closing Date and immediately following the making
of each Loan and after giving effect to the application of the proceeds of each
Loan, (a) the fair value of the properties of each such Loan Party
(individually and on a consolidated basis with its Subsidiaries) will exceed
its debts and liabilities, subordinated, contingent or otherwise; (b) the
present fair saleable value of the property of each such Loan Party
(individually and on a consolidated basis with its Subsidiaries) will be
greater than the amount that will be required to pay the probable liability of
its debts and other liabilities, subordinated, contingent or otherwise, as such
debts and other liabilities become absolute and matured; (c) each such
Loan Party (individually and on a consolidated basis with its Subsidiaries)
will be able to pay its debts and liabilities, subordinated, contingent or otherwise,
as such debts and liabilities become absolute and matured; and (d) each
such Loan Party (individually and on a consolidated basis with its
Subsidiaries) will not have unreasonably small capital with which to conduct
its business in which it is engaged as such business is now conducted and is
proposed to be conducted following the Closing Date.

SECTION 3.17     Employee Benefit Plans.  Each such Company that is subject to ERISA
and the Code and its ERISA Affiliates are in compliance in all material respects
with the applicable provisions of ERISA and the Code and the regulations and
published interpretations thereunder.  No
ERISA Event has occurred or is reasonably expected to occur that, when taken
together with all other such ERISA Events, could reasonably be expected to
result in a Material Adverse Effect or the imposition of a Lien on any of the
property of any such Company.  The
present value of all accumulated benefit obligations of all underfunded Plans
(based on the assumptions used for purposes of Statement of Financial
Accounting Standards No. 87) did not, as of the date of the most recent
financial statements reflecting such amounts, exceed by more than $250,000 the
fair market value of the property of all such underfunded Plans.  Using actuarial assumptions and computation
methods consistent with subpart I of subtitle E of Title IV of ERISA, the
aggregate liabilities of each such Company or its ERISA Affiliates to all
Multiemployer Plans in the event of a complete withdrawal therefrom, as of the close
of the most recent fiscal year of each such Multiemployer Plan, could not
reasonably be expected to result in a Material Adverse Effect.

To the extent applicable, each Foreign Plan has been
maintained in substantial compliance with its terms and with the requirements
of any and all applicable Requirements of Law and has been maintained, where
required, in good standing with applicable regulatory authorities.  No such Company has incurred any material
obligation in connection with the termination of or withdrawal from any Foreign
Plan.  The present value of the accrued
benefit liabilities (whether or not vested) under each Foreign Plan which is
funded, determined as of the end of the most recently ended fiscal year of the
respective Company on the basis of actuarial assumptions, each of which is
reasonable, did not exceed the current value of the property of such Foreign
Plan, and for each Foreign Plan which is not funded, the obligations of such
Foreign Plan are properly accrued.

SECTION
3.18     Environmental Matters.

(a)           Except
as set forth in Schedule 3.18 and except as, individually or in the
aggregate, could not reasonably be expected to result in a loss to the
business, property, operations or prospects of any Loan Party in excess of
$500,000:

(i)      Such Companies and their businesses,
operations and Real Property are in compliance with, and such Companies have no
liability under, any applicable Environmental Law; and under the currently
effective 

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business plan
of such Companies, no expenditures or operational adjustments will be required
in order to comply with applicable Environmental Laws during the term of this
Agreement;

(ii)     Such Companies have obtained all
Environmental Permits required for the conduct of their businesses and
operations, and the ownership, operation and use of their property, under
Environmental Law, all such Environmental Permits are valid and in good
standing and, under the currently effective business plan of such Companies, no
expenditures or operational adjustments will be required in order to renew or
modify such Environmental Permits during the term of this Agreement;

(iii)    There has been no Release or threatened
Release of Hazardous Material on, at, under or from any Real Property or
facility presently or formerly owned, leased or operated by such Companies or
their predecessors in interest that could result in liability by such Companies
under any applicable Environmental Law;

(iv)    There is no Environmental Claim pending or,
to the knowledge of the Companies, threatened against such Companies, or
relating to the Real Property currently or formerly owned, leased or operated
by such Companies or their predecessors in interest or relating to the operations
of such Companies, and there are no actions, activities, circumstances, conditions,
events or incidents that could form the basis of such an Environmental Claim;
and

(v)     No person with an indemnity or contribution
obligation to such Companies relating to compliance with or liability under
Environmental Law is in default with respect to such obligation.

(b)           Except
as set forth in Schedule 3.18:

(i)      No such Company is obligated to perform
any action or otherwise incur any expense under Environmental Law pursuant to
any order, decree, judgment or agreement by which it is bound or has assumed by
contract, agreement or operation of law, and no Company is conducting or financing
any Response pursuant to any Environmental Law with respect to any Real
Property or any other location;

(ii)     No Real Property or facility owned,
operated or leased by such Companies and, to the knowledge of such Companies,
no Real Property or facility formerly owned, operated or leased by such
Companies or any of their predecessors in interest is (i) listed or
proposed for listing on the National Priorities List promulgated pursuant to
CERCLA or (ii) listed on the Comprehensive Environmental Response,
Compensation and Liability Information System promulgated pursuant to CERCLA or
(iii) included on any similar list maintained by any Governmental
Authority including any such list relating to petroleum;

(iii)    No Lien has been recorded or, to the
knowledge of any Company, threatened under any Environmental Law with respect
to any Real Property or other assets of such Companies;

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(iv)    The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated hereby
will not require any notification, registration, filing, reporting, disclosure,
investigation, remediation or cleanup pursuant to any Governmental Real
Property Disclosure Requirements or any other applicable Environmental Law; and

(v)     Such Companies have made available to the
Lenders all material records and files in the possession, custody or control
of, or otherwise reasonably available to, such Companies concerning compliance
with or liability under Environmental Law, including those concerning the
actual or suspected existence of Hazardous Material at Real Property or
facilities currently or formerly owned, operated, leased or used by such Companies.

SECTION 3.19     Insurance.  Schedule 3.19 sets forth a true,
complete and correct description of all insurance maintained by each such
Company as of the Closing Date.  All
insurance maintained by such Companies is in full force and effect, all
premiums have been duly paid, no such Company has received notice of violation
or cancellation thereof, the Premises, and the use, occupancy and operation
thereof, comply in all material respects with all Insurance Requirements, and
there exists no default under any Insurance Requirement.  Each such Company has insurance in such
amounts and covering such risks and liabilities as are customary for companies
of a similar size engaged in similar businesses in similar locations.

SECTION
3.20     Security Documents.

(a)           Security
Agreement.  The Security Agreement is
effective to create in favor of the Collateral Agent for the benefit of the
Secured Parties, legal, valid and enforceable Liens on, and security interests
in, the Security Agreement Collateral pledged by such Company and, when
(i) financing statements and other filings in appropriate form are filed
in the offices specified on Schedule 7 to the Perfection
Certificate and (ii) upon the taking of possession or control by the
Collateral Agent of the Security Agreement Collateral with respect to which a
security interest may be perfected only by possession or control (which
possession or control shall be given to the Collateral Agent to the extent
possession or control by the Collateral Agent is required by each Security
Agreement), the Liens created by the Security Agreement shall constitute fully
perfected Liens on, and security interests in, all right, title and interest of
the grantors in the Security Agreement Collateral pledged by such Company
(other than such Security Agreement Collateral in which a security interest
cannot be perfected under the UCC as in effect at the relevant time in the
relevant jurisdiction), in each case subject to no Liens other than Permitted
Collateral Liens.

(b)           PTO
Filing; Copyright Office Filing. 
When the Security Agreement or a short form thereof is filed in the
United States Patent and Trademark Office and the United States Copyright
Office, the Liens created by such Security Agreement shall constitute fully
perfected Liens on, and security interests in, all right, title and interest of
the grantors thereunder in Patents (as defined in the Security Agreement)
registered or applied for with the United States Patent and Trademark Office
pledged by such Company or Copyrights (as defined in such Security Agreement)
registered or applied for with the United States Copyright Office pledged by
such Company, as the case may be, in each case subject to no Liens other than
Permitted Collateral Liens.

(c)           Mortgages.  Each Mortgage to be executed and delivered
after the date thereof in accordance with the provisions of Sections 5.11
and 5.12 shall be effective to create, in favor of the Collateral Agent,
for its benefit and the benefit of the Secured Parties, legal, valid and
enforceable first 

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priority Liens on, and security interests in, all of the applicable
Loan Parties’ right, title and interest in and to the Mortgaged Properties
thereunder and the proceeds thereof, subject only to Permitted Collateral Liens
or other Liens acceptable to the Collateral Agent, and when such Mortgage is
filed in the offices specified in the local counsel opinion delivered with
respect thereto in accordance with the provisions of Sections 5.11
and 5.12, such Mortgage shall constitute fully perfected Liens on, and
security interests in, all right, title and interest of the Loan Parties in the
Mortgaged Properties and the proceeds thereof, in each case prior and superior
in right to any other person, other than Liens permitted by such Mortgage.

(d)           Cayman
Share Charge.  The Cayman Share
Charge is effective to create in favor of the Collateral Agent for the benefit
of the Secured Parties, a legal, valid and enforceable first fixed charge and
equitable mortgage over, the Cayman Charged Property.

(e)           Cayman
Deed of Charge.  The Cayman Deed of
Charge is effective to create in favor of the Collateral Agent for the benefit
of the Secured Parties, a legal, valid and enforceable first floating charge
over the Collateral described therein.

(f)            Cayman
Security Agreement.  The Cayman
Security Agreement is effective to create in favor of the Collateral Agent for
the benefit of the Secured Parties, legal, valid and enforceable Liens on, and
security interests in, the Collateral pledged by the Cayman Borrower
thereunder, and when all appropriate filings or recordings are made in the
appropriate offices as may be required under applicable law, the Cayman
Security Document will constitute fully perfected Liens on, and security
interests in, all right, title and interest of the Cayman Borrower in such
Collateral, in each case subject to no Liens other than the applicable
Permitted Collateral Liens.

(g)           Valid
Liens.  Each Security Document
delivered pursuant to Sections 5.11 and 5.12 will, upon execution
and delivery thereof, be effective to create in favor of the Collateral Agent,
for the benefit of the Secured Parties, legal, valid and enforceable Liens on,
and security interests in, all of the applicable Loan Parties’ right, title and
interest in and to the Collateral thereunder, and (i) when all appropriate
filings or recordings are made in the appropriate offices as may be required
under applicable law and (ii) upon the taking of possession or control by
the Collateral Agent of such Collateral with respect to which a security
interest may be perfected only by possession or control (which possession or control
shall be given to the Collateral Agent to the extent required by any Security
Document), such Security Document will constitute fully perfected Liens on, and
security interests in, all right, title and interest of the applicable Loan
Parties in such Collateral, in each case subject to no Liens other than the
applicable Permitted Collateral Liens.

SECTION 3.21     Anti-Terrorism Law.  (a)  No
such Loan Party and, to the knowledge of such Loan Parties, none of its Affiliates
is in violation of any Requirement of Law relating to terrorism or money
laundering (“Anti-Terrorism Laws”), including
Executive Order No. 13224 on Terrorist Financing, effective September 24,
2001 (the “Executive Order”), and the Uniting
and Strengthening America by Providing Appropriate Tools Required to Intercept
and Obstruct Terrorism Act of 2001, Public Law 107-56.

(b)           No
such Loan Party and to the knowledge of such Loan Parties, no Affiliate or
broker or other agent of any such Loan Party acting or benefiting in any
capacity in connection with the Loans is any of the following:

(i)      a person that is listed in the annex to,
or is otherwise subject to the provisions of, the Executive Order;

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(ii)     a person owned or controlled by, or acting
for or on behalf of, any person that is listed in the annex to, or is otherwise
subject to the provisions of, the Executive Order;

(iii)    a person with which any Lender is prohibited
from dealing or otherwise engaging in any transaction by any Anti-Terrorism
Law;

(iv)    a person that commits, threatens or
conspires to commit or supports “terrorism” as defined in the Executive Order;
or

(v)     a person that is named as a “specially
designated national and blocked person” on the most current list published by
the U.S. Treasury Department Office of Foreign Assets Control (“OFAC”) at its official website or any
replacement website or other replacement official publication of such list.

(c)           No
such Loan Party and, to the knowledge of such Loan Parties, no broker or other
agent of any such Loan Party acting in any capacity in connection with the
Loans (i) conducts any business or engages in making or receiving any
contribution of funds, goods or services to or for the benefit of any person
described in paragraph (b) above, (ii) deals in, or otherwise engages
in any transaction relating to, any property or interests in property blocked
pursuant to the Executive Order, or (iii) engages in or conspires to
engage in any transaction that evades or avoids, or has the purpose of evading
or avoiding, or attempts to violate, any of the prohibitions set forth in any
Anti-Terrorism Law.

SECTION 3.22              Convertible
Bond Documents.

(a)           The
execution and delivery of the Loan Documents by any such Loan Party and the
incurrence of Indebtedness by any such Loan Party pursuant to the Loan
Documents, including any future advances hereunder, will not violate or result
in a default under any of the Convertible Bond Documents.

(b)           The
Obligations constitute “Senior Indebtedness” and “Designated Senior Indebtedness”
(as each such term is defined in the Convertible Bond Indenture) under the
terms of the Convertible Bond Documents entitled to the benefits of the
subordination provisions set forth in Article XI of the Convertible Bond Indenture.

(c)           The
Agents and Lenders are intended third party beneficiaries of the provisions set
forth in Article XI of the Convertible Bond Indenture, with the right and
ability to enforce such provisions for their own benefit.  Each such Borrower acknowledges and agrees
that the Agents and the Lenders are entering into this Agreement and are
extending Commitments in reliance upon the subordination provisions of Article
XI of the Convertible Bond Indenture and this Section 3.22.

SECTION 3.23              Foreign
Subsidiaries.

As of the Closing Date, no Foreign Subsidiary of the
US Borrower (other than the Cayman Borrower) holds any Intellectual Property,
and no Foreign Subsidiary of the US Borrower (other than the Cayman Borrower
and Irish Sciele) holds any material properties, is liable for any material obligations
(whether contingent or actual), engages in any trade or business, or conducts
any business activity, other than (1) the issuance of its Equity Interests
to the US Borrower or any Wholly Owned Subsidiary of the US Borrower or
(2) the licensing of Intellectual Property from one or more Companies and
activities incidental thereto.

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ARTICLE
IV

CONDITIONS
TO CREDIT EXTENSIONS

SECTION 4.01     Conditions to Initial Credit
Extension.  The obligation
of each Lender and, if applicable, each Issuing Bank to fund the initial Credit
Extension requested to be made by it shall be subject to the prior or
concurrent satisfaction (except to the extent that such conditions are
permitted to be satisfied on a post-closing basis pursuant to Section 5.15
herein) of each of the conditions precedent set forth in this Section 4.01.

(a)           Loan
Documents.  All legal matters
incident to this Agreement, the Credit Extensions hereunder and the other Loan
Documents shall be reasonably satisfactory to the Lenders, to the Issuing Bank
and to the Administrative Agent and there shall have been delivered to the
Administrative Agent an executed counterpart of each of the Loan Documents and
the Perfection Certificate.

(b)           Corporate
Documents.  The Administrative Agent
shall have received:

(i)      a certificate of the secretary or
assistant secretary of each Loan Party dated the Closing Date, certifying
(A) that attached thereto is a true and complete copy of each Organizational
Document of such Loan Party certified (to the extent applicable) as of a recent
date by the Secretary of State of the state of its organization, (B) that
attached thereto is a true and complete copy of resolutions duly adopted by the
Board of Directors of such Loan Party authorizing the execution, delivery and performance
of the Loan Documents to which such person is a party and, in the case of the
Borrowers, the borrowings hereunder, and that such resolutions have not been
modified, rescinded or amended and are in full force and effect and (C) as
to the incumbency and specimen signature of each officer executing any Loan
Document or any other document delivered in connection herewith on behalf of
such Loan Party (together with a certificate of another officer as to the
incumbency and specimen signature of the secretary or assistant secretary executing
the certificate in this clause (i));

(ii)     a certificate as to the good standing of
each Loan Party (in so-called “long-form” if available) (or foreign equivalent)
as of a recent date, from such Secretary of State (or other applicable
Governmental Authority); and

(iii)    such other documents as the Lenders, the
Issuing Bank or the Administrative Agent may reasonably request.

(c)           Officers’
Certificate.  The Administrative
Agent shall have received a certificate, dated the Closing Date and signed by
the chief executive officer, the chief financial officer or an equivalent
senior officer of each Borrower, confirming compliance with the conditions
precedent set forth in this Section 4.01 and Sections 4.02(b),
(c) and (d).

(d)           Financings
and Other Transactions, etc.

(i)      The Transactions shall have been
consummated or shall be consummated simultaneously on the Closing Date, in each
case in all material respects in accordance with the terms hereof and the terms
of the Loan Documents, without the waiver or amendment of any such

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terms not
approved by the Administrative Agent and the Arrangers other than any waiver or
amendment thereof that is not materially adverse to the interests of the
Lenders.

(ii)     The Lenders shall be reasonably satisfied
with the management, capitalization, the terms and conditions of any equity
arrangements and the corporate or other organizational structure of the
Companies (after giving effect to the Transactions) and any indemnities, employment
and other arrangements entered into in connection with the Transactions.

(iii)    The Refinancing shall have been consummated
in full to the reasonable satisfaction of the Lenders with all liens in favor
of the existing lenders being unconditionally released; the Administrative
Agent shall have received a “pay-off” letter in form and substance reasonably
satisfactory to the Administrative Agent with respect to all debt being
refinanced in the Refinancing; and the Administrative Agent shall have received
from any person holding any Lien securing any such debt, such UCC termination
statements, mortgage releases, releases of assignments of leases and rents,
releases of security interests in Intellectual Property and other instruments,
in each case in proper form for recording, as the Administrative Agent shall
have reasonably requested to release and terminate of record the Liens securing
such debt.

(e)           Financial
Statements; Pro Forma Balance Sheet; Projections.  The Lenders shall have received and shall be
satisfied with the form and substance of the financial statements described in Section 3.04
and with the forecasts of the financial performance of the US Borrower and its
Subsidiaries.

(f)            Indebtedness
and Minority Interests.  After giving
effect to the Transactions and the other transactions contemplated hereby, no
Company shall have outstanding any Indebtedness or preferred stock other than
(i) the Loans and Credit Extensions hereunder, (ii) the Indebtedness
listed on Schedule 6.01(b) and (iii) Indebtedness owed to any
Borrower or any Guarantor.

(g)           Opinions
of Counsel.  The Administrative Agent
shall have received, on behalf of itself, the other Agents, the Arrangers, the
Lenders and the Issuing Bank, a favorable written opinion of (i) Paul,
Hastings, Janofsky & Walker, LLP, special counsel for the Loan Parties, and
(ii) each local and foreign counsel listed on Schedule 4.01(g),
in each case (A) dated the Closing Date, (B) addressed to the Agents,
the Issuing Bank and the Lenders and (C) covering the matters set forth in
Exhibit N and such other matters relating to the Loan Documents and the
Transactions as the Administrative Agent shall reasonably request.

(h)           Solvency
Certificate.  The Administrative
Agent shall have received a solvency certificate in the form of Exhibit O,
dated the Closing Date and signed by the chief financial officer of each Borrower.

(i)            Requirements
of Law.  The Lenders shall be
satisfied that each Borrower, its Subsidiaries and the Transactions shall be in
full compliance with all material Requirements of Law, including Regulations T,
U and X of the Board, and shall have received satisfactory evidence of such compliance
reasonably requested by them.

(j)            Consents.  The Lenders shall be satisfied that all
requisite Governmental Authorities and third parties shall have approved or
consented to the Transactions, and there shall be no governmental or judicial
action, actual or threatened, that has or would have, singly or in the
aggregate, a reasonable likelihood of restraining, preventing or imposing burdensome
conditions on the Transactions or the other transactions contemplated hereby.

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(k)           Litigation.  There shall be no litigation, public or
private, or administrative proceedings, governmental investigation or other
legal or regulatory developments, actual or threatened, that, singly or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect,
or could materially and adversely affect the ability of the Borrowers and the
Subsidiaries to fully and timely perform their respective obligations under the
Loan Documents, or the ability of the parties to consummate the financings
contemplated hereby or the other Transactions.

(l)            Sources
and Uses.  The sources and uses of
the Loans shall be as set forth in Section 3.12.

(m)          Fees.  The Arrangers and Administrative Agent shall
have received all Fees and other amounts due and payable on or prior to the
Closing Date, including, to the extent invoiced, reimbursement or payment of
all out-of-pocket expenses (including the legal fees and expenses of Latham
& Watkins LLP, special
counsel to the Agents, and the fees and expenses of any local counsel, foreign
counsel, appraisers, consultants and other advisors) required to be reimbursed
or paid by the Borrowers hereunder or under any other Loan Document.

(n)           Personal
Property Requirements.  The
Collateral Agent shall have received:

(i)      UCC financing statements (or their foreign
equivalents) in appropriate form for filing under the UCC (or its foreign
equivalent), filings with the United States Patent and Trademark Office and
United States Copyright Office and such other documents under applicable Requirements
of Law in each jurisdiction as may be necessary or appropriate or, in the
opinion of the Collateral Agent, desirable to perfect the Liens created, or
purported to be created, by the Security Documents;

(ii)     certified copies of UCC (or their foreign
equivalents), United States Patent and Trademark Office and United States
Copyright Office, tax and judgment lien searches, bankruptcy and pending lawsuit
searches or equivalent reports or searches, each of a recent date listing all
effective financing statements, lien notices or comparable documents that name
any Loan Party as debtor and that are filed in those state and, if applicable,
county jurisdictions in which any property of any Loan Party is located and the
state and, if applicable, county jurisdictions in which any Loan Party is
organized or maintains its principal place of business and such other searches
that the Collateral Agent deems necessary or appropriate, none of which
encumber the Collateral covered or intended to be covered by the Security
Documents (other than Permitted Collateral Liens or any other Liens acceptable
to the Collateral Agent);

(iii)    with respect to each location set forth on Schedule 4.01(n)(iii),
a Landlord Access Agreement or Bailee Letter, as applicable; provided that no such Landlord Access Agreement or Bailee
Letter shall be required (A) with respect to any Real Property that could not
be obtained after the Loan Party that is the lessee of such Real Property or
owner of the inventory or other personal property Collateral stored with the
bailee thereof, as applicable, shall have used all commercially reasonable
efforts to do so, or (B) with respect to any location where the book value of
personal property Collateral stored with the bailee thereof is less than $5.0
million per location so long as the aggregate book value of personal property
Collateral at all such locations for which no Bailee Letter is obtained does not
exceed $10.0 million; and

 78
 

 

(iv)    evidence acceptable to the Collateral Agent
of payment or arrangements for payment by the Loan Parties of all applicable
recording taxes, fees, charges, costs and expenses required for the recording
of the Security Documents.

(o)           Insurance.  The Administrative Agent shall have received
a copy of, or a certificate as to coverage under, the insurance policies
required by Section 5.04 and the applicable provisions of the
Security Documents, each of which shall be endorsed or otherwise amended to include
a “standard” or “New York” lender’s loss payable or mortgagee endorsement (as
applicable) and shall name the Collateral Agent, on behalf of the Secured
Parties, as additional insured, in form and substance satisfactory to the Administrative
Agent.

(p)           USA
Patriot Act.  The Lenders shall have
received, sufficiently in advance of the Closing Date, all documentation and
other information that may be required by the Lenders in order to enable
compliance with applicable “know your customer” and anti-money laundering rules
and regulations, including the United States PATRIOT Act (Title III of Pub. L.
107-56 (signed into law October 26, 2001)) including the information described
in Section 10.13.

SECTION 4.02     Conditions to All Credit Extensions.  The obligation of each Lender and each
Issuing Bank to make any Credit Extension (including the initial Credit
Extension) shall be subject to, and to the satisfaction of, each of the conditions
precedent set forth below.

(a)           Notice.  The Administrative Agent shall have received
a Borrowing Request as required by Section 2.03 (or such notice
shall have been deemed given in accordance with Section 2.03) if
Loans are being requested or, in the case of the issuance, amendment, extension
or renewal of a Letter of Credit, the Issuing Bank and the Administrative Agent
shall have received an LC Request as required by Section 2.18(b)
or, in the case of the Borrowing of a Swingline Loan, the Swingline Lender and
the Administrative Agent shall have received a Borrowing Request as required by
Section 2.17(b).

(b)           No
Default.  The Borrowers and each
other Loan Party shall be in compliance in all material respects with all the
terms and provisions set forth herein and in each other Loan Document on its
part to be observed or performed, and, at the time of and immediately after
giving effect to such Credit Extension and the application of the proceeds
thereof, no Default shall have occurred and be continuing on such date.

(c)           Representations
and Warranties.  Each of the
representations and warranties made by any Loan Party set forth in Article III
hereof or in any other Loan Document shall be true and correct in all material
respects (except that any representation and warranty that is qualified as to “materiality”
or “Material Adverse Effect” shall be true and correct in all respects) on and
as of the date of such Credit Extension with the same effect as though made on
and as of such date, except to the extent such representations and warranties
expressly relate to an earlier date.

(d)           No
Legal Bar.  No order, judgment or
decree of any Governmental Authority shall purport to restrain any Lender from
making any Loans to be made by it.  No
injunction or other restraining order shall have been issued, shall be pending
or noticed with respect to any action, suit or proceeding seeking to enjoin or
otherwise prevent the consummation of, or to recover any damages or obtain
relief as a result of, the transactions contemplated by this Agreement or the
making of Loans hereunder.

 

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(e)           Credit
Extensions to the US Borrower.  If
such Credit Extension will be a Borrowing by the US Borrower or a US Letter of
Credit issuance, the Cayman Borrower shall have repaid in full all intercompany
loans and advances made to it by the US Borrower (other than Existing
Intercompany Loans).

Each of the delivery of a
Borrowing Request or an LC Request and the acceptance by a Borrower of the
proceeds of such Credit Extension shall constitute a representation and
warranty by the relevant Borrower and each other Loan Party that on the date of
such Credit Extension (both immediately before and after giving effect to such
Credit Extension and the application of the proceeds thereof) the conditions
contained in Sections 4.02(b)-(d) have been satisfied.  Each Borrower shall provide such information
(including calculations in reasonable detail of the covenants in Section 6.10)
as the Administrative Agent may reasonably request to confirm that the
conditions in Sections 4.02(b)-(d) have been satisfied.

ARTICLE V

AFFIRMATIVE
COVENANTS

Each Loan Party warrants, covenants and agrees with
each Lender that so long as this Agreement shall remain in effect and until the
Commitments have been terminated and the principal of and interest on each
Loan, all Fees and all other expenses or amounts payable under any Loan
Document shall have been paid in full and all Letters of Credit have been
canceled or have expired and all amounts drawn thereunder have been reimbursed
in full, unless the Required Lenders shall otherwise consent in writing, each
Loan Party will, and will cause each of its Subsidiaries to:

SECTION 5.01     Financial Statements, Reports,
etc.  Furnish to the
Administrative Agent and each Lender:

(a)           Annual
Reports.  As soon as available and in
any event within 90 days (or such earlier date on which the US Borrower is
required to file a Form 10-K under the Exchange Act) after the end of each
fiscal year, beginning with the fiscal year ending December 31, 2006,
(i) the consolidated balance sheet of the US Borrower as of the end of
such fiscal year and related consolidated statements of income, cash flows and
stockholders’ equity for such fiscal year, in comparative form with such financial
statements as of the end of, and for, the preceding fiscal year, and notes
thereto all prepared in accordance with Regulation S-X and accompanied by an
opinion of independent public accountants of recognized national standing or
otherwise satisfactory to the Administrative Agent (which opinion shall not be
qualified as to scope or contain any going concern or other qualification),
stating that such financial statements fairly present, in all material
respects, the consolidated financial condition, results of operations and cash
flows of the US Borrower as of the dates and for the periods specified in
accordance with GAAP, (ii) a management report in a form reasonably
satisfactory to the Administrative Agent setting forth (A) statement of income
items and Consolidated EBITDA of the US Borrower for such fiscal year, showing
variance, by dollar amount and percentage, from amounts for the previous fiscal
year and budgeted amounts and (B) key operational information and statistics
for such fiscal year consistent with internal and industry-wide reporting standards,
and (iii) a narrative report and management’s discussion and analysis, in
a form reasonably satisfactory to the Administrative Agent, of the financial
condition and results of operations of the US Borrower for such fiscal year, as
compared to amounts for the previous fiscal year and budgeted amounts (it being
understood that the information required by clause (i) and clause (iii) may be
furnished in the form of a Form 10-K);

 

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(b)           Quarterly
Reports.  As soon as available and in
any event within 45 days (or such earlier date on which the US Borrower is
required to file a Form 10-Q under the Exchange Act) after the end of each of
the first three fiscal quarters of each fiscal year, beginning with the fiscal
quarter ending September 30, 2006, the consolidated balance sheet of the US
Borrower as of the end of such fiscal quarter and related consolidated
statements of income and cash flows for such fiscal quarter and for then
elapsed portion of the fiscal year, in comparative form with the consolidated
statements of income and cash flows for the comparable periods in the previous
fiscal year, and notes thereto, all prepared in accordance with Regulation S-X
under the Securities Act and accompanied by a certificate of a Financial Officer
stating that such financial statements fairly present, in all material
respects, the consolidated financial condition, results of operations and cash
flows of the US Borrower as of the date and for the periods specified in
accordance with GAAP consistently applied, and on a basis consistent with
audited financial statements referred to in clause (a) of this Section,
subject to normal year-end audit adjustments (it being understood that the
information required by this paragraph (b) may be furnished in the form of a
Form 10-Q);

(c)           [Intentionally
Deleted].

(d)           Financial
Officer’s Certificate.  (i) 
Concurrently with any delivery of financial statements under Section 5.01(a)
or (b), a Compliance Certificate (A) certifying that no Default has occurred
or, if such a Default has occurred, specifying the nature and extent thereof
and any corrective action taken or proposed to be taken with respect thereto,
(B) beginning with the fiscal quarter ending September 30, 2006, setting forth
computations in reasonable detail satisfactory to the Administrative Agent
demonstrating compliance with the covenants contained in Sections 6.07(f)
and 6.10 and (C) showing a reconciliation of Consolidated EBITDA to the
net income set forth on the statement of income; and (ii) concurrently
with any delivery of financial statements under Section 5.01(a)
above, beginning with the fiscal quarter ending June 30, 2006, a report of the
accounting firm opining on or certifying such financial statements stating that
in the course of its regular audit of the financial statements of the US
Borrower and its Subsidiaries, which audit was conducted in accordance with
generally accepted auditing standards, such accounting firm obtained no
knowledge that any Default insofar as it relates to financial or accounting
matters has occurred or, if in the opinion of such accounting firm such a
Default has occurred, specifying the nature and extent thereof;

(e)           Financial
Officer’s Certificate Regarding Collateral. 
Concurrently with any delivery of financial statements under Section 5.01(a),
a certificate of a Financial Officer setting forth the information required pursuant
to the Perfection Certificate Supplement or confirming that there has been no
change in such information since the date of the Perfection Certificate or
latest Perfection Certificate Supplement;

(f)            Public
Reports.  Promptly after the same
become publicly available, copies of all periodic and other reports, proxy
statements and other materials filed by any Company with the Securities and
Exchange Commission, or any Governmental Authority succeeding to any or all of
the functions of said Commission, or with any national securities exchange, or
distributed to holders of its Indebtedness pursuant to the terms of the
documentation governing such Indebtedness (or any trustee, agent or other representative
therefor), as the case may be;

(g)           Management
Letters.  Promptly after the receipt
thereof by any Company, a copy of any “management letter” received by any such
person from its certified public accountants and the management’s responses
thereto;

 

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(h)           Budgets.  Within 30 days after the beginning of
each fiscal year, a budget for the US Borrower and its Subsidiaries in form reasonably
satisfactory to the Administrative Agent, but to include balance sheets,
statements of income and sources and uses of cash, for (i) each month of
such fiscal year prepared in detail and (ii) each fiscal year thereafter,
through and including the fiscal year in which the Final Maturity Date occurs,
prepared in summary form, in each case, with appropriate presentation and
discussion of the principal assumptions upon which such budgets are based,
accompanied by the statement of a Financial Officer of the US Borrower to the
effect that the budget of the US Borrower is a reasonable estimate for the
periods covered thereby and, promptly when available, any significant revisions
of such budget;

(i)            Organization.  Concurrently with any delivery of financial
statements under Section 5.01(a), an accurate organizational chart
as required by Section 3.07(c), or confirmation that there are no changes
to Schedule 10(a) to the Perfection Certificate;

(j)            Organizational
Documents.  Promptly provide copies
of any Organizational Documents that have been amended or modified in
accordance with the terms hereof and deliver a copy of any notice of default
given or received by any Company under any Organizational Document within 15
days after such Company gives or receives such notice; and

(k)           Other
Information.  Promptly, from time to
time, such other information regarding the operations, business affairs and
financial condition of any Company, or compliance with the terms of any Loan
Document, as the Administrative Agent or any Lender may reasonably request.

