Document:

Exhibit 10.1

EXHIBIT 10.1

PROMOTIONAL SERVICES AGREEMENT

DATE: As of January 19, 2006

PARTIES:

	(1)	 	SHIRE US INC., having its place of business at 725 Chesterbrook Boulevard, Wayne, PA 19087
(“Shire”); and
	 
	(2)	 	IMPAX LABORATORIES, INC., having its place of business at 30831 Huntwood Avenue, Hayward, CA
94544 (“Impax”).

RECITALS

	(A)	 	WHEREAS, Shire markets and distributes certain pharmaceutical products, including the Shire
Product for the treatment of epilepsy.
	 
	(B)	 	WHEREAS, Impax intends to market, sell and distribute the Impax Product.
	 
	(C)	 	WHEREAS, Shire had determined that it requires a sales organization committed to high and
legally compliant standards for the promotion of the Shire Product in the Territory.
	 
	(D)	 	WHEREAS, Shire is willing to engage Impax and Impax desires to be engaged in the hiring and
management of a Sales Force for the Shire Product in the Territory.
	 
	(E)	 	WHEREAS, the Sales Force shall promote the Shire Product and the Impax Product in the
Territory on the terms and conditions set out in this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants set out in this Agreement, and intending
to be legally bound hereby, the Parties agree as follows.

Article 1

INTERPRETATION

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

	 	(a)	 	capitalized terms are given the meaning set out in Schedule 1;
	 
	 	(b)	 	references to “persons” includes individuals, bodies corporate (wherever
incorporated), unincorporated associations and partnerships;

 

 

	 	(c)	 	the headings are inserted for convenience only and do not affect the
construction of the Agreement;
	 
	 	(d)	 	references to one gender includes both genders; and
	 
	 	(e)	 	any reference to an enactment or statutory provision is a reference to it as it
may have been, or may from time to time be amended, modified, consolidated or
re-enacted.

	1.2	 	Inconsistency. The Schedules comprise part of and shall be construed in accordance with the
terms of this Agreement. In the event of any inconsistency between the Schedules or any
standard operating procedures used in the performance of the Services, the terms of this
Agreement shall prevail.

Article 2

GRANT OF RIGHTS TO IMPAX

	2.1	 	Engagement. Subject to the terms of this Agreement, Shire appoints Impax as its exclusive
agent to provide the Services solely within the Territory.
	 
	2.2	 	Rights Reserved. Shire reserves the right (a) to promote the Shire Product itself within the
Territory and to promote the Shire Product itself, or to grant to one or more third Parties
the right to promote the Shire Product, outside the Territory, (b) to promote any products
other than the Shire Product itself, or to grant to one or more Third Parties the right to
promote any product other than the Shire Product, within and outside the Territory, in each
case on such terms as Shire may elect and determine in its sole and absolute discretion.

Article 3

SHIRE RESPONSIBILITIES

	3.1	 	Materials. During the Services Term, Shire, at Shire’s expense, shall provide to Impax:

	 	(a)	 	the Shire Materials;
	 
	 	(b)	 	samples of the Shire Product, as determined by Shire in accordance with Section
3.2;
	 
	 	(c)	 	documents relating to the alignment of the Sales Force with Shire’s sales
force;
	 
	 	(d)	 	Shire Product sales data, Call List, Call Plan, physician validation,
establishment and maintenance of Shire Product sampling procedures and strategies. The
Quarterly Call Plan (and the timing of the Call Plan) shall be agreed to by the
Parties. In the event that Shire seeks an amendment to the Call Plan, Shire shall
provide Impax with reasonable notice of such amendment and the Parties shall, in
good faith, discuss and agree upon the terms of such amendment, its method of
implementation, and any increase in costs associated with the amendment; and

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	 	(e)	 	the Compliance Training and the subsequent training as provided in Section 4.5,
in each case subject to Impax bearing Sales Force expenses as set forth in Section 4.5.

	3.2	 	Advertising and Promotional Activities. Shire shall
expend at least $6 million during each
Services Year with respect to advertising and promotional activities (such activities to be of
a similar kind and nature as those which Shire utilizes to advertise and promote its other
products) for the Shire Product, such activities to be determined in Shire’s sole discretion,
but shall be consistent with the activities which Shire had planned to undertake if it were
not for the grant to Impax as provided in Section 2.1. In the event a Generic Product launches
during the Services Term, the Parties shall meet to discuss in good faith an appropriate
reduction to the amount Shire is obligated to expend on advertising and promotional
activities. For clarification purposes, the cost of samples shall be included in the
aforementioned amount to be expended by Shire on advertising and promotional activities.
	 
	3.3	 	Events and Clinical Studies. Shire shall not have any obligation to conduct clinical or
non-clinical trials on the Shire Product, or initiate or participate in symposia, seminars,
technical or scientific exhibits or other professional events with respect to the Shire
Product; provided, however that Shire may in its sole discretion conduct any clinical or
non-clinical trials it deems necessary or appropriate with respect to the Shire Product.
Notwithstanding the foregoing, the Parties understand and agree that Impax shall not have any
right to conduct clinical or non-clinical trials on the Shire Product, or without Shire’s
consent, which consent shall not be unreasonably withheld, delayed or conditioned, initiate or
participate in symposia, seminars, technical or scientific exhibits or other professional
events with respect to the Shire Product.
	 
	3.4	 	Regulatory Responsibility. Shire shall have sole and exclusive authority over any regulatory
matter relating to the Shire Product, including without limitation, any Shire Product label
changes, responding to complaints regarding the Shire Product, reporting on adverse events,
handling Shire Product returns and recalls and any communication with any Regulatory
Authority. Impax shall promptly inform Shire upon becoming aware of any regulatory issue
concerning the Shire Product and shall promptly provide Shire with copies of any
correspondence Impax may receive from a Regulatory Authority relating to the Shire Product.
	 
	3.5	 	Safety Agreement. The Parties shall execute a Safety Agreement in the form attached in
Schedule 5 at the same time as the execution of this Agreement.
	 
	3.6	 	Managed Care. Shire shall use commercially reasonable efforts to maintain the Shire Product
on formularies of managed care customers consistent with the inclusion thereon of the Shire
Product as of the Effective Date of this Agreement. The current formulary positions for the
Shire Product are attached as Schedule 7.

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Article 4

IMPAX RESPONSIBILITIES

	4.1	 	Impax Personnel. Impax shall employ (or otherwise engage) and manage the Sales Force for the
performance of the Services. As between Shire and Impax, all Sales Force members shall at all
times remain employees of (or otherwise engaged by) Impax for all purposes, including without
limitation, any federal, state and local tax and employment laws. The Sales Force shall remain
under the authority and control of Impax.
	 
	4.2	 	Term of Services. Impax shall commence providing the Services as soon as practicable
following the Effective Date of this Agreement, and shall commence carrying out Calls on or
prior to July 1, 2006 (the date of such first Call to be referred to as the “Detail
Commencement Date”). Impax shall continue providing the Services until the third anniversary
of the Detail Commencement Date or the expiration of the Extension Period if Impax elects to
extend the Services Term through June 30, 2009. Such election shall be made by written notice
to Shire at least thirty (30) days prior to the third anniversary of the Detail Commencement
Date if such anniversary would occur prior to June 30, 2009.
	 
	4.3	 	Initial Training. Upon receipt of the Shire Materials relating to product training for the
Shire Product, Impax shall make the Sales Force available to Shire for initial product
training for the Shire Product prior to commencing any marketing or promotion of the Shire
Product, including without limitation, product training with respect to the marketing and
promotion of the Shire Product in accordance with all applicable Laws (“Compliance Training”).
	 
	4.4	 	New Hire Training. Impax shall make any new personnel hired (or otherwise engaged) by Impax
after the Effective Date to join the Sales Force (“New Hires”) available to Shire for
Compliance Training prior to commencing any sales or marketing of the Shire Product. Impax
shall cooperate as reasonably necessary in arranging for such New Hires to receive such
training.
	 
	4.5	 	Subsequent Training. Impax shall ensure that:

	 	(a)	 	all Sales Force members receive Compliance Training (twice in each Services
Year) or further training (as agreed upon by the Parties) in relation to the Shire
Product at the Plan of Action (“POA”) meetings;
	 
	 	(b)	 	at least two (2) but not more than four (4) POA meetings are held during each
year of the Services Term; and
	 
	 	(c)	 	all Sales Force members are trained in accordance with Shire’s Selling Skills
Training Module.

Impax shall cooperate as reasonably necessary in arranging for Sales Force members to attend
the aforementioned training and meetings and shall bear any expenses incurred by any Sales
Force members in attending such training and meetings (including, without limitation,
expenses relating to travel, lodging and meals).

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	4.6	 	Training Certification. Impax covenants and warrants that the Sales Force members that have
attended the Compliance Training shall certify at least once annually in writing that he or
she shall comply with the PDMA and any other policies, procedures and Compliance Training
provided by Impax or Shire. Impax shall maintain and have available for inspection by Shire
(or its nominee) a record of such certification by each Sales Force member.
	 
	4.7	 	Incentive Compensation Plan and Management. Subject to Shire’s prior approval, which shall
not be unreasonably withheld, delayed or conditioned, Impax shall implement an Incentive
Compensation Plan which shall be communicated to the Sales Force prior to commencing promotion
of the Shire Product. Impax shall not amend or modify the terms of the Incentive Compensation
Plan without Shire’s prior written approval, which approval shall not be unreasonably
withheld, delayed or conditioned.
	 
	4.8	 	Sales Force. Impax shall not knowingly employ or otherwise retain or permit to be retained as
a member of the Sales Force:

	 	(a)	 	a practicing physician or a person affiliated on a professional level with or
employed by any physician, physician practice or other healthcare professional or
provider; or
	 
	 	(b)	 	a person who may be in a position to unduly influence the purchase of the Shire
Product.

	4.9	 	Communications to Sales Force. All written communications from Impax to the Sales Force
regarding strategy, positioning, safety, efficacy, labeling or promotion for the Shire Product
are subject to the prior review and written approval of Shire, which approval shall not be
unreasonably withheld, delayed or conditioned. For other material communications relating to
the Shire Product, Impax shall provide Shire’s Principal Contact, within five (5) Business
Days of transmission, complete copies or transcripts (if any exist) of such communications.
	 
	4.10	 	Impax Efforts. Impax shall:

	 	(a)	 	diligently provide the Services in accordance with the terms of this Agreement
and Shire’s reasonable directions. Such efforts shall not be less than those that Impax
exerts to promote other products, even if the Services are, or may be, in competition
with any other product or services being marketed or promoted by Impax or its
Affiliates;
	 
	 	(b)	 	ensure that those of its personnel whose decisions are necessary for the
performance of the Services are available to Shire at all reasonable times upon
reasonable notice for consultation on any matter relating to the Services;
	 
	 	(c)	 	ensure that the Sales Force promotes the Shire Product either in the Primary
Position Detail or the Secondary Position Detail as set forth in Schedule 3 (unless
otherwise requested by Shire and agreed to by the Parties); and

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	 	(d)	 	use commercially reasonable efforts to ensure that the Sales Force meets the
targets set out in the Call Plan.

	4.11	 	Use of Materials Provided by Shire. Impax covenants and warrants that:

	 	(a)	 	except as otherwise set forth in this Agreement, it shall only use the Shire
Materials for the provision of the Services and such use shall be in accordance with
the terms of this Agreement, and shall not use the Shire Materials for the promotion of
any product other than the Shire Product;
	 
	 	(b)	 	it shall only use samples of Shire Product provided by Shire for the provision
of the Services and such use shall be in accordance with the terms of this Agreement;
	 
	 	(c)	 	the Shire Materials and Shire Product samples shall not be modified, changed,
misbranded, altered or adulterated by Impax or the Sales Force at any time; and
	 
	 	(d)	 	the Shire Materials and samples of Shire Product which are not used during the
Services Term shall be returned to Shire as soon as reasonably practicable (and in no
event later than sixty (60) days) after the earlier of the expiry of the Services Term
or the termination of this Agreement.

	4.12	 	Impax Product. Impax may elect to include the Impax Product (but not any other product) as
the primary or secondary product in any Call it performs as part of the Services, subject to
the Call Plan set forth on Schedule 3 and the terms and conditions of this Agreement.

Article 5

IMPAX’S SALES FORCE

	5.1	 	Impax’s Sales Force. The Sales Force may consist of employees of Impax and/or persons
employed by a CSO; provided that any such CSO shall be subject to the prior written approval
of Shire, such approval not to be unreasonably withheld, delayed or conditioned. Impax shall
ensure that prior to the deployment of any Sales Force member to make Calls, each member of
the Sales Force shall execute agreements with Impax (if an employee of Impax) or with the
applicable CSO (if an employee of such CSO), substantially in the form of Schedule 2,
including appropriate language under which the individual agrees to maintain confidentiality
of Confidential Information and agrees to perform his or her obligations hereunder in
accordance with all Laws.
	 
	5.2	 	Trademark and Identification. To the extent necessary for Impax to identify itself as
representing the Shire Product, Impax shall be entitled to use Shire’s company name and logo.
The form of all Sales Force business cards and badges shall require advance written approval
from Shire.
	 
	5.3	 	Background Checks. Impax shall be responsible for performing drug testing and background
checks of all Sales Force members. Impax represents and warrants that it will complete or
cause to be completed (with respect to sales representatives employed by

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	 	 	Impax or a CSO who become Sales Force members) a thorough background check of all Sales
Force members to ensure that they have no felony convictions relating to the job
responsibilities of such Sales Force members. Impax further represents and warrants that it
will perform or cause to be performed (with respect to sales representatives employed by
Impax or a CSO who become Sales Force members), background checks to confirm that no Sales
Force member:

	 	(a)	 	is an excluded person on the Office of Inspector General’s List of Excluded
Individuals/Entities and is not on the General Services Administration Excluded Parties
List; and
	 
	 	(b)	 	is, so far as it is aware, an unfit or an improper individual for the
performance of the Services.

	5.4	 	Other Testing. Impax shall use commercially reasonable efforts to conduct, or cause to be
conducted, additional background checks, consistent with Laws and Impax’s internal employment
policies, on Sales Force members in an effort to ensure that such members have not been:

	 	(a)	 	the subject of pending or threatened investigations or enforcement actions by
any Regulatory Authority; or
	 
	 	(b)	 	engaged in any fraudulent or unlawful activity, or other inappropriate conduct
as measured by the other requirements of this Agreement.

Notwithstanding anything in this Section 5.4 to the contrary, Impax shall conduct drug
testing on the Sales Force members where there is a reasonable suspicion of the presence of
substances of abuse or drug paraphernalia. Impax shall institute prompt corrective or
disciplinary action against any Sales Force member who fails to meet the requirements set
forth in this Section 5.4. Impax further agrees to cooperate and comply with all
investigations by or on behalf of Shire with respect to wrongdoing, or alleged or suspected
wrongdoing, in respect of any obligations of Impax or its Sales Force under this Agreement.
With respect to any persons employed by a CSO, Impax shall cause such CSO to comply with the
provisions of this Section 5.4 with respect to its employees who are Sales Force members.

	5.5	 	Information to Shire. Impax shall promptly provide Shire with such information as is
reasonably necessary (provided such disclosure is permitted by Law and in the possession of
Impax) for Shire to ascertain its risk or liability, if any, resulting from Impax’s
termination or removal of any Sales Force member or any CSO (or the termination or removal by
any CSO of any employee thereof who is a Sales Force member).
	 
	5.6	 	Disciplinary Actions. Impax shall be solely responsible and liable for all disciplinary,
probationary and termination actions taken by it (or by an applicable CSO with respect to an
employee thereof who is a Sales Force member), and for the formulation, content and
dissemination of all employment policies and rules (including written disciplinary,
probationary and termination policies) applicable to its employees, contractors and
Affiliates. Impax shall provide the Oversight Committee with monthly reports regarding

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	 	 	any probationary, corrective, preventative, termination or other employment actions taken by
it with respect to its or its Affiliate’s employees, or taken by any CSO with respect to
such CSO’s employees, engaged in the promotion, sale, sampling or marketing of the Shire
Product.

	5.7	 	Impax Employee Removal. Impax shall immediately remove any Sales Force member from the
provision of Services with respect to the Shire Product if

	 	(a)	 	such member breaches a material provision of the agreement referenced in
Section 5.1 or fails any of the tests referenced in Sections 5.3 or 5.4; or
	 
	 	(b)	 	subject to compliance with Impax’s human resource policies (in the case of a
Sales Force member who is an employee of Impax), Shire in its sole discretion, desires
the removal of such member.

Shire shall not be liable for any costs associated with the removal of such Sales Force
member.

	5.8	 	Worker’s Compensation Insurance. Impax shall obtain and maintain worker’s compensation
insurance and other insurances required for the Sales Force (or ensure that such insurances
are obtained and maintained by an applicable CSO) and acknowledges that Shire does not, and
shall have no obligation to maintain such insurances, all of which (as between Impax and
Shire) shall be Impax’s sole responsibility.
	 
	5.9	 	No Participation in Shire Benefit Plans. Impax acknowledges and agrees that the Sales Force
members are not, and are not intended to be or be treated as, employees of Shire and that no
such individual is, or is intended to be, eligible to participate in any benefits programs or
in any Shire “employee benefit plans,” (as defined in Section 3(3) of ERISA) (“Shire Benefits
Plan”). As between Impax and Shire, all matters of compensation, benefits and other terms of
employment for any Sales Force member shall be the sole responsibility of Impax, including
without limitation, the payment of all compensation and benefits under any such Impax employee
benefit plan and under the Incentive Compensation Plan.
	 
	5.10	 	No Shire Liability. Shire shall have no responsibility to Impax or any Sales Force member for
any compensation, expense reimbursements or benefits (including, without limitation, vacation
and holiday remuneration, healthcare coverage or insurance, life insurance, pension or
profit-sharing benefits and disability benefits), payroll-related or withholding taxes, or any
governmental charges or benefits (including, without limitation, unemployment and disability
insurance contributions or benefits and workers compensation contributions or benefits) that
may be imposed upon or be related to the performance by Impax or any Sales Force member of the
obligations under this Agreement, all of which (as between Impax and Shire) shall be the sole
responsibility of Impax, even if it is subsequently determined by any court, the IRS or any
other Regulatory Authority that such individual may be a common law employee of Shire.
	 
	5.11	 	Indemnification for Employee Reclassification. Impax shall indemnify, defend, and hold
harmless Shire and its Affiliates and their respective directors, officers, employees

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	 	 	and contractors (each of the foregoing, a “Shire Party”) from and against any damages,
liability, loss and costs, including but not limited to attorneys fees (collectively,
“Liability”), that may be paid or payable by any such Shire Party resulting from any claim
or other cause of action asserted by any Sales Force member, CSO or any other Third Party
(including without limitation federal, state or local Regulatory Authorities) and based on
or with respect to:

	 	(a)	 	costs, damages and losses that Shire may incur resulting from any claims for
benefits that any Sales Force member may make under or with respect to any Shire
Benefits Plan;
	 
	 	(b)	 	any payment or obligation to make a payment to any Sales Force member relating
in any way to any compensation, benefits of any type under any employee benefit plan
(as such term is defined Section 3(3) of ERISA), or any other bonus, stock option,
stock purchase, incentive, deferred compensation, supplemental retirement, severance
and other similar fringe or employee benefit plans, programs or arrangements that may
be sponsored at any time by Shire, even if it is subsequently determined by any court,
the IRS or any other Regulatory Authority that any Sales Force member may be a common
law or de facto employee of a Shire Party;
	 
	 	(c)	 	the payment or withholding of any contributions, payroll taxes, or any other
payroll-related item by or on behalf of Impax, CSO or any Sales Force member with
respect to which Impax, CSO or any Sales Force member may be responsible hereunder or
pursuant to applicable Law to pay, make, collect, withhold or contribute, even if it is
subsequently determined by any court, the IRS or by any other Regulatory Authority that
any Sales Force member may be a common law or dc facto employee of a Shire Party;
	 
	 	(d)	 	failure of Impax to withhold or pay required taxes or failure to file required
forms with regard to compensation paid to Impax by Shire and compensation and benefits
paid or extended by Impax or CSO to the Sales Force; or
	 
	 	(e)	 	any other liabilities which may arise as a result of a court, tribunal or other
Regulatory Authority determination that any Sales Force member is a common law or de
facto employee of any Shire Party or any other co-employment relationship is
determined.

Article 6

CONTACT PERSONS AND OVERSIGHT COMMITTEE

	6.1	 	Oversight Committee. Within 30 days after the Effective Date of this Agreement, the Parties
shall create an Oversight Committee comprising three representatives from each Party to
oversee the performance of the Services. Each Party may designate and change its
representatives upon written notice to the other Party. Each Party shall also identify its
Principal Contact on the Oversight Committee for exchanging information and

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	 	 	communicating its position regarding the day-to-day implementation and management of the
obligations under this Agreement.

	6.2	 	Oversight Committee Meetings. The Oversight Committee shall meet not less than once each
Quarter unless otherwise agreed by the Parties. Meeting locations shall alternate between the
offices of each Party, or as otherwise agreed by the Parties, and may also be conducted using
telephonic or electronic means whereby each committee member in attendance is able to hear the
others and view materials which are the subject of discussion. Each Party shall bear the costs
and expenses of its designated members incurred in connection with the Oversight Committee
meetings.
	 
	6.3	 	Oversight Committee Duties. The Oversight Committee shall be responsible for the following:

	 	(a)	 	designing and implementing programs to encourage and improve cooperation
between Shire and Impax with respect to maximizing sales of the Shire Product;
	 
	 	(b)	 	reviewing the implementation of the Call Plan (developed by Shire) and the
associated call frequency; and
	 
	 	(c)	 	such other matters as the Parties agree from time to time.

	6.4	 	Shire Approval. Notwithstanding anything contained in this Agreement, Shire shall have the
sole right to make final decisions relating to any advertising, marketing material or
promotion material, brand strategy and messaging relating to the Shire Product.
	 
	6.5	 	Senior Management. The SVP of Sales and Marketing of Impax and the EVP of Sales & Marketing
North America of Shire, or their designees, shall meet on an annual basis, at a place and time
to be agreed by the Parties, to discuss overall performance and strategy for the promotional
activities performed hereunder.

Article 7

PAYMENTS

	7.1	 	Consideration. In consideration of the performance of the Services, Shire shall pay Impax the
Fees and other amounts payable to Impax as further described on Schedule 5. Impax shall
provide Shire with an invoice each Quarter for the Fees and other amounts payable in
accordance with Schedule 5. The invoice shall set out a short description of the Services
provided and the amount due in respect of the Services. Impax shall pay to Shire any amounts
that may be due with respect to Shortfall PDEs (if Shire does not elect a credit) as further
described in Schedule 5.
	 
	7.2	 	Payment. Shire shall pay the amounts due under the relevant invoice within thirty (30) days
after the date of receipt of the invoice. Upon request from Shire, Impax shall provide
detailed documentary support for invoices submitted and Impax’s provision of such detailed
documents shall not be treated as a Non-Standard Report. Impax shall maintain its records in
accordance with GAAP. In the event of a dispute over any payment or portion of any payment for
the provision of Services under this Agreement,

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	 	 	the Parties shall use commercially reasonable efforts to resolve such dispute as soon as
commercially practicable after either Party provides notice to the other Party of such
dispute. In the event Impax is required to pay Shire any amounts with respect to Shortfall
PDEs, such amounts shall be due (if Shire does not elect a credit) within thirty (30) days
after the expiration of the second Quarter following the applicable first or second Services
Year, or the expiration of the final Services Year, as the case may be and as further
described in Schedule 5. Shire shall pay to Impax within five (5) days following the
effective date of an agreement between Impax and a CSO, as provided in Section 5.1, an
amount equal to the implementation fees payable to the CSO, as well as other start-up fees
that Impax may incur on its own, such as fees to recruit management, fees to purchase data
necessary for territory alignment, and other reasonable fees incurred in the cost of
implementing the Sales Force (collectively, referred to as the “Advance Fees”); provided,
however, that Advance Fees are payable only to the extent that they are related to Impax’s
promotion of the Shire Product. The Advance Fees that Shire shall pay to Impax cannot exceed
$3 million and can only be paid with respect to the first agreement that Impax enters into with
a CSO. Shire shall recoup all Advance Fees paid to Impax on a prorated basis over the next
two (2) Quarters of the Agreement, via a credit against amounts otherwise payable to Impax
under this Section 7.2.

	7.3	 	Electronic Funds Transfer (EFT). All payments due under this Agreement shall be made by EFT
(automated clearing house) in the United States dollars and shall be delivered to the
applicable Party’s bank account as designated in writing to the other Party.

Article 8

REPORTS AND AUDIT

	8.1	 	Shire Reports. Shire shall provide to Impax a written report(s) identifying the retail
prescriptions for the Shire Product in the Territory for each Sales Force member, as
determined by the Exponent Data issued by IMS, and the NPA data issued by IMS for the Shire
Product in the Territory, in each case for the previous Quarter and as soon as practicable
after Shire’s receipt of the corresponding information from IMS.
	 
	8.2	 	Impax Reports. Impax shall provide Shire with monthly raw data extracts of Call activity,
Call data and attendance information in a form to be agreed between the Parties. In addition,
Impax shall provide Shire within ten (10) days after the end of each month, a Sample delivery
report for the prior month and the number and date of promotional program activities for the
Shire Product for the relevant month.
	 
	8.3	 	Reports. The Parties shall maintain and preserve records and audit trails sufficient to
confirm the information contained in such reports. Any reports prepared pursuant to this
Section 8 shall be accurate and contain detail to the reasonable satisfaction of the Party
receiving it.
	 
	8.4	 	Maintenance of Records. During the Term, and for a period of three (3) years thereafter,
Impax shall, and shall procure that its Affiliates shall, keep at either its normal place of
business (or at an off-site storage facility), detailed, accurate and up to date:

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	 	(a)	 	records and books of account sufficient to confirm the calculation of the Fees
and to identify any pass through costs and expenses; and
	 
	 	(b)	 	information and data contained in any reports provided to the other Party in
connection with this Agreement.

	8.5	 	Inspection. During the Term, and for a period of three (3) years thereafter, on no less than
five (5) Business Days notice from Shire, Impax shall make all such records, books of account,
information and data (concerning this Agreement) available for inspection during normal
business hours by Shire (or its nominee) for the purpose of general review or audit (but not
more than once in any calendar year). Upon reasonable belief of discrepancy or dispute,
Shire’s external auditors shall be entitled to take copies or extracts from such records,
books of account, information and data (but only to the extent related to the contractual
obligations set out in this Agreement) during any review or audit provided the external
auditor signs a confidentiality agreement with Impax providing that such records, books of
account, information and data shall be treated as confidential information which may be
disclosed to Shire.
	 
	8.6	 	Inspection Costs. Shire shall be solely responsible for its costs in making any such review
and audit, unless Shire identifies a discrepancy in the Fee or the costs and expenses paid by
Shire under this Agreement in any calendar year from those properly payable for that calendar
year of five percent (5%) or greater, in which event Impax shall be solely responsible for the
cost of such review and audit and refund Shire any overpayment. All information disclosed by
Impax or its Affiliates pursuant to this Article 8 shall be deemed Confidential Information.

Article 9

SAMPLING

	9.1	 	Sample Supply. Subject to Section 3.2 of this Agreement, Shire shall determine the sampling
strategy (including determining which Call Plan Physicians are to receive samples) for, and
Shire shall be responsible for providing Impax with samples of, the Shire Product for
distribution in connection with performing the Services. Shire shall, in advance of each Shire
Product shipment, inform Impax of the Shire Product lot numbers being shipped. The timing of
such shipments and the quantities to be allocated to each Sales Force member shall be
coordinated by Impax and in accordance with the sampling strategy developed by Shire.
	 
	9.2	 	Sample Storage. Impax represents and warrants that it and each member of the Sales Force have
the necessary, secure and proper environment for the storage of samples of the Shire Product.
	 
	9.3	 	Use of Samples. Impax shall procure, either itself or through CSO, that the Sales Force
shall:

	 	(a)	 	only use samples of the Shire Product for sampling purposes directly in
connection with the provision of the Services; and

12

 

	 	(b)	 	not resell, repackage, modify, deconstruct, reverse engineer or otherwise use
samples of the Shire Product or its packaging in any other manner.

	9.4	 	Records; Compliance; Reports. Impax shall itself, or through CSO, employ a program, including
record keeping, for handling, storing, distributing and using samples of the Shire Product
which shall comply with all applicable Law. Upon receipt of any shipment of samples of the
Shire Product, Impax shall assume all risk in relation to such samples, including without
limitation, responsibility for distributing, storing and using such samples in compliance with
the PDMA and other applicable Laws. For purposes of complying with the foregoing, Shire
designates Impax as an authorized distributor of samples of the Shire Product. During the Term
and for a period of not less than three (3) years thereafter, on twenty-four (24) hours notice
from Shire, Impax shall provide, or procure that its Affiliates provide, Shire (or its
nominee) access to any records or reports relating to the receipt, storage or distribution of
samples of the Shire Product. In an emergency, including without limitation, a suspected loss
or diversion of samples of Shire Product, Impax shall use its best efforts to provide Shire
(or its nominee) immediate access to any records or reports relating to the receipt, storage
or distribution of samples of the Shire Product. In the event that Impax or CSO discovers the
loss of any samples of Shire Product, Impax shall within twenty-four (24) hours, report such
loss to the appropriate Shire representative. Shire shall then be responsible for reporting
the theft or loss to the appropriate Regulatory Authority.
	 
	9.5	 	Shire Product Sample Training. The Parties recognize that a sampling program for the Shire
Product will require incremental training in accountability for samples of Shire Product.
Shire shall provide all Sales Force members and other personnel associated with the Shire
Product with appropriate training in relation to the use, handling and storage of samples of
the Shire Product in compliance with the PDMA and all other applicable Laws. Impax shall
consult with Shire to ensure that the Sales Force members use sample report forms for the
Shire Product that are acceptable to Shire and that such training is no less rigorous than the
policies and procedures followed by Shire’s own employees.
	 
	9.6	 	Electronic Records. Impax represents and warrants that:

	 	(a)	 	it has sufficient protocols, policies and procedures to satisfy the
requirements associated with the electronic records and signatures rule, as set forth
in 21 Code of Federal Regulations Part 11 (“Part 11”); and
	 
	 	(b)	 	its hardware, software, procedures and documentation consistently meets FDA
electronic records and electronic signatures criteria, including but not limited to the
following:

	 	(i)	 	functionality that provides security, audit trails, record
display and printout, operational, authority and device checks;
	 
	 	(ii)	 	staff training and qualifications regarding understanding the
requirements of the pertinent FDA regulations; and

13

 

	 	(iii)	 	system or equipment qualification/validation to meet FDA
requirements procedures and other applicable controls.

	9.7	 	Validation of System. The Parties understand and agree that Impax shall deliver a fully
Validated System to Shire in connection with the provision of the Services. For purposes of
this Section, “Validation System” shall mean in compliance with regulatory requirements
including 21 C.F.R. Parts 11 and 203. If revalidation of the system is required due to
modifications or changes made or requested by any Regulatory Authority, such revalidation
costs incurred by Impax shall be borne by Impax.
	 
	9.8	 	No Other Obligations. The Parties shall have no other obligations to each other with respect
to samples of the Shire Product other than those obligations set forth in this Agreement.

Article 10

COMPLIANCE

	10.1	 	Compliance with Laws. Each Party shall:

	 	(a)	 	maintain in full force and effect all necessary licenses, permits, approvals
(or waivers) and authorizations required by Law to carry out its respective obligations
under this Agreement; and
	 
	 	(b)	 	comply with all applicable Laws, including without limitation, any requirements
of any product license relevant to the Shire Product. Impax and Shire shall each be
solely responsible for compliance with those Laws relating to the activities conducted
by or on its behalf under this Agreement (including, without limitation, those Laws
that apply to documentation and records retention relating to the distribution and use
of the Shire Product samples).

	10.2	 	No Kickback. Impax shall not, and shall procure that any CSO and the Sales Force members
shall not, directly or indirectly, pay, offer or authorize payment of anything of value
(either in the form of compensation, gift, contribution or otherwise) to any person or entity
in a position to order, recommend or purchase the Shire Product contrary to any Law.
	 
	10.3	 	Cooperation. The Parties shall cooperate with one another with the goal of ensuring full
compliance with Laws.
	 
	10.4	 	No Inconsistent Warranties.
	 
	 	 	Impax shall not, and shall ensure that the Sales Force members shall not, directly or
indirectly, make any representations or warranties relating to the Shire Product that
conflict, or are inconsistent with the NDA, applicable Law or the FDA approved label for the
Shire Product.
	 
	10.5	 	Compliance and Investigations. Impax covenants and warrants that:

14

 

	 	(a)	 	each Sales Force member shall promote, market and sell the Shire Product in
accordance with all applicable Laws, including but not limited to the OIG Guidance and
the PhRMA Code;
	 
	 	(b)	 	there are no pending or threatened investigations or enforcement actions by any
Regulatory Authorities against it or its Affiliates in which it is alleged or under
investigation that Impax or its Affiliates has engaged in any fraudulent or unlawful
activity; and
	 
	 	(c)	 	it and its Affiliates have policies and procedures that address Regulatory
Authority inspections of any kind, including a “for-cause-audit”.

	10.6	 	Future Investigations. Upon being contacted by any Regulatory Authority in connection with
any general inspection of any kind or in relation to the Shire Product, (including periodic
random or for-cause audits or investigations of either Party, its Affiliate’s or any CSO or
the Sales Force activity relating to Shire Product), Impax and Shire shall, and shall procure
that each of its Affiliates and any CSO shall:

	 	(a)	 	immediately inform the other Party of the nature of the inspection or audit and
the circumstances surrounding such inspection or audit;
	 
	 	(b)	 	periodically update the other Party on the status of the inspection or audit;
	 
	 	(c)	 	promptly respond to the Regulatory Authority to the extent necessary to comply
with its obligations under applicable Law after consultation with legal counsel and the
other Party; and
	 
	 	(d)	 	cooperate in good faith with any Regulatory Authority inspections,

	 	 	provided that, the foregoing shall not be construed to prevent a Party in any way from
complying with its obligations under any applicable Law.
	 
