Document:

EX-10.16

 

EXHIBIT 10.16

 

 

INVESTMENT AGREEMENT

dated as of February 8, 2008

by and among

MINRAD INC.

as Company

MINRAD INTERNATIONAL, INC.

as Parent

THE GUARANTORS FROM TIME TO TIME PARTY HERETO

LAMINAR DIRECT CAPITAL L.P.

as a Lender and as Agent,

and

THE OTHER LENDERS PARTY HERETO

 

 

$15,000,000 Senior Secured Notes due February 8, 2011

Warrants for 3,208,427 Common Shares

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	Section	 	Page
	ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS
	 	 	1	 
	1.01 Defined Terms
	 	 	1	 
	1.02 Other Interpretive Provisions
	 	 	17	 
	1.03 Accounting Terms
	 	 	17	 
	1.04 Rounding
	 	 	18	 
	1.05 References to Agreements and Laws
	 	 	18	 
	1.06 Times of Day
	 	 	18	 
	 
	 	 	 	 
	ARTICLE II. NOTES AND WARRANTS
	 	 	18	 
	2.01 Authorization and Issuance of the Notes and Warrants
	 	 	18	 
	 
	 	 	 	 
	ARTICLE III. PURCHASE AND SALE
	 	 	18	 
	3.01 Purchase and Sale of the Notes and Warrants; Closing
	 	 	18	 
	 
	 	 	 	 
	ARTICLE IV. TERMS OF NOTES
	 	 	19	 
	4.01 Loans
	 	 	19	 
	4.02 [Reserved]
	 	 	19	 
	4.03 Repayment of Principal
	 	 	19	 
	4.04 Payments of Interest
	 	 	19	 
	4.05 Mandatory Prepayments of the Notes
	 	 	21	 
	4.06 Optional Prepayments of the Notes
	 	 	22	 
	4.07 Mandatory Offer to Prepay upon a Change of Control
	 	 	22	 
	4.08 Direct Payment
	 	 	23	 
	4.09 Taxes
	 	 	23	 
	4.10 Fees
	 	 	24	 
	 
	 	 	 	 
	ARTICLE V. CONDITIONS PRECEDENT TO CLOSING
	 	 	24	 
	5.01 Conditions To Closing
	 	 	24	 
	 
	 	 	 	 
	ARTICLE VI. REPRESENTATIONS AND WARRANTIES
	 	 	29	 
	6.01 Existence, Qualification and Power; Compliance with Laws
	 	 	29	 
	6.02 Authorization; No Contravention
	 	 	29	 
	6.03 Governmental Authorization; Other Consents
	 	 	29	 
	6.04 Binding Effect
	 	 	29	 
	6.05 Financial Statements; No Material Adverse Effect
	 	 	30	 
	6.06 Litigation
	 	 	30	 
	6.07 No Default
	 	 	30	 
	6.08 Ownership of Property; Liens
	 	 	31	 
	6.09 Environmental Compliance
	 	 	31	 
	6.10 Insurance
	 	 	31	 
	6.11 Taxes
	 	 	31	 
	6.12 ERISA Compliance
	 	 	31	 
	6.13 Subsidiaries; Authorized and Issued Equity Interests
	 	 	32	 
	6.14 Margin Regulations; Investment Company Act
	 	 	32	 
	6.15 Disclosure
	 	 	33	 
	6.16 Compliance with Laws
	 	 	33	 
	6.17 Intellectual Property; Licenses, Etc.
	 	 	33	 
	6.18 Experience
	 	 	33	 
	6.19 Solvency
	 	 	34	 
	6.20 Compliance with Securities Laws
	 	 	34	 
	6.21 Deposit Accounts
	 	 	34	 

i

 

	 	 	 	 	 
	Section	 	Page
	6.22 Business Locations
	 	 	34	 
	6.23 Material Agreements
	 	 	34	 
	6.24 Transactions with Affiliates
	 	 	34	 
	6.25 Parent Holding Company
	 	 	35	 
	6.26 Registration Statement
	 	 	35	 
	6.27 SEC Reports: Financial Statements
	 	 	35	 
	6.28 Internal Accounting Controls
	 	 	36	 
	6.29 Private Placement
	 	 	36	 
	6.30 Principal Market; Approvals
	 	 	36	 
	6.31 Listing and Maintenance Requirements
	 	 	37	 
	6.32 Application of Takeover Protections
	 	 	37	 
	6.33 Acknowledgment Regarding Laminar’s Purchase of Warrants
	 	 	37	 
	6.34 No General Solicitation or Advertising in Regard to this Transaction
	 	 	37	 
	 
	ARTICLE VIA. REPRESENTATIONS AND WARRANTIES OF THE LENDERS
	 	 	38	 
	 
	 	 	 	 
	ARTICLE VII. AFFIRMATIVE COVENANTS
	 	 	38	 
	7.01 Financial Statements
	 	 	38	 
	7.02 Certificates; Other Information
	 	 	39	 
	7.03 Notices
	 	 	40	 
	7.04 Payment of Obligations
	 	 	41	 
	7.05
Preservation of Existence; Conduct of Business, Etc.
	 	 	41	 
	7.06 Maintenance of Properties
	 	 	41	 
	7.07 Maintenance of Insurance
	 	 	42	 
	7.08 Compliance with Laws
	 	 	42	 
	7.09 Books and Records
	 	 	42	 
	7.10 Inspection Rights; Field Audit
	 	 	42	 
	7.11 Use of Proceeds
	 	 	43	 
	7.12 Additional Subsidiaries
	 	 	43	 
	7.13 Environmental Matters
	 	 	44	 
	7.14 Further Assurances
	 	 	44	 
	7.15 Remarketing Cooperation
	 	 	44	 
	7.16 Pledged Assets; IP Subsidiary; Material Agreements
	 	 	44	 
	7.17 Board Observation Rights
	 	 	46	 
	7.18 Post-Closing Actions
	 	 	46	 
	 
	 	 	 	 
	ARTICLE VIII. NEGATIVE AND FINANCIAL COVENANTS
	 	 	47	 
	8.01 Liens
	 	 	47	 
	8.02 Investments
	 	 	48	 
	8.03 Indebtedness
	 	 	48	 
	8.04 Fundamental Changes
	 	 	49	 
	8.05 Dispositions
	 	 	49	 
	8.06 Restricted Payments
	 	 	50	 
	8.07 Change in Nature of Business
	 	 	50	 
	8.08 Transactions with Affiliates
	 	 	50	 
	8.09 Burdensome Agreements
	 	 	50	 
	8.10 Use of Proceeds
	 	 	51	 
	8.11 ERISA Compliance
	 	 	51	 
	8.12 Sales and Leasebacks
	 	 	51	 
	8.13 Sale or Discount of Receivables
	 	 	51	 
	8.14 Environmental Matters
	 	 	51	 
	8.15 Subsidiaries
	 	 	51	 
	8.16
Financial Covenants
	 	 	51	 

ii

 

	 	 	 	 	 
	Section	 	Page
	8.17 Deposit and Securities Accounts
	 	 	54	 
	8.18 Limitations on Affiliate Ownership of Obligations
	 	 	54	 
	8.19 Modifications of Pennsylvania Loans
	 	 	54	 
	8.20 Prepayment of Other Indebtedness
	 	 	54	 
	8.21 Changes to Organizational Documents
	 	 	54	 
	8.22 Changes in Fiscal Year
	 	 	54	 
	8.23 IP Subsidiary
	 	 	55	 
	8.24 Parent
	 	 	55	 
	 
	 	 	 	 
	ARTICLE IX. EVENTS OF DEFAULT AND REMEDIES
	 	 	55	 
	9.01 Events of Default
	 	 	55	 
	9.02 Remedies Upon Event of Default
	 	 	57	 
	9.03 Other Remedies; Application of Funds
	 	 	58	 
	9.04 Rescission of Acceleration
	 	 	58	 
	 
	 	 	 	 
	ARTICLE X. MISCELLANEOUS
	 	 	59	 
	10.01 Entire Agreement
	 	 	59	 
	10.02 Reimbursement of Expenses
	 	 	59	 
	10.03 Survival of Agreements and Representations and Warranties
	 	 	59	 
	10.04 No Waiver
	 	 	60	 
	10.05 Binding Effect; Participations
	 	 	60	 
	10.06 Initial Holder
	 	 	60	 
	10.07 Cumulative Powers
	 	 	60	 
	10.08 Loss of Securities; Reissue of Securities in Lesser Denominations
	 	 	60	 
	10.09 Communications
	 	 	61	 
	10.10 Form, Registration, Transfer and Exchange of Notes; Lost Notes
	 	 	61	 
	10.11 Confidentiality; Public Announcements
	 	 	64	 
	10.12 Governing Law
	 	 	65	 
	10.13 Headings
	 	 	65	 
	10.14 Multiple Originals
	 	 	65	 
	10.15 Amendment or Waiver
	 	 	65	 
	10.16 Waiver of Jury Trial
	 	 	65	 
	10.17 Consent to Jurisdiction and Service of Process
	 	 	66	 
	10.18 Indemnification; Damage Waiver
	 	 	66	 
	10.19 Regulatory Requirements
	 	 	67	 
	10.20 USA Patriot-Act Notice
	 	 	67	 
	 
	 	 	 	 
	ARTICLE XI. AGENCY PROVISIONS
	 	 	68	 
	11.01 Appointment
	 	 	68	 
	11.02 Delegation of Duties
	 	 	68	 
	11.03 Exculpatory Provisions
	 	 	68	 
	11.04 Reliance by Agent
	 	 	69	 
	11.05 Notices of Default
	 	 	69	 
	11.06 Non-Reliance on the Agent and Other Lenders
	 	 	69	 
	11.07 Indemnification
	 	 	70	 
	11.08 The Agent in Its Individual Capacity
	 	 	70	 
	11.09 Resignation of the Agent; Successor Agent
	 	 	70	 
	11.10 Reimbursement by Lenders
	 	 	71	 
	 
	 	 	 	 
	ARTICLE XII GUARANTY
	 	 	71	 
	12.01 The Guaranty
	 	 	71	 
	12.02 Obligations Unconditional
	 	 	71	 
	12.03 Reinstatement
	 	 	72	 
	12.04 Certain Additional Waivers
	 	 	72	 

iii

 

	 	 	 	 	 
	Section	 	Page
	12.05 Remedies
	 	 	73	 
	12.06 Rights of Contribution
	 	 	73	 
	12.07 Guarantee of Payment; Continuing Guarantee
	 	 	74	 

iv

 

EXHIBITS AND SCHEDULES

SCHEDULES

	 	 	 
	1.01
	 	Transaction Expenses
	3.01
	 	Issue Price of Notes and Warrants; Allocation
	6.05
	 	Material Indebtedness
	6.06
	 	Material Litigation
	6.07
	 	No Default
	6.11
	 	Taxes
	6.13
	 	Subsidiaries; Equity Interests; Investments
	6.17
	 	IP Rights
	6.21
	 	Existing Deposit and Securities Accounts
	6.22
	 	Business Locations
	6.23
	 	Material Agreements
	6.24
	 	Affiliate Transactions
	8.01
	 	Permitted Liens
	10.09
	Addresses of Loan Parties and Lenders

EXHIBITS

	 	 	 
	A
	 	Form of Note
	B
	 	Form of Warrant
	C
	 	Form of Security and Pledge Agreement
	D
	 	Form of Secretary’s Certificate
	E
	 	Form of Officer’s Closing Certificate
	F
	 	Form of Compliance Certificate
	G
	 	Form of Solvency Certificate
	H
	 	Form of Financial Condition Certificate

v

 

CREDIT
INVESTMENT
AGREEMENT

     THIS INVESTMENT AGREEMENT (this “Agreement”) is made and entered into as of February
8, 2008, among MINRAD INC., a Delaware corporation (the “Company”), MINRAD INTERNATIONAL,
INC., a Delaware corporation (the “Parent”), the guarantors from time to time party hereto
(together with the Parent, the “Guarantors”), LAMINAR DIRECT CAPITAL L.P., a Delaware
limited partnership, as a Lender and in its capacity as agent and collateral agent, in each case in
the manner and to the extent described in Article XI hereof (in each such capacity, the
“Agent”), the financial institutions identified as Lenders on the signature pages hereto,
and the other lenders from time to time party hereto (collectively, the “Lenders” and each
individually, a “Lender”).

STATEMENT OF PURPOSE

     A. The Company has requested that the Lenders make available to it a term loan in the
aggregate principal face amount of $15,000,000 to provide funds necessary to (a) fund general
corporate expenses, (b) fund working capital and (c) pay costs, fees and expenses payable in
connection with the transactions contemplated hereby.

     B. The Lenders are willing to make such financial accommodations on the terms and conditions
set forth herein.

AGREEMENT

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

ARTICLE I.

DEFINITIONS AND ACCOUNTING TERMS

1.01 Defined Terms.

     As used in this Agreement, the following terms shall have the meanings set forth below:

     “Accrual Rate” has the meaning set forth in Section 4.04(b).

     “Additional Cash Amount” has the meaning set forth in Section 4.04(c).

     “Additional Interest Amount” has the meaning set forth in Section 4.04(c).

     “Agent” has the meaning set forth in the first paragraph of this Agreement.

     “Affiliate” means, with respect to any 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. “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. Without limiting the generality of the
foregoing, a Person shall be deemed to be Controlled by another Person if such other Person
possesses, directly or indirectly, power to vote fifteen percent (15%) or more of the securities
having ordinary voting power for the election of directors, managing general partners or the
equivalent. Notwithstanding the foregoing, neither Laminar nor any of its Affiliates shall be
deemed an Affiliate of any Loan Party.

1

 

     “Agreement” means this Investment Agreement dated as of the Closing Date by and among
the Company, the Guarantors party hereto, the Agent, and the Lenders party hereto, as amended,
restated, supplemented or otherwise modified from time to time.

     “Approved Bank” has the meaning set forth in the definition of “Cash Equivalents.”

     “Approved Fund” has the meaning set forth in Section 10.10.

     “Assignment and Assumption” has the meaning set forth in Section 10.10.

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

     “Attributable Indebtedness” means, on any date, (a) in respect of any capital lease of
any Person, the capitalized amount thereof that would appear on a balance sheet of such Person
prepared as of such date in accordance with GAAP, and (b) in respect of any Synthetic Lease
Obligation, the capitalized amount of the remaining lease payments under the relevant lease that
would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP if
such lease were accounted for as a capital lease.

     “Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the Laws of, or are in fact closed in, Houston, TX
or New York, NY.

     “Cash Equivalents” means:

     (a) securities issued or directly and fully guaranteed or insured by the United States
or any agency or instrumentality thereof (provided that the full faith and credit of
the United States is pledged in support thereof) having maturities of not more than twelve
months from the date of acquisition;

     (b) Dollar-denominated certificates of deposit of (A) any Lender, (B) any domestic
commercial bank of recognized standing having capital and surplus in excess of $500,000,000
or (C) any bank whose short-term commercial paper rating from S&P is at least A-1 or the
equivalent thereof or from Moody’s is at least P-1 or the equivalent thereof (any such bank
being an “Approved Bank”), in each case with maturities of not more than one (1)
year from the date of acquisition;

     (c) commercial paper and variable or fixed rate notes issued by any Approved Bank (or
by the parent company thereof) or any variable rate notes issued by, or guaranteed by, any
domestic corporation not an Affiliate of the Company rated A-1 (or the equivalent thereof)
or better by S&P or P-1 (or the equivalent thereof) or better by Moody’s and maturing within
one (1) year of the date of acquisition;

     (d) repurchase agreements with a bank or trust company (including any of the Lenders)
or recognized securities dealer having capital and surplus in excess of $500,000,000 for
direct obligations issued by or fully guaranteed by the United States in which the Loan
Parties or one or more of their Subsidiaries shall have a perfected first priority security
interest (subject to no other Liens) and having, on the date of purchase thereof, a fair
market value of at least one hundred percent (100%) of the amount of the repurchase
obligations; and

2

 

     (e) Investments, classified in accordance with GAAP as current assets, in money market
investment programs registered under the Investment Company Act of 1940, as amended, which
are administered by reputable financial institutions having capital of at least $500,000,000
and the portfolios of which are limited to Investments of the character described in the
foregoing clauses (a) through (d).

     “Cash Pay Period” has the meaning set forth in Section 4.04(b).

     “Cash Pay Rate” has the meaning set forth in Section 4.04(b).

     “Change of Control” means, each and every issue, sale, transfer, pledge or other
disposition, directly or indirectly, of Equity Interests or other ownership interests, as
applicable, which, after giving effect thereto, results in:

     (a) the Parent failing to own legally and beneficially (directly or indirectly), free
and clear of all Liens (other than Permitted Liens), one hundred (100%) of the Equity
Interests of the Company and each other Subsidiary of the Parent other than pursuant to a
Merger permitted by §8.04(a) or a dissolution of a Subsidiary provided its assets are
distributed or transferred pursuant to §8.04(b); or

     (b) the Company failing to own legally and beneficially (directly or indirectly) one
hundred percent (100%) of the Equity Interests of each of its Subsidiaries; or

     (c) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, but excluding any employee benefit plan of such person or
its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other
fiduciary or administrator of any such plan) becomes the “beneficial owner” (as defined in
Rules 13d 3 and 13d 5 under the Securities Exchange Act of 1934, except that a person or
group shall be deemed to have “beneficial ownership” of all securities that such person or
group has the right to acquire (such right, an “option right”), whether such right is
exercisable immediately or only after the passage of time), directly or indirectly, of 35.0%
or more of the outstanding Capital Stock of Parent on a fully diluted basis (and taking into
account all such securities that such person or group has the right to acquire pursuant to
any option right); or

     (d) the sale or other disposition of all or substantially all of the assets of either
the Company or the Company and its Subsidiaries, taken as a whole.

     “Change of Control Offer” has the meaning set forth in Section 4.07(a).

     “Change of Control Payment” has the meaning set forth in Section 4.07(a).

     “Change of Control Payment Date” has the meaning set forth in Section 4.07(a).

     “Closing” has the meaning set forth in Section 3.01(b).

     “Closing Date” has the meaning set forth in Section 3.01(b).

     “Code” means the Internal Revenue Code of 1986, as amended, and any successor statute
of similar import, together with the regulations thereunder, in each case as in effect from time to
time. References to Sections of the Code shall be construed to also refer to any successor
sections.

3

 

     “Collateral” means any and all assets and rights and interests in or to property of
the Loan Parties pledged from time to time as security for the Obligations pursuant to the
Collateral Documents, whether now owned or hereafter acquired.

     “Collateral Documents” means the collective reference to the Security and Pledge
Agreement, the Deposit Account Control Agreements, the Mortgage Documents and each other document
and/or agreement securing the repayment of all or any portion of the Obligations.

     “Company” has the meaning set forth in the first paragraph of this Agreement.

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

     “Consolidated Balance Sheet” shall mean a consolidated balance sheet for the Parent
and its Subsidiaries, eliminating all inter company transactions and prepared in accordance with
GAAP.

     “Consolidated Capital Expenditures” means, for any period, the aggregate of all
expenditures by the Parent and its Subsidiaries which are required to be capitalized under GAAP on
a consolidated balance sheet of the Parent and its Subsidiaries, including without limitation, for
the acquisition or leasing of fixed or capital assets, additions to equipment (including
improvements during such period) or other similar costs. For the purpose of this definition, the
purchase price of equipment which is purchased simultaneously with the trade-in of existing
equipment owned by the Parent or any of its Subsidiaries or with insurance proceeds shall be
included in Consolidated Capital Expenditures only to the extent of the gross amount of such
purchase price less the credit granted by the seller of such equipment for such equipment being
traded in at such time, or the amount of such proceeds, as the case may be.

     “Consolidated Current Assets” shall mean, at any time, the amount at which the current
assets of the Parent and its Subsidiaries would appear on a consolidated balance sheet of the
Parent and its Subsidiaries at such time prepared in accordance with GAAP; provided that,
for purposes hereof, (i) accounts receivable shall exclude any accounts receivable that are
outstanding after the later of (a) 90 days from the relevant invoice date or (b) the contractual
payment term, and (ii) inventory shall exclude excess, slow-moving and obsolete inventory.

     “Consolidated Current Liabilities” shall mean, at any time, the amount at which the
current liabilities of the Parent and its Subsidiaries would appear on a consolidated balance sheet
of the Parent and its Subsidiaries at such time, prepared in accordance with GAAP.

     “Consolidated EBITDA” means, for any 12 month period, for the Parent and its
Subsidiaries on a consolidated basis, an amount equal to Consolidated Net Income for such period
plus (a) the following to the extent deducted in calculating such Consolidated Net Income
(and without duplication) (i) consolidated interest expense for such period, (ii) the provision for
federal, state, local and foreign income taxes and state franchise or similar taxes, (iii)
depreciation and amortization expense, (iv) non-recurring transaction expenses incurred in
connection with the consummation of the transactions contemplated by the Loan Documents to occur on
(or about) the Closing Date as set forth on Schedule 1.01, (v) other non-cash and/or
non-recurring cash charges (including charges from asset sales) approved by the Required Lenders
and (vi) non-cash compensation and other costs expensed in connection with employee options and/or
the Warrants in calculating Consolidated Net Income minus (b) the following to the extent
included in calculating such Consolidated Net Income (and without duplication): (i) federal, state,
local and foreign income tax credits of the Parent and its Subsidiaries for such period, (ii) all
non-recurring and/or non-cash items (including gains from asset sales) increasing Consolidated Net
Income for such period and (iii) consolidated interest income; provided, however,
that, for purposes of Section 8.16, (A) Consolidated EBITDA for the March 31, 2008 test
date shall be calculated as Consolidated EBITDA for

4

 

the Fiscal Quarter ending March 31, 2008
multiplied by 4, (B) Consolidated EBITDA for the June 30, 2008 test date shall be calculated as
Consolidated EBITDA for the two Fiscal Quarters ending June 30, 2008 multiplied by 2,
(C) Consolidated EBITDA for the September 30, 2008 test date shall be calculated as Consolidated
EBITDA for the three Fiscal Quarters ending September 30, 2008 multiplied by 1.33 and
(D) Consolidated EBITDA for the December 31, 2008 test date and each Fiscal Quarter ending test
date thereafter shall be calculated for the four Fiscal Quarters ending as of such applicable test
date.

     “Consolidated Excess Cash Flow” means, for any period for the Parent and its
Subsidiaries, an amount equal to the sum of without duplication (a) Consolidated EBITDA
minus (b) the sum of (i) consolidated interest expense paid in cash for such period, (ii)
Consolidated Scheduled Funded Debt Payments (and any other loan servicing fees) paid in cash for
such period, (iii) federal, state, local and foreign income taxes and state franchise or similar
taxes, to the extent paid or payable in cash for such period, and (iv) the amount by which the
unfinanced cash portion of Consolidated Capital Expenditures made (and permitted by this Agreement
during such period) exceeds the net proceeds from sales of fixed or capital assets received by the
Parent or any of its Subsidiaries during such period.

     “Consolidated Funded Indebtedness” means, as of any date of determination, for the
Parent and its Subsidiaries on a consolidated basis, the sum of the following, without duplication
(a) the outstanding principal amount of all obligations, whether current or long-term, for borrowed
money (including the Obligations) and all obligations evidenced by bonds, debentures, notes, loan
agreements or other similar instruments, (b) all purchase money Indebtedness (other than trade
accounts payable in the ordinary course of business), (c) all direct and contingent obligations
arising under letters of credit (including standby and commercial), bankers’ acceptances, bank
guaranties, surety bonds and similar instruments, (d) all obligations in respect of the deferred
purchase price of property or services (other than trade accounts payable in the ordinary course of
business), (e) Attributable Indebtedness with respect to capital leases and Synthetic Lease
Obligations, (f) all obligations to, during the term of this Agreement, purchase, redeem, retire,
defease or otherwise make any payment in respect of any Equity Interests in such Person, valued, in
the case of a redeemable preferred interest, at the greater of its voluntary or involuntary
liquidation preference plus accrued and unpaid dividends (g) without duplication, all Guarantees
with respect to outstanding Indebtedness of the types specified in clauses (a) through (f) above of
Persons other than the Parent or any Subsidiary, and (h)  all Indebtedness of the types referred to
in clauses (a) through (g) above of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which the Parent or a Subsidiary is a
general partner or joint venturer, unless such Indebtedness is expressly made non-recourse to the
Parent or such Subsidiary.

     “Consolidated Net Income” means, for any period, for the Parent and its Subsidiaries
on a consolidated basis, the net income of the Parent and its Subsidiaries for that period;
provided, however, that the following shall be excluded: (a) the net income of any
other Person in which such Person or one of its Subsidiaries has a joint interest with a
third-party (which interest does not cause the net income of such other Person to be consolidated
into the net income of such Person), except to the extent of the amount of dividends or
distributions paid to such Person or Subsidiary, (b) the net income of any Subsidiary of such
Person that is, on the last day of such period, subject to any restriction or limitation (other
than a restriction or limitation under the Loan Documents) on the payment of dividends or the
making of other distributions, to the extent of such restriction or limitation, (c) the net income
of any other Person arising prior to such other Person becoming a Subsidiary of such Person or
merging or consolidating into such Person or its Subsidiaries and (d) gains and losses deemed
extraordinary in accordance with GAAP.

     “Consolidated Net Working Capital” means, for any period, for the Parent and its
Subsidiaries on a consolidated basis, the sum of the following: (a) Consolidated Current Assets
minus (b) Consolidated Current Liabilities plus (c) out-of-pocket costs related to
the entering into of this Agreement.

5

 

     “Consolidated Net Worth” means, as of any date of determination, for the Parent and
its Subsidiaries on a consolidated basis, shareholders’ equity of the Parent and its Subsidiaries
on that date as determined in accordance with GAAP plus out-of-pocket costs related to the
entering into of this Agreement minus the Intangible Assets of the Company and its
Subsidiaries on that date. For purposes hereof, “Intangible Assets” means, with respect to any
Person, assets that are considered to be intangible assets under GAAP, including customer lists,
goodwill, computer software, copyrights, trade names, trademarks, patents, franchises, licenses,
unamortized deferred charges, unamortized debt discount and capitalized research and development
costs.

     “Consolidated Scheduled Funded Debt Payments” means for any period for the Parent and
its Subsidiaries on a consolidated basis, the sum of all scheduled payments of principal on
Consolidated Funded Indebtedness, as determined in accordance with GAAP. For purposes of this
definition, “scheduled payments of principal” shall be deemed to include the Attributable
Indebtedness in respect of capital leases, sale and leaseback transactions and Synthetic Lease
Obligations.

     “Consolidated Total Leverage Ratio” means, as of any date of determination, the ratio
of (a) Consolidated Funded Indebtedness as of such date to (b) Consolidated EBITDA for the twelve
month period then ended.

     “Consolidated Total Revenues” means, for any 12 month period, for the Company and its
Subsidiaries on a consolidated basis, the gross total revenues of the Company and its Subsidiaries
for that period determined in accordance with GAAP (excluding extraordinary items);
provided, however, that, for purposes of Section 8.16, (A) Consolidated
Total Revenues for the March 31, 2008 test date shall be calculated as Consolidated Total Revenues
for the Fiscal Quarter ending March 31, 2008 multiplied by 4, (B) Consolidated Total Revenues for
the June 30, 2008 test date shall be calculated as Consolidated Total Revenues for the two Fiscal
Quarters ending June 30, 2008 multiplied by 2, (C) Consolidated Total Revenues for the September
30, 2008 test date shall be calculated as Consolidated Total Revenues for the three Fiscal Quarters
ending September 30, 2008 multiplied by 1.33 and (D) Consolidated Total Revenues for the December
31, 2008 test date and each Fiscal Quarter ending test date thereafter shall be calculated for the
four Fiscal Quarters ending as of such applicable test date.

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

     “Control” has the meaning set forth in the definition of “Affiliate.”

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

     “Default” means any event or condition that constitutes an Event of Default or that,
with the giving of any notice, the passage of time, or both, would be an Event of Default.

     “Default Rate” has the meaning set forth in Section 4.04(d).

     “Deposit Account” shall have the meaning provided in the UCC.

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     “Deposit Account Control Agreements” means, collectively, all deposit account control
agreement securing the Obligations entered into on or after the Closing Date, in form and substance
satisfactory to the Agent.

     “Disposition” or “Dispose” means the sale, transfer, license, lease or other
disposition (including any sale and leaseback transaction) of any Property by any Person, including
any sale, assignment, transfer or other disposal, with or without recourse, of any notes or
accounts receivable or any rights and claims associated therewith.

     “Dollar” and “$” mean lawful money of the United States.

     “Domestic Subsidiary” means any Subsidiary that is organized under the laws of any
political subdivision of the United States.

     “Eligible Assignee” has the meaning set forth in Section 10.10.

     “Environmental Laws” means any and all Federal, state, local, and foreign statutes,
laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants,
franchises, licenses, agreements or governmental restrictions relating to pollution and the
protection of the environment or the release of any materials into the environment, including those
related to hazardous substances or wastes, air emissions and discharges to waste or public systems.

     “Equity Documents” the Warrant, the Registration Rights Agreement and all documents,
instruments and agreements executed in connection therewith, as each such document is in effect on
the Closing Date or amended and in effect thereafter as permitted pursuant to the terms of this
Agreement.

     “Equity Interests” means, with respect to any Person, all of the shares of capital
stock of (or other ownership or profit interests in) such Person, all of the warrants, options or
other rights for the purchase or acquisition from such Person of shares of capital stock of (or
other ownership or profit interests in) such Person, all of the securities convertible into or
exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person
or warrants, rights or options for the purchase or acquisition from such Person of such shares (or
such other interests), and all of the other ownership or profit interests in such Person (including
partnership, member or trust interests therein), whether voting or nonvoting, and whether or not
such shares, warrants, options, rights or other interests are outstanding on any date of
determination.

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

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

     “ERISA Event” means: (a) a Reportable Event with respect to a Pension Plan; (b) a
withdrawal by a Loan Party or any ERISA Affiliate from a Pension Plan subject to Section 4063 of
ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2)
of ERISA) or a cessation of operations that is treated as such a withdrawal under Section 4062(e)
of ERISA; (c) a complete or partial withdrawal by a Loan Party or any ERISA Affiliate from a
Multiemployer Plan or notification that a Multiemployer Plan is in reorganization; (d) the filing
of a notice of intent to terminate, the treatment of a Plan amendment as a termination under
Sections 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a
Pension Plan or Multiemployer Plan; (e) an event or condition which constitutes grounds under
Section 4042 of ERISA for the termination of, or the

7

 

appointment of a trustee to administer, any
Pension Plan or Multiemployer Plan; or (f) the imposition of any liability under Title IV of ERISA,
other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon a Loan Party
or any ERISA Affiliate.

     “Event of Default” has the meaning set forth in Section 9.01.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules
and regulations of the SEC thereunder.

     “Extraordinary Receipt” means any cash received by or paid to or for the account of
any Person not in the ordinary course of business, including tax refunds, pension plan reversions,
proceeds of insurance (other than proceeds of business interruption insurance to the extent such
proceeds constitute compensation for lost earnings), condemnation awards (and payments in lieu
thereof), indemnity payments and any purchase price adjustments; provided, however,
that an Extraordinary Receipt shall not include cash receipts from tax refunds, proceeds of
insurance, condemnation awards (or payments in lieu thereof) or indemnity payments to the extent
that such proceeds, awards or payments (a) in respect of loss or damage to equipment, fixed assets
or real property are applied (or in respect of which expenditures were previously incurred) to
replace or repair the equipment, fixed assets or real property in respect of which such proceeds
were received in accordance with the terms of Section 4.05(b) are received by any Person in
respect of any third party claim against such Person and applied to pay (or to reimburse such
Person for its prior payment of) such claim and the costs and expenses of such Person with respect
thereto.

     “Fiscal Quarter” means each of the four periods of three consecutive calendar months
which constitute each Fiscal Year.

     “Fiscal Year” means the Company’s Fiscal Year, which is the period of twelve
consecutive calendar months ending on December 31.

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

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

     “Fully Satisfied” means, with respect to the Obligations as of any date, that, as of
such date, (a) all principal of and interest accrued to such date which constitute Obligations
shall have been paid in full in cash, and (b) all fees, expenses and other amounts then due and
payable which constitute Obligations shall have been paid in full in cash.

     “Fund” has the meaning set forth in Section 10.10.

     “GAAP” means generally accepted accounting principles in the United States set forth
in the opinions and pronouncements of the Accounting Principles Board and the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial Accounting
Standards Board or such other principles as may be approved by a significant segment of the
accounting profession in the United States, that are applicable to the circumstances as of the date
of determination, consistently applied.

     “Governmental Approvals” shall mean authorizations, consents, approvals, waivers,
exemptions, variances, franchises, permissions, permits and licenses of, and filings and
declarations with, any Governmental Authority.