SECTION 5.02     Litigation and Other Notices.  Furnish to the Administrative Agent and each
Lender written notice of the following promptly (and, in any event, within
three Business Days of the occurrence thereof and, in the case of clause (f)
below, prior to such amendment, waiver or modification becoming effective):

(a)           any
Default, specifying the nature and extent thereof and the corrective action (if
any) taken or proposed to be taken with respect thereto;

(b)           the
filing or commencement of, or any threat or notice of intention of any person
to file or commence, any action, suit, litigation or proceeding, whether at law
or in equity by or before any Governmental Authority, (i) against any
Company or any Affiliate thereof that could reasonably be expected to result in
a Material Adverse Effect or (ii) with respect to any Loan Document;

(c)           any
development that has resulted in, or could reasonably be expected to result in
a Material Adverse Effect;

(d)           the
occurrence of a Casualty Event involving a loss of greater than $500,000;

(e)           (i) the
incurrence of any material Lien (other than Permitted Collateral Liens) on, or
claim asserted against any of the Collateral or (ii) the occurrence of any
other event which could materially affect the value of the Collateral;

(f)            any
proposed amendment, waiver or modification to the Convertible Bond Indenture,
which notice shall attach a copy of such proposed amendment, waiver or
modification; and

(g)           any
default (which notice shall attach a copy of any notice of default received by
any Company) under the Convertible Bond Indenture.

 

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SECTION
5.03     Existence; Businesses
and Properties.

(a)           Do
or cause to be done all things necessary to preserve, renew and maintain in
full force and effect its legal existence, except as otherwise expressly
permitted under Section 6.05 or Section 6.06 or, in the
case of any Subsidiary, where the failure to perform such obligations,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.

(b)           Do
or cause to be done all things necessary to obtain, preserve, renew, extend and
keep in full force and effect the rights, licenses, permits, privileges,
franchises, authorizations, patents, copyrights, trademarks and trade names
material to the conduct of its business; maintain and operate such business in
substantially the manner in which it is presently conducted and operated;
comply with all applicable Requirements of Law (including any and all zoning,
building, Environmental Law, ordinance, code or approval or any building
permits or any restrictions of record or agreements affecting the Real
Property) and decrees and orders of any Governmental Authority, whether now in
effect or hereafter enacted, except where the failure to comply, individually
or in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect; pay and perform its obligations under all Leases; and at all
times maintain, preserve and protect all property material to the conduct of
such business and keep such property in good repair, working order and
condition (other than wear and tear occurring in the ordinary course of
business) and from time to time make, or cause to be made, all needful and
proper repairs, renewals, additions, improvements and replacements thereto
necessary in order that the business carried on in connection therewith may be
properly conducted at all times; provided that
nothing in this Section 5.03(b) shall prevent (i) sales of
property, consolidations or mergers by or involving any Company in accordance
with Section 6.05 or Section 6.06; (ii) the
withdrawal by any Company of its qualification as a foreign corporation in any
jurisdiction where such withdrawal, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect; or
(iii) the abandonment by any Company of any rights, franchises, licenses,
trademarks, trade names, copyrights or patents that such person reasonably
determines are not useful to its business or no longer commercially desirable.

SECTION
5.04     Insurance.

(a)           Generally.  Keep its insurable property adequately
insured at all times by financially sound and reputable insurers; maintain such
other insurance, to such extent and against such risks as is customary with
companies in the same or similar businesses operating in the same or similar
locations, including insurance with respect to Mortgaged Properties and other
properties material to the business of the Companies against such casualties
and contingencies and of such types and in such amounts with such deductibles
as is customary in the case of similar businesses operating in the same or
similar locations, including (i) physical hazard insurance on an “all risk”
basis, (ii) commercial general liability against claims for bodily injury,
death or property damage covering any and all insurable claims,
(iii) explosion insurance in respect of any boilers, machinery or similar
apparatus constituting Collateral, (iv) business interruption insurance,
(v) worker’s compensation insurance and such other insurance as may be
required by any Requirement of Law and (vi) such other insurance against
risks as the Administrative Agent may from time to time require (such policies
to be in such form and amounts and having such coverage as may be reasonably
satisfactory to the Administrative Agent and the Collateral Agent); provided that with respect to physical hazard insurance,
neither the Collateral Agent nor the applicable Company shall agree to the adjustment
of any claim thereunder without the consent of the other (such consent not to
be unreasonably withheld or delayed); provided, further, that no consent of any Company shall be required
during an Event of Default.

 

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(b)           Requirements
of Insurance.  All such insurance
shall (i) provide that no cancellation, material reduction in amount or
material change in coverage thereof shall be effective until at least
30 days after receipt by the Collateral Agent of written notice thereof,
(ii) name the Collateral Agent on behalf of the Secured Parties as
mortgagee (in the case of property insurance) or additional insured (in the
case of liability insurance) or loss payee (in the case of property insurance),
as applicable, (iii) if reasonably requested by the Collateral Agent,
include a breach of warranty clause and (iv) be reasonably satisfactory in
all other respects to the Collateral Agent.

(c)           Notice
to Agents.  Notify the Administrative
Agent and the Collateral Agent immediately whenever any separate insurance
concurrent in form or contributing in the event of loss with that required to
be maintained under this Section 5.04 is taken out by any Company;
and promptly deliver to the Administrative Agent and the Collateral Agent a
duplicate original copy of such policy or policies.

(d)           Flood
Insurance.  With respect to each
Mortgaged Property, obtain flood insurance in such total amount as the Administrative
Agent or the Required Lenders may from time to time require, if at any time the
area in which any improvements 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.

(e)           Broker’s
Report.  Deliver to the
Administrative Agent and the Collateral Agent and the Lenders a report of a
reputable insurance broker with respect to such insurance and such supplemental
reports with respect thereto as the Administrative Agent or the Collateral
Agent may from time to time reasonably request.

(f)            Mortgaged
Properties.  No Loan Party that is an
owner of Mortgaged Property shall take any action that is reasonably likely to
be the basis for termination, revocation or denial of any insurance coverage
required to be maintained under such Loan Party’s respective Mortgage or that
could be the basis for a defense to any claim under any Insurance Policy
maintained in respect of the Premises, and each Loan Party shall otherwise
comply in all material respects with all Insurance Requirements in respect of
the Premises; provided, however,
that each Loan Party may, at its own expense and after written notice to the
Administrative Agent, (i) contest the applicability or enforceability of
any such Insurance Requirements by appropriate legal proceedings, the
prosecution of which does not constitute a basis for cancellation or revocation
of any insurance coverage required under this Section 5.04 or
(ii) cause the Insurance Policy containing any such Insurance Requirement
to be replaced by a new policy complying with the provisions of this Section 5.04.

SECTION
5.05     Obligations and Taxes.

(a)           Payment
of Obligations.  Pay its Indebtedness
and other obligations promptly and in accordance with their terms and pay and
discharge promptly when due all Taxes, assessments and governmental charges or
levies imposed upon it or upon its income or profits or in respect of its
property, before the same shall become delinquent or in default, as well as all
lawful claims for labor, services, materials and supplies or otherwise that, if
unpaid, might give rise to a Lien other than a Permitted Lien upon such
properties or any part thereof; provided that
such payment and discharge shall not be required with respect to any such Tax,
assessment, charge, levy or claim so long as (x)(i) the validity or amount
thereof shall be contested in good faith by appropriate proceedings timely
instituted and diligently conducted and the applicable Company shall have set
aside on its books adequate reserves or other appropriate provisions with
respect thereto in accordance with GAAP, (ii) such contest operates to 

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suspend collection of the contested obligation, Tax, assessment or
charge and enforcement of a Lien other than a Permitted Lien and (iii) in
the case of Collateral, the applicable Company shall have otherwise complied
with the Contested Collateral Lien Conditions and (y) the failure to pay could
not reasonably be expected to result in a Material Adverse Effect.

(b)           Filing
of Returns.  Timely and correctly
file all material Tax Returns required to be filed by it.  Withhold, collect and remit all Taxes that it
is required to collect, withhold or remit.

(c)           Tax
Shelter Reporting.  Neither Borrower
intends to treat the Loans as being a “reportable transaction” within the
meaning of Treasury Regulation Section 1.6011-4.  In the event any Borrower determines to take
any action inconsistent with such intention, it will promptly notify the Administrative
Agent thereof.

SECTION 5.06     Employee Benefits.  (a) 
Comply in all material respects with the applicable provisions of ERISA
and the Code to the extent such Loan Party or any of its Subsidiaries is
subject to ERISA and the Code and (b) furnish to the Administrative Agent
(x) as soon as possible after, and in any event within 5 days after,
any Responsible Officer of any Company or any ERISA Affiliates of any Company
knows or has reason to know that, any ERISA Event has occurred that, alone or
together with any other ERISA Event could reasonably be expected to result in
liability of the Companies or any of their ERISA Affiliates in an aggregate
amount exceeding $500,000 or the imposition of a Lien, a statement of a Financial
Officer of the US Borrower setting forth details as to such ERISA Event and the
action, if any, that the Companies propose to take with respect thereto, and
(y) upon request by the Administrative Agent, copies of (i) each
Schedule B (Actuarial Information) to the annual report (Form 5500 Series)
filed by any Company or any ERISA Affiliate with the Internal Revenue Service
with respect to each Plan; (ii) the most recent actuarial valuation report
for each Plan; (iii) all notices received by any Company or any ERISA
Affiliate from a Multiemployer Plan sponsor or any governmental agency concerning
an ERISA Event; and (iv) such other documents or governmental reports or
filings relating to any Plan (or employee benefit plan sponsored or contributed
to by any Company) as the Administrative Agent shall reasonably request.

SECTION 5.07     Maintaining Records; Access to
Properties and Inspections; Annual Meetings.

(a)           Keep
proper books of record and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law are made of all dealings and
transactions in relation to its business and activities.  Each Company will permit any representatives
designated by the Administrative Agent or any Lender to visit and inspect the
financial records and the property of such Company at reasonable times and as
often as reasonably requested and to make extracts from and copies of such financial
records, and permit any representatives designated by the Administrative Agent
or any Lender to discuss the affairs, finances, accounts and condition of any
Company with the officers and employees thereof and advisors therefor
(including independent accountants).

(b)           Within
150 days after the end of each fiscal year of the Companies, at the
request of the Administrative Agent or Required Lenders, hold a meeting (at a
mutually agreeable location, venue and time or, at the option of the
Administrative Agent, by conference call, the costs of such venue or call to be
paid by Borrowers) with all Lenders who choose to attend such meeting, at which
meeting shall be reviewed the financial results of the previous fiscal year and
the financial condition of the Companies and the budgets presented for the
current fiscal year of the Companies.

 

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SECTION 5.08     Use of Proceeds.  Use the proceeds of the Loans only for the
purposes set forth in Section 3.12 and request the issuance of
Letters of Credit only for the purposes set forth in the definition of
Commercial Letter of Credit or Standby Letter of Credit, as the case may be.

SECTION 5.09     Compliance with Environmental
Laws; Environmental Reports.

(a)           Comply,
and cause all lessees and other persons occupying Real Property owned, operated
or leased by any Company to comply, in all material respects with all
Environmental Laws and Environmental Permits applicable to its operations and
Real Property; obtain and renew all material Environmental Permits applicable
to its operations and Real Property; and conduct all Responses required by, and
in accordance with, Environmental Laws; provided that
no Company shall be required to undertake any Response to the extent that its
obligation to do so is being contested in good faith and by proper proceedings
and appropriate reserves are being maintained with respect to such circumstances
in accordance with GAAP.

(b)           If
a Default caused by reason of a breach of Section 3.18 or Section 5.09(a)
shall have occurred and be continuing for more than 20 days without the
Companies commencing activities reasonably likely to cure such Default in
accordance with Environmental Laws, at the written request of the Administrative
Agent or the Required Lenders through the Administrative Agent, provide to the
Lenders within 45 days after such request, at the expense of the
Borrowers, an environmental assessment report regarding the matters which are
the subject of such Default, including, where appropriate, soil and/or
groundwater sampling, prepared by an environmental consulting firm and, in the
form and substance, reasonably acceptable to the Administrative Agent and
indicating the presence or absence of Hazardous Materials and the estimated
cost of any compliance or Response to address them.

SECTION 5.10     Accounts. Each
Loan Party shall, and shall cause each Subsidiary of each Loan Party to, enter
into, and cause each bank or other depository and each securities intermediary
or commodities intermediary to enter into, Control Agreements or similar
agreements or foreign equivalent necessary to perfect the Collateral Agent’s
security interest in with respect to each deposit, securities, commodity or
similar account maintained by such Person, provided that
Foreign Loan Parties and their Foreign Subsidiaries may maintain bank accounts
that are not subject to such Control Agreements or similar agreements or
foreign equivalent so long as the
average daily balance on deposit in all such bank accounts during any
calendar month does not exceed $25.0 million.

SECTION
5.11     Additional Collateral;
Additional Guarantors.

(a)           Subject
to this Section 5.11, with respect to any property acquired after
the Closing Date by any Loan Party that is intended to be subject to the Lien
created by any of the Security Documents but is not so subject, promptly (and
in any event within 30 days after the acquisition thereof)
(i) execute and deliver to the Administrative Agent and the Collateral
Agent such amendments or supplements to the relevant Security Documents or such
other documents as the Administrative Agent or the Collateral Agent shall deem
necessary or advisable to grant to the Collateral Agent, for its benefit and
for the benefit of the other Secured Parties, a Lien on such property subject
to no Liens other than Permitted Collateral Liens, and (ii) take all
actions necessary to cause such Lien to be duly perfected to the extent
required by such Security Document in accordance with all applicable
Requirements of Law, including the filing of financing statements in such
jurisdictions as may be reasonably requested by the Administrative Agent.  The US Borrower shall otherwise take such
actions and execute and/or deliver to the Collateral Agent such documents as
the Administrative Agent or the Collateral Agent shall require to confirm the
validity, perfection and priority of the Lien of the Security Documents on the
properties 

 86
 

 

acquired after the Closing Date by a Domestic Loan Party, and the
Cayman Borrower shall otherwise take such actions and execute and/or deliver to
the Collateral Agent such documents as the Administrative Agent or the
Collateral Agent shall require to confirm the validity, perfection and priority
of the Lien of the Security Documents on the properties acquired after the
Closing Date by a Foreign Loan Party.

(b)           With
respect to any person that is or becomes a Subsidiary after the Closing Date,
promptly (and in any event within 30 days after such person becomes a
Subsidiary) (i) deliver to the Collateral Agent the certificates, if any,
representing all of the Equity Interests of such Subsidiary, together with
undated stock powers or other appropriate instruments of transfer executed and
delivered in blank by a duly authorized officer of the holder(s) of such Equity
Interests, and all intercompany notes owing from such Subsidiary to any Loan
Party together with instruments of transfer executed and delivered in blank by
a duly authorized officer of such Loan Party and (ii) cause such new
Subsidiary (A) to execute a Joinder Agreement or such comparable
documentation to become a Guarantor and a joinder agreement to the applicable
Security Agreement, substantially in the form annexed thereto or, in the case
of a Foreign Subsidiary, execute a security agreement compatible with the laws
of such Foreign Subsidiary’s jurisdiction in form and substance reasonably
satisfactory to the Administrative Agent, and (B) to take all actions
necessary or advisable in the opinion of the Administrative Agent or the
Collateral Agent to cause the Lien created by the applicable Security Agreement
to be duly perfected to the extent required by such agreement in accordance
with all applicable Requirements of Law, including the filing of financing
statements in such jurisdictions as may be reasonably requested by the
Administrative Agent or the Collateral Agent. 
Notwithstanding the foregoing, (1) the Equity Interests required to
be delivered to the Collateral Agent pursuant to clause (i) of this Section 5.11(b)
as a security for US Obligations shall not include any Equity Interests of a
Foreign Subsidiary created or acquired after the Closing Date and (2) no
Foreign Subsidiary shall be required to take the actions specified in
clause (ii) of this Section 5.11(b) to the extent such actions
relate to securing US Obligations, if, in the case of either clause (1) or
(2), doing so would constitute an investment of earnings in United States property
under Section 956 (or a successor provision) of the Code, which investment
would or could reasonably be expected to trigger a material increase in the net
income of a United States shareholder of such Subsidiary pursuant to
Section 951 (or a successor provision) of the Code, as reasonably
determined by the Administrative Agent; provided that
this exception 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 of this Section 5.11(b).

(c)           Promptly
grant to the Collateral Agent, within 30 days of the acquisition thereof,
a security interest in and Mortgage on each Real Property owned in fee by such
Loan Party as is acquired by such Loan Party after the Closing Date and that,
together with any improvements thereon, individually has a fair market value of
at least $1.0 million, as additional security for the Secured Obligations
(unless the subject property is already mortgaged to a third party to the
extent permitted by Section 6.02). 
Such Mortgages shall be granted pursuant to documentation reasonably
satisfactory in form and substance to the Administrative Agent and the
Collateral Agent and shall constitute valid and enforceable perfected Liens
subject only to Permitted Collateral Liens or other Liens acceptable to the Collateral
Agent.  The Mortgages or instruments
related thereto shall be duly recorded or filed in such manner and in such
places as are required by law to establish, perfect, preserve and protect the
Liens in favor of the Collateral Agent required to be granted pursuant to the
Mortgages and all taxes, fees and other charges payable in connection therewith
shall be paid in full.  Such Loan Party
shall otherwise take such actions and execute and/or deliver to the Collateral
Agent such documents as the Administrative Agent or the Collateral 

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Agent shall require to confirm the validity, perfection and priority of
the Lien of any existing Mortgage or new Mortgage against such after-acquired
Real Property (including a Title Policy, a Survey and local counsel opinion (in
form and substance reasonably satisfactory to the Administrative Agent and the
Collateral Agent) in respect of such Mortgage).

SECTION 5.12     Security Interests; Further
Assurances.  Promptly,
upon the reasonable request of the Administrative Agent, the Collateral Agent
or any Lender, at the relevant Borrower’s expense, execute, acknowledge and
deliver, or cause the execution, acknowledgment and delivery of, and thereafter
register, file or record, or cause to be registered, filed or recorded, in an appropriate
governmental office, any document or instrument supplemental to or confirmatory
of the Security Documents or otherwise deemed by the Administrative Agent or
the Collateral Agent reasonably necessary or desirable for the continued
validity, perfection and priority of the Liens on the Collateral covered
thereby subject to no other Liens except as permitted by the applicable
Security Document, or obtain any consents or waivers as may be necessary or
appropriate in connection therewith. 
Deliver or cause to be delivered to the Administrative Agent and the
Collateral Agent from time to time such other documentation, consents,
authorizations, approvals and orders in form and substance reasonably
satisfactory to the Administrative Agent and the Collateral Agent as the
Administrative Agent and the Collateral Agent shall reasonably deem necessary
to perfect or maintain the Liens on the Collateral pursuant to the Security
Documents.  Upon the exercise by the
Administrative Agent, the Collateral Agent or any Lender of any power, right,
privilege or remedy pursuant to any Loan Document which requires any consent,
approval, registration, qualification or authorization of any Governmental
Authority execute and deliver all applications, certifications, instruments and
other documents and papers that the Administrative Agent, the Collateral Agent
or such Lender may require.  If the
Administrative Agent, the Collateral Agent or the Required Lenders determine
that they are required by a Requirement of Law to have appraisals prepared in
respect of the Real Property of any Loan Party constituting Collateral, the
relevant Borrower shall provide to the Administrative Agent appraisals that
satisfy the applicable requirements of the Real Estate Appraisal Reform
Amendments of FIRREA and are otherwise in form and substance reasonably satisfactory
to the Administrative Agent and the Collateral Agent.

SECTION
5.13     Information Regarding
Collateral.

(a)           Not
effect any change (i) in any Loan Party’s legal name, (ii) in the
location of any Loan Party’s chief executive office, (iii) in any Loan
Party’s identity or organizational structure, (iv) in any Loan Party’s
Federal Taxpayer Identification Number or organizational identification number,
if any, or (v) in any Loan Party’s jurisdiction of organization (in each
case, including by merging with or into any other entity, reorganizing,
dissolving, liquidating, reorganizing or organizing in any other jurisdiction),
until (A) it shall have given the Collateral Agent and the Administrative Agent
not less than 30 days’ prior written notice (in the form of an Officers’
Certificate), or such lesser notice period agreed to by the Collateral Agent,
of its intention so to do, clearly describing such change and providing such
other information in connection therewith as the Collateral Agent or the
Administrative Agent may reasonably request and (B) it shall have taken
all action reasonably satisfactory to the Collateral Agent to maintain the
perfection and priority of the security interest of the Collateral Agent for
the benefit of the Secured Parties in the Collateral, if applicable.  Each Loan Party agrees to promptly provide
the Collateral Agent with certified Organizational Documents reflecting any of
the changes described in the preceding sentence.  Each Loan Party also agrees to promptly
notify the Collateral Agent of any change in the location of any office in
which it maintains books or records relating to Collateral owned by it or any
office or facility at which Collateral is located (including the establishment
of any such new office or facility), other than changes in location to a
Mortgaged Property or a leased property subject to a Landlord Access Agreement.

 

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(b)           Concurrently
with the delivery of financial statements pursuant to Section 5.01(a),
deliver to the Administrative Agent and the Collateral Agent a Perfection
Certificate Supplement and a certificate of a Financial Officer and the chief
legal officer of each Borrower certifying that all UCC financing statements
(including fixture filings, as applicable) or other appropriate filings, recordings
or registrations, including all refilings, rerecordings and reregistrations,
containing a description of the Collateral have been filed of record in each
governmental, municipal or other appropriate office in each jurisdiction
necessary to protect and perfect the security interests and Liens under the
Security Documents for a period of not less than 18 months after the date of
such certificate (except as noted therein with respect to any continuation statements
to be filed within such period).

SECTION
5.14           Affirmative
Covenants with Respect to Leases.  With respect to each Lease, the respective
Loan Party shall perform all the obligations imposed upon it by the landlord
under such Lease and enforce all of the tenant’s obligations thereunder, except
where the failure to so perform or enforce could not reasonably be expected to
result in a Property Material Adverse Effect.

SECTION
5.15           Post-Closing
Collateral Matters. 
Execute and deliver the documents and complete the tasks set forth on Schedule 5.15,
in each case within the time limits specified on such schedule.

ARTICLE
VI

NEGATIVE COVENANTS

Each Loan Party warrants, covenants and agrees with
each Lender that, so long as this Agreement shall remain in effect and until
the Commitments have been terminated and the principal of and interest on each
Loan, all Fees and all other expenses or amounts payable under any Loan Document
have been paid in full and all Letters of Credit have been canceled or have
expired and all amounts drawn thereunder have been reimbursed in full, unless
the Required Lenders shall otherwise consent in writing, no Loan Party will,
nor will they cause or permit any Subsidiaries to:

SECTION 6.01     Indebtedness.  Incur, create, assume or permit to exist,
directly or indirectly, any Indebtedness, except

(a)           Indebtedness
incurred under this Agreement and the other Loan Documents;

(b)           (i) Indebtedness
outstanding on the Closing Date and listed on Schedule 6.01(b),
(ii) refinancings or renewals thereof; provided that
(A) any such refinancing Indebtedness is in an aggregate principal amount
not greater than the aggregate principal amount of the Indebtedness being
renewed or refinanced, plus the amount
of any premiums required to be paid thereon and reasonable fees and expenses
associated therewith, (B) such refinancing Indebtedness has a later or
equal final maturity and longer or equal weighted average life than the
Indebtedness being renewed or refinanced, (C) if such refinancing Indebtedness
is issued or incurred to finance a put of the Convertible Bonds (to the extent
such put cannot be fully financed with Revolving Loans), such Indebtedness
shall be subordinated to the Obligations to the written satisfaction of the
Agents, and  (D) the covenants,
events of default, subordination and other provisions thereof (including any
guarantees thereof) shall be, in the aggregate, no less favorable to the
Lenders than those contained in the Indebtedness being renewed or refinanced;

(c)           Indebtedness
under Hedging Obligations with respect to interest rates, foreign currency
exchange rates or commodity prices, in each case not entered into for
speculative purposes; 

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provided that if such Hedging Obligations
relate to interest rates, (i) such Hedging Obligations relate to payment
obligations on Indebtedness otherwise permitted to be incurred by the Loan
Documents and (ii) the notional principal amount of such Hedging Obligations
at the time incurred does not exceed the principal amount of the Indebtedness
to which such Hedging Obligations relate;

(d)           Indebtedness
permitted by Section 6.04(f);

(e)           Indebtedness
incurred by a Loan Party in respect of Purchase Money Obligations and Capital
Lease Obligations, and refinancings or renewals thereof, in an aggregate amount
not to exceed $1.0 million at any time outstanding for all Loan Parties;

(f)            Contingent
Obligations of any Loan Party in respect of Indebtedness otherwise permitted under
this Section 6.01;

(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; provided, however,
that such Indebtedness is extinguished within five Business Days of incurrence;

(h)           Indebtedness
arising in connection with endorsement of instruments for deposit in the ordinary
course of business;

(i)            Earn-Outs
that have been assumed, incurred or owing by the US Borrower to Astrazeneca UK
Limited pursuant to that certain Asset Purchase Agreement, dated as of February
12, 2002, between the US Borrower and Astrazeneca UK Limited, as the same is in
effect and in existence on the Closing Date, in an aggregate amount not to exceed
$5.0 million;

(j)            Earn-Outs
that have been assumed, incurred or owing by the Cayman Borrower to Jagotec AG
pursuant to that certain License and Marketing Agreement, dated as of December
20, 2004, between the Cayman Borrower and Jagotec AG (as amended by that
certain First Amendment to the License and Marketing Agreement, dated January
31, 2005 and by that certain Second Amendment to the License and Marketing
Agreement, dated January 10, 2006, and as the same is in effect and in
existence on the Closing Date), in an aggregate amount not to exceed $30.0
million;

(k)           Earn-Outs
that are assumed, incurred or owing by the US Borrower or the Cayman Borrower
after the Closing Date to one or more sellers pursuant to Permitted
Acquisitions; and

(l)            unsecured
Indebtedness of any Loan Party in an aggregate amount not to exceed $3.0
million at any time outstanding for all Loan Parties.

SECTION 6.02     Liens.  Create, incur, assume or permit to exist,
directly or indirectly, any Lien on any property now owned or hereafter
acquired by it or on any income or revenues or rights in respect of any
thereof, except the following (collectively, the “Permitted
Liens”):

(a)           inchoate
Liens for taxes, assessments or governmental charges or levies not yet due and
payable or delinquent and Liens for taxes, assessments or governmental charges
or levies, which (i) are being contested in good faith by appropriate
proceedings for which adequate reserves have been established in accordance
with GAAP, which proceedings (or orders entered in connection with such proceedings)
have the effect of preventing the forfeiture or sale of the property subject to
any such Lien, 

 90
 

 

and (ii) in the case of any such charge or claim which has or may
become a Lien against any of the Collateral, such Lien and the contest thereof
shall satisfy the Contested Collateral Lien Conditions;

(b)           Liens
in respect of property of any Company imposed by Requirements of Law, which
were incurred in the ordinary course of business and do not secure Indebtedness
for borrowed money, such as carriers’, warehousemen’s, materialmen’s, landlords’,
workmen’s, suppliers’, repairmen’s and mechanics’ Liens and other similar Liens
arising in the ordinary course of business, and (i) which do not in the
aggregate materially detract from the value of the property of the Companies,
taken as a whole, and do not materially impair the use thereof in the operation
of the business of the Companies, taken as a whole, (ii) which, if they
secure obligations that are then due and unpaid, are being contested in good
faith by appropriate proceedings for which adequate reserves have been
established in accordance with GAAP, which proceedings (or orders entered in
connection with such proceedings) have the effect of preventing the forfeiture
or sale of the property subject to any such Lien, and (iii) in the case of
any such Lien which has or may become a Lien against any of the Collateral,
such Lien and the contest thereof shall satisfy the Contested Collateral Lien
Conditions;

(c)           any
Lien in existence on the Closing Date after giving effect to the Refinancing
and set forth on Schedule 6.02(c) and any Lien granted as a
replacement or substitute therefor; provided that
any such replacement or substitute Lien (i) except as permitted by Section 6.01(b)(ii)(A),
does not secure an aggregate amount of Indebtedness, if any, greater than that
secured on the Closing Date and (ii) does not encumber any property other
than the property subject thereto on the Closing Date (any such Lien, an “Existing Lien”);

(d)           easements,
rights-of-way, restrictions (including zoning restrictions), covenants,
licenses, encroachments, protrusions and other similar charges or encumbrances,
and minor title deficiencies on or with respect to any Real Property, in each
case whether now or hereafter in existence, not (i) securing Indebtedness,
(ii) individually or in the aggregate materially impairing the value or
marketability of such Real Property or (iii) individually or in the
aggregate materially interfering with the ordinary conduct of the business of
the Companies at such Real Property;

(e)           Liens
arising out of judgments, attachments or awards not resulting in a Default and
in respect of which such Company shall in good faith be prosecuting an appeal
or proceedings for review in respect of which there shall be secured a
subsisting stay of execution pending such appeal or proceedings and, in the
case of any such Lien which has or may become a Lien against any of the Collateral,
such Lien and the contest thereof shall satisfy the Contested Collateral Lien
Conditions;

(f)            Liens
(other than any Lien imposed by ERISA) (x) imposed by Requirements of Law
or deposits made in connection therewith in the ordinary course of business in
connection with workers’ compensation, unemployment insurance and other types
of social security legislation, (y) incurred in the ordinary course of
business to secure the performance of tenders, statutory obligations (other
than excise taxes), surety, stay, customs and appeal bonds, statutory bonds,
bids, leases, government contracts, trade contracts, performance and return of
money bonds and other similar obligations (exclusive of obligations for the
payment of borrowed money) or (z) arising by virtue of deposits made in
the ordinary course of business to secure liability for premiums to insurance
carriers; provided that (i) with respect to
clauses (x), (y) and (z) of this paragraph (f), such Liens are for
amounts not yet due and payable or delinquent or, to the extent such amounts
are so due and payable, such amounts are being contested in good faith by
appropriate proceedings for which adequate reserves have been established in
accordance with GAAP, which proceedings for orders entered in connection with
such proceedings have the effect of preventing the forfeiture or sale of the
property subject to any such Lien, 

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(ii) to the extent such Liens are not imposed by Requirements of
Law, such Liens shall in no event encumber any property other than cash and
Cash Equivalents, (iii) in the case of any such Lien against any of the
Collateral, such Lien and the contest thereof shall satisfy the Contested
Collateral Lien Conditions and (iv) the aggregate amount of deposits at
any time pursuant to clause (y) and clause (z) of this
paragraph (f) shall not exceed $250,000 in the aggregate;

(g)           Leases
of the properties of any Company granted by such Company to third parties, in
each case entered into in the ordinary course of such Company’s business so
long as such Leases are subordinate in all respects to the Liens granted and
evidenced by the Security Documents and do not, individually or in the
aggregate, (i) interfere in any material respect with the ordinary conduct
of the business of any Company, or (ii) materially impair the use (for its
intended purposes) or the value of the property subject thereto;

(h)           Liens
arising out of conditional sale, title retention, consignment or similar arrangements
for the sale of goods entered into by any Company in the ordinary course of
business in accordance with the past practices of such Company;

(i)            Liens
securing Indebtedness incurred pursuant to Section 6.01(e); provided that any such Liens attach only to the property
being financed pursuant to such Indebtedness and do not encumber any other property
of any Company;

(j)            bankers’
Liens, rights of setoff and other similar Liens existing solely with respect to
cash and Cash Equivalents on deposit in one or more accounts maintained by any
Company, in each case granted in the ordinary course of business in favor of
the bank or banks with which such accounts are maintained, securing amounts
owing to such bank with respect to cash management and operating account
arrangements, including those involving pooled accounts and netting
arrangements; provided that, unless such Liens
are non-consensual and arise by operation of law, in no case shall any such
Liens secure (either directly or indirectly) the repayment of any Indebtedness;

(k)           Liens
on property of a person existing at the time such person is acquired or merged
with or into or consolidated with any Company to the extent permitted hereunder
(and not created in anticipation or contemplation thereof); provided that such Liens do not extend to property not subject
to such Liens at the time of acquisition (other than improvements thereon) and
are no more favorable to the lienholders than such existing Lien;

(l)            Liens
granted pursuant to the Security Documents to secure the Secured Obligations;

(m)          licenses
of Intellectual Property granted by any Company in the ordinary course of
business and not interfering in any material respect with the ordinary conduct
of business of the Companies;

(n)           the
filing of UCC financing statements solely as a precautionary measure in connection
with operating leases or consignment of goods; and

(o)           Liens
incurred in the ordinary course of business of any Company with respect to
obligations that do not in the aggregate exceed $500,000 at any time
outstanding, so long as such Liens, to the extent covering any Collateral, are
junior to the Liens granted pursuant to the Security Documents;

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provided, however,
that no consensual Liens shall be permitted to exist, directly or indirectly,
on any Securities Collateral, other than Liens granted pursuant to the Security
Documents.

SECTION 6.03     Sale and Leaseback Transactions.  Enter into any arrangement, directly or
indirectly, with any person whereby it shall sell or transfer any property,
real or personal, used or useful in its business, whether now owned or
hereafter acquired, and thereafter rent or lease such property or other
property which it intends to use for substantially the same purpose or purposes
as the property being sold or transferred (a “Sale and
Leaseback Transaction”) unless (i) the sale of such property is
permitted by Section 6.06 and (ii) any Liens arising in
connection with its use of such property are permitted by Section 6.02.

