Document:

exv10w1

 

Exhibit 10.1

EXECUTION VERSION

U.S. $250,000,000

CREDIT AGREEMENT

Dated as of October 27, 2004

Among

COMUNICACIONES NEXTEL DE MÉXICO, S.A. DE C.V.

as Borrower

The Financial Institutions Parties Hereto as Lenders Hereto

CITIBANK, N.A.

as Administrative Agent

CITIGROUP GLOBAL MARKETS INC.

as Bookrunner and Joint Lead Arranger

and

SCOTIABANK INVERLAT, S.A.

as Bookrunner, Joint Lead Arranger and Syndication Agent

 

 

Table of Contents

	 	 	 	 	 
	 	 	Page

	ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
	 	 	 	 
	SECTION 1.01. Certain Defined Terms
	 	 	1	 
	SECTION 1.02. Computation of Time Periods
	 	 	16	 
	SECTION 1.03. Accounting Terms
	 	 	16	 
	SECTION 1.04. Currency Determination
	 	 	16	 
	ARTICLE II
AMOUNTS AND TERMS OF THE LOANS
	 	 	 	 
	SECTION 2.01. The Loans
	 	 	16	 
	SECTION 2.02. Making the Loans
	 	 	17	 
	SECTION 2.03. Fees
	 	 	18	 
	SECTION 2.04. Termination or Reduction of the Commitments
	 	 	18	 
	SECTION 2.05. Repayment
	 	 	18	 
	SECTION 2.06. Interest
	 	 	19	 
	SECTION 2.07. Interest Rate Determination
	 	 	20	 
	SECTION 2.08. Prepayments
	 	 	21	 
	SECTION 2.09. Increased Costs
	 	 	22	 
	SECTION 2.10. Illegality
	 	 	22	 
	SECTION 2.11. Payments and Computations
	 	 	23	 
	SECTION 2.12. Taxes
	 	 	24	 
	SECTION 2.13. Use of Proceeds
	 	 	27	 
	SECTION 2.14. Notes
	 	 	27	 
	SECTION 2.15. Sharing of Payments, Etc.
	 	 	28	 
	ARTICLE III
CONDITIONS TO EFFECTIVENESS AND LENDING
	 	 	 	 
	SECTION 3.01. Conditions Precedent to Effectiveness of Section 3.01
	 	 	29	 
	SECTION 3.02. Conditions Precedent to Each Borrowing
	 	 	31	 
	ARTICLE IV
REPRESENTATIONS AND WARRANTIES
	 	 	 	 
	SECTION 4.01. Representations and Warranties of the Borrower
	 	 	32	 

 

 

	 	 	 	 	 
	 	 	Page

	ARTICLE V
COVENANTS OF THE BORROWER
	 	 	 	 
	SECTION 5.01. Affirmative Covenants
	 	 	37	 
	SECTION 5.02. Negative Covenants
	 	 	41	 
	SECTION 5.03. Financial Covenants
	 	 	44	 
	ARTICLE VI
EVENTS OF DEFAULT
	 	 	 	 
	SECTION 6.01. Events of Default
	 	 	45	 
	ARTICLE VII
THE ADMINISTRATIVE AGENT
	 	 	 	 
	SECTION 7.01. Authorization and Action
	 	 	48	 
	SECTION 7.02. Delegation of Duties
	 	 	48	 
	SECTION 7.03. Administrative Agent’s Reliance, Etc.
	 	 	48	 
	SECTION 7.04. Citibank, N.A. and Affiliates
	 	 	48	 
	SECTION 7.05. Lender Credit Decision
	 	 	49	 
	SECTION 7.06. Indemnification
	 	 	49	 
	SECTION 7.07. Successor Agents
	 	 	50	 
	ARTICLE VIII
MISCELLANEOUS
	 	 	 	 
	SECTION 8.01. Amendments, Etc.
	 	 	50	 
	SECTION 8.02. Notices, Etc.
	 	 	51	 
	SECTION 8.03. No Waiver; Remedies
	 	 	52	 
	SECTION 8.04. Costs and Expenses
	 	 	53	 
	SECTION 8.05. Right of Set-off
	 	 	54	 
	SECTION 8.06. Binding Effect
	 	 	54	 
	SECTION 8.07. Assignments and Participations
	 	 	54	 
	SECTION 8.08. Governing Law
	 	 	57	 
	SECTION 8.09. Confidentiality
	 	 	57	 
	SECTION 8.10. Execution in Counterparts
	 	 	58	 
	SECTION 8.11. Jurisdiction; Waiver of Immunities
	 	 	58	 
	SECTION 8.12. Judgment Currency
	 	 	59	 
	SECTION 8.13. Waiver of Jury Trial
	 	 	59	 
	SECTION 8.14. Patriot Act Notice
	 	 	59	 

 

 

Schedules [OMITTED*]

Schedule I — Commitments

Schedule II — Subsidiary Guarantors

Schedule III — Calculation of Fixed Rate

Schedule 2.08(a) — Calculation of the Discount Rate

Schedule 3.01(d) — Disclosed Litigation

Schedule 4.01(j) — Material Contracts

Schedule 4.01(s) — Intellectual Property

Schedule 4.01(u) — Property

Schedule 4.01(v) — Concession Titles

Schedule 5.02(a) — Existing Liens

Exhibits [OMITTED*]

Exhibit A — Form of Tranche A Note

Exhibit B — Form of Tranche B Note

Exhibit C — Form of Tranche C Note

Exhibit D — Form of Notice of Borrowing

Exhibit E — Form of Assignment and Acceptance

Exhibit F — Form of Subsidiary Guaranty

Exhibit G — Form of Confidentiality Agreement

Exhibit H — Copy of Accounting Memo

	*	 	The Company will provide the omitted schedules and exhibits to the Commission
upon request.

 

 

AGREEMENT

Dated as of October 27, 2004

          CREDIT AGREEMENT among COMUNICACIONES NEXTEL DE MÉXICO, S.A. DE C.V., a
sociedad anónima de capital variable organized and existing under the laws of
México (the “Borrower”); each of the lenders that is a signatory hereto
and is listed under the caption “TRANCHE A BANKS” on Schedule I hereto and each
bank or financial institution that becomes a “Tranche A Bank” after the date
hereof pursuant to Section 8.07 hereof (individually, a “Tranche A Bank”
and, collectively, the “Tranche A Banks”); each of the lenders that is a
signatory hereto and is listed under the caption “TRANCHE B BANKS” on Schedule
I hereto and each bank or financial institution that becomes a “Tranche B Bank”
after the date hereof pursuant to Section 8.07 hereof (individually, a
“Tranche B Bank” and, collectively, the “Tranche B Banks”); each
of the lenders that is a signatory hereto and is listed under the caption
“TRANCHE C BANKS” on Schedule I hereto and each bank or financial institution
that becomes a “Tranche C Bank” after the date hereof pursuant to Section 8.07
hereof (individually, a “Tranche C Bank” and, collectively, the
“Tranche C Banks” and, together with the Tranche A Banks and the Tranche
B Banks, the “Lenders”); CITIGROUP GLOBAL MARKETS INC. and SCOTIABANK
INVERLAT, S.A., as the joint lead arrangers (collectively, the “Joint Lead
Arrangers”); CITIGROUP GLOBAL MARKETS INC. and SCOTIABANK INVERLAT, S.A. as
the bookrunners (collectively, the “Bookrunners”); SCOTIABANK INVERLAT,
S.A. as syndication agent (the “Syndication Agent”); and CITIBANK, N.A.,
as administrative agent for the Lenders hereunder (in such capacity, the
“Administrative Agent”).

          WHEREAS, the Borrower desires to borrow funds in Dollars and Pesos on the
terms and conditions set forth herein; and

          WHEREAS, the Lenders have agreed, on the terms and conditions set forth
herein, to make available to the Borrower senior unsecured loans in the
aggregate amount of up to U.S. $250,000,000 upon the terms and subject to the
conditions set forth in this Agreement, for the Borrower to use for general
corporate purposes.

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

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

          SECTION 1.01. Certain Defined Terms. As used in this Agreement,
the following terms shall have the following meanings (such meanings to be
equally applicable to both the singular and plural forms of the terms defined):

     “Accounting Memo” has the meaning specified in Section
3.02(g)(ii).

     “Administrative Agent” has the meaning specified in the
preamble hereto.

1

 

     “Administrative Agent’s Account” means, with respect to (i)
the Tranche A Loans, account number 36852248, maintained with Citibank,
N.A. and (ii) the Tranche B Loans and Tranche C Loans, account number
002180000098020020, maintained with Banamex.

     “Affiliate” means, as to any Person, any other Person that,
directly or indirectly, controls, is controlled by or is under common
control with such Person or is a director or officer of such Person;
provided, however, that Nextel Communications, Inc., a
company incorporated under the laws of Delaware (and its successors or
assigns) shall not be deemed an Affiliate of the Borrower. For purposes
of this definition, the term “control” (including the terms
“controlling”, “controlled by” and “under common control with”) of a
Person means the possession, direct or indirect, of the power to vote 5%
or more of the Voting Stock of such Person or to direct or cause the
direction of the management and policies of such Person, whether through
the ownership of Voting Stock, by contract or otherwise. “Affiliate”, as
applied to the Lenders, means each direct or indirect parent corporation
and controlling person (within the meaning of the U.S. Securities
Exchange Act of 1934, as amended) of such Lender and each direct or
indirect Subsidiary of each such parent corporation and each of their
respective directors, officers and agents.

     “Agent Parties” has the meaning specified in Section 8.02(d).

     “Agreement” means this Credit Agreement, as amended,
supplemented or otherwise modified from time to time.