	10.7	 	Bioterrorism Act. Impax shall, and shall procure that its Sales Force and CSO shall, adhere
to the requirements of the Public Health Security and Bioterrorism Preparedness and Response
Act of 2002 (the Bioterrorism Act) as amended from time to time.

Article 11

INTELLECTUAL PROPERTY

	11.1	 	Intellectual Property Rights. Nothing in this Agreement shall affect the ownership of any
Intellectual Property Rights existing at the date of this Agreement or generated outside the
Services which one Party agrees to make available to the other in the course of the Services.
Except for any Intellectual Property Rights that relate exclusively to the Impax Product, all
right, title and interest in any Intellectual Property Rights created, generated or arising in
connection with the provision of the Services shall vest in Shire. Impax shall execute and
cause to be executed any document prepared by or on behalf of Shire, and take such further
actions or cause such further actions to be taken (all at

15

 

	 	 	Shire’s sole cost and expense), as are reasonably necessary to vest ownership of any such
Intellectual Property Rights in Shire.

	11.2	 	Trademark. Shire hereby grants Impax a limited, non-exclusive license (without the right to
sub-license) to use the Trademark in relation to the sale, promotion and marketing of the
Shire Product in the Territory for the Services Term (including use of the Trademark for
production by Third Party vendors of business cards, name tags, training materials and meeting
planners). In addition, upon receipt of prior written approval from Shire, Impax may authorize
any CSO approved in accordance with this Agreement (in addition to the Third Party vendors set
forth in the preceding sentence) to use the Trademark, in relation to the sale, promotion and
marketing of the Shire Product and in accordance with the terms of this Agreement. Impax
shall:

	 	(a)	 	use the Trademark only in a manner which conforms to the reasonable directions
and standards notified to it (in writing) by Shire from time to time;
	 
	 	(b)	 	market the Shire Product throughout the Territory under the Trademark;
	 
	 	(c)	 	not use, register or attempt to register any trade marks, company, business or
trading names or domain names which are identical or similar to (or which incorporate)
any of the Trademarks, any aspect of them, or any other trademarks or trade names used
by Shire, without Shire’s prior written consent;
	 
	 	(d)	 	not do anything which could, in Shire’s reasonable opinion, bring the Trademark
or Shire into disrepute or which could otherwise damage the goodwill attaching to the
Trademark or any other trademarks or trade names of Shire; or
	 
	 	(e)	 	not use the Trademark in a manner which could, in Shire’s reasonable opinion,
result in any of them becoming generic or in Shire’s rights in them becoming diluted,
or which could otherwise prejudice or invalidate any registration or application for
registration of any of the Trademark anywhere in the world.

	11.3	 	Rights in the Trademark. Impax acknowledges that:

	 	(a)	 	it shall not acquire, nor claim, any right, title or interest in or to the
Trademark or the goodwill attaching to them by virtue of this Agreement or its use of
the Trademark, other than the rights specifically granted to it under Section 11.2; and
	 
	 	(b)	 	all goodwill arising from use of the Trademarks by Impax or its Affiliates
before, during or after the Term shall accrue and belong to Shire and Impax shall (and
shall procure that its Affiliates shall), at Shire’s request and cost, promptly execute
all documents required by Shire to confirm this.

	11.4	 	Third Party Trademark Use. Impax shall promptly notify Shire if it or CSO becomes aware of
the use of any mark by a Third Party that Impax or CSO considers a possible infringement,
passing off, or misappropriation of the Trademark. Shire shall have the sole right and
discretion to decide whether or not any action or proceeding shall be brought against such
Third Party. In the event that Shire decides that an action should be taken

16

 

	 	 	against such Third Party, Shire shall take such action at its sole expense and in its
own name. Impax agrees to cooperate with Shire, and to procure such cooperation from
any CSO or Sales Force member, to the extent reasonably necessary to prosecute such
action (and Shire shall pay all reasonable costs and fees of Impax associated
therewith). Any damages recovered under such action shall be for the account of
Shire.

	11.5	 	Warranties. Shire and Impax each represent and warrant that:

	 	(a)	 	it is a company duly organized and existing under the laws of Delaware and each
has the power and authority to enter into this Agreement;
	 
	 	(b)	 	it has obtained all corporate authorizations required to empower it to enter
into and perform its obligations under this Agreement;
	 
	 	(c)	 	this Agreement is valid and binding obligation enforceable against it in
accordance with its terms and conditions;
	 
	 	(d)	 	it is not under any obligation to any person, contractual or otherwise, that
conflicts with the terms of this Agreement;
	 
	 	(e)	 	the execution of this Agreement and the performance of its obligations
hereunder are not, and will not be, in violation of or in conflict with any obligation
it may have to any Third Party; and
	 
	 	(f)	 	it will maintain throughout the Services Term all permits, licenses,
registrations and other forms of governmental authorization and approval required in
order to perform its obligations under this Agreement.

	11.6	 	Shire covenants and warrants that, to Shire’s knowledge upon due investigation, the
manufacture, use or sale of the Shire Product in the Territory pursuant to this Agreement does
not infringe, misappropriate or otherwise conflict with any intellectual property rights of
any Third Party.
	 
	11.7	 	Limitation of Warranty. Except for the warranties, obligations and undertakings of each of
the Parties set forth in this Agreement, no warranty, condition, term, undertaking or
representation (express or implied, statutory or otherwise) is given by one Party to the other
in respect of the Trademark, the Shire Product or the Impax Product; such warranties,
conditions, terms, undertakings and representations are to the extent permitted by law
expressly excluded.

Article 12

CONFIDENTIALITY

	12.1	 	Confidentiality Obligation. Each Party shall keep and maintain as confidential any
Confidential Information supplied by the other Party during the Term. The confidentiality and
non-disclosure obligations contained in this Agreement shall not apply to the extent that such
Confidential Information is:

17

 

	 	(a)	 	at the time of disclosure by one Party to the other, in the public domain or
otherwise publicly known;
	 
	 	(b)	 	after disclosure by one Party to the other becomes part of the public domain,
other than by breach of any obligation of confidentiality;
	 
	 	(c)	 	information which the receiving Party can establish by documentary evidence was
already in its possession at the time of receipt or was independently developed by the
receiving Party; or
	 
	 	(d)	 	received from a Third Party who was lawfully entitled to disclose such
information.

	12.2	 	Exceptions. Notwithstanding Section 12.1, the Party receiving Confidential Information may
disclose such Confidential Information to the extent that such disclosure has been ordered by
a court of law or directed by a governmental authority, provided that, the disclosure is
limited to the extent ordered or directed and wherever practicable, the Party that owns the
Confidential Information has been given sufficient written notice in advance to enable it to
seek protection or confidential treatment of such Confidential Information.
	 
	12.3	 	Expiration of Confidentiality. The confidentiality obligation contained in this Section 12
shall survive the termination or expiry of this Agreement.
	 
	12.4	 	Disclosure. If Impax is subpoenaed or otherwise requested by any person including, without
limitation, any Regulatory Authority to give testimony or provide information which in any way
relates to this Agreement, the Sales Force, the Shire Product or practices associated with the
Shire Product, Impax shall give Shire prompt notice of such request, and unless otherwise
required by Law, shall make no disclosure until Shire has had a reasonable opportunity to
contest the right of the requesting person to such disclosure. Impax shall provide Shire with
all reasonable cooperation and generally make its employees available to give testimony or to
provide reasonable assistance in connection with any lawsuits, claims, proceedings and
investigations relating to this Agreement, the Sales Force members, the Shire Product or
practices associated with the Shire Product.

Article 13

TERM AND TERMINATION

	13.1	 	Term. This Agreement shall commence on the Effective Date and remain in effect for a period
of five (5) years from the Detail Commencement Date (the “Term”) unless terminated pursuant to
the other provisions of this Agreement. For clarification purposes, expiration of the Services
Term shall be distinct and separate from the expiration of the Term.
	 
	13.2	 	Termination. Either Party shall be entitled to terminate this Agreement by written notice to
the other if:

18

 

	 	(a)	 	the other Party commits a material breach of this Agreement, and fails to
remedy it within sixty (60) days of receipt of notice from the first Party of such
breach and of its intention to exercise its rights under this Section; or
	 
	 	(b)	 	an order is made or a resolution is passed for the winding up of the other
Party (other than voluntarily for the purposes of solvent amalgamation or
reconstruction) or an order is made for the appointment of an administrator to manage
the other Party’s affairs, business and property or if a receiver (which expression
shall include an administrative receiver) is appointed over any of the other Party’s
assets or undertaking or if circumstances arise which entitle the court or a creditor
to appoint a receiver or manager or which entitle the court to make a winding-up order
or if a voluntary arrangement is proposed in respect of the other Party or if the other
Party takes or suffers any similar or analogous action in consequence of debt, and such
order, appointment or similar action is not removed within ninety (90) days.

	13.3	 	Termination by Shire. Shire may terminate this Agreement upon forty-five (45) days’ prior
written notice, in the event of Change of Control of Impax to a Shire Competitor.
	 
	13.4	 	Effect of Termination. In the event of expiry or termination of this Agreement for any
reason, Impax shall:

	 	(a)	 	immediately cease to use the Trademark and cease to provide, or procure the
provision of the Services; and
	 
	 	(b)	 	promptly return to Shire all Confidential Information of Shire provided to
Impax and samples of the Shire Product provided to Impax or its Affiliates during the
Term.

In the event of expiry or termination of this Agreement for any reason, Shire shall promptly
return to Impax all Confidential Information of Impax provided to Shire or its Affiliates
during the Term.

	13.5	 	Payments on Termination. On termination of this Agreement by either Party for any reason,
Shire shall pay Impax all Fees and expenses through the actual date of termination.
	 
	13.6	 	Liability on Termination. The termination or expiry of this Agreement shall not release
either of the Parties from any liability which at the time of termination or expiry has
already accrued to the other Party, nor affect in any way the survival of any other right,
duty or obligation of the Parties which is expressly stated elsewhere in this Agreement to
survive such termination or expiry.
	 
	13.7	 	Surviving Sections. The provisions of Sections 5.10, 5.11, 8.4, 8.5, 8.6, 9.4, 11.1 and 11.3,
and Articles 12, 13, 15, 16 and 20 shall continue in force in accordance with their respective
terms notwithstanding expiry or termination of this Agreement for any reason. In addition, the
provisions of Sections 7.1 and 7.2 shall survive the expiry or termination

19

 

	 	 	of this Agreement solely to the extent of any amounts owing under this Agreement and which
have not been paid as of such expiration or termination.

Article 14

DISPUTE RESOLUTION

	14.1	 	Preliminary Processes. If there is a disagreement between the Parties as to the
interpretation of this Agreement or in relation to any aspect of the performance by either
Party of its obligations under this Agreement, the Oversight Committee shall, within ten (10)
Business Days of receipt of a written request from either Party, meet in good faith and try to
resolve the disagreement without recourse to legal proceedings.
	 
	14.2	 	Escalation of Dispute. If resolution of the disagreement does not occur within five (5)
Business Days after such meeting, the matter shall be escalated for determination by the SVP
of Sales and Marketing of Impax and the EVP Sales & Marketing North America of Shire for
resolution, who may resolve the matter themselves or jointly appoint a mediator or independent
expert to do so.
	 
	14.3	 	Equitable Relief. Nothing in this Article 14 restricts either Party’s freedom to seek urgent
relief to preserve a legal right or remedy, or to protect a proprietary or trade secret right.

Article 15

INDEMNIFICATION

	15.1	 	Impax Indemnity. Impax shall defend, indemnify and hold harmless each Shire Party from and
against any and all claims, actions, demands, losses, damages, costs and reasonable expenses
(including reasonable legal, counsel and expert fees) (“Impax Liability”) arising from or in
connection with:

	 	(a)	 	any Third Party claim, lawsuit, investigation, proceeding, regulatory action,
or other cause of action (“Claim”):

	 	(i)	 	resulting from any negligent or willful acts of any Impax Party
in connection with the performance of the Services; or
	 
	 	(ii)	 	arising from either Party’s use of Impax’s Intellectual
Property Rights in a manner consistent with the provisions set forth in this
Agreement;

	 	(b)	 	the breach by Impax of any of its representations or warranties contained in
this Agreement; or
	 
	 	(c)	 	any misuse by an Impax Party of the Trademark, Shire’s company name or logo;

except, in each case, to the extent that the Impax Liability is caused by the negligence,
breach of the terms of this Agreement, or willful misconduct of a Shire Party.

20

 

	15.2	 	Shire Indemnity. Shire shall defend, indemnify and hold harmless each of Impax and its
Affiliates, and their respective directors, officers, employees and contractors (“Impax
Party”) from and against any and all claims, actions, demands, losses, damages, costs and
reasonable expenses (including reasonable legal, counsel and expert fees) (“Shire Liability”)
arising from or in connection with:

	 	(a)	 	any Claim:

	 	(i)	 	resulting from any negligent or willful acts of any Shire Party
in connection with the performance of its obligations under this Agreement;
	 
	 	(ii)	 	arising from either Party’s use of Shire’s Intellectual
Property Rights relating to the Shire Product in a manner consistent with the
provisions set forth in this Agreement;
	 
	 	(iii)	 	resulting from Shire’s manufacture of the Shire Product; or
	 
	 	(iv)	 	resulting from Shire’s advertising and promotional materials
and activities;

	 	(b)	 	the breach by Shire of any of its representations or warranties contained in
this Agreement; or
	 
	 	(c)	 	any misuse by a Shire Party of Impax’s company name or logo;

except, in each case, to the extent that the Shire Liability is caused by the negligence,
breach of the terms of this Agreement, or willful misconduct of an Impax Party.

	15.3	 	Control of Proceedings. The indemnifying Party shall have the sole control over the defense
of any Claim, provided that, the indemnifying Party shall obtain the written consent of the
indemnified Party prior to settling or otherwise disposing of such Claim if as a result of the
settlement or Claim disposal the Indemnified Party’s interests are in any way adversely
affected.
	 
	15.4	 	No Admissions. The indemnified Party shall not make any payment or incur any expenses in
connection with any Impax Liability or Shire Liability (as the case may be), or make any
admissions or do anything that may compromise or prejudice the defense of any Claim without
the prior written consent of the indemnifying Party.
	 
	15.5	 	Claim Information. Each Party shall promptly:

	 	(a)	 	inform the other by written notice of any actual or threatened Claim to which
Sections 15.1 or 15.2 apply;
	 
	 	(b)	 	provide to the other Party copies of all papers and official documents received
in respect of any such Claim; and

21

 

	 	(c)	 	cooperate as reasonably requested by the other Party in the defense of any such
Claim.

	15.6	 	Contributory Negligence. If any Shire Liability or Impax Liability is caused by the
negligence of both Shire and Impax, the apportionment of liability shall be shared between
Shire and Impax based upon the comparative degree of each Party’s negligence and each Party
shall be responsible for its own defense and its own costs including, but not limited to, the
cost of defense attorneys’ fees and witnesses’ fees and expenses incident thereto.
	 
	15.7	 	Limitation of Liability. Except as may be included in a Claim under Section 16.1 or 16.2, in
no event shall either Party or their respective Affiliates be liable for special, punitive,
indirect, incidental or consequential loss or damage based on contract, tort or any other
legal theory arising out of this Agreement.

Article 16

INSURANCE

	16.1	 	Insurance. Each Party shall maintain, at its own cost, general commercial liability insurance
(including comprehensive product liability) in such amount as Shire and Impax respectively,
customarily maintain with respect to its other products and which is reasonable and customary
in the U.S. pharmaceutical industry for companies of comparable size and activities but in any
event not less than $10,000,000 per occurrence and $10,000,000 in the aggregate. In the event
the insurance policy obtained by a Party is a “claims made” policy (as opposed to an
“occurrence” policy), such Party shall obtain comparable insurance for not less than 6 (six)
years following the expiry or termination of this Agreement.
	 
	16.2	 	Notice. Each Party shall provide thirty (30) days prior written notice to the other of
cancellation or material change in the coverage before such cancellation or change takes
effect and shall provide the other Party evidence of such insurance upon written request.

Article 17

FORCE MAJEURE

	17.1	 	Force Majeure. Neither Party shall be entitled to terminate this Agreement or shall be liable
to the other under this Agreement for loss or damages attributable to any Force Majeure,
provided the Party affected shall give prompt notice thereof to the other Party. Subject to
Section 17.2, the Party giving such notice shall be excused from such of its obligations
hereunder for so long as it continues to be affected by Force Majeure.
	 
	17.2	 	Continued Force Majeure. If any Force Majeure continues unabated for a period of at least
ninety (90) days, the Parties shall meet to discuss in good faith what actions to take or what
modifications should be made to this Agreement as a consequence of such Force Majeure in order
to alleviate its consequences on the affected Party.

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Article 18

NOTICES

	18.1	 	Notice. Any notice or other document given under this Agreement shall be in writing in the
English language and shall be given by hand or sent by prepaid airmail, by fax transmission or
e-mail to the address of the receiving Party as set out in Section 18.2 below unless a
different address or fax number has been notified to the other in writing for this purpose.
	 
	18.2	 	Receipt of Notice. Each such notice or document shall:

	 	(a)	 	if sent by hand, be deemed to have been given when delivered at the relevant
address;
	 
	 	(b)	 	if sent by prepaid mail, be deemed to have been given five (5) days after
posting; or
	 
	 	(c)	 	if sent by fax or email transmission be deemed to have been given when
transmitted, provided that, a confirmatory copy of such fax or email transmission shall
have been sent by prepaid mail within twenty-four (24) hours of such transmission.

	18.3	 	Address for Notice. The address for services of notices and other documents on the Parties
shall be:

	 	 	 
	To Shire	 	To Impax
	 
	 	 
	Address:

	 	Address:
	Shire US, Inc.

725 Chesterbrook Blvd.

Wayne, PA 19087

United States of America

	 	Impax Laboratories, Inc.

121 New Britain Blvd.

Chalfont, PA 94544

United States of America
	 
	 	 
	Attention: Associate General

	 	Attention: Senior Vice President
	Counsel, North America

	 	Sales and Marketing
	Fax: 484-595-8163

	 	Fax: 215-933-0333
	Copy To: Shire Legal Department

	 	Copy To:
	Fax: 1-484-595-8674

	 	Fax:

Article 19

ASSIGNMENT

	19.1	 	Assignment. Impax shall not assign or transfer any of its rights or obligations under this
Agreement without the prior written consent of Shire, such consent not to be unreasonably
withheld, delayed or conditioned.

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Article 20

GENERAL PROVISIONS

	20.1	 	Relationship. In making and performing this Agreement, the Parties are acting, and intend to
be treated, as independent entities; and nothing contained in this Agreement shall be
construed or implied to create an agency, partnership, joint venture, or employer and employee
relationship between Shire and Impax. Except as otherwise provided herein, neither Party may
make any representation, warranty or commitment, whether express or implied, on behalf of or
incur any charges or expenses for or in the name of the other Party.
	 
	20.2	 	No Third Party Benefit. This Agreement shall be binding upon and inure solely to the benefit
of the Parties hereto, their successors and permitted assigns, and nothing in this Agreement,
express or implied, is intended to or shall confer upon any other Person or Persons any right,
benefits or remedies of any nature whatsoever under or by reason of this Agreement.
	 
	20.3	 	Public Announcements. The form and content of any public announcement to be made by one Party
regarding this Agreement, or the subject matter contained herein, shall be subject to the
prior written consent of the other Party (which consent may not be unreasonably withheld,
delayed or conditioned), except as may be required by applicable law, in which event the other
Party shall endeavor to give the other Party reasonable advance notice and review of any such
disclosure.
	 
	20.4	 	Further Assurances. Each of the Parties shall do, execute and perform and shall procure to be
done and perform all such further acts deeds documents and things as the other Party may
reasonably require from time to time to give full effect to the terms of this Agreement.
	 
	20.5	 	Agreement Costs. Each Party shall pay its own costs, charges and expenses incurred in
connection with the negotiation, preparation and completion of this Agreement.
	 
	20.6	 	Entire Agreement. This Agreement together with the Schedules attached hereto and the Safety
Agreement sets out the entire agreement and understanding between the Parties in respect of
the subject matter of this Agreement. It is agreed that:

	 	(a)	 	neither Party has entered into this Agreement or the Safety Agreement in
reliance upon any representation, warranty or undertaking of the other Party which is
not expressly set out in this Agreement or the Safety Agreement;
	 
	 	(b)	 	neither Party shall have any remedy in respect of misrepresentation or untrue
statement made by the other Party or for any breach of warranty which is not contained
in this Agreement or the Safety Agreement; and
	 
	 	(c)	 	this Section 20.6 shall not exclude any liability for, or remedy in respect of,
fraudulent misrepresentation.

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	20.7	 	Construction. Nothing in this Agreement shall operate to:

	 	(a)	 	exclude any provision implied into this Agreement by law and which may not be
excluded by law; or
	 
	 	(b)	 	limit or exclude any liability, right or remedy to a greater extent than is
permissible under law.

	20.8	 	Variation. No variation of this Agreement shall be valid unless it is in writing and signed
by or on behalf of both Parties.
	 
	20.9	 	Severability. If and to the extent that any provision of this Agreement is held to be
illegal, void or unenforceable, such provision shall be given no effect and shall be deemed
not to be included in this Agreement but without invalidating any of the remaining provisions
of this Agreement.
	 
	20.10	 	Waiver. No failure or delay by either Party in exercising any right or remedy provided by
law under or pursuant to this Agreement shall impair such right or remedy or operate or be
construed as a waiver or variation of it or preclude its exercise at any subsequent time and
no single or partial exercise of any such right or remedy shall preclude any other or further
exercise of it or the exercise of any other right or remedy.
	 
	20.11	 	Cumulative Rights. The rights and remedies of each of the Parties under or pursuant to this
Agreement are cumulative, may be exercised as often as such Party considers appropriate and
are in addition to its rights and remedies under general law.
	 
	20.12	 	Counterparts. This Agreement may be executed in any number of counterparts and by the
Parties on separate counterparts, each of which is an original but all of which together
constitute one and the same instrument.
	 
	20.13	 	Governing Law and Venue. This Agreement shall be governed by and construed in accordance
with the laws in effect in the Commonwealth of Pennsylvania (without reference to any
principles regarding conflicts of law) and any action brought by either Party shall be filed
in the state or federal courts located in the Commonwealth of Pennsylvania.

[The rest of this page has been left intentionally blank]

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed as of the date first
stated above.

	 	 	 	 	 
	 	SHIRE US INC.

 	 
	 	/s/ Matthew W. Emmens
 	 
	 	Name:  	Matthew W. Emmens 	 
	 	Title:  	CEO 	 
	 
	 	IMPAX LABORATORIES, INC.

 	 
	 	/s/ Barry R. Edwards
 	 
	 	Name:  	Barry R. Edwards 	 
	 	Title  	CEO 	 
	 

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Schedule I

Agreement Definitions

In this Agreement:

“Act” means United States Federal Food, Drug and Cosmetics Act, as amended from time to time, and
the rules, regulations and guidelines promulgated thereunder.

“Affiliates” means any firm, person or company which controls, is controlled by or is under common
control with a Party to this Agreement and for the purpose of this definition the term “control”
means the possession, directly or indirectly, of the power to direct or cause the direction of the
management and policies of such firm, person or company, whether through the ownership of voting
securities, by contract or otherwise or the ownership either directly or indirectly of more than
fifty percent (50%) of the voting securities of such firm, person or company.

“Agreement” means this agreement, together with its Schedules as the same may be amended from time
to time.

“Business Day” means any day other than Saturday or a Sunday on which the Banks in New York are
open for business.

“Call” means a face-to-face meeting with one or more Call Plan Physicians in an individual, group
practice or clinical setting, between a Sales Force member during which a Detail for the Shire
Product is made to a Call Plan Physician on the Call Plan and, if applicable, Shire Product samples
are offered in conformity with the Shire Product’s sampling strategy set out in Schedule 3.

“Call List” means the entire group of Call Plan Physicians.

“Call Plan Physician” means a physician who is eligible to receive a Detail and who is on the Call
List, as designated on Schedule 3.

“Call Plan” means the plan to Call the list of physicians and hospitals and the associated call
frequency for each such physician as set out in Schedule 3.

“Change of Control” means a transaction or series of related transactions, which result directly or
indirectly in the change of:

	 	(a)	 	control of more than half of the voting power of the issued share capital of
Impax; or
	 
	 	(b)	 	control of more than half of the issued share capital (excluding any part
thereof which carries no right to participate beyond a specified amount in the
distribution of either profit or capital) of Impax; or

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	 	(c)	 	control of the power to direct or cause the direction of the management and
policies of Impax, by virtue of any power conferred under the articles of association
or other documents relating to Impax.

“Claim” has the meaning given to it in Section 15.1(a).

“Competing Product” means any product that contains carbamazepine as its sole active ingredient.

“Compliance Training” has the meaning given to it in Section 4.3.

“Confidential Information” means any scientific, technical, formulation, process, manufacturing,
clinical, non-clinical, regulatory, marketing, financial or commercial information or data relating
to the business, projects, employees (including name, address and phone number, unless such
employee is converted pursuant to Article 10) or products of either Party and provided by one Party
to the other by written, oral, electronic or other means in connection with this Agreement.

“Contract Year” means the first twelve (12) month period commencing on the Detail Commencement Date
and each of the four following twelve (12) month periods commencing on the anniversary of the
Detail Commencement Date.

“CSO” means any contract sales organization retained by Impax to provide Services.

“Deployment” means the date the Sales Force commences Calls in relation to the Shire Product.

“Detail” means either a Primary Position Detail or a Secondary Position Detail.

“Detail Commencement Date” has the meaning given to it in Section 4.2.

“Effective Date” means the date of this Agreement.

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

“Extension Period” has the meaning given to it in Schedule 3.

“FDA” means Food and Drug Administration of the United States of America and any successor thereto.

“Fees” means the fees to be paid by Shire to Impax each Quarter for the performance of the Services
as set out in Schedule 5.

“Force Majeure” means any circumstances reasonably beyond a Party’s control, including, without
limitation, acts of God, civil disorders or commotions, acts of aggression, fire, explosions,
floods, drought, war, sabotage, embargo, unexpected safety or efficacy results obtained with the
Shire Product, utility failures, supplier failures, material shortages, labor disturbances, a
national health emergency, or appropriations of property.

“GAAP” means U.S. Generally Accepted Accounting Principles, consistently applied.

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“Generic Product” means a product that consists of an active ingredient that is the active
ingredient in the Shire Product, and which is submitted to the FDA for regulatory approval through
an abbreviated NDA that references the NDA for the Shire Product and is approved by the FDA as
being bioequivalent to and substitutable for the Shire Product.

“Impax Liability” has the meaning given to it in Section 15.1.

“Impax Party” has the meaning given to it in Section 15.2.

“Impax Product” means all formulations and dosages of VADOVA® (carbidopa/levadopa), subject to
approval by the FDA.

“IMS” means the International Marketing Services Prescription Reporting Service, or such other
prescription reporting service to which Impax and Shire may mutually agree to in writing.

“Incentive Compensation Plan” means a plan for providing incentive compensation to the Sales Force
members for sales of the Shire Product, such plan to contain terms and conditions as are customary
for sales representatives in the pharmaceutical industry.

“Intellectual Property Rights” means patents, trade marks, service marks, logos, get-up, trade
names, internet domain names, rights in designs, copyright (including rights in computer software)
and moral rights, database rights, semi-conductor topography rights, utility models, rights in
know-how and other intellectual property rights, in each case whether registered or unregistered
and including applications for registration, and all rights or forms of protection having
equivalent or similar effect anywhere in the world.

“IRS” means the Internal Revenue Service of the United States of America and any successor thereto.

“Law” means any laws, rules, and regulations, including any statutes, rules, regulations,
guidelines, or other requirements that may be in effect from time to time and apply to the
development, manufacture, registration, or marketing of the Shire Product in the Territory.

“NDA” means a New Drug Application and all supplements filed with the FDA, including all documents,
data and other information concerning the Shire Product which are necessary for, or included in, a
product approval to market the Shire Product in the United States of America, as more fully defined
in the Federal Food Drug and Cosmetic Act of 1934, and the rules and regulations promulgated
thereunder, as in effect from time to time.

“New Hires” has the meaning given to it in Section 4.3.

“Oversight Committee” has the meaning given to it in Section 6.1.

“Party” means either Impax or Shire (as applicable) and “Parties” means both Impax and Shire.

“PDMA” means the Prescription Drug Marketing Act 1987.

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“Primary Position Detail” means the meaningful presentation of the Shire Product to a Call Plan
Physician by a Sales Force member in which the Shire Product is the first Detail of the Call and
receives a majority of the time and focus of the Call.

“Principal Contact” has the meaning given to it in Section 6.1.

“Quarter” means the first three month period commencing on the Detail Commencement Date and each
following three (3) month period during the remainder of the Term.

“Regulatory Authority” shall mean any instrumentality, subdivision, court, administrative agency,
commission, official or other authority of the United States or any other country or any state,
province, prefect, municipality, locality or other government or political subdivision thereof, or
any quasi-governmental or private body exercising any regulatory, taxing, importing or other
governmental or quasi-governmental authority, including the FDA.

“Sales Force” means the sales representatives, each being the full time employees of Impax or
independent contractors engaged by Impax and each dedicated to the provision of the Services.

“Secondary Position Detail” means the meaningful presentation of the Shire Product to a Call Plan
Physician by a Sales Force member in which the Shire Product is presented immediately after the
presentation of the product that receives the majority of the time and focus of the Call.

“Selling Skills Training Module” means the training module provided by Shire to Impax to utilize
and to train the Sales Force.

“Services” means the marketing and promotion services for the Shire Product to be provided by Impax
to Shire through the Sales Force as set forth on Schedule 4, and in accordance with the Call Plan.

“Services Term” means the period commencing upon the Effective Date of this Agreement until the
third anniversary of the Detail Commencement Date, subject to extension at the election of Impax in
accordance with Section 4.2.

“Services Year” means the first twelve (12) month period commencing on the Detail Commencement Date
and each of the two following twelve (12) month periods commencing on the anniversary of the Detail
Commencement Date.

“Shire Benefits Plan” has the meaning given to it in Section 5.10.

“Shire Competitor” any company involved in the development, distribution or sale of pharmaceutical
products for the treatment of epilepsy and has annual sales of at least $100 million.

“Shire Materials” means any promotional, sales, marketing, training and educational materials for
the Shire Product in written, electronic or other form, to be used in connection with Services.

“Shire Liability” has the meaning given to it in Section 15.2.

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“Shire Party” has the meaning given to it in Section 5.11.

“Shire Product” means all formulations and dosages of CARBATROL® (carbamazepine) approved by the
FDA, but excluding EQUETRO®.

“Term” has the meaning given to it in Section 13.1.

“Territory” means the United States of America but excluding Puerto Rico and other U.S. territories
and possessions.

“Third Party” means any person or entity who or which are neither a Party nor an Affiliate of a
Party.

“Trademark” means U.S. Trademark Registration No. 1,975,246 for “CARBATROL”.

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Schedule 2

Form of Sales Force Agreement

EMPLOYMENT POLICIES AGREEMENT

This Employment Policies Agreement (“Agreement”) is made by and between Impax Laboratories, Inc., a
Delaware corporation with its principal place of business at 30831 Huntwood Avenue, Hayward, CA
94544 (hereinafter “Employer”) [or CSO] and                                                          
           
             (employee’s name),
(hereinafter “I” or “me”), to be effective as of                                          (date of receipt):

1.0 CONFIDENTIAL INFORMATION AND COMPANY PROPERTY

     1.1 Confidential Information.

     I acknowledge that Employer and its parents, subsidiaries, divisions and affiliates, as well
as majority-owned companies of such subsidiaries, divisions and affiliates, and their respective
predecessors and successors (hereinafter collectively, “Company”) possess certain Confidential
Information which has been and may be revealed to or learned by me during my employment with
Company. I acknowledge that the term “Confidential Information” includes all information that has
or could have commercial value or other utility relating to the Company’s Business and/or that of
its clients or the unauthorized disclosure of which could be detrimental to the interests of the
Company and/or its clients, whether or not such information is specifically identified as
Confidential Information by Company.

     1.2 Company Business.

     I acknowledge that Company’s Business includes any or all of the following: (i) providing
sales and marketing representatives on a contract basis to organizations in the pharmaceutical
and/or healthcare industry; and (ii) such other businesses as Company may enter or make preparation
to enter subsequent to the date that this Agreement is executed.

     1.3 Examples of Confidential Information.

     By way of example and not limitation, Confidential Information includes any and all
information, whether or not meeting the legal definition of a trade secret, concerning Company’s:
(i) marketing plans, business plans, strategies, forecasts, budgets, projections and costs; (ii)
information concerning the directors, officers, employees, and agents of the Company; (iii) client,
vendor and supplier lists; (iv) client, vendor and supplier needs, transaction histories, contacts,
volumes, characteristics, agreements and prices; (v) promotions, operations, sales, marketing, and
research and development; (vi) business operations, internal structures and financial affairs;
(vii) systems and procedures; (viii) pricing structure of Company’s services and products; (ix)
proposed services and products; and (x) contracts with other parties. I specifically acknowledge
that Confidential Information includes all of the information defined above belonging or relating
to clients of the Company. Confidential Information does not include information that has become
widely known to the public, except where that information has become known through the improper
disclosure by me. Notwithstanding anything to the contrary

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in this Agreement, however, Confidential Information includes any and all information that
Company is obligated to maintain as confidential.

     1.4 Patient Information as Confidential Information.

I expressly agree and acknowledge that the following described information or data that I may
obtain during the course of my employment for the Company are proprietary to the Company’s clients
and maybe legally protected under applicable federal and state law, shall be held by me in strict
confidence and, accordingly, shall not be disclosed by me to any other person or entity without the
Company’s and the Company’s client’s prior written consent and authorization, and shall be treated
as Confidential Information for purposes of this Agreement:

     (i) Information relating to the identity of any patient;

          Information relating to any services provided to any individual patient;

     (iii) Information relating to the diagnosis and treatment of any individual patient; and/or

     (iv) Information relating to any amounts charged to, or funds received from, any individual
patient or any Third Party payer with respect to any services provided to such individual patients.

I understand that any unauthorized disclosure of individually identifiable patient information
could be a violation of federal law, and could subject me to criminal penalties.