SECTION 6.04     Investment, Loan and Advances.  Directly or indirectly, lend money or credit
(by way of guarantee or otherwise) or make advances to any person, or purchase
or acquire any stock, bonds, notes, debentures or other obligations or
securities of, or any other interest in, or make any capital contribution to,
any other person, or purchase or own a futures contract or otherwise become
liable for the purchase or sale of currency or other commodities at a future
date in the nature of a futures contract (all of the foregoing, collectively, “Investments”), except that the following shall be permitted:

(a)           the
Companies may consummate the Transactions in accordance with the provisions of
the Loan Documents;

(b)           Investments
outstanding on the Closing Date and identified on Schedule 6.04(b);

(c)           the
Companies may (i) acquire and hold accounts receivables owing to any of
them if created or acquired in the ordinary course of business and payable or
dischargeable in accordance with customary terms, (ii) invest in, acquire
and hold cash and Cash Equivalents, (iii) endorse negotiable instruments
held for collection in the ordinary course of business or (iv) make lease,
utility and other similar deposits in the ordinary course of business;

(d)           Hedging
Obligations incurred pursuant to Section 6.01(c);

(e)           loans
and advances to directors, employees and officers of the US Borrower and the
Subsidiaries for bona fide business purposes and
to purchase Equity Interests of the US Borrower, in aggregate amount not to
exceed $500,000 at any time outstanding; provided that
no loans in violation of Section 402 of the Sarbanes-Oxley Act shall be
permitted hereunder;

(f)            Investments
(i) by any Company in the US Borrower or any Domestic Guarantor,
(ii) by any Foreign Subsidiary in the Cayman Borrower, (iii) by a
Subsidiary that is not a Guarantor (other than the Cayman Borrower) in any
other Subsidiary that is not a Guarantor, (iv) by the US Borrower in the Cayman
Borrower in the form of loans or advances as long as at the time of and
immediately after giving effect to such loan or advance (A) no Default or
Event of Default has occurred and is continuing or would result therefrom and
(B) the unpaid principal amount of the US Revolving Loans is zero ($0), and the
US LC Exposure and the US Swingline Exposure are each zero ($0) and (v) by
the Borrowers in Irish Sciele in the form of loans or advances in an aggregated
amount not to exceed $15.0 million at any time outstanding for all such loans
and advances by the Borrowers as long as at the time of or immediately after
giving effect to such loan no Default or Event of Default has occurred and is
continuing or would result therefrom; provided that
any Investment in the form of a loan or advance shall be evidenced by the 

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Intercompany Note and, in the case of a loan or advance by a Loan
Party, pledged by such Loan Party as Collateral pursuant to the Security
Documents;

(g)           Investments
in securities of trade creditors or customers in the ordinary course of
business received upon foreclosure or pursuant to any plan of reorganization or
liquidation or similar arrangement upon the bankruptcy or insolvency of such
trade creditors or customers;

(h)           Investments
made by any Borrower or any Subsidiary as a result of consideration received in
connection with an Asset Sale made in compliance with Section 6.06;
and

(i)            other
Investments in an aggregate amount not to exceed $500,000 at any time
outstanding.

An Investment shall be deemed to be outstanding to the
extent not returned in the same form as the original Investment to any Borrower
or any Guarantor.

SECTION 6.05     Mergers and Consolidations.  Wind up, liquidate or dissolve its affairs or
enter into any transaction of merger or consolidation (or agree to do any of
the foregoing at any future time), except that the following shall be permitted:

(a)           Asset
Sales in compliance with Section 6.06;

(b)           acquisitions
in compliance with Section 6.07;

(c)           any
Company may merge or consolidate with or into any Borrower or any Guarantor (as
long as a Borrower is the surviving person in the case of any merger or
consolidation involving a Borrower, and a Guarantor is the surviving person and
remains a Wholly Owned Subsidiary of a Borrower in any other case); provided that the US Borrower may not merge or consolidate
with or into the Cayman Borrower; provided, further, that the Lien on and security interest in such
property granted or to be granted in favor of the Collateral Agent under the
Security Documents shall be maintained or created in accordance with the
provisions of Section 5.11 or Section 5.12, as applicable;
and

(d)           any
Subsidiary may dissolve, liquidate or wind up its affairs at any time; provided that such dissolution, liquidation or winding up,
as applicable, could not reasonably be expected to have a Material Adverse
Effect.

To the extent the Required Lenders or all the Lenders,
as applicable, waive the provisions of this Section 6.05 with
respect to the sale of any Collateral, or any Collateral is sold as permitted
by this Section 6.05, such Collateral (unless sold to a Company)
shall be sold free and clear of the Liens created by the Security Documents,
and, so long as the Borrowers shall have provided the Agents such certifications
or documents as any Agent shall reasonably request in order to demonstrate
compliance with this Section 6.05, the Agents shall take all actions
they deem appropriate in order to effect the foregoing.

SECTION 6.06     Asset Sales.  Effect any Asset Sale, or agree to effect any
Asset Sale, except that the following shall be permitted:

(a)           disposition
of used, worn out, obsolete or surplus property by any Company in the ordinary
course of business and the abandonment or other disposition of Intellectual
Property 

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that is, in the reasonable judgment of the US
Borrower, no longer economically practicable to maintain or useful in the
conduct of the business of the Companies taken as a whole;

(b)           Asset
Sales (other than sales by any Company of all or any portion of its Equity
Interests in any Subsidiary, and other than issuances of Equity Interests by
any Subsidiary of any Borrower); provided that
the aggregate consideration received in respect of all Asset Sales pursuant to
this clause (b) shall not exceed $500,000 in any four consecutive fiscal
quarters of Borrower;

(c)           leases
of real or personal property in the ordinary course of business and in accordance
with the applicable Security Documents;

(d)           the
Transactions as contemplated by the Loan Documents;

(e)           mergers
and consolidations in compliance with Section 6.05; and

(f)            Investments
in compliance with Section 6.04.

To the extent the Required Lenders or all the Lenders,
as applicable, waive the provisions of this Section 6.06 with
respect to the sale of any Collateral, or any Collateral is sold as permitted
by this Section 6.06, such Collateral (unless sold to a Company)
shall be sold free and clear of the Liens created by the Security Documents,
and, so long as the Borrowers shall have provided the Agents such certifications
or documents as any Agent shall reasonably request in order to demonstrate
compliance with this Section 6.06, the Agents shall take all actions
they deem appropriate in order to effect the foregoing.

SECTION 6.07     Acquisitions and Licenses.  License, purchase or otherwise acquire (in
one or a series of related transactions) any part of the property (whether
tangible or intangible) of any person (or agree to do any of the foregoing at
any future time), except that the following shall be permitted:

(a)           Capital
Expenditures by the Borrowers and the Subsidiaries shall be permitted to the extent
permitted by Section 6.10(e);

(b)           purchases
and other acquisitions of inventory, materials, equipment and intangible property
in the ordinary course of business;

(c)           Investments
in compliance with Section 6.04;

(d)           leases
of real or personal property in the ordinary course of business and in accordance
with the applicable Security Documents;

(e)           the
Transactions as contemplated by the Loan Documents;

(f)            Permitted
Acquisitions in compliance with Section 3.12; and

(g)           mergers
and consolidations in compliance with Section 6.05;

provided that the Lien on and
security interest in such property granted or to be granted in favor of the
Collateral Agent under the Security Documents shall be maintained or created in
accordance with the 

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provisions of Section 5.11 or Section 5.12,
as applicable, except to the extent precluded by the terms of any Intellectual
Property licenses included in such transaction, which shall be excluded from
being subject to a Lien under the applicable Security Document only to the
extent provided in such Security Document.

SECTION 6.08     Dividends.  Authorize, declare or pay, directly or
indirectly, any Dividends with respect to any Company, except that the
following shall be permitted:

(a)           Dividends
by any Company to the US Borrower or any Domestic Guarantor that is a Wholly
Owned Subsidiary of the US Borrower; and

(b)           Dividends
by any Company to the Cayman Borrower or any Foreign Guarantor that is a Wholly
Owned Subsidiary of the Cayman Borrower

SECTION 6.09     Transactions with Affiliates.  Enter into, directly or indirectly, any
transaction or series of related transactions, whether or not in the ordinary
course of business, with any Affiliate of any Company (other than between or
among the Borrowers and one or more Guarantors), other than on terms and
conditions at least as favorable to such Company as would reasonably be
obtained by such Company at that time in a comparable arm’s-length transaction
with a person other than an Affiliate, except that the following shall be permitted:

(a)           Dividends
permitted by Section 6.08;

(b)           Investments
permitted by Sections 6.04(e) and (f);

(c)           reasonable
and customary director, officer and employee compensation (including bonuses)
and other benefits (including retirement, health, stock option and other
benefit plans) and indemnification arrangements, in each case approved by the
Board of Directors of the US Borrower;

(d)           transactions
with customers, clients, suppliers, joint venture partners or purchasers or
sellers of goods and services, in each case in the ordinary course of business
and otherwise not prohibited by the Loan Documents;

(e)           the
existence of, and the performance by any Loan Party of its obligations under
the terms of, any limited liability company, limited partnership or other
Organizational Document or securityholders agreement (including any
registration rights agreement or purchase agreement related thereto) to which
it is a party on the Closing Date, and which has been disclosed to the Lenders
in writing as in effect on the Closing Date, and similar agreements that it may
enter into thereafter; provided, however, that the existence of, or the performance by any
Loan Party of obligations under, any amendment to any such existing agreement
or any such similar agreement entered into after the Closing Date shall only be
permitted by this Section 6.09(e) to the extent not more adverse to
the interest of the Lenders in any material respect, when taken as a whole,
than any of such documents and agreements as in effect on the Closing Date;

(f)            sales
of Qualified Capital Stock of the US Borrower to Affiliates of the US Borrower
not otherwise prohibited by the Loan Documents and the granting of registration
and other customary rights in connection therewith;

 

 96
 

 

(g)           any
transaction with an Affiliate where the only consideration paid by any Loan
Party is Qualified Capital Stock of the US Borrower; and

(h)           the
Transactions as contemplated by the Loan Documents.

SECTION 6.10              Financial
Covenants.

(a)           Maximum
Total Leverage Ratio.  Permit
the  Total Leverage Ratio, at any date
during any period set forth in the table below, to exceed the ratio set forth
opposite such period in the table below:

	
  Test Period

  	
   

  	
  Total Leverage Ratio

  	
   

  
	
  Closing
  Date—September 30, 2007

  	
   

  	
  3.00 to 1.00

  	
   

  
	
  October 1,
  2007—December 31, 2008

  	
   

  	
  2.75 to 1.00

  	
   

  
	
  January 1, 2009 and
  thereafter

  	
   

  	
  2.50 to 1.00

  	
   

  

 

(b)           Minimum
Fixed Charge Coverage Ratio.  Permit
the Consolidated Fixed Charge Coverage Ratio, for any Test Period to be less
than 2.25 to 1.00.

(c)           Limitation
on Capital Expenditures.  Permit the
aggregate amount of Capital Expenditures made in any fiscal year to be greater
than $5.0 million provided, however,
that (x) if the aggregate amount of Capital Expenditures made in any
fiscal year shall be less than the maximum amount of Capital Expenditures
permitted under this Section 6.10(c) for such fiscal year (before
giving effect to any carryover), then an amount of such shortfall not exceeding
50% of such maximum amount may be added to the amount of Capital Expenditures
permitted under this Section 6.10(e) for the immediately succeeding
(but not any other) fiscal year, and (y) in determining whether any amount
is available for carryover, the amount expended in any fiscal year shall first
be deemed to be from the amount allocated to such fiscal year (before giving
effect to any carryover).

For the
purposes of calculating compliance with the above Total Leverage Ratio and the
Minimum Fixed Charge Coverage Ratio covenants, the terms Consolidated
Indebtedness and Indebtedness shall not include Earn-Outs to the extent such
Earn-Outs are permitted under  Sections 6.01(i), (j) or (k).

SECTION 6.11     Prepayments of Other
Indebtedness; Modifications of Organizational Documents and Other Documents,
etc.  Directly or
indirectly:

(a)           make
(or give any notice in respect thereof) any voluntary or optional payment or
prepayment on or redemption or acquisition for value of, or any prepayment or
redemption of any Indebtedness outstanding under any Subordinated Indebtedness,
except as otherwise permitted by this Agreement;

(b)           except
as otherwise provided in Section 6.22, amend or modify, or permit the
amendment or modification of, any document governing Subordinated Indebtedness
in any manner that is adverse in any material respect to the interests of the
Lenders; or

 

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(c)           terminate,
amend or modify any of its Organizational Documents (including (x) by the filing
or modification of any certificate of designation and (y) any election to treat
any Pledged Securities (as defined in the Security Agreement) as a “security”
under Section 8-103 of the UCC other than concurrently with the delivery of
certificates representing such Pledged Securities to the Collateral Agent) or
any agreement to which it is a party with respect to its Equity Interests
(including any stockholders’ agreement), or enter into any new agreement with
respect to its Equity Interests, other than any such amendments or
modifications or such new agreements which are not adverse in any material
respect to the interests of the Lenders; provided that
the US Borrower may issue such Equity Interests, so long as such issuance is
not prohibited by Section 6.13 or any other provision of this
Agreement, and may amend or modify its Organizational Documents to authorize
any such Equity Interests.

SECTION 6.12     Limitation on Certain
Restrictions on Subsidiaries. 
Directly or indirectly, create or otherwise cause or suffer to exist or
become effective any encumbrance or restriction on the ability of any
Subsidiary to (a) pay dividends or make any other distributions on its capital
stock or any other interest or participation in its profits owned by any
Borrower or any Subsidiary, or pay any Indebtedness owed to a Borrower or a
Subsidiary, (b) make loans or advances to any Borrower or any Subsidiary
or (c) transfer any of its properties to any Borrower or any Subsidiary,
except for such encumbrances or restrictions existing under or by reason of
(i) applicable Requirements of Law; (ii) this Agreement and the other
Loan Documents; (iii) customary provisions restricting subletting or
assignment of leasehold interests contained in any lease governing a leasehold
interest of a Subsidiary; (iv) customary provisions restricting assignment
of any agreement entered into by a Subsidiary in the ordinary course of
business; (v) any holder of a Lien permitted by Section 6.02
restricting the transfer of the property subject thereto; (vi) customary
restrictions and conditions contained in any agreement relating to the sale of
any property permitted under Section 6.06 pending the consummation
of such sale; (vii) any agreement in effect at the time such Subsidiary
becomes a Subsidiary of a Borrower, so long as such agreement was not entered
into in connection with or in contemplation of such person becoming a
Subsidiary of a Borrower; (viii) without affecting the Loan Parties’
obligations under Section 5.11, customary provisions in partnership
agreements, limited liability company organizational governance documents,
asset sale and stock sale agreements and other similar agreements entered into
in the ordinary course of business that restrict the transfer of ownership
interests in such partnership, limited liability company or similar person;
(ix) restrictions on cash or other deposits or net worth imposed by suppliers
or landlords under contracts entered into in the ordinary course of business;
(x) any instrument governing Indebtedness assumed in connection with any
Permitted Acquisition, which encumbrance or restriction is not applicable to
any person, or the properties or assets of any person, other than the person or
the properties or assets of the person so acquired; (xi) in the case of
any joint venture which is not a Loan Party in respect of any matters referred
to in clauses (b) and (c) above, restrictions in such person’s
Organizational Documents or pursuant to any joint venture agreement or
stockholders agreements solely to the extent of the Equity Interests of or property
held in the subject joint venture or other entity; or (xii) any
encumbrances or restrictions imposed by any amendments or refinancings that are
otherwise permitted by the Loan Documents of the contracts, instruments or
obligations referred to in clauses (iii) or (vii) above; provided that such amendments or refinancings are no more
materially restrictive with respect to such encumbrances and restrictions than
those prior to such amendment or refinancing.

SECTION
6.13     Limitation on Issuance
of Capital Stock.

(a)           With
respect to the US Borrower, issue any Equity Interest that is not Qualified
Capital Stock.

 

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(b)           With
respect to the US Borrower or any Subsidiary, issue any Equity Interest (including
by way of sales of treasury stock) or any options or warrants to purchase, or
securities convertible into, any Equity Interest, except (i) for stock
splits, stock dividends and additional issuances of Equity Interests which do
not decrease the percentage ownership of the US Borrower or any Subsidiaries in
any class of the Equity Interest of such Subsidiary; and (ii) Subsidiaries
of Borrower formed after the Closing Date in accordance with Section 6.14
may issue Equity Interests to Borrower or the Subsidiary of Borrower which is
to own such Equity Interests.  All Equity
Interests issued in accordance with this Section 6.13(b) shall, to
the extent required by Sections 5.11 and 5.12 or any
Security Agreement or if such Equity Interests are issued by any Borrower, be
delivered to the Collateral Agent for pledge pursuant to the applicable
Security Document.

SECTION 6.14     Limitation on Creation of
Subsidiaries.  Establish,
create or acquire any additional Subsidiaries without the prior written consent
of the Required Lenders; provided that,
without such consent, the Borrowers may (i) establish or create one or
more Wholly Owned Subsidiaries of the Borrowers, (ii) establish, create or
acquire one or more Subsidiaries in connection with an Investment made pursuant
to Section 6.04(f) or (iii) acquire one or more Subsidiaries in
connection with a Permitted Acquisition, so long as, in each case, Section 5.11(b)
shall be complied with.

SECTION
6.15     Business.  Engage (directly or indirectly) in any
business other than those businesses in which Borrower and its Subsidiaries are
engaged on the Closing Date as described in the Confidential Information
Memorandum.

SECTION 6.16     Limitation on Accounting Changes.  Make or permit any change in accounting
policies or reporting practices, without the consent of the Required Lenders,
which consent shall not be unreasonably withheld, except changes that are required
by GAAP.

SECTION 6.17     Fiscal Year.  Change its fiscal year-end to a date other
than December 31.

SECTION 6.18     Lease Obligations.  Create, incur, assume or suffer to exist any
obligations as lessee for the rental or hire of real or personal property of
any kind under leases or agreements to lease having an original term of one
year or more that would cause the direct and contingent liabilities of the US
Borrower and its Subsidiaries, on a consolidated basis, in respect of all such
obligations to exceed $15.0 million payable in any period of 12 consecutive
months.

SECTION 6.19     No Further Negative Pledge.  Enter into any agreement, instrument, deed or
lease which prohibits or limits the ability of any Loan Party to create, incur,
assume or suffer to exist any Lien upon any of their respective properties or
revenues, whether now owned or hereafter acquired, or which requires the grant
of any security for an obligation if security is granted for another
obligation, except the following: 
(1) this Agreement and the other Loan Documents; (2) covenants
in documents creating Liens permitted by Section 6.02 prohibiting
further Liens on the properties encumbered thereby; (3) any other
agreement that does not restrict in any manner (directly or indirectly) Liens
created pursuant to the Loan Documents on any Collateral securing the Secured
Obligations and does not require the direct or indirect granting of any Lien
securing any Indebtedness or other obligation by virtue of the granting of
Liens on or pledge of property of any Loan Party to secure the Secured
Obligations; and (4) any prohibition or limitation that (a) exists
pursuant to applicable Requirements of Law, (b) consists of customary
restrictions and conditions contained in any agreement relating to the sale of
any property permitted under Section 6.06 pending the consummation
of such sale, (c) restricts subletting or assignment of leasehold 

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interests contained in any lease governing a leasehold
interest of a Borrower or a Subsidiary, (d) exists in any agreement in
effect at the time such Subsidiary becomes a Subsidiary of a Borrower, so long
as such agreement was not entered into in contemplation of such person becoming
a Subsidiary or (e) is imposed by any amendments or refinancings that are
otherwise permitted by the Loan Documents of the contracts, instruments or
obligations referred to in clause (3) or (4)(d); provided
that such amendments and refinancings are no more materially restrictive with
respect to such prohibitions and limitations than those prior to such amendment
or refinancing.

SECTION 6.20     Anti-Terrorism Law; Anti-Money
Laundering.

(a)           Directly
or indirectly, (i) knowingly conduct any business or engage in making or
receiving any contribution of funds, goods or services to or for the benefit of
any person described in Section 3.21, (ii) knowingly deal in,
or otherwise engage in any transaction relating to, any property or interests
in property blocked pursuant to the Executive Order or any other Anti-Terrorism
Law, or (iii) knowingly engage in or conspire to engage in any transaction
that evades or avoids, or has the purpose of evading or avoiding, or attempts
to violate, any of the prohibitions set forth in any Anti-Terrorism Law (and
the Loan Parties shall deliver to the Lenders any certification or other
evidence requested from time to time by any Lender in its reasonable
discretion, confirming the Loan Parties’ compliance with this Section 6.20).

(b)           Cause
or permit any of the funds of such Loan Party that are used to repay the Loans
to be derived from any unlawful activity with the result that the making of the
Loans would be in violation of any Requirement of Law.

SECTION 6.21     Embargoed Person.  Cause or permit (a) any of the funds or
properties of the Loan Parties that are used to repay the Loans to constitute
property of, or be beneficially owned directly or indirectly by, any person
subject to sanctions or trade restrictions under United States law (“Embargoed Person” or “Embargoed Persons”)
that is identified on (1) the “List of Specially Designated Nationals and
Blocked Persons” maintained by OFAC and/or on any other similar list maintained
by OFAC pursuant to any authorizing statute including, but not limited to, the
International Emergency Economic Powers Act, 50 U.S.C. §§ 1701 et seq., The Trading with the Enemy Act, 50 U.S.C. App. 1 et seq., and any Executive Order or Requirement of Law
promulgated thereunder, with the result that the investment in the Loan Parties
(whether directly or indirectly) is prohibited by a Requirement of Law, or the
Loans made by the Lenders would be in violation of a Requirement of Law, or
(2) the Executive Order, any related enabling legislation or any other
similar Executive Orders or (b) any Embargoed Person to have any direct or
indirect interest, of any nature whatsoever in the Loan Parties, with the
result that the investment in the Loan Parties (whether directly or indirectly)
is prohibited by a Requirement of Law or the Loans are in violation of a
Requirement of Law.

SECTION 6.22     Convertible Bond Indenture.

(a)           Agree
or consent to any amendment to or modification or waiver of Article XI of the
Convertible Bond Indenture that is in any way adverse to any Agent or any
Lender.

(b)           Agree
or consent to any amendment to or modification or waiver of the Convertible
Bond Indenture (other than Article XI thereof) that is in any way material and
adverse to any Agent or any Lender.

 

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SECTION 6.23     Foreign Subsidiaries.

No Foreign Subsidiary of the US Borrower (other than
the Cayman Borrower) may hold any Intellectual Property, and no Foreign
Subsidiary of the US Borrower (other than the Cayman Borrower and Irish Sciele)
may hold any material properties, become liable for any material obligations
(whether contingent or actual), engage in any material trade or business, or
conduct any material business activity, other than (1) the issuance of its
Equity Interests to  the US Borrower or
any Wholly Owned Subsidiary of the US Borrower or (2) the licensing of
Intellectual Property from one or more Companies and activities incidental
thereto.  Neither any  Borrower nor any Subsidiary shall engage in
any transactions with any such Foreign Subsidiary in violation of the
immediately preceding sentence.

ARTICLE
VII

GUARANTEE

SECTION 7.01     The Guarantees.

(a)           The
Foreign Guarantors hereby jointly and severally guarantee, as a primary obligor
and not as a surety to each Secured Party and their respective successors and
assigns, the prompt payment in full when due (whether at stated maturity, by
required prepayment, declaration, demand, by acceleration or otherwise) of the
principal of and interest (including any interest, fees, costs or charges that
would accrue but for the provisions of the Title 11 of the United States Code
after any bankruptcy or insolvency petition under Title 11 of the United States
Code) on the Cayman Revolving Loans made by the Lenders to, and the Cayman
Notes held by each Lender of, the Cayman Borrower, and all other Secured Cayman
Obligations from time to time owing to the Secured Parties by any Foreign Loan
Party under any Loan Document or any Hedging Agreement or Treasury Services
Agreement entered into with a counterparty that is a Secured Party, in each
case strictly in accordance with the terms thereof (such obligations being
herein collectively called the “Foreign
Guaranteed Obligations”).  The
Foreign Guarantors hereby jointly and severally agree that if the Cayman
Borrower or other Foreign Guarantor(s) shall fail to pay in full when due
(whether at stated maturity, by acceleration or otherwise) any of the Foreign
Guaranteed Obligations, the Foreign Guarantors will promptly pay the same in
cash, without any demand or notice whatsoever, and that in the case of any
extension of time of payment or renewal of any of the Foreign Guaranteed
Obligations, the same will be promptly paid in full when due (whether at
extended maturity, by acceleration or otherwise) in accordance with the terms
of such extension or renewal.

(b)           The
Domestic Guarantors hereby jointly and severally guarantee, as a primary
obligor and not as a surety to each Secured Party and their respective
successors and assigns, the prompt payment in full when due (whether at stated
maturity, by required prepayment, declaration, demand, by acceleration or
otherwise) of the principal of and interest (including any interest, fees,
costs or charges that would accrue but for the provisions of the Title 11 of
the United States Code after any bankruptcy or insolvency petition under Title
11 of the United States Code) on the Loans made by the Lenders to, and the
Notes held by each Lender of, the Borrowers, and all other Secured Obligations
from time to time owing to the Secured Parties by any Loan Party (including,
without limitation, by any Foreign Guarantor pursuant to its guarantee in Section
7.01(a)) under any Loan Document or any Hedging Agreement or Treasury
Services Agreement entered into with a counterparty that is a Secured Party, in
each case strictly in accordance with the terms thereof (such obligations being
herein collectively called the “Guaranteed
Obligations”).  The Domestic
Guarantors hereby jointly and severally agree that if the US Borrower, the Cayman
Borrower or other Guarantor(s) shall fail to pay in full when due (whether at
stated maturity, by acceleration or otherwise) any of the Guaranteed
Obligations, the Domestic Guarantors will promptly pay the same in cash,
without any demand or notice whatsoever, and that in the case of any extension
of time 

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of payment or renewal of any of the Guaranteed Obligations, the same
will be promptly paid in full when due (whether at extended maturity, by
acceleration or otherwise) in accordance with the terms of such extension or renewal.

SECTION 7.02     Obligations Unconditional.  The obligations of the Foreign Guarantors
under Section 7.01(a) shall be joint and several with respect to the
Foreign Guaranteed Obligations, and the obligations of the Domestic Guarantors
under Section 7.01(b) shall be joint and several with respect to the
Guaranteed Obligations.  The obligations
of the Foreign Guarantors under Section 7.01(a) and the obligations
of the Domestic Guarantors under Section 7.01(b) shall constitute a
guaranty of payment and to the fullest extent permitted by applicable
Requirements of Law, are absolute, irrevocable and unconditional, irrespective
of the value, genuineness, validity, regularity or enforceability of the
Foreign Guaranteed Obligations or the Guaranteed Obligations under this Agreement,
the Notes, if any, or any other agreement or instrument referred to herein or
therein, or any substitution, release or exchange of any other guarantee of or
security for any of the Foreign Guaranteed Obligations or the Guaranteed
Obligations, and, irrespective of any other circumstance whatsoever that might
otherwise constitute a legal or equitable discharge or defense of a surety or
Guarantor (except for payment in full). 
Without limiting the generality of the foregoing, it is agreed that the
occurrence of any one or more of the following shall not alter or impair the
liability of the Guarantors hereunder which shall remain absolute, irrevocable
and unconditional under any and all circumstances as described above:

(i)      at any time or from time to time, without
notice to the Guarantors, the time for any performance of or compliance with
any of the Foreign Guaranteed Obligations or the Guaranteed Obligations shall
be extended, or such performance or compliance shall be waived;

(ii)     any of the acts mentioned in any of the
provisions of this Agreement or the Notes, if any, or any other agreement or
instrument referred to herein or therein shall be done or omitted;

(iii)    the maturity of any of the Foreign
Guaranteed Obligations or the Guaranteed Obligations shall be accelerated, or
any of the Foreign Guaranteed Obligations or the Guaranteed Obligations shall
be amended in any respect, or any right under the Loan Documents or any other
agreement or instrument referred to herein or therein shall be amended or
waived in any respect or any other guarantee of any of the Foreign Guaranteed
Obligations or the Guaranteed Obligations or any security therefor shall be
released or exchanged in whole or in part or otherwise dealt with;

(iv)    any Lien or security interest granted to, or
in favor of, Issuing Bank or any Lender or Agent as security for any of the
Foreign Guaranteed Obligations or the Guaranteed Obligations shall fail to be
perfected; or

(v)     the release of any other Guarantor pursuant
to Section 7.09.

The Guarantors hereby expressly waive diligence,
presentment, demand of payment, protest and all notices whatsoever, and any
requirement that any Secured Party exhaust any right, power or remedy or
proceed against any Borrower under this Agreement or the Notes, if any, or any
other agreement or instrument referred to herein or therein, or against any
other person under any other guarantee of, or security for, any of the Foreign
Guaranteed Obligations or the Guarantee Obligations.  The Guarantors waive any and all notice of
the creation, renewal, extension, waiver, termination or accrual of any of the
Foreign Guaranteed Obligations or the Guaranteed Obligations and notice of or 

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proof of reliance by any Secured Party upon these
Guarantees or acceptance of these Guarantees, and the Foreign Guaranteed
Obligations and the Guaranteed Obligations, and any of them, shall conclusively
be deemed to have been created, contracted or incurred in reliance upon these
Guarantees, and all dealings between the Borrowers and the Secured Parties
shall likewise be conclusively presumed to have been had or consummated in
reliance upon these Guarantees.  These
Guarantees shall be construed as a continuing, absolute, irrevocable and
unconditional guarantee of payment without regard to any right of offset with respect
to the Foreign Guaranteed Obligations or the Guaranteed Obligations at any time
or from time to time held by Secured Parties, and the obligations and
liabilities of the Guarantors hereunder shall not be conditioned or contingent
upon the pursuit by the Secured Parties or any other person at any time of any
right or remedy against any Borrower or against any other person which may be
or become liable in respect of all or any part of the Foreign Guaranteed
Obligations or the Guaranteed Obligations or against any collateral security or
guarantee therefor or right of offset with respect thereto.  These Guarantees shall remain in full force
and effect and be binding in accordance with and to the extent of its terms
upon the Guarantors and the successors and assigns thereof, and shall inure to
the benefit of the Lenders, and their respective successors and assigns,
notwithstanding that from time to time during the term of this Agreement there
may be no Foreign Guaranteed Obligations or the Guaranteed Obligations outstanding.

SECTION 7.03     Reinstatement.

(a)           The
obligations of the Foreign Guarantors under this Article VII shall
be automatically reinstated if and to the extent that for any reason any
payment by or on behalf of the Cayman Borrower or any other Foreign Loan Party
in respect of the Foreign Guaranteed Obligations is rescinded or must be
otherwise restored by any holder of any of the Foreign Guaranteed Obligations,
whether as a result of any proceedings in bankruptcy or reorganization or otherwise.

(b)           The
obligations of the Domestic Guarantors under this Article VII shall
be automatically reinstated if and to the extent that for any reason any
payment by or on behalf of the US Borrower, the Cayman Borrower or any other
Foreign Loan Party or Domestic Loan Party in respect of the Guaranteed
Obligations is rescinded or must be otherwise restored by any holder of any of
the Guaranteed Obligations, whether as a result of any proceedings in
bankruptcy or reorganization or otherwise.

SECTION 7.04     Subrogation; Subordination

.  Each Foreign
Guarantor hereby agrees that until the indefeasible payment and satisfaction in
full in cash of all Foreign Guaranteed Obligations and the expiration and
termination of the Commitments of the Lenders under this Agreement it shall
waive any claim and shall not exercise any right or remedy, direct or indirect,
arising by reason of any performance by it of its guarantee in Section 7.01(a),
whether by subrogation or otherwise, against the Cayman Borrower or any other
Foreign Guarantor of any of the Foreign Guaranteed Obligations or any security
for any of the Foreign Guaranteed Obligations. 
Any Indebtedness of any Loan Party permitted pursuant to Section 6.01(d)
shall be subordinated to such Loan Party’s Secured Cayman Obligations in the
manner set forth in the Intercompany Note evidencing such Indebtedness.

(a)           Each
Domestic Guarantor hereby agrees that until the indefeasible payment and
satisfaction in full in cash of all Guaranteed Obligations and the expiration
and termination of the Commitments of the Lenders under this Agreement it shall
waive any claim and shall not exercise any right or remedy, direct or indirect,
arising by reason of any performance by it of its guarantee in Section 7.01(b),
whether by subrogation or otherwise, against the Cayman Borrower, the US
Borrower or 

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any other Guarantor of any of the Guaranteed Obligations or any
security for any of the Guaranteed Obligations. 
Any Indebtedness of any Loan Party permitted pursuant to Section 6.01(d)
shall be subordinated to such Loan Party’s Secured Obligations in the manner
set forth in the Intercompany Note evidencing such Indebtedness.

SECTION 7.05     Remedies

(a)           The
Foreign Guarantors jointly and severally agree that, as between the Foreign
Guarantors and the Lenders, the obligations of the Cayman Borrower under this
Agreement and the Cayman Notes, if any, may be declared to be forthwith due and
payable as provided in Section 8.01 (and shall be deemed to have
become automatically due and payable in the circumstances provided in Section 8.01)
for purposes of Section 7.01(a), notwithstanding any stay,
injunction or other prohibition preventing such declaration (or such
obligations from becoming automatically due and payable) as against the Cayman
Borrower and that, in the event of such declaration (or such obligations being
deemed to have become automatically due and payable), such obligations (whether
or not due and payable by the Cayman Borrower) shall forthwith become due and
payable by the Foreign Guarantors for purposes of Section 7.01(a).