     “Applicable Lending Office” means, with respect to each of
the initial Lenders, the offices of each of the initial Lenders specified
as its “Applicable Lending Office” opposite its name on the signature
pages below, and with respect to any other Lender in the Assignment and
Acceptance pursuant to which such Lender became a Lender, or such other
office of any of the Lenders as such Lender may from time to time specify
to the Borrower.

     “Applicable Margin” means, with respect to each Tranche, the
percentage per annum as set forth below:

	 	 	 	 	 
	Tranche
	 	Percentage

	A
	 	 	2.375	%
	B
	 	 	2.00	%
	C
	 	 	2.00	%

     “Approved Fund” means, with respect to any Lender that is a
fund that invests in bank loans, any other fund that invests in bank
loans and is advised or managed by the same investment advisor as such
Lender or by an Affiliate of such investment advisor.

     “Assignment and Acceptance” means an assignment and
acceptance entered into by any of the Lenders and an assignee of any of
the Lenders in substantially the form of Exhibit E hereto.

2

 

     “Availability Period” means the period commencing on the
Closing Date and ending on the date that occurs one hundred and eighty
(180) days thereafter.

     “Banamex” means Banco Nacional de México, S.A., Integrante
del Grupo Financiero Banamex.

     “Board of Directors” means the Consejo de Administracion of a
Person duly appointed by the holders of the capital stock of such Person.

     “Borrower” has the meaning specified in the preamble hereto.

     “Borrowing” means each of the borrowing(s) consisting of the
Loans made by the Lenders.

     “Borrower’s Account” with respect to (i) the Tranche A Loans,
account number 36828993 maintained with Citibank, N.A. and (ii) the
Tranche B Loans and Tranche C Loans, account number 870 44204, maintained
with Banamex.

     “Bookrunners” has the meaning specified in the preamble
hereto.

     “Business Day” means a day of the year on which banks are not
required or authorized by law to close in New York City and/or Mexico
City and, if the applicable Business Day relates to the Tranche A Loans,
on which dealings are carried on in the London, England interbank market.

     “Capitalized Leases” means all leases that have been or
should be, in accordance with Mexican GAAP, recorded as capitalized
leases.

     “Cash Equivalents” means any of the following, to the extent
owned by the Borrower or any of its Subsidiaries free and clear of all
Liens and having a maturity of not greater than 90 days from the date of
acquisition thereof: (a) Dollar-denominated investments consisting of
(i) readily marketable direct obligations of the Government of the United
States or any agency or instrumentality thereof or obligations
unconditionally guaranteed by the full faith and credit of the Government
of the United States, (ii) insured certificates of deposit of or time
deposits with any commercial bank that is a Lender or a member of the
Federal Reserve System, issues (or the parent of which issues) commercial
paper rated as described in clause (iii) below, is organized under the
laws of the United States or any State thereof and has combined capital
and surplus of at least $1 billion or (iii) commercial paper in an
aggregate amount of no more than $30,000,000 per issuer outstanding at
any time, issued by any corporation organized under the laws of any State
of the United States and rated at least “Prime-1” (or the then equivalent
grade) by Moody’s Investors Service, Inc. or “A-1” (or the then
equivalent grade) by Standard & Poor’s, a division of The McGraw-Hill
Companies, Inc.; or (b) Peso-denominated investments in (i) securities
issued or expressly and unconditionally guaranteed by the
Federal Government of Mexico, or (ii) certificates of deposit issued
by any Mexican Financial Institution with a local currency credit rating
of at least “BBB” (or the then equivalent grade) by Standard & Poor’s, a
division of the MacGraw-Hill Companies, Inc. and the equivalent rating by
Moody’s Investors Service, Inc.

3

 

     “Closing Date” has the meaning specified in Section 3.01.

     “Commitments” means, as to any Lender, its aggregate Tranche
A Commitment, Tranche B Commitment and Tranche C Commitment; and
collectively, as to all Lenders, the aggregate Tranche A Commitments,
Tranche B Commitments and Tranche C Commitments.

     “Commitment Termination Date” has the meaning specified in
Section 2.03.

     “Communications” has the meaning specified in Section
8.02(b).

     “Concession Titles” means such telecommunications titles of
the Borrower as listed on Schedule 4.01(v).

     “Consolidated” refers to the consolidation of accounts in
accordance with Mexican GAAP, in the case of the Borrower and its
Subsidiaries, and U.S. GAAP, in the case of the Parent.

     “Consolidated Net Income” means, for any period, for the
Borrower and its Subsidiaries on a consolidated basis, the net income of
the Borrower and its Subsidiaries (excluding extraordinary gains and
extraordinary losses) for that period.

     “Consolidated Operating Income” means, for any period, for
the Borrower and its Subsidiaries on a consolidated basis, the operating
income of the Borrower and its Subsidiaries for that period.

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

     “Debt” of any Person means, without duplication, (a) all
indebtedness of such Person for borrowed money, (b) all obligations of
such Person for the deferred purchase price of property or services
(other than trade payables not overdue by more than 90 days incurred in
the ordinary course of such Person’s business), (c) all obligations of
such Person evidenced by notes, bonds, debentures or other similar
instruments, (d) all obligations of such Person created or arising under
any conditional sale or other title retention agreement with respect to
property acquired by such Person (even though the rights and remedies of
the seller or lender under such agreement in the event of default are
limited to repossession or sale of such property), (e) all obligations of
such Person as lessee under Capitalized Leases, in the amount which has
been or should
be capitalized, (f) all obligations, contingent or otherwise, of
such Person in respect of acceptances, letters of credit or similar
extensions of credit, (g) all obligations of such Person in respect of
Hedge Agreements, (h) all Debt of others referred to in clauses (a)
through (g) above or clause (i) below and other payment obligations
(collectively, “Guaranteed Debt”) guaranteed directly or
indirectly in any manner by such Person, or in effect guaranteed directly
or indirectly by such Person through an agreement (1) to pay or purchase
such Guaranteed Debt or to advance or supply funds for the payment or

4

 

purchase of such Guaranteed Debt, (2) to purchase, sell or lease (as
lessee or lessor) property, or to purchase or sell services, primarily
for the purpose of enabling the debtor to make payment of such Guaranteed
Debt or to assure the holder of such Guaranteed Debt against loss, (3) to
supply funds to or in any other manner invest in the debtor (including
any agreement to pay for property or services irrespective of whether
such property is received or such services are rendered) or (4) otherwise
to assure a creditor against loss, and (i) all Debt referred to in
clauses (a) through (h) above (including Guaranteed Debt) secured by (or
for which the holder of such Debt has an existing right, contingent or
otherwise, to be secured by) any Lien on property (including, without
limitation, accounts and contract rights) owned by such Person, even
though such Person has not assumed or become liable for the payment of
such Debt; provided, however, that “Debt” shall not include
obligations in respect of performance, surety or appeal bonds provided in
the ordinary course of business.

     “Debt/OIBDA Ratio” means, at any date of determination, the
ratio of (i) Consolidated total Debt of the Borrower and its Subsidiaries
as at the end of the most recently ended fiscal quarter of the Borrower
for which financial statements are required to be delivered to the
Lenders and Administrative Agent pursuant to Section 5.01(j) to (ii) the
product of (A) Consolidated OIBDA for the most recently ended fiscal
quarter of the Borrower and its Subsidiaries on a consolidated basis
multiplied by (B) four.

     “Default” means any Event of Default or any event that would
constitute an Event of Default but for the requirement that notice be
given or time elapse or both.

     “Default Interest” has the meaning specified in Section
2.06(c).

     “Discount Rate” has the meaning specified in Section 2.08(a).

     “Eligible Assignee” means (a) with respect to the Tranche A
Loans, (i) a Tranche A Bank; (ii) an Affiliate of a Tranche A Bank; (iii)
a commercial bank organized under the laws of the United States, or any
State thereof; (iv) a savings and loan association or savings bank
organized under the laws of the United States, or any State thereof; (v)
a commercial bank organized under the laws of any other country that is a
member of the OECD or has concluded special lending arrangements with the
International Monetary Fund associated with its General Arrangements to
Borrow, or a political subdivision of any such country, so long as such
bank is acting through a branch or agency located in the country in which
it is organized or another country that is described in this clause (v);
(vi) the central bank of any country that is a member of the OECD; (vii)
a finance company, insurance company or other financial institution or
fund (whether a corporation, partnership, trust or other entity) that is
engaged in making,
purchasing or otherwise investing in commercial loans in the
ordinary course of its business; and (viii) any other Person approved by
the Administrative Agent and, unless an Event of Default has occurred and
is continuing at the time any assignment is effected in accordance with
Section 8.07, the Borrower, such approval not to be unreasonably withheld
or delayed; provided, however, that neither any Loan Party
nor Affiliate of a Loan Party shall qualify as an Eligible Assignee under
this definition and (b) with respect to each of the Tranche B Loans and
the Tranche C Loans, a Mexican Financial Institution.

5

 

     “Environmental Action” means any action, suit, demand, demand
letter, claim, notice of non-compliance or violation, notice of liability
or potential liability, investigation, proceeding, consent order or
consent agreement relating in any way to any Environmental Law,
Environmental Permit or Hazardous Materials or arising from alleged
injury or threat of injury to health, safety or the environment,
including, without limitation, (a) by any governmental or regulatory
authority for enforcement, cleanup, removal, response, remedial or other
actions or damages and (b) by any governmental or regulatory authority or
any third party for damages, contribution, indemnification, cost
recovery, compensation or injunctive relief.

     “Environmental Law” means any federal, state, local,
national, regional or foreign statute, law, ordinance, rule, regulation,
code, order, judgment, decree or judicial or agency interpretation,
policy or guidance, including, without limitation, of Mexico or the
United States or any of their respective applicable political
subdivisions, relating to pollution or protection of the environment,
health, safety or natural resources, including, without limitation, those
relating to the use, handling, transportation, treatment, storage,
disposal, release or discharge of Hazardous Materials.