     1.5 Use of Confidential Information.

     During the term of my employment with Company and thereafter, I will not, directly or
indirectly, use or disclose to anyone, or authorize disclosure or use of, any of the Confidential
Information revealed to or learned by me during the course of my employment with Company
(regardless of the source of such information), unless such use or disclosure is both consistent
with Company’s obligations and is for the sole purpose of carrying out my duties to Company.

     1.6 Protection and Return of Company Property.

     I acknowledge that Confidential Information is essential to Company’s Business and/or to the
Company’s clients. I agree that I will not make any copies of Confidential Information or other
Company property except as authorized by Company. I agree that at the end of my employment I will
return to Company immediately any and all Company property and documents and other media containing
Confidential Information (and all copies thereof) in my possession, custody or control. Company’s
property includes but is not limited to all financial books, records, instruments and documents;
customer lists; data; reports; programs; software; hardware; tapes; rolodexes; telephone and
address books; call cards listings; credit and phone cards; programming; customer files and
records; training materials, marketing materials and books and policy manuals; and any and all
other instruments, computers and other equipment, products, literature, records and documents
recorded or stored on any medium whatsoever relating or pertaining, directly or indirectly, to
corporations, governmental entities and other

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persons and entities with whom Company has contractual relations, the services or products
provided by Company, or Company’s Business or business affairs.

2.0 NON-SOLICITATION OF EMPLOYEES

     I agree that during the term of my employment and for a period of twelve (12) months
thereafter, I shall not directly or indirectly induce any person associated with or employed by the
Company or any of its clients to leave the employ of or terminate his or her association with the
Company, or solicit the employment of any such person on either my behalf or on behalf of any other
business entity.

3.0 COMPLIANCE WITH PHARMACEUTICAL LAWS

     I agree to perform my obligations as an employee of Company in compliance with all applicable
Federal, State and local laws and regulations including without limitation, the Prescription Drug
Marketing Act of 1987 (“PDMA”) and if my job includes using samples of pharmaceutical products of
Company’s clients, to use and account for those samples as instructed by Employer and as required
by law and regulation, including without limitation the PDMA and any applicable final and proposed
FDA regulations.

4.0 ITEMS OF VALUE OFFERED TO HEALTHCARE PROFESSIONALS

     4.1. General.

     I understand that company and/or company client funds must never be allocated with strings
attached, used as a “reward” for prescribing particular products or placing them on a formulary, or
applied to cover operational expenses of healthcare professionals nor for the financial gain of
those persons receiving the funding on the benefits of the funding.

     4.2 Expenditures on Healthcare Professionals.

     I acknowledge that expenditures, such as lavish entertainment, are not consistent with either
professional ethics and applicable anti-kickback laws and regulations. Items of nominal value may
be permissible as long as they are directly related to the healthcare professional activities of
the healthcare professional involved and they have been previously approved for distribution by the
Company in consultation with the relevant client. However, even an item related to patient care may
be inappropriate because of its cost. Attached to this Agreement as Schedule A are some examples
you have given me of permissible expenditures and of unacceptable expenditures. I understand that
if I have any question with respect to a particular social event or gift, I should discuss this
with my Manager.

     4.3 Government Healthcare Professionals.

     Federal government employees, including physicians at Veterans Administration hospitals, and
many state employees may not accept an item of value of any kind from or on behalf of companies,
such as the Company, whose products or services they use.

Federal, State and Private Restrictions.

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     Federal law and the laws of some states prohibit or severely restrict giving any items of
value to healthcare professionals. In addition, PhRMA, the American Medical Association, some
managed care organizations and some other private associations have adopted ethical rules and
similar restrictions on healthcare professionals receiving items of value. I understand that I must
be careful to observe all applicable limits. If I have any questions, I will consult with my
Manager.

NO ALTERATION OF MARKETING MATERIALS

     I understand and agree that I am not permitted to make any change, abbreviation or other
modification of or to any marketing materials provided to me concerning any pharmaceutical product
or any medical device which I have been assigned to detail to healthcare professionals or otherwise
to market. I further understand and agree that I may not use any marketing materials in connection
with detailing or otherwise marketing any pharmaceutical product or medical device other than
marketing materials provided to me by the Company. I acknowledge that any action of mine contrary
to my agreements may be a violation of Federal and/or state law and may expose me to criminal
sanctions and/or civil liability. If I have any question about any statement or omission in any
marketing materials, I will promptly bring that question to the attention of my Manager.

6.0 ACCESS BY COMPANY TO EMPLOYEE COMMUNICATIONS AND WORK AREA

     I agree and consent that, during the term of my employment with Company and thereafter,
Company may review, audit, intercept, access and disclose all messages created, received or sent
over the electronic mail and internet access, or disclosure may occur during or after working
hours. I further consent and agree that Company may, at any time, access and review the contents of
all computers, computers disks, other data storage equipment and devices, files, desks, drawers,
closets, cabinets and work stations which are either on Company’s premises or which are owned or
provided by Company.

7.0 INDEPENDENT FROM CLIENTS

     I agree that (i) I have no authority to act for or represent any client of Company in any way
except as expressly authorized by Employer; (ii) I am not and shall not be deemed to be an employee
or agent of any client of Company for any purpose (and I may not hold myself out as an agent of any
client of Company), including federal, state and local tax purposes, and (iii) I am not eligible to
participate in, and shall not be entitled to participate in, any pension, profit sharing or other
“employee benefit plan” of any client of Company, as such term is defined in section 3(3) of ERISA,
even if I am subsequently determined by any court, the Internal Revenue Service or any other
governmental agency to be a common law employee of that client.

8.0 AT WILL EMPLOYMENT

     In consideration for my agreements here, Company agrees to extend an offer of at-will
employment to me or to continue my at-will employment. My employment can be terminated with or
without cause by me or by Company at any time. Nothing contained in this Agreement will limit or
otherwise alter the foregoing, except that as additional consideration for entering

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into this Agreement, Company agrees to provide ten (10) days’ pay in lieu of notice unless
such termination is for cause. If termination is for cause, no notice or pay in lieu of notice is
required. Further consideration for this Agreement is provided by Company’s disclosure of such
Confidential Information to me as is necessary for the performance of my duties.

9.0 INTERPRETATION OF AGREEMENT

     9.1 Continuation Obligations.

     Wherever this Agreement contemplates that I will have an obligation or restriction at or after
the term of my employment with Company, I agree that that obligation or restriction will exist
without regard to which party to the Agreement terminates the employment relationship, and without
regard for the reason (or lack thereof) for the termination of the employment relationship.

     9.2 Entire Agreement.

     Employer and I agree that this Agreement constitutes the entire understanding and agreement of
Company and me with respect to the subject matter of this Agreement, and supersedes all prior and
contemporaneous agreements or understandings, inducements or conditions, express or implied,
written or oral, between Company and me.

     9.3 Severability.

     Company and I agree that if any provision of this Agreement, or the application thereof, will
for any reason and to any extent be invalid or unenforceable, such provision will be deemed
severable and the remainder of this Agreement will remain valid and fully enforceable.

10.0 ENFORCEMENT OF AGREEMENT

     10.1 Breach Will Cause Irreparable Harm.

     I agree that if I engage in any activities prohibited by this Agreement or fail to take
actions required by this Agreement, irreparable harm to Company will likely result, for which a
remedy in the form of damages may not be adequate or otherwise ascertainable. Consequently, Company
will be entitled to temporary, preliminary and permanent injunctive relief against me. This section
will not limit any other legal or equitable remedies that Company may have against me for
violations of these restrictions.

     10.2 Attorneys’ Fees.

     Company and I agree that, in any lawsuit for breach of this Agreement, the prevailing party
will be entitled to recover its/his/her reasonable attorneys’ fees and costs, including expert
witness fees, unless there is an express determination by the court that the nonprevailing party’s
position was substantially justified.

11.0 GENERAL

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     11.1 Policies of Company Clients. I agree that I will promptly read any specific policy of a
Client of the Company (including any amendment or restatement of that policy), which is provided to
me in writing by the company. I will further promptly make certain that I understand the policy of
the Company client, including asking any questions I might have about the meaning or scope of the
policy. I will comply with each client policy to the extent it is more restrictive that what is
provided in this Employment Policies Agreement, so long as such policies are given to me in writing
by the Company in advance. I agree and understand that, if I fail to comply with a Client written
policy given to me in a timely fashion, I may be subject to disciplinary action by the Company,
including termination of employment.

     11.2 Successors and Assigns.

     Company and I agree that this Agreement will be binding upon and inure to the benefit of
Company, its successors and assigns. This Agreement may be assigned in whole or in part by Employer
to a successor to all or substantially all of the business or assets of Employer; or to any
division or part of Employer; or to any subsidiary, affiliate or division; or to any entity which
is majority-owned by Employer or its subsidiaries, divisions or affiliates.

     11.3 Waiver In Writing.

     Employer and I agree that any term or provision of this Agreement may only be amended or
waived by a writing signed by an officer of Employer and by me. The failure of either party to
enforce any of the provisions in this Agreement will not be construed to be a waiver of the right
of that party to enforce such provision thereafter.

     11.4 Agreement Not Confidential.

     I agree that this Agreement is not confidential, and that Company may, during the term of my
employment with Company and thereafter, provide copies of this Agreement to others, including
persons or entities which may employ, do business with, or consider employing or doing business
with me in the future.

     11.5 Employee Review; Right to Consult Counsel.

     By my signature below, I acknowledge that I (i) have had sufficient opportunity to read each
provision of this Agreement and understand each provision, (ii) have had an opportunity to review
the Agreement with legal counsel of my choice, (iii) am not under duress and (iv) am not relying on
any representations or promises that are not set forth in the Agreement.

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Schedule 3

Call Plan

Subject to the provisions of Article III of Schedule 5 of this Agreement, Impax shall cause the
Sales Force to perform at least 46,200 Primary Detail Equivalents (“PDEs”) during each Services
Year. To the extent Impax elects to extend the Services Term beyond the scheduled expiration of the
third Services Year to June 30, 2009 (the “Extension Period”), Impax shall cause the Sales Force to
perform a prorated number of PDEs for the Extension Period.

One
Primary Position Detail shall count as a single PDE, and two and
one-half Secondary Position Details shall
also count as a single PDE.

The neurologists and any other physicians who shall comprise the Call Plan Physicians shall be
determined in the manner set forth in the following paragraph. The Party(ies) with the right to
determine the designations of the Call Plan Physicians in the following paragraph shall also have
the right to amend such designations from time to time.

Shire shall identify, in its sole discretion, epilepsy-focused physicians (each, an “Epilepsy
Physician”) to be included as Call Plan Physicians. Impax shall identify, in its sole discretion,
Parkinson’s Disease-focused physicians (each, a “PD Physician”) to be included as Call Plan
Physicians. Call Plan Physicians who are both Epilepsy Physicians and PD Physicians shall instead
be considered “Dual-Focused Physicians”. Impax may carry out (a) only Primary Position Details with
respect to Epilepsy Physicians, (b) only Secondary Position Details with respect to PD Physicians,
and (c) either Primary Position Details or Secondary Position Details with respect to Dual-Focused
Physicians.

The Parties shall determine the Call List in accordance with the preceding paragraph within 30 days
of execution of this Agreement.

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Schedule 4

Services

Impax shall provide the following Services at its sole expense:

Implementation Services

	 	•	 	Recruit the Sales Force and, subject to Section 3.1 of this Agreement, arrange for
the Sales Force to be trained by Shire with respect to conducting Calls for the Shire
Product.
	 
	 	•	 	Develop relevant implementation and monitoring procedures as required under this
Agreement and for the conduct of Call Plan activities.
	 
	 	•	 	Establish and maintain Call activity reporting in accordance with the terms of this
Agreement.

Deployment Services

	 	•	 	Deploy at least sixty-six (66) full time employees (“FTEs”) as Sales Force members
dedicating their full business time to undertake Call Plan activities.
	 
	 	•	 	Deploy a reasonable number of dedicated regional coordinators (but in any event each
coordinator shall not supervise more than eleven (11) Sales Force members) and a
dedicated Project Director to oversee and manage the Sales Force and its Call Plan
activities, it being understood that Impax will employ a National Sales Director who
shall be responsible for the management of both the Impax Product and Shire Product.
The personnel reference in the preceding clause shall not be counted as FTEs.
	 
	 	•	 	Replace Sales Force members, regional coordinators, the Project Manager or the
Project Director as and when necessary.
	 
	 	•	 	Arrange for the Sales Force (or new Sales Force recruits) to be receive further
training by Shire as provided under the terms of this Agreement.
	 
	 	•	 	Provide storage for samples of Shire Product as necessary, and audits of samples of
Shire Product as requested by Shire from time to time.
	 
	 	•	 	Provide all necessary Sales Force equipment including handhelds, and laptop
computers as reasonably necessary for the conduct of the Services.
	 
	 	•	 	Reimbursement of all Sales Force business expenses, such as meals, travel and
entertainment, consistent with the policies of Impax or CSO.

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Call Plan Services

	 	•	 	Visit physicians and healthcare professionals, making Calls on such individuals in
accordance with the Call Plan.
	 
	 	•	 	Distribution of promotional materials and samples for the Shire Product in
accordance with the terms of this Agreement and the Call Plan.
	 
	 	•	 	Storage of Shire Product samples as agreed between the Parties.
	 
	 	•	 	Such other Services as are agreed under this Agreement or between the Parties in
writing from time to time.

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Schedule 5

Fees and Financial Terms

The Parties shall make the following payments set forth in this Schedule 5. All amounts are in U.S.
dollars.

	I.	 	FEES

     A. Fees for Gain Share Arrangement. With respect to each Quarter of the Term commencing July
1, 2006, Shire shall pay to Impax the amount set forth below (the “Gain Share Fees”) for each
prescription, as measured by IMS (“Prescription”), filled in the Territory for the Shire Product in
excess of 234,500:

	 	 	 
	Time Period	 	Amount per Prescription Filled
	Each Quarter from July 1, 2006 through June
30, 2009

	 	$20
	 
	 	 
	Each Quarter from July 1, 2009 through June
30, 2011

	 	$10

In
addition, in the event greater than an aggregate of 669,000 Prescriptions are filled in the
Territory for the Shire Product during the period from January 1, 2009 through June 30, 2009, Shire
shall pay to Impax an additional one-time payment of $5 million (the “Year 3 Bonus”).

In the event Shire is unable to supply the Shire Product in (i) sufficient quantities such that
there is a commercially meaningful backorder in the Territory for the Shire Product for two
consecutive Quarters and (ii) an amount equal to the number of Prescriptions filled in the
Territory for the Shire Product for the two immediately preceding consecutive Quarters (the two
Quarters referenced in clause (i), the “Unsupplied Quarters”) during the period from July 1, 2006
through June 30, 2009, then Shire shall pay to Impax the Year 3 Bonus at such time as such payment
would otherwise have been due if and only if: (i) the number of Prescriptions filled in the
Territory for the Shire Product increased in the aggregate over the four Quarters immediately
preceding the Unsupplied Quarters, or any such quarters if there are less than four Quarters
preceding the Unsupplied Quarters, (the “Reference Quarters”), and (ii) taking the average
Quarter-to-Quarter percentage increase during the Reference Quarters and applying such percentage
increase to each Quarter commencing with the Unsupplied Quarters, the number of prescriptions
filled in the Territory for the Shire Product for the period from January 1, 2009 through June 30,
2009 is reasonably forecasted to be at least 669,000. Payment of the FTE fees shall not be affected
by Shire’s inability to manufacture the Shire Product.

In the event of Unsupplied Quarters, the Parties shall meet to discuss the adjustment to the
calculation of the Gain Share Fees, including a reduction to the baseline, in order to provide
Impax with the same incentives in place during the period prior to the Unsupplied Quarters. If the
Parties are unable to agree to the adjustment, either Party shall have the right to take this issue
related to the adjustment to binding arbitration, consistent with the rules of the American
Arbitration Association, provided that it has given the other Party thirty (30) days’ advance
notice of its intention to take the issue to arbitration.

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In the event a Generic Product is launched, or a Competing Product is launched by Shire, in the
Territory during the Services Term, the number of Prescriptions of such Generic Product and/or of
any Competing Product launched by Shire shall be considered Prescriptions for the Shire Product in
calculating the Gain Share Fees, provided, for clarity, that such calculation shall not include any
Prescriptions of any Authorized Generic Product distributed by Impax.

     B. FTE Fees. Shire shall pay to Impax an amount for each Sales Force member, up to a
maximum of sixty-six (66) Sales Force members (prorated for employment of a Sales Force member for
partial Service Years), at the rate of $200,000 per Services Year, plus a prorated amount for the
Extension Period, if any. Impax may in its sole discretion employ or retain Sales Force members in
excess of such maximum number, it being acknowledged and agreed, however that Shire shall have no
obligation to pay to Impax any amounts with respect to more than sixty-six (66) Sales Force
members.

	II.	 	AUTHORIZATION OF GENERIC

     
In the event a Generic Product is launched in the Territory during the Services Term, Shire
shall either (i) pay to Impax the Year 3 Bonus at such time as such payment would otherwise have
been due, or (ii) grant Impax the right to promote the Authorized Generic Product in the Territory
pursuant to the terms of a Supply Agreement to be entered into between the Parties and having such
terms as a mutually acceptable and commercially reasonable commensurate with those standard in the
industry for supply agreements under similar circumstances. Under such supply agreement the
authorized Generic Product shall be supplied by Shire to Impax for the unexpired term of the
Services Term. The purchase price for the authorized Generic Product
shall be Shire’s reasonable out-of-pocket direct manufacturing
costs plus ten percent (10%). For purposes
of this Section II, “Authorized Generic Product” shall mean generically labeled Shire Product
approved for sale by the FDA pursuant to a labeling supplement to Shire’s NDA for the Shire
Product. Payment of the FTE fees shall not be affected by the launch of a Generic Product.

     
Shire’s ability to grant Impax the right to promote the Authorized Generic Product above shall
be conditioned on Shire’s ability to provide reasonably adequate quantities of such product for
launch at or prior to the Third Party launch of the Generic Product, and Impax’s acceptance of such
quantity as being reasonably adequate. If Impax does not accept the quantity as being reasonably
adequate, Shire shall pay to Impax the Year 3 Bonus at such time as such payment would otherwise
have been due.

	III.	 	SHORTFALL REIMBURSEMENTS

     
In the event Impax fails to perform at least 11,550 PDEs during any Quarter of any Services
Year (the number of the shortfall, the “Shortfall PDEs”) and fails to perform all of the Shortfall
PDEs by the expiration of the second Quarter following the Quarter in which the Shortfall PDEs
occurred, then Impax shall pay to Shire an amount equal to $286 for each Shortfall PDE that
remains unperformed upon the expiration of such second Quarter; provided, that Impax may also apply
up to 1,155 PDEs from the immediately preceding Quarter in excess of
11,550 PDEs from such preceding
Quarter to reduce the Shortfall PDEs. For clarification purposes, a PDE can only be counted once
towards achieving the 11,550 PDEs required for any Quarter. In the event of any Shortfall PDEs with
respect to either of the final

2

 

two Quarters of the third and final Services Year, Impax shall have the right to perform
Services to reduce such Shortfall PDEs during the first two Quarters immediately following the
third Services Year; provided, that Shire shall have no obligation to make any payments to Impax
with respect to such Services other than as may be owed to Impax as FTE fees for any Extension
Period. Impax’s repayment of $286 for each Shortfall
PDE shall be Shire’s sole remedy with respect
to each Shortfall PDE.

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Schedule 6

CARBATROL® SAFETY AGREEMENT

DATE: As of January 19, 2006

PARTIES:

	(1)	 	SHIRE US INC., having its place of business at 725 Chesterbrook Boulevard, Wayne, PA
19087-5637 (“Shire”)
	 
	(2)	 	IMPAX LABORATORIES, INC., having its place of business at 30831 Huntwood Avenue, Hayward, CA
94544 (“Impax”).
	 
	 	 	RECITALS
	 
	(A)	 	With effect from January 19, 2006, Shire and Impax entered into a Promotional Services
Agreement (the “Promotional Agreement”) with respect to the promotion of the Shire Product (as
defined below) in the Territory (as defined below).
	 
	(B)	 	Pursuant to the terms of the Promotional Agreement, the Parties are obligated to enter into
this Agreement to provide for the Parties’ respective obligations in relation to medical
information and pharmacovigilance services for the Shire Product.
	 
	(C)	 	In consideration of the above recitals and the mutual promises, covenants and obligations as
set out in this Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which is acknowledged, and intending to be legally bound, the Parties agree as
follows.
	 
	 	 	OPERATIVE PROVISIONS
	 
	1	 	INTERPRETATION

	 	1.1	 	In this Agreement:
	 
	 	 	 	“Adverse Event” means any untoward medical occurrence in a patient or clinical investigator
subject administered the Shire Product and which does not necessarily have a causal
relationship with this treatment for which the Shire Product is used. An adverse event can
therefore be any unfavorable and unintended sign (including an abnormal laboratory finding),
symptom, or disease temporally associated with the use of a medicinal (investigational)
product, whether or not related to the Shire Product. A pre-existing condition that worsened
in severity after administration of the Product would be considered an adverse event.
	 
	 	 	 	“Awareness Date” or “Clock Date” means the date on which a Party first becomes aware of an
Adverse Event or a Suspected Adverse Drug Reaction and, in relation to a third party
Representative of a Party, such as clinical research organizations or distributors, that
have contractual and/or regulatory obligations to report Adverse Events or a Suspected
Adverse Drug Reaction to that Party, the date on which such Third Parties

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	 	 	 	first become aware of that Adverse Event or a Suspected Adverse Drug Reaction. For both
Parties this is considered day zero.

	 	 	 	“Business Day” means a day (other than a Saturday or Sunday) on which banks are open for
business.
	 
	 	 	 	“Confidential Information” has the meaning given to it in the Promotional Agreement.
	 
	 	 	 	“Promotional Agreement” has the meaning given to it in Recital (A).
	 
	 	 	 	“Effective Date” has the meaning given to it in the Promotional Agreement.
	 
	 	 	 	“Marketing Authorization” means any authorization granted by a Regulatory Authority required
to permit the commercial marketing and sale of the Shire Product in the Territory.
	 
	 	 	 	“Medical Information” means information about the Shire Product including, but not limited
to, clinical and technical matters such as therapeutic uses for both the licensed and
unlicensed indications, drug interactions, drug-disease information, Adverse Events, product
stability and other product characteristics.
	 
	 	 	 	“Periodic Safety Report” means a safety report generated at set times and in accordance with
FDA guidelines for the purpose of demonstrating the current risk/benefit analysis of the
Shire Product according to present knowledge and produced to provide a historical
perspective on the safety issues surrounding the Shire Product.
	 
	 	 	 	“Shire Product” has the meaning given to it in the Promotional Agreement.
	 
	 	 	 	“Reference Safety Information” means the recognized Adverse Reactions to the Shire Product
contained in all or any one of Shire’s Developmental Core Safety Information (DCSI) in an
investigator’s brochure, Shire’s Company Core Safety Information (CCSI) in a marketed
product Company Core Data Sheet (CCDS) and Shire’s official local product labeling
(including the local Summary of Product Characteristics (SPC)).
	 
	 	 	 	“Regulatory Approval” means the granting of all necessary regulatory and governmental
approvals by a regulatory or other governmental body required to market and sell the Shire
Product in the Territory.
	 
	 	 	 	“Regulatory Authority” means any competent regulatory authority or other governmental body
responsible for granting any Regulatory Approval.
	 
	 	 	 	“Representatives” means the directors, officers, employees, agents and advisors of each of
the Parties or their respective Affiliates.
	 
	 	 	 	“Safety Issue” means any event, report, data or information, which could cause a
re-evaluation of the safety of the Shire Product including, but not limited to, Suspected
Adverse Drug Reaction and Unexpected Suspected Adverse Drug Reaction.

2

 

	 	 	 	“Serious Adverse Event” means any Adverse Event in relation to any dose of the administered
Product that:

A. results in death;

B. is life threatening;

C. requires in-patient hospitalization or prolongation of existing hospitalization;

D. results in persistent or significant disability or incapacity; or

E. is a congenital anomaly or birth defect.

	 	 	 	Medical and scientific judgment should be exercised in deciding whether expedited reporting
for the Shire Product is appropriate in other situations, such as medically important events
that may not be immediately life-threatening or result in death or hospitalization but may
jeopardize the patient or may require intervention to prevent one of the other outcomes
listed above. These should also usually be considered as Serious Adverse Events.
	 
	 	 	 	“Serious Suspected Adverse Drug Reaction” means any Suspected Adverse Drug Reaction in
relation to any dose of the administered Shire Product that:

F. results in death;

G. is life threatening;

H. requires in-patient hospitalization or prolongation of existing hospitalization;

I. results in persistent or significant disability or incapacity; or

J. is a congenital anomaly or birth defect.

	 	 	 	Medical and scientific judgment should be exercised in deciding whether expedited reporting
for the Shire Product is appropriate in other situations, such as medically important events
that may not be immediately life-threatening or result in death or hospitalization but may
jeopardize the patient or may require intervention to prevent one of the other outcomes
listed above. These should also usually be considered as Serious Suspected Adverse Drug
Reactions.
	 
	 	 	 	“Signal” means an unexpected observation of an event in relation to treatment with the Shire
Product which deviates so much from expectations that it calls for immediate and greater
attention, including (but not limited to) unlabelled Suspected Adverse Drug Reactions,
increased frequency or severity of labelled Suspected Adverse Drug Reactions and any change
in the risk/benefit/profile of the Shire Product.

3

 

	 	 	 	“Spontaneous Report” means a communication from an individual (e.g., a health care
professional, consumer) to a company or regulatory authority that describes a Suspected
Adverse Drug Reaction or medication error. It does not include cases identified from
information solicited by the applicant or contractor, such as individual case safety reports
or findings derived from a study, company-sponsored patient support program, disease
management program, patient registry, including pregnancy registries, or any organized data
collection scheme. It also does not include information compiled in support of class action
lawsuits.
	 
	 	 	 	“Suspected Adverse Drug Reaction” means a noxious and unintended response to any dose of the
Shire Product for which there is a reasonable possibility that the Shire Product caused the
response. In this definition, the phrase “a reasonable possibility” means that the
relationship cannot be ruled out.
	 
	 	 	 	“Term” means the term of this Agreement commencing on the Effective Date and expiring on the
date set out in Section 14 hereof.
	 
	 	 	 	“Territory” has the meaning given to it in the Promotional Agreement.
	 
	 	 	 	“Unexpected Suspected Adverse Drug Reaction” means any Suspected Adverse Drug Reaction that
is not included in the current U.S. labeling for the Shire Product.
	 
	 	 	 	“Valid Safety Reports” means the minimum information required for expedited reporting which
should at least include all of the following:

          A. an identifiable patient;

          B. a suspected medicinal product or therapeutic device;

          C. an identifiable reporter; and

          D. a Suspected Adverse Drug Reaction or an Adverse Event.

	 	1.2	 	In this Agreement, unless the context otherwise requires:

A. references to “persons” includes individuals, bodies corporate (wherever
incorporated), unincorporated associations and partnerships;

B. reference to a “Party” is to a Party to this Agreement and “Parties” is to both
of them;

C. the headings are inserted for convenience only and do not affect the construction
of the Agreement;

D. references to one gender includes both genders; and

4

 

E. any reference to an enactment or statutory provision is a reference to it as it
may have been, or may from time to time be amended, modified, consolidated or
re-enacted.

	 	1.3	 	The Schedules comprise part of and shall be construed in accordance with the terms of
this Agreement. In the event of any inconsistency between the Schedules and the terms of
this Agreement, the terms of this Agreement shall prevail.
	 
	 	1.4	 	Terms used in this Agreement, which are not otherwise defined within the Agreement or
the Promotional Agreement shall have the meaning given to them in accordance with FDA
Guidelines and
	 
	 	 	 	Shire Standard Operating Procedures (SOPs). In the event of any conflict between Shire’s
SOP’s and FDA guidelines, FDA guidelines shall prevail.

	2	 	PURPOSE

	 	2.1	 	In consideration of the mutual obligations contained in this Agreement, the Parties
have agreed to provide for the procedures relating to the exchange of safety and
pharmacovigilance information for the Shire Product between Shire and Impax in order to
comply with worldwide regulatory reporting requirements for the Shire Product.
	 
	 	2.2	 	As between Shire and Impax, Shire shall have sole responsibility, and Impax shall have
no responsibility, for:

	 	A.	 	Compliance with all Regulatory Authority reporting requirements related to
Adverse Events and Suspected Adverse Drug Reactions, including but not limited to FDA
requirements, Periodic Safety Reports, 15-day safety reports and MedWatch reports.
	 
	 	B.	 	Except to the extent required by law, responding to Third Parties, whether
governmental or private, regarding complaints, notices and inquiries as to Adverse
Events, Suspected Adverse Drug Reactions, or data, documents or reports related to any
of them. Impax shall refer all drug safety and pharmacovigilance related queries from
healthcare providers or their staff, or any Third Party (as such terms is defined in
the Promotional Agreement) in relation to the Shire Product arising in the context of
Impax’s activities pursuant to the Promotional Agreement. The Shire contact to receive
this information is identified in 11.1 of this agreement as the “Appointed Medical
Information Contact”.

	 	2.3	 	Except as specifically set forth in paragraph 2.2 above, Impax’s sole responsibilities
pursuant to this Agreement shall be to:

	 	A.	 	Ensure that there is a mechanism available during normal business hours to
receive notices regarding any safety issue under this Agreement;

5

 

	 	B.	 	Handle all telephone calls and other communications that it may receive
regarding Adverse Events and/or Suspected Adverse Drug Reactions in accordance with the
terms of this Agreement;
	 
	 	C.	 	Inform Shire as soon as possible of any communications of any kind received by
Impax from any Regulatory Authority involving safety issues in relation to the Shire
Product in the Territory; to the extent permitted by law, the Regulatory Authority
shall be referred to Shire for response. To the extent that Impax is required by law to
respond, Impax shall, if there is time to do so, submit its response to Shire before
submitting it to the Regulatory Authority. Shire will provide Impax with safety data
required to respond to a Regulatory Authority request and written approval of and/or
comments on such response within a timeframe sufficient to meet any deadlines imposed
by the requesting Regulatory Authority. Impax shall, to the extent possible, conform
its response to comments timely received from Shire; however, Impax reserves the right
to exercise final control over its response to Regulatory Agency communications
directed to, and requiring a response from, Impax, to the extent required by Impax, in
its sole judgment, in order to maintain Impax’s compliance with all applicable legal
requirements. Impax shall, to the extent permitted by law, cooperate fully with Shire
and keep Shire fully informed as to Regulatory Agency requests received by Impax within
the scope of this paragraph and Impax responses.
	 
	 	D.	 	Promptly inform Shire in the event that, at any time, Impax identifies
potential safety issues in relation to the Shire Product and will provide such further
assistance as Shire and Impax shall agree.
	 
	 	E.	 	Submit to an audit by Shire on a “for cause” basis concerning Pharmacovigilance
and adverse event collection and reporting in line with FDA regulations, in accordance
with Section 10.2. below and the terms of this Agreement.

	3	 	SCOPE

	 	3.1	 	This Agreement covers:

	 	A.	 	all Spontaneous Reports of Adverse Events and Suspected Adverse Drug Reactions
in relation to the Shire Product;
	 
	 	B.	 	all Serious Suspected Adverse Drug Reactions arising from post-marketing
surveillance with the Shire Product;
	 
	 	C.	 	all information required for periodic reporting in relation to the Shire
Product;
	 
	 	D.	 	all other information as required by Regulatory Authorities for the Shire
Product; and
	 
	 	E.	 	the provision of Medical Information to support third party inquiries.

	4	 	LANGUAGE OF ALL EXCHANGE AND TERMINOLOGY

6

 

	 	4.1	 	The language of all information exchanged pursuant to this Agreement, including reports to
Regulatory Authorities, shall (unless specifically stated otherwise) be in English, or if any
other language, accompanied by a translation into English. In the event of any conflict
between the English text and the text in any other language, the English text shall prevail.

	5	 	CONTACT PERSONNEL AND METHODS FOR ADVERSE EVENT TRANSMISSION

	 	5.1	 	The names and details of contact personnel for Shire and Impax are detailed in Schedule
1.
	 
	 	5.2	 	Any changes in names or details of any of the contact personnel for a Party in relation
to the Shire Product must be notified by that Party to the other Party in writing to the
address set out in Schedule 1 as soon as reasonably practicable after the change occurs.
	 
	 	5.3	 	Any notice given under this Agreement shall be in writing and (i) personally delivered
or (ii) sent by fax or (iii) e-mail to the address of the other Party as set out in
Schedule 1 (or such other address as may have been notified in writing from time to time by
a Party to the other Party) and any such notice shall be deemed to have been served at the
time of delivery (if personally delivered) or upon receipt of confirmation of transmission
by the sender’s fax machine (if sent by fax) and in the case of email upon receipt of
delivery confirmation by the sender’s computer (if sent by e-mail).

	6	 	SAFETY DATABASE

	 	6.1	 	The safety information generated pursuant to this Agreement shall be added to the
safety database for the Shire Product and shall be held and maintained by Shire and shall
be the central repository for all drug safety information received worldwide for the Shire
Product.
	 
	 	6.2	 	Impax acknowledges and agrees that all rights in and to the safety database shall vest
in Shire.
	 
	 	6.3	 	The safety database shall be used for all drug safety and pharmacovigilance regulatory
responses and purposes for the Shire Product.
	 
	 	6.4	 	Impax may reasonably request safety information from Shire’s safety database to provide
a response to answer any drug safety and pharmacovigilance related queries in relation to
the Shire Product. Shire will provide the information within a reasonable timeline
according to the urgency of request.
	 
	 	6.5	 	With the exception of FDA exchange, which may be implemented at some future point in
time, and except as otherwise set forth herein, Impax shall not have direct access to the
safety database for security and data privacy reasons.

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	7	 	EXCHANGE OF ADVERSE EVENT AND SUSPECTED ADVERSE DRUG REACTION INFORMATION

	 	7.1	 	All notification and response periods referred to in this Agreement (unless otherwise
specified) will be in calendar days in accordance with FDA regulations.
	 