(b)           The
Domestic Guarantors jointly and severally agree that, as between the Domestic
Guarantors and the Lenders, the obligations of the Cayman Borrower and the US
Borrower under this Agreement and the Cayman Notes and the US Notes, if any,
may be declared to be forthwith due and payable as provided in Section 8.01
(and shall be deemed to have become automatically due and payable in the
circumstances provided in Section 8.01) for purposes of Section 7.01(a),
notwithstanding any stay, injunction or other prohibition preventing such
declaration (or such obligations from becoming automatically due and payable)
as against the Cayman Borrower and the US Borrower and that, in the event of
such declaration (or such obligations being deemed to have become automatically
due and payable), such obligations (whether or not due and payable by the
Cayman Borrower and the US Borrower) shall forthwith become due and payable by
the Domestic Guarantors for purposes of Section 7.01(b).

SECTION 7.06     Instrument for the Payment of
Money

(a)           Each
Foreign Guarantor hereby acknowledges that the guarantee in this Article VII
constitutes an instrument for the payment of money, and consents and agrees
that any Lender or Agent, at its sole option, in the event of a dispute by such
Foreign Guarantor in the payment of any moneys due hereunder, shall have the
right to bring a motion-action under New York CPLR Section 3213.

(b)           Each
Domestic Guarantor hereby acknowledges that the guarantee in this Article VII
constitutes an instrument for the payment of money, and consents and agrees
that any Lender or Agent, at its sole option, in the event of a dispute by such
Domestic Guarantor in the payment of any moneys due hereunder, shall have the
right to bring a motion-action under New York CPLR Section 3213.

 

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SECTION 7.07     Continuing Guarantee

(a)           The
guarantee in this Article VII by the Foreign Guarantors is a
continuing guarantee of payment, and shall apply to all Foreign Guaranteed
Obligations whenever arising.

(b)           The
guarantee in this Article VII by the Domestic Guarantors is a
continuing guarantee of payment, and shall apply to all Guaranteed Obligations
whenever arising.

SECTION 7.08     General Limitation on Guarantee
Obligations.  In any
action or proceeding involving any state corporate limited partnership or
limited liability company law, or any applicable state, federal or foreign
bankruptcy, insolvency, reorganization or other law affecting the rights of
creditors generally, if the obligations of any Guarantor under Section 7.01
would otherwise be held or determined to be void, voidable, invalid or
unenforceable, or subordinated to the claims of any other creditors, on account
of the amount of its liability under Section 7.01, then, notwithstanding
any other provision to the contrary, the amount of such liability shall,
without any further action by such Guarantor, any Loan Party or any other person,
be automatically limited and reduced to the highest amount  that is valid and enforceable and not subordinated
to the claims of other creditors as determined in such action or proceeding.

SECTION 7.09     Release of Guarantors.  If, in compliance with the terms and
provisions of the Loan Documents, all or substantially all of the Equity
Interests or property of any Guarantor (other than the US Borrower) are sold or
otherwise transferred (a “Transferred Guarantor”)
to a person or persons, none of which is a Borrower or a Subsidiary, such
Transferred Guarantor shall, upon the consummation of such sale or transfer, be
automatically released from its obligations under this Agreement (including
under Section 10.03 hereof) and its obligations to pledge and grant
any Collateral owned by it pursuant to any Security Document and, in the case
of a sale of all or substantially all of the Equity Interests of the
Transferred Guarantor, the pledge of such Equity Interests to the Collateral
Agent pursuant to the Security Agreements shall be automatically released, and,
so long as the Borrowers shall have provided the Agents such certifications or
documents as any Agent shall reasonably request, the Collateral Agent shall
take such actions as are necessary to effect each release described in this Section 7.09
in accordance with the relevant provisions of the Security Documents, so long
as the Borrowers shall have provided the Agents such certifications or
documents as any Agent shall reasonably request in order to demonstrate
compliance with this Agreement.

ARTICLE
VIII

EVENTS OF
DEFAULT

SECTION 8.01     Events of Default.  Upon the occurrence and during the
continuance of the following events (“Events of Default”):

(a)           default
shall be made in the payment of any principal of any Loan or any Reimbursement
Obligation when and as the same shall become due and payable, whether at the
due date thereof or at a date fixed for prepayment (other than for voluntary
prepayment) thereof or by acceleration thereof or otherwise;

(b)           default
shall be made in the payment of any interest on any Loan or any Fee or any
other amount (other than an amount referred to in paragraph (a) above) due
under any Loan 

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Document, when and as the same shall become
due and payable, and such default shall continue unremedied for a period of
three Business Days;

(c)           any
representation or warranty made or deemed made in or in connection with any
Loan Document or the borrowings or issuances of Letters of Credit hereunder, or
any representation, warranty, statement or information contained in any report,
certificate, financial statement or other instrument furnished in connection
with or pursuant to any Loan Document, shall prove to have been false or
misleading in any material respect when so made, deemed made or furnished;

(d)           default
shall be made in the due observance or performance by any Company of any
covenant, condition or agreement contained in Section 5.02, 5.03(a)
or 5.08 or in Article VI;

(e)           default
shall be made in the due observance or performance by any Company of any
covenant, condition or agreement contained in any Loan Document (other than
those specified in paragraphs (a), (b) or (d) immediately above) and such
default shall continue unremedied or shall not be waived for a period of
30 days after written notice thereof from the Administrative Agent or any
Lender to Borrower;

(f)            any
Company shall (i) fail to pay any principal or interest, regardless of
amount, due in respect of any Indebtedness (other than the Obligations), when
and as the same shall become due and payable beyond any applicable grace
period, or (ii) fail to observe or perform any other term, covenant,
condition or agreement contained in any agreement or instrument evidencing or
governing any such Indebtedness if the effect of any failure referred to in
this clause (ii) is to cause, or to permit the holder or holders of such
Indebtedness or a trustee or other representative on its or their behalf (with
or without the giving of notice, the lapse of time or both, and without regard
to any subordination provision that may be contained in such agreement or
instrument) to cause, such Indebtedness to become due prior to its stated
maturity or become subject to a mandatory offer purchase by the obligor; provided that it shall not constitute an Event of Default
pursuant to this paragraph (f) unless the aggregate amount of all such
Indebtedness referred to in clauses (i) and (ii) exceeds $1.0 million at
any one time (provided that, in the case of
Hedging Obligations, the amount counted for this purpose shall be the amount
payable by all Companies if such Hedging Obligations were terminated at such
time);

(g)           an
involuntary proceeding shall be commenced or an involuntary petition shall be
filed in a court of competent jurisdiction seeking (i) relief in respect
of any Company, or of a substantial part of the property of any Company, under
Title 11 of the U.S. Code, as now constituted or hereafter amended, or any
other federal, state or foreign bankruptcy, insolvency, receivership or similar
law; (ii) the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for any Company or for a substantial part of
the property of any Company; or (iii) the winding-up or liquidation of any
Company; and such proceeding or petition shall continue undismissed for
60 days or an order or decree approving or ordering any of the foregoing
shall be entered;

(h)           any
Company shall (i) voluntarily commence any proceeding or file any petition
seeking relief under Title 11 of the United States Code, as now
constituted or hereafter amended, or any other federal, state or foreign
bankruptcy, insolvency, receivership or similar law; (ii) consent to the
institution of, or fail to contest in a timely and appropriate manner, any proceeding
or the filing of any petition described in clause (g) above;
(iii) apply for or consent to 

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the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for any Company or for
a substantial part of the property of any Company; (iv) file an answer
admitting the material allegations of a petition filed against it in any such
proceeding; (v) make a general assignment for the benefit of creditors;
(vi) become unable, admit in writing its inability or fail generally to
pay its debts as they become due; (vii) take any action for the purpose of
effecting any of the foregoing; or (viii) wind up or liquidate;

(i)            one
or more judgments, orders or decrees for the payment of money in an aggregate
amount in excess of $1.0 million shall be rendered against any Company or any
combination thereof and the same shall remain undischarged, unvacated or
unbonded for a period of 30 consecutive days during which execution shall not
be effectively stayed, or any action shall be legally taken by a judgment creditor
to levy upon properties of any Company to enforce any such judgment;

(j)            one
or more ERISA Events or noncompliance with respect to Foreign Plans shall have occurred that, in the opinion
of the Required Lenders, when taken together with all other such ERISA Events
and noncompliance with respect to Foreign Plans that have occurred, could
reasonably be expected to result in liability of any Company and its ERISA
Affiliates in an aggregate amount exceeding $500,000 or in the imposition of a
Lien on any properties of a Company;

(k)           any
security interest and Lien purported to be created by any Security Document
shall cease to be in full force and effect (including any security interest and
Lien in the Cayman Charged Property shall cease to be in full force and effect
by reason of any Change in Law with respect to Cayman Islands law or
otherwise), or shall cease to give the Collateral Agent, for the benefit of the
Secured Parties, the Liens, rights, powers and privileges purported to be created
and granted under such Security Document (including a perfected first priority
security interest in and Lien on all of the Collateral thereunder (except as
otherwise expressly provided in such Security Document)) in favor of the
Collateral Agent, or shall be asserted by any Borrower or any other Loan Party
not to be a valid, perfected, first priority (except as otherwise expressly provided
in this Agreement or such Security Document) security interest in or Lien on
the Collateral covered thereby;

(l)            any
Loan Document or any material provisions thereof shall at any time and for any
reason be declared by a court of competent jurisdiction to be null and void, or
a proceeding shall be commenced by any Loan Party or any other person, or by
any Governmental Authority, seeking to establish the invalidity or
unenforceability thereof (exclusive of questions of interpretation of any
provision thereof), or any Loan Party shall repudiate or deny any portion of
its liability or obligation for the Obligations;

(m)          there
shall have occurred a Change in Control;

(n)           there
shall have occurred the termination of, or the receipt by any Loan Party of
notice of the termination of, or the occurrence of any event or condition which
would, with the passage of time or the giving of notice or both, constitute an
event of default under or permit the termination of, any one or more material
agreements or licenses of any Company; or

(o)           any
Company shall be prohibited or otherwise restrained from conducting the
business theretofore conducted by it in any manner that has or could reasonably
be expected to 

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result in a Material Adverse Effect by virtue
of any determination, ruling, decision, decree or order of any court or
Governmental Authority of competent jurisdiction;

then, and in every such event (other than an event
with respect to a Borrower described in paragraph (g) or (h) above), and
at any time thereafter during the continuance of such event, the Administrative
Agent may, and at the request of the Required Lenders shall, by notice to a
Borrower, take either or both of the following actions, at the same or
different times:  (i) terminate
forthwith the Commitments and (ii) declare the Loans and Reimbursement
Obligations then outstanding to be forthwith due and payable in whole or in
part, whereupon the principal of the Loans and Reimbursement Obligations so declared
to be due and payable, together with accrued interest thereon and any unpaid
accrued Fees and all other Obligations of a Borrower accrued hereunder and
under any other Loan Document, shall become forthwith due and payable, without
presentment, demand, protest or any other notice of any kind, all of which are
hereby expressly waived by the Borrowers and the Guarantors, anything contained
herein or in any other Loan Document to the contrary notwithstanding; and in
any event, with respect to the Borrowers described in paragraph (g) or (h)
above, the Commitments shall automatically terminate and the principal of the
Loans and Reimbursement Obligations then outstanding, together with accrued
interest thereon and any unpaid accrued Fees and all other US Obligations of
the US Borrower and Cayman Obligations of the Cayman Borrower accrued hereunder
and under any other Loan Document, shall automatically become due and payable,
without presentment, demand, protest or any other notice of any kind, all of
which are hereby expressly waived by the Borrowers and the Guarantors, anything
contained herein or in any other Loan Document to the contrary notwithstanding.

SECTION 8.02     Application of Proceeds.
 The proceeds received by the Collateral
Agent in respect of any sale of, collection from or other realization upon all
or any part of the Collateral pursuant to the exercise by the Collateral Agent
of its remedies shall be applied, in full or in part, together with any other
sums then held by the Collateral Agent pursuant to this Agreement, promptly by
the Collateral Agent as follows:

A.            If such Collateral is that of any
Domestic Loan Party, then:

(a)           First, to the payment of all reasonable costs and expenses,
fees, commissions and taxes of such sale, collection or other realization
including compensation to the Collateral Agent and its agents and counsel, and
all expenses, liabilities and advances made or incurred by the Collateral Agent
in connection with any sale of, collection from or other realization upon all
or any part of such Collateral and all amounts for which the Collateral Agent
is entitled to indemnification from the Domestic Loan Parties pursuant to the
provisions of any Loan Document, together with interest on each such amount at
the highest rate then in effect under this Agreement from and after the date
such amount is due, owing or unpaid until paid in full;

(b)           Second, to the payment of all other reasonable costs and
expenses of such sale, collection or other realization upon all or any part of
such Collateral including compensation to the other Secured Parties and their
agents and counsel and all costs, liabilities and advances made or incurred by
the other Secured Parties in connection therewith, together with interest on
each such amount at the highest rate then in effect under this Agreement from
and after the date such amount is due, owing or unpaid until paid in full;

(c)           Third, without duplication of amounts applied pursuant to
clauses (a) and (b) of this Section 8.02(A), to the indefeasible
payment in full in cash, pro rata, of
interest and other amounts constituting US Obligations (other than principal
and US Reimbursement Obligations) 

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and any fees, premiums and scheduled periodic
payments due under Hedging Agreements or Treasury Services Agreements
constituting Secured US Obligations and any interest accrued thereon, in each
case equally and ratably in accordance with the respective amounts thereof then
due and owing;

(d)           Fourth, to the indefeasible payment in full in cash, pro rata, of principal amount of the US Obligations and any
premium thereon (including US Reimbursement Obligations) and any breakage,
termination or other payments under Hedging Agreements and Treasury Services Agreements
constituting Secured US Obligations and any interest accrued thereon;

(e)           Fifth, without duplication of amounts applied pursuant to
clauses (a) and (b) of this Section 8.02(A), to the indefeasible
payment in full in cash, pro rata, of
interest and other amounts constituting Cayman Obligations (other than
principal and Cayman Reimbursement Obligations) and any fees, premiums and
scheduled periodic payments due under Hedging Agreements or Treasury Services
Agreements constituting Secured Cayman Obligations and any interest accrued
thereon, in each case equally and ratably in accordance with the respective
amounts thereof then due and owing;

(f)            Sixth, to the indefeasible payment in full in cash, pro rata, of principal amount of the Cayman Obligations and
any premium thereon (including Cayman Reimbursement Obligations) and any
breakage, termination or other payments under Hedging Agreements and Treasury
Services Agreements constituting Secured Cayman Obligations and any interest
accrued thereon; and

(g)           Seventh, the balance, if any, to the person lawfully
entitled thereto (including the applicable Loan Party or its successors or
assigns) or as a court of competent jurisdiction may direct.

In the event that any such proceeds are insufficient
to pay in full the items described in clauses (a) through (f) of this Section 8.02(A),
the Domestic Loan Parties shall remain liable, jointly and severally, for any
deficiency.

B.            If such Collateral is that of any
Foreign Loan Party, then:

(a)           First, to the
payment of all reasonable costs and expenses, fees, commissions and taxes of
such sale, collection or other realization including compensation to the
Collateral Agent and its agents and counsel, and all expenses, liabilities and
advances made or incurred by the Collateral Agent in connection with any sale
of, collection from or other realization upon all or any part of such
Collateral and all amounts for which the Collateral Agent is entitled to
indemnification from the Foreign Loan Parties pursuant to the provisions of any
Loan Document, together with interest on each such amount at the highest rate
then in effect under this Agreement from and after the date such amount is due,
owing or unpaid until paid in full;

(b)           Second, to the
payment of all other reasonable costs and expenses of such sale, collection or
other realization upon all or any part of such Collateral including
compensation to the other Secured Parties and their agents and counsel and all
costs, liabilities and advances made or incurred by the other Secured Parties
in connection therewith, together with interest on each such amount at the
highest rate then in effect under this Agreement from and after the date such
amount is due, owing or unpaid until paid in full;

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(c)           Third, without duplication of amounts applied pursuant to
clauses (a) and (b) of this Section 8.02(B), to the indefeasible
payment in full in cash, pro rata, of
interest and other amounts constituting Cayman Obligations (other than
principal and Cayman Reimbursement Obligations) and any fees, premiums and
scheduled periodic payments due under Hedging Agreements or Treasury Services
Agreements constituting Secured Cayman Obligations and any interest accrued
thereon, in each case equally and ratably in accordance with the respective
amounts thereof then due and owing;

(d)           Fourth, to the indefeasible payment in full in cash, pro rata, of principal amount of the Cayman Obligations and
any premium thereon (including Cayman Reimbursement Obligations) and any breakage,
termination or other payments under Hedging Agreements and Treasury Services
Agreements constituting Secured Cayman Obligations and any interest accrued
thereon; and

(e)           Fifth, the balance, if any, to the person lawfully entitled
thereto (including the applicable Loan Party or its successors or assigns) or
as a court of competent jurisdiction may direct.

In the event that any such proceeds are insufficient
to pay in full the items described in clauses (a) through (d) of this Section 8.02(B),
the Foreign Loan Parties shall remain liable, jointly and severally, for any
deficiency.

ARTICLE
IX

THE
ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT

SECTION 9.01     Appointment and Authority.  Each of the Lenders and the Issuing Bank
hereby irrevocably appoints UBS AG, Stamford Branch, to act on its behalf as
the Administrative Agent and the Collateral Agent hereunder and under the other
Loan Documents and authorizes such Agents to take such actions on its behalf
and to exercise such powers as are delegated to such Agents 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 Administrative Agent, the Collateral Agent,
the Lenders and the Issuing Bank, and neither any Borrower nor any other Loan
Party shall have rights as a third party beneficiary of any of such provisions.

SECTION 9.02     Rights as a Lender.  Each person serving as an 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 an Agent and the term “Lender”
or “Lenders” shall, unless otherwise expressly indicated or unless the context
otherwise requires, include each person serving as an 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 any Borrower or any Subsidiary or other Affiliate thereof as
if such person were not an Agent hereunder and without any duty to account
therefor to the Lenders.

SECTION 9.03     Exculpatory
Provisions.  No Agent
shall have any duties or obligations except those expressly set forth herein
and in the other Loan Documents.  Without
limiting the generality of the foregoing, no Agent:

(i)      shall be subject to any fiduciary or other
implied duties, regardless of whether a Default has occurred and is continuing;

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(ii)     shall 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 Loan Documents that such
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 such Agent shall not be required to take any action that, in its judgment
or the judgment of its counsel, may expose such Agent to liability or that is
contrary to any Loan Document or applicable Requirements of Law; and

(iii)    shall, 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 any Borrower or
any of its Affiliates that is communicated to or obtained by the person serving
as such Agent or any of its Affiliates in any capacity.

No Agent shall be liable for any action taken or not
taken by it (x) 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
such Agent shall believe in good faith shall be necessary, under the
circumstances as provided in Section 10.02) or (y) in the
absence of its own gross negligence or willful misconduct.  No Agent shall be deemed to have knowledge of
any Default unless and until notice describing such Default is given to such
Agent by a Borrower, a Lender or the Issuing Bank.

No Agent shall 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,
(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 IV
or elsewhere herein, other than to confirm receipt of items expressly required
to be delivered to such Agent.  Without
limiting the generality of the foregoing, the use of the term “agent” in this
Agreement with reference to the Administrative Agent or the Collateral Agent is
not intended to connote any fiduciary or other implied (or express) obligations
arising under agency doctrine of any applicable law.  Instead, such term us used merely as a matter
of market custom and is intended to create or reflect only an administrative
relationship between independent contracting parties.

SECTION 9.04     Reliance by Agent.  Each 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. 
Each 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 the Issuing Bank, the Administrative Agent may presume
that such condition is satisfactory to such Lender or the Issuing Bank unless
the Administrative Agent shall have received notice to the contrary from such
Lender or the Issuing Bank prior to the making of such Loan or the issuance of
such Letter of Credit.  Each Agent may
consult with legal counsel (who may be counsel for a Borrower), independent 

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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.

SECTION 9.05     Delegation of Duties.  Each 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, or delegate any and all such rights and powers to, any
one or more sub-agents appointed by such Agent, including a sub-agent
which is a non-U.S. affiliate of such Agent. 
Each 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 each 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.

SECTION 9.06     Resignation of Agent.  Each Agent may at any time give notice of its
resignation to the Lenders, the Issuing Bank and the Borrowers.  Upon receipt of any such notice of resignation,
the Required Lenders shall have the right, in consultation with the US
Borrower, to appoint a successor, which shall be a bank or a financial
institution with an office in the United States, or an Affiliate of any such
bank or financial institution with an office in the United States.  If no such successor shall have been so
appointed by the Required Lenders 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 Issuing Bank,
appoint a successor Agent meeting the qualifications set forth above provided that if the Agent shall notify 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 (except that in the
case of any collateral security held by the Collateral Agent on behalf of the
Lenders or the Issuing Bank under any of the Loan Documents, the retiring Collateral
Agent shall continue to hold such collateral security as nominee until such
time as a successor Collateral Agent is appointed) and (2) all payments,
communications and determinations provided to be made by, to or through an
Agent shall instead be made by or to each Lender and the Issuing Bank directly,
until such time as the Required Lenders appoint a successor Agent as provided
for above in this paragraph.  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
paragraph).  The fees payable by any
Borrower to a successor Agent shall be the same as those payable to its
predecessor unless otherwise agreed between such Borrower and such successor.  After the retiring Agent’s resignation
hereunder and under the other Loan Documents, the provisions of this Article IX
and Section 10.03 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.

SECTION 9.07     Non-Reliance on Agent and Other
Lenders.  Each Lender and
the Issuing Bank acknowledges that it has, independently and without reliance
upon any Agent or any other Lender and based on such documents and information
as it has deemed appropriate, made its own credit analysis and decision to
enter into this Agreement.  Each Lender
further represents and warrants that it has reviewed the Confidential
Information Memorandum and each other document made available to it on the
Platform in connection with this Agreement and has acknowledged and accepted
the terms and conditions applicable to the recipients thereof.  Each Lender and the Issuing Bank also
acknowledges that it will, independently and without reliance upon any Agent or
any other Lender and based on such documents and information as it shall from
time to time deem appropriate, continue to make its own 

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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.

SECTION 9.08     No Other Duties, etc.  Anything herein to the contrary
notwithstanding, none of the Bookmanager, the Arrangers, the Syndication Agent
or the Co-Documentation Agents listed on the
cover page hereof shall have any powers, duties or responsibilities under this
Agreement or any of the other Loan Documents, except in its capacity, as applicable,
as the Administrative Agent, the Collateral Agent, a Lender or the Issuing Bank
hereunder.

ARTICLE X

MISCELLANEOUS

SECTION 10.01  Notices.

(a)           Generally.  Except in the case of notices and other
communications expressly permitted to be given by telephone (and except as
provided in paragraph (b) below), all notices and other communications provided
for herein shall be in writing and shall be delivered by hand or overnight courier
service, mailed by certified or registered mail or sent by telecopier as follows:

(i)      if to any Loan Party, to the US Borrower
at:

Sciele Pharma, Inc.

Five Concourse Parkway

Suite 1800

Atlanta, Georgia 30328

Attention: Chief Financial Officer

Telecopier No.:  678-992-1036

Email: dborne@sciele.com

(ii)     if to the Administrative Agent, the
Collateral Agent or Issuing Bank, to it at:

UBS AG, Stamford Branch

677 Washington Boulevard

Stamford, Connecticut  06901

Attention:  Christopher Gomes

Telecopier No.:  (203) 719-3241

Email:  christopher.gomes@ubs.com

(iii)    if to a Lender, to it at its address (or
telecopier number) set forth in its Administrative Questionnaire; and

(iv)    if to the Swingline Lender, to it at:

UBS Loan Finance LLC

677 Washington Boulevard

Stamford, Connecticut  06901

Attention:  Christopher Gomes

Telecopier No.:  (203) 719-3241

Email: christopher.gomes@ubs.com

 

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Notices sent by hand or overnight courier service, or
mailed by certified or registered mail, shall be deemed to have been given when
received; notices sent by telecopier shall be deemed to have been given when
sent (except that, if not given during normal business hours for the recipient,
shall be deemed to have been given at the opening of business on the next
business day for the recipient).  Notices
delivered through electronic communications to the extent provided in paragraph (b)
below, shall be effective as provided in said paragraph (b).

(b)           Electronic
Communications.  Notices and other
communications to the Lenders and the Issuing Bank hereunder may (subject to Section
10.01(d)) be delivered or furnished by electronic communication (including
e-mail and Internet or intranet websites) pursuant to procedures approved
by the Administrative Agent; provided that
the foregoing shall not apply to notices to any Lender or the Issuing Bank
pursuant to Article II if such Lender or the Issuing Bank, as
applicable, has notified the Administrative Agent that it is incapable of
receiving notices under such Article by electronic communication.  The Administrative Agent, the Collateral
Agent or any Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it (including as set forth in Section 10.01(d)); provided that approval of such procedures may be limited to
particular notices or communications.

Unless the Administrative Agent otherwise prescribes,
(i) notices and other communications sent to an e-mail address shall be
deemed received upon the sender’s receipt of an acknowledgement from the
intended recipient (such as by the “return receipt requested” function, as
available, return e-mail or other written acknowledgement); provided that if such notice or other communication is not
sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next business day for the recipient, and (ii) notices or communications
posted to an Internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described in
the foregoing clause (i) of notification that such notice or communication
is available and identifying the website address therefor.

(c)           Change
of Address, etc.  Any party hereto
may change its address or telecopier number for notices and other
communications hereunder by notice to the other parties hereto.

(d)           Posting.   Each Loan Party hereby agrees that it will
provide to the Administrative Agent all information, documents and other
materials that it is obligated to furnish to the Administrative Agent pursuant
to this Agreement and any other Loan Document, including all notices, requests,
financial statements, financial and other reports, certificates and other
information materials, but excluding any such communication that
(i) relates to a request for a new, or a conversion of an existing, Borrowing
or other extension of credit (including any election of an interest rate or
interest period relating thereto), (ii) relates to the payment of any
principal or other amount due under this Agreement prior to the scheduled date
therefor, (iii) provides notice of any Default under this Agreement or
(iv) is required to be delivered to satisfy any condition precedent to the
effectiveness of this Agreement and/or any borrowing or other extension of
credit hereunder (all such non-excluded communications, collectively, the “Communications”), by transmitting the
Communications in an electronic/soft medium in a format reasonably acceptable
to the Administrative Agent at christopher.gomes@ubs.com or at such other
e-mail address(es) provided to the US Borrower from time to time or in such
other form, including hard copy delivery thereof, as the Administrative Agent
shall require.  In addition, each Loan
Party agrees to continue to provide the Communications to the Administrative
Agent in the manner specified in this Agreement or any other Loan Document or
in such other form, including hard copy delivery thereof, as the Administrative
Agent shall require.  Nothing in this Section
10.01 shall prejudice the right of the 

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Agents, any Lender or any Loan Party to give any notice or other
communication pursuant to this Agreement or any other Loan Document in any
other manner specified in this Agreement or any other Loan Document or as any
such Agent shall require.

To the extent consented to by the Administrative Agent
in writing from time to time, Administrative Agent agrees that receipt of the
Communications by the Administrative Agent at its e-mail address(es) set forth
above shall constitute effective delivery of the Communications to the
Administrative Agent for purposes of the Loan Documents; provided
that the Borrowers shall also deliver to the Administrative Agent an executed
original of each Compliance Certificate required to be delivered hereunder.

Each Loan Party further agrees that Administrative
Agent may make the Communications available to the Lenders by posting the
Communications on Intralinks or a substantially similar electronic transmission
system (the “Platform”).  The Platform is provided “as is” and “as
available.”  The Agents do not warrant
the accuracy or completeness of the Communications, or the adequacy of the Platform
and expressly disclaim liability for errors or omissions in the communications.  No warranty of any kind, express, implied or
statutory, including, without limitation, any warranty of merchantability,
fitness for a particular purpose, non-infringement of third party rights or
freedom from viruses or other code defects, is made by any Agent in connection
with the Communications or the Platform. 
In no event shall the Administrative Agent or any of its Related Parties
have any liability to the Loan Parties, any Lender or any other person for
damages of any kind, including direct or indirect, special, incidental or
consequential damages, losses or expenses (whether in tort, contract or otherwise)
arising out of any Loan Party’s or the Administrative Agent’s transmission of
communications through the Internet, except to the extent the liability of such
person is found in a final non-appealable judgment by a court of competent
jurisdiction to have resulted from such person’s gross negligence or willful
misconduct.

SECTION
10.02  Waivers; Amendment.

(a)           Generally.  No failure or delay by any Agent, the Issuing
Bank or any Lender in exercising any right or power hereunder or under any
other Loan Document shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right or power, or any abandonment or discontinuance
of steps to enforce such a right or power, preclude any other or further
exercise thereof or the exercise of any other right or power.  The rights and remedies of each Agent, the
Issuing Bank and the Lenders hereunder and under the other Loan Documents are
cumulative and are not exclusive of any rights or remedies that they would
otherwise have.  No waiver of any
provision of any Loan Document or consent to any departure by any Loan Party
therefrom shall in any event be effective unless the same shall be permitted by
this Section 10.02, and then such waiver or consent shall be effective
only in the specific instance and for the purpose for which given.  Without limiting the generality of the
foregoing, the making of a Loan or issuance of a Letter of Credit shall not be
construed as a waiver of any Default, regardless of whether any Agent, any
Lender or the Issuing Bank may have had notice or knowledge of such Default at
the time.  No notice or demand on any
Borrower in any case shall entitle such Borrower to any other or further notice
or demand in similar or other circumstances.

(b)           Required
Consents.  Subject to Sections
10.02(c) and (d), neither this Agreement nor any other Loan Document
nor any provision hereof or thereof may be waived, amended, supplemented or
modified except, in the case of this Agreement, pursuant to an agreement or
agreements in writing entered into by the Borrowers and the Required Lenders
or, in the case of any other Loan Document, pursuant to an agreement or
agreements in writing entered into by the Administrative Agent, 

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the Collateral Agent (in the case of any Security Document) and the
Loan Party or Loan Parties that are party thereto, in each case with the
written consent of the Required Lenders; provided that
no such agreement shall be effective if the effect thereof would:

(i)      increase the Commitment of any Lender
without the written consent of such Lender (it being understood that no
amendment, modification, termination, waiver or consent with respect to any
condition precedent, covenant or Default shall constitute an increase in the
Commitment of any Lender);

(ii)     reduce the principal amount of any Loan or
LC Disbursement or reduce the rate of interest thereon (other than interest
pursuant to Section 2.06(c)), or reduce any Fees payable hereunder, or
change the form or currency of payment of any Obligation, without the written
consent of each Lender directly affected thereby (it being understood that any
amendment or modification to the financial definitions in this Agreement shall
not constitute a reduction in the rate of interest for purposes of this
clause (ii));

(iii)    (A) change the scheduled final maturity of
any Loan, (B) postpone the date for payment of any Reimbursement Obligation or
any interest or fees payable hereunder, (C) change the amount of, waive or
excuse any such payment (other than waiver of any increase in the interest rate
pursuant to Section 2.06(c)), or (D) postpone the scheduled date of
expiration of any Commitment or any Letter of Credit beyond the Final Maturity
Date, in any case, without the written consent of each Lender directly affected
thereby;

(iv)    increase the maximum duration of Interest
Periods hereunder, without the written consent of each Lender directly affected
thereby;

(v)     permit the assignment or delegation by any
Borrower of any of its rights or obligations under any Loan Document, without
the written consent of each Lender;

(vi)    release all or substantially all of the
Guarantors from their Guarantee (except as expressly provided in Article VII),
or limit their liability in respect of such Guarantee, without the written
consent of each Lender;

(vii)   release all or a substantial portion of the
Collateral from the Liens of the Security Documents or alter the relative
priorities of the Secured Obligations entitled to the Liens of the Security
Documents, in each case without the written consent of each Lender (it being
understood that additional Classes of Loans pursuant to Section 2.19 or
consented to by the Required Lenders may be equally and ratably secured by the
Collateral with then existing Secured Obligations under the Security Documents);

(viii)  change Section 2.14(b), (c)
or (d) in a manner that would alter the pro rata
sharing of payments or setoffs required thereby or any other provision in a
manner that would alter the pro rata
allocation among the Lenders of Loan disbursements, including, without
limitation, the requirements of Sections 2.02(a), 2.17(A)(d), 2.17(B)(d),
2.18(A)(d), 2.18(B)(d) and 8.02, without the written
consent of each Lender directly affected thereby;

(ix)    change any provision of this Section 10.02(b)
or Section 10.02(c) or (d), without the written consent of each
Lender directly affected thereby (except for additional restrictions on 

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amendments or
waivers for the benefit of Lenders of additional Classes of Loans pursuant to Section
2.19 or consented to by the
Required Lenders);

(x)     change the percentage set forth in the
definition of “Required Lenders,” “Required Class Lenders,” “Required Revolving
Lenders” or any other provision of any Loan Document (including this Section)
specifying the number or percentage of Lenders (or Lenders of any Class)
required to waive, amend or modify any rights thereunder or make any
determination or grant any consent thereunder, without the written consent of
each Lender (or each Lender of such Class, as the case may be), other than to
increase such percentage or number or to give any additional Lender or group of
Lenders such right to waive, amend or modify or make any such determination or
grant any such consent;

(xi)    change the application of prepayments as
among or between Classes under Section 2.10(c), without the written
consent of the Required Class Lenders of each Class that is being allocated a
lesser prepayment as a result thereof (it being understood that the Required
Lenders may waive, in whole or in part, any prepayment so long as the application,
as between Classes, of any portion of such prepayment that is still required to
be made is not changed;

(xii)   change or waive any provision of Article X
as the same applies to any Agent, or any other provision hereof as the same
applies to the rights or obligations of any Agent, in each case without the
written consent of such Agent;

(xiii)  change or waive any obligation of the Lenders
relating to the issuance of or purchase of participations in Letters of Credit,
without the written consent of the Administrative Agent and the Issuing Bank;

(xiv)  change or waive any provision hereof relating
to Swingline Loans (including the definition of “Swingline Commitment”),
without the written consent of the Swingline Lender; or

(xv)   expressly change or waive any condition
precedent in Section 4.02 to any Revolving Borrowing without the
written consent of the Required Revolving Lenders.