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

     “Equity Interests” means, with respect to any Person, shares
of capital stock of (or other ownership or profit interests in) such
Person, warrants, options or other rights for the purchase or other
acquisition from such Person of shares of capital stock of (or other
ownership or profit interests in) such Person, 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 other acquisition from such Person of such shares (or
such other interests), and other ownership or profit interests in such
Person (including, without limitation, partnership, member or trust
interests therein), whether voting or nonvoting, and whether or not such
shares, warrants, options, rights or other interests are authorized or
otherwise existing on any date of determination.

     “Eurocurrency Liabilities” has the meaning assigned to that
term in Regulation D of the Board of Governors of the Federal Reserve
System, as in effect from time to time.

     “Events of Default” has the meaning specified in Section
6.01.

     “Exchange Rate” means, on any date of determination, the
Peso/Dollar exchange rate published by Banco de México in the Federal
Official Gazette (Diario Oficial de la Federación) as the rate “para
solventar obligaciones denominadas en moneda extranjera pagaderas en la

República Mexicana” on such date; provided that, if Banco de México
ceases to publish such exchange rate, the exchange rate shall be
calculated by taking the Peso/Dollar exchange rates published by Banamex,
Scotiabank Inverlat, S.A., and
HSBC Mexico, S.A. as of close of business on the Business Day
immediately prior to such date, and calculating the average of such
exchange rates.

6

 

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

     “Federal Funds Rate” means, for any period, a fluctuating
interest rate per annum equal for each day during such period to the
weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds
brokers, as published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal Reserve Bank of
New York, or, if such rate is not so published for any day that is a
Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three Federal
funds brokers of recognized standing selected by it.

     “Forms” shall have the meaning specified in Section 2.12(d).

     “Fixed Rate” means an interest rate per annum, as determined
by the Administrative Agent in consultation with the Tranche B Banks two
Business Days prior to any Funding Date, determined on the basis of the
term swap rate for the TIIE Rate as adjusted on Schedule III.

     “Floating Rate” means, for each Interest Period applicable to
each Tranche C Loan, the TIIE Rate, as determined by the Administrative
Agent, all as published by Banco de México in the Diario Oficial de le
Federación on the first Business Day, or of most recent publication,
prior to the commencement of the relevant Interest Period, or if such day
is not a Business Day, on the next preceding Business Day on which there
was such a quote.

     “Funding Date” has the meaning specified in Section 3.02.

     “Governmental Authority” means, any nation or government, any
state or municipality or other political subdivision thereof, any entity
exercising executive, legislative, judicial, monetary, regulatory or
administrative functions of or pertaining to government and any such
power of any state.

     “Hazardous Materials” means (a) petroleum and petroleum
products, byproducts or breakdown products, radioactive materials,
asbestos-containing materials, polychlorinated biphenyls and radon gas
and (b) any other chemicals, materials or substances designated,
classified or regulated as hazardous or toxic or as a pollutant or
contaminant under any Environmental Law.

     “Hedge Agreements” means interest rate swap, cap or collar
agreements, interest rate future or option contracts, currency swap
agreements, currency future or option contracts and other similar
agreements.

     “Indemnified Costs” has the meaning specified in Section
7.06(a).

     “Interest Coverage Ratio” means, at any date of
determination, the ratio of (i) Consolidated OIBDA of the Borrower and
its Subsidiaries as at the end of the most recently ended fiscal quarter
of the Borrower for which financial statements are required

7

 

to be
delivered to the Lenders and the Administrative Agent pursuant to Section
5.01(j) to (ii) interest payable on, and amortization of debt discount in
respect of, all Debt of the Borrower and its Subsidiaries for such
period.

     “Interest Period” means (a) with respect to each Tranche A
Loan, the period commencing on the Funding Date of such Loan and ending
on the last day of the period selected by the Borrower pursuant to the
provisions below and thereafter, with respect to all Tranche A Loans, the
period commencing on the last day of the preceding Interest Period and
ending on the last day of the period selected by the Borrower pursuant to
the provisions below. The duration of each Interest Period shall be
three (3) or six (6) months as selected by the Borrower upon notice
received by the Administrative Agent not later than 11:00 A.M. (New York
time) on the third Business Day prior to the first day of such Interest
Period; provided, however, that:

     (i) if a scheduled repayment of principal amount of Tranche A
Loans would otherwise occur during an Interest Period, such
Interest Period shall end on the date of such scheduled repayment;

     (ii) if any Interest Period would otherwise end after the
Maturity Date, such Interest Period shall end on the Maturity Date;

     (iii) whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day of
such Interest Period shall be extended to occur on the next
succeeding Business Day; provided, however, that, if
such extension would cause the last day of such Interest Period to
occur in the next following calendar month, the last day of such
Interest Period shall occur on the next preceding Business Day;

     (iv) whenever the first day of any Interest Period occurs on a
day of an initial calendar month for which there is no numerically
corresponding day in the calendar month that succeeds such initial
calendar month by the number of months equal to the number of
months in such Interest Period, such Interest Period shall end on
the last Business Day of such succeeding calendar month; and

     (v) if an Interest Period is not selected pursuant to the
provisions above before the end of an Interest Period applicable to
a Tranche A Loan, an Interest Period of the same duration as the
Interest Period most recently applicable to such Tranche A Loan
shall be deemed to have been selected; and

     (b) with respect to each Tranche B Loan and to each Tranche C Loan,
the period commencing on the Funding Date of such Loan and ending
ninety-one (91) days thereafter and thereafter each period commencing on
the last day of the next preceding Interest Period and ending ninety-one
(91) days thereafter; provided, however, that:

     (i) if any Interest Period would otherwise end after the
Maturity Date, such Interest Period shall end on the Maturity Date;
and

8

 

     (ii) whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day of
such Interest Period shall be extended to occur on the next
succeeding Business Day.

     “Joint Lead Arrangers” has the meaning specified in the
preamble hereto.

     “Lender” has the meaning specified in the preamble hereto.

     “LIBO Rate” means, with respect to each day during each
Interest Period pertaining to a Tranche A Loan, an interest rate per
annum equal to the rate per annum obtained by dividing (a) the rate per
annum equal to the arithmetic average (rounded upward to the nearest
1/16% of 1%, if not a multiple of 1/16%) of the rates which appear on the
display designated as 3750 Telerate Access Service Page as the rates at
which deposits in U.S. Dollars are offered by banks therein mentioned in
London, England to prime banks in the London interbank market as of 11:00
A.M. (London time) two Business Days before the first day of such
Interest Period in an amount substantially equal to such Tranche A Loan
to be outstanding during such Interest Period and for a period equal to
such Interest Period by (b) a percentage equal to 100% minus the LIBO
Rate Reserve Percentage for such Interest Period.

     “LIBO Rate Reserve Percentage” for any Interest Period for
all Tranche A Loans comprising part of the same Borrowing means the
reserve percentage applicable two Business Days before the first day of
such Interest Period under regulations issued from time to time by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including, without
limitation, any emergency, supplemental or other marginal reserve
requirement) for a member bank of the Federal Reserve System in New York
City with respect to liabilities or assets consisting of or including
Eurocurrency Liabilities (or with respect to any other category of
liabilities that includes deposits by reference to which the interest
rate on Tranche A Loans is determined) having a term equal to such
Interest Period.

     “Lien” means any lien, security interest or other charge or
encumbrance of any kind, or any other type of preferential arrangement,
including, without limitation, the lien or retained security title of a
conditional vendor and any easement, right of way or other encumbrance on
title to real property.

     “Loan Documents” means, collectively this Agreement, the
Tranche A Notes, the Tranche B Notes, the Tranche C Notes and each
Subsidiary Guaranty.

     “Loan Party” means each of, and “Loan Parties” means,
the Borrower and the Subsidiary Guarantors.

     “Loans” means, collectively the Tranche A Loans, the Tranche
B Loans and the Tranche C Loans.

     “Material Adverse Change” means any material adverse change
in the business, condition (financial or otherwise), operations,
performance or properties of any Loan Party or the Borrower and its
Subsidiaries taken as a whole.

9

 

     “Material Adverse Effect” means a material adverse effect on
(a) the business, condition (financial or otherwise), operations,
performance or properties of any Loan Party or the Borrower and its
Subsidiaries taken as a whole, (b) the rights and remedies of any of the
Lenders under this Agreement or any of the Notes, or (c) the ability of
any of the Loan Parties to perform its obligations under any Loan
Document.

     “Material Contract” means, with respect to any Person, each
contract to which such Person is a party involving aggregate
consideration payable to or by such Person of U.S. $10,000,000 (or its
equivalent in other currencies) or more in any year or otherwise material
to the business, condition (financial or otherwise), operations,
performance, properties or prospects of such Person.

     “Material Subsidiary” means, at any time, a Subsidiary
(excluding Multifon, S.A. de C.V., until such time as Multifon, S.A. de
C.V. becomes Solvent pursuant to the requirements of Section 5.01(n)) of
the Borrower having assets in an amount equal to at least 5% of the
amount of total Consolidated assets of the Borrower and its Subsidiaries
(determined as of the last day of the most recent fiscal quarter of the
Borrower) or revenues or net income in an amount equal to at least 5% of
the amount of total Consolidated revenues or Consolidated Net Income of
the Borrower and its Subsidiaries for the 12-month period ending on the
last day of the most recent fiscal quarter of the Borrower.

     “Maturity Date” means, with respect to all Loans, the earlier
of (i) the fifth anniversary of the Closing Date, and (ii) the date on
which all amounts payable under this Agreement become due and payable
pursuant to Section 6.01.

     “Mexico” means the United Mexican States.

     “Mexican Financial Institution” means a financial institution
organized under and existing pursuant to and in accordance with the laws
of Mexico.

     “Mexican GAAP” has the meaning specified in Section 1.03.