	 	7.2	 	The relevant period for any notification or response for either Party (including their
Representatives) will commence on the Awareness Date.
	 
	 	7.3	 	Impax will attempt to warm transfer all Adverse Event and Suspected Adverse Drug
Reactions calls to Shire at (888) 300-6414 at the time of receipt. Prior to transferring
the call, Impax staff will obtain a name and contact number. If the warm transfer is not
successful, Impax will fax the caller’s name and contact information to Shire’s
Pharmacovigilance Department at (866) 557-4473 within one Business Day of receipt. Shire
will be responsible for the intake of the Adverse Events and Suspected Adverse Drug
Reactions and preparing MedWatch reports for any Adverse Reaction occurring. All written
Adverse Events and Suspected Adverse Drug Reactions received by Impax will be forwarded to
Shire within two Business Days of receipt.
	 
	 	7.4	 	Shire shall ensure that there is a mechanism available 24-hour/7 days per week to
receive notices for any safety issue under this Agreement.
	 
	 	7.5	 	Upon receipt of any report from Impax under Section 7.3, Shire will notify Impax of
receipt of the report as soon as possible; however in no event longer than two Business
Days thereafter. Any report from is considered transmitted only after an acknowledgement of
receipt is received from Shire.
	 
	 	7.6	 	Shire will provide written reports to the FDA meeting all 15-day safety report and
periodic/PSUR regulated timelines.
	 
	 	7.7	 	No later than the 15th day of each month, Shire will provide a line listing including
reported term, manufacturing number, demographics and a narrative for each report received
from Impax the previous month.

	 	 	Reports received from Literature Reviews

	 	7.8	 	Shire will be responsible for monitoring the worldwide scientific literature to meet
global regulatory reporting requirements and for monitoring drug safety for the Shire
Product. Once an Adverse Event or a Suspected Adverse Drug Reaction has been identified,
Shire will assess it according to seriousness and where appropriate report it as a
literature report quoting the reference for the article for onward reporting to the
appropriate Regulatory Authority in the Territory.

	 	 	Management of Follow up information
	 
	 	 	Follow up of initial reports

8

 

	 	7.9	 	Shire shall be responsible for all follow-up activities for any Adverse Events
occurring in the Territory.
	 
	 	7.10	 	Impax shall notify Shire of any additional information it reasonably requires regarding
an Adverse Event occurring in the Territory that Shire has notified it of pursuant to this
Section 7 and Shire will use its reasonable endeavors to obtain the additional information
within the applicable timeframe.

	8	 	ASSESSMENT OF ADVERSE EVENTS
	 
	 	 	Assessment of Listedness (Expectedness)

	 	8.1	 	All Adverse Events and Suspected Adverse Drug Reactions will be reported to Shire
irrespective of any assessment regarding listedness (expectedness).
	 
	 	8.2	 	Shire shall be responsible for assessing all Adverse Events and Suspected Adverse Drug
Reactions in the Territory and shall determine if any report is required to be made to the
Regulatory Authorities in accordance with Section 10.

	9	 	SAFETY ISSUES/SIGNALS AND REGULATORY INQUIRIES INVOLVING SAFETY ISSUES

	 	8.3	 	Shire shall, within 24 hours of it becoming aware, notify Impax of any significant safety
issues other than individual ADRs referenced in Section 7 in relation to the Shire Product.
Shire and Impax shall discuss in good faith how to deal with any such significant safety
issues and shall co-operate with the reasonable requests of the other Party in relation to
such issues. Significant safety issues relating to the Shire Product may occur as a result of
a request from a Regulatory Authority; potential changes in the risk/benefit of the Shire
Product; Shire Product quality issues that may have a clinical impact such as Shire Product
contamination or deterioration; external influences such as media or literature and ongoing
safety surveillance.
	 
	 	8.4	 	Shire is responsible for the maintenance of labeling changes and will notify Impax of all
changes.
	 
	 	8.5	 	Should Shire become aware of any potential safety signal, Shire shall promptly notify Impax.

	10	 	REGULATORY AUTHORITY INTERACTION
	 
	 	 	Expedited Reporting Responsibilities

	 	10.1	 	Subject to Sections 7.8 to 7.9, Shire will be responsible for assessing the
“reportability” and submitting reports of Serious Suspected Adverse Drug Reactions for the
Shire Product (according to current FDA regulations) to the relevant Regulatory
Authorities.

9

 

	 	10.2	 	Either Party may request an audit of the other Party on a “for cause” basis, and at
least 2 weeks notice will be provided before the audit request date. An audit will not be
conducted more than twice a year unless serious compliance issues have been identified in
previous audits. The audit will be for Pharmacovigilance and concentrate on adverse event
collection and reporting in line with FDA regulations and in compliance with each company’s
standard operating procedures. Any audit shall be conducted so as to not interfere with the
other Party’s business operations and the costs of any such audit shall be borne by the
party conducting the audit.

	 	 	Periodic Reporting

	 	10.3	 	Shire shall prepare and submit to the FDA, with a copy to Impax, the Periodic Safety
Report for the Shire Product in the Territory, according to its internal standard operating
procedures and in the format as detailed in 21 CFR 314. The periodicity of the Periodic
Safety Report will be according to the International Birth Date of the Shire Product.
	 
	 	10.4	 	Shire will provide Impax with a copy of each final Periodic Safety Report within 10
Business Days of the submitted Periodic Safety Report to the FDA in accordance to
regulatory timelines for submission.
	 
	 	10.5	 	Prior to regulatory submission, there should be discussion between the Parties to
promote harmonization and co-ordination if any safety signals or proposed amendments to the
Reference Safety Information are recommended. However, this must be achieved within the
applicable regulatory timeframe.

	11	 	MEDICAL INFORMATION/QUESTIONS

	 	11.1	 	Impax shall transfer all Medical Information inquiries received from third Parties in
the Territory regarding the Shire Product to the person or persons specified in Schedule 1
(“Appointed Medical Information Contact”).
	 
	 	11.2	 	If the inquiry is a request for information in connection with a report of an Adverse
Event or Suspected Adverse Drug Reaction, Impax shall confirm to the Appointed Medical
Information Contact that the report has been notified to Shire in accordance with Sections
7.3 and 7.6.

	12	 	AMENDMENTS TO THIS SAFETY AGREEMENT

	 	12.1	 	This Safety Agreement becomes effective on the Effective Date.
	 
	 	12.2	 	If a Party becomes aware of any change of law or regulation which affects any of the
matters the subject of this Agreement, it shall notify the other Party of any such change.
The Parties shall promptly meet and discuss any such changes and negotiate in good faith
any amendments to this Agreement, which either Party honestly believes are necessary or
desirable as a result of such changes.

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	 	12.3	 	Revision of attachments (Schedules) will not require that this Safety Agreement be
re-issued and signed off, but shall require the written agreement of both Parties.
	 
	 	12.4	 	Changes in company personnel and methods of communication must be conveyed immediately
to both Parties, to ensure the correct and timely flow of information.

	13	 	CONFIDENTIALITY

	 	13.1	 	Each Party agrees and undertakes that it will treat and keep confidential all
Confidential Information, which may become known, to that Party from the other Party.
	 
	 	13.2	 	Each Party acknowledges and agrees that Article 12 of the Promotional Agreement
(entitled “Confidential Information”) is hereby incorporated into this Agreement in its
entirety.

	14	 	DURATION AND TERMINATION

	 	14.1	 	This Agreement commences on the Effective Date and shall continue in force until the
Promotional Agreement is terminated or expires and this Agreement shall immediately
terminate on such date and Section 15 shall apply.

	15	 	CONSEQUENCES OF TERMINATION

	 	15.1	 	Upon the termination of this Agreement, Impax shall:

	 	A.	 	continue to comply with its obligations under this Agreement if and to the
extent it continues to have the right to sell the Shire Product after the expiration or
termination of the Promotional Agreement;
	 
	 	B.	 	comply with its obligations in Section 8.4 for a period of 6 months after the
termination of this Agreement.

	 	15.2	 	Sections 13, 15, 16 and 17 shall survive the termination of this Agreement.
	 
	 	15.3	 	The termination or expiration of this Agreement shall not release either of the Parties
from any liability which at the time of termination or expiration has already accrued to
the other Party, nor affect in any way the survival of any other right, duty or obligation
of the Parties which is expressly stated elsewhere in this Agreement to survive such
termination or expiration.

	16	 	RESOLVING DISPUTES

	 	16.1	 	If there is a disagreement between Shire and Impax in the interpretation of this
Agreement or any aspect of the performance by either Party of its obligations under this
Agreement, representatives of the Parties will resolve such dispute in accordance with the
dispute resolution procedure set out in Article 13 of the Promotional Agreement.

11

 

	17	 	GENERAL PROVISIONS

	 	17.1	 	Except as expressly provided for in this Agreement, no variation to the terms of this
Agreement shall be effective unless in writing and signed on behalf of each Party by a
director or other authorised person.
	 
	 	17.2	 	If any term or provision of this Agreement is held by any court or other competent
authority to be void or unenforceable in whole or in part, the other provisions of this
Agreement and the remainder of the affected provision shall continue to be valid.
	 
	 	17.3	 	Failure by either Party on one or more occasions to avail itself of a right conferred
by this Agreement shall not be construed as a waiver of such Party’s right to enforce such
right or any other right.
	 
	 	17.4	 	This Agreement and the Promotional Agreement contain the entire agreements and
understandings between the Parties and supersede all previous agreements and understandings
between the Parties with respect to the subject matter of this Agreement. In the event of a
conflict between the terms of any of the aforementioned agreements, the Promotional
Agreement (excluding Article 7.1) shall control to the extent of any inconsistency. Each
Party acknowledges that, in entering into this Agreement, it is not relying on any
representation or warranty (whether made orally or in writing) except as expressly provided
in this Agreement.
	 
	 	17.5	 	Nothing in this Agreement is deemed to constitute a partnership between the Parties nor
constitute any Party the agent of the other Party for any purpose.
	 
	 	17.6	 	The Parties to this Agreement do not intend that any term of this Agreement should be
enforceable by any person who is not a Party to this Agreement.
	 
	 	17.7	 	The rights and remedies of each of the Parties under or pursuant to this Agreement are
cumulative, may be exercised as often as such Party considers appropriate and are in
addition to its rights and remedies under general law.
	 
	 	17.8	 	Each of the Parties shall do, execute and perform and shall procure to be done,
executed and performed all such further acts deeds documents and things as the other Party
may reasonably require from time to time to give full effect to the terms of this
Agreement.
	 
	 	17.9	 	This Agreement may be executed in any number of counterparts and by the Parties to it
on separate counterparts, each of which is an original but all of which together constitute
one and the same instrument.
	 
	 	17.10	 	This Agreement and the obligations of the Parties shall be governed by and construed
in accordance with the laws in effect in the State of New York (without reference to
principles regarding conflicts of law)

12

 

IN WITNESS WHEREOF, this Agreement has been signed by the authorized representatives of the Parties
on the day and year first written above.

	 	 	 	 	 	 	 
	SIGNED for and on behalf of

	 	 	)	 	 	/s/ Matthew W. Emmens
	 

	 	 	 	 	 	 
	SHIRE US INC.

	 	 	)	 	 	Signature
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	Matthew W. Emmens, CEO
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	Print Name and Title
	 
	 	 	 	 	 	 
	SIGNED for and on behalf of

	 	 	)	 	 	/s/ Barry R. Edwards
	 

	 	 	 	 	 	 
	IMPAX LABORATORIES, INC

	 	 	)	 	 	Signature
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	Barry R. Edwards, CEO
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	Print Name and Title

13

 

Schedule 7

Formulary
Status

	 	 	 	 	 	 	 	 	 
	PHARMACY BENEFIT	 	 	 	FORMULARY	 	 	 	CARBATROL
	MANAGERS (PBM’s)	 	MEMBERS*	 	TYPE	 	PBM	 	TIER STATUS
	PCS ADVANCE

	 	50,000,000
	 	OPEN/3-TIER
	 	DC
	 	2nd
	PRIME THERAPEUTICS

	 	18,000,000	 	ALL	 	DC
	 	2nd
	CAREMARK

	 	22,000,000	 	ALL	 	DC
	 	2nd
	ANTHEM PRESCRIPT. MGT

	 	2,500,000	 	tiered	 	DC
	 	2nd
	INNOVIANT

	 	450,000	 	3T/2T OPEN	 	DC	 	2nd
	MEDCO

	 	65,000,000	 	tiered	 	DC
	 	2nd
	NAVITUS (60% 3T 40% 2T closed)

	 	560,000	 	3T/2T CLOSED	 	DC
	 	2nd
	MEDIMPACT

	 	17,000,000	 	O/C	 	DC
	 	2nd
	RxAmerica

	 	1,100,000	 	O/C	 	DC
	 	3rd
	Catalyst Rx

	 	1,000,000	 	O/C	 	DC
	 	2nd
	WELLPOINT

	 	27,000,000	 	O/C	 	DC
	 	2nd
	Inclusion on the National
Formulary does not ensure that all lives have preferred access to Carbatrol.
	 	 	 	 	 	 	 	 

	 	 	 	 	 	 	 	 	 
	 	 	 	 	FORMULARY	 	 	 	CARBATROL
	NATIONAL PLANS	 	MEMBERS*	 	TYPE	 	PBM	 	TIER STATUS
	Health Net Pharmaceutical Svcs

	 	5,300,000	 	O/C	 	DC	 	3rd
	Kaiser Permanente

	 	9,000,000	 	C	 	DC	 	3rd
	RxSolutions/Pacificare

	 	5,500,000	 	C	 	DC	 	3rd
	WellPoint Pharmacy Management

	 	27,000,000	 	O/C	 	DC	 	2nd
	United Health

	 	10,000,000	 	 	 	DC	 	2nd
	Cigna

	 	12,000,000	 	tiered	 	DC	 	3rd
	Aetna

	 	6,000,000	 	tiered	 	DC	 	2nd
	The Regence Group

	 	3,000,000	 	C	 	DC	 	2nd
	Humana

	 	3,300,000	 	4T	 	DC	 	2nd
	Anthem BCBS

	 	6,500,000	 	Tiered	 	DC	 	2nd
	Coventry HP

	 	500,000	 	 	 	DC	 	2nd
	Inclusion
on the Plans does not ensure that all lives have preferred access to
Carbatrol.
	 	 	 	 	 	 	 	 

	 	 	 	 	 	 	 	 	 
	 	 	 	 	FORMULARY	 	 	 	CARBATROL TIER
	VARIOUS REGIONAL PLANS*	 	MEMBERS*	 	TYPE	 	PBM	 	STATUS
	BC/BS OF MASS

	 	2,400,000	 	3-TIER	 	ESI	 	2nd
	INDEPENDENCE
BC — PHILA, PA.

	 	2,200,000	 	OPEN/TIERED	 	PCS/CM	 	2nd
	HORIZON BC/BS OF NEW JERSEY

	 	1,600,000	 	OPEN	 	PCS/CM	 	2nd
	BC/BS OF NEPA —
WILKES-BARRE, PA

	 	500,000	 	OPEN/TIERED	 	ESI	 	2nd

1

 

	 	 	 	 	 	 	 	 	 
	 	 	 	 	FORMULARY	 	 	 	CARBATROL TIER
	VARIOUS REGIONAL PLANS*	 	MEMBERS*	 	TYPE	 	PBM	 	STATUS
	CDPHP — ALBANY, NY

	 	365,000	 	CLOSED/TIERED	 	PCS/CM	 	2nd
	MAMSI OF MD — COLUMBIA, MD

	 	960,000	 	OPEN/3 TIER	 	UHC	 	3rd
	OXFORD HEALTH — CT

	 	1,500,000	 	OPEN/3 TIER	 	MM/UHC	 	2nd
	CAREFIRST BC/BS — BALTIMORE, MD

	 	1,100,000	 	3-TIER	 	S/C	 	3rd
	BC/BS EXCELLUS — NEW YORK

	 	1,800,000	 	3-TIER	 	 	 	2nd
	BCBS OF WNY & NENY (HEALTH NOW)

	 	700,000	 	3-TIER	 	WP	 	2nd
	HIGHMARK BC/BS — PITTSBURGH,
PA

	 	2,300,000	 	OPEN/CLOSED	 	M/M	 	3rd
	HARVARD PILGRIM — BOSTON, MA

	 	884,000	 	CONTRACT	 	 	 	2nd
	KEYSTONE MERCY MEDICAID —
PHILA, PA

	 	350,000	 	CLOSED/TIERED	 	 	 	3rd
	MVP HEALTH PLAN — ALBANY, NY

	 	362,000	 	3-TIER	 	CENTRUS	 	2nd
	UPMC — PITTSBURGH, PA

	 	380,000	 	CLOSED	 	S/C	 	2nd
	INDEPENDENT HEALTH —
BUFFALO, NY

	 	360,000	 	OPEN	 	S/C	 	2nd
	FALLON CLINIC / PHARMACARE —

	 	200,000	 	3-TIER	 	S/C	 	3rd
	THREE RIVERS/MED PLUS —
PITTSBURGH, PA

	 	200,000	 	CLOSED	 	PCS/CM	 	F
	CONNECTICARE — FARMINGTON, CT

	 	275,000	 	OPEN/3 TIER	 	ESI	 	2nd
	HIP HEALTH PLAN — NY, NY

	 	1,000,000	 	CLOSED	 	S/C	 	PA
	EMPIRE BC — NY

	 	1,200,000	 	OPEN/CLOSED/3TR	 	PCS/CM	 	2nd
	HMO
IL / BCBS

	 	2,600,000	 	Tiered	 	 	 	3rd
	JOHN DEERE HEALTH PLANS

	 	400,000	 	3-tier	 	 	 	2nd
	BCBS — FL

	 	1,600,000	 	3-tier	 	MM	 	3rd
	Vista HP

	 	400,000	 	3-tier	 	 	 	3rd
	AvMed

	 	250,000	 	3-tier	 	Argus	 	3rd
	BCBS — GA

	 	300,000	 	3-tier	 	WP	 	3rd
	BCBS — SC

	 	1,150,000	 	3-tier	 	MM/AP	 	3rd
	BCBS — NC

	 	1,000,000	 	3-tier	 	MM	 	3rd
	Sentara

	 	300,000	 	3-tier	 	 	 	2nd
	BCBS — MS

	 	425,000	 	3-tier	 	WP	 	3rd
	BCBS — AL

	 	3,000,000	 	3-tier	 	 	 	3rd
	HEALTH ALLIANCE

	 	 	 	tiered	 	 	 	2nd
	PERSONAL CARE (Coventry)

	 	80,000	 	3-tier	 	 	 	2nd
	M PLAN

	 	190,000	 	Tiered	 	 	 	3rd

2

 

	 	 	 	 	 	 	 	 	 
	 	 	 	 	FORMULARY	 	 	 	CARBATROL TIER
	VARIOUS REGIONAL PLANS*	 	MEMBERS*	 	TYPE	 	PBM	 	STATUS
	ARNETT HEALTH PLAN

	 	35,000	 	CLOSED	 	 	 	3rd
	PHP OFINDIANA (99% 3T)

	 	55,000	 	Tiered	 	 	 	3rd
	WELBORN HEALTH PLAN

	 	30,000	 	Tiered	 	 	 	3rd
	BLUEGRASS FAM.H.

	 	100,000	 	OPEN	 	 	 	3rd
	M Care (50% 2t 50% 3t)

	 	200,000	 	Tiered	 	 	 	3rd
	Health Plus of Michigan

	 	147,000	 	OPEN	 	 	 	3rd
	Priority Health

	 	237,000	 	CLOSED	 	 	 	2nd
	Blue Care Network

	 	642,000	 	OPEN	 	 	 	2nd
	Physicians Health Plan (PHP)

(United Health Care)

	 	200,000	 	Tiered	 	 	 	3rd
	Care Choices HMO

	 	263,000	 	3T 2T	 	 	 	2nd
	BC/BS of Michigan

	 	575,000	 	OPEN	 	 	 	2nd
	Great Lakes Health Plan

	 	62,000	 	OPEN	 	 	 	2nd
	MEDICA (70% open / 30% closed)

	 	750,000	 	Tiered	 	 	 	2nd
	HEALTHPARTNERS

	 	800,000	 	CLOSED	 	 	 	2nd
	BCBS OF MINNESOTA

	 	1,580,000	 	CLOSED/3T	 	 	 	2nd
	BLUE PLUS

	 	511,000	 	CLOSED/3T	 	 	 	2nd
	HEALTH PLAN OF THE UPPER OHIO 

VALLEY

	 	107,000	 	CLOSED	 	 	 	2nd
	QUAL CHOICE HEALTH PLAN

	 	95,000	 	2 & 3-TIER	 	 	 	2nd
	CHOICE CARE N.KY./OH. (HUMANA)

	 	304,000	 	 	 	 	 	2nd
	MEDICAL MUTUAL OF OHIO (medco)

	 	95,000	 	3-TIER	 	 	 	2nd
	SummaCare Health Plan

	 	82,000
	 	OPEN/3-TIER	 	 	 	3rd
	UNITY HEALTH PLAN

	 	80,000	 	3T/2T closed	 	 	 	2nd
	DEAN HEALTH PLAN

	 	280,000	 	2T closed	 	 	 	2nd
	NETWORK HEALTH PLAN

	 	70,000	 	CLOSED	 	 	 	3rd
	PRIMECARE (UNITED HEALTHCARE)

	 	90,000	 	CLOSED	 	 	 	3rd
	FHP COOP \ GHP COOP

	 	102,800	 	CLOSED	 	 	 	2nd
	PHYSICIANS PLUS INS.

	 	95,000	 	3T/2T closed	 	 	 	2nd
	MERCY CARE (serviced by 

Physicians +)

	 	30,000	 	3T/2T closed	 	 	 	2nd
	SECURITY HEALTH PLAN

	 	114,000	 	OPEN	 	 	 	2nd
	UNITED WI SERVICES (BCBS)

	 	550,000	 	ALL	 	 	 	2nd
	TOUCHPOINT HEALTH PLAN

(navitus)

	 	160,000	 	3T/2T closed	 	 	 	2nd
	Blue Shield of CA

	 	2,600,000	 	C	 	DC	 	2nd
	Molina

	 	250,000	 	C	 	RxA	 	2nd
	Blue Cross Blue Shield of AZ

	 	1,300,000	 	O/C	 	DC	 	2nd
	CPSA

	 	65,000	 	C	 	DC	 	2nd

3

 

	 	 	 	 	 	 	 	 	 
	 	 	 	 	FORMULARY	 	 	 	CARBATROL TIER
	VARIOUS REGIONAL PLANS*	 	MEMBERS*	 	TYPE	 	PBM	 	STATUS
	Value Options

	 	250,000	 	C	 	DC	 	2nd
	Nevada Care — Medicaid

	 	66,000	 	C	 	CatRx	 	2nd
	Sierra Health Plan

	 	350,000	 	O/C	 	ES	 	3rd
	Group Health Coop

	 	650,000	 	C	 	IR	 	2nd
	Premera Blue Cross

	 	1,500,000	 	O/C	 	MM	 	3rd
	Regence Blue Shield

	 	1,200,000	 	C	 	RG
	 	2nd
	Providence Health Plans

	 	450,000	 	C	 	WP	 	2nd
	Altius

	 	180,000	 	C	 	CT	 	3rd
	Intermountain Health Care

	 	490,000	 	C	 	DC	 	2nd
	Colorado Access

	 	100,000	 	C	 	DC	 	2nd
	BCBS AR

	 	160,000	 	OPEN	 	APC/CM	 	3rd
	Pharmacy Associates, Inc. —
PBM

	 	TPA+few	 	use Wellpoint	 	WP	 	2nd
	QCA-HP Qualchoice of Arkansas

	 	58,000	 	OPEN	 	ESI	 	3rdPA
	UNICARE HPs of LA

	 	19,000	 	Closed	 	WP/AP	 	2nd
	BCBSLA/HMO Louisiana

	 	996,588	 	OPEN-all T-3	 	MS	 	2nd
	Tenet Choices HP of Louisana

	 	35,000	 	SR.s only	 	NMHCS	 	2nd
	LOVELACE — Sandia HP of NM
(Commercial)

	 	181,000	 	Closed	 	IR	 	3rdPA
	Presbyterian HP

	 	350,000	 	CLOSED	 	MI-TPA	 	2nd
	Blue Cross & Blue Shield of OK

	 	500,000	 	3-TIER-OPEN	 	PT	 	3rd
	Community Care HMO of OK

	 	112,279	 	3-TIER-OPEN	 	WP/AP	 	2nd
	Health Choice HP of OK

	 	188,987	 	3-tier	 	MS	 	2nd
	Heartland Health Plan

(Medicaid)

	 	104,173	 	OPEN	 	ESI	 	3rd
	Prime Advantage HP —
Pharmacy Providers of OK-PBM

	 	8,500	 	OPEN T-3	 	PA	 	2nd
	Unicare of OK (CA-WELLPOINT
owned hp)

	 	90,000	 	Closed	 	WP/AP	 	2nd
	VHP Community Care/ Victory HP

	 	35,300	 	TennCareMCO	 	SPS	 	F
	Health Spring HP of TN

	 	55,000	 	Closed T-3	 	PSM	 	3rd
	BCBS of Tennessee-Chattanooga

	 	730,980	 	Tier-3	 	APC/CM	 	3rd
	John Deere HC

	 	 	 	TennCare	 	FH	 	F
	CARITEN Healthcare-Knoxville

	 	234,716-T	 	OPEN	 	FH	 	F
	OMNICARE-Memphis TN

	 	45,554	 	TennCareMCO	 	FH	 	F
	Memphis MgdCare Corp/TLC 

Family HP

	 	122,000	 	TennCareMCO	 	FH	 	F
	TENNCARE-State 

Medicaid-Nashville

	 	1,200,000+	 	CLOSED	 	FH	 	
	BCBS of TEXAS (8) —
SWTX-HMO, Inc.-HMO Blue

	 	295,812	 	3-tier	 	PT	 	2nd
	NYL-Care of the SW (Irving)
nowBCBSTX

	 	43,620	 	3-tier	 	PT	 	2nd

4

 

	 	 	 	 	 	 	 	 	 
	 	 	 	 	FORMULARY	 	 	 	CARBATROL TIER
	VARIOUS REGIONAL PLANS*	 	MEMBERS*	 	TYPE	 	PBM	 	STATUS
	United Health Care of Texas
— DFW-Plano

	 	
115,000	 	
ALL	 	MS	 	3rdPA
	Parkland Community HP

	 	
110,000	 	
CLOSED	 	
CM	 	3rd
	EverCare of Texas HP
(Medicare Seniors)

	 	
30,924	 	
OPEN	 	
MS	 	3rdPA
	Community First H.P. of S.TX

	 	
70,801	 	
commercial	 	
IQ	 	2nd
	Scott and White Health Plan
— Temple TX

	 	
166,000	 	
3-TIER	 	
SW	 	2nd
	Lagacy Health Plan of Waco, TX

	 	
32,576	 	
3-TIER	 	
SW	 	2nd
	Mercy HPs of Missouri (Laredo)

	 	
213,034	 	
3-TIER	 	
APC/CM	 	2nd
	WELLMARK (BCBSIA)

	 	
97,843	 	
OPEN/3-tier	 	
APC/CM	 	2nd
	University of Iowa CARE

	 	 	 	
	 	
	 	2nd
	MEDICAL ASSOCIATES HP

	 	
31,600	 	
3-Tier	 	
ESI	 	2nd
	SecureCare of Iowa

	 	70,000 	 	Federal 	 	 	 	2nd
	John Deere Regional Office

(Hawk-I)

	 	
448,340	 	
T-2/T3	 	
IR	 	2nd
	First Guard Health Plan —
KS/MO

	 	
90,000	 	
1:4-Com/MC+	 	
ESI	 	3rd/PA
	Preferred Plus HP of KS

	 	
148,523	 	
Tier-2 & 3	 	ESI
	 	3rd
	BCBS OF KANSAS-Blue Choice

	 	
626,500	 	
Tier-2 & 3	 	
PT	 	2nd
	BCBSKC BlueAdvantage

	 	
855,520	 	
Tier-3	 	
ESI/Argus	 	2nd
	BCBSMO-Blue Choice

	 	
870,000	 	
T-3-OPEN	 	
WP/AP	 	3rd
	HealthLINK of MO-HMO

	 	
570,000	 	
OPEN	 	
WP/AP	 	3rd
	CommunityCare Plus Alliance

	 	
46,600	 	
CLOSED	 	
ESI	 	3rdPA
	MERCY HPs of MO

	 	
220,000	 	
T-2/T-3	 	
APC/CM	 	2nd
	Missouri Consolidated HC Plan

	 	
102,780	 	 	 	
ESI	 	2nd
	BCBS of NE

	 	
25,260	 	
CLOSED	 	
PT	 	2nd
	Inclusion on the Plans does

not ensure that all lives

have preferred access to

Carbatrol.
	 	 	 	 	 	 	 	 

5EX-10.1

Exhibit 10.1

 

 

CREDIT AGREEMENT

dated as of

June 30, 2009

among

FUEL TECH, INC.

and

JPMORGAN CHASE BANK, N.A.

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page
	 
	 	 	 	 
	ARTICLE I — DEFINITIONS
	 	 	1	 
	SECTION 1.01. Defined Terms
	 	 	1	 
	SECTION 1.02. Classification of Loans and Borrowings
	 	 	14	 
	SECTION 1.03. Terms Generally
	 	 	14	 
	SECTION 1.04. Accounting Terms; GAAP
	 	 	14	 
	ARTICLE II — THE CREDITS
	 	 	15	 
	SECTION 2.01. Commitments
	 	 	15	 
	SECTION 2.02. Loans and Borrowings
	 	 	15	 
	SECTION 2.03. Borrowing Procedures; Requests for Revolving Borrowings
	 	 	15	 
	SECTION 2.04. Intentionally Omitted
	 	 	16	 
	SECTION 2.05. Letters of Credit; Letters of Guaranty
	 	 	16	 
	SECTION 2.06. Funding of Borrowings
	 	 	18	 
	SECTION 2.07. Interest Elections
	 	 	18	 
	SECTION 2.08. Termination of Commitments
	 	 	19	 
	SECTION 2.09. Repayment of Loans; Evidence of Debt
	 	 	19	 
	SECTION 2.10. Prepayment of Loans
	 	 	20	 
	SECTION 2.11. Fees
	 	 	20	 
	SECTION 2.12. Interest
	 	 	21	 
	SECTION 2.13. Alternate Rate of Interest
	 	 	21	 
	SECTION 2.14. Increased Costs
	 	 	22	 
	SECTION 2.15. Break Funding Payments
	 	 	22	 
	SECTION 2.16. Taxes
	 	 	23	 
	SECTION 2.17. Payments Generally; Allocation of Proceeds; Sharing of Set-offs
	 	 	24	 
	SECTION 2.18. Indemnity for Returned Payments
	 	 	24	 
	ARTICLE III — Representations and Warranties
	 	 	24	 
	SECTION 3.01. Organization; Powers
	 	 	24	 
	SECTION 3.02. Authorization; Enforceability
	 	 	24	 
	SECTION 3.03. Governmental Approvals; No Conflicts
	 	 	25	 
	SECTION 3.04. Financial Condition; No Material Adverse Change
	 	 	25	 
	SECTION 3.05. Properties
	 	 	25	 
	SECTION 3.06. Litigation and Environmental Matters
	 	 	25	 
	SECTION 3.07. Compliance with Laws and Agreements
	 	 	26	 
	SECTION 3.08. Investment Company Status
	 	 	26	 
	SECTION 3.09. Taxes
	 	 	26	 
	SECTION 3.10. ERISA
	 	 	26	 
	SECTION 3.11. Disclosure
	 	 	26	 
	SECTION 3.12. Material Agreements
	 	 	26	 
	SECTION 3.13. Solvency
	 	 	27	 
	SECTION 3.14. Insurance
	 	 	27	 
	SECTION 3.15. Capitalization and Subsidiaries
	 	 	27	 
	SECTION 3.16. Intentionally Omitted
	 	 	27	 
	SECTION 3.17. Employment Matters
	 	 	27	 
	ARTICLE IV — CONDITIONS
	 	 	27	 
	SECTION 4.01. Effective Date
	 	 	27	 
	SECTION 4.02. Each Credit Event
	 	 	29	 
	ARTICLE V — AFFIRMATIVE COVENANTS
	 	 	29	 
	SECTION 5.01. Financial Statements; Borrowing Base and Other Information
	 	 	29	 
	SECTION 5.02. Notices of Material Events
	 	 	30	 
	SECTION 5.03. Existence; Conduct of Business
	 	 	31	 

i

 

	 	 	 	 	 
	 	 	Page
	 
	 	 	 	 
	SECTION 5.04. Payment of Obligations
	 	 	31	 
	SECTION 5.05. Maintenance of Properties
	 	 	31	 
	SECTION 5.06. Books and Records; Inspection Rights
	 	 	31	 
	SECTION 5.07. Compliance with Laws
	 	 	32	 
	SECTION 5.08. Use of Proceeds and Letters of Credit
	 	 	32	 
	SECTION 5.09. Insurance
	 	 	32	 
	SECTION 5.10. Casualty and Condemnation
	 	 	32	 
	SECTION 5.11. Depository Banks
	 	 	32	 
	SECTION 5.12. Further Assurances
	 	 	32	 
	ARTICLE VI — NEGATIVE COVENANTS
	 	 	33	 
	SECTION 6.01. Indebtedness; Certain Equity Securities
	 	 	33	 
	SECTION 6.02. Liens
	 	 	33	 
	SECTION 6.03. Fundamental Changes
	 	 	34	 
	SECTION 6.04. Investments, Loans, Advances, Guarantees and Acquisitions
	 	 	34	 
	SECTION 6.05. Asset Sales
	 	 	35	 
	SECTION 6.06. Sale and Leaseback Transactions
	 	 	35	 
	SECTION 6.07. Swap Agreements
	 	 	35	 
	SECTION 6.08. Restricted Payments
	 	 	35	 
	SECTION 6.09. Transactions with Affiliates
	 	 	35	 
	SECTION 6.10. Restrictive Agreements
	 	 	36	 
	SECTION 6.11. Amendment of Material Documents
	 	 	36	 
	SECTION 6.12. Additional Subsidiaries
	 	 	36	 
	SECTION 6.13. Capital Expenditures
	 	 	36	 
	SECTION 6.14. Financial Covenants
	 	 	36	 
	ARTICLE VII — EVENTS OF DEFAULT
	 	 	37	 
	ARTICLE VIII — MISCELLANEOUS
	 	 	39	 
	SECTION 8.01. Notices
	 	 	39	 
	SECTION 8.02. Waivers; Amendments
	 	 	40	 
	SECTION 8.03. Expenses; Indemnity; Damage Waiver
	 	 	41	 
	SECTION 8.04. Successors and Assigns
	 	 	42	 
	SECTION 8.05. Survival
	 	 	43	 
	SECTION 8.06. Counterparts; Integration; Effectiveness
	 	 	43	 
	SECTION 8.07. Severability
	 	 	43	 
	SECTION 8.08. Right of Setoff
	 	 	44	 
	SECTION 8.09. Governing Law; Jurisdiction; Consent to Service of Process
	 	 	44	 
	SECTION 8.10. WAIVER OF JURY TRIAL
	 	 	44	 
	SECTION 8.11. Headings
	 	 	45	 
	SECTION 8.12. Confidentiality
	 	 	45	 
	SECTION 8.13. Nonreliance; Violation of Law
	 	 	45	 
	SECTION 8.14. USA PATRIOT Act
	 	 	45	 
	SECTION 8.15. Disclosure
	 	 	45	 
	ARTICLE IX — LOAN GUARANTY
	 	 	45	 
	SECTION 9.01. Guaranty
	 	 	45	 
	SECTION 9.02. Guaranty of Payment
	 	 	46	 
	SECTION 9.03. No Discharge or Diminishment of Loan Guaranty
	 	 	46	 
	SECTION 9.04. Defenses Waived
	 	 	46	 
	SECTION 9.05. Rights of Subrogation
	 	 	47	 
	SECTION 9.06. Reinstatement; Stay of Acceleration
	 	 	47	 
	SECTION 9.07. Information
	 	 	47	 
	SECTION 9.08. Termination
	 	 	47	 
	SECTION 9.09. Taxes
	 	 	47	 
	SECTION 9.10. Maximum Liability
	 	 	47	 
	SECTION 9.11. Contribution
	 	 	48	 

ii

 

	 	 	 	 	 
	 	 	Page
	 
	 	 	 	 
	SECTION 9.12. Liability Cumulative
	 	 	48	 

SCHEDULES:

Schedule 3.06 — Disclosed Matters

Schedule 3.14 — Insurance

Schedule 3.15 — Capitalization and Subsidiaries

Schedule 6.01 — Existing Indebtedness

Schedule 6.04 — Existing Investments

EXHIBITS:

Exhibit A — Form of Compliance Certificate

Exhibit B — Joinder Agreement

Exhibit C — Fuel Tech Inc. Cash Investment Policy

iii

 

          CREDIT AGREEMENT dated as of June 30, 2009 (as it may be amended or modified from time to
time, this “Agreement”), by and among FUEL TECH, INC., a Delaware corporation, the Loan
Parties party hereto and JPMORGAN CHASE BANK, N.A.