8

 

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

     “Guarantee” means, as to any Person, without duplication, (a) any obligation,
contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing
any Indebtedness or other obligation payable or performable by another Person (the “primary
obligor”) in any manner, whether directly or indirectly, and including any obligation of such
Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Indebtedness or other obligation, (ii) to purchase or lease property, securities
or services for the purpose of assuring the obligee in respect of such Indebtedness or other
obligation of the payment or performance of such Indebtedness or other obligation, (iii) to
maintain working capital, equity capital or any other financial statement condition or liquidity or
level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation, or (iv) entered into for the purpose of assuring in any other
manner the obligee in respect of such Indebtedness or other obligation of the payment or
performance thereof or to protect such obligee against loss in respect thereof (in whole or in
part), or (b) any Lien on any assets of such Person securing any Indebtedness or other obligation
of any other Person, whether or not such Indebtedness or other obligation is assumed by such Person
(or any right, contingent or otherwise, of any holder of such Indebtedness to obtain any such
Lien). The amount of any Guarantee shall be deemed to be an amount equal to the stated or
determinable amount of the related primary obligation, or portion thereof, in respect of which such
Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability
in respect thereof as determined by the guaranteeing Person in good faith; provided that
with respect to any Guarantee under clause (b) above where the Indebtedness is not assumed the
amount of such Guarantee shall be deemed to be the lesser of the amount of the Indebtedness secured
by such Lien and the fair market value of the assets securing such Indebtedness. The term
“Guarantee” as a verb has a corresponding meaning.

     “Guarantors” means a collective reference to each Person identified as a “Guarantor”
on the signature pages hereto, and each other Person that subsequently becomes a Guarantor by
executing a joinder agreement as contemplated by Section 7.12, and “Guarantor”
means any one of them.

     “Indebtedness” means, as to any Person at a particular time, without duplication, all
of the following, whether or not included as indebtedness or liabilities in accordance with GAAP:

     (a) all obligations of such Person for borrowed money and all obligations of such
Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments;

     (b) all direct or contingent obligations of such Person arising under letters of credit
(including standby and commercial), bankers’ acceptances, bank guaranties, surety bonds and
similar instruments;

     (c) net obligations of such Person under any Swap Contract;

     (d) all obligations of such Person to pay the deferred purchase price of property or
services (other than trade accounts payable in the ordinary course of business and, in each
case, not past due for more than ninety (90) days after the date on which such trade account
payable was created);

     (e) indebtedness (excluding prepaid interest thereon) secured by a Lien on property
owned or being purchased by such Person (including indebtedness arising under conditional
sales

9

 

or other title retention agreements), whether or not such indebtedness shall have been
assumed by such Person or is limited in recourse; provided that with respect to any
Guarantee under clause (b) above where the Indebtedness is not assumed the amount of such
Guarantee shall be deemed to be the lesser of the amount of the Indebtedness secured by such
Lien and the fair market value of the assets securing such Indebtedness;

     (f) the principal portion of capital leases and Synthetic Lease Obligations;

     (g) all obligations of such Person to, during the term of this Agreement, purchase,
redeem, retire, defease or otherwise make any payment in respect of any Equity Interests in
such Person or any other Person, valued, in the case of a redeemable preferred interest, at
the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid
dividends; and

     (h) all Guarantees of such Person in respect of any of the foregoing.

     For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any
partnership or joint venture (other than a joint venture that is itself a corporation or limited
liability company) in which such Person is a general partner or a joint venturer, unless such
Indebtedness is expressly made non-recourse to such Person. The amount of any net obligation under
any Swap Contract on any date shall be deemed to be the Swap Termination Value thereof as of such
date. The amount of any capital lease or Synthetic Lease Obligation as of any date shall be deemed
to be the amount of Attributable Indebtedness in respect thereof as of such date.

     “Indemnified Party” has the meaning set forth in Section 10.18.

     “Insolvency Proceeding” means any proceeding commenced by or against any Person under
any Debtor Relief Law.

     “Interest Payment Date” has the meaning set forth in Section 4.04(b).

     “Investment” means, as to any Person, any direct or indirect acquisition or investment
by such Person, whether by means of (a) the purchase or other acquisition of capital stock or other
securities of another Person, (b) a loan, advance or capital contribution to, Guarantee or
assumption of debt of, or purchase or other acquisition of any other debt or equity participation
or interest in, another Person, including any partnership or joint venture interest in such other
Person and any arrangement pursuant to which the investor Guarantees Indebtedness of such other
Person, or (c) the purchase or other acquisition (in one transaction or a series of transactions)
of assets of another Person that constitute a business unit, line of business or other purchase
outside the ordinary course of business. For purposes of covenant compliance, the amount of any
Investment shall be the amount actually invested, without adjustment for subsequent increases or
decreases in the value of such Investment.

     “Involuntary Disposition” means any loss of, damage to or destruction of, or any
condemnation or other taking for public use of, any Property of a Loan Party or any of its
Subsidiaries.

     “IP Rights” has the meaning set forth in Section 6.17.

     “IRS” means the United States Internal Revenue Service.

     “Laminar” means Laminar Direct Capital L.P., a Delaware limited partnership, and its
successors and assigns.

10

 

     “Laws” means, collectively, all applicable international, foreign, Federal, state and
local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or
judicial precedents or authorities, including the interpretation or administration thereof by any
Governmental Authority charged with the enforcement, interpretation or administration thereof, and
all applicable administrative orders, directed duties, requests, licenses, authorizations and
permits of, and agreements with, any Governmental Authority, in each case having the force of law.

     “Lender” or “Lenders” has the meaning set forth in the introductory paragraph
hereto and their respective successors and assigns.

     “Lien” means any mortgage, pledge, hypothecation, assignment, deposit arrangement,
encumbrance, lien (statutory or other), charge, or preference, priority or other security interest
or preferential arrangement in the nature of a security interest of any kind or nature whatsoever
(including any conditional sale or other title retention agreement, any easement, right of way or
other encumbrance on title to real property, and any financing lease having substantially the same
economic effect as any of the foregoing).

     “Loan Documents” means this Agreement, the Notes, the Collateral Documents, the Equity
Documents and all exhibits and schedules attached to any of the aforementioned documents and any
other documents entered into in connection therewith.

     “Loan Parties” means, collectively, the Company and the Guarantors.

     “Losses” has the meaning set forth in Section 10.18.

     “Material Adverse Effect” means (a) a material adverse effect on the properties,
assets, liabilities (actual or contingent), business, operations, prospects, income or condition
(financial or otherwise) of the Company or the Loan Parties and their Subsidiaries, taken as a
whole, (b) a material impairment of the ability of any Loan Party, to perform its obligations under
any of the Loan Documents to which it is a party or (c) a material adverse effect upon the
legality, validity, binding effect or enforceability against any Loan Party of any Loan Document to
which it is a party.

     “Material Asset Disposition” shall mean the sale, lease or other disposition, whether
in a single transaction or a series of related transactions, of assets of the Loan Parties and
their Subsidiaries other than a Disposition permitted by Section 8.05 which: (a)
represents more than ten percent (10%) of the combined assets of the Loan Parties and their
Subsidiaries as would be shown in the consolidated financial statements of the Loan Parties and
their Subsidiaries as of the beginning of the twelve (12)-month period ending with the month in
which such determination is made, or (b) is responsible for more than ten percent (10%) of the
combined net sales or net income of the Loan Parties and their Subsidiaries as reflected in the
consolidated financial statements referred to in subsection (a) above.

     “Maturity Date” means February 8, 2011.

     “Minrad EU” means Minrad EU, a corporation formed under the laws of France.

     “Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.

     “Mortgage” means the Mortgage and Security Agreement, dated as of the Closing Date,
between the Company and the Agent.

     “Mortgage Documents” means the (i) Mortgage and (ii) the title insurance policy.

11

 

     “Multiemployer Plan” means any employee benefit plan of the type described in Section
4001(a)(3) of ERISA, to which a Loan Party or any ERISA Affiliate makes or is obligated to make
contributions, or during the preceding five plan years, has made or been obligated to make
contributions.

     “Net Cash Proceeds” means:

     (a) with respect to any incurrence of any Indebtedness by any Loan Party, the aggregate
amount of all cash received by such Loan Party in respect of such Indebtedness, net of all
reasonable fees, discounts, commissions and expenses incurred by such Loan Party in
connection therewith;

     (b) with respect to the sale or other disposition of any asset by any Loan Party, any
Involuntary Disposition or any Extraordinary Receipt, the excess, if any, of (i) the sum of
cash and cash equivalents received in connection with such disposition or Extraordinary
Receipt (including any cash received by way of deferred payment pursuant to, or by
monetization of, a note receivable, escrow deposits or otherwise, but only as and when so
received) over (ii) the sum of (A) in the case of a disposition, the principal amount of any
Indebtedness that is secured by such asset and that is required to be repaid in connection
with the disposition thereof (other than Indebtedness under the Loan Documents), (B) the
out-of-pocket fees and expenses incurred by such Loan Party in connection with such
disposition or Extraordinary Receipt, (C) income taxes reasonably estimated to be actually
payable within two years of the date of the relevant disposition as a result of any gain
recognized in connection therewith and (D) reasonable reserves for indemnification
established in connection with such disposition in accordance with GAAP; and

     (c) with respect to the sale of any Equity Interests by any Loan Party, the excess of
(i) the sum of the cash and cash equivalents received in connection with such sale over (ii)
the underwriting discounts and commissions, fees and other out-of-pocket expenses, incurred
by such Loan Party in connection with such sale.

     “Note” or “Notes” has the meaning set forth in Section 2.01, as the
same may be modified, supplemented, restated and/or amended from time to time in accordance with
the terms hereof and thereof.

     “Obligations” means all Indebtedness, liabilities and other obligations of any and
every kind and nature now existing or hereafter arising, contingent or otherwise, of the Company or
any other Loan Party under, in connection with, or evidenced or secured by this Agreement, the
Notes and any of the other Loan Documents including, without limitation, obligations to pay (a)
principal, (b) interest or premium (including any interest or premium accruing after the filing of
a petition in bankruptcy or the commencement of any reorganization, regardless of whether the same
is allowed as a claim in such proceeding), (c) fees, (d) costs, expenses and other amounts related
to any indemnity against loss, damage or liability and (e) any other monetary obligation.

     “Organization Documents” means: (a) with respect to any corporation, the certificate
or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents
with respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company, the
certificate or articles of formation or organization and operating agreement; and (c) with respect
to any partnership, joint venture, trust or other form of business entity, the partnership, joint
venture, trust or other applicable agreement of formation or organization and any agreement,
instrument, filing or notice with respect thereto filed in

12

 

connection with its formation or
organization with the applicable Governmental Authority in the
jurisdiction of its formation or organization and, if applicable, any certificate or articles
of formation or organization of such entity.

     “Other Taxes” has the meaning set forth in Section 4.09(b).

     “Participant” has the meaning set forth in Section 10.10.

     “Patriot Act” has the meaning set forth in Section 10.20.

     “PBGC” means the Pension Benefit Guaranty Corporation.

     “Pension Plan” means any “employee pension benefit plan” (as such term is defined in
Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA and
is sponsored or maintained by a Loan Party or any ERISA Affiliate or to which a Loan Party or any
ERISA Affiliate contributes or has an obligation to contribute, or in the case of a multiple
employer or other plan described in Section 4064(a) of ERISA, has made contributions at any time
during the immediately preceding five plan years.

     “Pennsylvania Loans” means, collectively, (i) the $1,275,000 loan to the Company made
pursuant to the Loan Agreement dated as of March 31, 2007 between the Company and the Commonwealth
of Pennsylvania, acting by and through the Department of Community and Economic Development and
(ii) the $875,000 loan to the Company made pursuant to the Loan Agreement dated as of May 1, 2007
among the Pennsylvania Industrial Development Authority, Northampton County New Jobs Corp. and the
Company.

     “Permitted Indebtedness” means Indebtedness of a Loan Party or Subsidiary thereof
permitted to be incurred pursuant to Section 8.03.

     “Permitted Liens” has the meaning set forth in Section 8.01.

     “Person” means any individual, sole proprietorship, partnership, joint venture,
limited liability company, trust, unincorporated organization, association, corporation,
institution, entity or government (whether national, Federal, state, county, city, municipal or
otherwise, including, without limitation, any instrumentality, division, agency, body or department
thereof).

     “PIK Amount” has the meaning set forth in Section 4.04(c).

     “Plan” means any “employee benefit plan” (as such term is defined in Section 3(3) of
ERISA) established by a Loan Party or, with respect to any such plan that is subject to Section 412
of the Code or Title IV of ERISA, any ERISA Affiliate.

     “Principal” has the meaning set forth in Section 4.03.

     “Principal Market” initially means the American Stock Exchange and shall also include
the NASDAQ Small-Cap Market, the New York Stock Exchange or the NASDAQ National Market, whichever
is at the time the principal trading exchange or market for the Common Stock, based upon share
volume.

     “Property” means any interest in any kind of property or asset, whether real, personal
or mixed, or tangible or intangible. Properties shall mean the plural of Property. For purposes
of this Agreement, any

13

 

Loan Party shall be deemed to be the owner of any Property which it has
acquired or holds subject to a
conditional sale agreement, financing lease or other arrangement pursuant to which title to
the Property has been retained by or vested in some other Person for security purposes.

     “Redemption Price” means the principal amount of Notes being redeemed or repaid
multiplied by the applicable price percentage set forth below, in each case plus accrued
and unpaid interest on the principal reduced or repaid:

	 	 	 	 	 
	Period	 	Redemption Price Percentage
	Closing Date through February 7, 2009
	 	 	105	%
	February 8, 2009 through February 7, 2010
	 	 	103	%
	February 8, 2010 and thereafter
	 	 	100	%

     “Refinance” shall mean, in respect of any Indebtedness, to refinance, extend, renew,
defease, amend, modify, supplement, restructure, replace, refund or repay, or to issue other
Indebtedness, in exchange or replacement for, such Indebtedness in whole or in part, whether with
the same or different lenders, arrangers and/or agents. “Refinanced” and “Refinancing” shall have
correlative meanings.

     “Register” has the meaning set forth in Section 10.10.

     “Registration Rights Agreement” means the Registration Rights Agreement dated as of
the Closing Date between the Parent and Laminar and, as amended or supplemented.

     “Registration Statement” has the meaning set forth in the Registration Rights
Agreement.

     “Regulatory Requirement” has the meaning set forth in Section 10.19.

     “Related Parties” means, with respect to any Person, such Person’s (a) Affiliates and
the partners, directors, officers, employees, agents and advisors of such Person and of such
Person’s Affiliates and (b) spouses, lineal ancestors or descendants, natural or adopted, and
spouses of lineal ancestors or descendants, or trusts for the sole benefit of any of such Person’s
Affiliates.

     “Replacement Note” has the meaning set forth in Section 10.10.

     “Reportable Event” means any of the events set forth in Section 4043(c) of ERISA,
other than events for which the 30 day notice period has been waived.

     “Required Lenders” means, as of the date of any determination, Lenders holding more
than 50.0% of the outstanding Principal of the Notes.

     “Responsible Officer” means the chief executive officer, president, executive vice
president, chief financial officer, treasurer or corporate controller of a Loan Party. Any
document delivered hereunder that is signed by a Responsible Officer of a Loan Party shall be
conclusively presumed to have been authorized by all necessary corporate, partnership and/or other
action on the part of such Loan Party and such Responsible Officer shall be conclusively presumed
to have acted on behalf of such Loan Party.

     “Restricted Payment” means (a) any dividend or other distribution (whether in cash,
securities or other property) with respect to any Equity Interests of the Company 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 or on account of any return of capital to
the Company’s stockholders, partners or members (or the

14

 

equivalent Person thereof), (b) any ongoing
management fee, capital raising or merger and acquisition
transaction fee or similar fee to a holder of Equity Interests of the Company holding in
excess of 10% of the outstanding Equity Interests of the Company, or any Affiliate thereof, and
provided the Company has knowledge of such ownership, and (c) any payment or prepayment of interest
on, principal of, premium, if any, fees, redemption, conversion, exchange, purchase, retirement,
defeasance, sinking fund or similar payment with respect to, any Subordinated Indebtedness.

     “S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc. and any successor thereto.

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

     “SEC Reports” has the meaning set forth in Section 6.27.

     “Securities Account” shall have the meaning provided in the UCC.

     “Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations of the SEC thereunder.

     “Security and Pledge Agreement” means the Security and Pledge Agreement, dated as of
the Closing Date, by and among the Company, the other Loan Parties party thereto and the Agent,
substantially in the form of Exhibit C attached hereto.

     “Shareholder Approval” means such approval as may be required by the applicable rules
and regulations of the Principal Market (or any successor entity) from the shareholders of the
Company with respect to the transactions contemplated by the Equity Documents.

     “Solvent” or “Solvency” means, with respect to any Person as of a particular
date, that on such date (a) such Person has capital sufficient to carry on its businesses and
transactions and all businesses and transactions in which they are about to engage and are able to
pay their debts as they mature in the ordinary course, (b) the fair value of the Property of such
Person (on a going concern basis) is greater than the total amount of liabilities, including,
without limitation, contingent liabilities, of such Person and (c) the present fair salable value
of the assets of such Person (on a going concern basis) is not less than the amount that will be
required to pay the probable liability of such Person on its debts as they become absolute and
matured. In computing the amount of contingent liabilities at any time, it is intended that such
liabilities will be computed at the amount which, in light of all the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to become an actual or
matured liability for which such Person is not entitled to indemnification.

     “Source” has the meaning set forth in Article VIA.

     “Subordinated Indebtedness” means any Indebtedness of the Parent, the Company or any
of their Subsidiaries that by its terms is subordinated to the Obligations. All such Subordinated
Indebtedness must be subordinated in a manner and to an extent acceptable to the Required Lenders.

     “Subsidiary” means any corporation or other entity of which more than fifty percent
(50%) of the issued and outstanding Equity Interests entitled to vote for the election of directors
or persons performing similar functions (other than by reason of default in the payment of
dividends or other distributions) is at the time owned directly or indirectly by any Loan Party
and/or any Subsidiary.

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     “Swap Contract” means (a) any and all rate swap transactions, basis swaps, credit
derivative transactions, forward rate transactions, commodity swaps, commodity options, forward
commodity contracts, equity or equity index swaps or options, bond or bond price or bond index
swaps or options or forward bond or forward bond price or forward bond index transactions, interest
rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar
transactions, currency swap transactions, cross-currency rate swap transactions, currency options,
spot contracts, or any other similar transactions or any combination of any of the foregoing
(including any options to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions of any kind, and
the related confirmations, which are subject to the terms and conditions of, or governed by, any
form of master agreement published by the International Swaps and Derivatives Association, Inc.,
any International Foreign Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a “Master Agreement”), including any such
obligations or liabilities under any Master Agreement.

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

     “Synthetic Lease Obligation” means the monetary obligation of a Person under (a) a
so-called synthetic, off-balance sheet or tax retention lease, or (b) an agreement for the use or
possession of property creating obligations that do not appear on the balance sheet of such Person
but which, upon the insolvency or bankruptcy of such Person, would be characterized as the
indebtedness of such Person (without regard to accounting treatment).

     “Taxes” has the meaning set forth in Section 4.09(a).

     “Threshold Amount” means $100,000.

     “Transfer” means the sale, pledge, assignment, or other transfer of the Notes, in
whole or in part, and of the rights of the holders thereof with respect thereto and under this
Agreement.

     “Transferee” means any direct or indirect transferee of all or any part of any Notes
permitted under Section 10.10.

     “UCC” means the Uniform Commercial Code in effect in the State of New York, as amended
or modified from time to time.

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

     “United States” and “U.S.” mean the United States of America.

     Warrant” or “Warrants” means the warrants of the Parent for an aggregate
3,208,427 shares of common stock representing 5.00% of the fully-diluted Equity Interests of the
Parent as of the Closing Date.

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1.02 Other Interpretive Provisions.

     With reference to this Agreement and each other Loan Document, unless otherwise specified
herein or in such other Loan Document:

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

     (b) (i) The words “herein,” “hereto,” “hereof” and
“hereunder” and words of similar import when used in any Loan Document shall refer
to such Loan Document as a whole and not to any particular provision thereof.

     (ii) Article, Section, Exhibit and Schedule references are to the Loan Document in
which such reference appears.

     (iii) The term “including” is by way of example and not limitation.

     (iv) The term “documents” includes any and all instruments, documents,
agreements, certificates, notices, reports, financial statements and other writings, however
evidenced, whether in physical or electronic form.

     (v) The terms “knowledge” or “known” when used with respect to any Loan
Party shall be deemed to be a reference to the knowledge of any Responsible Officer.

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

     (d) Section headings herein and in the other Loan Documents are included for convenience of
reference only and shall not affect the interpretation of this Agreement or any other Loan
Document.

1.03 Accounting Terms.

     (a) All accounting terms not specifically or completely defined herein shall be construed in
conformity with, and all financial data (including financial ratios and other financial
calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity
with, GAAP applied on a consistent basis with the Company’s past practices, as in effect from time
to time.

     (b) If at any time any change in GAAP would affect the computation of any financial ratio or
requirement set forth in any Loan Document, and either the Company or the Required Lenders shall so
request, the Required Lenders and the Company shall negotiate in good faith to amend such ratio or
requirement to preserve the original intent thereof in light of such change in GAAP (subject to the
approval of the Company and the Required Lenders); provided that, until so amended,
(i) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such
change therein and (ii) the Company shall provide to the Lenders financial statements and other
documents required under this Agreement or as reasonably requested hereunder setting forth a
reconciliation between calculations of such ratio or requirement made before and after giving
effect to such change in GAAP.

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1.04 Rounding.

     Any financial ratios required to be maintained by the Loan Parties pursuant to this Agreement
shall be calculated by dividing the appropriate component by the other component, carrying the
result to one place more than the number of places by which such ratio or percentage is expressed
herein and rounding the result up or down to the nearest number (with a rounding-up if there is no
nearest number).

1.05 References to Agreements and Laws.

     Unless otherwise expressly provided herein, (a) references to the Loan Documents and other
contractual instruments shall be deemed to include all subsequent amendments, restatements,
extensions, supplements and other modifications thereto, but only to the extent that such
amendments, restatements, extensions, supplements and other modifications are not prohibited by any
Loan Document; and (b) references to any Law shall include all statutory and regulatory provisions
consolidating, amending, replacing, supplementing or interpreting such Law.

1.06 Times of Day.

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

ARTICLE II.

NOTES AND WARRANTS

2.01 Authorization and Issuance of the Notes and Warrants.

     The Company has authorized the issuance to the Lenders of senior secured notes in the
aggregate original principal face amount of $15,000,000 (the “Notes”) to be dated as of the
Closing Date, to mature on the Maturity Date, to bear interest on the unpaid balance thereof from
the Closing Date until the principal shall have become due and payable, at the rate specified in
Article IV and to be substantially in the form of Exhibit A; and the Parent has
authorized the issuance to the Lenders of the Warrants, in substantially the form of Exhibit
B, entitling the holders thereof to purchase in the aggregate 3,208,427 shares of common stock
of the Parent, representing 5.00% of the issued and outstanding shares of the Parent’s Equity
Interests, determined on a fully-diluted basis immediately following the Closing Date.

ARTICLE III.

PURCHASE AND SALE

3.01 Purchase and Sale of the Notes and Warrants; Closing.

     (a) Subject to the terms and conditions herein set forth, and in reliance upon the
representations and warranties of the Loan Parties contained herein, on the Closing Date the
Company and the Parent shall sell to the Lenders and the Lenders shall purchase from the Company
and the Parent, the Notes and the Warrants, respectively, for an aggregate purchase price of
$15,000,000, in each case in the amounts set forth on Schedule 3.01, with funding of such
amounts to occur as set forth herein.

     (b) The closing of the issuance, purchase and sale of the Notes and the Warrants (the
“Closing”) shall take place on the date hereof (the “Closing Date”). At the
Closing, the Company will issue, sell and deliver the Notes to the Lenders and the Parent will
issue, sell and deliver the Warrants to the Lenders, in

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each case, in the respective amounts set forth in Schedule 3.01, and the Lenders will
pay the Company and the Parent, respectively, the purchase price of $15,000,000 therefor by wire
transfer of immediately available funds pursuant to written instructions delivered to the Lenders
by the Company prior to the Closing.

     (c) The Company, the Parent and the Lenders hereby acknowledge and agree that the Notes and
Warrants to be issued are part of an investment unit within the meaning of Section 1273(c)(2) of
the Code. The Company, the Parent and the Lenders hereby further acknowledge and agree that, for
United States federal income tax purposes, the issue price of the Notes within the meaning of
Section 1273(b) of the Code, which issue price was determined pursuant to Section 1.1273-2(h)(1) of
the Treasury Regulations, is equal to the amount set forth on Schedule 3.01. The Company,
the Parent and the Lenders agree to use the issue price and allocation set forth on Schedule
3.01 for all income tax purposes with respect to the issuance of the Notes and the Warrants.

     (d) On a quarterly basis, and after receipt of the certified quarterly financial statements
delivered pursuant to Section 7.01(b) for the most recently ended Fiscal Quarter, the
Lenders, in their sole discretion, may make available incremental loans to the Company on terms to
be agreed upon among the Lenders and the Company at such time.

ARTICLE IV.

TERMS OF NOTES

4.01 Loans.

     Subject to the terms and conditions set forth herein, each Lender severally agrees to purchase
its respective Note from the Company in accordance with Section 3.01. Amounts repaid in
respect of such Notes may not be reborrowed.

4.02 [Reserved].

4.03 Repayment of Principal.

     Unless otherwise required or permitted to be sooner paid pursuant to the provisions hereof and
of the Notes, the Company shall repay the unpaid outstanding principal amount of the Notes
(including capitalized and accrued interest to the extent such interest is not paid in cash and is
added to the principal balance thereon) (the “Principal”) in full on the Maturity Date.
Whenever any payment to be made hereunder or under any Note shall be stated to be due on a day
which is not a Business Day, the due date thereof shall be extended to the next succeeding Business
Day.

4.04 Payments of Interest.

     (a) Interest Payments. So long as no Event of Default has occurred and is continuing,
the Principal shall bear interest on the unpaid balance thereof from the Closing Date until
repayment of the Notes in full, computed on the basis of actual days elapsed over a 360-day year.
Interest payments shall be due and payable monthly in arrears commencing on March 1, 2008 and
continuing on the first day of each succeeding fiscal month thereafter or if such day is not a
Business Day, on the next succeeding Business Day, until paid (each such date, an “Interest
Payment Date”). All accrued and unpaid interest shall be paid in full on the Maturity Date.
On each Interest Payment Date and subject to Sections 4.04(b) and 4.04(d), the
Company shall (i) pay to the Lenders in cash monthly installments of interest (in arrears) at the
applicable Cash Pay Rate on the then outstanding Principal under the Notes and (ii) as set forth
below, either accrue the PIK Amount to the outstanding Principal of the Notes or, at the option of
the

19

 

Company, pay a portion (or all) of the PIK Amount in cash. If an Event of Default has
occurred and is continuing, the Default Rate shall apply as set forth in Section 4.04(d).

     (b) Accrual Rates and Cash Pay Rates.

     (1) Subject to Section 4.04(d) hereof, from the Closing Date and thereafter
until the repayment of the Notes in full, interest shall accrue on the Principal of the
Notes outstanding from time to time at the fixed rate of 15.0% per annum (the “Accrual
Rate”).

     (2) Subject to Section 4.04(d) hereof, from the Closing Date and thereafter
until the repayment of the Notes in full (the “Cash Pay Period”), interest shall be
paid currently in cash on a monthly basis in arrears on each Interest Payment Date at the
fixed rate of 12.0% per annum (the “Cash Pay Rate”).

     (c) PIK Amounts; Optional Cash Payments. Subject to Section 4.04(d) hereof,
on each Interest Payment Date, the Company shall: (A) make an additional cash payment to the
Lenders of the Notes in an amount equal to 3.0% per annum of the Principal outstanding under the
Notes (the “Additional Cash Amount”); (B) increase the then outstanding Principal of the
Notes by an amount (the “PIK Amount”) equal to the difference between (i) interest accruing
at the applicable Accrual Rate during the preceding one-month period and (ii) interest accruing at
the applicable Cash Pay Rate during the preceding one-month period; or (C) pay a portion of the
Additional Cash Amount to the Lenders and accrue to the Principal a portion of the PIK Amount such
that the combined amount of the portion of the Additional Cash Amount and the portion of the PIK
Amount is equal to 3.0% per annum of the Principal outstanding under the Notes (collectively, the
Additional Cash Amount, the PIK Amount or any combination thereof, the “Additional Interest
Amount”); provided that, if the Company shall make an election to satisfy a portion of
its interest payment obligations under this Section 4.04(c) on an Interest Payment Date by
accruing any amount of the Additional Interest Amount, it shall do so by accruing any such amount
of the Additional Interest Amount to all holders of outstanding Notes on an equal and ratable
basis.

     (d) Default Rate; Payment of Default Interest. After the occurrence and during the
continuance of any Event of Default, the Principal and, to the extent they have become due and
payable, all of the other Obligations shall bear interest at a per annum rate equal to the sum of
the Accrual Rate plus 5.0% (the “Default Rate”), beginning on the date of the
occurrence of such Event of Default (it being understood and agreed that, with respect to an Event
of Default related to non-compliance with any of the covenants contained in Section 8.16,
the date of occurrence shall be the applicable test date). All such interest shall be paid in a
manner consistent with Section 4.04(b) and Section 4.04(c) hereof on a monthly
basis (or, at the option of the Lender, on demand) until the payment in full of the Notes hereunder
or other cure of such Event of Default; provided, however, that, the Cash Pay Rate,
as opposed to the PIK Amount and the Additional Interest Amount, shall increase by an amount equal
to 5.0% per annum of the Principal outstanding under the Notes (without duplication to the Default
Rate set forth above).

     (e) Calculation of Interest. Interest shall be calculated on the basis of a 360-day
year and shall be computed for each payment period on the Principal for the actual number of days
elapsed and shall be compounded monthly.

     (f) Savings Clause. In no contingency or event shall the interest rate charged
pursuant to the terms of this Agreement exceed the highest rate permissible under any law which a
court of competent jurisdiction shall, in a final determination, deem applicable hereto. In the
event that such a court determines that the Lenders have received interest hereunder in excess of
the highest applicable rate, the

20

 

amount of such excess interest shall be applied against the Principal then outstanding, and
any excess interest remaining after such application shall be refunded to the Company.

4.05 Mandatory Prepayments of the Notes.

     (a) Material Asset Dispositions. Upon the consummation of any Material Asset
Disposition, the Loan Parties shall prepay the full Principal amount of the Notes and all other
Obligations in the manner set forth in Section 4.05(e).

     (b) Extraordinary Receipts/Asset Dispositions/Involuntary Dispositions. The
Obligations are subject to mandatory prepayment by the Loan Parties from time to time up to the
full Principal amount of the Notes in an amount equal to one hundred percent (100%) of the Net Cash
Proceeds of any Extraordinary Receipt, asset disposition or Involuntary Disposition, each mandatory
prepayment required hereunder to be payable immediately upon receipt of the proceeds of such
Extraordinary Receipt, asset disposition or Involuntary Disposition by a Loan Party or a Subsidiary
thereof; provided, however, (i) the Loan Parties may apply such proceeds to the
purchase price of replacement property or other property used by the Loan Parties or their
Subsidiaries in their line of business within 180 days of such Involuntary Disposition to the
extent permitted by Section 8.05(c) and (ii) to the extent that any such proceeds are not
reinvested, they shall be applied to repay the Notes immediately after the expiration of such 180
day period.

     (c) Debt and Equity Proceeds. The Loan Parties shall make mandatory prepayments of
the Notes and Obligations in the manner set forth in Section 4.05(e) below in amounts equal
to one hundred percent (100%) of the aggregate Net Cash Proceeds from any (i) incurrence of
Indebtedness (other than Permitted Indebtedness) by any Loan Party or a Subsidiary thereof or (ii)
issuance of Equity Interests by the Parent; provided that such mandatory prepayment under
this clause (ii) shall not apply to (A) with respect to Net Cash Proceeds received from the
exercise of options or warrants issued by the Parent (including from the issuance of common stock
upon the exercise of (x) warrants outstanding on the date hereof, (y) the warrants and options to
acquire common stock issued pursuant to the Minrad 2004 Stock Option Plan and Minrad International,
Inc. Director’s Compensation Plan), the first $3,000,000 of Net Cash Proceeds from such exercises
received in Fiscal Year 2008 and the first $1,000,000 of Net Cash Proceeds from such exercises
received in each of Fiscal Year 2009 and Fiscal Year 2010 and (B) with respect to Net Cash Proceeds
above such caps and/or Net Cash Proceeds received from other issuances of Equity Interests by the
Parent, fifty percent (50%) of such Net Cash Proceeds, in all cases to the extent the remaining Net
Cash Proceeds are invested in the Company and used for growth capital. Such prepayments are to be
made within two (2) Business Days after the date of receipt of Net Cash Proceeds of any such
transaction.