     “Mexican Pesos” or “Pesos” or “Ps$” each means
the lawful currency of Mexico.

     “Mexican Subsidiary” means any Material Subsidiary of the
Borrower, which is organized under the laws of Mexico.

     “Ministry of Finance” means, the Mexican Ministry of Finance
and Public Credit (Secretaría de Hacienda y Crédito Público).

     “Non-Material Subsidiary” means, at any time, any Subsidiary
of the Borrower, which is not a Material Subsidiary. 

     “Notes” means, collectively, the Tranche A Notes, the Tranche
B Notes and the Tranche C Notes.

     “Notice of Borrowing” has the meaning specified in Section
2.02.

10

 

     “Obligation” means, with respect to any Person, any payment,
performance or other obligation of such Person of any kind, including,
without limitation, any liability of such Person on any claim, whether or
not the right of any creditor to payment in respect of such claim is
reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, disputed, undisputed, legal, equitable, secured or unsecured,
and whether or not such claim is discharged, stayed or otherwise affected
by any proceeding referred to in Section 6.01(f). Without limiting the
generality of the foregoing, the Obligations of the Borrower under the
Loan Documents include (a) the obligation to pay principal, interest,
Letter of Credit commissions, charges, expenses, fees, attorneys’ fees
and disbursements, indemnities and other amounts payable by the Borrower
under any Loan Document and (b) the obligation of the Borrower to
reimburse any amount in respect of any of the foregoing that any of the
Lenders, in its sole discretion, may elect to pay or advance on behalf of
the Borrower.

     “OECD” means the Organization for Economic Cooperation and
Development.

     “OIBDA” means, for any period, Consolidated Net Income for
such period plus, without duplication and to the extent deducted
in determining Consolidated Net Income for such period, the sum of (a)
total income tax expense (including withholding taxes), (b) interest
expense, amortization or write-offs of debt discount and debt issuance
costs and commissions, discounts and other fees and charges associated
with Debt of the Borrower and its Subsidiaries (including the Loans), (c)
depreciation and amortization expense, (d) amortization of intangibles,
(e) any extraordinary expenses or losses (including, whether or not
otherwise includable as a separate item in the statement of such
Consolidated Net Income for such period, losses on sales of assets
outside of the ordinary course of business) and (f) other non-operating
expenses excluded from Consolidated Operating Income, (g) any other
non-cash charges (including, without limitation, minority interest
expense, foreign exchange loss, intercompany allocations not currently
required to be paid in cash, or monetary loss), and minus, to the
extent included in the statement of such Consolidated Net Income for such
period, the sum of (a) interest income, (b) any extraordinary income or
gains (including, whether or not otherwise includable as a separate item
in the statement of such Consolidated Net Income for such period, gains
on the sales of assets outside of the ordinary course of business), (c)
other non-operating income excluded from Consolidated Operating Income,
and (d) any other non-cash income (including, without limitation
foreign exchange gains or monetary gains), all as determined on a
consolidated basis in accordance with Mexican GAAP.

     “Other Taxes” has the meaning specified in Section 2.12(b).

     “Parent” means NII Holdings, Inc.

     “Patriot Act” means the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism
Act of 2001, Pub. L. 107-56, signed into law October 26, 2001.

     “Permitted Liens” means such of the following (i) as to which
no enforcement, collection, execution, levy or foreclosure proceeding
shall have been commenced; or (ii)

11

 

with respect to clauses (a), (c) or
(d) below, which are being contested in good faith and as to which
adequate reserves have been established on the books of the Borrower in
accordance with Mexican GAAP: (a) Liens for taxes, assessments and
governmental charges or levies to the extent not required to be paid
under Section 5.01(b) hereof; (b) Liens imposed by law, such as
materialmen’s, mechanics’, carriers’, workmen’s and repairmen’s Liens and
other similar Liens arising in the ordinary course of business securing
obligations that are not overdue for a period of more than 30 days; (c)
pledges or deposits to secure obligations under workers’ compensation
laws or similar legislation or to secure public or statutory obligations;
and (d) easements, rights of way and other encumbrances on title to real
property that do not render title to the property encumbered thereby
unmarketable or materially adversely affect the use of such property for
its present purposes.

     “Person” means an individual, partnership, corporation
(including a business trust), joint stock company, trust, unincorporated
association, joint venture, limited liability company or other entity, or
a government or any political subdivision or agency thereof.

     “Peso Equivalent” means with respect to an amount in Dollars
on any date, the Peso amount that would result from the conversion of
Dollar amount into Pesos on such date, as determined by the
Administrative Agent using the Exchange Rate.

     “Platform” has the meaning specified in Section 8.02(c).

     “Process Agent” has the meaning specified in Section 8.11.

     “Register” has the meaning specified in Section 8.07(d).

     “Regulation D” means Regulation D of the Board of Governors
of the Federal Reserve System, as in effect from time to time.

     “Required Lenders” means, at any time, Lenders owed at least
66-2/3% of the then aggregate unpaid principal amount of the Tranche A
Loans and the USD Equivalent as of the Closing Date of the Tranche B
Loans and the Tranche C Loans
owing to Lenders, or, if no such principal amount is then
outstanding, Lenders having at least 66-2/3% of the Commitments.

     “Responsible Officer” means any officer of the Borrower
or any of its Subsidiaries.

     “Restricted Payments” has the meaning specified in Section
5.02(e).

     “SEC” has the meaning specified in Section 3.02(g)(ii)

     “Solvent” means, with respect to any Person on a particular
date, that on such date (a) the fair value of the property of such Person
is greater than the total amount of liabilities, including, without
limitation, contingent liabilities, of such Person, (b) the present fair
salable value of the assets of such Person is not less than the amount
that will

12

 

be required to pay the probable liability of such Person on its
debts as they become absolute and matured, (c) such Person does not
intend to, and does not believe that it will, incur debts or liabilities
beyond such Person’s ability to pay such debts and liabilities as they
mature, (d) such Person is not engaged in business or a transaction, and
is not about to engage in business or a transaction, for which such
Person’s property would constitute an unreasonably small capital and (e)
such Person is not insolvent under Article 2166 of the Mexican Federal
Civil Code (Código Civil Federal) or its correlative provisions of the
Civil Codes of the States that comprise Mexico and the Federal District
(or any legal provision that succeeds them). The amount of contingent
liabilities at any time shall be computed as the amount that, in the
light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual
or matured liability.

     “Subsidiary” of any Person means any corporation,
partnership, joint venture, limited liability company, trust or estate of
which (or in which) more than 50% of (a) the issued and outstanding
capital stock having ordinary voting power to elect a majority of the
Board of Directors of such corporation (irrespective of whether at the
time capital stock of any other class or classes of such corporation
shall or might have voting power upon the occurrence of any contingency),
(b) the interest in the capital or profits of such limited liability
company, partnership or joint venture or (c) the beneficial interest in
such trust or estate is at the time directly or indirectly owned or
controlled by such Person, by such Person and one or more of its other
Subsidiaries or by one or more of such Person’s other Subsidiaries.

     “Subsidiary Guarantor” means each Mexican Subsidiary of the
Borrower listed on Schedule II hereto and each other Subsidiary of the
Borrower that shall become a Mexican Subsidiary and, therefore shall be
required to execute and deliver a Subsidiary Guaranty pursuant to Section
5.01(m).

     “Subsidiary Guaranty” means the guaranty that any Mexican
Subsidiary of the Borrower shall be required to execute pursuant to
Section 5.01(m) substantially in the form of Exhibit F.

     “Substitute Evaluation Agent” shall mean, on the date of any
proposed prepayment by a Tranche B Bank under Section 2.08, the Tranche B
Banks with the largest volume and quantity of derivatives transactions in
the Mexican derivatives market, as determined by such Tranche B Bank
requesting to make a prepayment; provided, however, that no
Affiliate of such prepaying Tranche B Bank shall be a Substitute
Evaluation Agent.

     “Taxes” has the meaning specified in Section 2.12(a).

     “TIIE Rate” means, as of any date of determination, the
Equilibrium Interbank Interest Rate (Tasa de Interés Interbancaria de
Equilibrio) for a period of 91 days or such other period so published as
most closely equals to such 91 day period, as determined by the
Administrative Agent, all as published by Banco de México in the Diario
Oficial de la Federación, or if the TIIE Rate is not quoted on such date
or such

13

 

day is not a Business Day, on the next preceding Business Day on
which there was such a quote; provided that in the event the TIIE
Rate shall cease to be published, “TIIE Rate” shall mean any rate
specified by Banco de México as the substitute rate therefor.

     “Tranche” means, with respect to any Loan, the
characterization of such Loan as being a part of the Tranche A Facility,
the Tranche B Facility or the Tranche C Facility.

     “Tranche A Banks” has the meaning specified in the preamble
hereto.

     “Tranche A Commitment” means, as to each Tranche A Bank, the
obligation of such Tranche A Bank to make Tranche A Loans in an aggregate
principal amount not to exceed the amount set forth opposite such Tranche
A Bank’s name on Schedule I, as such amount may be reduced from time to
time in accordance with the provisions of this Agreement; and
collectively, as to all Tranche A Banks, the Tranche A Commitments.

     “Tranche A Facility” means the financing available under the
Tranche A Commitments.

     “Tranche A Final Principal Amount” has the meaning specified
in Section 2.05(a).

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

     “Tranche A Note” means a promissory note of the Borrower
(pagaré) guaranteed (por aval) by the Subsidiary Guarantors payable to
the order of any Tranche A Bank, in substantially the form of Exhibit A,
evidencing the aggregate indebtedness of the Borrower to such Tranche A
Bank resulting from the Tranche A Loan made by such Tranche A Bank or
acquired by such Tranche A Bank from another Lender pursuant to Section
8.07.

     “Tranche B Banks” has the meaning specified in the preamble
hereto.