          The parties hereto agree as follows:

ARTICLE I

Definitions

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

          “Acquisition” means the acquisition by the Borrower or any of its Subsidiaries of all
or substantially all of (i) the Equity Interests of any Person, (ii) the assets constituting the
business of a division, branch or other unit of operation of any Person, or (iii) the merger of any
Person with or into the Borrower or any of its Subsidiaries (and, in the case of a merger with the
Borrower, with the Borrower being the surviving corporation. Notwithstanding the foregoing, any
event described in (i), (ii) or (iii) above shall not constitute an Acquisition if the only parties
to such event are the Borrower and any of its Subsidiaries.

          “Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest
Period, an interest rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to
(a) the LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate.

          “Adjusted One Month LIBOR Rate” means, an interest rate per annum equal to the sum of
(i) 2.50% per annum plus (ii) the Adjusted LIBO Rate for a one month Interest Period on such day
(or if such day is not a Business Day, the immediately preceding Business Day); provided
that, for the avoidance of doubt, the Adjusted LIBO Rate for any day shall be based on the rate
appearing on the Reuters Screen LIBOR01 Page (or on any successor or substitute page) at
approximately 11:00 a.m. London time on such day (without any rounding).

          “Affiliate” means, 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.

          “Applicable Rate” means, for any day, with respect to any CBFR Loan or Eurodollar
Revolving Loan, or with respect to the commitment fees or letter of credit fees payable hereunder,
as the case may be, the applicable rate per annum set forth below under the caption “CBFR Spread,”
“Eurodollar Spread,” “Commitment Fee Rate,” or “Letter of Credit Rate” as the case may be, based
upon the Borrower’s Leverage Ratio as of the most recent determination date, provided that
until the delivery to the Lender, pursuant to Section 5.01, of the Borrower’s consolidated
financial information for the Borrower’s first fiscal quarter ending after the Effective Date, the
“Applicable Rate” shall be the applicable rate per annum set forth below in Category 3:

 

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Revolver	 	 	 	 
	 	 	Revolver	 	Eurodollar	 	Letter of Credit	 	Commitment Fee
	Leverage Ratio	 	CBFR Spread	 	Spread	 	Rate	 	Rate
	Category 1

≤ .75 to 1.0
	 	 	0	 	 	 	2.50	%	 	 	2.0	%	 	 	.25	%
	Category 2

> .75 to 1.0 but
≤ 1.25 to 1.0
	 	 	.25	%	 	 	2.75	%	 	 	2.25	%	 	 	.25	%
	Category 3

> 1.25 to 1.0
	 	 	.50	%	 	 	3.00	%	 	 	2.5	%	 	 	.25	%

          For purposes of the foregoing, (a) the Applicable Rate shall be determined as of the end of
each fiscal quarter of the Borrower based upon the Borrower’s annual or quarterly consolidated
financial statements delivered pursuant to Section 5.01 and (b) each change in the Applicable Rate
resulting from a change in the Leverage Ratio shall be effective during the period commencing on
and including the date of delivery to the Lender of such consolidated financial statements
indicating such change and ending on the date immediately preceding the effective date of the next
such change, provided that the Leverage Ratio shall be deemed to be in Category 3 at the
option of the Lender if the Borrower fails to deliver the annual or quarterly consolidated
financial statements required to be delivered by it pursuant to Section 5.01, during the period
from the expiration of the time for delivery thereof until such consolidated financial statements
are delivered.

          “Approved Fund” has the meaning assigned to such term in Section 8.04(b).

          “Availability Period” means the period from and including the Effective Date to but
excluding the earlier of the Maturity Date and the date of termination of the Commitment.

          “Available Revolving Commitment” means, at any time, the Revolving Commitment then in
effect minus the Revolving Exposure at such time.

          “Banking Services” means each and any of the following bank services provided to any
Loan Party by the Lender or any of its Affiliates: (a) credit cards for commercial customers
(including, without limitation, “commercial credit cards” and purchasing cards), (b) stored value
cards and (c) treasury management services (including, without limitation, controlled disbursement,
automated clearinghouse transactions, return items, overdrafts and interstate depository network
services).

          “Banking Services Obligations” of the Loan Parties means any and all obligations of
the Loan Parties, whether absolute or contingent and howsoever and whensoever created, arising,
evidenced or acquired (including all renewals, extensions and modifications thereof and
substitutions therefor) in connection with Banking Services.

          “Banking Services Reserves” means all Reserves which the Lender from time to time
establishes in its Permitted Discretion for Banking Services then provided or outstanding.

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

          “Borrower” means Fuel Tech, Inc., a Delaware corporation.

2

 

          “Borrowing” means Revolving Loans of the same 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.

          “Borrowing Request” means a request by the Borrower for a Revolving Borrowing in
accordance with Section 2.03.

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

          “Capital Expenditures” means, without duplication, any expenditure or commitment to
expend money for any purchase or other acquisition of any asset which would be classified as a
fixed or capital asset on a consolidated balance sheet of the Borrower and its Subsidiaries
prepared in accordance with GAAP.

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

          “CB Floating Rate” means the Prime Rate; provided that the CB Floating Rate
shall never be less than the Adjusted One Month LIBOR Rate for a one month Interest Period on such
day (or if such day is not a Business Day, the immediately preceding Business Day). Any change in
the CB Floating Rate due to a change in the Prime Rate or the Adjusted One Month LIBOR Rate shall
be effective from and including the effective date of such change in the Prime Rate or the Adjusted
One Month LIBOR Rate, respectively.

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

          “Change in Control” means (a) the acquisition of ownership, directly or indirectly,
beneficially or of record, by any Person or group (within the meaning of the Securities Exchange
Act of 1934 and the rules of the Securities and Exchange Commission thereunder as in effect on the
date hereof) of Equity Interests representing more than 51% of the aggregate ordinary voting power
represented by the issued and outstanding Equity Interests of the Borrower; or (b) during any
period of twelve consecutive calendar months, occupation of a majority of the seats (other than
vacant seats) on the board of directors of the Borrower by Persons who were neither (i) nominated
by the board of directors of the Borrower nor (ii) appointed by directors so nominated.

          “Change in Law” means (a) the adoption of any law, rule or regulation after the date
of this Agreement, (b) any change in any law, rule or regulation or in the interpretation or
application thereof by any Governmental Authority after the date of this Agreement or (c)
compliance by the Lender (or, for purposes of Section 2.14(b), by any lending office of the Lender
or by the Lender’s holding company, if any) with any request, guideline or directive (whether or
not having the force of law) of any Governmental Authority made or issued after the date of this
Agreement.

          “Class,” when used in reference to any Loan or Borrowing, refers to whether such Loan,
or the Loans comprising such Borrowing, are Revolving Loans.

          “Code” means the Internal Revenue Code of 1986, as amended from time to time.

3

 

          “Commercial LC Exposure” means, at any time, the sum of (a) the aggregate undrawn
amount of all outstanding commercial Letters of Credit at such time plus (b) the aggregate amount
of all LC Disbursements relating to commercial Letters of Credit that have not yet been reimbursed
by or on behalf of the Borrower at such time.

          “Commitment” means the Revolving Commitment. Such Commitment may be reduced from time
to time pursuant to Section 2.08.

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

          “Controlled Disbursement Account” means any replacement or additional account of the
Borrower maintained with the Lender as a zero balance, cash management account pursuant to and
under any agreement between the Borrower and the Lender, as modified and amended from time to time,
and through which all disbursements of the Borrower are made and settled on a daily basis with no
uninvested balance remaining overnight.

          “Credit Exposure” means the Revolving Exposure.

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

          “Disclosed Matters” means the actions, suits and proceedings and the environmental
matters disclosed in Schedule 3.06.

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

          “EBITDA” means, for any period, Net Income for such period plus (a) without
duplication and to the extent deducted in determining Net Income for such period, the sum of (i)
Interest Expense for such period, (ii) income tax expense for such period, (iii) all amounts
attributable to depreciation and amortization expense for such period, (iv) any extraordinary
charges for such period and (v) any other non-cash charges for such period (but excluding any
non-cash charge in respect of an item that was included in Net Income in a prior period,
minus (b) without duplication and to the extent included in Net Income, any extraordinary
gains and any non-cash items of income for such period, all calculated for the Borrower and its
Subsidiaries on a consolidated basis in accordance with GAAP.

          “Effective Date” means the date on which the conditions specified in Section 4.01 are
satisfied (or waived in accordance with Section 8.02).

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

          “Environmental Liability” means any liability, contingent or otherwise (including any
liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the
Borrower or any Subsidiary directly or indirectly resulting from or based upon (a) violation of any
Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or
threatened release of any Hazardous Materials into the environment or (e) any contract, agreement
or other consensual arrangement pursuant to which liability is assumed or imposed with respect to
any of the foregoing.

4

 

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

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

          “ERISA Affiliate” means any trade or business (whether or not incorporated) that,
together with the Borrower, is treated as a single employer under Section 414(b) or (c) of the Code
or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.

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

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

          “Event of Default” has the meaning assigned to such term in Article VII.

          “Excluded Taxes” means, with respect to the Lender, or any other recipient of any
payment to be made by or on account of any obligation of the Borrower hereunder, (a) income or
franchise taxes imposed on (or measured by) its net income by the United States of America, or by
the jurisdiction under the laws of which such recipient is organized or in which its principal
office is located or, in the case of the Lender, in which its applicable lending office is located,
(b) any branch profits taxes imposed by the United States of America or any similar tax imposed by
any other jurisdiction in which the Borrower is located.

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

          “Financial Officer” means the chief financial officer, principal accounting officer,
treasurer or controller of the Borrower.

          “Funding Account” has the meaning assigned to such term in Section 4.01(h).

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

5

 

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

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

          “Guaranteed Obligations” has the meaning assigned to such term in Section 9.01.

          “Guaranty Payment” means any payment made by Lender in connection with a Letter of
Credit.

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

          “Inactive Subsidiary” is defined in Section 3.15.

          “Indebtedness” of any Person means, without duplication, (a) all obligations of such
Person for borrowed money, (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 (excluding current accounts payable, customer deposits, advances and accrued
liabilities), (d) all obligations of such Person under conditional sale or other title retention
agreements relating to property acquired by such Person, (e) all obligations of such Person in
respect of the deferred purchase price of property or services (excluding current accounts payable,
customer deposits, advances and accrued liabilities incurred in the ordinary course of business),
(f) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired
by such Person, whether or not the Indebtedness secured thereby has been assumed, (g) all
Guarantees by such Person of Indebtedness of others, (h) all Capital Lease Obligations of such
Person, (i) all obligations, contingent or otherwise, of such Person as an account party in respect
of letters of credit and letters of guaranty, (j) all obligations, contingent or otherwise, of such
Person in respect of bankers’ acceptances, (k) obligations under any liquidated earn-out and (l)
obligations of such Person to purchase securities or other property arising out of or in connection
with the sale of the same or substantially similar securities or property or any other Off-Balance
Sheet Liability. The Indebtedness of any Person shall include the Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to the extent such Person is
liable therefor as a result of such Person’s ownership interest in or other relationship with such
entity, except to the extent the terms of such Indebtedness provide that such Person is not liable
therefor.

          “Indemnified Taxes” means Taxes other than Excluded Taxes.

          “Interest Election Request” means a request by the Borrower to convert or continue a
Revolving Borrowing in accordance with Section 2.07.

6

 

          “Interest Expense” means, with reference to any period, the interest expense
(including that attributable to Capital Lease Obligations) of the Borrower and its Subsidiaries for
such period with respect to all outstanding Indebtedness of the Borrower and its Subsidiaries
(including all commissions, discounts and other fees and charges owed with respect to letters of
credit and bankers’ acceptance financing and net costs under Swap Agreements in respect of interest
rates to the extent such net costs are allocable to such period in accordance with
GAAP), calculated on a consolidated basis for the Borrower and its Subsidiaries for such
period in accordance with GAAP.

          “Interest Payment Date” means (a) with respect to any CBFR Loan, the first Business
Day of each calendar month and the Maturity Date, (b) with respect to any Eurodollar Loan, the last
day of the Interest Period applicable to the Borrowing of which such Loan is a part and, in the
case of a Eurodollar Borrowing with an Interest Period of more than three months’ duration, each
day prior to the last day of such Interest Period that occurs at intervals of three months’
duration after the first day of such Interest Period, and (c) the Maturity Date.

          “Interest Period” means (a) with respect to any Eurodollar Borrowing, the period
commencing on the date of such Borrowing and ending on the numerically corresponding day in the
calendar month that is one, two, three or six months thereafter, as the Borrower may elect;
provided, that (i) 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, in the case of a
Eurodollar Borrowing only, 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 (ii) any
Interest Period pertaining to a Eurodollar Borrowing 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, in the case of a Revolving Borrowing, thereafter shall be
the effective date of the most recent conversion or continuation of such Borrowing.

          “Joinder Agreement” has the meaning assigned to such term in Section 5.12.

          “LC Collateral Account” has the meaning assigned to such term in Section 2.05(h).

          “LC Disbursement” means any payment made by Lender pursuant to a Letter of Credit.

          “LC Exposure” means, at any time, the sum of Commercial LC Exposure and Standby LC
Exposure.

          “Lender” means JPMorgan Chase Bank, N.A.

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

          “Letter of Guaranty” means any written undertaking by Lender or any Affiliate of
Lender, issued upon the application of the Borrower, to make payments to third parties, other than
Letters of Credit.

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

          “LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest Period,
the rate appearing on Reuters Screen LIBOR01 Page (or on any successor or substitute page of such
Service, or any successor to or substitute for such Service, providing rate quotations comparable
to those currently provided on such page of such Service, as determined by the Lender from time to
time for purposes of providing quotations of interest rates applicable to dollar deposits in the
London interbank market) at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for dollar deposits with a maturity comparable to
such Interest Period. In the event that such rate is not available at such time for any reason,
then the “LIBO Rate” with respect to such Eurodollar Borrowing for such Interest Period
shall be the rate at which dollar deposits of $5,000,000 and for a maturity comparable to such
Interest Period are offered by the principal

7

 

London office of the Lender in immediately available
funds in the London interbank market at approximately 11:00 a.m., London time, two Business Days
prior to the commencement of such Interest Period.

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

          “Loan Documents” means this Agreement, any promissory notes issued pursuant to the
Agreement, any Letter of Credit applications and all other agreements, instruments, documents and
certificates identified in Section 4.01 executed and delivered to, or in favor of, the Lender and
including all other negative pledge agreements, powers of attorney, consents, assignments,
contracts, notices, letter of credit agreements and all other written matter whether heretofore,
now or hereafter executed by or on behalf of any Loan Party, or any employee of any Loan Party, and
delivered to the Lender in connection with the Agreement or the transactions contemplated thereby.
Any reference in the Agreement or any other Loan Document to a Loan Document shall include all
appendices, exhibits or schedules thereto, and all amendments, restatements, supplements or other
modifications thereto, and shall refer to the Agreement or such Loan Document as the same may be in
effect at any and all times such reference becomes operative.

          “Loan Guarantor” means each Loan Party (other than the Borrower).

          “Loan Guaranty” means Article IX of this Agreement as it may be amended or
modified and in effect from time to time.

          “Loan Parties” means the Borrower, the Borrower’s Subsidiaries who are parties hereto,
and any other Person who becomes a party to this Agreement pursuant to a Joinder Agreement and
their successors and assigns.

          “Loans” means the loans and advances made by the Lender pursuant to this Agreement.

          “Material Adverse Effect” means a material adverse effect on (a) the business, assets,
operations, prospects or condition, financial or otherwise, of the Borrower, (b) the ability of the
Borrower to perform any of its obligations under the Loan Documents to which it is a party, or (c)
the ability of the Lender to enforce its rights of or benefits available to the Lender under the
Loan Documents (other than the Loan Guaranty) in any material respect.

          “Material Indebtedness” means Indebtedness (other than the Loans and Letters of
Credit), or obligations in respect of one or more Swap Agreements, of any one or more of the
Borrower in an aggregate principal amount exceeding $500,000.00. For purposes of determining
Material Indebtedness, the “obligations” of the Borrower in respect of any Swap Agreement at any
time shall be the maximum aggregate amount (giving effect to any netting agreements) that the
Borrower would be required to pay if such Swap Agreement were terminated at such time.

          “Maturity Date” means June 30, 2011 or any earlier date on which the Commitment is
reduced to zero or otherwise terminated pursuant to the terms hereof.

          “Maximum Liability” has the meaning assigned to such term in Section 9.10.

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

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

8

 

          “Net Income” means, for any period, the consolidated net income (or loss) of the
Borrower and its Subsidiaries, determined on a consolidated basis in accordance with GAAP;
provided that there shall be excluded (a) the income (or deficit) of any Person accrued
prior to the date it becomes a Subsidiary or is merged into or consolidated with the Borrower or
any of its Subsidiaries, and (b) the income (or deficit) of any Person (other than a Subsidiary) in
which the Borrower or any of its Subsidiaries has an ownership interest, except to the extent that
any such income is actually received by the Borrower or such Subsidiary in the form of dividends or
similar distributions.

          “Net Proceeds” means, with respect to any event, (a) the cash proceeds received in
respect of such event including (i) any cash received in respect of any non-cash proceeds
(including any cash payments received by way of deferred payment of principal pursuant to a note or
installment receivable or purchase price adjustment receivable or otherwise, but excluding any
interest payments), but only as and when received, (ii) in the case of a casualty, insurance
proceeds and (iii) in the case of a condemnation or similar event, condemnation awards and similar
payments, net of (b) the sum of (i) all reasonable fees and out-of-pocket expenses paid to third
parties (other than Affiliates) in connection with such event, (ii) in the case of a sale, transfer
or other disposition of an asset (including pursuant to a sale and leaseback transaction or a
casualty or a condemnation or similar proceeding), the amount of all payments required to be made
as a result of such event to repay Indebtedness (other than Loans) secured by such asset or
otherwise subject to mandatory prepayment as a result of such event and (iii) the amount of all
taxes paid (or reasonably estimated to be payable) and the amount of any reserves established to
fund contingent liabilities reasonably estimated to be payable, in each case during the year that
such event occurred or the next succeeding year and that are directly attributable to such event
(as determined reasonably and in good faith by a Financial Officer).

          “Non-Paying Guarantor” has the meaning assigned to such term in Section 9.11.

          “Obligated Party” has the meaning assigned to such term in Section 9.02.

          “Obligations” means all unpaid principal of and accrued and unpaid interest on the
Loans, all LC Exposure, all accrued and unpaid fees and all expenses, reimbursements, indemnities
and other obligations of the Loan Parties to the Lender or any indemnified party arising under the
Loan Documents. Obligations shall also include (i) all Banking Services Obligations and (ii) all
Swap Obligations owing to the Lender or its Affiliates.

          “Off-Balance Sheet Liability” of a Person means (a) any repurchase obligation or
liability of such Person with respect to accounts or notes receivable sold by such Person, (b) any
indebtedness, liability or obligation under any sale and leaseback transaction which is not a
Capital Lease Obligation, or (c) any indebtedness, liability or obligation under any so-called
“synthetic lease” transaction entered into by such Person or (d) any indebtedness, liability or
obligation arising with respect to any other transaction which is the functional equivalent of or
takes the place of borrowing but which does not constitute a liability on the balance sheets of
such Person (other than operating leases).

          “Other Taxes” means any and 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 from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement.

          “Participant” has the meaning set forth in Section 8.04.

          “Paying Guarantor” has the meaning assigned to such term in Section 9.11.

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

          “Permitted Acquisition” means any Acquisition by any Loan Party in a transaction that
satisfies each of the following requirements:

9

 

     (a) such Acquisition is not a hostile or contested acquisition;

     (b) the business acquired in connection with such Acquisition is not principally
engaged, directly or indirectly, in any line of business other than the businesses in which
the Loan Parties are engaged on the Closing Date and any business activities that are
substantially similar, related, or incidental thereto;

     (c) both before and after giving effect to such Acquisition and the Loans (if any)
requested to be made in connection therewith, each of the representations and warranties in
the Loan Documents is true and correct (except (i) any such representation or warranty which
relates to a specified prior date and (ii) to the extent the Lender have been notified in
writing by the Loan Parties that any representation or warranty is not correct and the
Lender has explicitly waived in writing compliance with such representation or warranty) and
no Default exists, will exist, or would result therefrom;

     (d) as soon as available, but not more than sixty days after publicly announcing such
Acquisition, the Borrower have provided the Lender (i) notice of such Acquisition and (ii) a
copy of all business and financial information reasonably requested by the Lender including
projected pro forma financial statements, and statements of cash flow, and projected
Financial Covenant compliance calculations;

     (e) if the Acquisition is being financed in whole or in part with the proceeds of a
Borrowing, Lender shall have given its prior written consent (such consent not to be
unreasonably withheld or delayed);

     (f) the purchase price for all Acquisitions made during any fiscal year of the Borrower
without the prior consent of the Lender shall not exceed $10,000,000.00 in the aggregate;

     (g) if such Acquisition is an acquisition of the Equity Interests of a Person, the
Acquisition is structured so that the acquired Person shall become a Wholly-Owned Subsidiary
of the Borrower and, a Loan Party pursuant to the terms of this Agreement;

     (h) if such Acquisition is an acquisition of assets, the Acquisition is structured so
that the Borrower or another Loan Party shall acquire such assets;

     (i) if such Acquisition is an acquisition of Equity Interests, such Acquisition will
not result in any violation of Regulation U;

     (j) no Loan Party shall, as a result of or in connection with any such Acquisition,
assume or incur any direct or contingent liabilities (whether relating to environmental,
tax, litigation, or other matters) that could reasonably be expected to have a Material
Adverse Effect; and

     (k) in connection with an Acquisition of the Equity Interests of any Person by the
Borrower, all Liens on property of such Person shall be terminated unless the Lender in its
sole discretion consents otherwise, and in connection with an Acquisition of the assets of
any Person by the Borrower, all Liens on such assets shall be terminated.

          “Permitted Discretion” means a determination made in good faith and in the exercise of
reasonable (from the perspective of a lender) business judgment.

          “Permitted Encumbrances” means:

10

 

     (a) Liens imposed by law for taxes that are not yet due or are being contested in
compliance with Section 5.04;

     (b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like
Liens imposed by law, arising in the ordinary course of business and securing obligations
that are not overdue by more than 30 days or are being contested in compliance with Section
5.04;

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

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

     (e) judgment liens in respect of judgments that do not constitute an Event of Default under
clause (k) of Article VII;

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

     (g) pledges or deposits made in the ordinary course of business to secure payment of worker’s
compensation or to participate in any fund in connection with worker’s compensation, unemployment
insurance or other social security obligations;

     (h) Liens, if any otherwise expressly permitted by this Agreement (including, without
limitation, subsection (k) of the definition of “Permitted Acquisitions;”

     (i) Liens in favor of the Lender (including, without limitation, Liens granted under Section
2.05); and

     (j) the Satisfaction of Letters of Credit Deposit, as defined in the letter dated June 30,
2009 by the Borrower to Wachovia Bank, N.A. (“Wachovia”) in respect of the deposit of cash
with Wachovia in satisfaction of potential obligations of the Borrower under letters of credit
issued by Wachovia (the “Wachovia Letters of Credit”).

provided that the term “Permitted Encumbrances” shall not include any Lien securing Indebtedness
(a) other than Indebtedness to Lender or (b) Indebtedness to which Lender has consented in its sole
discretion.

          “Permitted Investments” means:

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

     (b) investments in commercial paper maturing within 270 days from the date of
acquisition thereof and having, at such date of acquisition, the highest credit rating
obtainable from S&P or from Moody’s;

     (c) investments in certificates of deposit, banker’s acceptances and time deposits
maturing within 180 days from the date of acquisition thereof issued or guaranteed by or
placed with, and money market deposit accounts issued or offered by, any domestic office of
any commercial bank organized under

11

 

the laws of the United States of America or any state
thereof which has a combined capital and surplus and undivided profits of not less than
$500,000,000;

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

     (e) money market funds that (i) comply with the criteria set forth in Securities and
Exchange Commission Rule 2a-7 under the Investment Company Act of 1940, (ii) are rated AAA
by S&P and Aaa by Moody’s and (iii) have portfolio assets of at least $5,000,000,000;

     (f) deposits of cash with banks or other depository institutions in the ordinary course
of business in a manner consistent with the terms of this Agreement; and

     (g) any other investments set forth in the Fuel Tech Inc. Cash Investment Policy
attached hereto as Exhibit C.

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

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

          “Prime Rate” means the rate of interest per annum publicly announced from time to time
by the Lender as its prime rate; each change in the Prime Rate shall be effective from and
including the date such change is publicly announced as being effective.

          “Projections” has the meaning assigned to such term in Section 5.01(f).

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

          “Report” means reports prepared by the Lender or another Person showing the results of
appraisals, field examinations or audits pertaining to the Borrower’s assets from information
furnished by or on behalf of the Borrower, after the Lender has exercised its rights of inspection
pursuant to this Agreement.

          “Requirement of Law” means, as to any Person, the Certificate of Incorporation and
By-Laws or other organizational or governing documents of such Person, and any law, treaty, rule or
regulation or determination of an arbitrator or a court or other Governmental Authority, in each
case applicable to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.

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

          “Revolving Commitment” means the commitment of the Lender to make Revolving Loans and
Letters of Credit hereunder, as such commitment may be reduced from time to time pursuant to
Section 2.08. The initial amount of the Lender’s Revolving Commitment is $25,000,000.00.

12

 

          “Revolving Exposure” means, at any time, the sum of the outstanding principal amount
of Revolving Loans and LC Exposure at such time.

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

          “S&P” means Standard & Poor’s Rating Services, a division of The McGraw Hill
Companies, Inc.

          “Standby LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount
of all outstanding standby Letters of Credit at such time plus (b) the aggregate amount of all LC
Disbursements relating to standby Letters of Credit that have not yet been reimbursed by or on
behalf of the Borrower at such time.

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

          “Subordinated Indebtedness” of a Person means any Indebtedness of such Person the
payment of which is subordinated to payment of the Obligations to the written satisfaction of the
Lender.

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

          “Subsidiary” means any direct or indirect subsidiary of the Borrower or a Loan Party,
as applicable.

          “Swap Agreement” means any agreement with respect to any swap, forward, futures or
derivative transaction or option or similar agreement involving, or settled by reference to, one or
more rates, currencies, commodities, equity or debt instruments or securities, or economic,
financial or pricing indices or measures of economic, financial or pricing risk or value or any
similar transaction or any combination of these transactions; provided that no transactions
under any retirement plan or stock or similar plan providing for payments only on account of
services provided by current or former directors, officers, employees or consultants of the
Borrower or the Subsidiaries shall be a Swap Agreement.

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

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

13

 

          “Total Indebtedness” means, at any date, the aggregate principal amount of all
Indebtedness of the Borrower and its Subsidiaries at such date, determined on a consolidated basis
in accordance with GAAP.

          “Transactions” means the execution, delivery and performance by the Borrower of this
Agreement, the borrowing of Loans and other credit extensions, the use of the proceeds thereof and
the issuance of Letters of Credit hereunder.

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

          “UCC” means the Uniform Commercial Code as in effect from time to time in the State of
Illinois or any other state the laws of which are required to be applied in connection with the
issue of perfection of security interests.

          “Withdrawal Liability” means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in 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
by Type (e.g., a “Eurodollar Loan”) or by Class and Type (e.g., a “Eurodollar
Revolving Loan”). Borrowings also may be classified and referred to by Class (e.g., a
“Revolving Borrowing”) or by Type (e.g., a “Eurodollar Borrowing”) or by Class and Type
(e.g., a “Eurodollar Revolving Borrowing”).

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

          SECTION 1.04. Accounting Terms; GAAP. Except as otherwise expressly provided
herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP,
as in effect from time to time; provided that, if the Borrower notifies the Lender that the
Borrower requests an amendment to any provision hereof to eliminate the effect of any change
occurring after the date hereof in GAAP or in the application thereof on the operation of such
provision (or if the Lender notifies the Borrower that the Lender request an amendment to any
provision hereof for such purpose), regardless of whether any such notice is given before or after
such change in GAAP or in the application thereof, then such provision shall be interpreted on the
basis of GAAP as in effect and applied immediately before such change shall have become effective
until such notice shall have been withdrawn or such provision amended in accordance herewith.

ARTICLE II

The Credits 

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          SECTION 2.01. Commitment. Subject to the terms and conditions set forth herein, the
Lender agrees to make Revolving Loans to the Borrower from time to time during the Availability
Period in an aggregate principal amount that will not result in the Revolving Exposure exceeding
the Revolving Commitment. Within the foregoing limits and subject to the terms and conditions set
forth herein, the Borrower may borrow, prepay and reborrow Revolving Loans.

          SECTION 2.02. Loans and Borrowings. (a) Each Revolving Loan shall be made as part
of a Borrowing consisting of Loans of the same Class and Type.

          (b) Subject to Section 2.13, each Revolving Borrowing shall be comprised entirely of CBFR
Loans or Eurodollar Loans as the Borrower may request in accordance herewith, provided that all
Borrowings made on the Effective Date must be made as CBFR Borrowings. The Lender at its option
may make any Eurodollar Loan by causing any domestic or foreign branch or Affiliate of the Lender
to make such Loan; provided that any exercise of such option shall not affect the
obligation of the Borrower to repay such Loan in accordance with the terms of this Agreement.

          (c) At the commencement of each Interest Period for any Eurodollar Revolving Borrowing, such
Borrowing shall be in an aggregate amount that is an integral multiple of $100,000.00 and not less
than $200,000.00. CBFR Revolving Borrowings may be in any amount. Borrowings of more than one
Type and Class may be outstanding at the same time; provided that there shall not at any
time be more than a total of ten (10) Eurodollar Revolving Borrowings outstanding.

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

          SECTION 2.03. Borrowing Procedures; Requests for Revolving Borrowings.

          (a) Controlled Disbursement Account. Not later than 1:00 p.m., Chicago time, on each
Business Day, the Lender shall, subject to the conditions of this Agreement (but without any
further written notice required), make available to the Borrower, by a credit to the Funding
Account, the proceeds of a CBFR Borrowing to the extent necessary to pay items to be drawn on the
Controlled Disbursement Accounts that day. All other Revolving Loans shall be made upon notice
given in accordance with §2.03(b).

          (b) Notices by the Borrower to the Lender of requests for Revolving Loans other than
pursuant to §2.03(a). To request a Revolving Borrowing, the Borrower shall notify the Lender
of such request by telephone (a) in the case of a Eurodollar Borrowing, not later than 10:00 a.m.,
Chicago time, three Business Days before the date of the proposed Borrowing or (b) in the case of a
CBFR Borrowing, not later than noon, Chicago time, on the date of the proposed Borrowing;
provided that any such notice of a CBFR Revolving Borrowing to finance the reimbursement of
an LC Disbursement as contemplated by Section 2.05(d) may be given not later than 9:00 a.m.,
Chicago time, on the date of the proposed Borrowing. Each such telephonic Borrowing Request shall
be irrevocable and shall be confirmed promptly by hand delivery or facsimile to the Lender of a
written Borrowing Request in a form approved by the Lender and signed by the Borrower. Each such
telephonic and written Borrowing Request shall specify the following information in compliance with
Section 2.01:

	 	(i)	 	the aggregate amount of the requested Borrowing;
	 
	 	(ii)	 	the date of such Borrowing, which shall be a Business Day;
	 
	 	(iii)	 	whether such Borrowing is to be a CBFR Borrowing or a Eurodollar
Borrowing; and
	 
	 	(iv)	 	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.”