     (d) Consolidated Excess Cash Flow. With respect to the end of each fiscal quarter,
commencing with the fiscal quarter ending after the first anniversary of Closing Date, on or prior
to the date that is 45 days after the end of such fiscal quarter, the Company shall prepay the
Notes in the manner set forth in Sections 4.05(e) and 4.05(f) below in an aggregate
amount equal to 50% of Consolidated Excess Cash Flow for the fiscal quarter then ended;
provided, however, that after the occurrence and during the continuance of any
Event of Default, the Company shall prepay the Notes in the manner set forth in Sections
4.05(e) and 4.05(f) below in an aggregate amount equal to 100% of Consolidated Excess
Cash Flow for the fiscal quarter then ended.

     (e) Prepayment. Upon the occurrence of any event triggering the prepayment
requirement under Section 4.05(a), (b), (c) or (d) the Company
shall promptly give written notice to the Lenders. The Loan Parties covenant and agree that they
will prepay, promptly following the occurrence of such transactions or events (or as otherwise
required hereunder), the Notes and Obligations or the portion thereof

21

 

subject to prepayment by paying an aggregate amount equal to (i) the Redemption Price of the
outstanding Principal amount of the Notes to be redeemed plus, (ii) if applicable, accrued
and unpaid interest thereon plus (iii) all other Obligations outstanding.

     (f) Application of Payments. All mandatory prepayments under this Section
4.05 shall be applied first to all costs, expenses, indemnities and other amounts due and
payable hereunder and/or under the Notes, then to payment of default interest, if any, then to
payment of premium, if any, then to payment of accrued and unpaid interest and thereafter to
payment of Principal. Notwithstanding anything to the contrary contained herein, all payments of
Principal and interest due from the Company hereunder shall be made to the Lenders on an equal and
ratable basis. All Principal on the Notes which has been repaid may not be reborrowed.

4.06 Optional Prepayments of the Notes.

     The Company shall have the right at any time and from time to time, upon the notice provided
for below, to optionally prepay the Notes in whole or in part; provided, however,
that such prepayments shall be allocated to all of the Notes outstanding at the time in proportion
to the respective outstanding Principal amounts thereof. In the event of an optional prepayment
made under this Section 4.06, the Company shall give the Lenders irrevocable written notice
of such redemption not less than thirty (30) nor more than sixty (60) days prior to the redemption
date, specifying (i) such redemption date, (ii) the Redemption Price of the outstanding Principal
amount of the Notes to be prepaid on such date, and (iii) that such redemption is to be made
pursuant to this Section 4.06. All optional prepayments under this Section 4.06
shall be accompanied by accrued interest on the amount prepaid, and shall be applied first to all
costs, expenses, indemnities and other amounts payable hereunder and under the applicable Notes,
then to payment of default interest, if any, then to payment of premium, then to payment of accrued
interest and thereafter to payment of Principal. Notwithstanding anything to the contrary
contained herein, all payments of Principal and interest due from the Company hereunder shall be
made to the Lenders on an equal and ratable basis. All Principal on the Notes which has been
prepaid may not be reborrowed.

4.07 Mandatory Offer to Prepay upon a Change of Control.

     (a) Upon the occurrence of a Change of Control, each Lender shall have the right to require
the Company to repurchase all or any part of such Lender’s Notes pursuant to the offer described
below (the “Change of Control Offer”) at an offer price (the “Change of Control
Payment”) in cash equal to the Redemption Price of the outstanding Principal amount of the
Notes plus accrued and unpaid interest thereon, if any, to the date of purchase (the
“Change of Control Payment Date”) plus all other Obligations of such Lender outstanding.
Company will make the Change of Control Offer by delivering a written notice of such offer to the
Lenders within five (5) days of the occurrence of a Change of Control, specifying the Change of
Control Payment Date (which such date shall not be more than thirty (30) days following such Change
of Control). A Lender may accept such Change of Control Offer by delivering a written notice of
acceptance to the Company within fifteen (15) days after receipt of the Change of Control Offer
specifying the amount of the Notes to be redeemed. In connection with the Change of Control Offer,
the Company shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other
securities laws and regulations thereunder to the extent such laws and regulations are applicable
in connection with the repurchase of the Notes as a result of a Change of Control. To the extent
that the provisions of any securities laws or regulations conflict with the provisions of this
Agreement relating to such Change of Control Offer, the Company shall comply with the applicable
securities laws and regulations and shall not be deemed to have breached its obligations described
in this Agreement by virtue thereof (it being understood and agreed that an Event of Default may
nevertheless exist in such situation under Section 9.01).

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     (b) By 12:00 p.m. (noon) Central Time on the Change of Control Payment Date, the Company
shall, to the extent lawful, (1) accept for payment all Notes or portions thereof properly tendered
pursuant to the Change of Control Offer, and (2) pay via wire transfer in immediately available
funds an amount equal to the Change of Control Payment in respect of all Notes or portions thereof
so tendered. All payments under this Section 4.07 shall be applied first to all costs,
expenses, indemnities and other amounts payable hereunder and under the applicable Notes, then to
payment of default interest, if any, then to payment of premium, if any, then to payment of accrued
interest and thereafter to payment of Principal. The Company shall send to each Lender that has
tendered its Notes the applicable Change of Control Payment for such Notes, and the Company shall
promptly execute and mail to each Lender a new Note equal in Principal amount to any unpurchased
portion of the Notes surrendered, if any.

4.08 Direct Payment.

     All payments of Principal and interest due from the Loan Parties hereunder shall be due,
without any presentment thereof, directly to the Lenders, at the Lenders’ addresses set forth on
Schedule 3.01 in New York City, New York or such other address as the Lenders may from time
to time designate in writing to the Loan Parties or, if a bank account(s) with a United States bank
is designated for the Lenders on Schedule 3.01 or in any written notice to the Loan Parties
from the Lenders, the Loan Parties will make such payments in immediately available funds to such
bank account, no later than 12:00 p.m. (noon) Central time on the date due, marked for attention as
indicated, or in such other manner or to such other account in any United States bank as the
Lenders may from time to time direct in writing.

4.09 Taxes.

     (a) Any and all payments by or on behalf of the Loan Parties hereunder and under any Loan
Document shall be made, free and clear of and without deduction for any and all current or future
taxes, levies, imposts, deductions, charges or withholdings that are or would be applicable to the
Lenders, and all liabilities with respect thereto, excluding (x) income taxes imposed on the net
income of a Lender and (y) franchise taxes imposed on the net income of a Lender, in each case by
the jurisdiction under the laws of which such Lender is organized or qualified to do business or a
jurisdiction or any political subdivision thereof in which the Lender engages in business activity
other than activity arising solely from the Lender having executed this Agreement and having
enjoyed its rights and performed its obligations under this Agreement or any Loan Document or any
political subdivision thereof (all such nonexcluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities, collectively or individually, being called “Taxes”). If a
Loan Party must deduct any Taxes from or in respect of any sum payable hereunder or under any other
Loan Document to a Lender, (x) the sum payable shall be increased by the amount (an “additional
amount”) necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 4.09 such Lender shall receive an
amount equal to the sum it would have received had no such deductions been made, (y) such Loan
Party shall make such deductions and (z) such Loan Party shall pay the full amount deducted to the
relevant Governmental Authority in accordance with applicable law.

     (b) The Loan Parties will pay to the relevant Governmental Authority in accordance with
applicable law any current or future stamp or documentary taxes or any other excise or property
taxes, charges or similar levies that arise from any payment made hereunder or under any Loan
Document, or from the execution, delivery or registration of, or otherwise with respect to, this
Agreement or any Loan Document that are or would be applicable to the Lenders (“Other
Taxes”).

     (c) The Loan Parties jointly and severally agree to indemnify each Lender for the full amount
of Taxes and Other Taxes paid by such Lender and any liability (including penalties, interest and

23

 

expenses (including reasonable attorney’s fees and expenses)) arising therefrom or with
respect thereto, whether or not such Taxes or Other Taxes were correctly or legally asserted by the
relevant Governmental Authority. A certificate as to the amount of such payment or liability
prepared by such Lender absent manifest error, shall be final conclusive and binding for all
purposes. Such indemnification shall be made within thirty (30) days after the date such Lender
makes written demand therefor. The Loan Parties shall have the right to receive that portion of
any refund of any Taxes and Other Taxes received by a Lender for which any Loan Party has
previously paid any additional amount or indemnified such Lender and which leaves the Lender, after
such Loan Party’s receipt thereof, in no better or worse financial position than if no such Taxes
or Other Taxes had been imposed or additional amounts or indemnification paid to the Lender. The
Lender shall have sole discretion as to whether (and shall in no event be obligated) to make any
such claim for any refund of any Taxes or Other Taxes.

4.10 Fees.

     On the Closing Date, the Company shall pay to the Agent, for the account of each Lender any
fees as shall have been separately agreed upon in writing in the amounts and at the times so
specified. Such fees shall be fully earned when paid and shall not be refundable for any reason
whatsoever.

ARTICLE V.

CONDITIONS PRECEDENT TO CLOSING

5.01 Conditions To Closing.

     The Lenders’ obligations to enter into this Agreement and to purchase the Notes at Closing are
subject to each Lender determining, in its sole discretion, that the following conditions precedent
have been satisfied (or each Lender waiving in writing (or through funding) the conditions that it
has determined have not been satisfied), on or before the Closing Date:

     (a) Loan Documents, Certificates and Opinions. The Agent’s receipt of the
following, each of which shall be originals or facsimiles (followed promptly by originals)
unless otherwise specified, each properly executed by a Responsible Officer of the signing
Loan Party, each dated the Closing Date (or, in the case of certificates of governmental
officials, a recent date before the Closing Date) and each in form and substance reasonably
satisfactory to the Agent and its legal counsel:

          (i) Loan Documents. Executed counterparts of this Agreement, each of
the Collateral Documents (including a temporary Deposit Account Control Agreement
with respect to the Credit Parties’ Deposit Accounts at KeyBank National
Association), each of the Equity Documents and any other applicable Loan Documents.

          (ii) Notes. A Note executed by the Company in favor of each Lender in
the respective amounts set forth on Schedule 3.01.

          (iii) Secretary’s Certificates. A certificate of a Responsible Officer
of each Loan Party, in substantially the form of Exhibit D attached hereto,
certifying that attached thereto is a true, correct and complete copy of (A) the
resolutions duly adopted by the board of directors or other governing body of each
Loan Party, as applicable, authorizing the borrowings contemplated hereunder and the
execution, delivery and performance of the Loan Documents to which it is a party,
(B) the articles or certificate of incorporation or formation or other charter
documents of each Loan Party, as applicable, and all amendments thereto, certified
as of a recent date by the appropriate Governmental

24

 

Authority in its jurisdiction of
incorporation or formation, (C) the bylaws, operating agreement or other governing
document of each Loan Party, as applicable, as in effect on the date of such
certifications, (D) the names of each person of each Loan Party, as applicable,
executing any Loan Document to which such Loan Party is a party, together with the
attestation that such person has been duly elected or appointed and is qualified as
a Responsible Officer of the applicable Loan Party on the date hereof, holding the
office or offices set forth opposite his or her name, and the signature set forth
opposite his or her name is a specimen of his or her signature, (E) certificates as
of a recent date of the good standing of each Loan Party under the laws of its
jurisdiction of organization and, to the extent requested by the Lenders, each other
jurisdiction where each Loan Party is qualified to do business and a certificate, if
available, of the relevant taxing authorities of such jurisdictions certifying that
such Loan Party has filed required tax returns and owes no delinquent taxes, and (F)
all material consents, licenses and approvals required in connection with the
execution, delivery and performance by such Loan Party and the validity against such
Loan Party of the Loan Documents to which it is a party, and such consents, licenses
and approvals shall be in full force and effect, or stating that no such consents,
licenses or approvals are so required.

     (iv) Officer’s Closing Certificate. A certificate of a Responsible
Officer of the Company, in substantially the form of Exhibit E attached
hereto, certifying (A) that all of the conditions specified in this
Section 5.01 have been satisfied, (B) that since December 31, 2006 there has
been no change, occurrence or development that has had or could be reasonably
expected to have a Material Adverse Effect, and (C) except as disclosed on the
Schedules of this Agreement, that no actions, suits, investigations or proceedings
are pending or threatened in any court or before any arbitrator or Governmental
Authority that purport (1) to materially and adversely affect the Loan Parties or
(2) to affect any transaction contemplated by this Agreement or the ability of the
Loan Parties or any other obligor under the Loan Documents to perform their
respective obligations under the Loan Documents.

     (v) Opinions of Counsel. The Lenders shall have received, dated as of
the Closing Date and in form and substance reasonably satisfactory to the Lenders,
an opinion of Hodgson Russ LLP, as counsel to the Loan Parties, as to the Loan
Documents and the documents and instruments executed by the Loan Parties in
connection therewith.

     (vi) Such other assurances, certificates, documents, consents or opinions as
the Lenders reasonably may require.

(b) Financial Matters.

     (i) Financial Statements. The Lenders shall have received (A) the
audited combined balance sheets and statements of income, changes in shareholders’
equity and cash flow for the Parent and its Subsidiaries as of and for the Fiscal
Years ended December 31, 2005 and December 31, 2006, (B) the unaudited combined
balance sheets and statements of income, changes in shareholders’ equity and cash
flow for the Parent and its Subsidiaries as of and for the Fiscal Year period to
date ended November 30, 2007, prepared by the chief financial officer of the Parent;
and (C) an unadjusted, unaudited trial balance sheet of the Company as of December
31, 2007, all in form and substance satisfactory to the Lenders and prepared in
accordance with GAAP, subject, in the case of clauses (B) and (C), to the absence of
footnotes and to normal year-end audit adjustments.

25 

 

     (ii) Financial Forecasts. The Lenders shall have received financial
forecasts with respect to the Loan Parties and their Subsidiaries prepared by a
Responsible Officer of the Company, each in form satisfactory to the Lenders, of
income statements and cash flow statements on a monthly basis for the first year
following the Closing Date and on an annual basis for each year thereafter during
the term of this Agreement (the “Projections”).

     (iii) Financial Condition Certificate. The Lenders shall have received
a certificate of a Responsible Officer of the Company, dated as of the Closing Date,
in substantially the form of Exhibit H attached hereto.

     (iv) Solvency Certificate. The Lenders shall have received a
certificate of the chief financial officer (or other Responsible Officer agreed to
by the Lenders) of the Company, in substantially the form of Exhibit G
attached hereto, as to the financial condition and the Solvency of (x) the Company
and (y) the Parent and its Subsidiaries, taken as a whole, in each case after giving
effect to the transactions contemplated by the Loan Documents.

     (v) Fees and Expenses. Company shall have paid (i) all Attorney Costs
of the Lenders to the extent invoiced prior to or on the Closing Date, plus
such additional amounts of Attorney Costs as shall constitute Lenders’ reasonable
estimate of Attorney Costs incurred or to be incurred through the closing
proceedings (provided that such estimate shall not thereafter preclude a final
settling of accounts between the Company and the Lenders) and (ii) all other fees
and expenses required to be paid on or before the Closing Date as agreed to between
the Company and the Agent.

     (vi) Indebtedness. The Agent shall have received payoff and lien
release letters in form and substance satisfactory to Agent from each Person whose
Indebtedness is being satisfied with the proceeds of the Notes funded on the Closing
Date (including with respect to the Company’s existing credit facility with First
Niagara Bank) and shall be satisfied with the amount and terms of any inter-company
Indebtedness and all Indebtedness and material liabilities of the Company to any
third parties existing on the Closing Date. All existing Indebtedness of the Loan
Parties (other than Permitted Indebtedness) has been (or concurrently with the
initial borrowing will be) paid in full.

     (vii) Other Financial Information and Other Documents. The Lenders
shall have received any updates or modifications to the financial information
previously provided thereto by the Company, as reasonably requested by the Lenders.
The Lenders shall have received any other documents reasonably requested thereby in
connection with this Agreement, and each such document shall be in form and
substance reasonably satisfactory to the Lenders.

     (viii) No Injunction, Etc. Except as set forth on Schedule 6.06, no
litigation, action, proceeding, investigation, regulation or legislation shall have
been instituted, threatened or proposed before any Governmental Authority to enjoin,
restrain, or prohibit, or to obtain substantial damages in respect of, or which is
related to or arises out of the Loan Documents or the consummation of the
transactions contemplated thereby; or which, in the Lenders’ reasonable discretion
would make it inadvisable to consummate the transactions contemplated by this
Agreement and the other Loan Documents.

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(c) Collateral Matters.

     (i) The Agent shall have received:

          (A) searches of relevant real property records and of UCC filings in
the jurisdiction of the chief executive office of each Loan Party and each
jurisdiction where any Collateral is located or where a filing would need to
be made in order to perfect the Agent’s security interest in the Collateral,
copies of the financing statements or security agreements on file in such
jurisdictions and payoff letters in connection with existing Indebtedness,
all of which shall evidence that no Liens exist other than Permitted Liens;

          (B) UCC financing statements for each appropriate jurisdiction as are
necessary, in the Agent’s sole discretion, to perfect the Agent’s security
interest in the Collateral;

          (C) searches of ownership of intellectual property in the appropriate
governmental offices and such patent/trademark/copyright filings as
requested by the Agent in order to perfect the Agent’s security interest in
the Collateral;

          (D) to the extent the membership interests are certificated, all equity
certificates evidencing the Equity Interests pledged to the Agent pursuant
to the Collateral Documents, together with duly executed in blank undated
equity powers attached thereto;

          (E) all instruments and chattel paper in the possession of any of the
Loan Parties, together with allonges or assignments as may be necessary or
appropriate to perfect the Agent’s security interest in the Collateral to
the extent required under the Security and Pledge Agreement;

          (F) duly executed consents as are necessary, in the Agent’s sole
discretion, to perfect the Lenders’ security interest in the Collateral,
including, without limitation, such agreements from lessors of real property
as the Agent may require;

          (G) a duly executed perfection certificate from the Company in form and
substance satisfactory to the Agent in its sole discretion; and

          (H) a copy of insurance certificates evidencing the policies required
pursuant to Section 7.07, naming the Agent as additional insured and
loss payee.

     (ii) Priority of Liens. The Agent shall have received satisfactory
evidence that (A) the Agent, on behalf of the Lenders, holds a perfected Lien on all
Collateral (subject to clause (B)) and (B) none of the Collateral is subject to any
other Liens other than Permitted Liens.

(d) Miscellaneous.

     (i) Governmental and Third Party Approvals. The Company shall have
received all material governmental, shareholder and third party consents and
approvals necessary (as determined in the reasonable discretion of the Lenders) in
connection with

27

 

the transactions contemplated by this Agreement and the other Loan
Documents and the other transactions contemplated hereby and all applicable waiting
periods shall have expired without any action being taken by any Person that could
reasonably be expected to restrain, prevent or impose any material adverse
conditions on any of the Loan Parties or such other transactions or that could seek
or threaten any of the foregoing, and no law or regulation shall be applicable which
in the reasonable judgment of the Lenders could reasonably be expected to have such
effect.

          (ii) Corporate Structure and Capitalization of Parent. The capital and
ownership structure and the equity holder arrangements of the Parent, on the Closing
Date and on a pro forma basis after giving effect to the transactions contemplated
by the Loan Documents, shall be reasonably satisfactory to the Lenders (and the
Lenders shall have received satisfactory evidence that (A) the capital and ownership
structure and equity holder arrangements of the Parent are, as of the most recent
date for which such information is available and with such detail as is reasonably
available, as set forth in Schedule 6.13, and (B)  all Equity Interests of
the Parent’s Subsidiaries shall be owned by the Parent and/or one or more
Subsidiaries thereof).

          (iii) Other Documents. All opinions, certificates and other
instruments, and all proceedings in connection with the transactions contemplated by
the Loan Documents, shall be reasonably satisfactory in form and substance to the
Lenders. The Lenders shall have received copies of all other documents,
certificates and instruments reasonably requested thereby, with respect to the
transactions contemplated by the Loan Documents.

          (iv) Approval of Laminar’s Investment Committee. Laminar’s credit
committee and investment committee shall have reviewed and approved the terms of the
Loan Documents.

          (v) Completion of Due Diligence. The Lenders shall have completed their
due diligence, in form and scope satisfactory to the Lenders, on the Company, the
Parent, the Notes, the Warrant and the Pennsylvania Loans (including, but not
limited to, due diligence related to (A) management background checks, (B) quality
of earnings reports, (C) accounting and legal matters, (D) intellectual property,
(E) the Company’s pro forma capital structure, (F) appraisals and (G) industry and
market reports).

          (vi) Receipt of Updated Environmental Report. The Lenders shall have
received, and shall be satisfied with, any requested updates to existing
environmental reports.

          (vii) Permits. With respect to (A) discharges of stormwater and
wastewater, (B) air emissions and (C) the chemicals to be stored and used at any
real property owned or leased by the Company or any of its Subsidiaries, the Company
shall have applied for, and otherwise be using commercially reasonable efforts to
obtain, all permits necessary or desirable under applicable Environmental Laws in
connection with the storage and usage of such chemicals.

     (e) Representations and Warranties. The representations and warranties of the
Company and each other Loan Party contained in Article VI hereof and each other Loan
Document that are subject to materiality or Material Adverse Effect qualifications shall be
true and correct in all respects and the representations and warranties of the Company and
each other Loan Party contained in Article VI hereof and each other Loan Document
that are not subject to

28

 

materiality or Material Adverse Effect qualifications shall be true
and correct in all material respects, except to the extent that such representations and
warranties specifically refer to an earlier date, in which case they shall be true and
correct as of such earlier date.

          (f) Defaults or Events of Default. No Default or Event of Default shall exist,
or would result from entering into the Loan Documents.

ARTICLE VI.

REPRESENTATIONS AND WARRANTIES

     Each of the Loan Parties jointly and severally represents and warrants to the Lenders that,
immediately after giving effect to the transactions contemplated herein and the other Loan
Documents:

6.01 Existence, Qualification and Power; Compliance with Laws.

     Each Loan Party and each Subsidiary thereof (a) is duly organized or formed, validly existing
and in good standing under the Laws of the jurisdiction of its incorporation or organization, (b)
has all requisite corporate or limited liability company power and authority and all requisite
governmental licenses, authorizations, consents and approvals necessary to (i) own or lease its
assets and carry on its business and (ii) execute, deliver and perform its obligations under the
Loan Documents to which it is a party, (c) is duly qualified and is licensed and in good standing
under the Laws of each jurisdiction where its ownership, lease or operation of properties or the
conduct of its business requires such qualification or license, and (d) is in compliance with all
Laws; except in each case referred to in clause (b)(i), (c) or (d), to the extent that failure to
do so could not reasonably be expected to have a Material Adverse Effect.

6.02 Authorization; No Contravention.

     The execution, delivery and performance by each Loan Party of each Loan Document to which such
Person is party, have been duly authorized by all necessary corporate or limited liability company
organizational action, and do not and will not: (a) contravene the terms of any of such Person’s
Organization Documents; (b) conflict with or result in any breach or contravention of, or result in
or require the creation of any Lien under, or require any payment to be made under (i) any
Contractual Obligation to which such Person is a party or affecting such Person or the properties
of such Person or any of its Subsidiaries or (ii) any order, injunction, writ or decree of any
Governmental Authority or any arbitral award to which such Person or its property is subject; or
(c) violate any Law. Each Loan Party and each Subsidiary thereof is in compliance with all
Contractual Obligations referred to in clause (b)(i) or all Laws referred to in clause (c), except
to the extent that failure to do so could not reasonably be expected to have a Material Adverse
Effect.

6.03 Governmental Authorization; Other Consents.

     No approval, consent, exemption, authorization, or other action by, or notice to, or filing
with, any Governmental Authority or any other Person is necessary or required in connection with
the execution, delivery or performance by, or enforcement against, any Loan Party of this Agreement
or any other Loan Document, except to the extent that failure to do so could not reasonably be
expected to have a Material Adverse Effect.

6.04 Binding Effect.

     This Agreement has been, and each other Loan Document, when delivered hereunder, will have
been, duly executed and delivered by each Loan Party that is party thereto. This Agreement
constitutes,

29

 

and each other Loan Document when so delivered will constitute, a legal, valid and
binding obligation of such Loan Party, enforceable against each Loan Party that is party thereto in
accordance with its terms except as limited by Debtor Relief Laws.

6.05 Financial Statements; No Material Adverse Effect.

     (a) The financial statements referred to in Sections 5.01 and 7.01 (i) were
prepared in accordance with GAAP consistently applied throughout the period covered thereby, except
as otherwise expressly noted therein, and (ii) fairly present, in all material respects, the
financial condition of the Parent and its Subsidiaries, as of the date thereof and their results of
operations for the period covered thereby, subject, in the case of clauses (i) and (ii), to the
absence of footnotes and to normal year-end audit adjustments for the unaudited financial
statements. Set forth on Schedule 6.05 hereto is a complete and correct list of all
material credit agreements, indentures, purchase agreements, obligations in respect of letters of
credit, guarantees, joint venture agreements, and other instruments in effect or to be in effect as
of the Closing Date providing for, evidencing, securing or otherwise relating to any Indebtedness
of the Company or any of its Subsidiaries, and all material obligations of the Company or any of
its Subsidiaries to issuers of material surety or appeal bonds issued for account of the Company or
any such Subsidiary as of the Closing Date, and correctly sets forth the names of the debtor and
creditor with respect to the Indebtedness obligations outstanding or to be outstanding and the
property subject to any Lien securing such Indebtedness obligation as of the Closing Date. The
Company has heretofore delivered to the Lenders a complete and correct copy of all such material
credit agreements, indentures, purchase agreements, contracts, letters of credit, guarantees, joint
venture agreements, or other instruments, including any modifications or supplements thereto, as in
effect on the Closing Date.

     (b) Since December 31, 2006, there has been no event or circumstance, either individually or
in the aggregate, that has had or could reasonably be expected to have a Material Adverse Effect.

     (c) [Reserved.]

     (d) The consolidated forecasted balance sheet and statements of income and cash flows of the
Loan Parties and their Subsidiaries delivered pursuant to Section 5.01(b)(ii) were prepared
in good faith on the basis of the assumptions stated therein, which assumptions were fair in light
of the conditions existing and known to the Company at the time of delivery of such forecasts, and,
based on such assumptions, represented, at the time of delivery, the Loan Parties’ best estimate of
its future financial performance.

6.06 Litigation.

     Except to the extent set forth on Schedule 6.06, there are no actions, suits,
proceedings, claims or disputes pending or, to the knowledge of the Loan Parties, threatened or
contemplated, at law, in equity, in arbitration or before any Governmental Authority, by or against
any Loan Party or any of its Subsidiaries or against any of their properties or revenues that (a)
purport to affect or pertain to this Agreement or any other Loan Document, or any of the
transactions contemplated hereby, or (b) either individually or in the aggregate, if determined
adversely, could reasonably be expected to have a Material Adverse Effect.

6.07 No Default.

     Except to the extent set forth on Schedule 6.07, none of the Loan Parties or any
Subsidiary is in default under or with respect to any Contractual Obligation that could, either
individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. No
Default has occurred and is

30

 

continuing or would result from the consummation of the transactions
contemplated by this Agreement or any other Loan Document.

6.08 Ownership of Property; Liens.

     Each of the Loan Parties and each Subsidiary has good record and insurable title in fee simple
to, or valid leasehold interests in, all real property necessary or used in the ordinary conduct of
its business, except for such defects in title as could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. The Property of the Loan Parties and
their Subsidiaries is subject to no Liens, other than Permitted Liens.

6.09 Environmental Compliance.

     The Loan Parties and their Subsidiaries conduct in the ordinary course of business a review of
the effect of existing Environmental Laws and claims alleging potential liability or responsibility
for violation of any Environmental Law on their respective businesses, operations and properties,
and as a result thereof the Loan Parties have reasonably concluded that such Environmental Laws and
claims could not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

6.10 Insurance.

     The properties of the Loan Parties and their Subsidiaries are insured with financially sound
and reputable insurance companies not Affiliates of the Loan Parties, in such amounts with such
deductibles and covering such risks as are customarily carried by companies engaged in similar
businesses and owning similar properties in localities where the Company or the applicable
Subsidiary operates.

6.11 Taxes.

     Except as set forth on Schedule 6.11, the Loan Parties and their Subsidiaries have
filed all Federal, state and other material tax returns and reports required to be filed, and have
paid all Federal, state and other material taxes, assessments, fees and other governmental charges
levied or imposed upon them or their properties, income or assets otherwise due and payable, except
those which are being contested in good faith by appropriate proceedings diligently conducted and
for which adequate reserves have been provided in accordance with GAAP. There is no proposed tax
assessment against any Loan Party or any Subsidiary that would, if made, have a Material Adverse
Effect. Neither a Loan Party nor any Subsidiary thereof is party to any tax sharing agreement or
similar Contractual Obligation.

6.12 ERISA Compliance.

     (a) Each Plan is in compliance in all material respects with the applicable provisions of
ERISA, the Code and other Federal or state Laws. Each Plan that is intended to qualify under
Section 401(a) of the Code has received a favorable determination letter from the IRS or an
application for such a letter is currently being processed by the IRS with respect thereto and, to
the best knowledge of the Loan Parties, nothing has occurred which would prevent, or cause the loss
of, such qualification. The Loan Parties and each ERISA Affiliate have made all required
contributions to each Plan subject to Section 412 of the Code, and no application for a funding
waiver or an extension of any amortization period pursuant to Section 412 of the Code has been made
with respect to any Plan.

     (b) There are no pending or, to the best knowledge of the Loan Parties, threatened claims,
actions or lawsuits, or action by any Governmental Authority, with respect to any Plan that could
reasonably be expected to have a Material Adverse Effect. There has been no prohibited transaction
or

31

 

violation of the fiduciary responsibility rules with respect to any Plan that has resulted or
could reasonably be expected to result in a Material Adverse Effect.

     (c) (i) No ERISA Event has occurred or is reasonably expected to occur; (ii) no Pension Plan
has any Unfunded Pension Liability; (iii) neither the Loan Parties nor any ERISA Affiliate has
incurred, or reasonably expects to incur, any liability under Title IV of ERISA with respect to any
Pension Plan (other than premiums due and not delinquent under Section 4007 of ERISA); (iv) neither
the Loan Parties nor any ERISA Affiliate has incurred, or reasonably expects to incur, any
liability (and no event has occurred which, with the giving of notice under Section 4219 of ERISA,
would result in such liability) under Sections 4201 or 4243 of ERISA with respect to a
Multiemployer Plan; and (v) neither the Loan Parties nor any ERISA Affiliate has engaged in a
transaction that could be subject to Sections 4069 or 4212(c) of ERISA.

6.13 Subsidiaries; Authorized and Issued Equity Interests.

     (a) As of the Closing Date, the Company has no Subsidiaries or other equity investments in any
person or entity other than those specifically disclosed in Part (a) of Schedule 6.13, and
all of the outstanding Equity Interests in such Subsidiaries have been validly issued, are fully
paid and nonassessable and are owned by a Loan Party in the amounts specified on Part (a) of
Schedule 6.13 free and clear of all Liens (other than Liens permitted by
Section 8.01(a)).

     (b) The authorized capitalization of the Company as of the Closing Date (after giving effect
to the transactions contemplated hereunder) is set forth on Part (b) of Schedule 6.13.
Except as set forth on Part (b) of Schedule 6.13, no Loan Party has issued any of its
Equity Interests and there are no further subscriptions, contracts or agreements for the issuance
or purchase of any other or additional equity interest in the Loan Parties, either in the form of
options, agreements, warrants, calls, convertible securities or other similar rights. All of the
outstanding Equity Interests of the Loan Parties have been duly and validly authorized and issued
and are fully paid and nonassessable and will have been offered, issued, sold and delivered in
compliance with applicable federal and state securities laws. Set forth on Part (b) of
Schedule 6.13, as of the most recent date for which such information is available and with
such detail is reasonably available, is a listing (after giving effect to the transactions
contemplated hereunder) of all members, stockholders, shareholders and other equityholders
(including the number of shares of each class or percentage partnership interest, as the case may
be, owned by each such Person) of the Company and of the holders of all outstanding options,
agreements, warrants, calls, convertible securities and other rights relating to the issuance of
equity securities of, or interests in, the Company. Except as set forth on Part (c) of
Schedule 6.13, as of the Closing Date (after giving effect to the transactions contemplated
hereunder) (i) none of the Loan Parties is a party to any “phantom stock”, employee stock option
plan, other equity-based incentive plan or similar agreement, (ii) there are no preemptive or
similar rights to purchase or otherwise acquire equity securities of, or interests in, the Loan
Parties pursuant to any requirement of Law or Contractual Obligation applicable to the Loan Parties
and (iii) no registration rights under the Securities Act have been granted by the Loan Parties
with respect to its equity securities or interests which have not been registered.