     “Tranche B Commitment” means, as to each Tranche B Bank, the
obligation of such Tranche B Bank to make Tranche B Loans in an aggregate
principal amount not to exceed the Peso Equivalent as of the Closing Date
of the amount set forth opposite such Tranche B Bank’s name on Schedule
I, as such amount may be reduced from time to time in accordance with the
provisions of this Agreement; and collectively, as to all Tranche B
Banks, the Tranche B Commitments.

     “Tranche B Facility” means the financing available under the
Tranche B Commitments.

     “Tranche B Final Principal Amount” has the meaning specified
in Section 2.05(b).

     “Tranche B Loan” has the meaning specified in Section
2.01(b).

14

 

     “Tranche B Note” means a promissory note of the Borrower
(pagaré) guaranteed (por aval) by the Subsidiary Guarantors payable to
the order of any Tranche B Bank, in substantially the form of Exhibit B,
evidencing the aggregate indebtedness of the Borrower to such Tranche B
Bank resulting from the Tranche B Loan made by such Tranche B Bank or
acquired by such Tranche B Bank from another Lender pursuant to Section
8.07.

     “Tranche C Banks” has the meaning specified in the preamble
hereto.

     “Tranche C Commitment” means, as to each Tranche C Bank, the
obligation of such Tranche C Bank to make Tranche C Loans in an aggregate
principal amount not to exceed the amount set forth opposite such Tranche
C Bank’s name on Schedule I, as such amount may be reduced from time to
time in accordance with the provisions of this Agreement; and
collectively, as to all Tranche C Banks, the Tranche C Commitments.

     “Tranche C Facility” means the financing available under the
Tranche C Commitments.

     “Tranche C Final Principal Amount” has the meaning specified
in Section 2.05(c).

     “Tranche C Loan” has the meaning specified in Section
2.01(c).

     “Tranche C Note” means a promissory note of the Borrower
(pagaré) guaranteed (por aval) by the Subsidiary Guarantors payable to
the order of any Tranche C Bank, in substantially the form of Exhibit C,
evidencing the aggregate indebtedness of the Borrower to such Tranche C
Bank resulting from the Tranche C Loan made by such Tranche C Bank or
acquired by such Tranche C Bank from another Lender pursuant to Section
8.07.

     “United States” or “U.S.” means the United States of
America.

     “U.S. Dollars”, “U.S. $”, “Dollars” and
“$” each mean the lawful currency of the United States.

     “U.S. GAAP” means the generally acceptable accounting
principles under applicable U.S. law.

     “USD Equivalent” means with respect to an amount of Mexican
Pesos on any date, the amount that would result from the conversion of
such Mexican Peso amount into Dollars on such date, as determined by the
Administrative Agent using the Exchange Rate.

     “Voting Stock” means capital stock issued by a
corporation, or equivalent interests in any other Person, the holders of
which are ordinarily, in the absence of contingencies, entitled to vote
for the election of directors (or persons performing similar functions)
of such Person, even if the right so to vote has been suspended by the
happening of such a contingency.

15

 

     “Wholly-Owned Subsidiary” means, as to any Subsidiary of the
Borrower incorporated in Mexico, each such Subsidiary in which the
Borrower owns or controls, directly or indirectly, at least 97% of the
capital stock of such Subsidiary and as to all other Subsidiaries, each
Subsidiary in which the Borrower owns or controls, directly or
indirectly, 100% of its capital stock; provided however, that each of
Inversiones Nextel de Mexico, S.A. de C.V. and NII PCS, S.A. de C.V.
shall be deemed to be Wholly-Owned Subsidiaries for so long as the
Borrower owns or controls, directly or indirectly, at least 95% of the
capital stock of such Subsidiary.

          SECTION 1.02. Computation of Time Periods. In this Agreement in
the computation of periods of time from a specified date to a later specified
date, the word “from” means “from and including” and the words “to” and “until”
each mean “to but excluding”.

          SECTION 1.03. Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with generally
accepted accounting principles in Mexico consistent with those applied in the
preparation of the financial statements referred to in Section 4.01(e)
(“Mexican GAAP”).

          SECTION 1.04. Currency Determination. For the purposes of
determining the amount outstanding in Pesos, the Peso Equivalent of the Dollar
amount on the date of the determination shall be used. If any reference to any
amount herein would include amounts in Dollars and in Pesos or to an amount in
Dollars that is in fact in Pesos, such reference (whether or not it expressly
so provides) shall be deemed to refer to the USD Equivalent.

ARTICLE II

AMOUNTS AND TERMS OF THE LOANS

          SECTION 2.01. The Loans. (a) Subject to the terms and conditions
hereof, each Tranche A Bank severally agrees to make loans in U.S. Dollars
(each, a “Tranche A Loan”) to the Borrower on any Business Day during the
Availability Period, in an amount not to exceed such Tranche A Bank’s Tranche A
Commitment at such time and, as to all Tranche A Banks, in an aggregate
principal amount up to but not exceeding the aggregate total amount of all
Tranche A Commitments listed on Schedule I. The Tranche A Facility shall
consist of Tranche A Loans, each such loan made simultaneously by the Tranche A
Banks ratably according to their Tranche A Commitments. Amounts borrowed under
this Section 2.01(a) and repaid or prepaid may not be reborrowed.

          (b) Subject to the terms and conditions hereof, each Tranche B Bank
severally agrees to make loans in Mexican Pesos (each, a “Tranche B
Loan”) to the Borrower on any Business Day during the Availability Period,
in an amount not to exceed such Tranche B Bank’s Tranche B Commitment at such
time and, as to all Tranche B Banks, in an aggregate principal amount up to but
not exceeding the Peso Equivalent of the aggregate total amount of all Tranche
B Commitments listed on Schedule I. The Tranche B Facility shall consist of
Tranche B Loans, each such loan made simultaneously by the Tranche B Banks
ratably according to their Tranche

16

 

B Commitments. Amounts borrowed under this
Section 2.01(b) and repaid or prepaid may not be reborrowed.

          (c) Subject to the terms and conditions hereof, each Tranche C Bank
severally agrees to make loans in Mexican Pesos (each, a “Tranche C
Loan”) to the Borrower on any Business Day during the Availability Period,
in an amount not to exceed such Tranche C Bank’s Tranche C Commitment at such
time and, as to all Tranche C Banks, in an aggregate principal amount up to but
not exceeding the Peso Equivalent of the aggregate total amount of all Tranche
B Commitments listed on Schedule I. The Tranche C Facility shall consist of
Tranche C Loans, each such loan made simultaneously by the Tranche C Banks
ratably according to their Tranche C Commitments. Amounts borrowed under this
Section 2.01(c) and repaid or prepaid may not be reborrowed.

          SECTION 2.02. Making the Loans. (a) Each Borrowing shall be made
on notice, given not later than 11:00 A.M. (New York City time) in the case of
Tranche A Loans, and 11:00 A.M. (Mexico City time) in the case of Tranche B
Loans and Tranche C Loans, on the third Business Day prior to the date of the
proposed Borrowing, in each case, by the Borrower to the Administrative Agent.
Such notice of a Borrowing (a “Notice of Borrowing”) shall be by
telephone, confirmed immediately in writing, or telecopier or telex, in
substantially the form of Exhibit D hereto, specifying therein (i) the
requested date of the proposed Borrowing, (ii) the aggregate amount of such
Borrowing under the Tranche A Facility, (iii) the aggregate amount of such
Borrowing under the Tranche B Facility, (iv) the aggregate amount of such
Borrowing under the Tranche C Facility and (v) the initial proposed Interest
Period for the Tranche A Loans under the Tranche A Facility contemplated by
such proposed Borrowing. Each Lender shall, before 11:00 A.M. (New York City
time) in the case of Tranche A Loans, and 11:00 A.M. (Mexico City time) in the
case of Tranche B Loans and Tranche C Loans, on the date of such Borrowing,
make available for the account of its Applicable Lending Office to the
Administrative Agent at the Administrative Agent’s Account, in same day funds,
such Lender’s ratable portion of such Borrowing in accordance with the
respective Commitments under the applicable Tranche A Facility, Tranche B
Facility or Tranche C Facility, as the case may be, of such Lender and the
other Lenders. After the Administrative Agent’s receipt of such funds and
upon fulfillment of the applicable conditions set forth in Article III,
the Administrative Agent will promptly make such funds available to the
Borrower by crediting the Borrower’s Account.

          (b) Each Notice of Borrowing shall be irrevocable and binding on the
Borrower. The Borrower shall indemnify all of the Lenders against any loss,
cost or expense incurred by any of the Lenders as a result of any failure to
fulfill on or before the date specified in a Notice of Borrowing the applicable
conditions set forth in Article III, including, without limitation, any loss,
cost or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by any of the Lenders to fund a Loan when such
Loan, as a result of such failure, is not made on such date. A certificate of
the amount of such loss, cost or expense, submitted in good faith to the
Borrower by any such Lender, shall be conclusive and binding for all purposes,
absent manifest error.

          (c) On each Funding Date, the Administrative Agent shall make available to
the Borrower only such amounts of the Loans that the Administrative Agent has
received from each respective Lender.

17

 

          (d) The failure of any Lender to make any Loan to be made by it as part of
any Borrowing shall not relieve any other Lender of its obligation, if any,
hereunder to make its Loans on the date of such Borrowing, but no Lender shall
be responsible for the failure of any other Lender to make the Tranche A Loan,
Tranche B Loan or the Tranche C Loan, as the case may be, to be made by such
other Lender on the date of any Borrowing.

          (e) Nothing contained herein shall be deemed to limit the Borrower’s
rights against any defaulting Lender.