15

 

If no election as to the Type of Revolving Borrowing is specified, then the requested Revolving
Borrowing shall be a CBFR Borrowing. If no Interest Period is specified with respect to any
requested Eurodollar Revolving Borrowing, then the Borrower shall be deemed to have selected an
Interest Period of one month’s duration. Promptly following receipt of a Borrowing Request in
accordance with this Section, the Lender 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.

          SECTION 2.04. [Intentionally omitted]

          SECTION 2.05. Letters of Credit; Letters of Guaranty. (a) General. Subject
to the terms and conditions set forth herein, the Borrower may request the issuance of Letters of
Credit or Letters of Guaranty for its own account, in a form reasonably acceptable to the Lender at
any time and from time to time during the Availability Period. In the event of any inconsistency
between the terms and conditions of this Agreement and the terms and conditions of any form of
letter of credit application or other agreement submitted by the Borrower to, or entered into by
the Borrower with, the Lender relating to any Letter of Credit or Letter of Guaranty, the terms and
conditions of this Agreement shall control.

          (b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions. To request
the issuance of a Letter of Credit or a Letter of Guaranty (or the amendment, renewal or extension
of an outstanding Letter of Credit), the Borrower shall hand deliver or facsimile (or transmit by
electronic communication, if arrangements for doing so have been approved by the Lender) to the
Lender prior to 9:00 am, Chicago time, at least three Business Days prior to the requested date of
issuance, amendment, renewal or extension) a notice requesting the issuance of a Letter of Credit
or a Letter of Guaranty, or identifying the Letter of Credit to be amended, renewed or extended,
and specifying the date of issuance, amendment, renewal or extension (which shall be a Business
Day), the date on which such Letter of Credit is to expire (which shall comply with paragraph (c)
of this Section), the amount of such Letter of Credit or Letter of Guaranty, the name and address
of the beneficiary thereof and such other information as shall be necessary to prepare, amend,
renew or extend such Letter of Credit or Letter of Guaranty. If requested by the Lender, the
Borrower also shall submit a letter of credit application on the Lender’s standard form in
connection with any request for a Letter of Credit.

          (c) Expiration Date. Each Letter of Credit or Letter of Guaranty shall expire at or
prior to the close of business on the date that is five Business Days prior to the Maturity Date.
Extended maturity terms may be allowed by Lender in its Permitted Discretion.

          (d) Reimbursement. If the Lender shall make any LC Disbursement in respect of a
Letter of Credit or Letter of Guaranty, the Borrower shall reimburse such LC Disbursement or
Guaranty Payment by paying to the Lender an amount equal to such LC Disbursement or Guaranty
Payment not later than 11:00 a.m., Chicago time, on the date that such LC Disbursement or Guaranty
Payment is made, if the Borrower shall have received notice of such LC Disbursement or Guaranty
Payment prior to 9:00 a.m., Chicago time, on such date, or, if such notice has not been received by
the Borrower prior to such time on such date, then not later than 11:00 a.m., Chicago time, on (i)
the Business Day that the Borrower receives such notice, if such notice is received prior to 9:00
a.m., Chicago time, on the day of receipt, or (ii) the Business Day immediately following the day
that the Borrower receives such notice, if such notice is not received prior to such time on the
day of receipt; provided that the Borrower may, subject to the conditions to borrowing set
forth herein, request that such payment be financed with a CBFR Revolving Borrowing in an
equivalent amount and, to the extent so financed, the Borrower’s obligation to make such payment
shall be discharged and replaced by the resulting CBFR Revolving Borrowing.

          (e) Obligations Absolute. The Borrower’s obligation to reimburse LC Disbursements or
Guaranty Payments as provided in paragraph (d) of this Section shall be absolute, unconditional and
irrevocable, and shall be performed strictly in accordance with the terms of this Agreement under
any and all circumstances whatsoever and irrespective of (i) any lack of validity or enforceability
of any Letter of Credit, Letter of Guaranty or this Agreement, or any term or provision therein,
(ii) any draft or other document presented under a Letter of

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Credit or Letter of Guaranty proving to be forged, fraudulent or invalid in any respect or any
statement therein being untrue or inaccurate in any respect, (iii) payment by the Lender under a
Letter of Credit or Letter of Guaranty against presentation of a draft or other document that does
not comply with the terms of such Letter of Credit or Letter of Guaranty, or (iv) any other event
or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the
provisions of this Section, constitute a legal or equitable discharge of, or provide a right of
setoff against, the Borrower’s obligations hereunder. Neither the Lender nor any of its Related
Parties, shall have any liability or responsibility by reason of or in connection with the issuance
or transfer of any Letter of Credit or Letter of Guaranty or any payment or failure to make any
payment thereunder (irrespective of any of the circumstances referred to in the preceding
sentence), or any error, omission, interruption, loss or delay in transmission or delivery of any
draft, notice or other communication under or relating to any Letter of Credit or Letter of
Guaranty (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
Lender; provided that the foregoing shall not be construed to excuse the Lender from
liability to the Borrower to the extent of any direct damages (as opposed to consequential damages,
claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable
law) suffered by the Borrower that are caused by the Lender’s failure to exercise care when
determining whether drafts and other documents presented under a Letter of Credit or Letter of
Guaranty comply with the terms thereof. The parties hereto expressly agree that, in the absence of
gross negligence or wilful misconduct on the part of the Lender (as finally determined by a court
of competent jurisdiction), the Lender 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 Letter of Credit or Letter of Guaranty, the Lender may,
in its sole discretion, either accept and make payment upon such documents without responsibility
for further investigation, regardless of any notice or information to the contrary, or refuse to
accept and make payment upon such documents if such documents are not in strict compliance with the
terms of such Letter of Credit or Letter of Guaranty.

          (f) Disbursement Procedures. The Lender shall, promptly following its receipt
thereof, examine all documents purporting to represent a demand for payment under a Letter of
Credit. The Lender shall promptly notify a Financial Officer of the Borrower by telephone
(confirmed by facsimile) of such demand for payment and whether the Lender has made or will make an
LC Disbursement thereunder; provided that any failure to give or delay in giving such
notice shall not relieve the Borrower of its obligation to reimburse the Lender with respect to any
such LC Disbursement.

          (g) Interim Interest. If the Lender shall make any LC Disbursement, then, unless the
Borrower shall reimburse such LC Disbursement in full on the date such LC Disbursement is made, the
unpaid amount thereof shall bear interest, for each day from and including the date such LC
Disbursement is made to but excluding the date that the Borrower reimburses such LC Disbursement,
at the rate per annum then applicable to CBFR Revolving Loans; provided that, if the
Borrower fails to reimburse such LC Disbursement when due pursuant to paragraph (e) of this
Section, then Section 2.12(d) shall apply. Interest accrued pursuant to this paragraph shall be
for the account of the Lender. Interest shall not accrue at a default rate during any period in
which the Lender has failed or delayed giving notice to the Borrower of any demand for payment
under a Letter of Credit.

          (h) Cash Collateralization. If any Default shall occur and be continuing, on the
Business Day that the Borrower receives notice from the Lender demanding the deposit of cash
collateral pursuant to this paragraph, or on the Maturity Date if there shall then be exposure on a
Letter of Credit or a Letter of Guaranty, the Borrower shall deposit in an account with the Lender,
in the name and for the benefit of the Lender (the “LC Collateral Account”), an amount in
cash equal to 110% of the aggregate LC Exposure and exposure on any Letter of Guaranty as of such
date plus accrued and unpaid interest thereon; provided that the obligation to deposit such
cash collateral shall become effective immediately, and such deposit shall become immediately due
and payable, without demand or other notice of any kind, upon the occurrence of any Event of
Default with respect to the Borrower described in clause (h) or (i) of Article VII. Such deposit
shall be held by the Lender as collateral for the payment and performance of the Obligations. The
Lender shall have exclusive dominion and control, including the exclusive right of withdrawal, over
such account and the Borrower hereby grants the Lender a security interest in the LC Collateral
Account. Other than any interest earned on the investment of such deposits, which investments

17

 

shall be made in Permitted Investments at the option and sole discretion of the Lender and at the
Borrower’s risk and expense, such deposits shall not bear interest. Interest or profits, if any,
on such investments shall accumulate
in such account. Moneys in such account shall be applied by the Lender for LC Disbursements or
Guaranty Payments for which it has not been reimbursed and, to the extent not so applied, shall be
held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at
such time or, if the maturity of the Loans has been accelerated, be applied to satisfy other
Obligations. If the Borrower is required to provide an amount of cash collateral hereunder as a
result of the occurrence of an Event of Default, such amount (to the extent not applied as
aforesaid) shall be returned to the Borrower within three Business Days after all such Defaults
have been cured or waived.

          SECTION 2.06. Funding of Borrowings. The Lender shall make each Loan to be made by
it hereunder on the proposed date thereof available to the Borrower by promptly crediting the
amounts in immediately available funds, to the Funding Account; provided that CBFR
Revolving Loans made to finance the reimbursement of an LC Disbursement or a Guaranty Payment as
provided in Section 2.05(e) shall be retained by the Lender.

          SECTION 2.07. Interest Elections. (a) Each Revolving Borrowing initially shall be
of the Type specified in the applicable Borrowing Request and, in the case of a Eurodollar
Revolving Borrowing, shall have an initial Interest Period as specified in such Borrowing Request.
Thereafter, the Borrower may elect to convert such Borrowing to a different Type or to continue
such Borrowing and, in the case of a Eurodollar Revolving Borrowing, may elect Interest Periods
therefor, all as provided in this Section. The Borrower may elect different options with respect
to different portions of the affected Borrowing, and the Loans comprising each such portion shall
be considered a separate Borrowing.

          (b) To make an election pursuant to this Section, the Borrower shall notify the Lender of such
election by telephone by the time that a Borrowing Request would be required under Section 2.03 if
the Borrower were requesting a Revolving Borrowing of the Type resulting from such election to be
made on the effective date of such election. Each such telephonic Interest Election Request shall
be irrevocable and shall be confirmed promptly by hand delivery or facsimile to the Lender of a
written Interest Election Request in a form approved by the Lender and signed by the Borrower.

          (c) Each telephonic and written Interest Election Request shall specify the following
information in compliance with Section 2.02:

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

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

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

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

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

          (d) If the Borrower fails to deliver a timely Interest Election Request with respect to a
Eurodollar Revolving Borrowing prior to the end of the Interest Period applicable thereto, then,
unless such

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Borrowing is repaid as provided herein, at the end of such Interest Period such
Borrowing shall be converted to a CBFR Borrowing. Notwithstanding any contrary provision hereof,
if a Default has occurred and is continuing and the Lender so notifies the Borrower, then, so long
as a Default is continuing (i) no outstanding Revolving
Borrowing may be converted to or continued as a Eurodollar Borrowing and (ii) unless repaid, each
Eurodollar Revolving Borrowing shall be converted to a CBFR Borrowing at the end of the Interest
Period applicable thereto.

          SECTION 2.08. Termination of Commitment. (a) Unless previously terminated, the
Revolving Commitment shall terminate on the Maturity Date.

          (b) The Borrower may at any time terminate the Commitment upon (i) the payment in full of all
outstanding Loans, together with accrued and unpaid interest thereon and on any Letters of Credit
or Letters of Guaranty, (ii) the cancellation and return of all outstanding Letters of Credit or
Letters of Guaranty (or alternatively, with respect to each such Letter of Credit or Letters of
Guaranty, the furnishing to the Lender of a cash deposit equal to 110% of the LC Exposure or the
Letter of Guaranty exposure as of such date), (iii) the payment in full of the accrued and unpaid
fees, and (iv) the payment in full of all reimbursable expenses and other Obligations together with
accrued and unpaid interest thereon.

          (c) The Borrower may from time to time reduce, the Revolving Commitment; provided that
(i) each reduction of the Revolving Commitment shall be in an amount that is an integral multiple
of $100,000.00 and not less than $1,000,000.00 and (ii) the Borrower shall not reduce the Revolving
Commitment if, after giving effect to any concurrent prepayment of the Revolving Loans in
accordance with Section 2.09, the sum of the Revolving Exposures would exceed the Revolving
Commitment.

          (d) The Borrower shall notify the Lender of any election to terminate or reduce the Commitment
under paragraph (b) or (c) of this Section at least five Business Days prior to the effective date
of such termination or reduction, specifying such election and the effective date thereof. Each
notice delivered by the Borrower pursuant to this Section shall be irrevocable; provided
that a notice of termination of the Commitment delivered by the Borrower may state that such notice
is conditioned upon the effectiveness of other credit facilities, in which case such notice may be
revoked by the Borrower (by notice to the Lender on or prior to the specified effective date) if
such condition is not satisfied. Any termination or reduction of the Commitment shall be
permanent.

          SECTION 2.09. Repayment of Loans; Evidence of Debt. (a) The Borrower hereby
unconditionally promises to pay to the Lender for its account the then unpaid principal amount of
each Revolving Loan on the Maturity Date.

          (b) [Intentionally omitted.]

          (c) The Lender shall maintain in accordance with its usual practice an account or accounts
evidencing the indebtedness of the Borrower to the Lender resulting from each Loan made by the
Lender, including the amounts of principal and interest payable and paid to the Lender from time to
time hereunder.

          (d) The Lender shall maintain accounts in which it shall record (i) the date and amount of
each Loan made hereunder, the Class and Type thereof and the Interest Period applicable thereto,
(ii) the amount of any principal or interest due and payable or to become due and payable from the
Borrower to the Lender hereunder and (iii) the amount of any sum received by the Lender hereunder.

          (e) The entries made in the accounts maintained pursuant to paragraph (c) or (d) of this
Section shall be prima facie evidence of the existence and amounts of the
obligations recorded therein; provided that the failure of the Lender to maintain such
accounts or any error therein shall not in any manner affect the obligation of the Borrower to
repay the Loans in accordance with the terms of this Agreement.

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          (f) The Lender may request that Loans made by it be evidenced by a promissory note. In such
event, the Borrower shall prepare, execute and deliver to the Lender a promissory note payable to
the order of the Lender (or, if requested by the Lender, to the Lender and its registered assigns)
and in a form approved by the Lender. Thereafter, the Loans evidenced by such promissory note and
interest thereon shall at all times (including after assignment pursuant to Section 8.04) be
represented by one or more promissory notes in such form payable to
the order of the payee named therein (or, if such promissory note is a registered note, to such
payee and its registered assigns).

          SECTION 2.10. Prepayment of Loans. (a) The Borrower shall have the right at any
time and from time to time to prepay any Borrowing in whole or in part, without premium or penalty,
subject to prior notice in accordance with paragraph (f) of this Section.

          (b) [Intentionally omitted.]

          (c) [Intentionally omitted.]

          (d) [Intentionally omitted.]

          (e) [Intentionally omitted.]

          (f) The Borrower shall notify the Lender by telephone (confirmed by facsimile) of any
prepayment hereunder (i) in the case of prepayment of a Eurodollar Revolving Borrowing, not later
than 10:00 a.m., Chicago time, three Business Days before the date of prepayment, or (ii) in the
case of prepayment of a CBFR Revolving Borrowing, not later than 10:00 a.m., Chicago time, on the
date of prepayment. Each such notice shall be irrevocable and shall specify the prepayment date
and the principal amount of each Borrowing or portion thereof to be prepaid; provided that,
if a notice of prepayment is given in connection with a conditional notice of termination of the
Commitment as contemplated by Section 2.08, then such notice of prepayment may be revoked if such
notice of termination is revoked in accordance with Section 2.08. Each partial prepayment of any
Revolving Borrowing shall be in an amount that would be permitted in the case of an advance of a
Revolving Borrowing of the same Type as provided in Section 2.02. Prepayments shall be accompanied
by accrued interest to the extent required by Section 2.12.

          SECTION 2.11. Fees. (a) The Borrower agrees to pay to the Lender a commitment fee,
which shall accrue at the Applicable Rate on the average daily amount of the Available Revolving
Commitment of the Lender during the period from and including the Effective Date to but excluding
the date on which the Lender’s Revolving Commitment terminates. Accrued commitment fees shall be
payable in arrears on the first Business Day of each January, April, July and October and on the
date on which the Revolving Commitment terminates, commencing on the first such date to occur after
the date hereof. All commitment fees shall be computed on the basis of a year of 360 days and
shall be payable for the actual number of days elapsed.

          (b) The Borrower agrees to pay (i) to the Lender a letter of credit fee with respect to
Letters of Credit which shall accrue at the same Applicable Rate for Letters of Credit on the
average daily amount of the Lender’s LC Exposure (excluding any portion thereof attributable to
unreimbursed LC Disbursements) during the period from and including the Effective Date to but
excluding the later of the date on which the Lender’s Revolving Commitment terminates and the date
on which the Revolving Lender ceases to have any LC Exposure, and (ii) the Lender’s standard fees
with respect to the issuance, amendment, renewal or extension of any Letter of Credit or Letter of
Guaranty or processing of drawings thereunder. Letter of Credit or Letter of Guaranty fees accrued
through and including the last day of each calendar quarter shall be payable on the first Business
Day of each January, April, July and October following such last day, commencing on the first such
date to occur after the Effective Date; provided that all such fees shall be payable on the
date on which the Revolving Commitment terminates and any such fees accruing after the date on
which the Commitment terminates shall be payable on demand. Any other fees payable to the Lender
pursuant to this paragraph shall be payable within 10 days after demand. All fronting fees shall
be computed on the basis of a year of 360 days and shall be payable for the actual

20

 

number of days
elapsed. Fees to be incurred for Letters of Guaranty shall accrue at the same rate and shall be
payable on the same terms as for Letters of Credit.

          (c) All fees payable hereunder shall be paid on the dates due, in immediately available funds,
to the Lender. Fees paid shall not be refundable under any circumstances. Notwithstanding
anything to the contrary in this Agreement or the Loan Documents, no fees shall accrue following
the occurrence of any event
described in Section 7(h) or (i) with respect to the Lender during any period during which Lender
is precluded from making Loans or advances to or for the account of the Borrower.

          SECTION 2.12. Interest. (a) The Loans comprising each CBFR Borrowing shall bear
interest at the CB Floating Rate plus the Applicable Rate.

          (b) The Loans comprising each Eurodollar Borrowing shall bear interest at the Adjusted LIBO
Rate for the Interest Period in effect for such Borrowing plus the Applicable Rate.

          (c) [Intentionally omitted.]

          (d) Notwithstanding the foregoing, during the occurrence and continuance of an Event of
Default, the Lender may, at its option, by notice to the Borrower, declare that (i) all Loans shall
bear interest at 3% plus the rate otherwise applicable to such Loans as provided in the preceding
paragraphs of this Section or (ii) in the case of any other amount outstanding hereunder, such
amount shall accrue at 3% plus the rate applicable to such fee or other obligation as provided
hereunder.

          (e) Accrued interest on each Loan (for CBFR Loans, accrued through the last day of the prior
calendar month) shall be payable in arrears on each Interest Payment Date for such Loan and upon
termination of the Commitment; provided that (i) interest accrued pursuant to paragraph (d)
of this Section shall be payable on demand, (ii) in the event of any repayment or prepayment of any
Loan (other than a prepayment of a CBFR Revolving Loan prior to the end of the Availability
Period), accrued interest on the principal amount repaid or prepaid shall be payable on the date of
such repayment or prepayment and (iii) in the event of any conversion of any Eurodollar Loan prior
to the end of the current Interest Period therefor, accrued interest on such Loan shall be payable
on the effective date of such conversion.

          (f) All interest hereunder shall be computed on the basis of a year of 360 days and shall be
payable for the actual number of days elapsed. The applicable CB Floating Rate, Adjusted LIBO Rate
or LIBO Rate shall be determined by the Lender, and such determination shall be conclusive absent
manifest error.

          SECTION 2.13. Alternate Rate of Interest. If prior to the commencement of any
Interest Period for a Eurodollar Borrowing:

          (a) the Lender determines (which determination shall be conclusive absent manifest
error) that adequate and reasonable means do not exist for ascertaining the Adjusted LIBO
Rate or the LIBO Rate, as applicable, for such Interest Period; or

          (b) the Lender determines the Adjusted LIBO Rate or the LIBO Rate, as applicable, for
such Interest Period will not adequately and fairly reflect the cost to the Lender of making
or maintaining their Loans (or its Loan) included in such Borrowing for such Interest
Period;

then the Lender shall give notice thereof to the Borrower by telephone or facsimile as promptly as
practicable thereafter and, until the Lender notifies the Borrower that the circumstances giving
rise to such notice no longer exist, (i) any Interest Election Request that requests the conversion
of any Revolving Borrowing to, or continuation of any Revolving Borrowing as, a Eurodollar
Borrowing shall be ineffective, and (ii) if any Borrowing Request requests a Eurodollar Revolving
Borrowing, such Borrowing shall be made as a CBFR Borrowing.

21

 

          SECTION 2.14. Increased Costs. (a) If any Change in Law shall:

          (i) impose, modify or deem applicable any reserve, special deposit or similar
requirement against assets of, deposits with or for the account of, or credit extended by,
the Lender (except any such reserve requirement reflected in the Adjusted LIBO Rate); or

          (ii) impose on the Lender or the London interbank market any other condition affecting
this Agreement or Eurodollar Loans made by such Lender or any Letter of Credit or
participation therein;

and the result of any of the foregoing shall be to increase the cost to such Lender of making or
maintaining any Eurodollar Loan (or of maintaining its obligation to make any such Loan) or to
increase the cost to the Lender of participating in, issuing or maintaining any Letter of Credit or
to reduce the amount of any sum received or receivable by the Lender hereunder (whether of
principal, interest or otherwise), then the Borrower will pay to the Lender such additional amount
or amounts as will compensate the Lender for such additional costs incurred or reduction suffered.

          (b) If the Lender determines that any Change in Law regarding capital requirements has or
would have the effect of reducing the rate of return on the Lender’s capital or on the capital of
the Lender’s holding company, as a consequence of this Agreement or the Loans made by, Letters of
Credit issued by the Lender to a level below that which the Lender or the Lender’s holding company
could have achieved but for such Change in Law (taking into consideration the Lender’s policies and
the policies of the Lender’s holding company with respect to capital adequacy), then from time to
time the Borrower will pay to the Lender such additional amount or amounts as will compensate the
Lender or the Lender’s holding company for any such reduction suffered.

          (c) A certificate of the Lender setting forth the amount or amounts necessary to compensate
the Lender or its holding company, as the case may be, as specified in paragraph (a) or (b) of this
Section shall be delivered to the Borrower and shall be conclusive absent manifest error. The
Borrower shall pay the Lender the amount shown as due on any such certificate within 10 days after
receipt thereof.

          (d) Failure or delay on the part of the Lender to demand compensation pursuant to this Section
shall not constitute a waiver of the Lender’s right to demand such compensation; provided
that the Borrower shall not be required to compensate a Lender pursuant to this Section for any
increased costs or reductions incurred more than 270 days prior to the date that the Lender
notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of
the Lender’s intention to claim compensation therefor; provided further that, if
the Change in Law giving rise to such increased costs or reductions is retroactive, then the
270-day period referred to above shall be extended to include the period of retroactive effect
thereof.

          SECTION 2.15. Break Funding Payments. In the event of (a) the payment of any
principal of any Eurodollar Loan other than on the last day of an Interest Period applicable
thereto (including as a result of an Event of Default), (b) the conversion of any Eurodollar Loan
other than on the last day of the Interest Period applicable thereto or (c) the failure to borrow,
convert, continue or prepay any Eurodollar Loan on the date specified in any notice delivered
pursuant hereto (regardless of whether such notice may be revoked under Section 2.08 and is revoked
in accordance therewith), then, in any such event, the Borrower shall compensate the Lender for the
loss, cost and expense attributable to such event. In the case of a Eurodollar Loan, such loss,
cost or expense to the Lender shall be deemed to include an amount determined by the 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 LIBO Rate that would have been applicable
to such Loan, for the period from the date of such event to the last day of the then current
Interest Period therefor (or, in the case of a failure to borrow, convert or continue, for the
period that would have been the Interest Period for such Loan), over (ii) the amount of interest
which would accrue on such principal amount for such period at the interest rate which the 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 the Lender setting
forth any amount or amounts that the Lender is entitled to receive pursuant to this Section shall
be delivered to the Borrower and shall be conclusive absent manifest error.

22

 

The Borrower shall
pay the Lender the amount shown as due on any such certificate within 10 days after receipt
thereof.

          SECTION 2.16. Taxes. (a) Any and all payments by the Borrower hereunder shall be
made free and clear of and without deduction for any Indemnified Taxes or Other Taxes;
provided that if the Borrower shall be required to deduct any Indemnified Taxes or Other
Taxes from such payments, then (i) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to additional sums payable under
this Section) the Lender receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions and (iii) the Borrower shall pay
the full amount deducted to the relevant Governmental Authority in accordance with applicable law.

          (b) In addition, the Borrower shall pay any Other Taxes to the relevant Governmental Authority
in accordance with applicable law.

          (c) The Borrower shall indemnify the Lender within 10 days after written demand therefor, for
the full amount of any Indemnified Taxes or Other Taxes paid by the Lender on or with respect to
any payment by or on account of any obligation of the Borrower hereunder (including Indemnified
Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section)
and any penalties, interest and reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted
by the relevant Governmental Authority. A certificate as to the amount of such payment or
liability delivered to the Borrower by the Lender shall be conclusive absent manifest error.

          (d) As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the
Borrower to a Governmental Authority, the Borrower shall deliver to the Lender 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 Lender.

          (e) If the Lender determines, in its sole discretion, that it has received a refund of any
Taxes or Other Taxes as to which it has been indemnified by the Borrower or with respect to which
the Borrower has paid additional amounts pursuant to this Section 2.16, it shall pay over such
refund to the Borrower (but only to the extent of indemnity payments made, or additional amounts
paid, by the Borrower under this Section 2.16 with respect to the Taxes or Other Taxes giving rise
to such refund), net of all out-of-pocket expenses of the Lender and without interest (other than
any interest paid by the relevant Governmental Authority with respect to such refund); provided,
that the Borrower, upon the request of the Lender, agrees to repay the amount paid over to the
Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental
Authority) to the Lender in the event the Lender is required to repay such refund to such
Governmental Authority. This Section shall not be construed to require the Lender to make available
its tax returns (or any other information relating to its taxes which it deems confidential) to the
Borrower or any other Person.

          (f) Notwithstanding anything in this Section 2.16 to the contrary, the Borrower shall
not have any obligation to the Lender with respect to any Tax, Other Tax or other indemnity
payment to the extent arising from the willful misconduct or gross negligence of the Lender.

          SECTION 2.17. Payments Generally; Allocation of Proceeds. (a) The Borrower shall
make each payment required to be made by it hereunder (whether of principal, interest, fees or
reimbursement of LC Disbursements, or of amounts payable under Section 2.14, 2.15 or 2.16, or
otherwise) prior to 2:00 p.m., Chicago time, on the date when due, in immediately available funds,
without set-off or counterclaim. Any amounts received after such time on any date may, in the
discretion of the Lender, 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 Lender at its
offices at 10 South Dearborn Street, 22nd Floor, Chicago, Illinois. If any payment
hereunder shall be due on a day that is not a Business Day, the date for payment shall be extended
to the next succeeding Business Day, and, in the case of any payment accruing interest, interest
thereon shall be payable for the period of such extension. All payments hereunder shall be made in
dollars.

23

 

          (b) At the election of the Borrower or, if a Default has occurred and is continuing, at the
election of the Lender, all payments of principal, interest, LC Disbursements, fees, premiums,
reimbursable expenses (including, without limitation, all reimbursement for fees and expenses
pursuant to Section 8.03), and other sums payable under the Loan Documents, may be paid from the
proceeds of Borrowings made hereunder whether made following a request by the Borrower pursuant to
Section 2.03 or a deemed request as provided in this Section or may be deducted from any deposit
account of the Borrower maintained with the Lender. If a Default has occurred and is continuing,
the Borrower hereby irrevocably authorizes (i) the Lender to make a Borrowing for the purpose of
paying each payment of principal, interest and fees as it becomes due hereunder or any other amount
due under the Loan Documents and agrees that all such amounts charged shall constitute Loans and
that all such Borrowings shall be deemed to have been requested pursuant to Sections 2.03 or 2.04,
as applicable and (ii) the
Lender to charge any deposit account of the Borrower maintained with the Lender for each payment of
principal, interest and fees as it becomes due hereunder or any other amount due under the Loan
Documents.

          SECTION 2.18. Indemnity for Returned Payments. If after receipt of any payment which
is applied to the payment of all or any part of the Obligations, the Lender is for any reason
compelled to surrender such payment or proceeds to any Person because such payment or application
of proceeds is invalidated, declared fraudulent, set aside, determined to be void or voidable as a
preference, impermissible setoff, or a diversion of trust funds, or for any other reason, then the
Obligations or part thereof intended to be satisfied shall be revived and continued and this
Agreement shall continue in full force as if such payment or proceeds had not been received by the
Lender and the Borrower shall be liable to pay to the Lender. The provisions of this Section 2.18
shall be and remain effective notwithstanding any contrary action which may have been taken by the
Lender in reliance upon such payment or application of proceeds. The provisions of this Section
2.18 shall survive the termination of this Agreement.

ARTICLE III

Representations and Warranties

          Each Loan Party represents and warrants to the Lender that:

          SECTION 3.01. Organization; Powers. Each of the domestic Loan Parties and each of
its domestic Subsidiaries is duly organized, validly existing and in good standing under the laws
of the jurisdiction of its organization, has all requisite power and authority to carry on its
business as now conducted and is qualified to do business in, and is in good standing in, every
jurisdiction where such qualification is required and where failure to qualify would have a
Material Adverse Effect. Borrower will use its best efforts to ensure its foreign subsidiaries
comply with the terms of this Section 3.01, and will cause such compliance where failure of
compliance would have a Material Adverse Effect.

          SECTION 3.02. Authorization; Enforceability. The Transactions are within each Loan
Party’s organizational powers and have been duly authorized by all necessary organizational actions
and, if required, actions by equity holders. The Loan Documents to which it is a party have been
duly executed and delivered by it and constitute a legal, valid and binding obligation of it,
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.
This Section shall not be effective as to Borrower’s Italian subsidiary until August 31, 2009.

          SECTION 3.03. Governmental Approvals; No Conflicts. The Transactions (a) do not
require any consent or approval of, registration or filing with, or any other action by, any
Governmental Authority, except such as have been obtained or made and are in full force and effect
and except for filings necessary to perfect Liens created pursuant to the Loan Documents, (b) will
not violate any Requirement of Law applicable to any domestic Loan Party or any of its domestic
Subsidiaries, (c) will not violate or result in a default under any indenture,

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agreement or other
instrument binding upon any Loan Party or any of its Subsidiaries or its assets, or give rise to a
right thereunder to require any payment to be made by any Loan Party or any of its Subsidiaries,
and (d) will not result in the creation or imposition of any Lien on any asset of any Loan Party or
any of its Subsidiaries, except Liens created pursuant to the Loan Documents. Borrower will use
its best efforts to ensure its foreign Subsidiaries comply with this Section 3.03, but failure of a
foreign Subsidiary to comply with this section shall not constitute a breach of this Agreement
unless such failure to comply would cause a Material Adverse Effect.

          SECTION 3.04. Financial Condition; No Material Adverse Change. (a) The Borrower has
heretofore furnished to the Lender its consolidated balance sheet and statements of income,
stockholders equity and cash flows (i) as of and for the fiscal year ended December 31, 2008 and
(ii) as of and for the fiscal quarter and the portion of the fiscal year ended March 31, 2009,
certified by its chief financial officer. Such financial statements present fairly, in all
material respects, the financial position and results of operations and cash flows of the Borrower
and its consolidated Subsidiaries as of such dates and for such periods in accordance with GAAP,
subject
to year-end audit adjustments and the absence of footnotes in the case of the statements referred
to in clause (ii) above.

          (b) No event, change or condition has occurred that has had, or could reasonably be expected
to have, a Material Adverse Effect, since March 31, 2009.

          SECTION 3.05. Properties. (a) The Borrower and each other domestic Loan Party has
good title to, or valid leasehold interests in, all of its real and personal property material to
its business, except for minor defects in title that do not interfere with its ability to conduct
its business as currently conducted or to utilize such properties for their intended purposes.

          (b) The Borrower and each domestic Loan Party owns, or is licensed to use, all trademarks,
tradenames, copyrights, patents and other intellectual property material to its business, and the
use thereof by the Borrower and each other Loan Party does not infringe upon the rights of any
other Person, except for any such infringements that could not reasonably be expected to result in
a Material Adverse Effect. Borrower will use its best efforts to ensure that its foreign
Subsidiaries comply with this Section 3.05(b), but failure of a foreign Subsidiary to comply with
this subsection shall not constitute a breach of this Agreement unless such failure to comply would
cause a Material Adverse Effect.

          SECTION 3.06. Litigation and Environmental Matters. (a) There are no actions, suits
or proceedings by or before any arbitrator or Governmental Authority pending against or, to the
knowledge of any Loan Party, threatened against or affecting the Loan Parties or any of their
Subsidiaries (i) 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 (other than the Disclosed Matters) or (ii) that involve this
Agreement or the Transactions.

          (b) Except for the Disclosed Matters (i) no Loan Party nor any of its Subsidiaries has
received notice of any claim with respect to any Environmental Liability and (ii) and except with
respect to any other matters that, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, no Loan Party nor any of its domestic Subsidiaries
(1) has failed to comply with any Environmental Law or to obtain, maintain or comply with any
permit, license or other approval required under any Environmental Law or (2) has become subject to
any Environmental Liability. Borrower will use its best efforts to ensure to ensure its foreign
Subsidiaries comply with Environmental Laws applicable to such Subsidiaries and will cause such
compliance where failure of compliance would have a Material Adverse Effect.

          (c) Since the date of this Agreement, there has been no change in the status of the Disclosed
Matters that, individually or in the aggregate, has resulted in, or materially increased the
likelihood of, a Material Adverse Effect.