6.14 Margin Regulations; Investment Company Act.

     (a) The Loan Parties are not engaged and will not engage, principally or as one of their
important activities, in the business of purchasing or carrying margin stock (within the meaning of
Regulation U issued by the FRB), or extending credit for the purpose of purchasing or carrying
margin stock.

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     (b) None of the Loan Parties, any Person Controlling the Loan Parties, or any Subsidiary is or
is required to be registered as an “investment company” under the Investment Company Act of 1940.

6.15 Disclosure.

     The Loan Parties have disclosed to the Lenders all agreements, instruments and corporate or
other restrictions to which it or any of its Subsidiaries 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. No report, financial statement, certificate or other information furnished
(whether in writing or orally) by or, to the knowledge of the Company, on behalf of any Loan Party
to any Lender in connection with the transactions contemplated hereby and the negotiation of this
Agreement or delivered hereunder or under any other Loan Document (in each case, 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, forecasts and estimates, including estimated anticipated dates for
receiving governmental approvals, each of the Loan Parties represents only that such information
was prepared or provided in good faith based upon assumptions believed to be reasonable at the
time.

6.16 Compliance with Laws.

     Each of the Loan Parties and each Subsidiary is in compliance in all material respects with
the requirements of all Laws and all orders, writs, injunctions and decrees applicable to it or to
its properties, except in such instances in which (a) such requirement of Law or order, writ,
injunction or decree is being contested in good faith by appropriate proceedings diligently
conducted or (b) the failure to comply therewith, either individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect.

6.17 Intellectual Property; Licenses, Etc.

     The Loan Parties and their Subsidiaries own, or possess the right to use, all of the
trademarks, service marks, trade names, copyrights, patents, patent rights, franchises, licenses
and other intellectual property rights (collectively, “IP Rights”) that are reasonably
necessary for the operation of their respective businesses as currently conducted and as currently
anticipated to be conducted, without conflict with the rights of any other Person. Set forth on
Schedule 6.17 is a list as of the Closing Date of all active United States registered
patents, trademark and copyrights (including pending applications for registration) owned by each
of the Loan Parties and its Subsidiaries or that each of the Loan Parties or any of its
Subsidiaries has the right to use as of the Closing Date. Except as set forth on Schedule
6.17, none of such IP Rights are subject to any licensing agreement or similar arrangement. To
the best knowledge of the Loan Parties, no slogan or other advertising device, product, process,
method, substance, part or other material now employed, or now contemplated to be employed, by the
Loan Parties or any Subsidiary infringes upon any rights held by any other Person. No claim or
litigation regarding any of the foregoing is pending or, to the best knowledge of the Loan Parties,
threatened, which, either individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.

6.18 Experience.

     Each Loan Party acknowledges that it has the business and financial experience to protect its
respective interests.

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6.19 Solvency.

     The (i) Company and (ii) the Parent and its Subsidiaries, taken as a whole, after consummation
of the transactions contemplated by this Agreement and the other Loan Documents, are Solvent.

6.20 Compliance with Securities Laws.

     Assuming the accuracy of the representations and warranties of the Lenders contained in
Article VIA hereof the offer and sale of the Notes are not required to be registered
pursuant to the provisions of Section 5 of the Securities Act. None of the Loan Parties or any of
their agents have solicited or will solicit any offers to sell or have offered to sell or will
offer to sell all or any part of the Notes to any Person so as to bring the sale of Notes by the
Company within the registration provisions of the Securities Act or any state securities laws.

6.21 Deposit Accounts.

     Schedule 6.21 lists all of the Deposit Accounts and Securities Accounts of the Loan
Parties as of the Closing Date.

6.22 Business Locations.

     Set forth on Schedule 6.22 is a list of all real Property located in the United States
that is owned or leased by the Loan Parties as of the Closing Date. Set forth on
Schedule 6.22 is a list of all locations in the United States where any tangible personal
Property of a Loan Party is located as of the Closing Date. Set forth on Schedule 6.22 is
the chief executive office, jurisdiction of incorporation or formation and principal place of
business of each Loan Party as of the Closing Date.

6.23 Material Agreements.

     Schedule 6.23 accurately and completely lists all material agreements to which each of
the Loan Parties is a party that involve amounts on an annual basis in excess of the Threshold
Amount (each a “Material Agreement”), including, without limitation, all material purchase
agreements, material license agreements, material supply agreements, material research agreements,
material customer agreements, material right of way or occupancy agreements, material lease
agreements, material consulting agreements, material management agreements and material employment
agreements. All of such Material Agreements are valid, subsisting and in full force and effect and
none of the Loan Parties, or, to the knowledge of the Loan Parties, any other parties, are in
material default thereunder. The Loan Parties have provided or made available true and complete
copies of all such Material Agreements to the Lenders.

6.24 Transactions with Affiliates.

     Except as set forth on Schedule 6.24, there are no Contractual Obligations of any Loan
Party to any of the officers, directors, shareholders, Affiliates or their respective Affiliates,
or Related Parties, of any Loan Party other than (i) for payment of salary for services rendered,
(ii) reimbursement for reasonable expenses incurred on behalf of any Loan Party and (iii) for
standard employee benefits made generally available to all employees of the Loan Parties. Except
as set forth on Schedule 6.24, none of the officers, directors, shareholders, employees,
Affiliates, or their respective Affiliates or Related Parties, of any Loan Party has incurred
Indebtedness to any Loan Party or has any direct or indirect material ownership interest in any
Person with which any Loan Party is affiliated or, to the Loan Parties’ best knowledge, with which
any Loan Party has a business relationship except that such Person may own stock in publicly traded
companies. Other than as set forth on Schedule 6.24, no officer, director,

34

 

shareholder, Affiliate, or any of their respective Affiliates or Related Parties, of a Loan Party, is, directly
or indirectly, a party to or otherwise interested in any material Contractual Obligation with any
Loan Party. Except as may be expressly disclosed in notes to the financial statements, no Loan
Party is a guarantor or indemnitor of any Indebtedness of any other Person.

6.25 Parent Holding Company.

     The Parent is a single purpose entity that does not engage in any operations, business or
activity other than (a) owning 100% of the Equity Interests of the Company, (b) pledging its
interests therein to the Lenders, (c) executing the Loan Documents and shareholders agreements with
respect to Equity Interests issued by the Parent, (d) executing a guaranty of the Company’s
obligations under the Pennsylvania Loans and (e) fulfilling its obligations thereunder and
performing other administrative functions incidental to the foregoing, in each case to the extent
not otherwise prohibited hereunder.

6.26 Registration Statement.

     (a) When filed and declared effective by the SEC, the Registration Statement and any
prospectus supplement will comply in all material respects with the Securities Act, and the rules
and regulations of the SEC thereunder, and will not, as of the applicable effective date as to the
Registration Statement and any amendment thereto and as of the date of the prospectus supplement
and any amendment or supplement thereto, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading, and the prospectus
supplement, as amended or supplemented after the Closing Date as required by the SEC’s rules and
regulations, will not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light of the circumstances under which they
were made, not misleading.

     (b) The documents incorporated by reference in the Registration Statement, when filed with the
SEC, conform or will conform, as the case may be, in all material respects to the requirements of
the Exchange Act, and none of such documents contained or will contain an untrue statement of a
material fact or omitted to state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading.

     (c) The financial statements, and the related notes thereto, included or incorporated by
reference in the Registration Statement present or will present, as the case may be, fairly the
consolidated financial position of the Company and its consolidated Subsidiaries as of the dates
indicated and the results of their operations and the changes in their consolidated cash flows for
the periods specified; said financial statements have been and will be prepared in conformity with
GAAP applied on a consistent basis except as set forth in the notes thereto, and the supporting
schedules included or incorporated by reference in the Registration Statement present fairly the
information required to be stated therein.

6.27 SEC Reports: Financial Statements.

     The Company has filed all reports required to be filed by it under the Securities Act and the
Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the
date hereof (or such shorter period as the Company was required by law to file such material) (the
foregoing materials being collectively referred to herein as the “SEC Reports”) on a timely
basis or has received a valid extension of such time of filing and has filed any such SEC Reports
prior to the expiration of any such extension. As of their respective dates, the SEC Reports
complied in all material respects with the requirements of the Securities Act and the Exchange Act
and the rules and regulations of the SEC promulgated thereunder, and none of the SEC Reports, when
filed, contained any untrue statement of a

35

 

material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The financial statements of the Company
included in the SEC Reports comply in all material respects with applicable accounting requirements
and the rules and regulations of the SEC with respect thereto as in effect at the time of filing.
Such financial statements have been prepared in accordance with GAAP, except as may be otherwise
specified in such financial statements or the notes thereto, and fairly present in all material
respects the financial position of the Company and its consolidated Subsidiaries as of and for the
dates thereof and the results of operations and cash flows for the periods then ended, subject, in
the case of unaudited statements, to normal, immaterial, year-end audit adjustments.

6.28 Internal Accounting Controls.

     To the extent required under the Securities Act or the Exchange Act, and except as set forth
in the SEC Reports, the Company and its Subsidiaries maintain a system of internal control over
financial reporting sufficient to provide reasonable assurance that (i) transactions are executed
in accordance with management’s general or specific authorizations, (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with GAAP and to maintain
asset accountability, (iii) access to assets is permitted only in accordance with management’s
general or specific authorization, and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with respect to any
differences. There are no disagreements of any kind presently existing, or reasonably anticipated
by the Company to arise, between the accountants and lawyers formerly or presently employed by the
Company with respect to any fees owed to its accountants and lawyers. To the extent required under
the Securities Act or the Exchange Act, and except as set forth in the SEC Reports, the Company
maintains disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14)
for the Company and designed such disclosures controls and procedures to ensure that material
information relating to the Company, including its Subsidiaries, is made known to the certifying
officers by others within those entities, particularly during the period in which the Company’s
Form 10-K or 10-Q, as the case may be, is being prepared. To the extent required under the
Securities Act or the Exchange Act, (a) the Company’s certifying officers have evaluated the
effectiveness of the Company’s controls and procedures as of the end of the period covered by the
Company’s Form 10-K for the fiscal year ended December 31, 2006 and Forms 10-Q for the fiscal
quarters ended March 31, June 30, and September 30, 2007 (each such date, the “Evaluation
Date”), (b) the Company presented the conclusions of the certifying officers about the
effectiveness of the disclosure controls and procedures based on their evaluations as of each
Evaluation Date and (c) since the most recent Evaluation Date, there have been no significant
changes in the Company’s internal controls (as such term is defined in Item 307(b) of
Regulation S-K under the Exchange Act) or, the Company’s knowledge, in other factors that could
significantly affect the Company’s internal controls.

6.29 Private Placement.

     Assuming the accuracy of the representations and warranties of Laminar set forth in
Article VIA, the offer, issuance and sale of the Warrants to Laminar as contemplated hereby
are exempt from the registration requirements of the Securities Act. The issuance and sale of the
Warrants hereunder does not contravene the rules and regulations of the Principal Market and no
shareholder approval is required for the Company to fulfill its obligations under the Equity
Documents.

6.30 Principal Market; Approvals.

     The issuance and sale of the Warrants hereunder does not contravene the rules and regulations
of the Principal Market and no Shareholder Approval is required (i) in connection with the issuance
and sale

36

 

of the Warrants being acquired by Laminar as contemplated by this Agreement, and (ii) for
the Company to fulfill its obligations under the Equity Documents.

6.31 Listing and Maintenance Requirements.

     The Company has not, in the 12 months preceding the date hereof, received notice from any
Principal Market on which any of its securities is or has been listed or quoted to the effect that
the Company is not in compliance with the listing or maintenance requirements of such Principal
Market. The Company is, and has no reason to believe that it will not in the foreseeable future
continue to be, in compliance with all such listing and maintenance requirements.

6.32 Application of Takeover Protections.

     The Company and its Board of Directors have taken all necessary action, if any, in order to
render inapplicable any control share acquisition, business combination, poison pill (including any
distribution under a rights agreement) or other similar anti-takeover provision under the Company’s
Articles of Incorporation (or similar charter documents), as amended through the date hereof, or
the laws of its state of incorporation that is or could become applicable to Laminar as a result of
Laminar and the Company fulfilling their obligations or exercising their rights under the Equity
Documents, including without limitation as a result of the Company’s issuance of the Warrants and
Laminar’s ownership of the Warrants.

6.33 Acknowledgment Regarding Laminar’s Purchase of Warrants.

     The Company acknowledges and agrees that Laminar is acting solely in the capacity of an arm’s
length purchaser with respect to this Agreement and the transactions contemplated hereby. The
Company further acknowledges that Laminar is not acting as a financial advisor or fiduciary of the
Company (or in any similar capacity) with respect to this Agreement and the transactions
contemplated hereby and any statement made by Laminar or any of its respective representatives or
agents in connection with this Agreement and the transactions contemplated hereby is not advice or
a recommendation and is merely incidental to Laminar’s purchase of the Warrants. The Company
further represents to Laminar that the Company’s decision to enter into this Agreement has been
based solely on the independent evaluation of the Company and its representatives.

6.34 No General Solicitation or Advertising in Regard to this Transaction.

     Neither the Company, nor, to the knowledge of the Company, any of its directors or officers
(i) has conducted or will conduct any general solicitation (as that term is used in Rule 502(c) of
Regulation D of the Securities Act) or general advertising with respect to the sale of the
Warrants, or (ii) made any offers or sales of any security or solicited any offers to buy any
security under any circumstances that would require registration of the Company’s offer and sale of
the Warrants under the Securities Act or made any “directed selling efforts” as defined in Rule 902
of Regulation S.

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ARTICLE VIA.

REPRESENTATIONS AND WARRANTIES OF THE LENDERS

     Each of the Lenders, severally and not jointly, represents and warrants only as to itself to
the Company as follows:

          (a) It is an “accredited investor” as that term is defined in Rule 501 of the
Securities Act, and that, in making the purchases contemplated herein, it is specifically
understood and agreed that the Lenders is acquiring the Notes for the purpose of investment
and not with a view towards the sale or distribution thereof within the meaning of the
Securities Act; provided, however, that the disposition of the Lenders’
property shall at all times be and remain within its control.

          (b) It understands that the Notes will not be registered under the Securities Act, by
reason of their issuance by the Company in a transaction exempt from the registration
requirements of the Securities Act, and that it must hold the Notes indefinitely unless a
subsequent disposition thereof is registered under the Securities Act and applicable state
securities laws or is exempt from registration.

          (c) It has not employed any broker or finder in connection with the transactions
contemplated by this Agreement.

          (d) It has been furnished with or has had access to the information it has requested
from the Company and has had an opportunity to discuss with the management of the Company
the business and financial affairs of the Loan Parties, and has generally such knowledge and
experience in business and financial matters and with respect to investments in securities
or privately held companies so as to enable it to understand and evaluate the risks of such
investment and form an investment decision with respect thereto; provided,
however, that the foregoing shall in no way affect, diminish or derogate from the
representations and warranties made by the Company hereunder or the right of the Lenders to
rely thereon and to seek indemnification hereunder.

          (e) Either (i) no part of the funds to be used by such Lender to acquire or hold the
Notes constitutes assets of any “employee benefit plan” within the meaning of Section 3(3)
of ERISA or any “plan” within the meaning of Section 4975 of the Code or (ii) the
acquisition and holding of the Notes by such Lender is exempt from the restrictions on
prohibited transactions of ERISA and the Code pursuant to one or more statutory, regulatory
or administrative exemptions.

ARTICLE VII.

AFFIRMATIVE COVENANTS

     So long as any Lender shall have any Notes remaining unpaid or unsatisfied or other
Obligations (other than contingent indemnity obligations) hereunder shall remain unpaid or
unsatisfied, each Loan Party shall, and shall cause each of its Subsidiaries to:

7.01 Financial Statements.

     Deliver to the Agent and each Lender (both in writing and by electronic transmission to
ldc-fininfo@deshaw.com), in form and detail satisfactory to the Agent and the Required Lenders:

     (a) Annual Financial Statements. As soon as available, but in any event within
ninety (90) days after the end of each Fiscal Year of the Company, a consolidated and consolidating
balance sheet of the Parent and its Subsidiaries as at the end of such Fiscal Year, and the related
consolidated and

38

 

consolidating statements of income or operations, shareholders’ equity and cash
flows for such Fiscal Year, setting forth in each case in comparative form the figures for the
previous Fiscal Year, all in reasonable detail and prepared in accordance with GAAP, such
consolidated statements to be audited and accompanied by a report and opinion of an independent
certified public accountant reasonably acceptable to the Required Lenders, which report and opinion
shall be prepared in accordance with GAAP and shall not be subject to any “going concern” or like
qualification or exception or any qualification or exception as to the scope of such audit;

     (b) Quarterly Financial Statements. As soon as available, and in any event within
forty-five (45) days after the end of each Fiscal Quarter (other than the fourth quarter of each
Fiscal Year, which will be due within 90 days of the end of such quarter), a copy of the unaudited
interim financial statements of the Parent and its Subsidiaries as of the end of such Fiscal
Quarter and for the portion of the Fiscal Year then ended, containing, on a consolidated and
consolidating basis, balance sheets and related statements of income, retained earnings, and cash
flow, in each case setting forth in comparative form the figures for the corresponding period of
the preceding Fiscal Year, all in reasonable detail certified by the chief financial officer or
treasurer of the Company to have been prepared in accordance with GAAP and to fairly and accurately
present (subject to normal year-end audit adjustments and absence of footnotes) the financial
condition and results of operations of the Parent and its Subsidiaries, on a consolidated and
consolidating basis, at the date and for the periods indicated therein; and

     (c) Monthly Financial Statements. As soon as available, and in any event within
thirty (30) days after the end of each calendar month (other than the last month of each Fiscal
Quarter which will be due within 45 days of the end of such Fiscal Quarter), (i) an operational
summary prepared in reasonable detail, signed by a Responsible Officer of the Company, describing
the operations and financial condition of the Parent and its Subsidiaries for the portion of the
Fiscal Year then ended and discussing the reasons for any significant variations from the most
recent projections for such Fiscal Year together with (ii) a copy of the unaudited interim
financial statements of the Parent and its Subsidiaries as of the end of such calendar month and
for the portion of the Fiscal Year then ended, containing, on a consolidated and consolidating
basis, balance sheets and related statements of income, retained earnings, and cash flow, in each
case setting forth in comparative form the figures for the corresponding period of the preceding
Fiscal Year, all in reasonable detail certified by the chief financial officer or treasurer of the
Company to have been prepared in accordance with GAAP and to fairly and accurately present (subject
to normal year-end audit adjustments and absence of footnotes) the financial condition and results
of operations of the Parent and its Subsidiaries, on a consolidated and consolidating basis, at the
date and for the periods indicated therein.

     Documents required to be delivered pursuant to Section 7.01(a), (b) or
(c) may be delivered electronically; provided that the Company shall deliver paper
copies of such documents to the Agent or any Lender that requests the Company to deliver such paper
copies until a written request to cease delivering paper copies is given by the Agent or such
Lender.

7.02 Certificates; Other Information.

     Deliver to the Agent and each Lender (both in writing and by electronic transmission to
ldc-fininfo@deshaw.com), in form and detail satisfactory to the Agent and the Required Lenders:

     (a) concurrently with the delivery of the financial statements referred to in
Sections 7.01(a), (b) and (c), a duly completed Compliance Certificate
signed by a Responsible Officer of the Company;

39

 

     (b) promptly after the furnishing thereof, copies of any statement or report furnished to the
holder of any debt securities (including any Subordinated Indebtedness) of any Loan Party or any of
its Subsidiaries;

     (c) promptly after any request by the Agent or any Lender, copies of any detailed audit
reports, management letters or recommendations submitted to the board of directors (or the audit
committee of the board of directors) of the Company or Parent by independent accountants in
connection with the accounts or books of the Parent, Company or any Subsidiary, or any audit of any
of them;

     (d) within 30 days of each Fiscal Year end, (i) three-year financial forecasts with respect
to the Loan Parties and their Subsidiaries, each prepared by a Responsible Officer of the
Company, and each in form satisfactory to the Lenders, of income statement and cash flow
statements; and (ii) a report supplementing Schedule 6.17, setting forth (A) a list of
registration numbers for all patents, trademarks, service marks, trade names and copyrights
awarded to any Loan Party or any Subsidiary thereof during such fiscal year and (B) a list of
all patent applications, trademark applications, service mark applications, trade name
applications and copyright applications submitted by any Loan Party or any Subsidiary thereof
during such fiscal year and the status of each such application, such report to be signed by a
Responsible Officer of the Company and to be in a form reasonably satisfactory to the
Administrative Agent;

     (e) promptly, such additional information regarding the business, financial or corporate
affairs of the Company or any Subsidiary, or compliance with the terms of the Loan Documents, as
the Agent or any Lender may from time to time reasonably request.

7.03 Notices.

     Promptly, upon a Responsible Officer becoming aware of, notify the Agent and each Lender:

     (a) of the occurrence of any Default;

     (b) of any matter that has resulted or could reasonably be expected to result in a Material
Adverse Effect, including (i) breach or non-performance of, or any default under, a Contractual
Obligation of a Loan Party or any Subsidiary; (ii) any dispute, litigation, investigation,
proceeding or suspension between a Loan Party or any Subsidiary and any Governmental Authority; or
(iii) the commencement of, or any material development in, any litigation or proceeding affecting a
Loan Party or any Subsidiary, including pursuant to any applicable Environmental Laws;

     (c) of the occurrence of any ERISA Event; and

     (d) of any material change in accounting policies or financial reporting practices by the
Company or any Subsidiary.

     Each notice pursuant to this Section shall be accompanied by a statement of a Responsible
Officer of the Company setting forth details of the occurrence referred to therein and stating what
action the Company has taken and proposes to take with respect thereto. Each notice pursuant to
Section 7.03(a) shall describe with particularity any and all provisions of this Agreement
and any other Loan Document that have been breached.

40

 

7.04 Payment of Obligations.

     Pay and discharge as the same shall become due and payable (taking into account any approved
or authorized extensions), all its obligations and liabilities, including (a) all tax liabilities,
assessments and governmental charges or levies upon it or its properties or assets, unless the same
are being contested in good faith by appropriate proceedings diligently conducted and adequate
reserves in accordance with GAAP are being maintained by the Company or such Subsidiary; (b) all
lawful claims which, if unpaid, would by law become a Lien upon its property except for Liens
permitted in accordance with Section 8.01; and (c) all Indebtedness, as and when due and
payable, but subject to any subordination provisions contained in any instrument or agreement
evidencing such Indebtedness and except to the extent the failure to do so could not reasonably be
expected to have a Material Adverse Effect.

7.05 Preservation of Existence; Conduct of Business, Etc.

     (a) Preserve, renew and maintain in full force and effect its legal existence and good
standing under the Laws of the jurisdiction of its organization except in a transaction permitted
by Section 8.04;

     (b) Take all reasonable action to maintain all rights, privileges, permits, licenses and
franchises necessary or desirable in the normal conduct of its business, except to the extent that
failure to do so could not reasonably be expected to have a Material Adverse Effect; and

     (c) (i) Preserve or renew (so long as capable of being renewed under applicable Laws) all of
its patents, trademarks, trade names and service marks, the non-preservation or non-reissue of
which could reasonably be expected to have a Material Adverse Effect, (ii) take all necessary
actions, including, without limitation, in any proceeding before the United States Patent and
Trademark Office, to maintain each such patent, patent application, trademark, or trademark
application, including, without limitation, payment of maintenance fees, filing of applications for
renewal, affidavits of use, affidavits of incontestability and opposition, interference and
cancellation proceedings, and (iii) notify the Agent promptly if it knows that any material
application, letters patent or registration relating to any such patent or trademark (or
application therefore) of the Loan Parties or any of their Subsidiaries may become abandoned, or of
any adverse determination or development (including, without limitation, the institution of, or any
such determination or development in, any proceeding in the United States Patent and Trademark
Office, any court, or the United States Food and Drug Administration, including any relevant
adverse action by a third party) regarding any Loan Party’s or any of its Subsidiary’s ownership of
any patent or trademark, its right to patent or register the same, or to enforce, keep and maintain
the same, or its rights under any license for any such patent or trademark.

7.06 Maintenance of Properties.

     (a) Maintain, preserve and protect all of its material properties and equipment necessary in
the operation of its business in good working order and condition, ordinary wear and tear excepted;

     (b) Make all necessary repairs thereto and renewals and replacements thereof, except where the
failure to do so could not reasonably be expected to have a Material Adverse Effect; and

     (c) Use the standard of care typical in the industry in the operation and maintenance of its
facilities.

41

 

7.07 Maintenance of Insurance.

     (a) Maintain in full force and effect insurance (including worker’s compensation insurance,
liability insurance, casualty insurance and business interruption insurance) with financially sound
and reputable insurance companies not Affiliates of the Loan Parties, in such amounts, with such
deductibles and covering such risks as are customarily carried by companies engaged in similar
businesses and owning similar properties in localities where a Loan Party or the applicable
Subsidiary operates, naming the Agent as loss payee and/or additional insured with respect to any
such insurance and each provider of any such insurance shall agree, by endorsement upon the policy
or policies issued by it or by independent instruments furnished to the Agent, that it will give
the Agent thirty (30) days prior written notice before any such policy or policies shall be altered
or canceled.

     (b) In the event that a Loan Party or one of its Subsidiaries receives Net Cash Proceeds (from
insurance payments, governmental reimbursement or otherwise) on account of an Involuntary
Disposition, the Loan Parties shall apply such proceeds (a) to the purchase price of replacement
property or other property used by the Loan Parties or their Subsidiaries in their line of business
within 180 days of such Involuntary Disposition and/or (b) in accordance with Section
4.03(b). Any Net Cash Proceeds (in excess of amounts already applied toward replacement
assets) of such Involuntary Disposition shall, pending application to replacement assets, be
deposited in a Deposit Account. All insurance proceeds of Collateral shall be subject to the
security interest of the Agent (for the ratable benefit of the Lenders) under the Collateral
Documents.

7.08 Compliance with Laws.

     Comply in all material respects with the requirements of all Laws and all orders, writs,
injunctions and decrees applicable to it or to its business or property, except in such instances
in which (a) such requirement of Law or order, writ, injunction or decree is being contested in
good faith by appropriate proceedings diligently conducted, or (b) the failure to comply therewith
could not reasonably be expected to have a Material Adverse Effect.

7.09 Books and Records.

     (a) Maintain proper books of record and account, in which full, true and correct entries in
conformity with GAAP consistently applied shall be made of all financial transactions and matters
involving the assets and business of the Company or such Subsidiary, as the case may be; and

     (b) Maintain such books of record and account in material conformity with all applicable
requirements of any Governmental Authority having regulatory jurisdiction over the Company or such
Subsidiary, as the case may be.

7.10 Inspection Rights; Field Audit.

     (a) Permit representatives and independent contractors on behalf of the Agent and the Lenders
to visit and inspect any of its properties, to examine its corporate, financial and operating
records, and make copies thereof or abstracts therefrom, and to discuss its affairs, finances and
accounts with its directors, officers, and independent public accountants, all at the expense of
the Company, and at such reasonable times during normal business hours and upon reasonable notice
and as often as may be reasonably desired; provided, however, that when an Event of
Default exists the Agent or any Lender (or any of their respective representatives or independent
contractors) may do any of the foregoing at the expense of the Loan Parties at any time during
normal business hours and without advance notice. In addition, the Loan Parties will permit, and
will cause each Subsidiary to permit representatives on behalf

42

 

of the Agent and the Lenders to
conduct an annual field audit of the Company’s and its Subsidiaries’ assets at the reasonable
expense of the Company.

     (b) Without limitation of subsection (a), permit the Lenders to appoint a consultant
(financial or otherwise) to meet with the senior management and auditors of the Parent and its
Subsidiaries and to have access to their respective records, in each case during normal business
hours and no less frequently than once per calendar month for such duration as such consultant
determines in the exercise of its commercially reasonable judgment, and the Loan Parties shall
cause the senior management and auditors to work with such consultant in good faith and in a
commercially reasonable manner. In such meetings, the senior management and auditors shall be
prepared to discuss the business of the Parent and its Subsidiaries and all matters relevant to the
Notes and the other transactions contemplated by this Agreement (as determined in the reasonable
judgment of the Lenders). All cost and expense incurred by the Lenders with respect to such
consultant shall be paid or reimbursed to the Lenders by the Company, provided that, in no event
shall the Loan Parties be obligated to pay any such cost or expense in excess of $100,000 during
the initial 12-month period after the Closing Date or in excess of $50,000 during any subsequent
12-month period, as such period shall be measured from the annual anniversary of the Closing Date
(except after the occurrence and during the continuation of an Event of Default has occurred
(regardless of whether such Event of Default is waived), in which case there shall be no limit as
to the Loan Parties’ obligation for such costs and expenses). In addition, any and all
calculations prepared by Parent or its Subsidiaries with respect to the financial covenants herein
(or the component definitions thereof) shall be subject to the review of, and shall be satisfactory
to, the Agent in its commercially reasonable judgment (which right of review the Agent shall be
deemed to have delegated to such consultant until such time as the Agent notifies the Borrower to
the contrary).

7.11 Use of Proceeds.

     Use the proceeds of the Notes, whether directly or indirectly, and whether immediately,
incidentally or ultimately, to (a) fund the refinancing of certain indebtedness of the Company to
First Niagara Bank in the amount of approximately $6,000,000; (b) fund approximately $8,000,000 to
bring current certain accounts payable of the Company, including the payment promptly after the
Closing Date of (i) approximately $3,300,000 to Daikin Chemical Europe, GmbH and (ii) approximately
$4,000,000 in the aggregate to J. J. White Products, Inc. and Flemington of Ringoes, New Jersey;
(c) fund research and development, sales and marketing expenses, working capital increases and
other general corporate purposes of the Loan Parties; and (d) partially fund the costs, fees, and
expenses arising in connection with the Loan Documents, each of the foregoing items and amounts on
terms and conditions acceptable to Laminar in its sole discretion.

7.12 Additional Subsidiaries.

     At least 30 days prior (to the extent practicable) to any Person becoming a Subsidiary of the
Company, notify the Lenders of such event, and, contemporaneously with such Person becoming a
Subsidiary, cause such Person to (a) become a Guarantor by executing and delivering to the Lenders
a joinder agreement with respect to this Agreement and the Security and Pledge Agreement, and such
other document as the Lenders shall deem appropriate for such purpose, and delivering such other
documents as the Agent shall deem appropriate for such purpose, and (b) deliver to the Agent
documents of the types referred to in clause (iii) of Section 5.01(a) and favorable
opinions of counsel to such Person (which shall cover, among other things, the legality, validity,
binding effect and enforceability of the documentation referred to in clause (a)), all of the
foregoing in form, content and scope reasonably satisfactory to the Agent; provided,
however, that no Subsidiary shall be required to become a Guarantor if and to the extent
that material adverse tax consequences would result therefrom.

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7.13 Environmental Matters.

     (a) Establishment of Procedures. Establish and implement such procedures as may be
reasonably necessary to continuously determine and assure that any failure of the following does
not have a Material Adverse Effect: (i) all property of the Loan Parties and their Subsidiaries and
the operations conducted thereon and other activities of the Loan Parties and their Subsidiaries
are in compliance with and do not violate the requirements of any Environmental Laws, (ii) no oil,
hazardous substances or solid wastes are disposed of or otherwise released on or to any property
owned by any such party except in compliance with Environmental Laws, (iii) no hazardous substance
will be released on or to any such property in a quantity equal to or exceeding that quantity which
requires reporting pursuant to Section 103 of CERCLA, and (iv) no oil, oil and gas exploration and
production wastes or hazardous substance is released on or to any such property so as to pose an
imminent and substantial endangerment to public health or welfare or the environment.

     (b) Notice of Action. Promptly notify the Agent and the Lenders in writing of any
threatened action, investigation or inquiry by any Governmental Authority of which the Loan Parties
have knowledge in connection with any Environmental Laws, excluding action in respect of permit
applications in the ordinary course of business and routine testing and corrective action.

7.14 Further Assurances.

     Upon the request of the Agent or the Required Lenders, cure promptly any defects in the
creation and issuance of the Obligations and the execution and delivery of the Loan Documents. The
Loan Parties at their expense will and will cause each Subsidiary to promptly execute and deliver
to the Agent or the Required Lenders upon reasonable request all such other documents, agreements
and instruments to comply with the covenants and agreements of the Loan Parties or any Subsidiary,
as the case may be, in the Loan Documents, or to further evidence and more fully describe the
collateral intended as security for the Obligations, or to correct any omissions in the Loan
Documents, or to state more fully the security obligations set out herein or in any of the Loan
Documents, or to perfect, protect or preserve any Liens created pursuant to any of the Loan
Documents, or to make any recordings, to file any notices or obtain any consents, all as may be
necessary or appropriate in connection therewith.