          SECTION 2.03. Fees. (a) Commitment Fee. The Borrower
agrees to pay to the Administrative Agent, for the account of each of the
Lenders, on the last Business Day of each month during the Availability Period,
on the last day of the Availability Period (the “Commitment Termination
Date”), and on the date of termination of the Lenders’ obligation to make
loans pursuant to Section 6.01 or the permanent reduction to zero of the
Commitments, a commitment fee in Dollars at a rate per annum of 1.0% of the
average daily unused portion of the Commitments which will accrue on a daily
basis from the Closing Date to the earlier to occur of the Commitment
Termination Date and the date of termination of the Lenders’ obligation to make
loans pursuant to Section 6.01 or the permanent reduction to zero of the
Commitments.

          (b) Agency Fee. The Borrower shall pay to the Administrative Agent
for its own account such fees in Dollars as specified in the commitment letter
dated June 24, 2004 among the Borrower, the Administrative Agent, the
Bookrunners and the Parent.

          SECTION 2.04. Termination or Reduction of the Commitments. (a)
Optional. The Borrower shall have the right, upon at least three
Business Days’ notice to the Administrative Agent, to terminate in whole or
permanently reduce ratably in part the unused portions of the respective
Commitments of the Lenders, provided that each partial reduction shall
be in the aggregate amount of U.S.$5,000,000 or an integral multiple of
U.S.$1,000,000 in excess thereof in the case of Tranche A Loans, and
Ps$50,000,000 or an
integral multiple of Ps$10,000,000 in excess thereof in the case of
Tranche B Loans and the Tranche C Loans.

          (b) Mandatory. On the Business Day immediately following the last
day of the Availability Period, the unused aggregate Commitments of the Lenders
shall be automatically and permanently terminated.

          SECTION 2.05. Repayment. (a) The Borrower shall repay in Dollars
to the Administrative Agent, for the ratable account of the Tranche A Banks,
the aggregate principal amount of the Tranche A Loans outstanding at the end of
the Availability Period (the “Tranche A Final Principal Amount”) on the
following dates and in the percentages indicated; provided that the
final principal installment shall be in an amount equal to the principal amount
of Tranche A Loans outstanding on the date on which such final principal
installment is due:

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	 	 	 	 	 	 	Percentage
	 	 	 	 	 	 	of “Tranche
	 	 	 	 	 	 	A Final
	 	 	Installment	 	Principal
	Due Date
	 	No.
	 	Amount”

	October 27, 2007
	 	 	1	 	 	 	20	%
	April 27, 2008
	 	 	2	 	 	 	20	%
	October 27, 2008
	 	 	3	 	 	 	20	%
	April 27, 2009
	 	 	4	 	 	 	20	%
	October 27, 2009
	 	 	5	 	 	 	20	%

          (b) The Borrower shall repay in Pesos to the Administrative Agent, for the
ratable account of the Tranche B Banks, the aggregate principal amount of the
Tranche B Loans outstanding at the end of the Availability Period (the
“Tranche B Final Principal Amount”) on the following dates and in the
percentages indicated; provided that the final principal installment
shall be in an amount equal to the principal amount of Tranche B Loans
outstanding on the date on which such final principal installment is due:

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Percentage
	 	 	 	 	 	 	of “Tranche
	 	 	 	 	 	 	B Final
	 	 	Installment	 	Principal
	Due Date
	 	No.
	 	Amount”

	October 27, 2007
	 	 	1	 	 	 	20	%
	April 27, 2008
	 	 	2	 	 	 	20	%
	October 27, 2008
	 	 	3	 	 	 	20	%
	April 27, 2009
	 	 	4	 	 	 	20	%
	October 27, 2009
	 	 	5	 	 	 	20	%

          (c) The Borrower shall repay in Pesos to the Administrative Agent, for the
ratable account of the Tranche C Banks, the aggregate principal amount of the
Tranche C Loans outstanding at the end of the Availability Period (the “Tranche C Final
Principal Amount”) on the following dates and in the percentages indicated;
provided that the final principal installment shall be in an amount
equal to the principal amount of Tranche Loans outstanding on such date on
which the final principal installment is due:

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Percentage
	 	 	 	 	 	 	of “Tranche
	 	 	 	 	 	 	C Final
	 	 	Installment	 	Principal
	Due Date
	 	No.
	 	Amount”

	October 27, 2007
	 	 	1	 	 	 	20	%
	April 27, 2008
	 	 	2	 	 	 	20	%
	October 27, 2008
	 	 	3	 	 	 	20	%
	April 27, 2009
	 	 	4	 	 	 	20	%
	October 27, 2009
	 	 	5	 	 	 	20	%

          SECTION 2.06. Interest. (a) Scheduled Interest. The
Borrower shall pay interest on the unpaid principal amount of each Tranche A
Loan, Tranche B Loan and Tranche C Loan, as the case may be, owing to each
Lender from the date of such Tranche A Loan, or

19

 

Tranche B Loan or Tranche C
Loan, as the case may be, until such principal amount shall be paid in full, at
the following rates per annum:

     (i) Tranche A Loans. Each Tranche A Loan shall bear interest
for each day during each Interest Period with respect thereto at a rate
per annum equal at all times during such Interest Period for such Tranche
A Loan to the sum of (x) the LIBO Rate determined for such Interest
Period plus (y) the Applicable Margin, computed on the basis of a 360-day
year for actual days elapsed, payable in arrears on the last day of such
Interest Period and, if such Interest Period has a duration of more than
three months, on each day that occurs during such Interest Period every
three months from the first day of such Interest Period and on the date
such Tranche A Loan shall be paid in full.

     (ii) Tranche B Loans. Each Tranche B Loan shall bear
interest for each day during each Interest Period with respect thereto at
a rate per annum equal at all times during such Interest Period for such
Tranche B Loan to the sum of (x) the Fixed Rate plus (y) the Applicable
Margin computed on the basis of a 360-day year for actual days elapsed,
payable in arrears on the last day of such Interest Period.

     (iii) Tranche C Loans. Each Tranche C Loan shall bear
interest for each day during each Interest Period with respect thereto at
a rate per annum equal at all times during such Interest Period for such
Tranche C Loan to the sum of (x) the Floating Rate plus (y) the
Applicable Margin computed on the basis of a 360-day year for actual days
elapsed, payable in arrears on the last day of such Interest Period.

          (b) LIBO Rate and TIIE Rate Loans. The Borrower hereby agrees that
interest rates for the Tranche A Loans and Tranche C Loans shall vary based on
changes in the LIBO Rate or the TIIE Rate, as the case may be, in the manner
described herein and consents to such adjustments, with such notices as are
required in accordance herewith.

          (c) Default Interest. Upon the occurrence and during the
continuance of any Event of Default, the Borrower shall pay interest
(“Default Interest”) on the outstanding principal amount owing to each
Lender (to the extent permitted under applicable law), payable in arrears on
the dates referred to in clause (a)(i), (a)(ii) or (a)(iii) above and on
demand, at a rate per annum equal at all times (i) in the case of Tranche A
Loans, to 2% per annum above the rate per annum required to be paid on such
Loan pursuant to clause (a)(i) above, (ii) in the case of the Tranche B Loans,
to a rate equal to twice the TIIE Rate in effect at such time, above the rate
per annum required to be paid on such Loan pursuant to clause (a)(ii) above and
(iii) in the case of the Tranche C Loans, to a rate equal to twice the TIIE
Rate in effect at such time, above the rate per annum required to be paid on
such Loan pursuant to clause (a)(iii) above.

          SECTION 2.07. Interest Rate Determination. With respect to the
Tranche A Loans, if the Required Lenders determine that the LIBO Rate for any
Interest Period for any Tranche A Loan will not adequately reflect the cost to
such Required Lenders of making, funding or maintaining their respective
Tranche A Loans for such Interest Period, such Required Lenders shall forthwith
so notify the Administrative Agent. During the 15 days next succeeding the
giving of such notice, the Borrower and the Administrative Agent shall
negotiate in good faith in order to arrive at a mutually satisfactory interest
rate which shall be applicable during

20

 

such Interest Period to such Loan. If
within such 15-day period, the Borrower and the Administrative Agent agree in
writing upon an alternative interest rate, such rate shall be effective from
the commencement of such Interest Period. If the Borrower and the
Administrative Agent fail to agree upon such an alternative interest rate
within such 15-day period, the interest rate during such Interest Period
applicable to such Tranche A Loan effective from the commencement of such
Interest Period shall be such rate as the Administrative Agent shall determine
(in a certificate delivered by the Administrative Agent to the Borrower setting
forth the basis of the computation of such amount, which certificate shall be
conclusive and binding for all purposes, absent manifest error) to be necessary
to compensate the Lender for its cost of obtaining (in good faith and using
commercially reasonable efforts to minimize the interest cost to the Borrower)
as of the commencement of such Interest Period funds for such Interest Period
in an amount equal to the principal amount of such Tranche A Loan plus
the Applicable Margin. The Administrative Agent shall notify the Borrower of
each such determination as promptly as practicable.