(c)           Collateral.  Without the consent of any other person, the
applicable Loan Party or Parties and the Administrative Agent and/or Collateral
Agent may (in its or their respective sole discretion, or shall, to the extent
required by any Loan Document) enter into any amendment or waiver of any Loan
Document, or enter into any new agreement or instrument, to effect the granting,
perfection, protection, expansion or enhancement of any security interest in
any Collateral or additional property to become Collateral for the benefit of
the Secured Parties, or as required by local law to give effect to, or protect
any security interest for the benefit of the Secured Parties, in any property
or so that the security interests therein comply with applicable Requirements
of Law.

(d)           Dissenting
Lenders.  If, in connection with any
proposed change, waiver, discharge or termination of the provisions of this
Agreement as contemplated by Section 10.02(b), the consent of the
Required Lenders is obtained but the consent of one or more of such other
Lenders whose consent is required is not obtained, then the US Borrower shall
have the right to replace all, but not less than all, of such non-consenting
Lender or Lenders (so long as all non-consenting Lenders are so replaced) with
one or more persons pursuant to Section 2.16 so long as at the time
of such replacement each such new Lender consents to the proposed change,
waiver, discharge or termination.  Each
Lender agrees that, if the US Borrower elects to replace such Lender in
accordance with this Section, it shall 

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promptly execute and deliver to the Administrative Agent an Assignment
and Assumption to evidence such sale and purchase and shall deliver to the
Administrative 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
non-consenting Lender to execute an Assignment and Assumption shall not render
such sale and purchase (and the corresponding assignment) invalid and such
assignment shall be recorded in the Register.

SECTION
10.03   Expenses; Indemnity; Damage Waiver.

(a)           Costs
and Expenses.  Each Borrower shall
pay (i) all reasonable out-of-pocket expenses incurred by the
Administrative Agent, the Collateral Agent, the Syndication Agent and their
respective Affiliates (including the reasonable fees, charges and disbursements
of counsel for the Administrative Agent and/or the Collateral Agent) in
connection with the syndication of the credit facilities provided for herein
(including the obtaining and maintaining of CUSIP numbers for the Loans), the
preparation, negotiation, execution, delivery and administration of this
Agreement and the other Loan Documents or any amendment, amendment and
restatement, modification or waiver of the provisions hereof or thereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated), including in connection with post-closing searches to confirm
that security filings and recordations have been properly made, (ii) all
reasonable out-of-pocket expenses incurred by the Issuing Bank in
connection with the issuance, amendment, renewal or extension of any Letter of
Credit or any demand for payment thereunder, (iii) all out-of-pocket
expenses incurred by the Administrative Agent, the Collateral Agent, any Lender
or the Issuing Bank (including the fees, charges and disbursements of any
counsel for the Administrative Agent, the Collateral Agent, any Lender or the
Issuing Bank), in connection with the enforcement or protection of its rights
(A) in connection with this Agreement and the other Loan Documents,
including its rights under this Section 10.03, 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 and (iv) all
documentary and similar taxes and charges in respect of the Loan Documents.

(b)           Indemnification
by Borrowers.

(i)      The US Borrower shall indemnify each
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 any counsel for any Indemnitee) incurred by any Indemnitee
or asserted against any Indemnitee by any third party or by any Borrower or any
other Loan Party arising out of, in connection with, or as a result of
(i) the execution or delivery of this Agreement, any other Loan Document,
or any amendment, amendment and restatement, modification or waiver of the
provisions hereof or thereof, 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, (ii) any Loan or Letter of Credit or the
use or proposed use of the proceeds therefrom (including any refusal by the
Issuing Bank to honor a demand for payment under a Letter of Credit if the
documents presented in connection with such demand do not strictly comply with
the terms of such Letter of Credit), (iii) any actual or alleged presence
or Release or threatened Release of Hazardous Materials on, at, under or from
any property owned, leased or operated by any Company at any time, or any
Environmental Claim related in any way to any Company, 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 any Borrower or any other Loan Party, and
regardless of whether any Indemnitee is a party 

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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 (x) 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 (y) result
from a claim brought by any 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 such 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.

(ii)     The Cayman Borrower shall indemnify each
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 any counsel for any Indemnitee) incurred by any Indemnitee
or asserted against any Indemnitee by any third party or by the Cayman Borrower
or any other Foreign Loan Party arising out of, in connection with, or as a
result of (i) the Cayman Borrower’s execution or delivery of this
Agreement, any other Loan Document, or any amendment, amendment and
restatement, modification or waiver of the provisions hereof or thereof, or any
agreement or instrument contemplated hereby or thereby, the performance by the
Cayman Borrower of the obligations hereunder or thereunder or the consummation
of the transactions contemplated hereby or thereby, (ii) any Cayman
Revolving Loan or Cayman Letter of Credit or the use or proposed use of the
proceeds therefrom (including any refusal by the Issuing Bank to honor a demand
for payment under a Cayman Letter of Credit if the documents presented in
connection with such demand do not strictly comply with the terms of such
Cayman Letter of Credit), (iii) any actual or alleged presence or Release
or threatened Release of Hazardous Materials on, at, under or from any property
owned, leased or operated by the Cayman Borrower or any Foreign Subsidiary at
any time, or any Environmental Claim related in any way to the Cayman Borrower
or any Foreign Subsidiary, 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 Cayman Borrower or any other Foreign 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 (x) 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 (y) result from a claim brought by the Cayman Borrower
or any other Foreign Loan Party against an Indemnitee for breach in bad faith
of such Indemnitee’s obligations hereunder or under any other Loan Document, if
the Cayman Borrower or such Foreign Loan Party has obtained a final and
nonappealable judgment in its favor on such claim as determined by a court of
competent jurisdiction.

(c)           Reimbursement
by Lenders.  To the extent that any
Borrower for any reason fails to indefeasibly pay any amount required under
paragraph (a) or (b) of this Section 10.03 to be paid by it to
the Administrative Agent (or any sub-agent thereof), the Collateral Agent, the
Issuing Bank, the Swingline Lender or any Related Party of any of the
foregoing, each Lender severally agrees to pay to the Administrative Agent (or
any such sub-agent), the Collateral Agent (or any sub-agent thereof), the
Issuing Bank, the Swingline Lender or such Related Party, as the case may be,
such Lender’s pro  rata
share (determined as of the time that the applicable unreimbursed expense or
indemnity payment is sought) of such unpaid 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 the
Administrative Agent (or any such sub-agent), the Collateral Agent (or any
sub-agent thereof), the Swingline Lender or the Issuing Bank in its capacity as
such, or against any Related Party of any of the foregoing acting for the

 

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Administrative Agent (or any such sub-agent), the Collateral Agent (or
any sub-agent thereof), the Swingline Lender or Issuing Bank in connection with
such capacity.  The obligations of the
Lenders under this paragraph (c) are subject to the provisions of Section 2.14.  For purposes hereof, a Lender’s “pro  rata share”
shall be determined based upon its share of the sum of the total Revolving
Exposure and unused Commitments at the time.

(d)           Waiver
of Consequential Damages, Etc.  To
the fullest extent permitted by applicable Requirements of Law, no Loan Party
shall assert, and each Loan Party 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 referred to in
paragraph (b) above shall be liable for any damages arising from the use by unintended
recipients of any information or other materials distributed by it through
telecommunications, electronic or other information transmission systems in
connection with this Agreement or the other Loan Documents or the transactions
contemplated hereby or thereby.

(e)           Payments.  All amounts due under this Section shall be
payable not later than 3 Business Days after demand therefor.

SECTION
10.04  Successors and Assigns.

(a)           Successors
and Assigns Generally.  The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns permitted
hereby, except that no Borrower may assign or otherwise transfer any of its
rights or obligations hereunder without the prior written consent of the
Administrative Agent, the Collateral Agent, the Issuing Lender, the Swingline
Lender and each Lender and no Lender may assign or otherwise transfer any of
its rights or obligations hereunder except (i) to an Eligible Assignee in
accordance with the provisions of paragraph (b) of this Section 10.04,
(ii) by way of participation in accordance with the provisions of paragraph (d)
of this Section 10.04 or (iii) by way of pledge or assignment of a
security interest subject to the restrictions of paragraph (f) of this
Section (and any other attempted assignment or transfer by a Borrower or any
Lender shall be null and void).  Nothing
in this Agreement, expressed or implied, shall be construed to confer upon any
person (other than the parties hereto, their respective successors and assigns
permitted hereby, Participants to the extent provided in paragraph (d) of
this Section and, to the extent expressly contemplated hereby, the other
Indemnitees) any legal or equitable right, remedy or claim under or by reason
of this Agreement.

(b)           Assignments
by Lenders.  Any Lender may at any
time assign to one or more Eligible Assignees all or a portion of its rights
and obligations under this Agreement (including all or a portion of its
Commitment and the Loans at the time owing to it); provided
that

(i)      except in the case of any assignment made
in connection with the primary syndication of the Commitment and Loans by the
Arrangers or an assignment of the entire remaining amount of the assigning
Lender’s Commitment and the Loans at the time owing to it or in the case of an
assignment to a Lender or an Affiliate of a Lender or an Approved Fund with
respect to a Lender, the aggregate amount of the Commitment (which for this
purpose includes Loans outstanding thereunder) or, if the applicable 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 

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delivered to
the Administrative Agent or, if “Trade Date” is specified in the Assignment and
Assumption, as of the Trade Date) shall not be less than $1.0 million, in the
case of any assignment in respect of Revolving Loans and/or Revolving
Commitments, unless each of the Administrative Agent and, so long as no Default
has occurred and is continuing, the US Borrower otherwise consent (each such
consent not to be unreasonably withheld or delayed);

(ii)     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 Loan or the Commitment
assigned, except that this clause (ii) shall not prohibit any Lender from
assigning all or a portion of its rights and obligations among separate
tranches on a non-pro rata basis; and

(iii)    the parties to each assignment shall execute
and deliver to the Administrative Agent an Assignment and Assumption, together
with a processing and recordation fee of $3,500, and the Eligible Assignee, if
it shall not be a Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire.

Subject to acceptance and recording thereof by the
Administrative Agent pursuant to paragraph (c) of this Section 10.04,
from and after the effective date specified in each Assignment and Assumption,
the Eligible 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 2.12, 2.13, 2.15 and 10.03
with respect to facts and circumstances occurring prior to the effective date
of such assignment.  Any assignment or
transfer by a Lender of rights or obligations under this Agreement that does not
comply with this paragraph shall be treated for purposes of this Agreement as a
sale by such Lender of a participation in such rights and obligations in accordance
with paragraph (d) of this Section 10.04.

(c)           Register.  The Administrative Agent, acting solely for
this purpose as an agent of the Borrowers, shall maintain at one of its offices
in Stamford, Connecticut 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 LC Disbursements
owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). 
The entries in the Register shall be conclusive, and Borrowers, the
Administrative Agent, the Issuing Bank and the Lenders may treat each person
whose name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary.  The Register shall be
available for inspection by Borrowers, the Issuing Bank, the Collateral Agent,
the Swingline Lender and any Lender (with respect to its own interest only), at
any reasonable time and from time to time upon reasonable prior notice.

(d)           Participations.  Any Lender may at any time, without the
consent of, or notice to, any Borrower, the Administrative Agent, the Issuing
Bank or the Swingline Lender sell participations to any person (other than a
natural person or a Borrower or any of such Borrower’s Affiliates or Subsidiaries)
(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 owing to it); provided that (i) such Lender’s obligations under this
Agreement shall remain unchanged, (ii) such Lender shall remain 

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solely responsible to the other parties hereto for the performance of
such obligations, (iii) Borrowers, the Administrative Agent and the
Lenders and Issuing Bank shall continue to deal solely and directly with such
Lender in connection with such Lender’s rights and obligations under this
Agreement and (iv) no additional obligations of any Borrower are created as a
result of such participation.

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 the Loan Documents and to approve any amendment, modification
or waiver of any  provision of the Loan
Documents; provided that such agreement or
instrument may provide that such Lender will not, without the consent of the Participant,
agree to any amendment, modification or waiver described in clause (i), (ii) or
(iii) of the first proviso to Section 10.02(b) that affects such
Participant.  Subject to
paragraph (e) of this Section, each Borrower agrees that each Participant
shall be entitled to the benefits of Sections 2.12, 2.13 and 2.15
(subject to the requirements of those Sections) to the same extent as if it
were a Lender and had acquired its interest by assignment pursuant to
paragraph (b) of this Section.  To
the extent permitted by law, each Participant also shall be entitled to the
benefits of Section 10.08 as though it were a Lender, provided such
Participant agrees to be subject to Section 2.14 as though it were a
Lender.

(e)           Limitations
on Participant Rights.  A Participant
shall not be entitled to receive any greater payment under Sections 2.12,
2.13 and 2.15 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 Borrower’s prior
written consent.

(f)            Certain
Pledges.  Any Lender may at any time
pledge or assign a security interest in all or any portion of its rights under
this Agreement to secure obligations of such Lender, including any pledge or
assignment to secure obligations to a Federal Reserve Bank; 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.  In the case of any Lender that is a fund that
invests in bank loans, such Lender may, without the consent of any Borrower or
the Administrative Agent, collaterally assign or pledge all or any portion of
its rights under this Agreement, including the Loans and Notes or any other
instrument evidencing its rights as a Lender under this Agreement, to any
holder of, trustee for, or any other representative of holders of, obligations
owed or securities issued, by such fund, as security for such obligations or
securities.

(g)           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 Requirement of 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.

SECTION 10.05  Survival of Agreement.  All covenants, agreements, representations
and warranties made by the Loan Parties in the Loan Documents and in the
certificates or other instruments delivered in connection with or pursuant to
this Agreement or any other Loan Document shall be considered to have been
relied upon by the other parties hereto and shall survive the execution and delivery
of the Loan Documents and the making of any Loans and issuance of any Letters
of Credit, regardless of any investigation made by any such other party or on
its behalf and notwithstanding that the Agents, the Issuing Bank or any Lender
may have had notice or knowledge of 

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any Default or incorrect representation or warranty at
the time any credit is extended hereunder, and shall continue in full force and
effect as long as the principal of or any accrued interest on any Loan or any
fee or any other amount payable under this Agreement is outstanding and unpaid
or any Letter of Credit is outstanding and so long as the Commitments have not
expired or terminated.  The provisions of
Sections 2.12, 2.14, 2.15 and Article X
(other than Section 10.12) shall survive and remain in full force and
effect regardless of the consummation of the transactions contemplated hereby,
the repayment of the Loans, the payment of the Reimbursement Obligations, the
expiration or termination of the Letters of Credit and the Commitments or the
termination of this Agreement or any provision hereof.

SECTION
10.06  Counterparts; Integration;
Effectiveness.  This
Agreement may be executed in counterparts (and by different parties hereto in
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract.  This Agreement and the other Loan Documents
(including the Engagement Letter) constitute the entire contract among the
parties relating to the subject matter hereof and supersede any and all
previous agreements and understandings, oral or written, relating to the subject
matter hereof.  Except as provided in Section
4.01, this Agreement shall become effective when it shall have been executed
by the Administrative Agent and when the Administrative Agent shall have
received counterparts hereof that, when taken together, bear the signatures of
each of the other parties hereto. 
Delivery of an executed counterpart of a signature page of this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.

SECTION 10.07  Severability.  Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.

SECTION 10.08  Right of Setoff.  If an Event of Default shall have occurred
and be continuing, each Lender, the Issuing Bank, and each of their respective
Affiliates is hereby authorized at any time and from time to time, to the
fullest extent permitted by applicable Requirements of Law, to set off and
apply any and all deposits (general or special, time or demand, provisional or
final, in whatever currency) at any time held and other obligations (in
whatever currency) at any time owing by such Lender, the Issuing Bank or any
such Affiliate to or for the credit or the account of any Borrower or any other
Loan Party against any and all of the obligations of such Borrower or such Loan
Party now or hereafter existing under this Agreement or any other Loan Document
to such Lender or the Issuing Bank, irrespective of whether or not such Lender
or the Issuing Bank shall have made any demand under this Agreement or any
other Loan Document and although such obligations of such Borrower or such Loan
Party may be contingent or unmatured or are owed to a branch or office of such
Lender or the Issuing Bank different from the branch or office holding such
deposit or obligated on such indebtedness. 
The rights of each Lender, the Issuing Bank and their respective
Affiliates under this Section are in addition to other rights and remedies (including
other rights of setoff) that such Lender, the Issuing Bank or their respective
Affiliates may have.  Each Lender and the
Issuing Bank agrees to notify the US Borrower and the Administrative Agent
promptly after any such setoff and application; provided
that the failure to give such notice shall not affect the validity of such
setoff and application.

 

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SECTION
10.09  Governing Law;
Jurisdiction; Consent to Service of Process.

(a)           Governing
Law.  This Agreement shall be
construed in accordance with and governed by the law of the State of New York,
without regard to conflicts of law principles that would require the
application of the laws of another jurisdiction.

(b)           Submission
to Jurisdiction.  Each Loan Party
hereby irrevocably and unconditionally submits, for itself and its property, to
the nonexclusive jurisdiction of the Supreme Court of the State of New York
sitting in New York County and of the United States District Court of the
Southern District of New York, and any appellate court from any thereof, in any
action or proceeding arising out of or relating to any Loan Document, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such New York State
court or, to the fullest extent permitted by applicable law, in such Federal
court.  Each of the parties hereto agrees
that a final judgment in any such action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law.  Nothing in this
Agreement or any other Loan Document shall affect any right that the
Administrative Agent, the Issuing Bank or any Lender may otherwise have to
bring any action or proceeding relating to this Agreement or any other Loan
Document against any Loan Party or its properties in the courts of any jurisdiction.

(c)           Waiver
of Venue.  Each Loan Party hereby
irrevocably and unconditionally waives, to the fullest extent permitted by
applicable Requirements of Law, any objection which it may now or hereafter
have to the laying of venue of any suit, action or proceeding arising out of or
relating to this Agreement or any other Loan Document in any court referred to
in Section 10.09(b).  Each of the
parties hereto hereby irrevocably waives, to the fullest extent permitted by
applicable Requirements of Law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.

(d)           Service
of Process.  Each party hereto
irrevocably consents to service of process in any action or proceeding arising
out of or relating to any Loan Document, in the manner provided for notices
(other than telecopier) in Section 10.01.  Nothing in this Agreement or any other Loan
Document will affect the right of any party hereto to serve process in any
other manner permitted by applicable Requirements of Law.

SECTION 10.10  Waiver of Jury Trial.  Each Loan Party hereby waives, to the fullest
extent permitted by applicable Requirements of Law, any right it may have to a
trial by jury in any legal proceeding directly or indirectly arising out of or
relating to this Agreement, any other Loan Document or the transactions
contemplated hereby (whether based on contract, tort or any other theory).  Each party hereto (a) certifies that no
representative, agent or attorney of any other party has represented, expressly
or otherwise, that such other party would not, in the event of litigation, seek
to enforce the foregoing waiver and (b) acknowledges that it and the other
parties hereto have been induced to enter into this Agreement by, among other
things, the mutual waivers and certifications in this Section.

SECTION 10.11  Headings.  Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of
this Agreement and shall not affect the construction of, or be taken into consideration
in interpreting, this Agreement.

SECTION 10.12  Treatment of Certain Information;
Confidentiality.  Each of
the Administrative Agent, the Lenders and the Issuing Bank agrees to maintain
the confidentiality of the 

 124
 

 

Information (as defined below), except that
Information may be disclosed (a) to its Affiliates and to its and its
Affiliates’ respective partners, directors, officers, employees, agents, advisors
and other representatives (it being understood that the persons to whom such
disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to
the extent requested by any Governmental Authority or regulatory authority (including
any self-regulatory authority, such as the National Association of Insurance
Commissioners), (c) to the extent required by applicable Requirements of
Law or by any subpoena or similar legal process, (d) to any other party
hereto, (e) in connection with the exercise of any remedies hereunder or
under any other Loan Document or any action or proceeding relating to this Agreement
or any other Loan Document or the enforcement of rights hereunder or
thereunder, (f) subject to an agreement containing provisions substantially
the same as those of this Section 10.12, to (i) any assignee of or
Participant in, or any prospective assignee of or Participant in, any of its
rights or obligations under this Agreement, (ii) any actual or prospective
counterparty (or its advisors) to any swap or derivative transaction relating
to any Borrower and its obligations or (iii) any rating agency for the purpose
of obtaining a credit rating applicable to any Lender, (g) with the
consent of the US Borrower or (h) to the extent such Information
(x) becomes publicly available other than as a result of a breach of this
Section by such Person or (y) becomes available to the Administrative
Agent, any Lender, the Issuing Bank or any of their respective Affiliates on a
nonconfidential basis from a source other than the Borrowers.  For purposes of this Section, “Information” means all information received from a Borrower
or any of its Subsidiaries relating to a Borrower or any of its Subsidiaries or
any of their respective businesses, other than any such information that is
available to the Administrative Agent, any Lender or the Issuing Bank on a
nonconfidential basis prior to disclosure by a Borrower or any of its
Subsidiaries; provided that, in the case of
information received from a Borrower or any of its Subsidiaries after the date
hereof, such information is clearly identified at the time of delivery as confidential.  Any person required to maintain the
confidentiality of Information as provided in this Section shall be considered
to have complied with its obligation to do so if such person has exercised the
same degree of care to maintain the confidentiality of such Information as such
person would accord to its own confidential information.

SECTION 10.13  USA PATRIOT Act Notice.  Each Lender that is subject to the Act (as
hereinafter defined) and the Administrative Agent (for itself and not on behalf
of any Lender) hereby notifies the Borrowers that pursuant 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 Borrowers,
which information includes the name, address and tax identification number of
each Borrower and other information regarding each Borrower that will allow
such Lender or the Administrative Agent, as applicable, to identify each Borrower
in accordance with the Act.  This notice
is given in accordance with the requirements of the Act and is effective as to
the Lenders and the Administrative Agent.

SECTION 10.14  Interest Rate Limitation.  Notwithstanding anything herein to the
contrary, if at any time the interest rate applicable to any Loan, together
with all fees, charges and other amounts which are treated as interest on such
Loan under applicable Requirements of Law (collectively, the “Charges”), shall exceed the maximum lawful rate (the “Maximum Rate”) which may be contracted for, charged, taken,
received or reserved by the Lender holding such Loan in accordance with
applicable Requirements of Law, the rate of interest payable in respect of such
Loan hereunder, together with all Charges payable in respect thereof, shall be
limited to the Maximum Rate and, to the extent lawful, the interest and Charges
that would have been payable in respect of such Loan but were not payable as a
result of the operation of this Section shall be cumulated and the interest and
Charges payable to such Lender in respect of other Loans or periods shall be
increased (but not above the Maximum Rate therefor) 

 125
 

 

until such cumulated amount, together with interest
thereon at the Federal Funds Effective Rate to the date of repayment, shall
have been received by such Lender.

SECTION 10.15  Lender Addendum.  Each Lender to become a party to this
Agreement on the date hereof shall do so by delivering to the Administrative
Agent a Lender Addendum duly executed by such Lender, the Borrowers and the
Administrative Agent.

SECTION 10.16  Obligations Absolute.  To the fullest extent permitted by applicable
Requirements of Law, all obligations of the Loan Parties hereunder shall be
absolute and unconditional irrespective of:

(a)           any
bankruptcy, insolvency, reorganization, arrangement, readjustment, composition,
liquidation or the like of any Loan Party;

(b)           any
lack of validity or enforceability of any Loan Document or any other agreement
or instrument relating thereto against any Loan Party;

(c)           any
change in the time, manner or place of payment of, or in any other term of, all
or any of the Obligations, or any other amendment or waiver of or any consent
to any departure from any Loan Document or any other agreement or instrument
relating thereto;

(d)           any
exchange, release or non-perfection of any other Collateral, or any release or

amendment or waiver of or consent to any departure from any guarantee, for all
or any of the Obligations;

(e)           any
exercise or non-exercise, or any waiver of any right, remedy, power or privilege
under or in respect hereof or any Loan Document; or

(f)            any
other circumstances which might otherwise constitute a defense available to, or
a discharge of, the Loan Parties.

SECTION 10.17  Designated Senior Indebtedness.  Parties hereto agree that Obligations are “Designated
Senior Indebtedness” for purposes of the Convertible Bond Indenture.

[Signature
Pages Follow]

 

 126

 

 

IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed by their respective authorized officers as
of the day and year first above written.

	
  

  	
  SCIELE PHARMA, INC., as the US Borrower and a
  Domestic Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Darrell Borne

  
	
   

  	
   

  	
  Name: Darrell Borne

  
	
   

  	
   

  	
  Title: EVP, CFO, Secretary and Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SCIELE PHARMA CAYMAN LTD., as the Cayman Borrower
  and a Foreign Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Leslie B. Zachs

  
	
   

  	
   

  	
  Name: Leslie B. Zachs

  
	
   

  	
   

  	
  Title: Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SCIELE PHARMA SALES, INC., as a Domestic Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David Fisherskeller

  
	
   

  	
   

  	
  Name: David Fisherskeller

  
	
   

  	
   

  	
  Title: Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SCIELE PHARMA IRELAND, LTD., as a Foreign Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Darrell Borne

  
	
   

  	
   

  	
  Name: Darrell Borne

  
	
   

  	
   

  	
  Title: Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SCIELE PHARMA CYPRUS, LTD., as a Foreign Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael Milligan

  
	
   

  	
   

  	
  Name: Michael Milligan

  
	
   

  	
   

  	
  Title: Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  FIRST HORIZON PHARMACEUTICAL BV, as a Foreign Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Darrell Borne

  
	
   

  	
   

  	
  Name: Darrell Borne

  
	
   

  	
   

  	
  Title: Director

  
	
   

  	
   

  	
   

  

 

 S-1
 

 

 

	
  

  	
   

  	
   

  
	
   

  	
  UBS SECURITIES LLC, as Joint Lead Arranger

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard L. Tavrow

  
	
   

  	
   

  	
  Name: Richard L. Tavrow

  
	
   

  	
   

  	
  Title: Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Irja R. Otsa

  
	
   

  	
   

  	
  Name: Irja R. Otsa

  
	
   

  	
   

  	
  Title: Associate Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  LASALLE BANK NATIONAL ASSOCIATION, as Joint Lead Arranger
  and Syndication Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Patrick J. O’Toole

  
	
   

  	
   

  	
  Name: Patrick J. O’Toole

  
	
   

  	
   

  	
  Title: First Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  UBS AG, STAMFORD BRANCH, as Issuing Bank,
  Administrative Agent and Collateral Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard L. Tavrow

  
	
   

  	
   

  	
  Name: Richard L. Tavrow

  
	
   

  	
   

  	
  Title: Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Irja R. Otsa

  
	
   

  	
   

  	
  Name: Irja R. Otsa

  
	
   

  	
   

  	
  Title: Associate Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  UBS LOAN FINANCE LLC, as Swingline Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard L. Tavrow

  
	
   

  	
   

  	
  Name: Richard L. Tavrow

  
	
   

  	
   

  	
  Title: Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Irja R. Otsa

  
	
   

  	
   

  	
  Name: Irja R. Otsa

  
	
   

  	
   

  	
  Title: Associate Director

  

 

 S-2

 

 

Annex I

Applicable Margin

 

	
  

  	
   

  	
  Revolving Loans

  	
   

  	
   

  	
   

  
	
  Total Leverage Ratio

  	
   

  	
  Eurodollar

  	
   

  	
  ABR

  	
   

  	
  Applicable

  Fee

  	
   

  
	
  Level I

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  <1.50:1.0

  	
   

  	
  1.750

  	
  %

  	
  0.750

  	
  %

  	
  0.375

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Level II

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  <2.00:1.0 but 31.50:1.0

  	
   

  	
  2.000

  	
  %

  	
  1.000

  	
  %

  	
  0.375

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Level III

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  <2.50:1.0 but 32.00:1.0

  	
   

  	
  2.250

  	
  %

  	
  1.250

  	
  %

  	
  0.375

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Level IV

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  32.50:1.0

  	
   

  	
  2.500

  	
  %

  	
  1.500

  	
  %

  	
  0.500

  	
  %

  

 

Each change in the Applicable Margin or Applicable Fee
resulting from a change in the  Total
Leverage Ratio shall be effective with respect to all Loans and Letters of
Credit outstanding on and after the date of delivery to the Administrative
Agent of the financial statements and certificates required by Section 5.01(a)
or (b) and Section 5.01(d), respectively, indicating such
change until the date immediately preceding the next date of delivery of such
financial statements and certificates indicating another such change.  Notwithstanding the foregoing, the Total
Leverage Ratio shall be deemed to be in (A) Level II from the Closing Date
to the date of delivery to the Administrative Agent of the financial statements
and certificates required by Section 5.01(a) or (b) and Section 5.01(d)
for the fiscal period ended at least six months after the Closing Date, and (B)
Level IV (i) at any time during which any Borrower has failed to deliver
the financial statements and certificates required by Section 5.01(a)
or (b) and Section 5.01(d), respectively, and (ii) at
any time during the existence of an Event of DefaultExhibit
10.3

SECURITY AGREEMENT

By

SCIELE PHARMA,
INC.,

as US Borrower

and

THE  OTHER GUARANTORS PARTY HERETO

and

UBS AG, STAMFORD
BRANCH,

as Collateral Agent

Dated as of
September 18, 2006

 

   
 

 

 

TABLE OF CONTENTS

	
  

  	
   

  	
  

  	
   

  	
   

  	
   

  
	
  PREAMBLE

  	
   

  	
   

  	
   

  	
  1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  RECITALS

  	
   

  	
   

  	
   

  	
  1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AGREEMENT

  	
   

  	
   

  	
   

  	
  2

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE I

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  DEFINITIONS AND
  INTERPRETATION

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION
  1.1.

  	
   

  	
  DEFINITIONS

  	
   

  	
  2

  	
   

  
	
  SECTION
  1.2.

  	
   

  	
  INTERPRETATION

  	
   

  	
  9

  	
   

  
	
  SECTION
  1.3.

  	
   

  	
  RESOLUTION OF DRAFTING
  AMBIGUITIES

  	
   

  	
  9

  	
   

  
	
  SECTION
  1.4.

  	
   

  	
  PERFECTION CERTIFICATE

  	
   

  	
  9

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE II

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  GRANT OF
  SECURITY AND SECURED US OBLIGATIONS

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION
  2.1.

  	
   

  	
  GRANT OF SECURITY
  INTEREST

  	
   

  	
  9

  	
   

  
	
  SECTION
  2.2.

  	
   

  	
  FILINGS

  	
   

  	
  10

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE III

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PERFECTION;
  SUPPLEMENTS; FURTHER ASSURANCES;

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  USE OF PLEDGED
  COLLATERAL

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION
  3.1.

  	
   

  	
  DELIVERY OF
  CERTIFICATED SECURITIES COLLATERAL

  	
   

  	
  11

  	
   

  
	
  SECTION
  3.2.

  	
   

  	
  PERFECTION OF
  UNCERTIFICATED SECURITIES COLLATERAL

  	
   

  	
  12

  	
   

  
	
  SECTION
  3.3.

  	
   

  	
  FINANCING STATEMENTS
  AND OTHER FILINGS; MAINTENANCE OF PERFECTED SECURITY INTEREST

  	
   

  	
  12

  	
   

  
	
  SECTION
  3.4.

  	
   

  	
  OTHER ACTIONS

  	
   

  	
  12

  	
   

  
	
  SECTION
  3.5.

  	
   

  	
  JOINDER OF ADDITIONAL
  GUARANTORS

  	
   

  	
  16

  	
   

  
	
  SECTION 3.6.

  	
   

  	
  SUPPLEMENTS; FURTHER ASSURANCES

  	
   

  	
  16

  	
   

  

 

 i
 

 

 

	
  

  	
   

  	
  

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE IV

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  REPRESENTATIONS,
  WARRANTIES AND COVENANTS

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION
  4.1.

  	
   

  	
  TITLE

  	
   

  	
  17

  	
   

  
	
  SECTION
  4.2.

  	
   

  	
  VALIDITY OF SECURITY
  INTEREST

  	
   

  	
  17

  	
   

  
	
  SECTION
  4.3.

  	
   

  	
  DEFENSE OF CLAIMS;
  TRANSFERABILITY OF PLEDGED COLLATERAL

  	
   

  	
  18

  	
   

  
	
  SECTION
  4.4.

  	
   

  	
  OTHER FINANCING
  STATEMENTS

  	
   

  	
  18

  	
   

  
	
  SECTION
  4.5.

  	
   

  	
  LOCATION OF INVENTORY
  AND EQUIPMENT

  	
   

  	
  18

  	
   

  
	
  SECTION
  4.6.

  	
   

  	
  DUE AUTHORIZATION AND
  ISSUANCE

  	
   

  	
  18

  	
   

  
	
  SECTION
  4.7.

  	
   

  	
  CONSENTS, ETC.

  	
   

  	
  19

  	
   

  
	
  SECTION
  4.8.

  	
   

  	
  PLEDGED COLLATERAL

  	
   

  	
  19

  	
   

  
	
  SECTION
  4.9.

  	
   

  	
  INSURANCE

  	
   

  	
  19

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE V

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CERTAIN
  PROVISIONS CONCERNING SECURITIES COLLATERAL

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION
  5.1.