7.15 Remarketing Cooperation.

     Cooperate with the Lenders in completing any resale of any portion of the Notes provided such
Resale is in compliance with applicable Securities Laws. Such cooperation shall include, without
limitation, the following: (i) as promptly as reasonably practicable, producing information related
to the Loan Parties and their business and operations necessary to produce, prepare and complete a
preliminary “bank book” relating to such Notes; and (ii) delivering to the Lenders all audited
consolidated financial statements of the Loan Parties, prepared in accordance with GAAP and all
other data and schedules of the Loan Parties, and such unaudited consolidated financial statements
of the Loan Parties, pro forma financial statements, in each case, prepared in accordance with, or
reconciled to, GAAP.

7.16 Pledged Assets; IP Subsidiary; Material Agreements.

     (a) Equity Interests. Cause (i) cause one hundred percent (100%) of the issued and
outstanding Equity Interests of each Domestic Subsidiary and (ii) cause sixty-five percent (65%) in
each Foreign Subsidiary (or, subject to the last sentence of this subsection (a), such greater
percentage that, due to a change in an applicable Law after the date hereof, (A) could not
reasonably be expected to cause the undistributed earnings of such Foreign Subsidiary as determined
for United States federal income tax purposes to be treated as a deemed dividend to such Foreign
Subsidiary’s United States parent and

44

 

(B) could not reasonably be expected to cause any material adverse tax consequences) of the
issued and outstanding Equity Interests entitled to vote (within the meaning of Treas. Reg. Section
1.956-2(c)(2)) and one hundred percent (100%) of the issued and outstanding Equity Interests not
entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) directly owned by the
Company or any Domestic Subsidiary to be subject at all times to a perfected Lien (subject only to
Permitted Liens) in favor of the Agent pursuant to the terms and conditions of the Collateral
Documents or such other security documents as the Agent shall reasonably request.

     (b) Other Assets. (i) Cause all of its owned real and personal Property that is
Collateral to be subject at all times (except as otherwise provided herein) to perfected and, in
the case of owned real Property, if any, title insured Liens (subject only to Permitted Liens) in
favor of the Agent, for the ratable benefit of each Lender, to secure the Obligations pursuant to
the terms and conditions of the Collateral Documents or, with respect to any such Property acquired
subsequent to the Closing Date, such other additional security documents as the Agent shall
reasonably request, subject in any case to Permitted Liens and (ii) deliver such other
documentation as the Agent may reasonably request in connection with the foregoing, including,
without limitation, appropriate UCC-1 financing statements, real estate title insurance policies,
surveys, environmental reports, landlord’s waivers, certified resolutions and other organizational
and authorizing documents of such Person, favorable opinions of counsel to such Person (which shall
cover, among other things, the legality, validity, binding effect and enforceability of the
documentation referred to above and the perfection of the Agent’s Liens thereunder) and other items
of the types required to be delivered pursuant to Section 5.01(d), all in form, content and
scope reasonably satisfactory to the Agent. Notwithstanding anything to the contrary set forth in
this Section 7.16, the obligations of the Loan Parties under this Section 7.16(b)
with respect to leased Property shall be limited solely to using commercially reasonable efforts,
and any refusal by the lessor or landlord to cooperate with any action sought to be taken under
this Section 7.16(b) shall not constitute a Default or an Event of Default.

     (c) IP Subsidiary. After the occurrence and during the continuance of an Event of
Default, (i) Promptly upon the request of the Agent, and in any event within 30 days thereafter,
cause the Company to form a new wholly-owned special purpose subsidiary (the “IP
Subsidiary”) of the Company for the purposes of holding title to all of the Company’s owned and
patents, trademarks, copyrights, applications therefore and all related IP Rights, (ii)
contemporaneously with the formation of the IP Subsidiary, cause the IP Subsidiary to become a
Guarantor by executing and delivering the documents required and/or requested by the Agent pursuant
to Section 7.12, (iii) and contemporaneously with the formation of the IP Subsidiary, if
possible, and in any event within 30 days following request of the Agent to form the IP Subsidiary,
cause ownership of all of the Company’s United States patents, trademarks, copyrights, applications
therefore and all related IP Rights (including outbound licenses therefore) to be transferred to
the IP Subsidiary, (iv) as soon as practicable, and in any event within 90 days following the
formation of the IP Subsidiary (or such later date as may be agreed by the Agent in its sole
discretion) cause ownership of all of the Company’s foreign patents, trademarks, copyrights,
applications therefore and all related IP Rights (including outbound licenses therefore) to be
transferred to the IP Subsidiary, in each case pursuant to documentation in form and substance
acceptable to the Agent and its counsel.

     (d) Material Agreements. With respect to any agreement or contract of a Loan Party
entered into after the Closing Date (including, without limitation, any manufacturing agreement)
that would qualify as a Material Agreement pursuant to Section 6.23 if in effect on the
Closing Date, the Company shall provide the Agent prior advance notice and a copy thereof, and the
Loan Parties shall use commercially reasonable efforts to ensure that any such Material Agreement
contains (or that the applicable counterparty provides in a separate document) (i) an
acknowledgment by the applicable counterparty of the Agent’s security interest in such Material
Agreement and the Company’s rights

45

 

thereunder and (ii) a consent by such counterparty to the exercise by the Agent of its rights under the Loan
Documents, in each case in form and substance reasonably satisfactory to the Agent.

7.17 Board Observation Rights.

     (a) Permit one (1) Person, designated by the Lenders, representing the Lenders (the
“Observer”) holding at least a majority of the aggregate outstanding principal amount of
the Notes to attend and observe (but not vote) at all meetings of the board of directors of the
Parent (which shall be held on at least a quarterly basis), and any committee thereof, whether in
person, by telephone or otherwise. The Parent shall notify the Observer in writing of (i) the date
and time for each general or special meeting of its board of managers (or directors, as applicable)
or any committee thereof and (ii) of the adoption of any resolutions or actions by written consent
(describing, in reasonable detail, the nature and substance of such action). In the case of a
general meeting, such notice shall be given to the Observer at least one (1) week prior to any
general meeting; in the case of the approval of resolutions or actions by written consent, such
notice shall be given to the Observer at least three (3) Business Days prior to the approval of
resolutions or actions by written consent; and in the case of any special meeting, such notice
shall be given to the Lenders at the time notice is provided to the board of managers (or
directors, as applicable) of such special meeting. The Parent shall concurrently deliver to the
Observer any materials delivered to the board of managers (or directors, as applicable), including
a draft of any resolutions or actions proposed to be adopted by written consent. The Observer shall
be free prior to such meeting or adoption by consent to contact the board of managers (or
directors, as applicable) and discuss the pending actions to be taken.

     (b) Pay the Observer’s reasonable out-of-pocket expenses (including, without limitation, the
cost of airfare, meals and lodging) in connection with the attendance of such meetings.

     (c) If an issue is to be discussed or otherwise arises at any meeting of the board of managers
(or directors, as applicable) of the Parent or committee thereof which, in the reasonable good
faith judgment of the board of managers (or directors, as applicable), is not appropriate to be
discussed in the presence of the Observer in order to avoid a conflict of interest on the part of
the Observer or to preserve an attorney-client privilege, then such issue may be discussed without
the Observer being present, so long as the Observer is given notice of the occurrence of such
judgment by the board of managers (or directors, as applicable) and that the Observer is being
excused.

7.18 Post-Closing Actions.

     (a) Within 30 days of the Closing Date (or by such later date as agreed to by the Agent in
writing), deliver to the Agent one or more fully executed Deposit Account Control Agreements, in
form and substance reasonably acceptable to the Agent (and which do not automatically terminate
prior to the Maturity Date), with respect to each of its Deposit Accounts (whether located at
KeyBank National Association or another financial institution reasonably acceptable to the Agent),
except with respect to Permitted Unperfected Accounts (as defined in the Security and Pledge
Agreement), it being further understood and agreed that (i) all other Deposit Accounts will be
closed after all outstanding invoices for accounts receivable outstanding which included payment
instructions to such account are paid in full, provided that the Company uses the account for no
other purposes and that it promptly transfers such payments into accounts subject to a Deposit
Account Control Agreement within such timeframe and (ii) the aggregate amount maintained in Deposit
Accounts at First Niagara Bank and other Deposit Accounts not subject to an executed Deposit
Account Control Agreement acceptable to the Agent shall not exceed $100,000 at any one time
outstanding.

46

 

     (b) Within 60 days after the earlier of (i) receipt by the Parent or the Company of regulatory
approval to market or sell sevoflurane or desflurane in the European Union or (ii) Laminar’s
request, which request shall be given no earlier than the date that is 45 days after the Closing Date
(or by such later date as agreed to by the Agent in writing), (A) deliver to the Agent a fully
executed French law governed pledge agreement covering 65% of the Equity Interests of Minrad EU and
a related opinion of French counsel to Minrad EU, each in form and substance reasonably acceptable
to the Agent, and (B) take such other actions as may be reasonably requested by the Agent in
connection with such pledge.

     (c) Within 10 days of the Closing Date (or by such later date as agreed to by the Agent in
writing), (i) deliver to the Agent and Chicago Title (i.e., the title insurance company issuing a
lender’s title insurance policy) a completed and up-to-date survey with respect to the Company’s
Bethlehem, Pennsylvania facility, which survey shall be in form and substance reasonably acceptable
to the Agent and Chicago Title, and (ii) cause Chicago Title to issue a title insurance policy
endorsement that effectively removes any survey exception existing in such policy on the Closing
Date.

ARTICLE VIII.

NEGATIVE AND FINANCIAL COVENANTS

     So long as any Lender shall have any Notes remaining unpaid or unsatisfied or other
Obligations (other than contingent indemnity obligations) hereunder shall remain unpaid or
unsatisfied, no Loan Party shall, nor shall it permit any of its Subsidiaries to, directly or
indirectly:

8.01 Liens.

     Create, incur, assume or suffer to exist any Lien upon any of its property, assets or
revenues, whether now owned or hereafter acquired, other than the following (the “Permitted
Liens”):

     (a) Liens securing Obligations;

     (b) Liens existing on the date hereof and listed on Schedule 8.01, but not including
any renewals or extensions of the underlying obligations;

     (c) Liens for taxes not yet due or which are being contested in good faith and by appropriate
proceedings diligently conducted, if adequate reserves with respect thereto are maintained on the
books of the applicable Person in accordance with GAAP;

     (d) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like Liens
arising in the ordinary course of business which are not overdue for a period of more than ninety
(90) days or which are being contested in good faith and by appropriate proceedings diligently
conducted, if adequate reserves with respect thereto are maintained on the books of the applicable
Person;

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

     (f) deposits to secure the performance of bids, trade contracts and leases (other than
Indebtedness), statutory obligations, surety bonds (other than bonds related to judgments or
litigation), performance bonds and other obligations of a like nature incurred in the ordinary
course of business;

47

 

     (g) easements, rights-of-way, restrictions and other similar encumbrances affecting real
property which, in the aggregate, are not substantial in amount, and do not in any case materially
detract from the value of the property subject thereto or materially interfere with the ordinary
conduct of the business of the applicable Person, including exceptions 13 through 18 on Schedule B-2 of Chicago
Title Report Number 8108-0007 File Number 825069LC covering the Bethlehem, Pennsylvania, property;

     (h) Liens securing judgments for the payment of money not constituting an Event of Default
under Section 9.01(h) or securing appeal or other surety bonds related to such judgments;

     (i) Liens securing Indebtedness permitted under Section 8.03(e); provided that
(i) such Liens do not at any time encumber any property other than the property financed by such
Indebtedness and (ii) the Indebtedness secured thereby does not exceed the cost or fair market
value, whichever is lower, of the property being acquired on the date of acquisition; and

     (j) existing Liens on Investments or assets acquired pursuant to Section 8.02; and

8.02 Investments.

     Make any Investments, except:

     (a) Investments held by the Company or such Subsidiary in the form of Cash Equivalents for
which the Agent, for the benefit of the Lenders hereunder, has a security interest;

     (b) Investments of any Loan Party in any other Loan Party;

     (c) Investments consisting of extensions of credit in the nature of accounts receivable or
notes receivable arising from the grant of trade credit in the ordinary course of business, and
Investments received in satisfaction or partial satisfaction thereof from financially troubled
account debtors to the extent reasonably necessary in order to prevent or limit loss; and

     (d) Guarantees permitted by Section 8.03;

     (e) Right to acquire up to 2,000,000 shares of RxElite Holdings, Inc. common stock without the
payment of further consideration; and

     (f) Investments in The SmartPill Corporation existing as of the date hereof and described on
Schedule 6.13.

8.03 Indebtedness.

     Create, incur, assume or suffer to exist any Indebtedness, except:

     (a) Indebtedness arising under the Loan Documents;

     (b) Indebtedness outstanding on the date hereof and listed on Schedule 6.05, but not
including and any refinancings, refundings, renewals or extensions thereof;

     (c) Guarantees of the Loan Parties in respect of Indebtedness otherwise permitted hereunder of
the Loan Parties;

48

 

     (d) obligations (contingent or otherwise) of the Loan Parties or any Subsidiary existing or
arising under any Swap Contract, provided that (i) such obligations are (or were) entered
into by such Person in the ordinary course of business for the purpose of directly mitigating risks
associated with liabilities, commitments, investments, assets, or property held or reasonably
anticipated by such Person, or changes in the value of securities issued by such Person, and not for purposes of speculation or
taking a “market view;” and (ii) such Swap Contract does not contain any provision exonerating the
non-defaulting party from its obligation to make payments on outstanding transactions to the
defaulting party;

     (e) Indebtedness in respect of capital leases, Synthetic Lease Obligations, purchase money
obligations for fixed or capital assets within the limitations set forth in Section 8.01(i)
and other unsecured Indebtedness; provided, however, that the aggregate amount of
all such Indebtedness at any one time outstanding shall not exceed $100,000; and

     (f) Indebtedness under the Pennsylvania Loans existing as of the date hereof.

8.04 Fundamental Changes.

     Merge, dissolve, liquidate, consolidate with or into another Person, or Dispose of (whether in
one transaction or in a series of transactions) all or substantially all of its assets (whether now
owned or hereafter acquired) to or in favor of any Person, except that, so long as no Default
exists or would result therefrom:

     (a) any Loan Party may merge with any other Loan Party, provided that if such merger involves
the Company, the Company is the surviving entity; and

     (b) any Loan Party may Dispose of all or substantially all of its assets (upon voluntary
liquidation or otherwise) to any other Loan Party.

8.05 Dispositions.

     Make any Disposition or enter into any agreement to make any Disposition, except:

     (a) Dispositions of obsolete or worn out property, whether now owned or hereafter acquired, in
the ordinary course of business;

     (b) Dispositions of inventory in the ordinary course of business;

     (c) Dispositions of equipment, real property or other non-working capital assets to the extent
that (x)(i) such property is exchanged for credit against the purchase price of similar or
replacement property, (ii) the proceeds of such Disposition are reasonably promptly (and in any
event within 180 days of the applicable Disposition) applied to the purchase price of such
replacement property or other property used by the Loan Parties or their Subsidiaries in their line
of business, or (iii) the aggregate consideration for such Disposition, together with all other
Dispositions in the same Fiscal Year does not exceed $100,000 and the Net Cash Proceeds of such
Disposition are applied in accordance with Section 4.05(b); and (y) with respect to
Dispositions described in the foregoing clause (ii) the net proceeds (in excess of amounts already
applied toward similar or replacement assets) of such Disposition are, pending application to
similar or replacement assets, deposited in a Deposit Account;

49

 

     (d) Dispositions of property by any Subsidiary to any Loan Party or to a wholly-owned
Subsidiary; provided that if the transferor of such property is a Loan Party, the
transferee thereof must be a Loan Party; and

     (e) Dispositions permitted by Section 8.04.

provided, however, that any Disposition pursuant to clauses (a) through (c) shall
be for fair market value.

8.06 Restricted Payments.

     Declare or make, directly or indirectly, any Restricted Payment, or incur any obligation
(contingent or otherwise) to do so, except that:

     (a) (i) any Subsidiary of the Parent may make Restricted Payments to any Loan Party and (ii)
subject to the terms of the Equity Documents, the Parent or any Subsidiary may declare and make
dividend payments or other distributions payable solely in the Equity Interests of such Person; and

     (b) so long as no Default or Event of Default shall have occurred and be continuing or would
result therefrom, the Parent may repurchase Equity Interests of the Company held by former
employees, directors or consultants pursuant to stock repurchase agreements in an aggregate amount
not to exceed $100,000 in any Fiscal Year.

8.07 Change in Nature of Business.

     Engage in any material line of business substantially different from those lines of business
conducted by the Company and its Subsidiaries on the date hereof or any business substantially
related or incidental thereto.

8.08 Transactions with Affiliates.

     Enter into any transaction of any kind with any Affiliate of a Loan Party known to the Company
to be an Affiliate, whether or not in the ordinary course of business, except that a Loan Party or
a Subsidiary may, subject to the payment restrictions set forth in Section 8.06, enter into
transactions on fair and reasonable terms substantially as favorable to such Loan Party or such
Subsidiary as would be obtainable by such Loan Party or such Subsidiary at the time in a comparable
arm’s length transaction with a Person other than an Affiliate.

8.09 Burdensome Agreements.

     Enter into any Contractual Obligation (other than the Loan Documents in effect as of the
Closing Date) that (a) limits the ability (i) of any Subsidiary to make Restricted Payments to the
Company or to otherwise transfer property to the Company, (ii) of any Subsidiary to Guarantee the
Indebtedness of the Company or (iii) of the Company or any Subsidiary to create, incur, assume or
suffer to exist Liens on property of such Person to secure the Obligations; provided,
however, that this clause (iii) shall not prohibit any negative pledge incurred or provided
in favor of any holder of Indebtedness permitted under Section 8.03(e) solely to the extent
any such negative pledge relates to the property financed by or the subject of such Indebtedness
requires the grant of a Lien to secure an obligation of such Person if a Lien is granted to secure
another obligation of such Person.

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8.10 Use of Proceeds.

     Use the proceeds of the Notes, whether directly or indirectly, and whether immediately,
incidentally or ultimately, to purchase or carry margin stock (within the meaning of Regulation U
of the FRB) or to extend credit to others for the purpose of purchasing or carrying margin stock or
to refund indebtedness originally incurred for such purpose.

8.11 ERISA Compliance.

     Engage in any transaction, activity or occurrence with which the Loan Parties or any
Subsidiary could be subject to valid claims, actions or lawsuits regarding non-compliance or
violation of any provision of ERISA, except to the extent the failure to do so could not reasonably
be expected to have a Material Adverse Effect.

8.12 Sales and Leasebacks.

     Except as permitted pursuant to Section 8.05, enter into any arrangement, directly or
indirectly, with any Person whereby a Loan Party or any Subsidiary shall sell or transfer any of
its property, whether now owned or hereafter acquired, and whereby the Company or such Subsidiary
shall then or thereafter rent or lease as lessee such property or any part thereof or other
property which the Company or any Subsidiary intends to use for substantially the same purpose or
purposes as the property sold or transferred.

8.13 Sale or Discount of Receivables.

     Discount or sell (with or without recourse) any of its notes receivable or accounts receivable
(excluding any discounts provided in the ordinary course of business and settlement of past due
amounts in the ordinary course of business and in accordance with prudent commercial practice).

8.14 Environmental Matters.

     Cause or permit any of its property to be in violation of, or do anything or permit anything
to be done which will subject any such property to any remedial obligations under any Environmental
Laws, assuming disclosure to the applicable Governmental Authority of all relevant facts,
conditions and circumstances, if any, pertaining to such property, in each case where such
violations or remedial obligations could reasonably be expected to have a Material Adverse Effect.

8.15 Subsidiaries.

     (a) Create any Foreign Subsidiaries, other than as required to comply with pharmaceutical and
medical devise regulatory registration requirements after the Closing Date (it being understood and
agreed that any such required Foreign Subsidiaries shall be capitalized only to the extent mandated
by such requirements), or (b) create any Domestic Subsidiaries after the Closing Date unless the
Loan Parties and its Subsidiaries have complied with Section 7.12.

8.16 Financial Covenants.

     (a) Minimum Consolidated Net Worth. Permit as of the last day of any Fiscal Quarter,
commencing with the Fiscal Quarter ending March 31, 2008, Consolidated Net Worth on such date to be
less than the amount set forth below opposite such period:

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	 	 	Minimum Consolidated
	Fiscal Quarter Ending	 	Net Worth
	March 31, 2008	 	$21,705,000
	June 30, 2008	 	$23,219,000
	September 30, 2008	 	$24,023,000
	December 31, 2008	 	$26,024,000
	March 31, 2009	 	$26,609,000
	June 30, 2009	 	$30,656,000
	September 30, 2009	 	$34,857,000
	December 31, 2009	 	$40,523,000
	March 31, 2010	 	$45,000,000
	June 30, 2010	 	$45,000,000
	September 30, 2010	 	$45,000,000
	December 31, 2010 and thereafter	 	$45,000,000

     (b) Minimum Consolidated Total Revenues. Permit as of the last day of any Fiscal
Quarter, commencing with the Fiscal Quarter ending March 31, 2008, Consolidated Total Revenues for
the twelve month period ending on such date to be less than the amount set forth below opposite
such period:

	 	 	 
	 	 	Minimum
	 	 	Consolidated
	Fiscal Quarter Ending	 	Total Revenues
	March 31, 2008	 	$38,674,000
	June 30, 2008	 	$43,370,000
	September 30, 2008	 	$44,671,000
	December 31, 2008	 	$46,211,000
	March 31, 2009	 	$48,982,000
	June 30, 2009	 	$51,488,000
	September 30, 2009	 	$56,162,000
	December 31, 2009	 	$59,168,000
	March 31, 2010	 	$70,000,000
	June 30, 2010	 	$70,000,000
	September 30, 2010	 	$70,000,000
	December 31, 2010 and thereafter	 	$70,000,000

     (c) Minimum Consolidated EBITDA. Permit as of the last day of any Fiscal Quarter,
commencing with the Fiscal Quarter ending March 31, 2008, Consolidated EBITDA for the trailing
twelve month period then ended, to be less than the amount set forth below opposite such period:

	 	 	 
	 	 	Minimum
	 	 	Consolidated
	Fiscal Quarter Ending	 	EBITDA
	March 31, 2008	 	$8,967,000
	June 30, 2008	 	$8,006,000
	September 30, 2008	 	$6,816,000
	December 31, 2008	 	$7,381,000
	March 31, 2009	 	$5,858,000

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	 	 	Minimum
	 	 	Consolidated
	Fiscal Quarter Ending	 	EBITDA
	June 30, 2009	 	$7,702,000
	September 30, 2009	 	$10,493,000
	December 31, 2009	 	$12,676,000
	March 31, 2010	 	$17,500,000
	June 30, 2010	 	$17,500,000
	September 30, 2010	 	$17,500,000
	December 31, 2010 and thereafter	 	$17,500,000

     (d) Maximum Consolidated Total Leverage Ratio. Permit as of the last day of any Fiscal
Quarter, commencing with the Fiscal Quarter ending March 31, 2008, the Consolidated Total Leverage
Ratio for the trailing twelve month period then ended, to be greater than the amount set forth
below opposite such period:

	 	 	 
	 	 	Maximum Consolidated
	Fiscal Quarter Ending	 	Total Leverage Ratio
	March 31, 2008	 	1.70:1.00
	June 30, 2008	 	2.60:1.00
	September 30, 2008	 	2.50:1.00
	December 31, 2008	 	2.20:1.00
	March 31, 2009	 	2.70:1.00
	June 30, 2009	 	1.40:1.00
	September 30, 2009	 	1.00:1.00
	December 31, 2009	 	0.50:1.00
	March 31, 2010	 	0.50:1.00
	June 30, 2010	 	0.50:1.00
	September 30, 2010	 	0.50:1.00
	December 31, 2010 and thereafter	 	0.50:1.00

     (e) Minimum Consolidated Net Working Capital. Permit as of the last day of any Fiscal
Quarter, commencing with the Fiscal Quarter ending March 31, 2008, Consolidated Net Working Capital
to be less than the amount set forth below opposite such period:

	 	 	 
	 	 	Minimum
	 	 	Consolidated
	Period Ending	 	Net Working Capital
	March 31, 2008	 	$13,600,000
	June 30, 2008	 	$19,000,000
	September 30, 2008	 	$19,000,000
	December 31, 2008	 	$20,000,000
	March 31, 2009	 	$18,500,000
	June 30, 2009	 	$16,000,000
	September 30, 2009	 	$19,000,000
	December 31, 2009	 	$19,500,000
	March 31, 2010	 	$20,000,000
	June 30, 2010	 	$20,000,000
	September 30, 2010	 	$20,000,000
	December 31, 2010 and thereafter	 	$20,000,000

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     (f) Maximum Consolidated Capital Expenditures. Make or commit to make in any Fiscal
Year Consolidated Capital Expenditures in the aggregate for the Parent and its Subsidiaries in
excess of the amount set forth below opposite such Fiscal Year:

	 	 	 	 	 
	 	 	Maximum
	 	 	Consolidated
	Fiscal Year Ended	 	Capital Expenditures
	December 31, 2008

	 	$	4,000,000	 
	December 31, 2009

	 	$	8,500,000	 
	December 31, 2010

	 	$	7,500,000	 
	December 31, 2011*

	 	$	1,000,000	 

 

			
	*	 	Only applicable for the portion of 2011 prior to the Maturity Date

8.17 Deposit and Securities Accounts.

     Establish after the Closing Date, directly or indirectly, any new bank account, Deposit
Account or Securities Account without prior written notice to the Agent and unless such account is
subject to a control agreement in form and substance satisfactory to the Agent. The Company shall
be the sole account holder of each Deposit Account or Securities Account and the Loan Parties shall
not allow any other Person (other than the Agent) to have control over a Deposit Account or
Securities Account or any Property deposited therein.

8.18 Limitations on Affiliate Ownership of Obligations.

     Permit the Company or the Parent, to directly or indirectly, purchase, participate, be
assigned or in any way beneficially own any of the Indebtedness arising under any of the Loan
Documents.

8.19 Modifications of Pennsylvania Loans.

     Amend, replace, refinance, refund, restructure, supplement, extend or otherwise modify the
Pennsylvania Loans and related documents in effect on the Closing Date to contravene the provisions
hereof or otherwise in a manner materially adverse to the Lenders.

8.20 Prepayment of Other Indebtedness.

     Directly or indirectly, voluntarily purchase, redeem, defease or prepay any Indebtedness
(other than Indebtedness under the Loan Documents), other than (a) Indebtedness secured by a
Permitted Lien if the asset securing such Indebtedness has been sold or otherwise disposed of in
accordance with Section 8.05; (b) prepayment of Indebtedness in connection with capital
leases and purchase money Indebtedness permitted hereunder; and (c) so long as no Default or Event
of Default exists at the time of such action (including after giving effect thereto), the
Pennsylvania Loans.

8.21 Changes to Organizational Documents.

     Permit the charter, by-laws or other Organization Documents of a Loan Party or any Subsidiary
to be amended or modified in any way which could reasonably be expected to materially adversely
affect the interests of the Lenders.

8.22 Changes in Fiscal Year.

     Change its Fiscal Year.

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8.23 IP Subsidiary.

     At any time that the IP Subsidiary shall be in existence, permit the IP Subsidiary to incur
any Indebtedness or grant any Liens upon any of its properties or assets or engage in any
operations, business or activity other than (a) owning registered patents, trademarks, copyrights,
applications therefore and related IP Rights, and activities reasonably related thereto (including
the licensing of such IP Rights to third parties pursuant to documentation acceptable to the
Agent), (b) acting as a Guarantor hereunder and pledging its assets to the Agent, for the benefit of the Lenders, pursuant to the Collateral
Documents to which it is a party and (c) fulfilling its obligations under the Loan Documents.

8.24 Parent.

     Permit the Parent to incur any Indebtedness, grant any Liens upon any of its properties or
assets or engage in any operations, business or activity other than (a) owning 100% of the Equity
Interests of the Company, (b) pledging its Equity Interests of the Company to the Agent, (c)
executing the Collateral Documents in favor of the Agent, (d) fulfilling its obligations under the
Loan Documents, and (e) employing executive officers of the Company and managing its operations.

ARTICLE IX.

EVENTS OF DEFAULT AND REMEDIES

9.01 Events of Default.

Any of the following shall constitute an Event of Default (an “Event of Default”):

     (a) Non-Payment. The Company or any other Loan Party fails to pay (i) when and
as required to be paid herein, any amount of Principal of any Notes, or (ii) within two (2)
days after the same becomes due, any interest on any Notes, any fee due hereunder or any
other amount payable hereunder or under any other Loan Document; or

     (b) Specific Covenants. (i) The Company or any other Loan Party fails to
perform or observe any term, covenant or agreement contained in Sections 7.05,
7.07(a), 7.11, 7.16 and 7.17 or Article VIII when
and as required to be performed or observed or (ii) the Company or any other Loan Party
fails to perform or observe any term, covenant or agreement contained in Sections
7.01, 7.02, 7.03(b), (c) and (d), and 7.07(b)
and such failure continues for five (5) days after written notice thereof has been given to
the Company by the Lenders or after any Loan Party becomes aware, or any Responsible Officer
of any Loan Party becomes aware, thereof; or

     (c) Other Defaults. The Company or any other Loan Party fails to perform or
observe any other covenant or agreement (not specified in subsection (a) or subsection (b)
above) contained in any Loan Document on its part to be performed or observed and such
failure continues for thirty (30) days after written notice thereof has been given to the
Company by the Lenders or after any Loan Party become aware; or

     (d) Representations and Warranties. Any representation, warranty, certification
or statement of fact made or deemed made by or on behalf of the Company or any other Loan
Party herein, in any other Loan Document, or in any document delivered in connection
herewith or therewith shall be materially incorrect or materially misleading when made or
deemed made; or

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     (e) Cross-Default. (i) The Company or any other Loan Party (A) fails after all
applicable grace periods to make any payment when due (whether by scheduled maturity,
required prepayment, acceleration, demand, or otherwise) in respect of any Indebtedness
having an aggregate principal amount (including undrawn committed or available amounts and
including amounts owing to all creditors under any combined or syndicated credit
arrangement) of more than the Threshold Amount, or (B) fails to observe or perform any other
agreement or condition relating to any such Indebtedness or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event occurs, the effect of
which default or other event is to cause, or to permit the holder or holders of such Indebtedness (or a trustee or
agent on behalf of such holder or holders or beneficiary or beneficiaries) to cause, with
the giving of notice if required, such Indebtedness to be demanded or to become due or to be
repurchased, prepaid, defeased or redeemed (automatically or otherwise), or an offer to
repurchase, prepay, defease or redeem such Indebtedness to be made, prior to its stated
maturity, or such guarantee to become payable or cash collateral in respect thereof to be
demanded; or

     (ii) The Company or any other Loan Party shall default in the payment when due,
or in the performance or observance, of any material obligation or material
condition of any Contractual Obligation the result of which could reasonably be
expected to have a Material Adverse Effect, unless, but only as long as, the
existence of any such default is being contested by the Company or any such Loan
Party in good faith by appropriate proceedings and adequate reserves in respect
thereof have been established on the books of such Company or any such Loan Party to
the extent required by GAAP; or

     (f) Insolvency Proceedings, Etc. Any Loan Party institutes or consents to the
institution of any proceeding under any Debtor Relief Law, or makes an assignment for the
benefit of creditors; or applies for or consents to the appointment of any receiver,
trustee, custodian, conservator, liquidator, rehabilitator or similar officer for it or for
all or any material part of its property; or any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer is appointed without the application or consent
of such Person and the appointment continues undischarged or unstayed for sixty (60)
calendar days; or any proceeding under any Debtor Relief Law relating to any such Person or
to all or any material part of its property is instituted without the consent of such Person
and continues undismissed or unstayed for sixty (60) calendar days, or an order for relief
is entered in any such proceeding; or

     (g) Inability to Pay Debts; Attachment. (i) Any Loan Party becomes unable or
admits in writing its inability or fails generally to pay its debts as they become due, or
(ii) any writ or warrant of attachment or execution or similar process is issued or levied
against all or any material part of the property of any such Person and is not released,
vacated or fully bonded within thirty (30) days after its issue or levy; or

     (h) Judgments. There is entered against any Loan Party (i) a final judgment or
order for the payment of money in an aggregate amount exceeding the Threshold Amount (to the
extent not paid or covered by indemnification or independent third-party insurance as to
which the insurer does not dispute coverage), or (ii) any one or more non-monetary final
judgments that have, or could reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect and, in either case, (A) enforcement proceedings are
commenced by any creditor upon such judgment or order, or (B) there is a period of fifteen
(15) consecutive days during which a stay of enforcement of such judgment, by reason of a
pending appeal or otherwise, is not in effect; or

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     (i) Invalidity of Loan Documents. Any Loan Document, at any time after its
execution and delivery and for any reason other than as expressly permitted hereunder or
satisfaction in full of all the Obligations, ceases to be in full force and effect; or any
Loan Party or any other Person contests in any manner the validity or enforceability of any
Loan Document; or any Loan Party denies that it has any or further liability or obligation
under any Loan Document, or purports to revoke, terminate or rescind any Loan Document; or

     (j) ERISA. An ERISA Event occurs with respect to a Pension Plan or
Multiemployer Plan which has resulted or could reasonably be expected to result in liability
of a Loan Party under Title IV of ERISA to the Pension Plan, Multiemployer Plan or the PBGC
in an aggregate amount in excess of the Threshold Amount, or (ii) a Loan Party or any ERISA Affiliate
fails to pay when due, after the expiration of any applicable grace period, any installment
payment with respect to its withdrawal liability under Section 4201 of ERISA under a
Multiemployer Plan in an aggregate amount in excess of the Threshold Amount; or

     (k) Destruction of Collateral. There shall occur any material damage to, or
loss, theft or destruction of, whether or not insured, or any strike, lockout, labor
dispute, embargo, condemnation, act of God or public enemy, or other casualty, which in any
such case causes, for more than fifteen (15) consecutive days, the cessation or substantial
curtailment of revenue producing activities at any facility of a Loan Party or any of their
respective Subsidiaries if such event or circumstance is not covered by business
interruption insurance and would have a material adverse effect on the business or financial
condition of the Company and its Subsidiaries taken as a whole; or

     (l) Subordinated Debt Documentation. (i) There shall occur and be continuing
any “Event of Default” (or any comparable term) under, and as defined in, the documents
evidencing or governing any Subordinated Indebtedness, (ii) any of the Obligations for any
reason shall cease to be “Designated Senior Indebtedness” (or any comparable term) under,
and as defined in, the documents evidencing or governing any Subordinated Indebtedness,
(iii) any Indebtedness other than the Obligations shall constitute “Designated Senior
Indebtedness” (or any comparable term) under, and as defined in, the documents evidencing or
governing any Subordinated Indebtedness or (iv) the subordination provisions of the
documents evidencing or governing any Subordinated Indebtedness shall, in whole or in part,
terminate, cease to be effective or cease to be legally valid, binding and enforceable
against any holder of the applicable Subordinated Indebtedness.