          SECTION 2.08. Prepayments. (a) Optional. The Borrower
may, upon at least five Business Days’ notice to the Administrative Agent
stating the proposed date and aggregate principal amount of the prepayment, and
if such notice is given, the Borrower shall, prepay the outstanding principal
amount of the Tranche A Loans, the Tranche B Loans or the Tranche C Loans, as
the case may be, in whole or in part, together with accrued interest to the
date of such prepayment on the principal amount prepaid; provided,
however, that (x) each partial prepayment of the Tranche A Loans shall
be in an aggregate principal amount of U.S. $20,000,000, or an integral
multiple of U.S. $5,000,000 in excess thereof, or in the case of the Tranche B
Loans or the Tranche C Loans, an aggregate principal amount of Ps$200,000,000
or an integral multiple of Ps$50,000,000 in excess thereof and (y) the Borrower
shall be obligated to reimburse the Lenders in respect thereof pursuant to
Section 8.04(c). Each principal portion of such prepayment shall be applied to
the principal installments due hereunder in inverse order of maturity;
provided further that
in the case of the prepayment of any Tranche B Loan, the Borrower shall
pay on the date of such prepayment all break funding costs previously evidenced
to the Borrower in reasonable detail by the relevant Tranche B Bank; provided
that, the basis for the calculation of any amounts that any Tranche B Bank is
entitled to receive pursuant to this proviso shall be the present value,
calculated as of the scheduled prepayment date, of the future payments on such
Tranche B Loan through maturity of such Loan, at a discount rate (the
“Discount Rate”) equal to the rate determined by the Administrative
Agent in consultation with the Tranche B Banks pursuant to the derivatives
transactions evaluation model in the market, which takes into account financial
market practice and the standard rules applied by Banco de Mexico, as such
methodology is described on Schedule 2.08(a); provided, however:

     (i) in the event that the Borrower does not agree with the amount
that such Tranche B Bank is entitled to receive as determined pursuant to
the methodology referred to above, the Borrower shall within two Business
Days of notice of such amount, send a notice to such Tranche B Bank
indicating the specific reasons for its disagreement. Such Tranche B
Bank shall then select a Substitute Evaluation Agent to calculate the
amount that such Tranche B Bank is entitled to receive using the same
methodology previously described to the Borrower by such Tranche B Bank.
A certificate of the amount of payment determined by the Substitute
Evaluation Agent shall be conclusive and binding for all purposes, absent
manifest error; and

21

 

     (ii) if the Borrower objects to the payment amount determined by
such Tranche B Bank and by the Substitute Evaluation Agent or fails to
pay such amount on the prepayment date, the Borrower shall not have the
right to prepay such Tranche B Loan.

          (b) Mandatory. The Borrower shall, upon the occurrence of the
Borrower ceasing to be Controlled by the Parent, prepay the aggregate principal
amount of the Loans outstanding at such time.

          SECTION 2.09. Increased Costs. (a) If, due to either (i) the
introduction of or any change in or in the interpretation of any law or
regulation or (ii) the compliance with any guideline or request from any
central bank or other governmental authority (whether or not having the force
of law) after the date of this Agreement, there shall be any increase in the
cost to any of the Lenders of agreeing to make or making, funding or
maintaining its Tranche A Loans, Tranche B Loans or Tranche C Loans, as the
case may be, (excluding for purposes of this Section 2.09 any such increased
costs resulting from (x) Taxes or Other Taxes (as to which Section 2.12 shall
govern), and (y) changes in the basis of taxation of overall net income or
overall gross income by the United States or by the foreign jurisdiction or
state under the laws of which such Lender is organized or has its Applicable
Lending Office or any political subdivision thereof), then the Borrower shall
from time to time, upon demand by any of the Lenders, pay to such Lender
additional amounts sufficient to compensate such Lender for such increased
cost; provided, however, that before making any such demand, each
Lender agrees to use reasonable efforts (consistent with its internal policy
and legal and regulatory restrictions) to designate a different Applicable
Lending Office if the making of such a designation would avoid the need for, or
reduce the amount of, such increased cost and would not, in the reasonable
judgment of such Lender, be otherwise disadvantageous to such Lender. A
certificate as to the amount of such increased cost, submitted in good
faith to the Borrower by such Lender, shall be conclusive and binding for all
purposes, absent manifest error.

          (b) If any of the Lenders determines in good faith that compliance with
any law or regulation or any guideline or request from any central bank or
other governmental authority enacted after the date of this Agreement (whether
or not having the force of law) affects or would affect the amount of capital
required or expected to be maintained by such Lender or any corporation
controlling such Lender and that the amount of such capital is increased by or
based upon the existence of such Lender’s commitment to lend hereunder and
other commitments of this type, then, upon demand by such Lender, the Borrower
shall pay to such Lender, from time to time as specified by such Lender,
additional amounts sufficient to compensate such Lender or such corporation in
the light of such circumstances, to the extent that such Lender reasonably
determines such increase in capital to be allocable to the existence of such
Lender’s commitment to lend hereunder. A certificate as to such amounts
submitted to the Borrower by such Lender in good faith, shall be conclusive and
binding for all purposes, absent manifest error.

          SECTION 2.10. Illegality. Notwithstanding any other provision of
this Agreement, if any of the Lenders determines in good faith that the
introduction of or any change in or in the interpretation of any law or
regulation makes it unlawful, or any central bank or other governmental
authority asserts that it is unlawful, for any of the Lenders or its Applicable
Lending Office to perform its obligations hereunder to make Tranche A Loans,
Tranche B Loans

22

 

or Tranche C Loans, as the case may be, or to fund or maintain
any Loans to be made by it hereunder, such Lender shall forthwith give notice
thereof to the Borrower and the Administrative Agent, whereupon (a) until such
Lender notifies the Borrower and the Administrative Agent that the
circumstances giving rise to such suspension no longer exist, the obligation of
such Lender to make Tranche A Loans, Tranche B Loans or Tranche C Loans, as the
case may be, shall be suspended and (b) if such Lender shall so request in such
notice, the Borrower shall within 15 (fifteen) days of such notice, unless such
law, regulation, central bank or governmental authority requires that
prepayment shall occur immediately, prepay in full the then outstanding
principal amount of such Tranche A Loan, Tranche B Loan or Tranche C Loan, as
the case may be, together with accrued interest thereon. If it is lawful for
such Lender to maintain any such Loan through the last day of the Interest
Period then applicable to such Loan, such prepayment shall be due on such last
day.

          SECTION 2.11. Payments and Computations. (a) The Borrower shall
make each payment hereunder and under the Notes, irrespective of any right of
counterclaim or set-off, not later than 11:00 A.M. (New York City time) in the
case of Tranche A Loans, and 11:00 A.M. (Mexico City time) in the case of
either the Tranche B Loans or Tranche C Loans, on the day when due (i) in the
case of the Tranche A Loans, in U.S. Dollars and in the case of either the
Tranche B Loans or Tranche C Loans, in Pesos, in all cases to the
Administrative Agent, for the account of each of the Lenders, at the
Administrative Agent’s Account in same day funds, with payments being received
by the Administrative Agent after such time being deemed to have been received
on the next succeeding Business Day. The Administrative Agent will promptly
thereafter cause like funds to be distributed (i) if such payment by the
Borrower is in respect of principal, interest, commitment fees or any other
Obligation then payable hereunder and under the Notes to more than one Lender,
to such Lenders for the account of their respective Applicable Lending Offices
ratably in accordance with the amounts of such respective
Obligations then payable to such Lenders and (ii) if such payment by the
Borrower is in respect of any Obligation then payable hereunder to one Lender,
to such Lender for the account of its Applicable Lending Office, in each case
to be applied in accordance with the terms of this Agreement. Upon its
acceptance of an Assignment and Acceptance and recording of the information
contained therein in the Register pursuant to Section 8.07(d), from and after
the effective date of such Assignment and Acceptance, the Administrative Agent
shall make all payments hereunder and under the Notes in respect of the
interest assigned thereby to such Lender assignee thereunder, and the parties
to such Assignment and Acceptance shall make all appropriate adjustments in
such payments for periods prior to such effective date directly between
themselves.

          (b) The Borrower hereby authorizes each Lender and each of its Affiliates,
if and to the extent payment owed to such Lender is not made when due hereunder
or, in the case of a Lender, under the Tranche A Note, Tranche B Note or
Tranche C Note, as the case may be, held by such Lender, to charge from time to
time, to the fullest extent permitted by law, against any or all of the
Borrower’s accounts with such Lender or such Affiliate any amount so due.

          (c) All computations of interest based on the LIBO Rate, the TIIE Rate,
the Fixed Rate and of facility fees shall be made by the Administrative Agent
on the basis of a year of 360 days, in each case for the actual number of days
(including the first day but excluding the last day) occurring in the period
for which such interest or facility fees are payable. The

23

 

Administrative Agent
shall determine each interest rate applicable to the Loans hereunder. Each
determination by the Administrative Agent of an interest rate hereunder shall
be conclusive and binding for all purposes, absent manifest error.

          (d) Whenever any payment hereunder or under the Notes shall be stated to
be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or facility fee, as the case
may be; provided, however, that, if such extension would cause
payment of interest on or principal of any Loan to be made in the next
following calendar month, such payment shall be made on the next preceding
Business Day.

          (e) Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to any Lender hereunder
that the Borrower will not make such payment in full, the Administrative Agent
may assume that the Borrower has made such payment in full to the
Administrative Agent on such date and the Administrative Agent may, in reliance
upon such assumption, cause to be distributed to each such Lender on such due
date an amount equal to the amount then due such Lender. If and to the extent
the Borrower shall not have so made such payment in full to the Administrative
Agent, each such Lender shall repay to the Administrative Agent forthwith on
demand such amount distributed to such Lender together with interest thereon,
for each day from the date such amount is distributed to such Lender until the
date such Lender repays such amount to the Administrative Agent, at the Federal
Funds Rate in the case of Tranche A Loans, and the TIIE Rate in the case of
Tranche B Loans and Tranche C Loans.