  	
   

  	
  PLEDGE OF ADDITIONAL
  SECURITIES COLLATERAL

  	
   

  	
  19

  	
   

  
	
  SECTION
  5.2.

  	
   

  	
  VOTING RIGHTS;
  DISTRIBUTIONS; ETC.

  	
   

  	
  20

  	
   

  
	
  SECTION
  5.3.

  	
   

  	
  DEFAULTS, ETC

  	
   

  	
  21

  	
   

  
	
  SECTION
  5.4.

  	
   

  	
  CERTAIN AGREEMENTS OF
  PLEDGORS AS ISSUERS AND HOLDERS OF EQUITY INTERESTS

  	
   

  	
  21

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE VI

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CERTAIN
  PROVISIONS CONCERNING INTELLECTUAL

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PROPERTY
  COLLATERAL

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION
  6.1.

  	
   

  	
  GRANT OF INTELLECTUAL
  PROPERTY LICENSE

  	
   

  	
  22

  	
   

  
	
  SECTION
  6.2.

  	
   

  	
  PROTECTION OF
  COLLATERAL AGENT’S SECURITY

  	
   

  	
  22

  	
   

  
	
  SECTION
  6.3.

  	
   

  	
  AFTER-ACQUIRED PROPERTY

  	
   

  	
  23

  	
   

  
	
  SECTION
  6.4.

  	
   

  	
  LITIGATION

  	
   

  	
  23

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE VII

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CERTAIN
  PROVISIONS CONCERNING RECEIVABLES

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION
  7.1.

  	
   

  	
  MAINTENANCE OF RECORDS

  	
   

  	
  24

  	
   

  
	
  SECTION
  7.2.

  	
   

  	
  LEGEND

  	
   

  	
  24

  	
   

  
	
  SECTION
  7.3.

  	
   

  	
  MODIFICATION OF TERMS,
  ETC

  	
   

  	
  24

  	
   

  
	
  SECTION 7.4.

  	
   

  	
  COLLECTION

  	
   

  	
  24

  	
   

  

 

 ii
 

 

 

	
  

  	
   

  	
  

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE VIII

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TRANSFERS

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION
  8.1.

  	
   

  	
  TRANSFERS OF
  PLEDGED COLLATERAL

  	
   

  	
  25

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE IX

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  REMEDIES

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION
  9.1.

  	
   

  	
  REMEDIES

  	
   

  	
  25

  	
   

  
	
  SECTION
  9.2.

  	
   

  	
  NOTICE OF SALE

  	
   

  	
  27

  	
   

  
	
  SECTION
  9.3.

  	
   

  	
  WAIVER OF NOTICE
  AND CLAIMS

  	
   

  	
  27

  	
   

  
	
  SECTION
  9.4.

  	
   

  	
  CERTAIN SALES OF
  PLEDGED COLLATERAL

  	
   

  	
  28

  	
   

  
	
  SECTION
  9.5.

  	
   

  	
  NO WAIVER;
  CUMULATIVE REMEDIES

  	
   

  	
  29

  	
   

  
	
  SECTION
  9.6.

  	
   

  	
  CERTAIN
  ADDITIONAL ACTIONS REGARDING INTELLECTUAL PROPERTY

  	
   

  	
  30

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE X

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  APPLICATION OF PROCEEDS

  	
   

  	
  30

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION
  10.1.

  	
   

  	
  APPLICATION OF
  PROCEEDS

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE XI

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  MISCELLANEOUS

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION
  11.1.

  	
   

  	
  CONCERNING
  COLLATERAL AGENT

  	
   

  	
  30

  	
   

  
	
  SECTION
  11.2.

  	
   

  	
  COLLATERAL AGENT
  MAY PERFORM; COLLATERAL AGENT APPOINTED ATTORNEY-IN-FACT

  	
   

  	
  32

  	
   

  
	
  SECTION
  11.3.

  	
   

  	
  CONTINUING SECURITY
  INTEREST; ASSIGNMENT

  	
   

  	
  32

  	
   

  
	
  SECTION
  11.4.

  	
   

  	
  TERMINATION;
  RELEASE

  	
   

  	
  33

  	
   

  
	
  SECTION
  11.5.

  	
   

  	
  MODIFICATION IN
  WRITING

  	
   

  	
  34

  	
   

  
	
  SECTION
  11.6.

  	
   

  	
  NOTICES

  	
   

  	
  34

  	
   

  
	
  SECTION
  11.7.

  	
   

  	
  GOVERNING LAW,
  CONSENT TO JURISDICTION AND SERVICE OF PROCESS; WAIVER OF JURY TRIAL

  	
   

  	
  34

  	
   

  
	
  SECTION
  11.8.

  	
   

  	
  SEVERABILITY OF
  PROVISIONS

  	
   

  	
  34

  	
   

  
	
  SECTION
  11.9.

  	
   

  	
  EXECUTION IN
  COUNTERPARTS

  	
   

  	
  34

  	
   

  
	
  SECTION
  11.10.

  	
   

  	
  BUSINESS DAYS

  	
   

  	
  34

  	
   

  
	
  SECTION
  11.11.

  	
   

  	
  NO CREDIT FOR
  PAYMENT OF TAXES OR IMPOSITION

  	
   

  	
  34

  	
   

  
	
  SECTION
  11.12.

  	
   

  	
  NO CLAIMS
  AGAINST COLLATERAL AGENT

  	
   

  	
  35

  	
   

  
	
  SECTION 11.13.

  	
   

  	
  NO RELEASE

  	
   

  	
  35

  	
   

  

 

 iii
 

 

 

	
  

  	
   

  	
  

  	
   

  	
   

  	
   

  
	
  SECTION
  11.14.

  	
   

  	
  OBLIGATIONS ABSOLUTE

  	
   

  	
  35

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SIGNATURES

  	
   

  	
   

  	
   

  	
  S-1

  	
   

  

 

	
  EXHIBIT 1

  	
   

  	
  Form of Issuer’s Acknowledgment

  
	
  EXHIBIT 2

  	
   

  	
  Form of Securities Pledge Amendment

  
	
  EXHIBIT 3

  	
   

  	
  Form of Joinder Agreement

  
	
  EXHIBIT 4

  	
   

  	
  Form of Control Agreement Concerning Securities
  Accounts

  
	
  EXHIBIT 5

  	
   

  	
  Form of Control Agreement Concerning Deposit
  Accounts

  
	
  EXHIBIT 6

  	
   

  	
  Form of Copyright Security Agreement

  
	
  EXHIBIT 7

  	
   

  	
  Form of Patent Security Agreement

  
	
  EXHIBIT 8

  	
   

  	
  Form of Trademark Security Agreement

  
	
  EXHIBIT 9

  	
   

  	
  Form of Bailee’s Letter

  

 

 iv

 

SECURITY AGREEMENT

This SECURITY AGREEMENT
dated as of September 18, 2006 (as amended, amended and restated, supplemented
or otherwise modified from time to time in accordance with the provisions
hereof, this “Agreement”) made by SCIELE PHARMA, INC., a Delaware corporation
(the “US Borrower”) and the Guarantors from to time to time party hereto
(the “Guarantors”), as pledgors, assignors and debtors (the US Borrower,
together with the Guarantors, in such capacities and together with any
successors in such capacities, the “Pledgors,” and each, a “Pledgor”),
in favor of UBS AG, STAMFORD BRANCH, in its capacity as collateral agent pursuant
to the Credit Agreement (as hereinafter defined), as pledgee, assignee and
secured party (in such capacities and together with any successors in such
capacities, the “Collateral Agent”).

R E C I T A L S :

A.            The US Borrower, Sciele Pharma
Cayman Ltd., an exempted company incorporated under Cayman Islands law (the “Cayman
Borrower” and together with the US Borrower, “Borrowers”), the
Guarantors, the Collateral Agent, the lending institutions listed therein (the “Lenders”)
and certain other parties thereto have, in connection with the execution and delivery
of this Agreement, entered into that certain credit agreement, dated as of
September 18, 2006 (as amended, amended and restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”; which term shall
also include and refer to any increase in the amount of indebtedness under the
Credit Agreement and any refinancing or replacement of the Credit Agreement
(whether under a bank facility, securities offering or otherwise) or one or
more successor or replacement facilities whether or not with a different group
of agents or lenders (whether under a bank facility, securities offering or
otherwise) and whether or not with different obligors upon the Administrative
Agent’s acknowledgment of the termination of the predecessor Credit Agreement).

B.            Each Guarantor has, pursuant to the
Credit Agreement, unconditionally guaranteed the Secured US Obligations.

C.            The Borrowers and each Guarantor
will receive substantial benefits from the execution, delivery and performance
of the obligations under the Credit Agreement and the other Loan Documents and
each is, therefore, willing to enter into this Agreement.

D.            This Agreement is given by each
Pledgor in favor of the Collateral Agent for the benefit of the Secured Parties
(as hereinafter defined) to secure the payment and performance of all of the
Secured US Obligations.

F.             It is a condition to (i) the
obligations of the Lenders to make the Loans under the Credit Agreement, (ii)
the obligations of the Issuing Bank to issue Letters of Credit, and (iii) the
performance of the obligations of the Secured Parties under Hedging Agreements 

 

that constitute Secured
US Obligations that each Pledgor execute and deliver the applicable Loan
Documents, including this Agreement.

A G R E E M E N T :

NOW THEREFORE, in
consideration of the foregoing premises and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, each Pledgor and
the Collateral Agent hereby agree as follows:

ARTICLE I

DEFINITIONS AND
INTERPRETATION

SECTION 1.1.              Definitions.

(a)           Unless otherwise
defined herein or in the Credit Agreement, capitalized terms used herein that
are defined in the UCC shall have the meanings assigned to them in the UCC; provided
that in any event, the following terms shall have the meanings assigned to them
in the UCC:

“Accounts”; “Bank”;
“Chattel Paper”; “Commercial Tort Claim”; “Commodity Account”;
“Commodity Contract”; “Commodity Intermediary”; “Documents”;
“Electronic Chattel Paper”; “Entitlement Order”; “Equipment”;
“Financial Asset”; “Fixtures”; “Goods”, “Inventory”;
“Letter-of-Credit Rights”; “Letters of Credit”; “Money”; “Payment
Intangibles”; “Proceeds”; “ Records”; “Securities Account”;
“Securities Intermediary”; “Supporting Obligations”; and “Tangible
Chattel Paper.”

(b)           Terms used but not
otherwise defined herein that are defined in the Credit Agreement shall have
the meanings given to them in the Credit Agreement.  Sections 1.03 and 1.05 of the Credit
Agreement shall apply herein mutatis mutandis.

(c)           The
following terms shall have the following meanings:

“Account Debtor”
shall mean each person who is obligated on a Receivable or Supporting
Obligation related thereto.

“Agreement” shall
have the meaning assigned to such term in the Preamble hereof.

“Bailee Letter”
shall be an agreement in form substantially similar to Exhibit 9 hereto.

 2
 

 

“Borrowers” shall
have the meaning assigned to such term in the Preamble hereof.

“Collateral Agent”
shall have the meaning assigned to such term in the Preamble hereof.

“Collateral Support”
shall mean all property (real or personal) assigned, hypothecated or otherwise
securing any Pledged Collateral and shall include any security agreement or
other agreement granting a lien or security interest in such real or personal
property.

“Commodity Account
Control Agreement” shall mean a control agreement in a form that is reasonably
satisfactory to the Administrative Agent establishing the Collateral Agent’s
Control with respect to any Commodity Account.

“Contracts” shall
mean, collectively, with respect to each Pledgor, all sale, service,
performance, equipment or property lease contracts, agreements and grants and
all other contracts, agreements or grants (in each case, whether written or
oral, or third party or intercompany), between such Pledgor and any third
party, and all assignments, amendments, restatements, supplements, extensions,
renewals, replacements or modifications thereof.

“Control” shall
mean (i) in the case of each Deposit Account, “control,” as such term is
defined in Section 9-104 of the UCC, (ii) in the case of any
Security Entitlement, “control,” as such term is defined in Section 8-106
of the UCC, and (iii) in the case of any Commodity Contract, “control,” as
such term is defined in Section 9-106 of the UCC.

“Control Agreements”
shall mean, collectively, the Deposit Account Control Agreement, the Securities
Account Control Agreement and the Commodity Account Control Agreement.

“Copyrights”
shall mean, collectively, with respect to each Pledgor, all copyrights (whether
statutory or common law, whether established or registered in the United States
or any other country or any political subdivision thereof, whether registered
or unregistered and whether published or unpublished) and all copyright
registrations and applications made by such Pledgor, in each case, whether now
owned or hereafter created or acquired by or assigned to such Pledgor, together
with any and all (i) rights and privileges arising under applicable law
with respect to such Pledgor’s use of such copyrights, (ii) reissues,
renewals, continuations and extensions thereof and amendments thereto, (iii)
income, fees, royalties, damages, claims and payments now or hereafter due
and/or payable with respect thereto, including damages and payments for past,
present or future infringements thereof, (iv) rights corresponding thereto
throughout the world and (v) rights to sue for past, present or future
infringements thereof.

“Copyright Security
Agreement” shall mean an agreement substantially in the form of Exhibit 6
hereto.

 3
 

 

“Credit Agreement”
shall have the meaning assigned to such term in Recital A hereof.

“Deposit Account
Control Agreement” shall mean an agreement substantially in the form of Exhibit
5 hereto or such other form that is reasonably satisfactory to the
Collateral Agent establishing the Collateral Agent’s Control with respect to
any Deposit Account.

“Deposit Accounts”
shall mean, collectively, with respect to each Pledgor, (i) all “deposit
accounts” as such term is defined in the UCC and in any event shall include the
LC Account and all accounts and sub-accounts relating to any of the foregoing
accounts and (ii) all cash, funds, checks, notes and instruments from time to
time on deposit in any of the accounts or sub-accounts described in clause (i)
of this definition.

“Distributions”
shall mean, collectively, with respect to each Pledgor, all dividends, cash,
options, warrants, rights, instruments, distributions, returns of capital or
principal, income, interest, profits and other property, interests (debt or
equity) or proceeds, including as a result of a split, revision,
reclassification or other like change of the Pledged Securities, from time to
time received, receivable or otherwise distributed to such Pledgor in respect
of or in exchange for any or all of the Pledged Securities or Intercompany
Notes.

“Excluded Property”
shall mean

(a)           any permit or license issued by a
Governmental Authority to any Pledgor or any agreement to which any Pledgor is
a party (including any Intellectual Property Licenses), in each case, only to
the extent and for so long as the terms of such permit, license or agreement or
any Requirement of Law applicable thereto, validly prohibit the creation by
such Pledgor of a security interest in such permit, license or agreement (or in
any underlying Intellectual Property Collateral that is the subject matter of
such agreement) in favor of the Collateral Agent (after giving effect to
Sections 9-406(d), 9-407(a), 9-408(a) or 9-409 of the
UCC (or any successor provision or provisions) or any other applicable law
(including the Bankruptcy Code) or principles of equity), and

(b)           Equipment owned by any Pledgor on the
date hereof or hereafter acquired that is subject to a Lien securing a Purchase
Money Obligation or Capital Lease Obligation permitted to be incurred pursuant
to the provisions of the Credit Agreement if the contract or other agreement in
which such Lien is granted (or the documentation providing for such Purchase
Money Obligation or Capital Lease Obligation) validly prohibits the creation of
any other Lien on such Equipment;

provided, however,
that Excluded Property shall not include any Proceeds, substitutions or replacements
of any Excluded Property referred to in clause (a) or (b) (unless such
Proceeds, substitutions or replacements would constitute Excluded Property
referred to in clause (a) or (b)).

 4
 

 

“Excluded Cayman
Shares” shall mean all issued and outstanding Equity Interests in the
Cayman Borrower held by the US Borrower which have been pledged by the US
Borrower to the Collateral Agent for the benefit of Secured Parties pursuant to
the Cayman Share Charge.

“General Intangibles”
shall mean, collectively, with respect to each Pledgor, all “general
intangibles,” as such term is defined in the UCC, of such Pledgor and, in any
event, shall include (i) all of such Pledgor’s rights, title and interest
in, to and under all Contracts and insurance policies (including all
rights and remedies relating to monetary damages, including indemnification
rights and remedies, and claims for damages or other relief pursuant to or in respect
of any Contract), (ii) all know-how and warranties relating to any of the
Pledged Collateral or the Mortgaged Property, (iii) any and all other
rights, claims, choses-in-action and causes of action of such Pledgor against
any other person and the benefits of any and all collateral or other security
given by any other person in connection therewith, (iv) all guarantees,
endorsements and indemnifications on, or of, any of the Pledged Collateral or
any of the Mortgaged Property, (v) all lists, books, records,
correspondence, ledgers, printouts, files (whether in printed form or stored
electronically), tapes and other papers or materials containing information
relating to any of the Pledged Collateral or any of the Mortgaged Property,
including all customer or tenant lists, identification of suppliers, data,
plans, blueprints, specifications, designs, drawings, appraisals, recorded
knowledge, surveys, studies, engineering reports, test reports, manuals,
standards, processing standards, performance standards, catalogs, research
data, computer and automatic machinery software and programs and the like,
field repair data, accounting information pertaining to such Pledgor’s
operations or any of the Pledged Collateral or any of the Mortgaged Property
and all media in which or on which any of the information or knowledge or data
or records may be recorded or stored and all computer programs used for the
compilation or printout of such information, knowledge, records or data,
(vi) all licenses, consents, permits, variances, certifications,
authorizations and approvals, however characterized, now or hereafter acquired
or held by such Pledgor, including building permits, certificates of occupancy,
environmental certificates, industrial permits or licenses and certificates of
operation and (vii) all rights to reserves, deferred payments, deposits,
refunds, indemnification of claims and claims for tax or other refunds against
any Governmental Authority.

“Goodwill” shall
mean, collectively, with respect to each Pledgor, the goodwill connected with
such Pledgor’s business including all goodwill connected with (i) the use of
and symbolized by any Trademark or Intellectual Property License with respect
to any Trademark in which such Pledgor has any interest, (ii) all
know-how, trade secrets, customer and supplier lists, proprietary information,
inventions, methods, procedures, formulae, descriptions, compositions,
technical data, drawings, specifications, name plates, catalogs, confidential
information and the right to limit the use or disclosure thereof by any person,
pricing and cost information, business and marketing plans and proposals,
consulting agreements, engineering contracts and such other assets which relate
to such goodwill and (iii) all product lines of such Pledgor’s business.

“Guarantors”
shall have the meaning assigned to such term in the Preamble hereof.

 5
 

 

“Instruments”
shall mean, collectively, with respect to each Pledgor, all “instruments,” as
such term is defined in Article 9, rather than Article 3, of the UCC,
and shall include all promissory notes, drafts, bills of exchange or
acceptances.

“Intellectual
Property Collateral” shall mean, collectively, the Patents, Trademarks,
Copyrights, Intellectual Property Licenses and Goodwill.

“Intellectual
Property Licenses” shall mean, collectively, with respect to each Pledgor,
all license and distribution agreements with, and covenants not to sue, any
other party with respect to any Patent, Trademark or Copyright or any other
patent, trademark or copyright, whether such Pledgor is a licensor or licensee,
distributor or distributee under any such license or distribution agreement,
together with any and all (i) renewals, extensions, supplements and continuations
thereof, (ii) income, fees, royalties, damages, claims and payments now
and hereafter due and/or payable thereunder and with respect thereto including
damages and payments for past, present or future infringements or violations
thereof, (iii) rights to sue for past, present and future infringements or
violations thereof and (iv) other rights to use, exploit or practice any or all
of the Patents, Trademarks or Copyrights or any other patent, trademark or
copyright.

“Intercompany Notes”
shall mean, with respect to each Pledgor, all intercompany notes described in Schedule 11
to the Perfection Certificate and intercompany notes hereafter acquired by such
Pledgor and all certificates, instruments or agreements evidencing such intercompany
notes, and all assignments, amendments, restatements, supplements, extensions,
renewals, replacements or modifications thereof to the extent permitted pursuant
to the terms hereof.

“Investment Property”
shall mean a security, whether certificated or uncertificated, Security
Entitlement, Securities Account, Commodity Contract or Commodity Account,
excluding, however, the Securities Collateral.

“Joinder Agreement”
shall mean an agreement substantially in the form of Exhibit 3
hereto.

“LC Account”
shall mean any account established and maintained in accordance with the
provisions of Section 2.18(i) of the Credit Agreement and all property
from time to time on deposit in such LC Account.

“Lenders” shall
have the meaning assigned to such term in Recital A hereof.

“Material
Intellectual Property Collateral” shall mean any Intellectual Property
Collateral that is material (i) to the use and operation of the Pledged
Collateral or Mortgaged Property or (ii) to the business, results of
operations, prospects or condition, financial or otherwise, of any Pledgor.

 6
 

 

“Mortgaged Property”
shall have the meaning assigned to such term in the Mortgages.

“Patents” shall
mean, collectively, with respect to each Pledgor, all patents issued or
assigned to, and all patent applications and registrations made by, such
Pledgor (whether established or registered or recorded in the United States or
any other country or any political subdivision thereof), together with any and
all (i) rights and privileges arising under applicable law with respect to
such Pledgor’s use of any patents, (ii) inventions and improvements described
and claimed therein, (iii) reissues, divisions, continuations, renewals,
extensions and continuations-in-part thereof and amendments thereto, (iv)
income, fees, royalties, damages, claims and payments now or hereafter due
and/or payable thereunder and with respect thereto including damages and payments
for past, present or future infringements thereof, (v) rights
corresponding thereto throughout the world and (vi) rights to sue for past,
present or future infringements thereof.

“Patent Security
Agreement” shall mean an agreement substantially in the form of Exhibit 7
hereto.

“Perfection
Certificate” shall mean that certain perfection certificate dated September
18, 2006, executed and delivered by each Pledgor in favor of the Collateral
Agent for the benefit of the Secured Parties, and each other Perfection
Certificate (which shall be in form and substance reasonably acceptable to the
Collateral Agent) executed and delivered by the applicable Guarantor in favor
of the Collateral Agent for the benefit of the Secured Parties contemporaneously
with the execution and delivery of each Joinder Agreement executed in accordance
with Section 3.5 hereof, in each case, as the same may be amended,
amended and restated, supplemented or otherwise modified from time to time in accordance
with the Credit Agreement or upon the request of the Collateral Agent.

“Pledge Amendment”
shall have the meaning assigned to such term in Section 5.1 hereof.

“Pledged Collateral”
shall have the meaning assigned to such term in Section 2.1 hereof.

“Pledged Securities”
shall mean, collectively, with respect to each Pledgor, (i) all issued and
outstanding Equity Interests of each issuer set forth on Schedules 10(a)
and 10(b) to the Perfection Certificate as being owned by such Pledgor
and all options, warrants, rights, agreements and additional Equity Interests
of whatever class of any such issuer acquired by such Pledgor (including by
issuance), together with all rights, privileges, authority and powers of such
Pledgor relating to such Equity Interests in each such issuer or under any Organizational
Document of each such issuer, and the certificates, instruments and agreements
representing such Equity Interests and any and all interest of such Pledgor in
the entries on the books of any financial intermediary pertaining to such
Equity Interests, (ii) all Equity Interests of any issuer, which Equity
Interests are hereafter acquired by such Pledgor (including by issuance) and
all options, 

 7
 

 

warrants, rights,
agreements and additional Equity Interests of whatever class of any such issuer
acquired by such Pledgor (including by issuance), together with all rights,
privileges, authority and powers of such Pledgor relating to such Equity
Interests or under any Organizational Document of any such issuer, and the
certificates, instruments and agreements representing such Equity Interests and
any and all interest of such Pledgor in the entries on the books of any
financial intermediary pertaining to such Equity Interests, from time to time
acquired by such Pledgor in any manner, and (iii) all Equity Interests issued
in respect of the Equity Interests referred to in clause (i) or (ii) upon any
consolidation or merger of any issuer of such Equity Interests; provided,
however, that Pledged Securities shall not include (x) any Equity
Interests which are not required to be pledged pursuant to Section 5.11(b)
of the Credit Agreement or (y) the Excluded Cayman Shares.

“Pledgor” shall
have the meaning assigned to such term in the Preamble hereof.

“Receivables”
shall mean all (i) Accounts, (ii) Chattel Paper, (iii) Payment Intangibles,
(iv) General Intangibles, (v) Instruments and (vi) all other rights to payment,
whether or not earned by performance, for goods or other property sold, leased,
licensed, assigned or otherwise disposed of, or services rendered or to be
rendered, regardless of how classified under the UCC together with all of
Pledgors’ rights, if any, in any goods or other property giving rise to such
right to payment and all Collateral Support and Supporting Obligations related
thereto and all Records relating thereto.

“Securities Account
Control Agreement” shall mean an agreement substantially in the form of Exhibit
4 hereto or such other form that is reasonably satisfactory to the
Collateral Agent establishing the Collateral Agent’s Control with respect to
any Securities Account.

“Securities
Collateral” shall mean, collectively, the Pledged Securities, the Intercompany
Notes and the Distributions.

“Trademarks”
shall mean, collectively, with respect to each Pledgor, all trademarks
(including service marks), slogans, logos, certification marks, trade dress,
uniform resource locations (URL’s), domain names, corporate names and trade
names, whether registered or unregistered, owned by or assigned to such Pledgor
and all registrations and applications for the foregoing (whether statutory or
common law and whether established or registered in the United States or any
other country or any political subdivision thereof), together with any and all
(i) rights and privileges arising under applicable law with respect to
such Pledgor’s use of any trademarks, (ii) reissues, continuations,
extensions and renewals thereof and amendments thereto, (iii) income,
fees, royalties, damages and payments now and hereafter due and/or payable
thereunder and with respect thereto, including damages, claims and payments for
past, present or future infringements thereof, (iv) rights corresponding
thereto throughout the world and (v) rights to sue for past, present and future
infringements thereof.

“Trademark Security
Agreement” shall mean an agreement substantially in the form of Exhibit 8
hereto.

 8
 

 

“UCC” shall mean
the Uniform Commercial Code as in effect from time to time in the State of New
York; provided, however, that, at any time, if by reason of
mandatory provisions of law, any or all of the perfection or priority of the
Collateral Agent’s and the Secured Parties’ security interest in any item or
portion of the Pledged Collateral is governed by the Uniform Commercial Code as
in effect in a jurisdiction other than the State of New York, the term “UCC”
shall mean the Uniform Commercial Code as in effect, at such time, in such
other jurisdiction for purposes of the provisions hereof relating to such
perfection or priority and for purposes of definitions relating to such
provisions.

SECTION 1.2.              Interpretation.  The rules of interpretation specified in the
Credit Agreement (including Section 1.03 thereof) shall be applicable
to this Agreement.

SECTION 1.3.              Resolution
of Drafting Ambiguities.  Each
Pledgor acknowledges and agrees that it was represented by counsel in
connection with the execution and delivery hereof, that it and its counsel
reviewed and participated in the preparation and negotiation hereof and that
any rule of construction to the effect that ambiguities are to be resolved
against the drafting party (i.e., the Collateral Agent) shall not be
employed in the interpretation hereof.

SECTION 1.4.              Perfection
Certificate.  The Collateral Agent
and each Secured Party agree that the Perfection Certificate and all
descriptions of Pledged Collateral, schedules, amendments and supplements
thereto are and shall at all times remain a part of this Agreement.

ARTICLE II

GRANT OF SECURITY AND
SECURED US OBLIGATIONS

SECTION 2.1.              Grant
of Security Interest.  As collateral
security for the payment and performance in full of all the Secured US
Obligations, each Pledgor hereby pledges and grants to the Collateral Agent for
the benefit of the Secured Parties, a lien on and security interest in all of
the right, title and interest of such Pledgor in, to and under the following
property, wherever located, and whether now existing or hereafter arising or
acquired from time to time (collectively, the “Pledged Collateral”):

(i)                     all Accounts;

(ii)                  all Equipment,
Goods, Inventory and Fixtures;

(iii)               all Documents,
Instruments and Chattel Paper;

(iv)              all Letters of
Credit and Letter-of-Credit Rights;

 

 9

 

 

(v)                 all Securities
Collateral;

(vi)              all Investment
Property;

(vii)           all Intellectual
Property Collateral;

(viii)        the Commercial Tort Claims
described on Schedule 13 to the Perfection Certificate;

(ix)                all General
Intangibles;

(x)                   all Money and
all Deposit Accounts;

(xi)                all Supporting
Obligations;

(xii)             all books and records
relating to the Pledged Collateral; and

(xiii)          to the extent not
covered by clauses (i) through (xii) of this sentence, all other personal
property of such Pledgor, whether tangible or intangible, and all Proceeds and
products of each of the foregoing and all accessions to, substitutions and
replacements for, and rents, profits and products of, each of the foregoing,
any and all Proceeds of any insurance, indemnity, warranty or guaranty payable
to such Pledgor from time to time with respect to any of the foregoing.

Notwithstanding anything
to the contrary contained in clauses (i) through (xiii) above, the security
interest created by this Agreement shall not extend to, and the term “Pledged
Collateral” shall not include, any Excluded Property and (i) the Pledgors
shall from time to time at the request of the Collateral Agent give written
notice to the Collateral Agent identifying in reasonable detail the Excluded
Property and shall provide to the Collateral Agent such other information
regarding the Excluded Property as the Collateral Agent may reasonably request
and (ii) from and after the Closing Date, no Pledgor shall permit to
become effective in any document creating, governing or providing for any
permit, license or agreement a provision that would prohibit the creation of a
Lien on such permit, license or agreement in favor of the Collateral Agent
unless such Pledgor believes, in its reasonable judgment, that such prohibition
is usual and customary in transactions of such type.

SECTION 2.2.        Filings.  (a) 
Each Pledgor hereby irrevocably authorizes the Collateral Agent at any
time and from time to time to file in any relevant jurisdiction any financing
statements (including fixture filings) and amendments thereto that contain the
information required by Article 9 of the Uniform Commercial Code of each
applicable jurisdiction for the filing of any financing statement or amendment
relating to the Pledged Collateral, including (i) whether such Pledgor is an
organization, the type of organization and any organizational identification
number issued to such Pledgor, (ii) any financing or continuation statements or
other 

 10
 

 

documents without the
signature of such Pledgor where permitted by law, including the filing of a
financing statement describing the Pledged Collateral as “all assets now owned
or hereafter acquired by the Pledgor or in which Pledgor otherwise has rights”
and (iii) in the case of a financing statement filed as a fixture filing or
covering Pledged Collateral constituting minerals or the like to be extracted
or timber to be cut, a sufficient description of the real property to which
such Pledged Collateral relates.  The
Collateral Agent shall promptly, prior to filing, provide Borrower with a copy
of each such financing statement and amendment. 
Each Pledgor agrees to provide all information described in the
immediately preceding sentence to the Collateral Agent promptly upon request by
the Collateral Agent.

(b)           Each Pledgor hereby
ratifies its authorization for the Collateral Agent to file in any relevant
jurisdiction any financing statements relating to the Pledged Collateral if
filed prior to the date hereof.

(c)           Each Pledgor hereby
further authorizes the Collateral Agent to file filings with the United States
Patent and Trademark Office or United States Copyright Office (or any successor
office or any similar office in any other country), including this Agreement,
any Copyright Security Agreement, the Patent Security Agreement and the
Trademark Security Agreement, or other documents for the purpose of perfecting,
confirming, continuing, enforcing or protecting the security interest granted
by such Pledgor hereunder, without the signature of such Pledgor, and naming
such Pledgor, as debtor, and the Collateral Agent, as secured party.  Collateral Agent shall, prior to filing,
provide Borrower with a copy of each such document to be filed.

ARTICLE III

PERFECTION; SUPPLEMENTS;
FURTHER ASSURANCES;

USE OF PLEDGED COLLATERAL

SECTION 3.1.        Delivery of Certificated Securities
Collateral.  Each Pledgor represents
and warrants that all certificates, agreements or instruments representing or
evidencing the Securities Collateral in existence on the date hereof have been
delivered to the Collateral Agent in suitable form for transfer by delivery or
accompanied by duly executed instruments of transfer or assignment in blank and
that the Collateral Agent has a perfected first priority security interest
therein.  Each Pledgor hereby agrees that
all certificates, agreements or instruments representing or evidencing
Securities Collateral acquired by such Pledgor after the date hereof shall
promptly (but in any event within five days after receipt thereof by such
Pledgor) be delivered to and held by or on behalf of the Collateral Agent pursuant
hereto.  All certificated Securities Collateral
shall be in suitable form for transfer by delivery or shall be accompanied by
duly executed instruments of transfer or assignment in blank, all in form and
substance satisfactory to the Collateral Agent. 
The Collateral Agent shall have the right, at any time upon the
occurrence and during the continuance of any Event of Default, to endorse,
assign or otherwise transfer to or to 

 11
 

 

register in the name of
the Collateral Agent or any of its nominees or endorse for negotiation any or
all of the Securities Collateral, without any indication that such Securities
Collateral is subject to the security interest hereunder.  In addition, upon the occurrence and during
the continuance of an Event of Default, the Collateral Agent shall have the
right at any time to exchange certificates representing or evidencing
Securities Collateral for certificates of smaller or larger denominations.