     (m) Change of Control. There shall occur (i) any failure by the Company, for
any reason, to comply with the procedures, or to timely make any required payment, set forth
in Section 4.07 regarding a Change of Control Offer or (ii) any Change of Control in
circumstances where Section 4.07 need not be complied with because of applicable
securities laws or regulations.

9.02 Remedies Upon Event of Default.

     If any Event of Default occurs and is continuing, then (A) if such event is an Event of
Default specified in Section 9.01(f) or Section 9.01(g), all of the Notes shall
automatically become immediately due and payable, together with interest accrued and premium, if
any, thereon, without presentment, demand, protest or notice of any kind, all of which are hereby
waived by the Company and each other Loan Party, (B) if such event is an Event of Default specified
in Section 9.01(a), any Lender may, at its option, declare by notice in writing to the
Company all of its Notes to be, and all of its Notes shall thereupon be and become, immediately due
and payable, together with interest accrued and premium, if any, thereon without presentment,
demand, protest or other notice of any kind, all of which are hereby

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waived by the Company and each other Loan Party, and (C) if such event is any other Event of Default, Lenders holding an aggregate
Principal amount of greater than fifty percent (50%) or more of outstanding Notes may, at their
option, declare by notice in writing to the Company all of its Notes to be, and all of its Notes
shall thereupon be and become, immediately due and payable, together with interest accrued and
premium, if any, thereon without presentment, demand, protest or other notice of any kind, all of
which are hereby waived by the Company and each other Loan Party. The Principal amount of the Notes
payable upon an Event of Default and acceleration pursuant to this Section 9.02 shall be an
amount equal to the outstanding Principal amount of the Notes.

9.03 Other Remedies; Application of Funds

     (a) If any Event of Default under Section 9.01(a), (f) or (g) shall
occur and be continuing, any Lender, and (b) if any other Event of Default shall occur and be
continuing, the Required Lenders, may proceed to protect and enforce its rights under this
Agreement and the Notes by exercising such remedies as are available under applicable Law, either
by suit in equity or by action at law, or both, whether for specific performance of any covenant or
other agreement contained in this Agreement or in aid of the exercise of any power granted in this
Agreement. No remedy conferred in this Agreement upon any Lender is intended to be exclusive of any
other remedy, and each and every such remedy shall be cumulative and in addition to every other
remedy conferred herein or now or hereafter existing at law or in equity or by statute or
otherwise.

     After acceleration of the Notes and Obligations as provided in Section 9.02, all amounts
received by the Agent shall be applied (i) first, to payment of that portion of the
Obligations constituting fees, indemnities, expenses and other amounts (including fees, charges and
disbursements of counsel to the Agent) payable to the Agent in its capacity as such, (ii)
second, to payment of that portion of the Obligations constituting fees, indemnities and
other amounts (other than principal and interest) payable to the Lenders (including fees, charges
and disbursements of counsel to the respective Lenders), ratably among them in proportion to the
respective amounts described in this clause (ii), (iii) third, to payment of that portion
of the Obligations constituting accrued and unpaid interest on the Notes and other Obligations,
ratably among the Lenders in proportion to the respective amounts described in this clause (iii)
payable to them, (iv) fourth, to payment of that portion of the Obligations constituting
unpaid Principal, ratably among the Lenders in proportion to the respective amounts described in
this clause (iv) payable to them; and (v) last, the balance, if any, after all of the
Obligations have been indefeasibly paid in full, to the Company or as otherwise required by Law.

9.04 Rescission of Acceleration.

     The provisions of Section 9.02 are subject to the condition that if the Principal of
and accrued interest on the Notes have been declared immediately due and payable by reason of the
occurrence of any Event of Default described in Section 9.01(e)(ii), the Required Lenders
may, by written instrument filed with the Company, rescind and annul such declaration and the
consequences thereof, provided that at the time such declaration is annulled and rescinded:

     (a) no judgment or decree has been entered for the payment of any monies due pursuant
to the Notes or this Agreement;

     (b) all arrears of interest and Principal upon all the Notes and all other sums payable
under the Notes and under this Agreement shall have been duly paid, unless the same
specifically has been waived in writing by the Required Lenders; and

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     (c) each and every other Event of Default shall have been made good, cured or waived;

and provided that no such rescission and annulment shall extend to or affect any subsequent
Event of Default or impair any right consequent thereto.

ARTICLE X.

MISCELLANEOUS

     As further and special provisions set forth under this Agreement, the parties hereto further
warrant, covenant, contract and agree each with the other as follows:

10.01 Entire Agreement.

     This Agreement, the Loan Documents and other documents referred to herein and therein
constitute the entire understanding among the parties as to the subject matter specifically
referred to herein or therein.

10.02 Reimbursement of Expenses.

     Each of the Loan Parties agrees (a) to pay upon demand all reasonable out-of-pocket costs and
expenses of the Agent and the Lenders (including, without limitation, the reasonable fees and
expenses of counsel to the Agent and the Lenders) in connection with (i) the due diligence
investigation in connection with, and the preparation, negotiation, execution, delivery of, this
Agreement and the other Loan Documents, and any amendment, modification or waiver hereof or thereof
or consent with respect hereto or thereto and (ii) the administration, monitoring and review of
this Agreement, the Notes and the other Loan Documents (including, without limitation,
out-of-pocket expenses for travel, meals, long-distance telephone calls, wire transfers, facsimile
transmissions and copying), (b) to pay upon demand all reasonable out-of-pocket costs and expenses
of the Agent and the Lenders (including, without limitation, reasonable attorneys’ fees and
expenses) in connection with (x) any refinancing or restructuring of the Notes, whether in the
nature of a “work-out,” in any insolvency or bankruptcy proceeding or otherwise and whether or not
consummated, and (y) the enforcement, attempted enforcement or preservation of any rights or
remedies under this Agreement or any of the other Loan Documents, whether in any action, suit or
proceeding (including any bankruptcy or insolvency proceeding) or otherwise, (c) to pay and hold
the Agent and the Lenders harmless from and against all liability for any intangibles, documentary,
stamp or other similar taxes, fees and excises, if any, including any interest and penalties, and
any finder’s or brokerage fees, commissions and expenses (other than any fees, commissions or
expenses of finders or brokers engaged by the Lenders), that may be payable in connection with the
Notes contemplated by this Agreement and the other Loan Documents, and (d) to pay all reasonable
fees, expenses and disbursements of the Agent or any Lender incurred in connection with UCC
searches, UCC filings, intellectual property searches, intellectual property filings or mortgage
recordings, and any amendments, modifications, releases or terminations thereof.

10.03 Survival of Agreements and Representations and Warranties.

     All agreements, representations and warranties contained herein or made in writing by the Loan
Parties (x) shall be considered to have been relied upon by the Lenders, (y) shall survive the
execution and delivery of this Agreement, the Notes and payment therefor or termination of this
Agreement and may be relied upon by any Lenders, regardless of any investigation made at any time
by or on behalf of the Lenders and (z) shall continue in full force and effect until the repayment
in full of the Notes and all

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other Obligations (it being understood and agreed that indemnification
obligations shall specifically survive the repayment of the Notes and Obligations).

10.04 No Waiver.

     No delay by or on behalf of the Lenders in exercising any rights conferred hereunder, and no
course of dealing between the Lenders, and the Loan Parties shall operate as a waiver of any right
granted hereunder, unless expressly waived in writing by the party whose waiver is alleged.

10.05 Binding Effect; Participations.

     All covenants, representations, warranties and other stipulations in this Agreement and other
documents referred to herein, given by or on behalf of any of the parties hereto, shall bind and
inure to the benefit of the respective successors, heirs, personal representatives and assigns of
the parties hereto, except that each of the Company and the other Loan Parties may not assign or
transfer any of its respective rights or obligations under this Agreement or any of the other Loan
Documents without the prior written consent of the Lenders.

10.06 Initial Holder.

     The Company shall be entitled to treat and deal with the Lenders, and shall not be required to
recognize any other Person as the holder of any Note, except after production of such Note duly
endorsed for transfer, together with such documentation as the Company may reasonably require
concerning compliance with Federal or state securities laws, or after receipt by the Company of
written notice from the Person theretofore entitled to be treated as the holder advising the
Company of the transfer of such Note to such other Person and stating the latter’s address,
together with such documentation as the Loan Parties may reasonably require concerning compliance
with Federal or state securities laws.

10.07 Cumulative Powers.

     No remedy herein conferred upon the Lenders or any holder of the Notes, as the case may be, is
intended to be exclusive of any other remedy, and each such remedy shall be cumulative and in
addition to every other remedy given hereunder or now or hereafter existing at law, or in equity or
by statute or otherwise.

10.08 Loss of Securities; Reissue of Securities in Lesser Denominations.

     Upon:

     (a) receipt of evidence satisfactory to the Company of loss, theft, mutilation or
destruction of a Note, and

     (b) in the case of any such loss, theft or destruction, upon delivery of indemnity in
such form and amount as shall be reasonably satisfactory to the Company, or in the event of
such mutilation, upon surrender and cancellation of such Note,

the Company will make and deliver a new Note of like tenor, in lieu of such lost, stolen, mutilated
or destroyed Note. In addition, upon request of any holder of a Note, or other securities of the
Company now or hereafter issued by the Company to the Lenders, and upon surrender of such Note, or
other securities to the Company and compliance with any restrictive legends, the Company will
reissue, in lesser denominations to

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parties designated by such holder, new certificates or other
securities in the equivalent amounts of such other securities surrendered.

10.09 Communications.

     All communications and notices provided for hereunder shall be sent by personal delivery,
nationally recognized overnight courier, facsimile or registered or certified mail, to the Lenders,
the Loan Parties at their addresses set forth on Schedule 10.09 or to such other address
with respect to any party as such party shall notify the other parties hereto in writing. Any
notice required to be given hereunder by one party to another shall be deemed to have been received (i) when delivered, if personally delivered or sent via
facsimile, or (ii) one day following delivery to a nationally recognized overnight courier or (iii)
on the third business day following the date on which the piece of mail containing such
communication is posted, if sent by certified or registered mail. Except as otherwise provided for
herein, Loan Parties shall use their commercially reasonable efforts to complete all requests for
disclosure or other provision of information to be made or otherwise given by the Loan Parties
shall be completed no later than ten (10) days following the receipt by the Loan Parties of a
written request therefor in the manner described in this Section 10.09.

10.10 Form, Registration, Transfer and Exchange of Notes; Lost Notes.

     (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
Company may not assign or otherwise transfer any of its rights or obligations hereunder without the
prior written consent of each Lender, and no Lender may assign or otherwise transfer any of its
rights or obligations hereunder except (i) to an Eligible Assignee in accordance with the
provisions of subsection (b) of this Section, (ii) by way of participation in accordance with the
provisions of subsection (d) of this Section, or (iii) by way of pledge or assignment of a security
interest subject to the restrictions of subsection (f) of this Section (and any other attempted
assignment or transfer by any party hereto 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 Indemnified Parties) any legal or equitable right, remedy or claim under or by reason
of this Agreement.

     (b) Any Lender may assign to one or more Eligible Assignees all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Notes at the time owing to it);
provided that:

     (i) except in the case of an assignment of the entire remaining amount of the assigning Lender’s
Notes at the time owing to it, or in the case of an assignment to a Lender or an Affiliate of
a Lender or an Approved Fund as defined in subsection (h) of this Section with respect to a
Lender, shall not be less than $1,000,000 unless each of the Agent and, so long as no Default
has occurred and is continuing, the Company otherwise consents (each such consent not to be
unreasonably withheld or delayed);

     (ii) each partial assignment shall be made as an assignment of a proportionate part of all the
assigning Lender’s rights and obligations under this Agreement with respect to its Notes
assigned; and

     (iii) the parties to each assignment shall execute and deliver to the Agent an assignment and
assumption agreement (an “Assignment and Assumption”) in a form acceptable to the
Agent.

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Subject to acceptance and recording thereof by the Agent pursuant to subsection (c) of this
Section, from and after the effective date specified in each Assignment and Assumption, the
assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such
Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and
the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment
and Assumption, be released from its obligations under this Agreement (and, in the case of an
Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this
Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the
benefits of this Agreement with respect to Company’s obligations surviving termination of this
Agreement). Upon request, Agent shall prepare and the Company shall execute and deliver a Note
(each a “Replacement Note”) to the assignee Lender and, to the extent the assigning Lender
has not assigned the entire amount of its original Note, to the assigning Lender as well. Any
assignment or transfer by a Lender of rights or obligations under this Agreement that does not
comply with this subsection shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with subsection (d) of this
Section.

     (c) The Agent, acting solely for this purpose as an agent of the Company, shall maintain at
the Agent’s office a copy of each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, and principal amount of each Lender’s Notes
owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The
entries in the Register shall be conclusive, and the Company, the Agent and the Lenders may treat
each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register
shall be available for inspection by the Company and any Lender, at any reasonable time and from
time to time upon reasonable prior notice.

     (d) Any Lender may, without the consent of, but with prior notice to the Agent, sell
participations to one or more entities (a “Participant”) in all or a portion of such
Lender’s rights and/or obligations under this Agreement (including all or a portion of its
commitment and/or its Notes owing to it); provided that (i) such Lender’s obligations under
this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations, (iii) the Company, the Agent and the
other Lenders shall continue to deal solely and directly with such Lender in connection with such
Lender’s rights and obligations under this Agreement, and (iv) except to the extent consented to by
Agent in its sole discretion with respect to each participation, any agreement or instrument
pursuant to which a Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement.

     (e) A Participant shall not be entitled to receive any greater payment than the applicable
Lender would have been entitled to receive with respect to the participation sold to such
Participant.

     (f) Any Lender may at any time pledge or assign a security interest in all or any portion of
its rights under this Agreement (including under its Note, if any) to secure obligations of such
Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank;
provided that no such pledge or assignment shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

     (g) If the consent of the Company to an assignment or to an assignee is required hereunder
(including a consent to an assignment which does not meet the minimum assignment threshold
specified in clause (i) of the provision to the first sentence of subsection (b) above), the
Company shall be deemed to have given its consent five Business Days after the date notice thereof
has been delivered by the assigning Lender (through the Agent) unless such consent is expressly
refused by the Company prior to such fifth Business Day.

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     (h) As used herein, the following terms have the following meanings:

“Eligible Assignee” means (a) a Lender; (b) an Affiliate of a Lender; (c) an
Approved Fund; and (d) any other person (other than a natural person or a Loan Party or
Affiliate thereof) approved by the Agent.

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

“Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b)
an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or
manages a Lender.

     (i) Any Lender may make an assignment to any Person as provided for herein provided that (i)
such Assignment is made in compliance with the Securities Act and any applicable state securities
laws, (ii) such Lender has provided the Company with such information as to such Transferee’s
compliance with applicable securities laws as reasonably may be requested by the Company. The
Company shall cooperate in connection with any such Transfer including providing such information
to any Lender or such Lender’s proposed Transferee as, in the reasonable opinion of counsel to the
transferor, may be necessary to satisfy the requirements of Rule 144A of the Securities Act in
connection with any Transfer to a “Qualified Institutional Buyer” under such rule. Upon any
Transfer, the Transferee shall, to the extent of such Transfer, be entitled to exercise the rights
of the Lender making such Transfer and shall thereunder be deemed a “Lender” under this Agreement.

     (j) Upon original issuance, and until such time as the same is no longer required under the
applicable requirements of the Securities Act, each Note (and all securities issued in exchange
therefor or situation thereof) shall bear the following legend:

“THIS NOTE HAS NOT BEEN REGISTERED PURSUANT TO THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR QUALIFIED PURSUANT TO ANY
APPLICABLE STATE SECURITIES LAW. THIS NOTE MAY BE RESOLD ONLY IF REGISTERED PURSUANT
TO THE PROVISIONS OF THE ACT AND QUALIFIED PURSUANT TO APPLICABLE STATE SECURITIES
LAWS OR IF AN EXEMPTION FROM SUCH REGISTRATION AND QUALIFICATION IS AVAILABLE,
EXCEPT UNDER CIRCUMSTANCES WHERE NEITHER SUCH REGISTRATION, QUALIFICATION NOR
EXEMPTION IS REQUIRED BY LAW.

THIS NOTE IS ISSUED WITH ORIGINAL ISSUE DISCOUNT (“OID”) FOR FEDERAL INCOME
TAX PURPOSES. THE ISSUE PRICE, AMOUNT OF OID, ISSUE DATE AND YIELD TO MATURITY OF
THE NOTE ARE AVAILABLE UPON REQUEST BY CONTACTING THE CHIEF FINANCIAL OFFICER OF
THE COMPANY AT 50 COBHAM DRIVE ORCHARD PARK, NEW YORK 14127.”

     The Loan Parties shall, from time to time at the request of any Lender, execute and deliver to
such Lender or to such party or parties as such Lender may designate, all further instruments as
may in such Lender’s reasonable opinion be necessary or advisable to give full force and effect to
any Transfer and shall provide to such Lender or to such party or parties as such Lender may
designate all such information as such Lender reasonable may request.

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10.11 Confidentiality; Public Announcements.

     (a) Each Lender shall use its best efforts not to make public disclosure of any information
(i) designated by the Company in writing as confidential, including all information presented at or
in connection with meetings of the Parent’s board of directors and all financial terms and
financial and organizational information contained in any documents, statements, certificates,
materials or information furnished, or to be furnished, by the Loan Parties in connection with the
Notes contemplated by this Agreement or (ii) disclosed orally in any meeting of the board of
directors to the observer attending the meeting on behalf of the Lenders and orally identified as
confidential; provided, however, that the foregoing shall not be construed, now or
in the future, to apply to any information reflected in any recorded document, information which is
independently developed by such Lender, information obtained from sources other than the Loan
Parties or information that is or becomes in the public domain other than through the fault of such
Lender, nor shall it be construed to prevent such Lender from (i) making any disclosure of any
information (A) if required to do so by any requirement of Law (it being understood and agreed,
however, that such Lender shall make a good faith effort to advise the Company of such requirement
prior to disclosure and cooperate with any effort by a Loan Party, at its expense, to limit or
prevent such disclosure), (B) to any Governmental Authority having or claiming authority to
regulate or oversee any aspect of the Lender’s business or that of the Loan Parties or their
affiliates of such Lender in connection with the exercise of such authority or claimed authority,
or (C) pursuant to subpoena (it being understood and agreed, however, that such Lender shall make a
good faith effort to advise the Company of such requirement prior to disclosure and cooperate with
any effort by a Loan Party, at its expense, to limit or prevent such disclosure); or (ii) to the
extent such Lender or its counsel deems necessary or appropriate to do so to effect or preserve its
security for any applicable investment or financing or to enforce any remedy provided herein or in
any applicable investment or financing documents or otherwise available by law; or (iii) making, on
a confidential basis (providing for confidentiality to the extent provided herein), such
disclosures as such Lender deems necessary or appropriate to such Lender’s legal counsel or
accountants (including outside auditors); or (iv) making such disclosures as such Lender reasonably
deems necessary or appropriate to any bank or financial institution or other entity, and/or counsel
to or other representatives of such bank or financial institution or other entity, to which such
Lender in good faith desires to sell an interest in any applicable investment or financing;
provided, however, that such bank, financial institution or other entity or counsel
to or representative thereof, agrees to take reasonable steps to maintain the confidentiality of
such disclosures; or (v) making such disclosures to (x) any bank or financial institution and (y)
S&P, Moody’s and/or other ratings agency, as such Lender reasonably deems necessary or appropriate
in connection with such Lender’s obtaining financing.

     Each Lender acknowledges and agrees that the Parent’s common stock is publicly traded and that
the confidential information referenced in this Section may include material non-public
information. Accordingly, each Lender (a) acknowledges it is subject to restrictions under federal
and state securities laws regarding the purchase or sale of the Parent’s common stock while in the
possession of material non-public information and (b) without limiting the foregoing, agrees to
abide by the Parent’s Insider Trading Policy governing trading by officers and directors of the
Parent as in effect from time to time for as long as it shall have the Board observation rights set
forth in Section 7.17.

     (b) The Required Lenders shall have the right to review and approve, such approval not to be
unreasonably withheld, any public announcement or public filing made after the Closing Date
relating to the Note, or to the Lenders in any way before any such announcement or filing is
announced or filed, provided, however, no review or approval shall be required for any such
announcement or filing required to be announced or filed by law. In addition, the Lenders shall
provide the Company an opportunity to review and approve any public announcement issued by the
Lenders specifically relating to the Note, such approval not to be unreasonably withheld or
delayed; provided, however, no review or approval shall be required for any such
announcement required to be announced by law; provided further, the Lenders shall
provide the

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Company with an advance copy of any regulatory filings relating to the Notes or Lenders or
tombstone ads prepared by or on behalf of the Lenders, but shall not be required to obtain approval
by the Company.

10.12 Governing Law.

     THIS AGREEMENT SHALL BE GOVERNED IN ALL RESPECTS BY THE LAWS OF THE STATE OF NEW YORK WITHOUT
REGARD TO CONFLICTS OF LAWS.

10.13 Headings.

     The descriptive Section headings herein have been inserted for convenience only and shall not
be deemed to limit or otherwise affect the construction of any provisions hereof.

10.14 Multiple Originals.

     This Agreement may be executed simultaneously in two or more counterparts, each of which shall
be deemed an original, and it shall not be necessary in making proof of this Agreement to produce
or account for more than one such counterpart.

10.15 Amendment or Waiver.

     This Agreement may be amended, and the Loan Parties may take any action herein prohibited, or
omit to perform any act herein required to be performed by them, if the Loan Parties shall obtain
the prior written consent of the Required Lenders to such amendment, action or omission to act;
provided, however, that, without the prior written consent of all of the Lenders,
no such agreement shall (i) decrease or forgive the Principal amount of, or extend the Maturity
Date of any Note, or decrease the rate of interest or premium on the Note, or any fees or other
amounts payable hereunder, (ii) effect any waiver, amendment or modification that by its terms
changes the amount, allocation, payment or pro rata sharing of payment on or among the Notes, or
any date fixed by this Agreement or any other Loan Document for any payment of Principal, interest
or premium, (iii) amend the provisions of this Section 10.15, the definition of the term
“Required Lenders” or of the term “Notes”, (iv) release any of the Loan Parties from their
obligations under the Loan Documents, or (v) release all or substantially all of the Collateral,
except to the extent such Collateral is sold or to be sold as part of or in connection with any
sale permitted hereunder or under any other Loan Document, in which case such release may be made
by the Agent acting alone as provided in Article XI, provided that the mechanics
for sharing of the Collateral with the providers of Indebtedness that is permitted under
Section 8.03 on a pari passu or subordinated basis, including the entering into of an
intercreditor agreement, may be done by the Agent acting on behalf of the Lenders without a vote
thereof, and such sharing shall not constitute a release of Collateral hereunder. Each holder of a
Note, at the time or times thereafter outstanding, shall be bound by any consent authorized by this
Section 10.15, whether or not the Note shall have been marked to indicate such consent.

10.16 Waiver of Jury Trial.

     THE LENDERS AND THE LOAN PARTIES EACH HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE
(TO THE EXTENT PERMITTED BY APPLICABLE LAW) ANY RIGHT TO A TRIAL BY JURY OF ANY DISPUTE ARISING
UNDER, RELATING TO, OR CONNECTED WITH THIS AGREEMENT, OR ANY OTHER AGREEMENT, INSTRUMENT OR
DOCUMENT CONTEMPLATED HEREBY OR DELIVER IN CONNECTION HEREWITH AND AGREE THAT ANY SUCH DISPUTE
SHALL BE TRIED BEFORE A JUDGE SITTING WITHOUT A JURY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR
THE PARTIES TO ENTER INTO THIS AGREEMENT.

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10.17 Consent to Jurisdiction and Service of Process.

     ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST THE LOAN PARTIES WITH RESPECT TO THIS AGREEMENT, THE
NOTE OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE CITY OF NEW YORK IN THE STATE OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF
THIS AGREEMENT, EACH OF THE LOAN PARTIES ACCEPTS, FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES,
GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND
IRREVOCABLY AGREES TO BE BOUND BY ANY FINAL JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS
AGREEMENT FROM WHICH NO APPEAL HAS BEEN TAKEN OR IS AVAILABLE. EACH OF THE LOAN PARTIES
IRREVOCABLY AGREES THAT ALL SERVICE OF PROCESS IN ANY SUCH PROCEEDINGS IN ANY SUCH COURT MAY BE
EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR
FORM OF MAIL), POSTAGE PREPAID, TO IT AT ITS ADDRESS SET FORTH IN SCHEDULE 10.09 OR AT SUCH
OTHER ADDRESS OF WHICH THE LENDERS SHALL HAVE BEEN NOTIFIED PURSUANT THERETO, SUCH SERVICE BEING
HEREBY ACKNOWLEDGED BY THE LOAN PARTIES TO BE EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT. EACH
OF THE PARTIES HERETO IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS WHICH IT MAY NOW
OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH JURISDICTION.
NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR
SHALL LIMIT THE RIGHT OF THE LENDERS TO BRING PROCEEDINGS AGAINST THE LOAN PARTIES IN THE COURT OF
ANY OTHER JURISDICTION.

10.18 Indemnification; Damage Waiver.

     (a) The Loan Parties, jointly and severally, and without limitation as to time, will defend
and indemnify the Lenders and their respective officers, directors, managers, employees, attorneys
and agents (each, an “Indemnified Party”) against, and hold each Indemnified Party harmless
from, all losses, claims, damages, liabilities, costs (including the costs of preparation and
attorneys’ fees and expenses) (collectively, the “Losses”) incurred by any Indemnified
Party as a result of, or arising out of, or relating to (i) any misrepresentation or breach of any
representation or warranty made by any Loan Party herein, (ii) any breach of any covenant,
agreement or obligation of any Loan Party contained in any of the Loan Documents or (iii) any
investigation or proceeding against a Loan Party or any Indemnified Party and arising out of or in
connection with this Agreement or any of the Loan Documents, whether or not the transactions
contemplated by this Agreement are consummated, which investigation or proceeding requires the
participation of, or is commenced or filed against, any Indemnified Party because of this
Agreement, any other Loan Document or such other documents and the transactions contemplated hereby
or thereby, other than any Losses resulting from action on the part of such Indemnified Party which
is finally determined in such proceeding to be primarily and directly a result of such party’s
gross negligence or willful misconduct. Each Loan Party agrees to reimburse each Indemnified Party
promptly for all such Losses as they are incurred by such Indemnified Party in connection with the
investigation of, preparation for or defense of any pending or threatened claim or any action or
proceeding arising therefrom. The Lenders agree to reimburse the Loan Parties for any payments
made by the Loan Parties to the Lenders pursuant to this paragraph for Losses which are finally
determined in such proceeding to primarily and directly result from the gross negligence or willful
misconduct of the Lenders. The obligations of the Loan Parties under this paragraph will survive
any transfer of the Notes by the Lenders and the termination of this Agreement. In the event that
the foregoing indemnity

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is unavailable or insufficient to hold an Indemnified Party harmless, then the Loan Parties
will contribute to amounts paid or payable by such Indemnified Party in respect of such Indemnified
Party’s Losses in such proportions as appropriately reflect the relative benefits received by and
fault of the Loan Parties and such Indemnified Party in connection with the matters as to which
such Losses relate and other equitable considerations.

     (b) If any action, proceeding or investigation is commenced, as to which any Indemnified Party
proposes to demand such indemnification, it shall notify the Loan Parties with reasonable
promptness; provided, however, that any failure by such Indemnified Party to notify
the Loan Parties shall not relieve the Loan Parties from their obligations hereunder except to the
extent the Loan Parties are prejudiced thereby. The Loan Parties shall be entitled to assume the
defense of any such action, proceeding or investigation, including the employment of counsel and
the payment of all fees and expenses. The Indemnified Party shall have the right to employ
separate counsel in connection with any such action, proceeding or investigation and to participate
in the defense thereof, but the fees and expenses of such counsel shall be paid by the Indemnified
Party, unless (i) the Loan Parties have failed to assume the defense and employ counsel as
provided herein, (ii) the Loan Parties have agreed in writing to pay such fees and expenses of
separate counsel or (iii) an action, proceeding, or investigation has been commenced against both
the Indemnified Party and/or a Loan Party and representation of both such Loan Parties and/or the
Indemnified Party by the same counsel would be inappropriate because of actual or potential
conflicts of interest between the parties. In the case of any circumstance described in
clauses (i), (ii) or (iii) of the immediately preceding sentence, the Loan Parties shall be
responsible for the reasonable fees and expenses of such separate counsel; provided,
however, that the Loan Parties shall not in any event be required to pay the fees and
expenses of more than one separate counsel (and, if deemed necessary by such separate counsel,
appropriate local counsel who shall report to such separate counsel) for all Indemnified Parties.
The Loan Parties shall be liable only for settlement of any claim against an Indemnified Party made
with the Loan Parties’ written consent.

     (c) To the fullest extent permitted by applicable law, the Loan Parties shall not assert, and
hereby waive, any claim against any Indemnified Party, on any theory of liability, for special,
indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out
of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement
or instrument contemplated hereby, the transactions contemplated hereby or thereby, or the use of
the proceeds thereof. No Indemnified Party shall be liable for any damages arising from the use by
unintended recipients of any information or other materials distributed by it through
telecommunications, electronic or other information transmission systems in connection with this
Agreement or the other Loan Documents or the transactions contemplated hereby or thereby.

10.19 Regulatory Requirements.

     In the event of any reasonable determination by any Lender that, by reason of any existing or
future federal or state law, statute, rule, regulation, guideline, order, court or administrative
ruling, request or directive (whether or not having the force of law and whether or not failure to
comply therewith would be unlawful) (collectively, a “Regulatory Requirement”), such Lender
is effectively restricted or prohibited from holding any of the Notes, or otherwise realizing upon
or receiving the benefits intended under the Notes, the Loan Parties shall, and shall cause their
Subsidiaries, to take such action as such Lenders and the Loan Parties shall jointly agree in good
faith to be reasonably necessary to permit such Lenders to comply with such Regulatory Requirement.
The reasonable costs of taking such action shall be borne by the Loan Parties.

10.20 USA Patriot-Act Notice.

     Each Lender (for itself and not on behalf of any Lender) hereby notifies each of the Loan
Parties that pursuant to the requirements of the USA Patriot Act (Title III of Pub.L. 107-56
(signed into law

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October 26, 2001)) (the “Patriot Act”), it is required to obtain, verify and record
information that identifies the Loan Parties, which information includes the name and address of
each of the Loan Parties and other information that will allow such Lender, as applicable, to
identify each Loan Party in accordance with the Act.

ARTICLE XI.