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          SECTION 3.07. Compliance with Laws and Agreements. Each Loan Party and its
Subsidiaries is in compliance with all Requirements of Law applicable to it or its property and all
indentures, agreements and other instruments binding upon it or its property, except where the
failure to do so, individually or in the aggregate, could not reasonably be expected to result in a
Material Adverse Effect. No Default has occurred and is continuing.

          SECTION 3.08. Investment Company Status. No Loan Party is an “investment company” as
defined in, or subject to regulation under, the Investment Company Act of 1940.

          SECTION 3.09. Taxes. Each Loan Party and its Subsidiaries has timely filed or caused
to be filed all Tax returns and reports required to have been filed and has paid or caused to be
paid all Taxes required to have been paid by it, except (a) Taxes that are being contested in good
faith by appropriate proceedings and for which such Loan Party or such Subsidiary, as applicable,
has set aside on its books adequate reserves or (b) to the extent that the failure to do so could
not be expected to result in a Material Adverse Effect. No tax liens have been filed and no claims
are being asserted with respect to any such taxes.

          SECTION 3.10. ERISA. No ERISA Event has occurred or is reasonably expected to occur
that, when taken together with all other such ERISA Events for which liability is reasonably
expected to occur, could reasonably be expected to result in a Material Adverse Effect. The
present value of all accumulated benefit obligations under each Plan (based on the assumptions used
for purposes of Statement of Financial Accounting Standards No. 87) did not, as of the date of the
most recent financial statements reflecting such amounts, exceed the fair market value of the
assets of such Plan, except where such excess could not reasonably be expected to result in a
Material Adverse Effect.

          SECTION 3.11. Disclosure. The Borrower has disclosed to the Lender all agreements,
instruments and corporate or other restrictions to which it or any Subsidiary is subject, and all
other matters known to it, that, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect. None of the reports, financial statements, certificates or
other information furnished by or on behalf of any Loan Party to the Lender or any Lender in
connection with the negotiation of this Agreement or any other Loan Document (as modified or
supplemented by other information so furnished) contains any material misstatement of fact or omits
to state any material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that, with respect to
projected financial information, the Borrower represents only that such information was prepared in
good faith based upon assumptions believed to be reasonable at the time delivered and, if such
projected financial information was delivered prior to the Effective Date, as of the Effective
Date.

          SECTION 3.12. Material Agreements. Neither the Borrower nor any Loan Party is in
default in the performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in (i) any material agreement to which it is a party or (ii) any agreement or
instrument evidencing or governing Indebtedness.

          SECTION 3.13. Solvency. (a) Immediately after the consummation of the Transactions
to occur on the Effective Date, (i) the fair value of the assets of each Loan Party, at a fair
valuation, will exceed its debts and liabilities, subordinated, contingent or otherwise, (ii) the
present fair saleable value of the property of each Loan Party will be greater than the amount that
will be required to pay the probable liability of its debts and other liabilities, subordinated,
contingent or otherwise, as such debts and other liabilities become absolute and matured; (iii)
each Loan Party will be able to pay its debts and liabilities, subordinated, contingent or
otherwise, as such debts and liabilities become absolute and matured, and (iv) each Loan Party will
not have unreasonably small capital with which to conduct the business in which it is engaged as
such business is now conducted and is proposed to be conducted after the Effective Date.

          (b) No Loan Party intends to, or will permit any of its Subsidiaries to, and believes that it
or any of its Subsidiaries will, incur debts beyond its ability to pay such debts as they mature,
taking into account the timing of and amounts of cash to be received by it or any such Subsidiary
and the timing of the amounts of cash to be payable on or in respect of its Indebtedness or the
Indebtedness of any such Subsidiary.

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          SECTION 3.14. Insurance. Schedule 3.14 sets forth a description of all
insurance maintained by or on behalf of the Borrower as of the Effective Date. As of the Effective
Date, all premiums in respect of such insurance have been paid. The Borrower believes that the
insurance maintained by or on behalf of the Borrower and the Subsidiaries is adequate.

          SECTION 3.15. Capitalization and Subsidiaries. Schedule 3.15 sets forth a
correct and complete list of the name and relationship to the Borrower of each and all of the
Borrower’s Subsidiaries, including the type of entity of the Borrower and each of its
Subsidiaries. Each Subsidiary which is an Inactive Subsidiary is identified on Schedule 3.15.
“Inactive Subsidiary” for the purposes of this Agreement means a Subsidiary which has
generated less than $1,000,000.00 in gross revenue in its most recent fiscal year, as determined
from time to time. All of the issued and outstanding Equity Interests owned by any Loan Party has
been (to the extent such concepts are relevant with respect to such ownership interests) duly
authorized and issued and is fully paid and non-assessable.

          SECTION 3.16. [Intentionally omitted.].

          SECTION 3.17. Employment Matters. As of the Effective Date, there are no strikes,
lockouts or slowdowns against any Loan Party or any Subsidiary pending or, to the knowledge of the
Borrower, threatened. The hours worked by and payments made to employees of the Loan Parties and
the Subsidiaries have not been in violation of the Fair Labor Standards Act or any other applicable
Federal, state, local or foreign law dealing with such matters, except where such violation would
not have a Material Adverse Effect. All payments due from any Loan Party or any Subsidiary, or for
which any claim may be made against any Loan Party or any Subsidiary, on account of wages and
employee health and welfare insurance and other benefits, have been paid or accrued as a liability
on the books of the Loan Party or such Subsidiary, except where failure to make such payment or
accrual would not have a Material Adverse Effect.

ARTICLE IV

Conditions

          SECTION 4.01. Effective Date. The obligations of the Lender to make Loans and to
issue Letters of Credit hereunder shall not become effective until the date on which each of the
following conditions is satisfied (or waived in accordance with Section 8.02):

     (a) Credit Agreement and Loan Documents. The Lender (or its counsel) shall
have received (i) from each party hereto either (A) a counterpart of this Agreement signed
on behalf of such party or (B) written evidence satisfactory to the Lender (which may
include facsimile transmission of a signed signature page of this Agreement) that such party
has signed a counterpart of this Agreement and (ii) duly executed copies of the Loan
Documents and such other certificates, documents, instruments and agreements as the Lender
shall reasonably request in connection with the transactions contemplated by this Agreement
and the other Loan Documents, including a written opinion of the Borrower’s counsel,
addressed to the Lender in form and substance reasonably satisfactory to the Lender.

     (b) Financial Statements and Projections. The Lender shall have received (i)
audited consolidated financial statements of Borrower for the 2006, 2007 and 2008 fiscal
years, (ii) unaudited interim consolidated financial statements of Borrower for each fiscal
quarter ended after the date of the latest applicable financial statements delivered
pursuant to clause (i) of this paragraph as to which such financial statements are
available, and such financial statements shall not, in the reasonable judgment of the
Lender, reflect any material adverse change in the consolidated financial condition of
Borrower, as reflected in the most recent financial statements or projections delivered to
Lender.

27

 

     (c) Closing Certificates; Certified Certificate of Incorporation; Good Standing
Certificates. The Lender shall have received (i) a certificate of each Loan Party,
dated the Effective Date and executed by its Secretary or Assistant Secretary, which shall
(A) certify the resolutions of its Board of Directors, members or other body authorizing the
execution, delivery and performance of the Loan Documents to which it is a party, (B)
identify by name and title and bear the signatures of the Financial Officers and any other
officers of such Loan Party authorized to sign the Loan Documents to which it is a party,
and (C) contain appropriate attachments, including the certificate or articles of
incorporation or organization of each Loan Party certified by the relevant authority of the
jurisdiction of organization of such Loan Party and a true and correct copy of its by-laws
or operating, management or partnership agreement, and (ii) a long form good standing
certificate for each Loan Party from its jurisdiction of organization.

     (d) No Default Certificate. The Lender shall have received a certificate,
signed by the chief financial officer of the Borrower, on the initial Borrowing date (i)
stating that no Default has occurred and is continuing, (ii) stating that the
representations and warranties contained in Article III are true and correct as of such
date, and (iii) certifying any other factual matters as may be reasonably requested by the
Lender.

     (e) Fees. The Lender shall have received all fees required to be paid, and all
expenses for which invoices have been presented (including the reasonable fees and expenses
of legal counsel), on or before the Effective Date. All such amounts will be paid with
proceeds of Loans made on the Effective
Date and will be reflected in the funding instructions given by the Borrower to the
Lender on or before the Effective Date.

     (f) Lien Searches. The Lender shall have received the results of a recent lien
search in each of the jurisdictions where a material portion of the assets of the Borrower
are located, and such search shall reveal no liens on any of the assets of the Borrower
except for liens permitted by Section 6.02 or discharged on or prior to the Effective Date
pursuant to a pay-off letter or other documentation satisfactory to the Lender.

     (g) Pay-Off Letter. The Lender shall have received satisfactory pay-off
letters for all existing Indebtedness to be repaid from the proceeds the initial Borrowing,
confirming that all letters of credit issued or guaranteed as part of such Indebtedness
shall have been cash collateralized or supported by a Letter of Credit.

     (h) Funding Account. The Lender shall have received a notice setting forth the
deposit account of the Borrower (the “Funding Account”) to which the Lender is
authorized by the Borrower to transfer the proceeds of any Borrowings requested or
authorized pursuant to this Agreement.

     (i) Other Documents. The Lender shall have received such other documents as
the Lender or its counsel may have reasonably requested.

The Lender shall notify the Borrower of the Effective Date, and such notice shall be conclusive and
binding. Notwithstanding the foregoing, the obligations of the Lender to make Loans and to issue
Letters of Credit hereunder shall not become effective unless each of the foregoing conditions is
satisfied (or waived pursuant to Section 9.02).

          SECTION 4.02. Each Credit Event. The obligation of the Lender to make a Loan on the
occasion of any Borrowing, and to issue, amend, renew or extend any Letter of Credit, is subject to
the satisfaction of the following conditions:

     (a) The representations and warranties of the Borrower set forth in this Agreement
shall be true and correct on and as of the date of such Borrowing or the date of issuance,
amendment, renewal or extension of such Letter of Credit, as applicable.

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     (b) At the time of and immediately after giving effect to such Borrowing or the
issuance, amendment, renewal or extension of such Letter of Credit, as applicable, no
Default shall have occurred and be continuing.

          (c) After giving effect to any Borrowing or the issuance of any Letter of Credit or
Letter of Guaranty, Availability is not less than zero.

Each Borrowing and each issuance, amendment, renewal or extension of a Letter of Credit shall be
deemed to constitute a representation and warranty by the Borrower on the date thereof as to the
matters specified in paragraphs (a), (b) and (c) of this Section.

ARTICLE V

Affirmative Covenants

          Until the Commitment has expired or been terminated and the principal of and interest on each
Loan and all fees payable hereunder shall have been paid in full and all Letters of Credit or
Letters of Guaranty shall have expired or terminated and all LC Disbursements or Guaranty Payments
shall have been reimbursed, the Borrower agrees with the Lender that:

          SECTION 5.01. Financial Statements; Borrowing Base and Other Information. The
Borrower will furnish to the Lender:

     (a) within 90 days after the end of each fiscal year of the Borrower, its audited
consolidated and consolidating balance sheet and related income statement, and its
consolidated (but not consolidating) statements of stockholders’ equity and cash flows as of
the end of and for such year, setting forth in each case in comparative form the figures for
the previous fiscal year, all reported on by nationally recognized independent public
accountants (without a “going concern” or like qualification or exception and without any
qualification or exception as to the scope of such audit) to the effect that such
consolidated financial statements present fairly in all material respects the financial
condition and results of operations of the Borrower and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied, accompanied by any
management letter prepared by said accountants;

     (b) within 50 days after the end of each of the first three fiscal quarters of the
Borrower, its consolidated and consolidating balance sheet and related income statement and
its consolidated (but not consolidating) statements of stockholders’ equity and cash flows
as of the end of and for such fiscal quarter and the then elapsed portion of the fiscal
year, setting forth in each case in comparative form the figures for the corresponding
period or periods of (or, in the case of the balance sheet, as of the end of) the previous
fiscal year, all certified by one of its Financial Officers as presenting fairly in all
material respects the financial condition and results of operations of the Borrower and its
consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently
applied, subject to normal year-end audit adjustments and the absence of footnotes;

     (c) [Intentionally omitted.]

     (d) concurrently with any delivery of financial statements under clause (a) or (b) or
(c) above, a certificate of a Financial Officer of the Borrower in substantially the form of
Exhibit A (i) certifying, in the case of the financial statements delivered under
clause (b) or (c), as presenting fairly in all material respects the financial condition and
results of operations of the Borrower and its consolidated Subsidiaries on a consolidated
basis in accordance with GAAP consistently applied, subject to normal year-end audit
adjustments and the absence of footnotes, (ii) certifying as to whether a Default has
occurred and, if a Default has occurred, specifying the details thereof and any action taken
or proposed to be taken with respect thereto, (iii) setting forth reasonably detailed
calculations demonstrating compliance with the

29

 

Financial Covenants contained herein and (iv)
stating whether any change in GAAP or in the application thereof has occurred since the date
of the audited financial statements referred to in Section 3.04 and, if any such change has
occurred, specifying the effect of such change on the financial statements accompanying such
certificate;

     (e) [Intentionally omitted.]

     (f) as soon as available, but in any event prior to the end of each fiscal year of the
Borrower, a copy of the plan and forecast (including a projected consolidated and
consolidating balance sheet and income statement and consolidated (but not consolidating)
statement of cash flows) of the Borrower for each quarter of the coming fiscal year (the
“Projections”) in form reasonably satisfactory to the Lender;

     (g) [Intentionally omitted.]

     (h) promptly after the same become publicly available, copies of all periodic and other
reports, proxy statements and other materials filed by the Borrower or any Subsidiary with
the 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 by the Borrower to its shareholders generally, as the case may be; and

     (i) promptly following any request therefor, such other information regarding the
operations, business affairs and financial condition of any Loan Party, or compliance with
the terms of this Agreement, as the Lender may reasonably request.

          SECTION 5.02. Notices of Material Events. The Borrower will furnish to the Lender
prompt written notice of the following:

     (a) the occurrence of any Default;

     (b) receipt of any notice of any governmental investigation or any litigation commenced
or threatened against any Loan Party that (i) seeks damages in excess of $2,000,000.00, (ii)
seeks injunctive relief, (iii) is asserted or instituted against any Plan, its fiduciaries
or its assets, (iv) alleges criminal misconduct by any Loan Party, (v) alleges the violation
of any law regarding, or seeks remedies in connection with, any Environmental Laws; (vi)
contests any tax, fee, assessment, or other governmental charge in excess of $1,000,000.00,
(vii) involves any product recall or (vii) could reasonably be expected to have a Material
Adverse Effect;

     (c) any material Lien (other than Permitted Encumbrances) or claim made or asserted
against any of the Borrower’s assets which, if adversely determined, could reasonably be
expected to have a Material Adverse Effect;

     (d) the occurrence of any ERISA Event that, alone or together with any other ERISA
Events that have occurred, could reasonably be expected to result in liability of the
Borrower and its Subsidiaries in an aggregate amount exceeding $1,000,000.00; and

     (e) any other development that results in, or could reasonably be expected to result
in, a Material Adverse Effect.

Each notice delivered under this Section shall be accompanied by a statement of a Financial Officer
or other executive officer of the Borrower setting forth the details of the event or development
requiring such notice and any action taken or proposed to be taken with respect thereto.

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          SECTION 5.03. Existence; Conduct of Business. Each Loan Party will, and will cause
each Subsidiary to, (a) do or cause to be done all things necessary to preserve, renew and keep in
full force and effect its legal existence and the rights, qualifications, licenses, permits,
franchises, governmental authorizations, intellectual property rights, licenses and permits
material to the conduct of its business, and maintain all requisite authority to conduct its
business in each jurisdiction in which its business is conducted, except where failure to do so
could not reasonably be expected to have a Material Adverse Effect; provided that the
foregoing shall not prohibit any merger, consolidation, liquidation or dissolution permitted under
Section 6.03 and (b) carry on and conduct its business in substantially the same manner and in
substantially the same fields of enterprise as it is presently conducted.

          SECTION 5.04. Payment of Obligations. Each Loan Party will and will cause each
Subsidiary to, pay or discharge all Material Indebtedness and all other material liabilities and
obligations, including Taxes, before the same shall become delinquent or in default, but subject to
any applicable grace periods, except where (a) the validity or amount thereof is being contested in
good faith by appropriate proceedings, (b) such Loan Party or such Subsidiary has set aside on its
books adequate reserves with respect thereto in accordance with GAAP and (c) the failure to make
payment pending such contest could not reasonably be expected to result in a Material Adverse
Effect.

          SECTION 5.05. Maintenance of Properties. Each Loan Party will, and will cause each
Subsidiary to keep and maintain all property material to the conduct of its business in good
working order and condition, ordinary wear and tear excepted, except where failure to do so could
not reasonably be expected to result in a Material Adverse Effect

          SECTION 5.06. Books and Records; Inspection Rights. Each Loan Party will, and will
cause each Subsidiary to, (i) keep proper books of record and account in which full, true and
correct entries are made of all dealings and transactions in relation to its business and
activities and (ii) permit any representatives designated by the Lender (including employees of the
Lender, or any consultants, accountants, lawyers and appraisers retained by the Lender, upon
reasonable prior notice, to visit and inspect the Borrower’s properties, to examine and make
extracts from its books and records, including environmental assessment reports and Phase I or
Phase II studies, and to discuss its affairs, finances and condition with its officers and
independent accountants, all at such reasonable times and as often as reasonably requested;
provided, that unless a Default is continuing, such visits and inspections shall not occur more
than once every 365 days. Such visits shall be made in such a manner as to interfere as little as
possible with the conduct of the Borrower’s business. The Borrower acknowledges that the Lender,
after exercising its rights of inspection, may prepare certain Reports pertaining to the Borrower’s
assets for internal use by the Lender. The Borrower will permit the Lender to conduct field audit
examinations of the Borrower’s assets, liabilities, books and records at a frequency not less than
once every 365 days; provided further that the Borrower will permit the Lender to conduct such
examinations at any time and with any reasonable frequency while a Default is continuing.

          SECTION 5.07. Compliance with Laws. Each Loan Party will, and will cause each
Subsidiary to, comply with all Requirements of Law applicable to it or its property, except where
the failure to do so, individually or in the aggregate, could not reasonably be expected to result
in a Material Adverse Effect.

          SECTION 5.08. Use of Proceeds and Letters of Credit. The proceeds of the Loans will
be used only for repayment of existing Indebtedness and for general operating purposes. No part of
the proceeds of any Loan and no Letter of Credit or Letter of Guaranty will be used, whether
directly or indirectly, (i) for any purpose that entails a violation of any of the Regulations of
the Board, including Regulations T, U and X or (ii) to make any Acquisition other than a Permitted
Acquisition.

          SECTION
5.09. Insurance. Each Loan Party will, and will cause each Subsidiary to,
maintain (in all jurisdictions where such insurance is reasonably available and customary for
companies in similar businesses and of similar size) with financially sound and reputable carriers
insurance in such amounts (with no greater risk retention) and against such risks including
(i) loss or damage by fire and loss in transit; (ii) theft, burglary,

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pilferage, larceny,
embezzlement, and other criminal activities; (iii) business interruption; (iv) general liability
and (v) and such other hazards, as is customarily maintained by companies of established repute
engaged in the same or similar businesses operating in the same or similar locations. The Borrower
will, upon request, furnish to the Lender, information in reasonable detail as to the insurance so
maintained.

          SECTION 5.10. Casualty and Condemnation. The Borrower (a) will furnish to the Lender
prompt written notice of any casualty or other insured damage to any material asset, if the amount
of such damage is reasonably expected to exceed $1,000,000.00 and (b) will use commercially
reasonable efforts to ensure that the Net Proceeds of any such event (whether in the form of
insurance proceeds, condemnation awards or otherwise) are collected.

          SECTION 5.11. Depository Banks. The Borrower will maintain the Lender as its sole
depository and remittance bank, including for the maintenance of operating, administrative, cash
management, collection activity, and other deposit accounts for the conduct of its business to the
extent the Lender is willing and able to undertake these activities.

          SECTION 5.12. Further Assurances. (a) Subject to applicable law, the Borrower and each
Subsidiary that is a Loan Party shall, unless the Lender otherwise consents, cause each Subsidiary
of the Borrower formed or acquired after the date of this Agreement in accordance with the terms of
this Agreement and each Inactive Subsidiary to become a Loan Party by executing the Joinder
Agreement set forth as Exhibit B hereto (the “Joinder Agreement”), provided,
however, that neither the existing Inactive Subsidiaries nor any foreign Subsidiaries shall be
required to execute a Joinder Agreement if (i) such Subsidiary does not generate gross revenue of
more than $1,000,000.00 in fiscal year 2009 or any subsequent fiscal year, (ii) there is a
substantial likelihood that joinder to this Agreement would violate applicable laws, rules or
regulations of the such Subsidiary’s jurisdiction of formation or result in any liability for any
officer or director of the Borrower or such Subsidiary or (iii) such joinder could reasonably be
expected to result in increased costs to the Borrower or such Subsidiary in any given year of more
than $25,000.00. Any Subsidiary which executes a Joinder Agreement shall continue to be a Loan
Party until the expiration of this Agreement. Upon execution and delivery of a Joinder Agreement,
each such Person shall automatically become a Loan Guarantor hereunder and thereupon shall have all
of the rights, benefits, duties, and obligations in such capacity under the Loan Documents.
Notwithstanding anything to the contrary provided in this Agreement, no foreign Subsidiary which
executes a Joinder Agreement shall be required to provide a legal opinion regarding enforceability
nor shall any foreign Subsidiary be required to execute a guaranty governed by the laws of any
jurisdiction other than the United States or the state of Illinois.

ARTICLE VI

Negative Covenants

          Until the Commitment has expired or terminated and the principal of and interest on each Loan
and all fees payable hereunder have been paid in full and all Letters of Credit or Letters of
Guaranty have expired or terminated and all LC Disbursements shall have been reimbursed, the
Borrower covenants and agrees with the Lender that:

          SECTION 6.01. Indebtedness; Certain Equity Securities.

          The Borrower will not create, incur, assume or permit to exist any Indebtedness,
except:

     (i) Indebtedness created under the Loan Documents and other Indebtedness to the
Bank;

     (ii) Indebtedness existing on the date hereof and set forth in Schedule 6.01;

32

 

     (iii) Indebtedness of Borrower to any of its Subsidiaries;

     (iv) [Intentionally omitted];

     (v) Guarantees of Indebtedness permitted under this Section 6.01;

     (vi) Capital Lease Obligations or purchase money Indebtedness in an aggregate
amount not exceeding, at any one time outstanding, $1,500,000.00;

     (vii) Indebtedness created pursuant to Section 5.14 and “mark to market”
exposure resulting from any Swap Agreement entered into for protection against
interest rate, foreign currency or commodity price risks incurred in the ordinary
course of the Borrower’s business, and not for speculative purposes;

     (viii) other Indebtedness in an aggregate principal amount not exceeding
$500,000.00 at any one time outstanding;

     (ix) extensions, renewals and replacements of any of the foregoing that do not
increase the outstanding principal amount thereof; and

     (x) Indebtedness under the Wachovia Letters of Credit.

          SECTION 6.02. Liens. The Borrower will not, and will not permit any other Loan Party
to, create, incur, assume or permit to exist any Lien (including, without limitation, any mortgage
on real estate or any security interest in accounts, equipment, inventory, general intangibles or
intellectual property) on any property or asset now owned or hereafter acquired by it, or assign or
sell any income or revenues (including accounts receivable) or rights in respect of any thereof,
except:

     (i) Liens securing obligations owed to Lender under a Swap Agreement or under an
agreement governing Banking Services;

     (ii) Liens created pursuant to Capital Lease Obligations or purchase money
Indebtedness permitted pursuant to this Agreement; provided that such Liens are only
in respect of the property or assets subject to, and secure only, the respective
Capital Lease Obligations or purchase money Indebtedness not to exceed $1,500,000.00
in the aggregate; and

     (iii) Permitted Encumbrances.

          SECTION 6.03. Fundamental Changes.

     (a) The Borrower will not, nor will it permit any other Loan Party to, merge into or
consolidate with any other Person, or permit any other Person to merge into or consolidate
with it, or liquidate or dissolve, except that (i) any Subsidiary may merge into any other
Subsidiary or into Borrower and (ii) Borrower may effect a Permitted Acquisition.

     (b) The Borrower will not and will not permit any other Loan Party to, engage to any
material extent in any business other than businesses of the type conducted by the Borrower
and the other Loan Parties on the date of execution of this Agreement and businesses
reasonably related thereto.

          SECTION 6.04. Investments, Loans, Advances, Guarantees and Acquisitions. Absent the
written consent of the
Lender, which will not be unreasonably withheld or delayed, the Borrower will not purchase, hold or
acquire (including pursuant to any merger with any Person that was not a wholly owned Subsidiary of
Borrower

33

 

prior to such merger) any Equity Interests in or evidences of indebtedness or other
securities (including any option, warrant or other right to acquire any of the foregoing) of, in
each case other than financing extended to customers in the ordinary course of business, make or
permit to exist any loans or advances to, Guarantee any obligations of, or make or permit to exist
any investment or any other interest in, any other Person, or purchase or otherwise acquire (in one
transaction or a series of transactions) any assets of any other Person constituting a business
unit, except:

     (a) investments existing on the date hereof and set forth on Schedule 6.04;

     (b) Permitted Investments;

     (c) loans or advances permitted under Section 6.01(a);

     (d) loans or advances by the Borrower or any of its Subsidiaries to their respective
employees in the ordinary course of business, not to exceed $500,000.00 in the aggregate for
Borrower and its Subsidiaries at any one time outstanding;

     (e) Accounts receivable owned by the Borrower or any of its Subsidiaries, if created in
the ordinary course of business and payable or dischargeable in accordance with customary
trade terms;

     (f) Guarantees constituting Indebtedness permitted by Section 6.01;

     (g) investments received in connection with the bankruptcy or reorganization of, or
settlement of delinquent Accounts and disputes with, customers and suppliers, in each case
in the ordinary course of business;

     (h) investments or other interests acquired in compliance with Section 6.03;
and

     (i) investments or loans by Borrower in or to any Subsidiary (or all Subsidiaries in
the aggregate) in an aggregate principal amount not to exceed $1,000,000 at any time
outstanding.

          SECTION 6.05. Asset Sales. The Borrower will not, and will not permit any other Loan
Party to, sell, transfer, lease or otherwise dispose of any asset, including any Equity Interest
owned by it, except:

     (a) sales, transfers, leases and other dispositions of inventory in the ordinary course
of business, licenses of intellectual property in the ordinary course of business, used or
surplus equipment or intellectual property which is no longer useful in such party’s
business and Permitted Investments in the ordinary course of business;

     (b) sales, transfers and dispositions to the Borrower or to any of its Subsidiaries;
provided that any such sales, transfers or dispositions involving a Subsidiary of Borrower
that is not a Loan Party shall be made in compliance with Section 6.09; and

     (c) sales of Equity Interests in Subsidiaries which, in the aggregate, do not result in
a Material Adverse Effect;

     (d) other sales, transfers, leases or other dispositions by the Borrower or any of its
Subsidiaries which do not exceed, in the aggregate, $1,000,000.00 in any fiscal year;

provided that all sales, transfers, leases and other dispositions permitted hereby (other
than those permitted by clauses (a) and (b) above) shall be made for fair value.

          SECTION 6.06. Sale and Leaseback Transactions. The Borrower will not, and will not
permit any other Loan Party to, enter into any arrangement, directly or indirectly, whereby it
shall sell or transfer any property, real or personal, used or useful in its business, whether now
owned or hereinafter acquired, and thereafter rent or

34

 

lease such property or other property that it
intends to use for substantially the same purpose or purposes as the property sold or transferred,
other than sale-leaseback transactions with Subsidiaries of not more than $1,000,000 in the
aggregate at any time, if at arm’s length and for fair market value.

          SECTION 6.07. Swap Agreements. The Borrower will not, and will not permit any other
Loan Party to, enter into any Swap Agreement, other than Swap Agreements entered into in the
ordinary course of business to hedge or mitigate risks to which the Borrower or any other Loan
Party is exposed in the conduct of its business or the management of its liabilities.

          SECTION 6.08. Restricted Payments. The Borrower will not make, or agree to pay or
make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or
otherwise) to do so, except (i) the Borrower may declare and pay dividends with respect to its
Equity Interests payable solely in additional shares of its Equity Interests and (ii) the Borrower
may make any cash payment or other distribution of cash or property to redeem, purchase, repurchase
or retire, or to obtain the surrender of, any outstanding warrants, options or other rights to
acquire any of its Equity Interests in an amount not to exceed $1,000,000 in any fiscal year
provided no such payment or distribution may be made during the continuation of a Default or if
such payment or distribution will cause a Default.

          SECTION 6.09. Transactions with Affiliates. The Borrower will not, nor will it
permit any other Loan Party to, sell, lease or otherwise transfer any property or assets to, or
purchase, lease or otherwise acquire any property or assets from, or otherwise engage in any other
transactions with, any of its Affiliates, except transactions in the ordinary course of business
that are at prices and on terms and conditions not less favorable to the Borrower than could be
obtained on an arm’s-length basis from unrelated third parties.

          SECTION 6.10. Restrictive Agreements. The Borrower will not, directly or indirectly,
enter into, incur or permit to exist any agreement or other arrangement that prohibits, restricts
or imposes any condition upon (a) the ability of the Borrower to create, incur or permit to exist
any Lien upon any of its property or assets, or (b) the ability of any domestic Subsidiary of
Borrower to pay dividends or other distributions with respect to any of its Equity Interests or to
make or repay loans or advances to the Borrower or any other Subsidiary of Borrower or to Guarantee
Indebtedness of the Borrower or any of its Subsidiaries; provided that the foregoing shall not
apply to restrictions and conditions imposed by law or by any Loan Document.

          SECTION 6.11. Amendment of Material Documents. The Borrower will not amend, modify or
waive any of its rights under (a) any Agreement relating to any Subordinated Indebtedness or (b)
its organizational documents (in any manner materially adverse to the Lender).

          SECTION 6.12. Additional Subsidiaries.. The Borrower will not, and will not permit
any other Loan Party to, form or acquire any Subsidiary after the Effective Date except that
Borrower or any of its Subsidiaries may form, create or acquire a wholly-owned Subsidiary so long
as (a) immediately thereafter and giving effect thereto, no event will occur and be continuing
which constitutes a Default; (b) such Subsidiary (and, where applicable, Borrower) shall (to the
extent required by Section 5.12 hereof) execute and deliver a Guarantee (or, at the option of
Lender, a joinder to the Guarantee executed concurrently herewith) and (c) Lender is given prior
notice of such formation, creation or acquisition. Borrower shall not permit any foreign
Subsidiary to form, create or acquire a domestic Subsidiary.

          SECTION 6.13. Capital Expenditures. The Borrower will not, and will not permit any
Subsidiary to, incur or make aggregate Capital Expenditures during any period set forth below in an
amount exceeding the amount set forth opposite such period:

	 	 	 	 	 
	Period	 	Maximum Capital Expenditures
	Borrower’s Fiscal Year
	 	$	10,000,000.00	 

35

 

The unused portion of permitted Capital Expenditures in any fiscal year cannot be carried over to a
subsequent fiscal year.

          SECTION 6.14. Financial Covenants.

     (a) Minimum Net Income. The Borrower shall have, at the end of each period set
forth below, Net Income for the quarter then-ended of not less than the following:

	 	 	 	 	 
	Period	 	Net Income
	6/30/09
	 	 	($2,000,000.00	)
	9/30/09
	 	$	750,000.00	 

     (b) Leverage Ratio. The Borrower will not permit the Leverage Ratio,
determined for any period of four consecutive fiscal quarters ending on any date during any
period set forth below, to be less than the ratio set forth below opposite such period:

	 	 	 	 	 
	Period	 	Ratio
	12/31/09
	 	 	2.0:1.0	 
	3/31/10 and each quarter-end thereafter
	 	 	1.5:1.0	 

     (c) Minimum Tangible Net Worth. Borrower’s Tangible Net Worth shall not at any
time be less than the Minimum Tangible Net Worth; “Minimum Tangible Net Worth” is defined
for purposes of this Subsection as $42,000,000.00 at all times from the date hereof through
December 31, 2009 and adjusted on the last day of each Fiscal Year of Borrower (starting
with December 31, 2009) by adding an amount equal to fifty percent (50%) of Borrower’s Net
Income (but without reduction for any net loss) for the Fiscal Year then ended as reflected
on Borrower’s audited year-end financial statement plus 100% of all capital contributed
through the issuance of Equity Interests in the Borrower during such period; and
“Tangible Net Worth” being defined for purposes of this Subsection as Borrower’s
consolidated shareholders’ equity (including retained earnings) less the net book value of
all Intangible Assets plus the amount of any LIFO reserve plus the amount of any debt
subordinated to Lender, all as determined under GAAP applied on a basis consistent with the
financial statement dated December 31, 2008. “Intangible Assets” shall mean goodwill,
patents, trademarks, customer lists and other items that are categorized as intangible
assets in accordance with GAAP.