SECTION 3.2.        Perfection of Uncertificated Securities
Collateral.  Each Pledgor represents
and warrants that the Collateral Agent has a perfected first priority security
interest in all uncertificated Pledged Securities pledged by it hereunder that
are in existence on the date hereof. 
Each Pledgor hereby agrees that if any of the Pledged Securities are at
any time not evidenced by certificates of ownership, then each applicable
Pledgor shall, to the extent permitted by applicable law, (i) cause the issuer
to execute and deliver to the Collateral Agent an acknowledgment of the pledge
of such Pledged Securities substantially in the form of Exhibit 1
hereto or such other form that is reasonably satisfactory to the Collateral
Agent, (ii) if necessary or desirable to perfect a security interest in such
Pledged Securities, cause such pledge to be recorded on the equityholder
register or the books of the issuer, execute any customary pledge forms or
other documents necessary or appropriate to complete the pledge and give the
Collateral Agent the right to transfer such Pledged Securities under the terms
hereof, (iii) upon request by the Collateral Agent, provide to the Collateral
Agent an opinion of counsel, in form and substance reasonably satisfactory to
the Collateral Agent, confirming such pledge and perfection thereof, and (iv)
after the occurrence and during the continuance of any Event of Default, upon
request by the Collateral Agent, (A) cause the Organizational Documents of each
such issuer that is a Subsidiary of the US Borrower to be amended to provide that
such Pledged Securities shall be treated as “securities” for purposes of the
UCC and (B) cause such Pledged Securities to become certificated and delivered
to the Collateral Agent in accordance with the provisions of Section 3.1.

SECTION 3.3.        Financing Statements and Other
Filings; Maintenance of Perfected Security Interest.  Each Pledgor represents and warrants that all
financing statements, agreements, instruments and other documents necessary to
perfect the security interest granted by it to the Collateral Agent in respect
of the Pledged Collateral have been delivered to the Collateral Agent in
completed and, to the extent necessary or appropriate, duly executed form for
filing in each governmental, municipal or other office specified in Schedule
7 to the Perfection Certificate. 
Each Pledgor agrees that at the sole cost and expense of the Pledgors,
such Pledgor will maintain the security interest created by this Agreement in
the Pledged Collateral as a perfected first priority security interest subject
only to Permitted Collateral Liens.

SECTION 3.4.        Other Actions.  In order to further ensure the attachment,
perfection and priority of, and the ability of the Collateral Agent to enforce,
the Collateral Agent’s security interest in the Pledged Collateral, each
Pledgor represents and warrants (as to itself) as follows and agrees, in each
case at such Pledgor’s own expense, to take the following actions with respect
to the following Pledged Collateral:

 12
 

 

(a)           Instruments and
Tangible Chattel Paper.  As of the
date hereof, no amounts payable under or in connection with any of the Pledged
Collateral are evidenced by any Instrument or Tangible Chattel Paper other than
such Instruments and Tangible Chattel Paper listed in Schedule 11
to the Perfection Certificate.  Each
Instrument and each item of Tangible Chattel Paper listed in Schedule 11
to the Perfection Certificate has been properly endorsed, assigned and
delivered to the Collateral Agent, accompanied by instruments of transfer or
assignment duly executed in blank.  If
any amount then payable under or in connection with any of the Pledged
Collateral shall be evidenced by any Instrument or Tangible Chattel Paper, and
such amount, together with all amounts payable evidenced by any Instrument or
Tangible Chattel Paper not previously delivered to the Collateral Agent exceeds
$500,000 in the aggregate for all Pledgors, the Pledgor acquiring such
Instrument or Tangible Chattel Paper shall promptly (but in any event within
five days after receipt thereof) endorse, assign and deliver the same to the
Collateral Agent, accompanied by such instruments of transfer or assignment
duly executed in blank as the Collateral Agent may from time to time specify.

(b)           Deposit Accounts.  As of the date hereof, no Pledgor has any
Deposit Accounts other than the accounts listed in Schedule 14 to the
Perfection Certificate.  The Collateral
Agent has a first priority security interest in each such Deposit Account,
which security interest is perfected by Control.  No Pledgor shall hereafter establish and maintain
any Deposit Account unless (1) it shall have given the Collateral Agent 30
days’ prior written notice of its intention to establish such new Deposit
Account with a Bank, (2) such Bank shall be reasonably acceptable to the
Collateral Agent and (3) such Bank and such Pledgor shall have duly
executed and delivered to the Collateral Agent a Deposit Account Control
Agreement with respect to such Deposit Account. 
The Collateral Agent agrees with each Pledgor that the Collateral Agent
shall not give any instructions directing the disposition of funds from time to
time credited to any Deposit Account or withhold any withdrawal rights from
such Pledgor with respect to funds from time to time credited to any Deposit
Account unless an Event of Default has occurred and is continuing.  The provisions of this Section 3.4(b)
shall not apply to the LC Account or to any other Deposit Accounts for which
the Collateral Agent is the Bank.  No
Pledgor shall grant Control of any Deposit Account to any person other than the
Collateral Agent.

(c)           Securities
Accounts and Commodity Accounts. 
(i)  As of the date hereof, no
Pledgor has any Securities Accounts or Commodity Accounts other than those
listed in Schedule 14 to the Perfection Certificate.  Except as set forth on Schedule 14 to
the Perfection Certificate, the Collateral Agent has a first priority security
interest in each such Securities Account and Commodity Account, which security
interest is perfected by Control.  No
Pledgor shall hereafter establish and maintain any Securities Account or
Commodity Account with any Securities Intermediary or Commodity Intermediary
unless (1) it shall have given the Collateral Agent 30 days’ prior written
notice of its intention to establish such new Securities Account or Commodity
Account with such Securities Intermediary or Commodity Intermediary,
(2) such Securities Intermediary or

 13
 

 

Commodity Intermediary
shall be reasonably acceptable to the Collateral Agent and (3) such Securities
Intermediary or Commodity Intermediary, as the case may be, and such Pledgor
shall have duly executed and delivered a Control Agreement with respect to such
Securities Account or Commodity Account, as the case may be.  Each Pledgor shall accept any cash and Investment
Property in trust for the benefit of the Collateral Agent and within one (1)
Business Day of actual receipt thereof, deposit any and all cash and Investment
Property received by it into a Deposit Account or Securities Account subject to
Collateral Agent’s Control.  The Collateral
Agent agrees with each Pledgor that the Collateral Agent shall not give any
Entitlement Orders or instructions or directions to any issuer of uncertificated
securities, Securities Intermediary or Commodity Intermediary, and shall not
withhold its consent to the exercise of any withdrawal or dealing
rights by such Pledgor, unless an Event of Default has occurred and is
continuing or, after giving effect to any such investment and withdrawal
rights, would occur.  The provisions of
this Section 3.4(c) shall not apply to any Financial Assets credited to
a Securities Account for which the Collateral Agent is the Securities
Intermediary.  No Pledgor shall grant
Control over any Investment Property to any person other than the Collateral
Agent.

(ii)           As between the
Collateral Agent and the Pledgors, the Pledgors shall bear the investment risk
with respect to the Investment Property and Pledged Securities, and the risk of
loss of, damage to, or the destruction of the Investment Property and Pledged
Securities, whether in the possession of, or maintained as a Security
Entitlement or deposit by, or subject to the Control of, the Collateral Agent,
a Securities Intermediary, a Commodity Intermediary, any Pledgor or any other
person.

(d)           Electronic
Chattel Paper and Transferable Records. 
As of the date hereof, no amount under or in connection with any of the
Pledged Collateral is evidenced by any Electronic Chattel Paper or any “transferable
record” (as that term is defined in Section 201 of the Federal Electronic Signatures
in Global and National Commerce Act, or in Section 16 of the Uniform
Electronic Transactions Act as in effect in any relevant jurisdiction) other
than such Electronic Chattel Paper and transferable records listed in Schedule
11 to the Perfection Certificate.  If
any amount payable under or in connection with any of the Pledged Collateral
shall be evidenced by any Electronic Chattel Paper or any transferable record,
the Pledgor acquiring such Electronic Chattel Paper or transferable record
shall promptly notify the Collateral Agent thereof and shall take such action
as the Collateral Agent may reasonably request to vest in the Collateral Agent
control of such Electronic Chattel Paper under Section 9-105 of the
UCC or control under Section 201 of the Federal Electronic Signatures in Global
and National Commerce Act or, as the case may be, Section 16 of the
Uniform Electronic Transactions Act, as so in effect in such jurisdiction, of
such transferable record.  The
requirement in the preceding sentence shall not apply to the extent that such
amount, together with all amounts payable evidenced by Electronic Chattel Paper
or any transferable record in which the Collateral Agent has not been vested
control within the meaning of the statutes described in the immediately preceding
sentence, does not exceed $1,000,000 in the aggregate for all Pledgors.  The 

 14
 

 

Collateral Agent agrees
with such Pledgor that the Collateral Agent will arrange, pursuant to
procedures satisfactory to the Collateral Agent and so long as such procedures
will not result in the Collateral Agent’s loss of control, for the Pledgor to
make alterations to the Electronic Chattel Paper or transferable record
permitted under Section 9-105 of the UCC or, as the case may be,
Section 201 of the Federal Electronic Signatures in Global and National
Commerce Act or Section 16 of the Uniform Electronic Transactions Act for
a party in control to allow without loss of control, unless an Event of Default
has occurred and is continuing or would occur after taking into account any
action by such Pledgor with respect to such Electronic Chattel Paper or transferable
record.

(e)           Letter-of-Credit
Rights.  If any Pledgor is at any
time a beneficiary under a Letter of Credit now or hereafter issued, such
Pledgor shall promptly notify the Collateral Agent thereof and such Pledgor
shall, at the request of the Collateral Agent, pursuant to an agreement in form
and substance reasonably satisfactory to the Collateral Agent, either (i)
arrange for the issuer and any confirmer of such Letter of Credit to consent to
an assignment to the Collateral Agent of the proceeds of any drawing under the
Letter of Credit or (ii) arrange for the Collateral Agent to become the
transferee beneficiary of such Letter of Credit, with the Collateral Agent
agreeing, in each case, that the proceeds of any drawing under the Letter of
Credit are to be applied as provided in the Credit Agreement.  The actions in the preceding sentence shall
not be required to the extent that the amount of any such Letter of Credit,
together with the aggregate amount of all other Letters of Credit for which the
actions described above in clause (i) and (ii) have not been taken, does not
exceed $1,000,000 in the aggregate for all Pledgors.

(f)            Commercial Tort
Claims.   As of the date hereof, each
Pledgor hereby represents and warrants that it holds no Commercial Tort Claims
other than those listed in Schedule 13 to the Perfection
Certificate.  If any Pledgor shall at any
time hold or acquire a Commercial Tort Claim, such Pledgor shall immediately
notify the Collateral Agent in writing signed by such Pledgor of the brief
details thereof and grant to the Collateral Agent in such writing a security
interest therein and in the Proceeds thereof, all upon the terms of this Agreement,
with such writing to be in form and substance reasonably satisfactory to the
Collateral Agent.  The requirement in the
preceding sentence shall not apply to the extent that the amount of such
Commercial Tort Claim, together with the amount of all other Commercial Tort
Claims held by any Pledgor in which the Collateral Agent does not have a
security interest, does not exceed $1,000,000 in the aggregate for all
Pledgors.

(g)           Landlord’s Access
Agreements/Bailee Letters.  Each
Pledgor shall use its commercially reasonable efforts to obtain as soon as
practicable after the date hereof with respect to each location set forth in Schedule 4.01(n)(vi)
to the Credit Agreement, where such Pledgor maintains Pledged Collateral, a
Bailee Letter and/or Landlord Access Agreement, as applicable, and use
commercially reasonable efforts to obtain a Bailee Letter, Landlord Access
Agreement and/or landlord’s lien waiver, as applicable, from all 

 15
 

 

such bailees and
landlords, as applicable, who from time to time have possession of any Pledged
Collateral if reasonably requested by the Collateral Agent.  A waiver of bailee’s lien shall not be
required if the value of the Pledged Collateral held by such bailee is less
then $5,000,000, provided that the aggregate value of the Pledged Collateral
held by all bailees who have not delivered a Bailee Letter is less than
$10,000,000 in the aggregate.

(h)           Motor Vehicles.  Upon the request of the Collateral Agent,
each Pledgor shall deliver to the Collateral Agent originals of the certificates
of title or ownership for the motor vehicles (and any other Equipment covered
by certificates of title or ownership) owned by it, with the Collateral Agent
listed as lienholder therein.  Such
requirement shall not apply if any such motor vehicle (or any such other
Equipment) is valued at less than $75,000, provided that the aggregate value of
all motor vehicles (and such Equipment) as to which any Pledgor has not
delivered a certificate of title or ownership is less than $500,000.

SECTION 3.5.        Joinder of Additional Guarantors.  The Pledgors shall cause each Subsidiary of
the US Borrower which, from time to time, after the date hereof shall be required
to pledge any assets to the Collateral Agent for the benefit of the Secured
Parties pursuant to the provisions of the Credit Agreement, (a) to execute and
deliver to the Collateral Agent (i) a Joinder Agreement substantially in
the form of Exhibit 3 hereto within thirty (30) days of the date on
which it was acquired or created and (ii) a Perfection Certificate, in each
case, within thirty (30) days of the date on which it was acquired or created
or (b) in the case of a Subsidiary organized outside of the United States
required to pledge any assets to the Collateral Agent, to execute and deliver
to the Collateral Agent such documentation as the Collateral Agent shall
reasonably request and, in each case with respect to clauses (a) and (b) above,
upon such execution and delivery, such Subsidiary shall constitute a “Guarantor”
and a “Pledgor” for all purposes hereunder with the same force and effect as if
originally named as a Guarantor and Pledgor herein.  The execution and delivery of such Joinder
Agreement shall not require the consent of any Pledgor hereunder.  The rights and obligations of each Pledgor
hereunder shall remain in full force and effect notwithstanding the addition of
any new Guarantor and Pledgor as a party to this Agreement.

SECTION 3.6.        Supplements; Further Assurances.  Each Pledgor shall take such further actions,
and execute and/or deliver to the Collateral Agent such additional financing
statements, amendments, assignments, agreements, supplements, powers and
instruments, as the Collateral Agent may in its reasonable judgment deem
necessary or appropriate in order to create, perfect, preserve and protect the
security interest in the Pledged Collateral as provided herein and the rights
and interests granted to the Collateral Agent hereunder, to carry into effect
the purposes hereof or better to assure and confirm the validity,
enforceability and priority of the Collateral Agent’s security interest in the
Pledged Collateral or permit the Collateral Agent to exercise and enforce its
rights, powers and remedies hereunder with respect to any Pledged Collateral,
including the filing of financing statements, continuation statements and other
documents (including this Agreement) under the Uniform Commercial Code (or
other similar laws) in effect 

 16
 

 

in any jurisdiction with
respect to the security interest created hereby and the execution and delivery
of Control Agreements, all in form reasonably satisfactory to the Collateral
Agent and in such offices (including the United States Patent and Trademark
Office and the United States Copyright Office) wherever required by law to
perfect, continue and maintain the validity, enforceablity and priority of the
security interest in the Pledged Collateral as provided herein and to preserve
the other rights and interests granted to the Collateral Agent hereunder, as
against third parties, with respect to the Pledged Collateral.  Without limiting the generality of the
foregoing, each Pledgor shall make, execute, endorse, acknowledge, file or
refile and/or deliver to the Collateral Agent from time to time upon reasonable
request by the Collateral Agent such lists, schedules, descriptions and
designations of the Pledged Collateral, copies of warehouse receipts, receipts
in the nature of warehouse receipts, bills of lading, documents of title,
vouchers, invoices, schedules, confirmatory assignments, supplements,
additional security agreements, conveyances, financing statements, transfer
endorsements, powers of attorney, certificates, reports and other assurances or
instruments as the Collateral Agent shall reasonably request.  If an Event of Default has occurred and is
continuing, the Collateral Agent may institute and maintain, in its own name or
in the name of any Pledgor, such suits and proceedings as the Collateral Agent
may be advised by counsel shall be necessary or expedient to prevent any
impairment of the security interest in or the perfection thereof in the Pledged
Collateral.  All of the foregoing shall
be at the sole cost and expense of the Pledgors.

ARTICLE IV

REPRESENTATIONS,
WARRANTIES AND COVENANTS

Each
Pledgor represents, warrants and covenants as follows:

SECTION 4.1.        Title.  Except for the security interest granted to
the Collateral Agent for the ratable benefit of the Secured Parties pursuant to
this Agreement and Permitted Liens, such Pledgor owns and has rights and, as to
Pledged Collateral acquired by it from time to time after the date hereof, will
own and/or have rights in each item of Pledged Collateral pledged by it
hereunder, free and clear of any and all Liens or claims of others.  In addition, no Liens or claims exist on the
Securities Collateral, other than as permitted by Section 6.02 of
the Credit Agreement.

SECTION 4.2.        Validity of Security Interest.  The security interest in and Lien on the
Pledged Collateral granted to the Collateral Agent for the benefit of the
Secured Parties hereunder constitutes (a) a legal and valid security
interest in all the Pledged Collateral securing the payment and performance of
the Secured US Obligations, and (b) subject to the filings and other actions
described in Schedule 7 to the Perfection Certificate (to the extent
required to be listed on the schedules to the Perfection Certificate as of the
date this representation is made or deemed made), a perfected security interest
in all the Pledged Collateral.  The
security interest 

 17
 

 

and Lien granted to the
Collateral Agent for the benefit of the Secured Parties pursuant to this
Agreement in and on the Pledged Collateral will at all times constitute a
perfected, continuing security interest therein, prior to all other Liens on
the Pledged Collateral except for Permitted Collateral Liens.

SECTION 4.3.        Defense of Claims; Transferability of
Pledged Collateral.  Subject to Section
5.05 of the Credit Agreement, each Pledgor shall, at its own cost and
expense, defend title to the Pledged Collateral pledged by it hereunder and the
security interest therein and Lien thereon granted to the Collateral Agent and
the priority thereof against all claims and demands of all persons, at its own
cost and expense, at any time claiming any interest therein adverse to the
Collateral Agent or any other Secured Party other than Permitted Collateral
Liens.  There is no agreement, order,
judgment or decree, and no Pledgor shall enter into any agreement or take any
other action, that would restrict the transferability of any of the Pledged
Collateral or otherwise impair or conflict with such Pledgor’s obligations or
the rights of the Collateral Agent hereunder.

SECTION 4.4.        Other Financing Statements.  It has not filed, nor authorized any third
party to file (nor will there be), any valid or effective financing statement
(or similar statement, instrument of registration or public notice under the
law of any jurisdiction) covering or purporting to cover any interest of any
kind in the Pledged Collateral, except such as have been filed in favor of the
Collateral Agent pursuant to this Agreement or in favor of any holder of a
Permitted Collateral Lien with respect to such Permitted Collateral Lien or
financing statements or public notices relating to the termination statements
listed on Schedule 9 to the Perfection Certificate.  No Pledgor shall execute, authorize or permit
to be filed in any public office any financing statement (or similar statement,
instrument of registration or public notice under the law of any jurisdiction)
relating to any Pledged Collateral, except financing statements and other
statements and instruments filed or to be filed in respect of and covering the
security interests granted by such Pledgor to the holder of the Permitted Collateral
Liens.

SECTION 4.5.        Location of Inventory and Equipment.  It shall not move any Equipment or Inventory
(other than Equipment and Inventory the aggregate book value of which does not
exceed $3,000,000 for all such Equipment and Inventory) to any location, other
than any location that is listed in the relevant Schedules to the Perfection
Certificate, unless (i) it shall have given the Collateral Agent not less than
30 days’ prior written notice (in the form of an Officers’ Certificate) of its
intention so to do, clearly describing such new location and providing such
other information in connection therewith as the Collateral Agent may request
and (ii) to the extent applicable with respect to such new location, such
Pledgor shall have complied with Section 3.4(g); provided that in no event
shall any Equipment or Inventory be moved to any location outside of the continental
United States.

SECTION 4.6.        Due Authorization and Issuance.  All of the Pledged Securities existing on the
date hereof have been, and to the extent any Pledged Securities are hereafter issued,
such Pledged Securities will be, upon such issuance, duly authorized, validly
issued and 

 18
 

 

fully paid and
non-assessable to the extent applicable. 
There is no amount or other obligation owing by any Pledgor to any
issuer of the Pledged Securities in exchange for or in connection with the issuance
of the Pledged Securities or any Pledgor’s status as a partner or a member of
any issuer of the Pledged Securities.

SECTION 4.7.        Consents, etc.  In the event that the Collateral Agent
desires to exercise any remedies, voting or consensual rights or
attorney-in-fact powers set forth in this Agreement and determines it necessary
to obtain any approvals or consents of any Governmental Authority or any other
person therefor, then, upon the reasonable request of the Collateral Agent,
such Pledgor agrees to use commercially reasonable efforts to assist and aid
the Collateral Agent to obtain as soon as practicable any necessary approvals
or consents for the exercise of any such remedies, rights and powers.

SECTION 4.8.        Pledged Collateral.  All information set forth herein, including
the schedules hereto, and all information contained in any documents, schedules
and lists heretofore delivered to any Secured Party, including the Perfection
Certificate and the schedules thereto, in connection with this Agreement, in
each case, relating to the Pledged Collateral, is accurate and complete in all
material respects.  The Pledged
Collateral described on the schedules to the Perfection Certificate constitutes
all of the property of such type of Pledged Collateral owned or held by the
Pledgors.

SECTION 4.9.        Insurance.  In the event that the proceeds of any
insurance claim are paid to any Pledgor after the Collateral Agent has
exercised its right to foreclose after an Event of Default, such Net Cash
Proceeds shall be held in trust for the benefit of the Collateral Agent and
immediately after receipt thereof shall be paid to the Collateral Agent for
application in accordance with the Credit Agreement.

ARTICLE V

CERTAIN PROVISIONS
CONCERNING SECURITIES COLLATERAL

SECTION 5.1.        Pledge of Additional Securities
Collateral.  Each Pledgor shall, upon
obtaining any Pledged Securities or Intercompany Notes of any person, accept
the same in trust for the benefit of the Collateral Agent and promptly (but in
any event within five days after receipt thereof) deliver to the Collateral
Agent a pledge amendment, duly executed by such Pledgor, in substantially the
form of Exhibit 2 hereto (each, a “Pledge Amendment”), and the
certificates and other documents required under Section 3.1 and Section 3.2
hereof in respect of the additional Pledged Securities or Intercompany Notes
which are to be pledged pursuant to this Agreement, and confirming the
attachment of the Lien hereby created on and in respect of such additional
Pledged Securities or Intercompany Notes.  Each Pledgor hereby authorizes the Collateral
Agent to attach each Pledge Amendment to this Agreement and agrees that all
Pledged

 

 19

 

Securities or
Intercompany Notes.  Each Pledgor hereby
authorizes the Collateral Agent to attach each Pledge Amendment to this Agreement
and agrees that all Pledged Securities or Intercompany Notes listed on any
Pledge Amendment delivered to the Collateral Agent shall for all purposes
hereunder be considered Pledged Collateral.

SECTION 5.2.              Voting
Rights; Distributions; etc.

(a)           So long as no Event
of Default shall have occurred and be continuing:

(i)            Each
Pledgor shall be entitled to exercise any and all voting and other consensual
rights pertaining to the Securities Collateral or any part thereof for any purpose
not inconsistent with the terms or purposes hereof, the Credit Agreement or any
other document evidencing the Secured US Obligations; provided, however,
that no Pledgor shall in any event exercise such rights in any manner which
could reasonably be expected to have a Material Adverse Effect.

(ii)           Each
Pledgor shall be entitled to receive and retain, and to utilize free and clear
of the Lien hereof, any and all Distributions, but only if and to the extent
made in accordance with the provisions of the Credit Agreement; provided,
however, that any and all such Distributions consisting of rights or
interests in the form of securities shall be forthwith delivered to the
Collateral Agent to hold as Pledged Collateral and shall, if received by any
Pledgor, be received in trust for the benefit of the Collateral Agent, be segregated
from the other property or funds of such Pledgor and be promptly (but in any event
within five days after receipt thereof) delivered to the Collateral Agent as
Pledged Collateral in the same form as so received (with any necessary endorsement).

(b)           So long as no Event
of Default shall have occurred and be continuing, the Collateral Agent shall be
deemed without further action or formality to have granted to each Pledgor all
necessary consents relating to voting rights and shall, if necessary, upon
written request of any Pledgor and at the sole cost and expense of the
Pledgors, from time to time execute and deliver (or cause to be executed and
delivered) to such Pledgor all such instruments as such Pledgor may reasonably
request in order to permit such Pledgor to exercise the voting and other rights
which it is entitled to exercise pursuant to Section 5.2(a)(i)
hereof and to receive the Distributions which it is authorized to receive and
retain pursuant to Section 5.2(a)(ii) hereof.

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

(i)            All
rights of each Pledgor to exercise the voting and other consensual rights it
would otherwise be entitled to exercise pursuant to Section 5.2(a)(i)
hereof shall immediately cease, and all such rights shall thereupon become
vested in the Collateral Agent, which shall thereupon have the sole right to
exercise such voting and other consensual rights.

(ii)           All
rights of each Pledgor to receive Distributions which it would otherwise be
authorized to receive and retain pursuant to Section 5.2(a)(ii)
hereof shall immediately cease and all such rights shall thereupon become
vested in the Collateral Agent, 

 20
 

 

which shall
thereupon have the sole right to receive and hold as Pledged Collateral such
Distributions.

(d)           Each Pledgor shall,
at its sole cost and expense, from time to time execute and deliver to the
Collateral Agent appropriate instruments as the Collateral Agent may request in
order to permit the Collateral Agent to exercise the voting and other rights
which it may be entitled to exercise pursuant to Section 5.2(a)(i)
hereof and to receive all Distributions which it may be entitled to receive under
Section 5.2(a)(ii) hereof.

(e)           All Distributions
which are received by any Pledgor contrary to the provisions of Section 5.2(a)(ii)
hereof shall be received in trust for the benefit of the Collateral Agent,
shall be segregated from other funds of such Pledgor and shall immediately be
paid over to the Collateral Agent as Pledged Collateral in the same form as so
received (with any necessary endorsement).

SECTION 5.3.              Defaults,
etc.  Such Pledgor is not in default
in the payment of any portion of any mandatory capital contribution, if any,
required to be made under any agreement to which such Pledgor is a party
relating to the Pledged Securities pledged by it, and such Pledgor is not in
violation of any other provisions of any such agreement to which such Pledgor
is a party, or otherwise in default or violation thereunder.  No Securities Collateral pledged by such
Pledgor is subject to any defense, offset or counterclaim, nor have any of the foregoing
been asserted or alleged against such Pledgor by any person with respect
thereto, and as of the date hereof, there are no certificates, instruments,
documents or other writings (other than the Organizational Documents and certificates
representing such Pledged Securities that have been delivered to the Collateral
Agent) which evidence any Pledged Securities of such Pledgor.

SECTION 5.4.              Certain Agreements of Pledgors
As Issuers and Holders of Equity Interests

(a)           In the case of each
Pledgor which is an issuer of Securities Collateral, such Pledgor agrees to be
bound by the terms of this Agreement relating to the Securities Collateral
issued by it and will comply with such terms insofar as such terms are
applicable to it.

(b)           In the case of each
Pledgor which is a partner, shareholder or member, as the case may be, in a
partnership, limited liability company or other entity, such Pledgor hereby
consents to the extent required by the applicable Organizational Document to
the pledge by each other Pledgor, pursuant to the terms hereof, of the Pledged
Securities in such partnership, limited liability company or other entity and,
upon the occurrence and during the continuance of an Event of Default, to the
transfer of such Pledged Securities to the Collateral Agent or its nominee and
to the substitution of the Collateral Agent or its nominee as a substituted
partner, shareholder or member in such partnership, limited liability company
or other entity with all the rights, powers and duties of a general partner,
limited partner, shareholder or member, as the case may be.

 21
 

 

ARTICLE VI

CERTAIN PROVISIONS
CONCERNING INTELLECTUAL

PROPERTY COLLATERAL

SECTION 6.1.              Grant
of Intellectual Property License.  For
the purpose of enabling the Collateral Agent, during the continuance of an
Event of Default, to exercise rights and remedies under Article IX
hereof at such time as the Collateral Agent shall be lawfully entitled to
exercise such rights and remedies, and for no other purpose, each Pledgor
hereby grants to the Collateral Agent, to the extent assignable, an irrevocable,
non-exclusive license to use, assign, license or sublicense any of the
Intellectual Property Collateral now owned or hereafter acquired by such
Pledgor and which constitutes Pledged Collateral, wherever the same may be
located.  Such license shall include
access to all media in which any of the licensed items may be recorded or
stored and to all computer programs used for the compilation or printout
hereof.

SECTION 6.2.              Protection
of Collateral Agent’s Security.  On a
continuing basis, each Pledgor shall, at its sole cost and expense, (i)
promptly following its becoming aware thereof, notify the Collateral Agent of
any adverse determination in any proceeding or the institution of any
proceeding in any federal, state or local court or administrative body or in
the United States Patent and Trademark Office or the United States Copyright
Office regarding any Material Intellectual Property Collateral, such Pledgor’s
right to register such Material Intellectual Property Collateral or its right
to keep and maintain such registration in full force and effect,
(ii) maintain all Material Intellectual Property Collateral as presently
used and operated, (iii) not permit to lapse or become abandoned any
Material Intellectual Property Collateral, and not settle or compromise any
pending or future litigation or administrative proceeding with respect to any
such Material Intellectual Property Collateral, in either case except as shall
be consistent with commercially reasonable business judgment, (iv) upon
such Pledgor obtaining knowledge thereof, promptly notify the Collateral Agent
in writing of any event which may be reasonably expected to materially and
adversely affect the value or utility of any Material Intellectual Property
Collateral or the rights and remedies of the Collateral Agent in relation
thereto including a levy or threat of levy or any legal process against any
Material Intellectual Property Collateral, (v) not license any
Intellectual Property Collateral other than licenses entered into by such
Pledgor in, or incidental to, the ordinary course of business, or amend or permit
the amendment of any of the licenses in a manner that materially and adversely
affects the right to receive payments thereunder, or in any manner that would
materially impair the value of any Intellectual Property Collateral or the Lien
on and security interest in the Intellectual Property Collateral created
therein hereby, without the consent of the Collateral Agent,
(vi) diligently keep adequate records respecting all Intellectual Property
Collateral and (vii) furnish to the Collateral Agent from time to time
upon the Collateral Agent’s request therefor reasonably detailed statements and
amended schedules further identifying and describing the Intellectual Property
Collateral and such other materials evidencing or reports pertaining to any
Intellectual Property Collateral as the Collateral Agent may from time to time
request.

 22
 

 

SECTION 6.3.              After-Acquired
Property.  If any Pledgor shall at
any time after the date hereof (i) obtain any rights to any additional
Intellectual Property Collateral or (ii) become entitled to the benefit of
any additional Intellectual Property Collateral or any renewal or extension
thereof, including any reissue, division, continuation, or continuation-in-part
of any Intellectual Property Collateral, or any improvement on any Intellectual
Property Collateral, the provisions hereof shall automatically apply thereto
and any such item enumerated in the preceding clause (i) or (ii) shall
automatically constitute Intellectual Property Collateral as if such would have
constituted Intellectual Property Collateral (and would not have constituted Excluded
Property) at the time of execution hereof and be subject to the Lien and
security interest created by this Agreement without further action by any
party.  Each Pledgor shall promptly provide
to the Collateral Agent written notice of any of the foregoing and confirm the
attachment of the Lien and security interest created by this Agreement to any
rights described in clauses (i) and (ii) above by execution of an instrument in
form reasonably acceptable to the Collateral Agent and the filing of any
instruments or statements as shall be reasonably necessary to create, preserve,
protect or perfect the Collateral Agent’s security interest in such
Intellectual Property Collateral. 
Further, each Pledgor authorizes the Collateral Agent to modify this
Agreement by amending Schedules 12(a) and 12(b) to the Perfection
Certificate to include any Intellectual Property Collateral of such Pledgor
acquired or arising after the date hereof.

SECTION 6.4.              Litigation.  Unless there shall occur and be continuing
any Event of Default, each Pledgor shall have the right to commence and
prosecute in its own name, as the party in interest, for its own benefit and at
the sole cost and expense of the Pledgors, such applications for protection of
the Intellectual Property Collateral and suits, proceedings or other actions to
prevent the infringement, counterfeiting, unfair competition, dilution,
diminution in value or other damage as are necessary to protect the
Intellectual Property Collateral.  Upon
the occurrence and during the continuance of any Event of Default, the
Collateral Agent shall have the right but shall in no way be obligated to file
applications for protection of the Intellectual Property Collateral and/or
bring suit in the name of any Pledgor, the Collateral Agent or the Secured
Parties to enforce the Intellectual Property Collateral and any license thereunder.  In the event of such suit, each Pledgor
shall, at the reasonable request of the Collateral Agent, do any and all lawful
acts and execute any and all documents requested by the Collateral Agent in aid
of such enforcement and the Pledgors shall promptly reimburse and indemnify the
Collateral Agent for all costs and expenses incurred by the Collateral Agent in
the exercise of its rights under this Section 6.4 in accordance
with Section 10.03 of the Credit Agreement.  In the event that the Collateral Agent shall
elect not to bring suit to enforce the Intellectual Property Collateral, each
Pledgor agrees, at the reasonable request of the Collateral Agent, to take all
commercially reasonable actions necessary, whether by suit, proceeding or other
action, to prevent the infringement, counterfeiting, unfair competition,
dilution, diminution in value of or other damage to any of the Intellectual
Property Collateral by any person.