AGENCY PROVISIONS

11.01 Appointment.

     Each of the Lenders hereby irrevocably designates and appoints Laminar as the agent (including
the collateral agent) of such Lender (or the Lenders represented by it) under this Agreement and
the other Loan Documents for the term hereof (and Laminar hereby accepts such appointment) and each
such Lender irrevocably authorizes Laminar to take such action on its behalf under the provisions
of this Agreement and the other Loan Documents and to exercise such powers and perform such duties
as are expressly delegated to the Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental thereto. Notwithstanding
any provision to the contrary elsewhere in this Agreement or the other Loan Documents, the Agent
shall not have any duties or responsibilities, except those expressly set forth herein and therein,
and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be
read into this Agreement or the other Loan Documents or otherwise exist against the Agent. Any
reference to the Agent in this Agreement or the other Loan Documents shall be deemed to refer to
the Agent solely in its capacity as Agent and not in its capacity, if any, as a Lender.

11.02 Delegation of Duties.

     The Agent may execute any of its respective duties under this Agreement or the other Loan
Documents by or through agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by the Agent with reasonable
care.

11.03 Exculpatory Provisions.

     Neither the Agent nor any of its officers, directors, employees, agents, attorneys-in-fact,
Subsidiaries or Affiliates shall be (i) liable for any action lawfully taken or omitted to be taken
by it or such Person under or in connection with this Agreement (except for actions occasioned by
its or such Person’s own gross negligence or willful misconduct), or (ii) responsible in any manner
to any of the Lenders for any recitals, statements, representations or warranties made by the Loan
Parties or any of their Subsidiaries or any officer thereof contained in this Agreement, the other
Loan Documents or in any certificate, report, statement or other document referred to or provided
for in, or received by the Agent under or in connection with, this Agreement or the other Loan
Documents or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of
this Agreement or any other Loan Document or for any failure of the Loan Parties or any of their
Subsidiaries to perform its obligations hereunder or thereunder. The Agent shall not be under any
obligation to any Lender to ascertain or to inquire as to the observance or performance of any of
the agreements contained in, or conditions of, this Agreement or of any other Loan Document, or to
inspect the properties, books or records of the Loan Parties or any of their Subsidiaries.

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11.04 Reliance by Agent.

     The Agent shall be entitled to rely, and shall be fully protected in relying, upon any note,
writing, resolution, notice, consent, certificate, affidavit, letter, cablegram, telegram,
telecopy, telex or teletype message, statement, order or other document or conversation believed by
it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons
and upon advice and statements of legal counsel (including, without limitation, counsel to the Loan
Parties), independent accountants and other experts selected by the Agent. The Agent may deem and
treat the payee of any Note as the owner thereof for all purposes unless the Agent shall have
actual notice of any transferee. The Agent shall be fully justified in failing or refusing to take
any action under this Agreement and the other Loan Documents unless it shall first receive such
advice or concurrence of the Required Lenders (or, when expressly required hereby, all the Lenders)
as it deems appropriate or it shall first be indemnified to its satisfaction by the Lenders against
any and all liability and expense which may be incurred by it by reason of taking or continuing to
take any such action except for its own gross negligence or willful misconduct. The Agent shall in
all cases be fully protected in acting, or in refraining from acting, under this Agreement and the
other Loan Documents in accordance with a request of the Required Lenders (or, when expressly
required hereby, all the Lenders), and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders and all future Lenders.

11.05 Notices of Default.

     The Agent shall not be deemed to have knowledge or notice of the occurrence of any Event of
Default hereunder or under any other Loan Document unless it has received notice of such Event of
Default in accordance with the terms of hereof or thereof or notice from a Lender or the Loan
Parties referring to this Agreement or the other Loan Documents, describing such Event of Default
and stating that such notice is a “notice of default.” In the event that the Agent receives such a
notice, it shall promptly give notice thereof to the Lenders. The Agent shall take such action
with respect to such Event of Default as shall be reasonably directed by the Required Lenders;
provided that unless and until the Agent shall have received such directions, the Agent may
(but shall not be obligated to) take such action, or refrain from taking such action, with respect
to such Event of Default as it shall deem advisable in the best interests of the Lenders,
except to the extent that other provisions of this Agreement or the other Loan Documents
expressly require that any such action be taken or not be taken only with the consent and
authorization or the request of the Lenders or Required Lenders, as applicable.

11.06 Non-Reliance on the Agent and Other Lenders.

     Each of the Lenders expressly acknowledges that neither the Agent nor any of its respective
officers, directors, employees, agents, attorneys-in-fact, Subsidiaries or Affiliates has made any
representations or warranties to it and that no act by the Agent hereinafter taken, including any
review of the affairs of the Loan Parties or any of their Subsidiaries, shall be deemed to
constitute any representation or warranty by the Agent to any Lender. Each of the Lenders,
represents that it has made and will continue to make, independently and without reliance upon the
Agent or any other Lender, and based on such documents and information as it shall deem appropriate
at the time, its own credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigation as it deems necessary
to inform itself as to the business, operations, property, financial and other condition and
creditworthiness of the Loan Parties and their Subsidiaries. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the Agent hereunder or under the
other Loan Documents, the Agent shall not have any duty or responsibility to provide any Lender
with any credit or other information concerning the business, operations, property, financial and
other condition or creditworthiness of the Loan Parties or any of their

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Subsidiaries which may come into the possession of the Agent or any of its respective
officers, directors, employees, agents, attorneys-in-fact, Subsidiaries or Affiliates.

11.07 Indemnification.

     Each of the Lenders hereby agrees to indemnify the Agent in its capacity as such (to the
extent not reimbursed by the Loan Parties and without limiting the obligation of the Loan Parties
to do so), ratably according to the respective amounts of their Notes, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind whatsoever which may at any time (including, without limitation, at any
time following the payment of the Notes) be imposed on, incurred by or asserted against the Agent
in any way relating to or arising out of this Agreement, the other Loan Documents, or any documents
contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby
or any action taken or omitted by the Agent under or in connection with any of the foregoing;
provided that no Lender shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements to the extent they result from the Agent’s gross negligence or willful misconduct.
The agreements in this Section 11.07 shall survive the payment of the Notes and all other
amounts payable hereunder and the termination of this Agreement and the other Loan Documents.

11.08 The Agent in Its Individual Capacity.

     The Agent and its respective Subsidiaries and Affiliates may make loans to, accept deposits
from and generally engage in any kind of business with the Loan Parties as though the Agent were
not a Agent hereunder. With respect to any Note issued to it, the Agent shall have the same rights
and powers under this Agreement and the other Loan Documents as any Lender and may exercise the
same as though it were not a Agent, and the term “Lenders” shall include the Agent in its
individual capacity.

11.09 Resignation of the Agent; Successor Agent.

     The Agent may resign as Agent at any time by giving thirty (30) days advance notice thereof to
the Lenders and the Company and, thereafter, the retiring Agent shall be discharged from its duties
and obligations hereunder. Upon any such resignation, the Required Lenders shall have the right,
subject to the approval of the Company (so long as no Event of Default has occurred and is
continuing; such approval not to be unreasonably withheld), to appoint a successor Agent. If no
successor Agent shall have been so appointed by the Required Lenders, been approved (so long as no
Event of Default has occurred and is continuing) by the Company or have accepted such appointment
within thirty (30) days after the Agent’s giving of notice of resignation, then the Agent may, on
behalf of the Lenders, appoint a successor Agent reasonably acceptable to the Company (so long as
no Default or Event of Default has occurred and is continuing). Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such successor Agent shall thereupon succeed
to and become vested with all rights, powers, privileges and duties of the retiring Agent. After
any retiring Agent’s resignation hereunder as Agent, the provisions of this Section 11.09
shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by
it while it was acting as Agent. If no successor has accepted appointment as Agent by the date
which is thirty (30) days following a retiring Agent’s notice of resignation, the retiring Agent’s
resignation shall nevertheless thereupon become effective and the Required Lenders shall perform
all of the duties of the Agent hereunder until such time, if any, as the Required Lenders appoint a
successor agent as provided for above.

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11.10 Reimbursement by Lenders.

     To the extent that the Loan Parties for any reason fail to indefeasibly pay any amount
required under Section 10.02 or Section 10.18 to be paid by it to the Agent (or any
sub-agent thereof), or any Related Party of any of the foregoing, each Lender severally agrees to
pay to the Agent (or any such sub-agent) or such Related Party, as the case may be, such Lender’s
applicable percentage thereof (determined as of the time that the applicable unreimbursed expense
or indemnity payment is sought) of such unpaid amount, provided that the unreimbursed
expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was
incurred by or asserted against the Agent (or any such sub-agent) in its capacity as such, or
against any Related Party of any of the foregoing acting for the Agent (or any such sub-agent) in
connection with such capacity. For the purposes of this Section 11.10, the “applicable
percentage” of a Lender shall be the percentage of the total aggregate principal amount of the
Notes represented by the Notes held by such Lender at such time.

ARTICLE XII

GUARANTY

12.01 The Guaranty.

     Each of the Guarantors hereby jointly and severally guarantees to each Lender, each Affiliate
of a Lender that enters into a Swap Contract with the Company, and the Agent as hereinafter
provided, as primary obligor and not as surety, the prompt payment of the Obligations in full when
due (whether at stated maturity, as a mandatory prepayment, by acceleration, as a mandatory cash
collateralization or otherwise) strictly in accordance with the terms thereof. The Guarantors
hereby further agree that if any of the Obligations are not paid in full when due (whether at
stated maturity, as a mandatory prepayment, by acceleration, as a mandatory cash collateralization
or otherwise), the Guarantors will, jointly and severally, promptly pay the same, without any
demand or notice whatsoever, and that in the case of any extension of time of payment or renewal of
any of the Obligations, the same will be promptly paid in full when due (whether at extended
maturity, as a mandatory prepayment, by acceleration, as a mandatory cash collateralization or
otherwise) in accordance with the terms of such extension or renewal.

     Notwithstanding any provision to the contrary contained herein or in any other of the Loan
Documents or Swap Contracts, the obligations of each Guarantor under this Agreement and the other
Loan Documents shall be limited to an aggregate amount equal to the largest amount that would not
render such obligations subject to avoidance under the Debtor Relief Laws or any comparable
provisions of any applicable state law.

12.02 Obligations Unconditional.

     The obligations of the Guarantors under Section 12.01 are joint and several, absolute
and unconditional, irrespective of the value, genuineness, validity, regularity or enforceability
of any of the Loan Documents or Swap Contracts with the Company, or any other agreement or
instrument referred to therein, or any substitution, release, impairment or exchange of any other
guarantee of or security for any of the Obligations, and, to the fullest extent permitted by
applicable law, irrespective of any other circumstance whatsoever which might otherwise constitute
a legal or equitable discharge or defense of a surety or guarantor, it being the intent of this
Section 12.02 that the obligations of the Guarantors hereunder shall be absolute and
unconditional under any and all circumstances. Each Guarantor agrees that such Guarantor shall not
be entitled to exercise any right of subrogation, indemnity, reimbursement or contribution against
the Company or any other Guarantor for amounts paid under this Article XII until such time
as the Obligations have been Fully Satisfied. Without limiting the generality of the foregoing, it
is agreed that, to the fullest extent permitted by law, the occurrence of any one or more of the
following

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shall not alter or impair the liability of any Guarantor hereunder which shall remain absolute
and unconditional as described above:

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

     (b) any of the acts mentioned in any of the provisions of any of the Loan Documents, any Swap
Contract between the Company and any Lender, or any Affiliate of a Lender, or any other agreement
or instrument referred to in the Loan Documents or such Swap Contracts shall be done or omitted;

     (c) the maturity of any of the Obligations shall be accelerated, or any of the Obligations
shall be modified, supplemented or amended in any respect, or any right under any of the Loan
Documents, any Swap Contract between the Company and any Lender, or any Affiliate of a Lender, or
any other agreement or instrument referred to in the Loan Documents or such Swap Contracts shall be
waived or any other guarantee of any of the Obligations or any security therefor shall be released,
impaired or exchanged in whole or in part or otherwise dealt with;

     (d) any Lien granted to, or in favor of, the Agent or any Lender or Lenders as security for
any of the Obligations shall fail to attach or be perfected; or

     (e) any of the Obligations shall be determined to be void or voidable (including, without
limitation, for the benefit of any creditor of any Guarantor) or shall be subordinated to the
claims of any Person (including, without limitation, any creditor of any Guarantor).

     With respect to its obligations hereunder, each Guarantor hereby expressly waives diligence,
presentment, demand of payment, protest and, to the maximum extent permitted by law, all notices
whatsoever, and any requirement that the Agent or any Lender exhaust any right, power or remedy or
proceed against any Person under any of the Loan Documents, any Swap Contract between the Company
and any Lender, or any Affiliate of a Lender, or any other agreement or instrument referred to in
the Loan Documents or such Swap Contracts, or against any other Person under any other guarantee
of, or security for, any of the Obligations.

12.03 Reinstatement.

     The obligations of the Guarantors under this Article XII shall be automatically
reinstated if and to the extent that for any reason any payment by or on behalf of any Person in
respect of the Obligations is rescinded or must be otherwise restored by any holder of any of the
Obligations, whether as a result of any proceedings in bankruptcy or reorganization or otherwise,
and each Guarantor agrees that it will indemnify the Agent and each Lender on demand for all
reasonable costs and expenses (including, without limitation, reasonable fees and expenses of
external counsel) incurred by the Agent or such Lender in connection with such rescission or
restoration, including any such costs and expenses incurred in defending against any claim alleging
that such payment constituted a preference, fraudulent transfer or similar payment under any
bankruptcy, insolvency or similar law.

12.04 Certain Additional Waivers.

     Each Guarantor agrees that such Guarantor shall have no right of recourse to security for the
Obligations, except through the exercise of rights of subrogation pursuant to Section 12.02
and through the exercise of rights of contribution pursuant to Section 12.06.

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12.05 Remedies.

     The Guarantors agree that, to the fullest extent permitted by law, as between the Guarantors,
on the one hand, and the Agent and the Lenders, on the other hand, the Obligations may be declared
to be forthwith due and payable as provided in Section 9.02 (and shall be deemed to have
become automatically due and payable in the circumstances provided in said Section 9.02)
for purposes of Section 12.01 notwithstanding any stay, injunction or other prohibition
preventing such declaration (or preventing the Obligations from becoming automatically due and
payable) as against any other Person and that, in the event of such declaration (or the Obligations
being deemed to have become automatically due and payable), the Obligations (whether or not due and
payable by any other Person) shall forthwith become due and payable by the Guarantors for purposes
of Section 12.01. The Guarantors acknowledge and agree that their obligations hereunder are
secured in accordance with the terms of the Collateral Documents and that the Lenders may exercise
their remedies thereunder in accordance with the terms thereof.

12.06 Rights of Contribution.

     The Guarantors hereby agree as among themselves that, if any Guarantor shall make an Excess
Payment (as defined below), such Guarantor shall have a right of contribution from each other
Guarantor in an amount equal to such other Guarantor’s Contribution Share (as defined below) of
such Excess Payment. The payment obligations of any Guarantor under this Section 12.06
shall be subordinate and subject in right of payment to the Obligations until such time as the
Obligations have been Fully Satisfied, and none of the Guarantors shall exercise any right or
remedy under this Section 12.06 against any other Guarantor until such Obligations have
been Fully Satisfied. For purposes of this Section 12.06, (a) “Excess Payment” shall mean
the amount paid by any Guarantor in excess of its Ratable Share of any Guaranteed Obligations;
(b) “Ratable Share” shall mean, for any Guarantor in respect of any payment of Obligations, the
ratio (expressed as a percentage) as of the date of such payment of Guaranteed Obligations of
(i) the amount by which the aggregate present fair salable value of all of its assets and
properties exceeds the amount of all debts and liabilities of such Guarantor (including contingent,
subordinated, unmatured, and unliquidated liabilities, but excluding the obligations of such
Guarantor hereunder) to (ii) the amount by which the aggregate present fair salable value of all
assets and other properties of all of the Loan Parties exceeds the amount of all of the debts and
liabilities (including contingent, subordinated, unmatured, and unliquidated liabilities, but
excluding the obligations of the Loan Parties hereunder) of the Loan Parties; provided,
however, that, for purposes of calculating the Ratable Shares of the Guarantors in respect
of any payment of Obligations, any Guarantor that became a Guarantor subsequent to the date of any
such payment shall be deemed to have been a Guarantor on the date of such payment and the financial
information for such Guarantor as of the date such Guarantor became a Guarantor shall be utilized
for such Guarantor in connection with such payment; (c) “Contribution Share” shall mean, for any
Guarantor in respect of any Excess Payment made by any other Guarantor, the ratio (expressed as a
percentage) as of the date of such Excess Payment of (i) the amount by which the aggregate present
fair salable value of all of its assets and properties exceeds the amount of all debts and
liabilities of such Guarantor (including contingent, subordinated, unmatured, and unliquidated
liabilities, but excluding the obligations of such Guarantor hereunder) to (ii) the amount by which
the aggregate present fair salable value of all assets and other properties of the Loan Parties
other than the maker of such Excess Payment exceeds the amount of all of the debts and liabilities
(including contingent, subordinated, unmatured, and unliquidated liabilities, but excluding the
obligations of the Loan Parties) of the Loan Parties other than the maker of such Excess Payment;
provided, however, that, for purposes of calculating the Contribution Shares of the
Guarantors in respect of any Excess Payment, any Guarantor that became a Guarantor subsequent to
the date of any such Excess Payment shall be deemed to have been a Guarantor on the date of such
Excess Payment and the financial information for such Guarantor as of the date such Guarantor
became a Guarantor shall be utilized for such Guarantor in

73

 

connection with such Excess Payment; and (d) “Guaranteed Obligations” shall mean the
Obligations guaranteed by the Guarantors pursuant to this Article XII. This Section
12.06 shall not be deemed to affect any right of subrogation, indemnity, reimbursement or
contribution that any Guarantor may have under Law against the Company in respect of any payment of
Guaranteed Obligations. Notwithstanding the foregoing, all rights of contribution against any
Guarantor shall terminate from and after such time, if ever, that such Guarantor shall be relieved
of its obligations in accordance with Section 10.15.

12.07 Guarantee of Payment; Continuing Guarantee.

     The guarantee in this Article XII is a guaranty of payment and not of collection, is a
continuing guarantee, and shall apply to all Obligations whenever arising.

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

	 	 	 	 	 	 	 
	COMPANY:	 	MINRAD INC.
a Delaware corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	GUARANTOR:	 	MINRAD INTERNATIONAL, INC.
a Delaware corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 

	 	 

74

 

	 	 	 	 	 
	AGENT/LENDER:       	LAMINAR DIRECT CAPITAL L.P.,

as Agent and as a Lender

 	 
	 	By:  	 	 
	 	 	Robert Ladd 	 
	 	 	Authorized Signatory 	 
	 

75

 

SCHEDULE 3.01

PURCHASE AND SALE OF NOTES AND WARRANTS

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Principal	 	 	 	 	 	 	 	 	 	Total Notes and	 	 
	 	 	Name in which to	 	Amount	 	Issue Price	 	Issue Price	 	Warrants	 	Payment
	Name of Lender	 	Register Notes	 	of Notes	 	for Notes	 	for Warrants	 	Purchase Price	 	Wire Instructions
	Laminar Direct
Capital L.P.

	 	Laminar Direct
Capital L.P.
	 	$	15,000,000	 	 	$	12,568,141	 	 	$	2,431,859	 	 	$15,000,000.00
	 	VIA WIRE TRANSFER TO:

HSBC Bank USA

ABA #: 021001088

Credit: Laminar

Direct Capital L.P.

Acct # : 639722598

Reference: Minrad Inc.

76

 

SCHEDULE 10.09

ADDRESSES OF THE LOAN PARTIES AND LENDERS

ADDRESS OF THE LOAN PARTIES:

Minrad International, Inc.

50 Cobham Drive

Orchard Park, New York 14127

Attention: William Burns, CEO

Telephone: 716.855.1068

Facsimile: 716.855.1078

with a copy to:

Hodgson Russ LLP

140 Pearl Street, Suite 100

Buffalo, NY 14202-4040

Attention: Robert J. Fleming, Jr.

Telephone: 716.848.1350

Facsimile: 716.849.0349

ADDRESS OF LENDER AND AGENT:

Laminar Direct Capital L.P.

D. E. Shaw & Co., L.P.

120 West 45th Street, 22nd Floor

New York, New York 10036

Attention: Mr. Brad Parish

Facsimile: 212.845.1553

Laminar Direct Capital LP

10000 Memorial Drive, Suite 500

Houston, Texas 77024

Attention: Ms. Debbie Blank

Facsimile: 713.292.5454

D. E. Shaw & Co., L.P.

120 West 45th Street, 39th Floor

New York, New York 10036

Attention: Ms. Hilda Blair

Facsimile: 212.845.1553

with a copy to:

Moore & Van Allen PLLC

100 North Tryon Street, 47th Floor

Charlotte, North Carolina 28202

Attention: C. Wayne McKinzie, Esq.

Facsimile: 704.378.2061

77EX-10.1

 

Exhibit 10.1

Master Supply Agreement

By and between

RTI HAMILTON, INC. AND TRONOX LLC

     This Master Supply Agreement (this “Agreement”) is entered into on this 25th day of
March, 2008, between RTI HAMILTON, INC., a corporation duly incorporated and existing under the
laws of Ohio, having its principal office at 1000 Warren Avenue, Niles, Ohio, 44446, U.S.A.
(hereinafter referred to as “RTI”), and TRONOX LLC, a limited liability company duly organized and
existing under the laws of Delaware, having its principal office at One Leadership Square, Suite
300, 211 North Robinson Avenue, Oklahoma City, Oklahoma, 73102, U.S.A. (herein referred to as
“TRONOX”).

WITNESSETH:

     WHEREAS, RTI and TRONOX intend to enter into necessary lease agreements for certain property
adjacent to a plant operated by TRONOX in Hamilton, Mississippi for the purpose of constructing a
titanium sponge manufacturing facility that will have access to TiCl4 produced by TRONOX; and

     WHEREAS, RTI will require a stable supply of TiCl4 in the manufacturing of titanium sponge at
the RTI Facility over a long period of time; and

     WHEREAS, TRONOX desires to provide and sell sufficient quantities of TiCl4 to RTI necessary
for the operation of the RTI Facility throughout the term of this Agreement on the terms and
conditions set forth hereinafter; and

     WHEREAS, RTI will generate Chlorine gas as a co-product of its manufacturing process, which
TRONOX desires to obtain and RTI has agreed to supply.

1

 

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

ARTICLE 1

DEFINITIONS

     As used in this Agreement, the following terms shall have the meanings as specified below:

1.1 “Annual Nomination” shall have the meaning described in Section 5.1 and Appendix B.

1.2 “Calendar Year” means each year from January 1st to December 31st, the
first of which is the year of January 1, 2009, to December 31, 2009.

1.3 “Capacity Reservation” shall have the meaning described in Section 5.1 and Appendix B.

1.4 “Chlorine” shall mean chlorine produced as a co-product of RTI and meeting the Chlorine
Specification. Any and all references to “Chlorine” in this Agreement shall be deemed to describe
chlorine that conforms to the Chlorine Specification, unless the context requires otherwise.

1.5 “Chlorine Pipeline” shall have the meaning described in Section 3.3.

1.6 “Chlorine Specification” means the specification of return Chlorine from RTI to TRONOX as
specified in No. 40323010, dated December 18, 2007, which is attached as Appendix A, and as may be
mutually amended or modified from time to time.

1.7 “Claims” shall have the meaning described in Section 11.1.

1.8 “Confidential Information” shall have the meaning described in Section 18.1.

2

 

1.9 “Delivered Price” shall mean the price of a component plus freight to the TRONOX Plant gate and
handling.

1.10 “Disclosing Party” shall have the meaning described in Section 18.1.

1.11 “Environmental Laws” shall have the meaning described in Section 11.4.

1.12 “Ground Lease” shall have the meaning described in Section 16.1.

1.13 “Initial Annual Nomination” shall have the meaning described in Section 4.2.

1.14 “Non-renewal Notice” shall have the meaning described in Section 15.1.

1.15 “Price” shall have the meaning described in Section 7.1.

1.16 “Purchase Order” shall have the meaning described in Section 6.1.

1.17 “Quarter” means any three (3) month period of January 1st to March 31st,
April 1st to June 30th, July 1st to September 30th or
October 1st to December 31st.

1.18 “Quarterly Estimate” shall have the meaning described in Section 5.2.

1.19 “Receiving Party” shall have the meaning described in Section 18.1.

1.20 “Regulated Substances” shall have the meaning described in Section 11.1.

1.21 “Renewal Term” shall have the meaning described in Section 15.1.

1.22 “RTI Facility” means the RTI titanium sponge manufacturing facility being constructed in
Hamilton, Mississippi adjacent to the TRONOX Plant and the real property on which such facilities
are situated.

1.23 “Term” shall have the meaning described in Section 15.1.

1.24 “TiCl4” shall mean titanium tetrachloride produced by TRONOX and meeting the TiCl4
Specification. Any and all references to “TiCl4” in this Agreement shall be deemed to describe
TiCl4 that conforms to the TiCl4 Specification, unless the context requires otherwise.

3

 

1.25 “TiCl4 Pipeline” shall have the meaning described in Section 3.2.

1.26 “TiCl4 Specification” means the specification of TiCl4 specified in No. S-100HAM, revision
dated March 3, 2008, which is attached as Appendix A, and as may be mutually amended or
modified from time to time.

1.27 “Ton” shall mean two thousand (2,000) pounds.

1.28 “Tronox Permitted Air Emissions” shall have the meaning described in Section 11.3.

1.29 “Tronox Plant” means the existing TRONOX facility located in Hamilton, Mississippi wherein
TRONOX is currently producing TiCl4 and the real property on which such facility is situated.

ARTICLE 2

SALES AND PURCHASE

2.1 During the term of this Agreement, TRONOX agrees to sell and deliver to RTI, and RTI agrees to
purchase and take delivery of, TiCl4 upon the terms and conditions hereinafter set forth.

2.2 All of the TiCl4 sold and delivered by TRONOX hereunder shall be produced in accordance with
all applicable laws and regulations, and shall conform, in all material respects, to the TiCl4
Specification.

2.3 The sale and delivery of TiCl4 by TRONOX to RTI shall be accomplished through the issuance of
Purchase Orders, as set forth in Article 6 of this Agreement.

4

 

ARTICLE 3

DELIVERY

3.1 Consistent with the requirements set forth in Article 5 of this Agreement, RTI shall provide
TRONOX with reasonable written notice prior to placing all orders for purchase of TiCl4.

3.2 TRONOX shall timely fulfill all Purchase Orders for TiCl4 received from RTI and shall deliver
such TiCl4 through a pipeline that connects from the TRONOX Plant to the RTI Facility (the “TiCl4
Pipeline”).

3.3 RTI shall timely supply Chlorine to TRONOX and shall deliver such Chlorine through a pipeline
that connects from the RTI Facility to the TRONOX Plant (the “Chlorine Pipeline”).

3.4 TiCl4 shall be deemed delivered by TRONOX to RTI when TiCl4 within the TiCl4 Pipeline enters
the storage tanks installed at the RTI Facility. Chlorine shall be deemed delivered by RTI to
TRONOX when Chlorine within the Chlorine Pipeline enters the TRONOX Plant Chlorine header.

3.5 RTI shall be responsible for all cost and expense associated with the construction of the TiCl4
Pipeline and the Chlorine Pipeline. The design and specifications for the materials of the
construction of the TiCl4 Pipeline and the Chlorine Pipeline must be approved in writing by the
parties prior to commencing construction. TRONOX shall own the TiCl4 Pipeline and shall be
responsible for all cost and expense associated with the operation, maintenance, repair and
replacement of the TiCl4 Pipeline. RTI shall own the Chlorine Pipeline and shall be responsible
for all cost and expense associated with the operation, maintenance, repair and replacement of the
Chlorine Pipeline. RTI shall own

5

 

and be responsible for all cost and expense associated with the construction, operation,
maintenance, repair and replacement of all water, sewage, natural gas, or other pipelines that
exist and/or are installed solely for use by RTI, from the tie in of such dedicated pipelines in
the TRONOX Plant to the origin or final destination in the RTI Facility. RTI shall own and be
responsible for all cost and expense associated with the construction, operation, maintenance,
repair and replacement of the pipe rack connecting the RTI Facility to the TRONOX Plant from origin
to destination. TRONOX agrees to grant RTI an easement, in a form mutually satisfactory to the
parties, on, over, under and through the TRONOX Plant for the sole purpose of providing RTI access
rights necessary for RTI to meet its operation, maintenance, repair and replacement obligations set
forth herein.

ARTICLE 4

QUANTITY

4.1 Pursuant to the provisions of Sections 4.2 and 4.3, RTI shall purchase and TRONOX shall sell
the quantity of TiCl4 necessary and sufficient for the operation of the RTI Facility at the price
stipulated in Appendix B for each of the Calendar Years 2009 (if any) to 2030.

4.2 During the Calendar Year 2009, RTI will purchase from TRONOX a sufficient quantity of TiCl4
required to begin operations of the RTI Facility, if any. RTI will provide written notice of this
quantity for Calendar Year 2009 (the “Initial Annual Nomination”)” to TRONOX on or before October
15, 2008.

4.3 During each of the Calendar Years 2010 to 2030, RTI will purchase from TRONOX a sufficient
quantity of TiCl4 required for the operations of the RTI Facility

6

 

for the minimum quantities (set forth in Tons) specified in Appendix B, and TRONOX agrees to
reserve, make available, supply and sell TiCl4 in a quantity no less than that which is specified
in Appendix B. RTI agrees that TRONOX is not obligated to deliver TiCl4 in equal periodic amounts
during a Calendar Year, but TRONOX’s obligation is to deliver the Annual Nomination (or such other
quantity of TiCl4 agreed to in writing between the parties) during the course of the applicable
Calendar Year, subject to the provisions of Article 10.1 and Appendix B.

4.4 For purposes of this Article 4 and Article 6 only, TiCl4 shall be deemed to be sold and
purchased when delivered by TRONOX, which shall be such time as the TiCl4 within the TiCl4 Pipeline
enters the storage tanks installed at the RTI Facility. Title to and risk of loss of TiCl4 is as
defined in Article 9 of this Agreement.

4.5 During each of the Calendar Years 2009 (if any) to 2030, RTI will return to TRONOX Chlorine
through the Chlorine Pipeline in quantities that are equivalent to the amount of Chlorine contained
in the TiCl4 delivered to RTI by TRONOX. The Chlorine shall conform to the Chlorine Specification.
Any difference in the amount of Chlorine supplied in the TiCl4 and the amount of Chlorine returned
to TRONOX will be invoiced by TRONOX to RTI on a monthly basis as specified in Appendix B. For
clarification purposes, RTI and TRONOX agree that one (1) ton of TiCl4 contains 0.7475 (Merck Index
Ratio) tons of Chlorine.

ARTICLE 5

ADVANCE NOTICE OF REQUIREMENTS

5.1 RTI shall provide to TRONOX a written “Capacity Reservation” schedule for four (4) Calendar
Years on a rolling four (4) year schedule as specified in Appendix B.

7

 

RTI shall provide to TRONOX a written projection of its requirement for TiCl4 necessary and
sufficient for the operations of the RTI Facility for each Calendar Year on or before October 15 of
the preceding Calendar Year (each, an “Annual Nomination”), subject to the restrictions as
described in Appendix B. In addition, RTI will provide TRONOX with a written forecast for any
planned titanium sponge production capacity increases for the next succeeding Calendar Year,
subject to the restrictions set forth in Appendix B.

5.2 In addition to the foregoing, RTI shall furnish TRONOX, at least thirty days (30) in advance of
each Quarter, a written projection of its requirement for TiCl4 sufficient for the operations of
the RTI Facility for such Quarter (the “Quarterly Estimate”). During any one (1) month period
within a Calendar Year, TRONOX shall not be required to sell and deliver an amount of TiCl4 that is
twenty percent (20%) greater than or twenty percent (20%) less than the preceding month, unless
mutually agreed upon in writing by both parties; provided, however, that this variance shall not
apply if such variance is the result of a previously planned production increase that is detailed
in the Annual Nomination and thereby disclosed by RTI to TRONOX. In the event that TRONOX
experiences a planned or an unplanned outage in a month, TRONOX agrees to sell and RTI agrees to
purchase, in subsequent months, the quantity of TiCl4 necessary to satisfy the Quarterly Estimate
and replenish the “supply reserve” requirement (as described in Section 10.1). Any purchases of
TiCl4 from alternate sources by RTI pursuant to Section 10.2 shall be credited against the
Quarterly Estimate for the purpose of this Section 5.2.

8

 

5.3 Notwithstanding the provisions of Sections 5.1 and 5.2, RTI agrees to purchase, and TRONOX
agrees to sell and deliver, TiCl4 in minimum quantities for each Calendar Year as set forth on
Appendix B.