ARTICLE VII

Events of Default

          If any of the following events (“Events of Default”) shall occur:

     (a) the Borrower shall fail to pay any principal of any Loan or any reimbursement
obligation in respect of any LC Disbursement when and as the same shall become due and
payable, whether at the due date thereof or at a date fixed for prepayment thereof or
otherwise;

     (b) the Borrower shall fail to pay any interest on any Loan or any fee or any other
amount (other than an amount referred to in clause (a) of this Article) payable under this
Agreement, within three Business Days after the same shall become due and payable;

36

 

     (c) any representation or warranty made or deemed made by or on behalf of any Loan
Party or any Subsidiary in or in connection with this Agreement or any Loan Document or any
amendment or modification thereof or waiver thereunder, or in any report, certificate,
financial statement or other document furnished pursuant to or in connection with this
Agreement or any Loan Document or any amendment or modification thereof or waiver
thereunder, shall prove to have been incorrect in any material respect when made or deemed
made;

     (d) the Borrower shall fail to observe or perform any covenant, condition or agreement
contained in Section 5.02(a), 5.03 (with respect to the Borrower’s existence) or 5.08 or in
Article VI;

     (e) any Loan Party shall fail to observe or perform any covenant, condition or
agreement contained in this Agreement (other than those which constitute a default under
another Section of this Article), and such failure shall continue unremedied for a period of
(i) 5 days after the earlier of knowledge of such breach or written notice thereof from the
Lender if such breach relates to terms or provisions of Section 5.01, or 5.03 through 5.07
and 5.09 of this Agreement or (ii) 30 days after the earlier of knowledge of such breach or
notice thereof from the Lender if such breach relates to terms or provisions of any other
Section of this Agreement;

     (f) any Loan Party or any Subsidiary shall fail to make any payment (whether of
principal or interest and regardless of amount) in respect of any Material Indebtedness,
when and as the same shall become due and payable after lapse of any applicable grace period
set forth in the agreement governing such Material Indebtedness;

     (g) any event or condition occurs that results in any Material Indebtedness becoming
due prior to its scheduled maturity or that enables or permits (with or without the giving
of notice or the lapse of any applicable grace period set forth in the agreement governing
such Material Indebtedness, or both) the holder or holders of any Material Indebtedness or
any trustee or agent on its or their behalf to cause any Material Indebtedness to become
due, prior to its scheduled maturity; provided that this clause (g) shall not apply
to secured Indebtedness that becomes due as a result of the voluntary sale or transfer of
the property or assets securing such Indebtedness;

     (h) an involuntary proceeding shall be commenced or an involuntary petition shall be
filed seeking (i) liquidation, reorganization or other relief in respect of a Loan Party or
Beijing Fuel Tech Environmental Technologies Co., Ltd. or its debts, or of a substantial
part of its assets, under any Federal, state or foreign bankruptcy, insolvency, receivership
or similar law now or hereafter in effect or (ii) the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for any Loan Party or Beijing Fuel
Tech Environmental Technologies Co., Ltd. or for a substantial part of its assets, and, in
any such case, such proceeding or petition shall continue undismissed for 60 days or an
order or decree approving or ordering any of the foregoing shall be entered;

     (i) any Loan Party or Beijing Fuel Tech Environmental Technologies Co., Ltd. shall (i)
voluntarily commence any proceeding or file any petition seeking liquidation, reorganization
or other relief under any Federal, state or foreign bankruptcy, insolvency, receivership or
similar law now or hereafter in effect, (ii) consent to the institution of, or fail to
contest in a timely and appropriate manner, any proceeding or petition described in clause
(h) of this Article, (iii) apply for or consent to the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for such Loan Party or Beijing Fuel
Tech Environmental Technologies Co., Ltd. or for a substantial part of its assets, (iv) file
an answer admitting the material allegations of a petition filed against it in any such
proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any
action for the purpose of effecting any of the foregoing;

     (j) any Loan Party or Beijing Fuel Tech Environmental Technologies Co., Ltd. shall
become unable, admit in writing its inability or fail generally to pay its debts as they
become due;

37

 

     (k) one or more judgments for the payment of money in an aggregate amount in excess of
$250,000 shall be rendered against any Loan Party, any Subsidiary of any Loan Party or any
combination thereof and the same shall remain undischarged for a period of 30 consecutive days
during which execution shall not be effectively stayed, or any action shall be legally taken by a
judgment creditor to attach or levy upon any assets of any Loan Party or any Subsidiary of any Loan
Party to enforce any such judgment or any Loan Party or any Subsidiary of any Loan Party shall fail
within 30 days to discharge one or more non-monetary judgments or orders which, individually or in
the aggregate, could reasonably be expected to have a Material Adverse Effect, which judgments or
orders, in any such case, are not stayed on appeal or otherwise being appropriately contested in
good faith by proper proceedings diligently pursued;

     (l) an ERISA Event shall have occurred that, in the opinion of the Lender, when taken
together with all other ERISA Events that have occurred, could reasonably be expected to
result in a Material Adverse Effect;

     (m) a Change in Control shall occur;

     (n) the occurrence of any “default”, as defined in any Loan Document (other than this
Agreement) or the breach of any of the terms or provisions of any Loan Document (other than
this Agreement), which default or breach continues beyond any period of grace therein
provided;

     (o) [Intentionally omitted];

     (p) any material provision of any Loan Document (other than the Loan Guaranty) for any
reason ceases to be valid, binding and enforceable in accordance with its terms (or any Loan
Party shall challenge the enforceability of any Loan Document (other than the Loan Guaranty)
or shall assert in writing, or engage in any action or inaction based on any such assertion,
that any provision of any of the Loan Documents has ceased to be or otherwise is not valid,
binding and enforceable in accordance with its terms);

     (q) any Loan Party is criminally indicted or convicted under any law that may
reasonably be expected to lead to a forfeiture of any property of such Loan Party having a
fair market value in excess of $250,000.00; or

     (r) any event or condition occurs that causes an Event of Default under the Credit
Facility Agreement between Beijing Fuel Tech Environmental Technologies Co., Ltd., and
JPMorgan Chase Bank (China) Company Limited, Shanghai Branch dated as of September 14, 2007,
as amended, supplemented, modified or restated from time to time but only for so long as
said agreement remains in effect;

then, and in every such event (other than an event with respect to the Borrower described in clause
(h) or (i) of this Article), and at any time thereafter during the continuance of such event, the
Lender may, by notice to the Borrower, take either or both of the following actions, at the same or
different times: (i) terminate the Commitment, and thereupon the Commitment shall terminate
immediately, and (ii) declare the Loans then outstanding to be due and payable in whole (or in
part, in which case any principal not so declared to be due and payable may thereafter be declared
to be due and payable), and thereupon the principal of the Loans so declared to be due and payable,
together with accrued interest thereon and all fees and other obligations of the Borrower accrued
hereunder, shall become due and payable immediately, without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Borrower; and in case of any event with
respect to the Borrower described in clause (h) or (i) of this Article, the Commitment shall
automatically terminate and the principal of the Loans then outstanding, together with accrued
interest thereon and all fees and other obligations of the Borrower accrued hereunder, shall
automatically become due and payable, without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Borrower. Upon the occurrence and the continuance of
an Event of Default, the Lender may increase the rate of interest applicable to the Loans and other

38

 

Obligations as set forth in this Agreement and exercise any rights and remedies provided to the
Lender under the Loan Documents or at law or equity, including all remedies provided under the UCC.

ARTICLE VIII

Miscellaneous

          SECTION 8.01. Notices. (a) Except in the case of notices and other communications
expressly permitted to be given by telephone (which shall be given to the telephone numbers set
forth below) (and subject to 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 facsimile, as follows:

	 	(i)	 	if to any Loan Party, to the Borrower at:
	 
	 	 	 	Fuel Tech, Inc.

27601 Bella Vista Parkway

Warrenville, IL 60555

Attention: John Graham, CFO

Telephone No.: (630) 845-4493

Facsimile No: (630) 845-4501
	 
	 	(ii)	 	if to the Lender, to JPMorgan Chase Bank, N.A. at:
	 
	 	 	 	JPMorgan Chase Bank, N.A.

111 East Busse Avenue

Mount Prospect, IL 60056

Attention: Lewis E. Rieck

Telephone No.: 847-506-8406

Facsimile No: 847-590-3745
	 
	 	 	 	with a copy to:
	 
	 	 	 	Locke Lord Bissell & Liddell LLP

111 West Wacker Drive

Chicago, IL 60606

Attention: Kenneth M. Lodge

Facsimile: 312-896-6478

All such notices and other communications (i) sent by hand or overnight courier service, or mailed
by certified or registered mail, shall be deemed to have been given when received or (ii) sent by
facsimile shall be deemed to have been given when sent, provided 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.

          (b) Notices and other communications to the Lender hereunder may be delivered or furnished by
electronic communications (including e-mail and internet or intranet websites) pursuant to
procedures approved by the Lender; provided that the foregoing shall not apply to notices
pursuant to Article II or to compliance and no Event of Default certificates delivered pursuant to
Section 5.01(d) unless otherwise agreed by the Lender. The Lender or the Borrower (on behalf of
the Loan Parties) may, in its discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant to procedures approved by it; provided that
approval of such procedures may be limited to particular notices or communications. All such
notices and other communications (i) 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,

39

 

return e-mail or other written acknowledgement),
provided that if not given during the normal business hours of the recipient, such notice
or communication shall be deemed to have been given at the opening of business on the next
Business Day for the recipient, and (ii) 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 (b)(i) of notification that such notice or communication is
available and identifying the website address therefor.

          (c) Any party hereto may change its address or facsimile number for notices and other
communications hereunder by notice to the other parties hereto.

          SECTION 8.02. Waivers; Amendments. (a) No failure or delay by the Lender in
exercising any right or power hereunder or under any other Loan Document shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. The rights and remedies of the Lender
hereunder and under any other Loan Document are cumulative and are not exclusive of any rights or
remedies that they would otherwise have. No waiver of any provision of any Loan Document or
consent to any departure by any Loan Party therefrom shall in any event be effective unless the
same shall be permitted by paragraph (b) of this Section, 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 Event of Default, regardless of whether the Lender may have had notice
or knowledge of such Event of Default at the time.

          (b) Neither this Agreement nor any other Loan Document nor any provision hereof or thereof may
be waived, amended or modified except (i) in the case of this Agreement, pursuant to an agreement
or agreements in writing entered into by the Borrower and the Lender, or (ii) in the case of any
other Loan Document, pursuant to an agreement or agreements in writing entered into by the Lender
and the Loan Party or Loan Parties that are parties thereto.

          SECTION 8.03. Expenses; Indemnity; Damage Waiver. (a) The Borrower shall pay (i)
all reasonable out-of-pocket expenses incurred by the Lender and its Affiliates, including the
reasonable fees, charges and disbursements of counsel for the Lender in connection with the credit
facilities provided for herein, the preparation and administration of the Loan Documents or any
amendments, modifications or waivers of the provisions of the Loan Documents (whether or not the
transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable
out-of-pocket expenses incurred by the Lender in connection with the issuance, amendment, renewal
or extension of any Letter of Credit or any demand for payment thereunder and (iii) all
out-of-pocket expenses incurred by the Lender, including the fees, charges and disbursements of
any counsel for the Lender in connection with the enforcement, collection or protection of its
rights in connection with the Loan Documents, including its rights under this Section, or 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. Expenses being reimbursed by the Borrower under this Section
include, without limiting the generality of the foregoing, costs and expenses incurred in
connection with:

     (i) appraisals and insurance reviews;

     (ii) field examinations and the preparation of Reports based on the fees charged by a
third party retained by the Lender or the internally allocated fees for each Person employed
by the Lender with respect to each field examination;

     (iii) background checks regarding senior management and/or key investors, as deemed
necessary or appropriate in the sole discretion of the Lender;

     (iv) taxes, fees and other charges for (A) lien and title searches and title insurance
and (B) recording the Mortgages, filing financing statements and continuations, and other
actions to perfect, protect, and continue the Lender’s Liens;

40

 

     (v) sums paid or incurred to take any action required of any Loan Party under the Loan
Documents that such Loan Party fails to pay or take; and

     (vi) forwarding loan proceeds, collecting checks and other items of payment, and
establishing and maintaining the accounts and lock boxes.

All of the foregoing costs and expenses may be charged to the Borrower as Revolving Loans or to
another deposit account, all as described in Section 2.17(c).

          (b) The Borrower shall indemnify the Lender, and each Related Party of the Lender(each such
Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any
and all losses, claims, damages, penalties, incremental taxes, liabilities and related expenses,
including the fees, charges and disbursements of any counsel for any Indemnitee, incurred by or
asserted against any Indemnitee arising out of, in connection with, or as a result of (i) the
execution or delivery of the Loan Documents or any agreement or instrument contemplated thereby,
the performance by the parties hereto of their respective obligations thereunder or the
consummation of the Transactions or any other transactions contemplated hereby, (ii) any Loan or
Letter of Credit or the use of the proceeds therefrom (including any refusal by the Lender to honor
a demand for payment under a Letter of Credit if the documents presented in connection with such
demand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged
presence or release of Hazardous Materials on or from any property owned or operated by the
Borrower or any of its Subsidiaries, or any Environmental Liability related in any way to the
Borrower or any of its Subsidiaries, or (iv) the failure of the Borrower to deliver to the Lender
the required receipts or other required documentary evidence with respect to a payment made by the
Borrower for Taxes pursuant to Section 2.17, or (v) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on contract, tort or
any other theory 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, penalties, liabilities or related expenses are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or
wilful misconduct of such Indemnitee.

          (c) The relationship between any Loan Party on the one hand and the Lender on the other hand
shall be solely that of debtor and creditor. The Lender (i) shall not have any fiduciary
responsibilities to any Loan Party or (ii) does not undertake any responsibility to any Loan Party
to review or inform such Loan Party of any matter in connection with any phase of any Loan Party’s
business or operations. To the extent permitted by applicable law, no Loan Party shall assert, and
each hereby waives, any claim against any Indemnitee, on any theory of liability, for special,
indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out
of, in connection with, or as a result of, this Agreement or any agreement or instrument
contemplated hereby, the Transactions, any Loan or Letter of Credit or the use of the proceeds
thereof.

          (d) All amounts due under this Section shall be payable not later than seven (7) days after
written demand therefor.

          SECTION 8.04. Successors and Assigns. (a) The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective successors and
assigns permitted hereby, except that the Borrower may not assign or otherwise transfer any of its
rights or obligations hereunder without the prior written consent of the Lender (and any attempted
assignment or transfer by the Borrower without such consent 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 and, to the extent
expressly contemplated hereby, the Related Parties of each of the Lender) any legal or equitable
right, remedy or claim under or by reason of this Agreement.

          (b) The Lender may assign to one or more assignees all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Commitment and the Loans at the
time owing to

41

 

it); provided that, except in the case of an assignment to an Affiliate of the Lender or an
Approved Fund, the Borrower must give its prior written consent to such assignment (which consent
shall not be unreasonably withheld); and provided further that any consent of the
Borrower otherwise required under this paragraph shall not be required if an Event of Default under
clause (h) or (i) of Article VII has occurred and is continuing. Subject to notification of an
assignment, the assignee shall be a party hereto and, to the extent of the interest assigned, have
the rights and obligations of the Lender under this Agreement, and the Lender shall, to the extent
of the interest assigned, be released from its obligations under this Agreement (and, in the case
of an assignment covering all of the Lender’s rights and obligations under this Agreement, the
Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of
Sections 2.14, 2.15, 2.16 and 8.03). The Borrower hereby agrees to execute any amendment and/or
any other document that may be necessary to effectuate such an assignment, including an amendment
to this Agreement to provide for multiple lenders and an administrative agent to act on behalf of
such lenders. Any assignment or transfer by the 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 the Lender of a participation in such rights and obligations in accordance with
paragraph (c) of this Section.

     For the purposes of this Section 8.04(b), the term “Approved Fund” has the following
meaning:

          “Approved Fund” means any Person (other than a natural person) that is engaged in
making, purchasing, holding or investing in bank loans and similar extensions of credit in the
ordinary course of its business and that is administered or managed by (a) the Lender, (b) an
Affiliate of the Lender or (c) an entity or an Affiliate of an entity that administers or manages
the Lender.

          (c) The Lender may, without the consent of the Borrower, sell participations to one or more
banks or other entities (a “Participant”) in all or a portion of the Lender’s rights and
obligations under this Agreement (including all or a portion of its Commitment and the Loans owing
to it); provided that (i) the Lender’s obligations under this Agreement shall remain
unchanged, (ii) the Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (iii) the Borrower shall continue to deal solely and directly
with the Lender in connection with the Lender’s rights and obligations under this Agreement.
Subject to paragraph (d) of this Section, the Borrower agrees that each Participant shall be
entitled to the benefits of Sections 2.14, 2.15 and 2.16 to the same extent as if it were the
Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section.

          (d) A Participant shall not be entitled to receive any greater payment under Section 2.14 or
2.15 than the Lender would have been entitled to receive with respect to the participation sold to
such Participant, unless the sale of the participation to such Participant is made with the
Borrower’s prior written consent.

          (e) The 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 the Lender, including any pledge or
assignment to secure obligations to a Federal Reserve Lender, and this Section shall not apply to
any such pledge or assignment of a security interest; provided that no such pledge or
assignment of a security interest shall release the Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for the Lender as a party hereto.

          SECTION 8.05. Survival. All covenants, agreements, representations and warranties
made by the Loan Parties in the Loan Documents and in the certificates or other instruments
delivered in connection with or pursuant to this Agreement or any other Loan Document shall 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 Lender, the Lender or any Lender may have had notice or knowledge of any Event of 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 Commitment has not expired or terminated. The
provisions of Sections 2.14, 2.15, 2.16 and Article VIII shall survive and remain in full force and
effect regardless of the consummation of the transactions contemplated hereby,

42

 

the repayment of the Loans, the expiration or termination of the Letters of Credit and the
Commitment or the termination of this Agreement or any provision hereof.

          SECTION 8.06. Counterparts; Integration; Effectiveness. This Agreement may be
executed in counterparts (and by different parties hereto on different counterparts), each of which
shall constitute an original, but all of which when taken together shall constitute a single
contract. This Agreement, the other Loan Documents and any separate letter agreements with respect
to fees payable to the Lender 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 Lender and when the Lender shall
have received counterparts hereof which, when taken together, bear the signatures of each of the
other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns. Delivery of an executed counterpart of a
signature page of this Agreement by facsimile shall be effective as delivery of a manually executed
counterpart of this Agreement.

          SECTION 8.07. Severability. Any provision of any Loan Document 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 thereof; and the invalidity of a particular
provision in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.

          SECTION 8.08. Right of Setoff. If an Event of Default shall have occurred and be
continuing, the Lender and each of its Affiliates is hereby authorized at any time and from time to
time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other obligations at any time
owing by such Lender or Affiliate to or for the credit or the account of the Borrower against any
of and all the Obligations held by such Lender, irrespective of whether or not such Lender shall
have made any demand under the Loan Documents and although such obligations may be unmatured. The
rights of each Lender under this Section are in addition to other rights and remedies (including
other rights of setoff) which such Lender may have.

          SECTION 8.09. Governing Law; Jurisdiction; Consent to Service of Process. (a) The
Loan Documents (other than those containing a contrary express choice of law provision) shall be
governed by and construed in accordance with the internal laws (including, without limitation, 735
ILCS Section 105/5-1 et seq, but otherwise without regard to the conflict of laws provisions) of
the State of Illinois, but giving effect to federal laws applicable to national banks.

          (b) Each Loan Party hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any U.S. Federal or Illinois State court sitting in
Chicago, Illinois in any action or proceeding arising out of or relating to any Loan Documents, 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 Illinois State or, to the extent permitted by law, in such Federal court.
Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law. Nothing in this Agreement or any other Loan Document shall affect any
right that the Lender, the Lender 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) Each Loan Party hereby irrevocably and unconditionally waives, to the fullest extent it
may legally and effectively do so, 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 paragraph (b) of this Section. Each of the parties
hereto hereby irrevocably waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.

43

 

          (d) Each party to this Agreement irrevocably consents to service of process in the manner
provided for notices in Section 8.01. Nothing in this Agreement or any other Loan Document will
affect the right of any party to this Agreement to serve process in any other manner permitted by
law.

          SECTION 8.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL
PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN
DOCUMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY (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 8.11. 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 8.12. Confidentiality. The Lender agrees to maintain the confidentiality of
the Information (as defined below), except that Information may be disclosed (a) to its and its
Affiliates’ directors, officers, employees and agents, including accountants, legal counsel and
other advisors (it being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by any regulatory authority, (c) to the extent required
by applicable laws or regulations or by any subpoena or similar legal process, (d) to any other
party to this Agreement, (e) in connection with the exercise of any remedies hereunder or any suit,
action or proceeding relating to this Agreement or any other Loan Document or the enforcement of
rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the
same as those of this Section, to (i) any assignee of or Participant in, or any prospective
assignee of or Participant in, any of its rights or obligations under this Agreement or (ii) any
actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating
to the Loan Parties and their obligations, (g) with the prior written consent of the Borrower or
(h) to the extent such Information (i) becomes publicly available other than as a result of a
breach of this Section or (ii) becomes available to the Lender on a non-confidential basis from a
source other than the Borrower. For the purposes of this Section, “Information” means all
information received from the Borrower relating to the Borrower or its business, other than any
such information that is available to the Lender, the Lender or any Lender on a non-confidential
basis prior to disclosure by the Borrower; provided that, in the case of information
received from the Borrower 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 8.13. Nonreliance; Violation of Law. The Lender hereby represents that it is
not relying on or looking to any margin stock for the repayment of the Borrowings provided for
herein. Anything contained in this Agreement to the contrary notwithstanding, the Lender shall not
be obligated to extend credit to the Borrower in violation of any limitation or prohibition
provided by any applicable statute or regulation.

          SECTION 8.14. USA PATRIOT Act. The Lender is subject to the requirements of the USA
Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”) and hereby
notifies the Borrower that pursuant to the requirements of the Act, it is
required to obtain, verify and record information that identifies the Borrower, which information
includes the name and address of the Borrower and other information that will allow such Lender to
identify the Borrower in accordance with the Act.

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          SECTION 8.15. Disclosure. Each Loan Party hereby acknowledges and agrees that the
Lender and/or its Affiliates from time to time may hold investments in, make other loans to or have
other relationships with any of the Loan Parties and their respective Affiliates.

ARTICLE IX

Loan Guaranty

          SECTION 9.01. Guaranty. Each Loan Guarantor (other than those that have delivered a
separate Guaranty) hereby agrees that it is jointly and severally liable for, and, as primary
obligor and not merely as surety, absolutely and unconditionally guarantees to the Lender the
prompt payment when due, whether at stated maturity, upon acceleration or otherwise, and at all
times thereafter, of the Obligations and all costs and expenses including, without limitation, all
court costs and attorneys’ and paralegals’ fees and expenses paid or incurred by the Lender in
endeavoring to collect all or any part of the Obligations from, or in prosecuting any action
against, the Borrower, any Loan Guarantor or any other guarantor of all or any part of the
Obligations (such costs and expenses, together with the Obligations, collectively the
“Guaranteed Obligations”). Each Loan Guarantor further agrees that the Guaranteed
Obligations may be extended or renewed in whole or in part without notice to or further assent from
it, and that it remains bound upon its guarantee notwithstanding any such extension or renewal. All
terms of this Loan Guaranty apply to and may be enforced by or on behalf of any domestic or foreign
branch or Affiliate of any Lender that extended any portion of the Guaranteed Obligations.

          SECTION 9.02. Guaranty of Payment. This Loan Guaranty is a guaranty of payment and
not of collection. Each Loan Guarantor waives any right to require the Lender to sue the Borrower,
any Loan Guarantor, any other guarantor, or any other person obligated for all or any part of the
Guaranteed Obligations (each, an “Obligated Party”), or otherwise to enforce its payment
against any collateral securing all or any part of the Guaranteed Obligations.

          SECTION 9.03. No Discharge or Diminishment of Loan Guaranty. (a) Except as otherwise
provided for herein, the obligations of each Loan Guarantor hereunder are unconditional and
absolute and not subject to any reduction, limitation, impairment or termination for any reason
(other than the indefeasible payment in full in cash of the Guaranteed Obligations), including:
(i) any claim of waiver, release, extension, renewal, settlement, surrender, alteration, or
compromise of any of the Guaranteed Obligations, by operation of law or otherwise; (ii) any change
in the corporate existence, structure or ownership of the Borrower or any other guarantor of or
other person liable for any of the Guaranteed Obligations; (iii) any insolvency, bankruptcy,
reorganization or other similar proceeding affecting any Obligated Party, or their assets or any
resulting release or discharge of any obligation of any Obligated Party; or (iv) the existence of
any claim, setoff or other rights which any Loan Guarantor may have at any time against any
Obligated Party, Lender, or any other person, whether in connection herewith or in any unrelated
transactions.

          (b) The obligations of each Loan Guarantor hereunder are not subject to any defense or setoff,
counterclaim, recoupment, or termination whatsoever by reason of the invalidity, illegality, or
unenforceability of any of the Guaranteed Obligations or otherwise, or any provision of applicable
law or regulation purporting to prohibit payment by any Obligated Party, of the Guaranteed
Obligations or any part thereof.

          (c) Further, the obligations of any Loan Guarantor hereunder are not discharged or impaired or
otherwise affected by: (i) the failure of the Lender to assert any claim or demand or to enforce
any remedy with respect to all or any part of the Guaranteed Obligations; (ii) any waiver or
modification of or supplement to any provision of any agreement relating to the Guaranteed
Obligations; (iii) any release, non-perfection, or invalidity of any indirect or direct security
for the obligations of the Borrower for all or any part of the Guaranteed Obligations
or any obligations of any other guarantor of or other person liable for any of the Guaranteed
Obligations; (iv) any action or failure to act by the Lender with respect to any collateral
securing any part of the Guaranteed Obligations;

45

 

or (v) any default, failure or delay, willful or
otherwise, in the payment or performance of any of the Guaranteed Obligations, or any other
circumstance, act, omission or delay that might in any manner or to any extent vary the risk of
such Loan Guarantor or that would otherwise operate as a discharge of any Loan Guarantor as a
matter of law or equity (other than the indefeasible payment in full in cash of the Guaranteed
Obligations).

          SECTION 9.04. Defenses Waived. To the fullest extent permitted by applicable law,
each Loan Guarantor hereby waives any defense based on or arising out of any defense of the
Borrower or any Loan Guarantor or the unenforceability of all or any part of the Guaranteed
Obligations from any cause, or the cessation from any cause of the liability of the Borrower or any
Loan Guarantor, other than the indefeasible payment in full in cash of the Guaranteed Obligations.
Without limiting the generality of the foregoing, each Loan Guarantor irrevocably waives acceptance
hereof, presentment, demand, protest and, to the fullest extent permitted by law, any notice not
provided for herein, as well as any requirement that at any time any action be taken by any person
against any Obligated Party, or any other person. The Lender may, at its election, foreclose on
any collateral held by it by one or more judicial or nonjudicial sales, accept an assignment of any
such collateral in lieu of foreclosure or otherwise act or fail to act with respect to any
collateral securing all or a part of the Guaranteed Obligations, compromise or adjust any part of
the Guaranteed Obligations, make any other accommodation with any Obligated Party or exercise any
other right or remedy available to it against any Obligated Party, without affecting or impairing
in any way the liability of such Loan Guarantor under this Loan Guaranty except to the extent the
Guaranteed Obligations have been fully and indefeasibly paid in cash. To the fullest extent
permitted by applicable law, each Loan Guarantor waives any defense arising out of any such
election even though that election may operate, pursuant to applicable law, to impair or extinguish
any right of reimbursement or subrogation or other right or remedy of any Loan Guarantor against
any Obligated Party or any security.

          SECTION 9.05. Rights of Subrogation. No Loan Guarantor will assert any right, claim
or cause of action, including, without limitation, a claim of subrogation, contribution or
indemnification that it has against any Obligated Party, or any collateral, until the Loan Parties
and the Loan Guarantors have fully performed all their obligations to the Lender.

          SECTION 9.06. Reinstatement; Stay of Acceleration. If at any time any payment of any
portion of the Guaranteed Obligations is rescinded or must otherwise be restored or returned upon
the insolvency, bankruptcy, or reorganization of the Borrower or otherwise, each Loan Guarantor’s
obligations under this Loan Guaranty with respect to that payment shall be reinstated at such time
as though the payment had not been made and whether or not the Lender is in possession of this Loan
Guaranty. If acceleration of the time for payment of any of the Guaranteed Obligations is stayed
upon the insolvency, bankruptcy or reorganization of the Borrower, all such amounts otherwise
subject to acceleration under the terms of any agreement relating to the Guaranteed Obligations
shall nonetheless be payable by the Loan Guarantors forthwith on demand by the Lender.

          SECTION 9.07. Information. Each Loan Guarantor assumes all responsibility for being
and keeping itself informed of the Borrower’s financial condition and assets, and of all other
circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations and the nature,
scope and extent of the risks that each Loan Guarantor assumes and incurs under this Loan Guaranty,
and agrees that the Lender shall not have any duty to advise any Loan Guarantor of information
known to it regarding those circumstances or risks.

          SECTION 9.08. Termination. The Lender may continue to make loans or extend credit to
the Borrower based on this Loan Guaranty until five days after it receives written notice of
termination from any Loan Guarantor. Notwithstanding receipt of any such notice, each Loan
Guarantor will continue to be liable to the Lender for any Guaranteed Obligations created, assumed
or committed to prior to the fifth day after receipt of the notice, and all subsequent renewals,
extensions, modifications and amendments with respect to, or substitutions for, all or any part of
that Guaranteed Obligations.

          SECTION 9.09. Taxes. All payments of the Guaranteed Obligations will be made by each
Loan Guarantor free and clear of and without deduction for any Indemnified Taxes or Other Taxes;
provided that if any Loan Guarantor shall be required to deduct any Indemnified Taxes or
Other Taxes from such payments, then (i) the

46

 

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 Lender receives
an amount equal to the sum it would have received had no such deductions been made, (ii) such Loan
Guarantor shall make such deductions and (iii) such Loan Guarantor shall pay the full amount
deducted to the relevant Governmental Authority in accordance with applicable law.

          SECTION 9.10. Maximum Liability. The provisions of this Loan Guaranty are severable,
and in any action or proceeding involving any state corporate law, or any state, federal or foreign
bankruptcy, insolvency, reorganization or other law affecting the rights of creditors generally, if
the obligations of any Loan Guarantor under this Loan Guaranty would otherwise be held or
determined to be avoidable, invalid or unenforceable on account of the amount of such Loan
Guarantor’s liability under this Loan Guaranty, then, notwithstanding any other provision of this
Loan Guaranty to the contrary, the amount of such liability shall, without any further action by
the Loan Guarantors or the Lender, be automatically limited and reduced to the highest amount that
is valid and enforceable as determined in such action or proceeding (such highest amount determined
hereunder being the relevant Loan Guarantor’s “Maximum Liability”. This Section with
respect to the Maximum Liability of each Loan Guarantor is intended solely to preserve the rights
of the Lender to the maximum extent not subject to avoidance under applicable law, and no Loan
Guarantor nor any other person or entity shall have any right or claim under this Section with
respect to such Maximum Liability, except to the extent necessary so that the obligations of any
Loan Guarantor hereunder shall not be rendered voidable under applicable law. Each Loan Guarantor
agrees that the Guaranteed Obligations may at any time and from time to time exceed the Maximum
Liability of each Loan Guarantor without impairing this Loan Guaranty or affecting the rights and
remedies of the Lender hereunder, provided that, nothing in this sentence shall be
construed to increase any Loan Guarantor’s obligations hereunder beyond its Maximum Liability. In
addition to the above, it is agreed that the liability of the Fuel Tech S.r.l. under this Section 9
may never exceed, and shall automatically be reduced to the maximum amount that, if paid, would
allow Fuel Tech S.r.l. to remain operating as a going concern in good standing and not become
insolvent.

          SECTION 9.11. Contribution. In the event any Loan Guarantor (a “Paying
Guarantor”) shall make any payment or payments under this Loan Guaranty or shall suffer any
loss as a result of any realization upon any collateral granted by it to secure its obligations
under this Loan Guaranty, each other Loan Guarantor (each a “Non-Paying Guarantor”) shall
contribute to such Paying Guarantor an amount equal to such Non-Paying Guarantor’s “Applicable
Percentage” of such payment or payments made, or losses suffered, by such Paying Guarantor. For
purposes of this Article IX, each Non-Paying Guarantor’s “Applicable Percentage” with
respect to any such payment or loss by a Paying Guarantor shall be determined as of the date on
which such payment or loss was made by reference to the ratio of (i) such Non-Paying Guarantor’s
Maximum Liability as of such date (without giving effect to any right to receive, or obligation to
make, any contribution hereunder) or, if such Non-Paying Guarantor’s Maximum Liability has not been
determined, the aggregate amount of all monies received by such Non-Paying Guarantor from the
Borrower after the date hereof (whether by loan, capital infusion or by other means) to (ii) the
aggregate Maximum Liability of all Loan Guarantors hereunder (including such Paying Guarantor) as
of such date (without giving effect to any right to receive, or obligation to make, any
contribution hereunder), or to the extent that a Maximum Liability has not been determined for any
Loan Guarantor, the aggregate amount of all monies received by such Loan Guarantors from the
Borrower after the date hereof (whether by loan, capital infusion or by other means). Nothing in
this provision shall affect any Loan Guarantor’s several liability for the entire amount of the
Guaranteed Obligations (up to such Loan Guarantor’s Maximum Liability). Each of the Loan
Guarantors covenants and agrees that its right to receive any contribution under this Loan Guaranty
from a Non-Paying Guarantor shall be subordinate and junior in right of payment to the payment in
full in cash of the Guaranteed Obligations. This provision is for the benefit of the Lender and
the Loan Guarantors and may be enforced by any one, or more, or all of them in accordance with the
terms hereof.

     SECTION 9.12. Liability Cumulative. The liability of each Loan Party as a Loan
Guarantor under this Article IX is in addition to and shall be cumulative with all liabilities of
each Loan Party to the Lender under this Agreement and the other Loan Documents to which such Loan
Party is a party or in respect of any obligations or liabilities of the other Loan Parties, without
any limitation as to amount, unless the instrument or agreement evidencing or creating such other liability specifically
provides to the contrary.

[signature pages to follow]

47

 

          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.

	 	 	 	 	 
	 	FUEL TECH, INC.,

a Delaware corporation

 	 
	 	By:  	                                              /s/ John P. Graham
 	 
	 	 	Name:  	John P. Graham 	 
	 	 	Title:  	Chief Financial Officer 	 
	 
	 	FUEL TECH S.r.l.,

organized under the laws of the Italian Republic

 	 
	 	By:  	                                              /s/ John P. Graham
 	 
	 	 	Name:  	John P. Graham 	 
	 	 	Title:  	Director 	 
	 
	 	JPMORGAN CHASE BANK, N.A.

 	 
	 	By:  	                                              /s/ Eric Devereaux
 	 
	 	 	Name:  	Eric Devereaux 	 
	 	 	Title:  	Vice President

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