 23
 

 

ARTICLE VII

CERTAIN PROVISIONS
CONCERNING RECEIVABLES

SECTION 7.1.              Maintenance
of Records.  Each Pledgor shall keep
and maintain at its own cost and expense complete records of each Receivable,
in a manner consistent with prudent business practice, including records of all
payments received, all credits granted thereon, all merchandise returned and
all other documentation relating thereto. 
Each Pledgor shall, at such Pledgor’s sole cost and expense, upon the
Collateral Agent’s demand made at any time after the occurrence and during the
continuance of any Event of Default, deliver all tangible evidence of
Receivables, including all documents evidencing Receivables and any books and
records relating thereto to the Collateral Agent or to its representatives (copies
of which evidence and books and records may be retained by such Pledgor).  Upon the occurrence and during the continuance
of any Event of Default, the Collateral Agent may transfer a full and complete
copy of any Pledgor’s books, records, credit information, reports, memoranda
and all other writings relating to the Receivables to and for the use by any
person that has acquired or is contemplating acquisition of an interest in the
Receivables or the Collateral Agent’s security interest therein without the consent
of any Pledgor.

SECTION 7.2.              Legend.  Each Pledgor shall legend, at the request of
the Collateral Agent and in form and manner satisfactory to the Collateral
Agent, the Receivables and the other books, records and documents of such
Pledgor evidencing or pertaining to the Receivables with an appropriate reference
to the fact that the Receivables have been assigned to the Collateral Agent for
the benefit of the Secured Parties and that the Collateral Agent has a security
interest therein.

SECTION 7.3.              Modification
of Terms, etc.  No Pledgor shall
rescind or cancel any obligations evidenced by any Receivable or modify any
term thereof or make any adjustment with respect thereto except in the ordinary
course of business consistent with prudent business practice, or extend or
renew any such obligations except in the ordinary course of business consistent
with prudent business practice or compromise or settle any dispute, claim, suit
or legal proceeding relating thereto or sell any Receivable or interest therein
except in the ordinary course of business consistent with prudent business
practice without the prior written consent of the Collateral Agent.  Each Pledgor shall timely fulfill all
obligations on its part to be fulfilled under or in connection with the
Receivables.

SECTION 7.4.              Collection.  Each Pledgor shall cause to be collected from
the Account Debtor of each of the Receivables, as and when due in the ordinary
course of business and consistent with prudent business practice (including
Receivables that are delinquent, such Receivables to be collected in accordance
with generally accepted commercial collection procedures), any and all amounts
owing under or on account of such Receivable, and apply forthwith upon receipt
thereof all such amounts as are so collected to the outstanding balance of such
Receivable, 

 24
 

 

except that any Pledgor may, with respect to a Receivable, allow in the
ordinary course of business (i) a refund or credit due as a result of returned
or damaged or defective merchandise and (ii) such extensions of time to pay
amounts due in respect of Receivables and such other modifications of payment
terms or settlements in respect of Receivables as shall be commercially
reasonable in the circumstances, all in accordance with such Pledgor’s ordinary
course of business consistent with its collection practices as in effect from
time to time.  The costs and expenses
(including attorneys’ fees) of collection, in any case, whether incurred by any
Pledgor, the Collateral Agent or any Secured Party, shall be paid by the
Pledgors.

ARTICLE VIII

TRANSFERS

SECTION 8.1.              Transfers
of Pledged Collateral.  No Pledgor
shall sell, convey, assign or otherwise dispose of, or grant any option with
respect to, any of the Pledged Collateral pledged by it hereunder except as
expressly permitted by the Credit Agreement.

ARTICLE IX

REMEDIES

SECTION 9.1.              Remedies.  Upon the occurrence and during the
continuance of any Event of Default, the Collateral Agent may from time to time
exercise in respect of the Pledged Collateral, in addition to the other rights
and remedies provided for herein or otherwise available to it, the following
remedies:

(i)         Personally,
or by agents or attorneys, immediately take possession of the Pledged
Collateral or any part thereof, from any Pledgor or any other person who then
has possession of any part thereof with or without notice or process of law,
and for that purpose may enter upon any Pledgor’s premises where any of the
Pledged Collateral is located, remove such Pledged Collateral, remain present
at such premises to receive copies of all communications and remittances
relating to the Pledged Collateral and use in connection with such removal and
possession any and all services, supplies, aids and other facilities of any
Pledgor;

(ii)        Demand,
sue for, collect or receive any money or property at any time payable or
receivable in respect of the Pledged Collateral including instructing the
obligor or obligors on any agreement, instrument or other obligation
constituting part of the Pledged Collateral to make any payment required by the
terms of such agreement, instrument or other obligation directly to the
Collateral Agent, and in connection with any of the foregoing, compromise, 

 25
 

 

settle, extend the time for payment and make other modifications with
respect thereto; provided, however, that in the event that any such
payments are made directly to any Pledgor, prior to receipt by any such obligor
of such instruction, such Pledgor shall segregate all amounts received pursuant
thereto in trust for the benefit of the Collateral Agent and shall promptly
(but in no event later than one (1) Business Day after receipt thereof) pay
such amounts to the Collateral Agent;

(iii)       Sell,
assign, grant a license to use or otherwise liquidate, or direct any Pledgor to
sell, assign, grant a license to use or otherwise liquidate, any and all investments
made in whole or in part with the Pledged Collateral or any part thereof, and
take possession of the proceeds of any such sale, assignment, license or liquidation;

(iv)       Take
possession of the Pledged Collateral or any part thereof, by directing any
Pledgor in writing to deliver the same to the Collateral Agent at any place or
places so designated by the Collateral Agent, in which event such Pledgor shall
at its own expense:  (A) forthwith
cause the same to be moved to the place or places designated by the Collateral
Agent and therewith delivered to the Collateral Agent, (B) store and keep
any Pledged Collateral so delivered to the Collateral Agent at such place or
places pending further action by the Collateral Agent and (C) while the
Pledged Collateral shall be so stored and kept, provide such security and
maintenance services as shall be necessary to protect the same and to preserve
and maintain them in good condition. 
Each Pledgor’s obligation to deliver the Pledged Collateral as contemplated
in this Section 9.1(iv) is of the essence hereof.  Upon application to a court of equity having
jurisdiction, the Collateral Agent shall be entitled to a decree requiring
specific performance by any Pledgor of such obligation;

(v)        Withdraw
all moneys, instruments, securities and other property in any bank, financial
securities, deposit or other account of any Pledgor constituting Pledged
Collateral for application to the Secured US Obligations as provided in Article
X hereof;

(vi)       Retain
and apply the Distributions to the Secured US Obligations as provided in Article X
hereof;

(vii)      Exercise
any and all rights as beneficial and legal owner of the Pledged Collateral,
including perfecting assignment of and exercising any and all voting,
consensual and other rights and powers with respect to any Pledged Collateral;
and

(viii)     Exercise
all the rights and remedies of a secured party on default under the UCC, and
the Collateral Agent may also in its sole discretion, without notice except as
specified in Section 9.2 hereof, sell, assign or grant a license to
use the Pledged Collateral or any part thereof in one or more parcels at public
or private sale, at any exchange, broker’s board or at any of the Collateral
Agent’s offices or elsewhere, for cash, on credit or for future delivery, and
at such price or prices and upon such other terms as the Collateral Agent may
deem commercially reasonable.  The
Collateral Agent or any other Secured Party or any of their respective Affiliates
may be the purchaser, licensee, assignee or recipient of the Pledged Collateral
or any part thereof 

 26
 

 

at any such sale and shall be entitled, for the purpose of bidding and
making settlement or payment of the purchase price for all or any portion of
the Pledged Collateral sold, assigned or licensed at such sale, to use and
apply any of the Secured US Obligations owed to such person as a credit on account
of the purchase price of the Pledged Collateral or any part thereof payable by
such person at such sale.  Each
purchaser, assignee, licensee or recipient at any such sale shall acquire the
property sold, assigned or licensed absolutely free from any claim or right on
the part of any Pledgor, and each Pledgor hereby waives, to the fullest extent
permitted by law, all rights of redemption, stay and/or appraisal which it now
has or may at any time in the future have under any rule of law or statute now
existing or hereafter enacted.  The
Collateral Agent shall not be obligated to make any sale of the Pledged
Collateral or any part thereof regardless of notice of sale having been
given.  The Collateral Agent may adjourn
any public or private sale from time to time by announcement at the time and
place fixed therefor, and such sale may, without further notice, be made at the
time and place to which it was so adjourned. 
Each Pledgor hereby waives, to the fullest extent permitted by law, any
claims against the Collateral Agent arising by reason of the fact that the
price at which the Pledged Collateral or any part thereof may have been sold,
assigned or licensed at such a private sale was less than the price which might
have been obtained at a public sale, even if the Collateral Agent accepts the
first offer received and does not offer such Pledged Collateral to more than
one offeree.

SECTION 9.2.              Notice
of Sale.  Each Pledgor acknowledges
and agrees that, to the extent notice of sale or other disposition of the
Pledged Collateral or any part thereof shall be required by law, ten (10) days’
prior notice to such Pledgor of the time and place of any public sale or of the
time after which any private sale or other intended disposition is to take
place shall be commercially reasonable notification of such matters.  No notification need be given to any Pledgor
if it has signed, after the occurrence of an Event of Default, a statement
renouncing or modifying any right to notification of sale or other intended
disposition.

SECTION 9.3.              Waiver
of Notice and Claims.  Each Pledgor
hereby waives, to the fullest extent permitted by applicable law, notice or
judicial hearing in connection with the Collateral Agent’s taking possession or
the Collateral Agent’s disposition of the Pledged Collateral or any part
thereof, including any and all prior notice and hearing for any prejudgment
remedy or remedies and any such right which such Pledgor would otherwise have
under law, and each Pledgor hereby further waives, to the fullest extent
permitted by applicable law: 
(i) all damages occasioned by such taking of possession,
(ii) all other requirements as to the time, place and terms of sale or
other requirements with respect to the enforcement of the Collateral Agent’s
rights hereunder and (iii) all rights of redemption, appraisal, valuation,
stay, extension or moratorium now or hereafter in force under any applicable law.  The Collateral Agent shall not be liable for
any incorrect or improper payment made pursuant to this Article IX
in the absence of gross negligence or willful misconduct on the part of the
Collateral Agent.  Any sale of, or the
grant of options to purchase, or any other realization upon, any Pledged
Collateral shall operate to divest all right, title, interest, claim and demand,
either at law or in equity, of the applicable Pledgor therein and thereto, and
shall be a perpetual bar both at law and in equity against such Pledgor 

 27
 

 

and against any and all persons claiming or attempting to claim the
Pledged Collateral so sold, optioned or realized upon, or any part thereof,
from, through or under such Pledgor.

SECTION 9.4.              Certain
Sales of Pledged Collateral.

(a)           Each Pledgor
recognizes that, by reason of certain prohibitions contained in law, rules,
regulations or orders of any Governmental Authority, the Collateral Agent may
be compelled, with respect to any sale of all or any part of the Pledged
Collateral, to limit purchasers to those who meet the requirements of such
Governmental Authority.  Each Pledgor acknowledges
that any such sales may be at prices and on terms less favorable to the
Collateral Agent than those obtainable through a public sale without such
restrictions, and, notwithstanding such circumstances, agrees that any such
restricted sale shall be deemed to have been made in a commercially reasonable
manner and that, except as may be required by applicable law, the Collateral
Agent shall have no obligation to engage in public sales.

(b)           Each Pledgor
recognizes that, by reason of certain prohibitions contained in the Securities
Act, and applicable state securities laws, the Collateral Agent may be compelled,
with respect to any sale of all or any part of the Securities Collateral and
Investment Property, to limit purchasers to persons who will agree, among other
things, to acquire such Securities Collateral or Investment  Property for their own account, for
investment and not with a view to the distribution or resale thereof.  Each Pledgor acknowledges that any such
private sales may be at prices and on terms less favorable to the Collateral
Agent than those obtainable through a public sale without such restrictions
(including a public offering made pursuant to a registration statement under
the Securities Act), and, notwithstanding such circumstances, agrees that any
such private sale shall be deemed to have been made in a commercially
reasonable manner and that the Collateral Agent shall have no obligation to
engage in public sales and no obligation to delay the sale of any Securities
Collateral or Investment Property for the period of time necessary to permit
the issuer thereof to register it for a form of public sale requiring
registration under the Securities Act or under applicable state securities
laws, even if such issuer would agree to do so.

(c)           Notwithstanding the
foregoing, each Pledgor shall, upon the occurrence and during the continuance
of any Event of Default, at the reasonable request of the Collateral Agent, for
the benefit of the Collateral Agent, cause any registration, qualification
under or compliance with any Federal or state securities law or laws to be
effected with respect to all or any part of the Securities Collateral as soon
as practicable and at the sole cost and expense of the Pledgors.  Each Pledgor will use its commercially
reasonable efforts to cause such registration to be effected (and be kept
effective) and will use its commercially reasonable efforts to cause such qualification
and compliance to be effected (and be kept effective) as may be so requested
and as would permit or facilitate the sale and distribution of such Securities
Collateral including registration under the Securities Act (or any similar
statute then in effect), appropriate qualifications under applicable blue sky
or other state securities laws and appropriate compliance with all other
requirements of any Governmental Authority. 
Each Pledgor shall use its commercially reasonable 

 28
 

 

efforts to cause the Collateral Agent to be kept advised in writing as
to the progress of each such registration, qualification or compliance and as
to the completion thereof, shall furnish to the Collateral Agent such number of
prospectuses, offering circulars or other documents incident thereto as the
Collateral Agent from time to time may request, and shall indemnify and shall
cause the issuer of the Securities Collateral to indemnify the Collateral Agent
and all others participating in the distribution of such Securities Collateral
against all claims, losses, damages and liabilities caused by any untrue
statement (or alleged untrue statement) of a material fact contained therein
(or in any related registration statement, notification or the like) or by any
omission (or alleged omission) to state therein (or in any related registration
statement, notification or the like) a material fact required to be stated
therein or necessary to make the statements therein not misleading.

(d)           If the Collateral
Agent determines to exercise its right to sell any or all of the Securities
Collateral or Investment Property, upon written request, the applicable Pledgor
shall from time to time furnish to the Collateral Agent all such information as
the Collateral Agent may request in order to determine the number of securities
included in the Securities Collateral or Investment Property which may be sold
by the Collateral Agent as exempt transactions under the Securities Act and the
rules of the Securities and Exchange Commission thereunder, as the same are
from time to time in effect.

(e)           Each Pledgor further
agrees that a breach of any of the covenants contained in this Section 9.4
will cause irreparable injury to the Collateral Agent and the other Secured
Parties, that the Collateral Agent and the other Secured Parties have no
adequate remedy at law in respect of such breach and, as a consequence, that
each and every covenant contained in this Section 9.4 shall be
specifically enforceable against such Pledgor, and such Pledgor 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 and is continuing.

SECTION 9.5.              No
Waiver; Cumulative Remedies.

(a)           No failure on the
part of the Collateral Agent to exercise, no course of dealing with respect to,
and no delay on the part of the Collateral Agent in exercising, any right,
power or remedy hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right, power, privilege or remedy
hereunder preclude any other or further exercise thereof or the exercise of any
other right, power, privilege or remedy; nor shall the Collateral Agent be
required to look first to, enforce or exhaust any other security, collateral or
guaranties.  All rights and remedies
herein provided are cumulative and are not exclusive of any rights or remedies
provided by law or otherwise available.

(b)           In
the event that the Collateral Agent shall have instituted any proceeding to
enforce any right, power, privilege or remedy under this Agreement or any other
Loan Document by foreclosure, sale, entry or otherwise, and such proceeding
shall have been discontinued or abandoned for any reason or shall have been
determined adversely to the Collateral Agent,

 

 29

 

 

then and in every such case, the Pledgors,
the Collateral Agent and each other Secured Party shall be restored to their
respective former positions and rights hereunder with respect to the Pledged
Collateral, and all rights, remedies, privileges and powers of the Collateral
Agent and the other Secured Parties shall continue as if no such proceeding had
been instituted.

SECTION 9.6.              Certain
Additional Actions Regarding Intellectual Property.  If any Event of Default shall have occurred
and be continuing, upon the written demand of the Collateral Agent, each
Pledgor shall execute and deliver to the Collateral Agent an assignment or
assignments of the Pledged Collateral consisting of the registered Patents,
Trademarks and/or Copyrights and Goodwill and such other documents as are
necessary or appropriate to carry out the intent and purposes hereof.  Within five (5) Business Days of written
notice thereafter from the Collateral Agent, each Pledgor shall make available
to the Collateral Agent, to the extent within such Pledgor’s power and
authority, such personnel in such Pledgor’s employ on the date of the Event of
Default as the Collateral Agent may reasonably designate to permit such Pledgor
to continue, directly or indirectly, to produce, advertise and sell the
products and services sold by such Pledgor under the registered Patents, Trademarks
and/or Copyrights, and such persons shall be available to perform their prior
functions on the Collateral Agent’s behalf.

ARTICLE X

APPLICATION OF PROCEEDS

SECTION 10.1.            Application
of Proceeds.  The proceeds received
by the Collateral Agent in respect of any sale of, collection from or other
realization upon all or any part of the Pledged Collateral pursuant to the exercise
by the Collateral Agent of its remedies shall be applied, together with any
other sums then held by the Collateral Agent pursuant to this Agreement, in
accordance with the Credit Agreement.

ARTICLE XI

MISCELLANEOUS

SECTION 11.1.            Concerning
Collateral Agent.

(a)           The Collateral Agent
has been appointed as collateral agent pursuant to the Credit Agreement.  The actions of the Collateral Agent hereunder
are subject to the provisions of the Credit Agreement.  The Collateral Agent shall have the right
hereunder to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking action (including the
release or substitution of the Pledged Collateral), in accordance 

 30
 

 

with this Agreement and the Credit Agreement.  The Collateral Agent may employ agents and
attorneys-in-fact in connection herewith and shall not be liable for the
negligence or misconduct of any such agents or attorneys-in-fact selected by it
in good faith.  The Collateral Agent may
resign and a successor Collateral Agent may be appointed in the manner provided
in the Credit Agreement.  Upon the
acceptance of any appointment as the Collateral Agent by a successor Collateral
Agent, that successor Collateral Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Collateral Agent under this Agreement, and the retiring Collateral Agent shall
thereupon be discharged from its duties and obligations under this
Agreement.  After any retiring Collateral
Agent’s resignation, the provisions hereof shall inure to its benefit as to any
actions taken or omitted to be taken by it under this Agreement while it was
the Collateral Agent.

(b)           The Collateral Agent
shall be deemed to have exercised reasonable care in the custody and
preservation of the Pledged Collateral in its possession if such Pledged Collateral
is accorded treatment substantially equivalent to that which the Collateral
Agent, in its individual capacity, accords its own property consisting of
similar instruments or interests, it being understood that neither the
Collateral Agent nor any of the Secured Parties shall have responsibility for
(i) ascertaining or taking action with respect to calls, conversions,
exchanges, maturities, tenders or other matters relating to any Securities Collateral,
whether or not the Collateral Agent or any other Secured Party has or is deemed
to have knowledge of such matters or (ii) taking any necessary steps to
preserve rights against any person with respect to any Pledged Collateral.

(c)           The
Collateral Agent shall be entitled to rely upon any written notice, statement,
certificate, order or other document or any telephone message believed by it to
be genuine and correct and to have been signed, sent or made by the proper
person, and, with respect to all matters pertaining to this Agreement and its
duties hereunder, upon advice of counsel selected by it.

(d)           If
any item of Pledged Collateral also constitutes collateral granted to the
Collateral Agent under any other deed of trust, mortgage, security agreement,
pledge or instrument of any type, in the event of any conflict between the
provisions hereof and the provisions of such other deed of trust, mortgage,
security agreement, pledge or instrument of any type in respect of such
collateral, the Collateral Agent, in its sole discretion, shall select which
provision or provisions shall control.

(e)           The
Collateral Agent may rely on advice of counsel as to whether any or all UCC
financing statements of the Pledgors need to be amended as a result of any of
the changes described in Section 5.13(a) of the Credit Agreement.  If any Pledgor fails to provide information
to the Collateral Agent about such changes on a timely basis, the Collateral
Agent shall not be liable or responsible to any party for any failure to
maintain a perfected security interest in such Pledgor’s property constituting
Pledged Collateral, for which the Collateral Agent needed to have information
relating to such changes.  The Collateral
Agent shall have no duty to 

 31
 

 

inquire about such changes if any Pledgor
does not inform the Collateral Agent of such changes, the parties acknowledging
and agreeing that it would not be feasible or practical for the Collateral
Agent to search for information on such changes if such information is not
provided by any Pledgor.

SECTION 11.2.            Collateral Agent May Perform;
Collateral Agent Appointed Attorney-in-Fact.  If any Pledgor shall fail to perform any
covenants contained in this Agreement (including such Pledgor’s covenants to
(i) pay the premiums in respect of all required insurance policies hereunder,
(ii) pay and discharge any taxes, assessments and special assessments, levies,
fees and governmental charges imposed upon or assessed against, and landlords’,
carriers’, mechanics’, workmen’s, repairmen’s, laborers’, materialmen’s,
suppliers’ and warehousemen’s Liens and other claims arising by operation of
law against, all or any portion of the Pledged Collateral, (iii) make repairs,
(iv) discharge Liens or (v) pay or perform any obligations of such Pledgor under
any Pledged Collateral) or if any representation or warranty on the part of any
Pledgor contained herein shall be breached, the Collateral Agent may (but shall
not be obligated to) do the same or cause it to be done or remedy any such
breach, and may expend funds for such purpose; provided, however,
that the Collateral Agent shall in no event be bound to inquire into the
validity of any tax, Lien, imposition or other obligation which such Pledgor
fails to pay or perform as and when required hereby and which such Pledgor does
not contest in accordance with the provisions of the Credit Agreement.  Any and all amounts so expended by the
Collateral Agent shall be paid by the Pledgors in accordance with the
provisions of Section 10.03 of the Credit Agreement.  Neither the provisions of this Section
11.2 nor any action taken by the Collateral Agent pursuant to the
provisions of this Section 11.2 shall prevent any such failure to observe
any covenant contained in this Agreement nor any breach of representation or
warranty from constituting an Event of Default. 
Each Pledgor hereby appoints the Collateral Agent its attorney-in-fact,
with full power and authority in the place and stead of such Pledgor and in the
name of such Pledgor, or otherwise, from time to time in the Collateral Agent’s
discretion to take any action and to execute any instrument consistent with the
terms of the Credit Agreement, this Agreement and the other Security Documents
which the Collateral Agent may deem necessary or advisable to accomplish the
purposes hereof (but the Collateral Agent shall not be obligated to and shall
have no liability to such Pledgor or any third party for failure to so do or
take action).  The foregoing grant of
authority is a power of attorney coupled with an interest is given to secure
the performance of each Pledgor’s obligations hereunder and such appointment
shall be irrevocable for the term hereof. 
Each Pledgor hereby ratifies all that such attorney shall lawfully do or
cause to be done by virtue hereof.

SECTION 11.3.            Continuing
Security Interest; Assignment.  This
Agreement shall create a continuing security interest in the Pledged Collateral
and shall (i) be binding upon the Pledgors, their respective successors
and assigns and (ii) inure, together with the rights and remedies of the
Collateral Agent hereunder, to the benefit of the Collateral Agent and the
other Secured Parties and each of their respective successors, transferees and
assigns.  No other persons (including any
other creditor of any Pledgor) shall have any interest herein or any right or
benefit with respect hereto.  Without
limiting the generality of the foregoing clause (ii), any 

 32
 

 

Secured Party may assign or otherwise transfer any indebtedness held by
it secured by this Agreement to any other person, and such other person shall
thereupon become vested with all the benefits in respect thereof granted to
such Secured Party, herein or otherwise, subject however, to the provisions of
the Credit Agreement and, in the case of a Secured Party that is a party to a
Hedging Agreement, such Hedging Agreement. 
Each of the Pledgors agrees that its obligations hereunder and the
security interest created hereunder shall continue to be effective or be
reinstated, as applicable, if at any time payment, or any part thereof, of all
or any part of the Secured US Obligations is rescinded or must otherwise be restored
by the Secured Party upon the bankruptcy or reorganization of any Pledgor or
otherwise.

SECTION 11.4.            Termination;
Release.  (a)             When all the Secured Obligations have been paid in full
and the Commitments of the Lenders to make any Loan or to issue any Letter of
Credit under the Credit Agreement shall have expired or been sooner terminated
and all Letters of Credit have been terminated or cash collateralized in
accordance with the provisions of the Credit Agreement, this Agreement shall
terminate.  Upon termination of this
Agreement the Pledged Collateral shall be released from the Lien of this
Agreement.  Upon such release or any
release of Pledged Collateral or any part thereof in accordance with the
provisions of the Credit Agreement, the Collateral Agent shall, upon the
request and at the sole cost and expense of the Pledgors, assign, transfer and
deliver to Pledgor, against receipt and without recourse to or warranty by the
Collateral Agent except as to the fact that the Collateral Agent has not
encumbered the released assets, such of the Pledged Collateral or any part
thereof to be released (in the case of a release) as may be in possession of
the Collateral Agent and as shall not have been sold or otherwise applied pursuant
to the terms hereof, and, with respect to any other Pledged Collateral, proper
documents and instruments (including UCC-3 termination financing
statements or releases) acknowledging the termination hereof or the release of
such Pledged Collateral, as the case may be.

(b)           Notwithstanding the foregoing, if (i)
the Obligations have been paid in full and the Commitments of the Lenders to
make any Loan or to issue any Letter of Credit under the Credit Agreement shall
have expired or been sooner terminated and all Letters of Credit have been
terminated or cash collateralized in accordance with the provisions of the
Credit Agreement, (ii) Secured US Obligations of the type described in clause
(b) and/or clause (c) of the definition of Secured US Obligations (“Remaining
Secured Obligations”) remain outstanding and (iii) all or a portion of the
repayment of the Obligations is financed by the proceeds of Indebtedness of one
or more Loan Parties or any affiliate of a Loan Party (“Refinancing Indebtedness”)
which Refinancing Indebtedness is secured by property of such persons on an
equal and ratable basis with the Remaining Secured Obligations, this Agreement
shall terminate as if the Remaining Secured Obligations have been paid in full
and the provisions of paragraph (a) of this Section 11.4 shall
apply concurrently with the incurrence of such Refinancing Indebtedness. For
the avoidance of doubt, if the Refinancing Indebtedness is not secured, this
Agreement shall not terminate but shall remain in full force and effect.

 33
 

 

SECTION 11.5.      Modification
in Writing. 
No amendment, modification, supplement, termination or waiver of or to
any provision hereof, nor consent to any departure by any Pledgor therefrom,
shall be effective unless the same shall be made in accordance with the terms
of the Credit Agreement and unless in writing and signed by the Collateral
Agent.  Any amendment, modification or
supplement of or to any provision hereof, any waiver of any provision hereof
and any consent to any departure by any Pledgor from the terms of any provision
hereof in each case shall be effective only in the specific instance and for
the specific purpose for which made or given. 
Except where notice is specifically required by this Agreement or any
other document evidencing the Secured US Obligations, no notice to or demand on
any Pledgor in any case shall entitle any Pledgor to any other or further
notice or demand in similar or other circumstances.

SECTION 11.6.            Notices.  Unless otherwise provided herein or in the
Credit Agreement, any notice or other communication herein required or permitted
to be given shall be given in the manner and become effective as set forth in
the Credit Agreement, as to any Pledgor, addressed to it at the address of the
US Borrower set forth in the Credit Agreement and as to the Collateral Agent, addressed
to it at the address set forth in the Credit Agreement, or in each case at such
other address as shall be designated by such party in a written notice to the
other party complying as to delivery with the terms of this Section 11.6.

SECTION 11.7.            Governing
Law, Consent to Jurisdiction and Service of Process; Waiver of Jury Trial.  Sections 10.09 and 10.10
of the Credit Agreement are incorporated herein, mutatis mutandis, as if a part hereof.

SECTION 11.8.            Severability
of Provisions.  Any provision hereof
which is invalid, illegal or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such invalidity, illegality
or unenforceability without invalidating the remaining provisions hereof or
affecting the validity, legality or enforceability of such provision in any
other jurisdiction.

SECTION 11.9.            Execution
in Counterparts.  This Agreement and
any amendments, waivers, consents or supplements hereto may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original,
but all such counterparts together shall constitute one and the same agreement.

SECTION 11.10.            Business Days. 
In the event any time period or any date provided in this Agreement ends
or falls on a day other than a Business Day, then such time period shall be
deemed to end and such date shall be deemed to fall on the next succeeding Business
Day, and performance herein may be made on such Business Day, with the same
force and effect as if made on such other day.

SECTION 11.11.            No Credit for Payment of Taxes or Imposition.  Such Pledgor shall not be entitled to any
credit against the principal, premium, if any, or interest payable under 

 34
 

 

the Credit Agreement, and such Pledgor shall not be entitled to any
credit against any other sums which may become payable under the terms thereof
or hereof, by reason of the payment of any Tax on the Pledged Collateral or any
part thereof.

SECTION 11.12.            No Claims Against Collateral Agent.  Nothing contained in this Agreement shall
constitute any consent or request by the Collateral Agent, express or implied,
for the performance of any labor or services or the furnishing of any materials
or other property in respect of the Pledged Collateral or any part thereof, nor
as giving any Pledgor any right, power or authority to contract for or permit
the performance of any labor or services or the furnishing of any materials or
other property in such fashion as would permit the making of any claim against
the Collateral Agent in respect thereof or any claim that any Lien based on the
performance of such labor or services or the furnishing of any such materials
or other property is prior to the Lien hereof.

SECTION 11.13.            No Release. 
Nothing set forth in this Agreement or any other Loan Document, nor the
exercise by the Collateral Agent of any of the rights or remedies hereunder,
shall relieve any Pledgor from the performance of any term, covenant, condition
or agreement on such Pledgor’s part to be performed or observed under or in respect
of any of the Pledged Collateral or from any liability to any person under or
in respect of any of the Pledged Collateral or shall impose any obligation on
the Collateral Agent or any other Secured Party to perform or observe any such
term, covenant, condition or agreement on such Pledgor’s part to be so
performed or observed or shall impose any liability on the Collateral Agent or
any other Secured Party for any act or omission on the part of such Pledgor
relating thereto or for any breach of any representation or warranty on the
part of such Pledgor contained in this Agreement, the Credit Agreement or the
other Loan Documents, or under or in respect of the Pledged Collateral or made
in connection herewith or therewith. 
Anything herein to the contrary notwithstanding, neither the Collateral
Agent nor any other Secured Party shall have any obligation or liability under
any contracts, agreements and other documents included in the Pledged
Collateral by reason of this Agreement, nor shall the Collateral Agent or any
other Secured Party be obligated to perform any of the obligations or duties of
any Pledgor thereunder or to take any action to collect or enforce any such
contract, agreement or other document included in the Pledged Collateral
hereunder.  The obligations of each
Pledgor contained in this Section 11.13 shall survive the termination
hereof and the discharge of such Pledgor’s other obligations under this
Agreement, the Credit Agreement and the other Loan Documents.

SECTION 11.14.            Obligations Absolute.  All obligations of each Pledgor hereunder
shall be absolute and unconditional irrespective of:

(i)          any bankruptcy, insolvency,
reorganization, arrangement, readjustment, composition, liquidation or the like
of any other Pledgor;

 35
 

 

(ii)         any lack of validity or enforceability
of the Credit Agreement, any Hedging Agreement or any other Loan Document, or
any other agreement or instrument relating thereto;

(iii)        any change in the time, manner or place
of payment of, or in any other term of, all or any of the Secured US
Obligations, or any other amendment or waiver of or any consent to any
departure from the Credit Agreement, any Hedging Agreement or any other Loan
Document or any other agreement or instrument relating thereto;

(iv)       any pledge, exchange, release or
non-perfection of any other collateral, or any release or amendment or waiver
of or consent to any departure from any guarantee, for all or any of the
Secured US Obligations;

(v)        any exercise, non-exercise or waiver of
any right, remedy, power or privilege under or in respect hereof, the Credit
Agreement, any Hedging Agreement or any other Loan Document except as
specifically set forth in a waiver granted pursuant to the provisions of Section 11.5
hereof; or

(vi)       any other circumstances which might
otherwise constitute a defense available to, or a discharge of, any Pledgor.

[REMAINDER OF
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 36

 

 

IN WITNESS WHEREOF, each
Pledgor and the Collateral Agent have caused this Agreement to be duly executed
and delivered by their duly authorized officers as of the date first above written.

	
  

  	
   

  	
  SCIELE PHARMA, INC.,

  
	
   

  	
   

  	
  as Pledgor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  /s/ Darrell Borne

  
	
   

  	
   

  	
   

  	
   

  	
  Name: Darrell Borne

  
	
   

  	
   

  	
   

  	
   

  	
  Title: EVP, CFO, Secretary and Treasurer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SCIELE PHARMA SALES, INC.,

  
	
   

  	
   

  	
  as Pledgor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  /s/ David Fisherskeller

  
	
   

  	
   

  	
   

  	
   

  	
  Name: David Fisherskeller

  
	
   

  	
   

  	
   

  	
   

  	
  Title: Secretary

  

[Signature Page to Security Agreement]

 

 

 

	
  

  	
   

  	
  UBS AG, STAMFORD BRANCH,

  
	
   

  	
   

  	
  as Collateral Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  /s/ Richard L. Tavrow

  
	
   

  	
   

  	
   

  	
   

  	
  Name: Richard L. Tavrow

  
	
   

  	
   

  	
   

  	
   

  	
  Title: Director

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  /s/ Irja R. Otsa

  
	
   

  	
   

  	
   

  	
   

  	
  Name: Irja R. Otsa

  
	
   

  	
   

  	
   

  	
   

  	
  Title: Associate Director

  

 

[Signature Page to
Security Agreement]

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