5.4 TRONOX acknowledges that its covenants contained in this Article 5 are material, and that the
failure to reserve, make available, supply, sell and deliver TiCl4 in quantity equal to the lesser
of the Capacity Reservation for the applicable Calendar Year or 125% of the Annual Nomination for
the applicable Calendar Year would cause material and substantial damages to RTI in the operation
of the RTI Facility and its other operations dependent upon output planned from the RTI Facility.

5.5 RTI acknowledges that its covenants contained in this Article 5 are material, and that its
failure to purchase and take delivery of TiCl4 in quantity equal to the Initial Annual Nomination
and the Capacity Reservation, or the minimum quantities for each Calendar Year set forth on
Appendix B, whichever is less, or to deliver the Chlorine to TRONOX would cause material and
substantial damages to TRONOX in the operation of the TRONOX Plant.

ARTICLE 6

PURCHASE ORDERS

6.1 During the term of this Agreement, RTI shall submit written annual blanket purchase orders to
TRONOX in the form of Appendix C, or as Appendix C may be amended or modified from time to time by
the mutual written agreement of the parties (each is referred to as a “Purchase Order”).

9

 

6.2 Each Purchase Order shall stipulate the applicable Annual Nomination of TiCl4 for the
applicable Calendar Year. RTI will issue individual monthly release quantities against the annual
Purchase Order by the 20th day of the preceding month.

6.3 Each Purchase Order shall be deemed to incorporate the terms and conditions set forth in this
Agreement. Performance under this Agreement or any Purchase Order is expressly limited to the
terms and conditions of this Agreement and the commercial terms of the applicable Purchase Order.
No modification of the terms and conditions of this Agreement shall be affected by TRONOX’s
acceptance of a Purchase Order containing different terms and conditions and such terms and
conditions shall be considered objected to by TRONOX.

ARTICLE 7

PRICE

7.1 The parties agree that the price for all TiCl4 purchased and sold pursuant to this Agreement
shall be stated in U.S. Dollars per Ton FOB the TiCl4 Pipeline (the “Price”).

7.2 The Price of TiCl4 shall be as set forth on the price schedule contained in Appendix B, and
shall be adjusted as provided in Appendix B. Further, TRONOX agrees to provide RTI with a written
forecast for any planned or projected price increases for TiCl4 purchased hereunder no later than
October 15 of each year to be applied to the following Calendar Year. Such forecast shall be
determined using the price calculation process and components of the price calculation set forth in
Appendix B. Such forecast is an estimate and subject to change subject to the terms contained in
Appendix B.

10

 

ARTICLE 8

PAYMENT

8.1 Unless RTI and TRONOX otherwise agree in writing and set forth in any Purchase Order, TRONOX
will issue a consolidated invoice to RTI at the end of each month for the TiCl4 delivered to RTI
during that month and for the difference in the Chlorine delivered to RTI and the Chlorine returned
by RTI to the TRONOX Plant Chlorine header. RTI agrees to pay such invoices no later than thirty
(30) days from the date the invoice is issued.

ARTICLE 9

TITLE AND RISK

9.1 Title to TiCl4 purchased by RTI shall transfer to RTI once TiCl4 within the TiCl4 Pipeline
enters the storage tanks constructed and installed at the RTI Facility. TRONOX shall bear the risk
of loss of, or damage to, the TiCl4 within the TiCl4 Pipeline until the TiCl4 enters the storage
tanks installed at the RTI Facility.

9.2 Title to Chlorine delivered by RTI to TRONOX shall transfer to TRONOX once Chlorine within the
Chlorine Pipeline enters the TRONOX Plant Chlorine header. RTI shall bear the risk of loss, or
damage to, the Chlorine within the Chlorine Pipeline until the Chlorine enters the TRONOX Plant
Chlorine header.

ARTICLE 10

SUPPLY DISRUPTION

10.1 The parties acknowledge that TRONOX will have periodic planned maintenance outages and that
during any such outage TRONOX will not be able to deliver TiCl4 to RTI. In order to ensure the
uninterrupted supply of TiCl4 to RTI during any such

11

 

outage, and without limiting the obligation of TRONOX to provide RTI with an uninterrupted supply
of TiCl4, RTI agrees to construct, install and maintain storage tanks on the RTI Facility with an
aggregate capacity equal to or greater than a ten (10) days’ supply of TiCl4, and TRONOX agrees to
maintain storage capacity of not less than a two (2) days’ supply TiCl4 in the two feed tanks
situated downstream from the TiCl4 purification columns in the TRONOX Plant. The parties
acknowledge the purpose of the storage capacity is to provide a supply reserve for RTI during any
planned or unplanned outage, and RTI agrees to only use the supply reserve for such purposes, and
as an in-line buffer to balance minor daily imbalances between TRONOX supply and RTI consumption of
TiCl4. In the event TRONOX is unable to supply TiCl4 for a period, for any reason not set forth in
Article 19 (Force Majeure), immediately at such time as TRONOX recommences production, TRONOX is
obligated to supply the volume of TiCl4 required to support the RTI daily production rate and begin
to replenish the ten (10) days’ supply reserve in an expeditious manner. Should the down time
extend such that the ten (10) days’ supply reserve is exhausted, TRONOX is obligated to have
alternate supply in place to satisfy RTI’s daily production rate. In the event of a total
disruption of the supply of TiCl4, and once the ten (10) days’ supply reserve is exhausted, TRONOX
is obligated to secure TiCl4 from other sources as described in Section 10.2. RTI is obligated to
receive whatever quantity is necessary to replenish the ten (10) days’ supply reserve immediately
at such time as TRONOX recommences TiCl4 production. For purposes of this Agreement, the parties
agree that a one (1) day of supply of TiCl4, in Tons, equals no less than the RTI Quarterly
Estimate for the given Quarter divided by ninety (90) days.

12

 

10.2 In the event of an unplanned outage or sustained planned outage that may jeopardize the
continuous operation of the RTI Facility, or if TRONOX otherwise fails to sell and deliver the
requested quantities of TiCl4 to RTI, except for the reasons set forth in Article 19 (Force
Majeure), TRONOX will secure TiCl4 from an alternate TiCl4 facility, which may or may not be owned
or operated by TRONOX, and provide such TiCl4 to RTI at the price set forth in Article 7 hereof.
In the event TRONOX is unable to obtain an alternate, adequate supply of TiCl4 to satisfy the
requests of RTI, TRONOX shall provide, to the extent technically possible, any processing required
to complete the production of qualified TiCl4 from materials provided by RTI. Further, TRONOX
shall reimburse RTI for all costs, expenses and damages reasonably incurred by RTI to obtain and
deliver (a) component materials for processing from an alternate source; and (b) TiCl4 from an
alternate TiCl4 facility, which is not owned by TRONOX.

10.3 Notwithstanding the foregoing, in the event of an unplanned outage or sustained planned outage
that is caused by or adversely affects the continuous supply of Chlorine to TRONOX, RTI will
reimburse TRONOX for costs related to the loss of Chlorine supply as set forth in Appendix B.2.

10.4 In a Calendar Year, TRONOX will have planned outage(s) of not more than 48 hours cumulatively,
and may include more than one (1) event, in which a reduced amount or no Chlorine return from RTI
can be processed. TRONOX will provide RTI with ninety (90) days written notice of planned outages
and RTI will be responsible for the disposition of Chlorine generated during these times; provided,
however, if circumstances prevent TRONOX from scheduling a planned outage ninety (90) days in
advance, then in

13

 

no event shall TRONOX schedule a planned outage less than thirty (30) days after delivery of
written notice to RTI of such planned outage.

ARTICLE 11

ENVIRONMENTAL AND INDEMNITY

11.1 TRONOX agrees and covenants to indemnify, defend, hold harmless, save, discharge and release
RTI, its parent and affiliated companies, and their respective shareholders, members, partners,
directors, managers, officers, employees, agents, successors and assigns from and against any and
all causes of action, administrative actions or proceedings, investigation and remediation costs,
obligations, judgments, payments, charges, judgments, assessments, damages, liabilities, claims,
demands, actions, penalties, fines, losses, costs and expenses (including attorneys fees, costs,
fees of experts and any legal or other expenses reasonably incurred in connection therewith) of any
type or nature whatsoever (collectively, the “Claims”) arising out of, resulting from or
related to: (i) any breach or inaccuracy in any representation or warranty made by TRONOX in this
Agreement; (ii) any failure of TRONOX to perform or observe any term, provision, condition or
covenant set forth in this Agreement; (iii) the migration, flow, percolation, diffusion or movement
of any hazardous or toxic substance, material, chemical, pollutant, constituent, waste, mold or any
element (collectively, “Regulated Substances”) which is included under or regulated by any
Environmental Law (as hereafter defined) from the TRONOX Plant on, to or under the RTI Facility
that arise from or are caused by, directly or indirectly, the actions of or failure to act by
TRONOX; (iv) the presence of any Regulated Substances on, to or under the RTI Facility that arises
from or exists as a result of TRONOX’s prior possession of the RTI Facility, whether

14

 

the same is discovered before or after the effective date of this Agreement; and (v) the violation
of any Environmental Law.

11.2 RTI agrees and covenants to indemnify, defend, hold harmless, save, discharge and release
TRONOX, its parent and affiliated companies, and their respective shareholders, members, partners,
directors, managers, officers, employees, agents, successors and assigns from and against any
Claims arising out of, resulting from or related to: (i) any breach or inaccuracy in any
representation or warranty made by RTI in this Agreement; (ii) any failure of RTI to perform or
observe any term, provision, condition or covenant set forth in this Agreement; (iii) the
migration, flow, percolation, diffusion or movement of any Regulated Substances from the RTI
Facility on, to or under the TRONOX Plant that arise from or are caused by, directly or indirectly,
the actions of or failure to act by RTI; and (iv) the violation of any Environmental Law.

11.3 It shall be the sole responsibility of RTI to obtain all environmental permits and comply with
any Environmental Laws necessary for construction and/or operation of the RTI Facility, including
without limitation, any permits related to air quality, wetlands regulation. RTI shall not seek any
environmental permit which impacts or potentially impacts operation of the Tronox Plant. RTI agrees
to consult with Tronox prior to filing any permit application which would allow construction and/or
operation of the RTI Facility. Notwithstanding the foregoing, the parties may, by mutual written
agreement, determine that it is beneficial to replace the current unified Title V air permit for
the TRONOX Plant and the RTI Facility with a separate air permit for the TiO2 and sodium chlorate
plants within the TRONOX Plant on the one hand, and the RTI Facility on the other. The current
Title V air permit related to the Tronox Plant allows potential

15

 

emissions of not more than certain amounts per hour of particulate matter (“TRONOX Permitted Air
Emissions”). RTI shall have the right to construct or expand its titanium sponge plant, provided
that such construction or expansion (i) is done in a manner using best available control technology
(unless otherwise required by law) and designed to result in minimal or no degradation of air
emissions at the TRONOX Plant; and (ii) such construction or expansion does not, without the prior
written consent of TRONOX, use any particulate material increment remaining under the TRONOX
Permitted Air Emissions, except to the extent agreed to in writing by TRONOX.

11.4 For purposes of this Agreement, “Environmental Law” shall mean any and all present and
future federal, state and local environmental laws, rules and regulations, court and regulatory
orders, ordinances and directives of any entity or governmental body having jurisdiction over
environmental regulation that govern the existence, cleanup and/or remedy of contamination on
property, the protection of the environment from spilled, deposited or otherwise placed
contamination, or the control, use, generation, storage, transport, treatment, removal or recovery
of Regulated Substances.

ARTICLE 12

WARRANTY

12.1 TRONOX hereby warrants that any and all TiCl4 supplied under this Agreement shall conform to
the TiCl4 Specification. EXCEPT FOR THE FOREGOING, NO OTHER WARRANTY OR REPRESENTATION, EXPRESS OR
IMPLIED, INCLUDING, WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR
PURPOSE, IS MADE BY TRONOX.

16

 

ARTICLE 13

DEFAULT

13.1 TRONOX shall be in default under this Agreement upon the occurrence of any one (1) or more of
the following events:

      (a) The failure to supply any requested quantity of TiCl4 to RTI subject to the provisions
contained in Appendix B. In the event TRONOX fails to supply a requested quantity of TiCl4 to RTI,
RTI shall provide written notice of same (pursuant to the notice provision of this Agreement)
within five (5) days. TRONOX shall have five (5) days from the date of receipt of such notice to
cure the default and provide the requested quantity of TiCl4, or such other quantity as RTI agrees
in writing, provided; however, Tronox shall not be required to provide any quantity in excess of
that required under this Agreement.

     (b) The
delivery of any quantity of TiCl4 to RTI that fails to conform, in all
material respects, to the TiCl4 Specifications. RTI and TRONOX agree that Section 6 of Appendix A
shall control any issue related to or involving TiCl4 that does not conform to the TiCl4
Specifications.

      (c) Failure to comply with any other terms or provisions set forth in this Agreement or any
Purchase Order within ten (10) days following written notice to TRONOX from RTI setting forth the
failure to comply and the reasonable steps required to cure such failure.

13.2 RTI shall be in default under this Agreement upon the occurrence of any one (1) or more of the
following events:

17

 

      (a) Failure to remit amounts due to TRONOX under a monthly invoice submitted pursuant to
Article 8 as and when due. In the event RTI fails to remit amounts due to TRONOX owed under a
monthly invoice as and when due, TRONOX shall provide written notice of same (pursuant to the
notice provision of this Agreement) within five (5) days. RTI shall have five (5) business days
from the receipt of such notice to remit payment of the requested amount, or to provide written
notice that it contests such amounts are due, and setting forth the basis therefor.

      (b) Failure to comply with any other terms or provisions set forth in this Agreement or any
Purchase Order within ten (10) days following written notice to RTI from TRONOX setting forth the
failure to comply and the reasonable steps required to cure such failure.

      (c) The delivery of any quantity of Chlorine to TRONOX that fails to conform, in all material
respects, to the Chlorine Specification.

ARTICLE 14

REPRESENTATIONS AND WARRANTIES

14.1 Each party represents and warrants to the other that it has the right and authority to enter
into this Agreement and to perform all of its respective obligations and undertakings herein. Each
party further represents and warrants to the other that (i) the rights and privileges granted or to
be granted hereunder are and will at all times be free and clear of any liens, claims, charges or
encumbrances; and (ii) neither party has done or omitted to do, nor will do or omit to do, any act
or thing that would or might impair, encumber, or diminish the other party’s full enjoyment of the
rights and privileges granted and to be granted under this Agreement.

18

 

14.2 Each party represents and warrants that (i) it is duly organized and existing in good standing
under the laws of the jurisdiction in which it is organized, is duly qualified and in good standing
as a foreign corporation in every state in which the character of its business requires such
qualifications, and has the power to own its property and to carry on its business as now being
conducted, (ii) this Agreement is the legal, valid and binding obligation of such party and is
enforceable against such party in accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, or other similar laws affecting the enforcement of creditors’
rights generally and except that the availability of equitable remedies, including specific
performance, may be subject to the discretion of the court before which any proceeding may be
brought; (iii) no approvals or consents are required to be obtained for such party to execute,
deliver or perform under this Agreement; and (iv) there are no claims, demands, investigations,
actions, suits or other legal proceedings of any type or nature whatsoever pending or threatened
against such party that would impair the ability of such party to execute, deliver or perform under
this Agreement.

14.3 TRONOX represents and warrants that, in the event it files a petition for relief for
protection under any chapter of the Bankruptcy Code (11 U.S.C. § 101, et seq.), or if involuntary
bankruptcy proceedings are initiated against TRONOX , during the Initial Term, or any applicable
Renewal Term of this Agreement, then TRONOX, upon the written request of RTI, shall seek the
assumption (and assignment, if requested) of this Agreement pursuant to § 365 of the Bankruptcy
Code (11 U.S.C. § 365), and/or other similar provisions of the Bankruptcy Code governing the
assumption of executory contracts.

19

 

ARTICLE 15

TERM

15.1 The term of this Agreement shall commence on the date first set forth above and remain in
effect for a period of twenty (20) Calendar Years commencing from January 1 of the Calendar Year
immediately following the date on which TRONOX makes its first delivery of TiCl4 to RTI under this
Agreement (the “Initial Term”). For illustrative purpose only, if TRONOX make its first delivery
of TiCl4 to RTI on July 1, 2009, then the term of this Agreement shall commence effective as of
January 1, 2010, and shall expire on December 31, 2030. This Agreement shall automatically renew
for consecutive twenty (20) Calendar Year terms (each, a “Renewal Term”), under the same terms and
provisions set forth herein, unless terminated by either party upon delivering written notice to
the other party of its desire not to renew not more than three (3) years and not less than two (2)
years prior to the end of the Initial Term, or the then-existing Renewal Term (the “Non-renewal
Notice”).

15.2 In the event either party delivers a Non-renewal Notice, the parties agree to engage in good
faith discussions for ninety (90) days from the date of receipt of the Non-renewal Notice, which
discussions may be extended beyond the initial ninety (90) days by the mutual written agreement of
the parties, to negotiate a replacement or successor agreement to this Agreement.

ARTICLE 16

TERMINATION

16.1 This Agreement and/or any Purchase Order may be immediately terminated by either party upon
(i) the failure of the other party to comply with laws and regulations

20

 

which materially affect such party’s rights or reputation and where such failure is not cured
within thirty (30) days of receipt of written notice thereof from the other party; or (ii) any
material breach of this Agreement by the other party which is not cured within the period
prescribed by Article 13 hereof, to the extent such breach may be cured, or (iii) any
representation or warranty in this Agreement proves to be false or misleading, (iv) the failure of
the parties to mutually agree upon terms for and execute (1) the Ground Lease of
Commercial/Industrial Property anticipated to be executed by and between TRONOX and RTI (the
“Ground Lease”), and (2) any other material agreement, document or certificate deemed necessary by
the parties or a party to fulfill the intent of this Agreement, on or before May 15, 2008, or
(v) any default exists under (1) the Ground Lease or (2) any other material agreement, document or
certificate executed in connection with this Agreement or the forgoing agreements, which default is
not cured within any applicable cure period provided for therein.

16.2 Either party may immediately terminate this Agreement and/or any Purchase Order by written
notice to such effect to the other party if (i) bankruptcy, insolvency or reorganization
proceedings, or any other analogous proceedings concerning, generally, creditors’ rights, are
instituted by or against the other party; or (ii) if the other party is dissolved or liquidated,
whether voluntarily or involuntarily; or (iii) if a receiver or trustee is appointed for all or for
a substantial part of the assets of the other party; or (iv) if the other party makes an assignment
for the benefit of creditors generally.

21

 

ARTICLE 17

RIGHTS AND OBLIGATIONS AFTER TERMINATION

17.1 If this Agreement is terminated pursuant to Article 16, the parties hereto shall fulfill the
obligations contained in all outstanding Purchase Orders which have not been canceled pursuant to
Article 16 hereof.

17.2 No termination of this Agreement shall affect any right or claim of either party that has
accrued prior to the effective date of such termination with respect to any sale and purchase of
TiCl4 or delivery of Chlorine prior to the effective date of termination, or otherwise arising
under this Agreement.

17.3 No termination of this Agreement or any Purchase Order shall terminate, alter or limit the
effects of Article 9, Article 11, Article 12, Article 18 (except as limited by Section 16.2) and
Article 20, all of which shall survive any such termination.

ARTICLE 18

CONFIDENTIALITY AND NON-SOLICITATION

18.1 The parties hereto consider this Agreement and all of its terms and conditions to be
confidential. Each party acknowledges and agrees that it may have access to information,
including, but not limited to, intellectual property, trade secrets, business information, ideas
and expressions, which are proprietary to and/or embody the substantial creative efforts of the
other party (together, with this Agreement, the “Confidential Information”). The parties agree
that Confidential Information will remain the sole and exclusive property of the disclosing party
(“Disclosing Party”), and the receiving party (the “Receiving Party”) agrees to maintain and
preserve the confidentiality of such information, including, but without limitation, taking such
steps to

22

 

protect and preserve the confidentiality of the Confidential Information as it takes to preserve
and protect the confidentiality of its own Confidential Information. All materials and information
disclosed by either party to the other will be presumed to be Confidential Information and will be
so regarded by the Receiving Party unless the Receiving Party can prove that the materials or
information are not Confidential Information.

18.2 For the purposes of this Article 18, the obligations, covenants and undertakings contained in
this Article 18 shall survive the termination or expiration of this Agreement for five (5) years
after the effective date of any termination or expiration of this Agreement.

18.3 The parties agree that the Confidential Information will be disclosed for use by the Receiving
Party only for the limited and sole purpose of carrying out the terms of this Agreement.

18.4 The Receiving Party agrees not to disclose or permit any other person or entity access to the
Confidential Information, except that such disclosure will be permitted to an employee, agent,
representative, independent contractor or customer of the Receiving Party requiring access to the
same or any disclosure that is required by applicable law.

18.5 The Receiving Party agrees (i) not to alter or remove any identification of any copyright,
trademark or other proprietary rights notice which indicates the ownership of any part of the
Confidential Information; and (ii) to notify the Disclosing Party of the circumstances surrounding
any possession, use or knowledge of the Confidential Information by any person or entity other than
those authorized by this Agreement.

23

 

18.6 Confidential Information will exclude any information that (i) has been or is obtained by the
Receiving Party from a source independent of the Disclosing Party and not receiving such
information from the Disclosing Party; (ii) is or becomes generally available to the public other
than as a result of an unauthorized disclosure by the Disclosing Party or its personnel; or (iii)
is independently developed by the Receiving Party without reliance in any way on the Confidential
Information provided by the Disclosing Party; or (iv) the Receiving Party is required to disclose
under judicial order, regulatory requirement, or statutory requirement, provided that the Receiving
Party provides written notice and an opportunity for the Disclosing Party to take any available
protective action prior to such disclosure.

18.7 During the term of this Agreement and for a period of two (2) years after the expiration or
termination of this Agreement, each party agrees and covenants not to directly or indirectly for
its own behalf or on behalf of any other party (i) call upon, solicit, entice or otherwise
encourage any employee of the other party from leaving the employment of the other party or
(ii) hire, employ or offer employment to any employee of the other party, except for any such
employee that directly initiates employment discussions with the other party or responds to a
general employment advertisement that is not directly targeted at the employees of the other party.

ARTICLE 19

FORCE MAJEURE

19.1 No party shall be liable for or will be considered to be in breach of or default under this
Agreement on account of any delay or failure to perform as required by this Agreement or any
Purchase Order to the extent that such party is unable to perform,

24

 

directly or indirectly, due to any cause or circumstance beyond the reasonable control of such
party including, without limitation, acts of God (such as fire, flood, storms, earthquake), war
(whether declared or not), armed conflict, hostilities, terrorist activities, mobilization,
blockade, embargo, detention, revolution, riot, lockout, strike or other labor dispute,
unavailability of transportation, changes in any law, statute or rule or the regulations
promulgated under such laws, or other unavailability of TRONOX TiCl4 for reason beyond the control
of TRONOX. Provided, however, that the provisions of this Article 19 shall not apply if TRONOX is
unable to supply TiCl4 due to a chlorinator in the TRONOX Plant that is not operating or otherwise
properly functioning, unless such chlorinator is not operating or otherwise properly functioning
due to the existence of one or more circumstances described in the preceding sentence.

19.2 The party affected by an event of Force Majeure shall notify the other party hereto within ten
(10) days of such event, in writing, as to its commencement and termination. The party so affected
shall take reasonable steps to resume performance hereunder with the least possible delay.

19.3 If any of the events set forth in Section 19.1 occur and the failure or delay caused thereby
cannot be cured within thirty (30) days, either party may terminate any Purchase Order affected
thereby.

ARTICLE 20

DISPUTE RESOLUTION

20.1 In the event a dispute or controversy arises between the parties arising out of, related to or
in connection with the interpretation or enforcement of this Agreement and/or any Purchase Order,
the parties shall use good faith efforts to attempt to resolve it

25

 

amicably. If settlement is not reached between the parties hereto, each party reserves the right
to pursue any and all available remedies through any federal court having jurisdiction over the
parties and/or the subject matter of this Agreement.

ARTICLE 21

GOVERNING LAW

21.1 This Agreement and any Purchase Order shall be governed, construed and enforced in accordance
with the laws of the State of Mississippi, notwithstanding any jurisdiction’s choice of law rules
to the contrary.

ARTICLE 22

ENTIRE AGREEMENT

22.1 This Agreement and the appendices attached hereto constitute the entire agreement between the
parties hereto regarding the subject matter contained herein and wholly cancel, terminate and
supersede all previous negotiations, agreements and commitments, whether formal or informal, oral
or written, with respect to the subject matter hereof. The parties recognize that, for
administrative purposes, documents, such as Purchase Orders, acknowledgments, invoices and similar
documents, may be used during the time this Agreement is in force, and in no event shall any term
or condition contained in any such administrative documents be interpreted as amending or modifying
the terms of this Agreement whether such administrative documents are signed or not.

22.2 Notwithstanding the foregoing, the parties acknowledge that the obligations under this
Agreement are subject to and contingent upon the execution and delivery of the Ground Lease and any
other material agreement, document or certificate deemed

26

 

necessary by the parties or a party to fulfill the intent of this Agreement as set out in Section
16.1.

ARTICLE 23

AMENDMENTS

23.1 This Agreement shall not be amended, changed or modified in any manner except by an instrument
in writing signed by duly authorized representatives of both parties hereto.

ARTICLE 24

BINDING EFFECT; ASSIGNMENT

24.1 The provisions of this Agreement shall bind and inure to the benefit of each of the parties
hereto and their respective successors and permitted assigns. This Agreement may not be assigned
in whole or in part by any party, except with the prior written consent of the other Party, which
consent shall not be unreasonably withheld, conditioned or delayed.

ARTICLE 25

NO WAIVER

25.1 No failure to exercise or delay in exercising any right or remedy under this Agreement or
under any Purchase Order by any party shall operate as a waiver thereof or of any other right or
remedy which such party may have hereunder or thereunder, nor shall any single or partial exercise
of such right or remedy preclude any further exercise thereof or of any other right or remedy which
such party may have hereunder or thereunder.

27

 

25.2 The rights and remedies provided herein are cumulative and not exclusive of any rights and
remedies provided by law, in equity or otherwise.

ARTICLE 26

SEVERABILITY

26.1 In the event that any provision or any portion of any provision of this Agreement is adjudged
by a court of competent jurisdiction as provided in Article 20 to be invalid, illegal or
unenforceable under the laws of the State of Mississippi, such provision or portion thereof shall
be deemed to be deleted from this Agreement and the validity of the remainder of this Agreement
shall remain unaffected thereby.

26.2 If any provision of this Agreement, or the application thereof to any party hereto, is held
illegal, unenforceable, or otherwise invalid by government promulgation, such holding shall not
affect the other provisions or application of this Agreement which can be given effect without the
invalid provision; provided that the parties shall promptly negotiate in good faith as to
adjustments in this Agreement as may be necessary to make it fair and reasonable.

ARTICLE 27

NOTICES

27.1 All notices, requests or other communications required or permitted to be given hereunder
shall be in writing in the English language and shall be deemed duly given (i) when delivered
personally to the recipient, (ii) when delivered by facsimile transmission and the sending party
has customary evidence of delivery thereof, (iii) one (1) business day after being sent to the
recipient by Federal Express or another reputable overnight courier service, charges prepaid, (iv)
when delivered by electronic mail

28

 

transmission and the sending party has customary evidence of delivery thereof, or (v) five (5)
business days after being mailed to the recipient by certified or registered mail, return receipt
requested and postage prepaid, and addressed to the intended recipient as set forth below:

If to TRONOX:

TRONOX LLC

One Leadership Square

Suite 300

Oklahoma City, Oklahoma, 73102

Fax:405.228.6101

Attention: Robert Brown, Vice President, Strategic Planning

and Business Development

E-mail: Robert.Brown@tronox.com

With a copy to the Vice President and General Counsel

Fax: 405.775.5903

E-Mail: Michael.Foster@tronox.com

If to RTI:

RTI Hamilton, Inc.

1000 Warren Avenue

Niles, Ohio 44446

Fax No.: (330) 544-7701

Attention: Stephen Giangiordano, Executive Vice President

E-mail: sgior@rtiintl.com

With a copy to the Vice President & General Counsel

Fax: (412) 893-0027

E-mail: cwhalen@rtiintl.com

Either party may change the address to which notices, requests, demand, claims or other
communications hereunder are to be delivered, by giving the other party notice in the manner set
forth herein.

29

 

ARTICLE 28

HEADINGS

28.1 The headings used in this Agreement are inserted for convenience of reference only and shall
not affect the construction or interpretation hereof.

ARTICLE 29

COMPLIANCE WITH LAWS

29.1 RTI and TRONOX shall be responsible for compliance with all applicable federal, state, and
local ordinances and regulations applicable to the subject matter covered hereunder and each party
shall indemnify and save the other parties harmless from any and all loss, cost (including, but not
limited to, reasonable attorney fees and other costs of defense), expense and liability arising
from such party’s non-compliance with any such laws, ordinances and regulations.

ARTICLE 30

RECORDS

30.1 Each party agrees to maintain all records pertaining to Purchase Orders and/or releases,
invoices and payment as with respect to transactions pursuant to this Agreement for a minimum
period of two (2) years following completion of this Agreement and/or Purchase Orders.

ARTICLE 31

MULTIPLE COUNTERPARTS

31.1 This Agreement may be executed in one or more counterparts, by facsimile or otherwise, each of
which shall be deemed an original but all of which together will constitute one and the same
instrument.

30

 

ARTICLE 32

PLURAL; GENDER

32.1 Words used in this Agreement in the singular, where the context so permits, shall be deemed to
include the plural and vice versa. Words used in the masculine or the feminine, where the context
so permits, shall be deemed to mean the other and vice versa. The definitions of words in the
singular in this Agreement shall apply to such words when used in the plural where the context so
permits and vice versa, and the definitions of words in the masculine or feminine in this Agreement
shall apply to such words when used in the other form where the context so permits and vice versa.
Any and all appendices, exhibits and schedules described in this Agreement are hereby incorporated
by reference into this Agreement and made a part of this Agreement. Any reference in this
Agreement to a section or article number shall mean the section or article number in this Agreement
unless otherwise expressly stated.

ARTICLE 33

LIMITATION OF LIABILITY

33.1 IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY IN ANY MANNER, UNDER ANY THEORY OF
LIABILITY, WHETHER IN CONTRACT, TORT (INCLUDING NEGLIGENCE), BREACH OF WARRANTY OR OTHER THEORY,
FOR ANY INDIRECT, CONSEQUENTIAL, INCIDENTAL, EXEMPLARY, PUNITIVE, STATUTORY OR SPECIAL DAMAGES,
INCLUDING WITHOUT LIMITATION LOST PROFITS AND LOSS OF DATA, REGARDLESS OF WHETHER SUCH PARTY WAS
ADVISED OF OR WAS AWARE OF THE POSSIBILITY OF SUCH DAMAGES.  THE LIMITATIONS SET FORTH IN THIS

31

 

PARAGRAPH SHALL BE DEEMED TO APPLY TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW AND
NOTWITHSTANDING THE FAILURE OF THE ESSENTIAL PURPOSE OF ANY LIMITED REMEDIES SET FORTH IN THIS
AGREEMENT.  THE PARTIES ACKNOWLEDGE AND AGREE THAT THEY HAVE FULLY CONSIDERED THE FOREGOING
ALLOCATION OF RISK AND FIND IT REASONABLE, AND THAT THE FOREGOING LIMITATIONS IN THIS PARAGRAPH ARE
AN ESSENTIAL BASIS OF THE BARGAIN BETWEEN THE PARTIES.

33.2 Notwithstanding the foregoing, the parties expressly acknowledge and agree that the provisions
of Section 31.1 do not apply to the obligations and remedies set forth in Section 10.2, and that
the remedies described in Section 10.2 are not, and shall not be characterized to be, indirect,
consequential, incidental, exemplary, punitive, statutory or special damages.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their
respective duly authorized representatives on the day and year first above written.

	 	 	 	 	 	 	 	 	 
	RTI HAMILTON, INC.	 	 	 	TRONOX LLC
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Stephen R. Giangiordano
	 	 	 	By:
	 	/s/ Robert Y. Brown III
	 

	 	 
	 	 	 	 	 	 
	Title:

	 	Executive Vice President
	 	 	 	Title:
	 	Vice President Strategic Planning
	 

	 	 	 	 	 	 	 	and Business Services
	Dated: March 24, 2008	 	 	 	Dated: March 24, 2008
	 
	 	 	 	 	 	 	 	 
	ATTEST:	 	 	 	ATTEST:
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Chad Whalen
	 	 	 	By:
	 	/s/ Michael J. Foster
	 

	 	 
	 	 	 	 	 	 

32

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