          SECTION 2.12. Taxes. (a) Any and all payments by the Borrower
under the Loan Documents or any other documents to be delivered thereunder
shall be made, in
accordance with Section 2.12 or the applicable provisions of such other
documents, free and clear of and without deduction for any and all present or
future taxes (including, without limitation, value-added taxes and withholding
taxes), levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding, in the case of the
Administrative Agent or any of the Lenders, taxes imposed on its overall net
income, and franchise taxes imposed on it in lieu of net income taxes, by the
jurisdiction under the laws of which the Administrative Agent or any of the
Lenders is organized or any political subdivision thereof and taxes imposed on
its overall net income, and franchise taxes imposed on it in lieu of net income
taxes, by the jurisdiction of the Administrative Agent or any of the Lenders’
Applicable Lending Office or any political subdivision thereof (all such
non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities in respect of payments under the Loan Documents being hereinafter
referred to as “Taxes”). If the Borrower shall be required by law to
deduct any Taxes from or in respect of any sum payable under any of the Loan
Documents, or any other documents to be delivered thereunder to the
Administrative Agent or any of the Lenders, (i) the sum payable shall be
increased as may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
2.12) the Administrative Agent or any Lender receives an amount equal to the
sum it would have received had no such deductions been made (provided,
however, that no such additional amounts shall be payable in respect of
any taxes imposed by reason of the Administrative Agent or any Lender’s failure
to comply with Section 2.12(d), in excess of the additional amounts that would
have been payable had the Administrative Agent or any Lender

24

 

complied with such
Section), (ii) the Borrower shall make such deductions and (iii) the Borrower
shall pay the full amount deducted to the relevant taxation authority or other
authority in accordance with applicable law.

          (b) In addition, the Borrower shall pay any present 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 the Notes or any
other documents to be delivered hereunder or from the execution, delivery or
registration of, performing under, or otherwise with respect to, this Agreement
or the Notes or any other documents to be delivered hereunder (hereinafter
referred to as “Other Taxes”).

          (c) The Borrower shall indemnify the Administrative Agent or any of the
Lenders for and hold them harmless against the full amount of Taxes or Other
Taxes (including, without limitation, taxes of any kind imposed or asserted by
any jurisdiction on amounts payable under this Section 2.12) imposed on or paid
by the Administrative Agent or any of the Lenders and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto.
This indemnification shall be made within 30 days from the date the
Administrative Agent or any Lender (as the case may be) makes written demand
therefor.

          (d) Each Lender (that is not a Mexican Financial Institution) hereby
represents to the Borrower as of the date hereof that it is a foreign financial
institution or export credit agency registered with the Ministry of Finance for
purposes of Article 195-I or 196 of the Mexican Income Tax Law (Ley del
Impuesto Sobre la Renta) and that it is a resident (or its principal office is
a resident) in a country that has entered into a treaty for the avoidance of
double taxation with Mexico. The Borrower shall not be obligated to pay the
Administrative Agent or any Lender (that is not a Mexican Financial
Institution) any amounts described in Section 2.12(a) in
respect of Taxes that would not have been imposed but for the failure of
the Administrative Agent or such Lender (that is not a Mexican Financial
Institution) (i) prior to the last day of the first Interest Period (a) to be
registered (or, with respect to any bank, export credit agency or other
financial institution which becomes a Lender pursuant to Section 8.07, on the
date such bank or other financial institution becomes a Lender) with the
Ministry of Finance as a foreign financial institution or export credit agency
for purposes of Article 195-I or 196 of the Mexican Income Tax Law (Ley del
Impuesto Sobre la Renta) or any successor provisions and the regulations
thereunder and (b) to be a resident (or to have the principal offices of such
Lender be a resident, if such Lender lends through a branch or agency) for tax
purposes of a jurisdiction with which Mexico has in effect a treaty for the
avoidance of double taxation, (ii) to use its reasonable efforts (consistent
with legal and regulatory restrictions) to maintain its registration with the
Ministry of Finance as a foreign financial institution or export credit agency
for purposes of Article 195-I or 196 of the Mexican Income Tax Law (Ley del
Impuesto Sobre la Renta) or any successor provisions and the regulations
thereunder, if the making of such filing would not, in the reasonable judgment
of such Lender, be materially disadvantageous to such Lender or (iii) following
a reasonable request of the Borrower upon 60 days’ written notice (unless a
lesser period is reasonable under the circumstances), to complete and file with
the appropriate Governmental Authority, such forms, certificates or documents
(collectively, “Forms”) prescribed by law, rule or regulation enacted or issued
by Mexico, or by a double taxation treaty to which Mexico is a party and which
is in effect, that are necessary to avoid or reduce such Taxes pursuant to
provisions of any law, rule or regulation enacted or issued by

25

 

Mexico, or a
double taxation treaty to which Mexico is a party and which is in effect
(provided that (i) such Lender shall be under no obligation to provide any
information to the Borrower which such Lender deems, in such Lender’s judgment,
to be confidential, (ii) such Lender or the Administrative Agent is legally
entitled to complete, execute and deliver such Forms, (iii) the completion,
execution and delivery of such Forms will not result, in the good faith,
reasonable determination of such Lender or the Administrative Agent, made in
writing to the Borrower, in the imposition on such Lender or the Administrative
Agent of (1) any additional material legal or regulatory burden or (2) any
additional material out-of-pocket costs or (3) any other material adverse
consequences). Promptly upon written request by the Borrower, each Lender
(that is not a Mexican Financial Institution) shall provide to the Borrower, to
the extent it is so registered, evidence of its tax registration with the
Ministry of Finance, in effect at the time of such request, in connection with
Article 195-I or 196 of the Mexican Income Tax Law (Ley del Impuesto Sobre la
Renta) and the regulations thereunder. For purposes of Section 2.12(d) (i)
(b), the parties hereto hereby agree that if the Mexican Ministry of Finance or
any other competent Mexican Governmental Authority determines, by means of a
written resolution to such effect, or if the Borrower has reasonable grounds to
believe, based on an opinion of counsel of recognized standing delivered to the
Administrative Agent, that the Mexican withholding tax regime applicable to the
branches or agencies of a Lender (that is not a Mexican Financial Institution)
is different from the tax regime that would be applicable to the principal
office of a Lender (that is not a Mexican Financial Institution), then the
Borrower shall be entitled to request the relevant Lender, and the relevant
Lender shall use its reasonable efforts to change its Applicable Lending Office
to a jurisdiction with which Mexico shall have entered into a treaty for the
avoidance of double taxation, and if the Lender (that is not a Mexican
Financial Institution) shall fail to do so within a sixty (60) day period, the
Borrower would be entitled to (x) prepay the Loans of such Lender in accordance
with the prepayment terms contemplated herein (without the relevant
Lender being obligated to observe the sharing provisions referred to in
Section 2.09) or (y) cause a Lender or third party to purchase the relevant
Loan, at par plus accrued and unpaid interest to such date plus any applicable
funding breakage costs set forth in Section 2.02.

          (e) Within 30 days after the date of any payment of Taxes, the Borrower
shall furnish to the Administrative Agent for its own account or for the
account of such Lender, as the case may be, at its address referred to in
Section 8.02, the original or a certified copy of a receipt evidencing such
payment. In the case of any payment hereunder or under the Notes or any other
documents to be delivered hereunder by or on behalf of the Borrower, if the
Borrower determines that no Taxes or Other Taxes are payable in respect
thereof, the Borrower shall, at the request of the Administrative Agent or any
of the Lenders, furnish, or cause the payor to furnish, to the Administrative
Agent or such Lender, as the case may be, an opinion of counsel acceptable to
the Administrative Agent or such Lender stating that such payment is exempt
from Taxes or Other Taxes.

          (f) The obligations of the Borrower contained in this Section 2.12 shall
survive the termination of this Agreement and the payment of the Notes and all
other amounts payable under the Loan Documents.

          (g) In the event that an additional payment is made under this Section
2.12 (a), (b) or (c) for the account of any Lender and such Lender, in its sole
discretion, determines that it has finally and irrevocably received or been
granted a credit against or release or remission for, or

26

 

repayment of, any tax
paid or payable by it in respect of or calculated with reference to the
deduction or withholding giving rise to such payment, such Lender shall, to the
extent that it determines that it can do so without prejudice to the retention
of the amount of such credit, relief, remission or repayment, pay to the
Borrower such amount as such Lender shall, in its sole discretion, have
determined to be attributable to such deduction or withholding and which will
leave such Lender (after such payment) in no worse position than it would have
been in if the Borrower had not been required to make such deduction or
withholding, provided that the Borrower, upon the request of such Lender
agrees to repay the amount paid over to it (plus any penalties, interest or
other charges imposed by the relevant Governmental Authority) to the such
Lender in the event such Lender is required to repay such refund to such
Governmental Authority. Nothing herein contained shall interfere with the
right of a Lender to claim any tax credit or to disclose any information
relating to its tax affairs or any computations in respect thereof or require
any Lender to do anything that would prejudice its ability to benefit from any
other credits, reliefs, remissions or repayments to which it may be entitled.

          SECTION 2.13. Use of Proceeds. The proceeds of the Loans shall be
available (and the Borrower agrees that it shall use such proceeds) for the
Borrower’s general corporate purposes, including spectrum acquisition and
capital expenditures.

          SECTION 2.14. Notes. (a) The Borrower will execute and deliver to
the Administrative Agent for the account of each Tranche A Bank one or more
duly executed promissory note(s) (pagaré) of the Borrower guaranteed (por aval)
by the Subsidiary Guarantors, dated the relevant Funding Date evidencing such
Tranche A Loan made on such Funding Date by such Tranche A Bank, substantially
in the form of Exhibit A (each, a
“Tranche A Note” and, collectively, the “Tranche A Notes”),
payable to the order of such Tranche A Bank and in a principal amount equal to
such Tranche A Loan made on such Funding Date.

          (b) The Borrower will execute and deliver to the Administrative Agent for
the account of each Tranche B Bank one or more duly executed promissory note(s)
(pagaré) of the Borrower guaranteed (por aval) by the Subsidiary Guarantors,
dated the relevant Funding Date evidencing such Tranche B Loan made on such
Funding Date by such Tranche B Bank, substantially in the form of Exhibit B
(each, a “Tranche B Note” and, collectively, the “Tranche B
Notes”, payable to the order of such Tranche B Bank and in a principal
amount equal to such Tranche B Loan made on such Funding Date.

          (c) The Borrower will execute and deliver to the Administrative Agent for
the account of each Tranche C Bank one or more duly executed promissory note(s)
(pagaré) of the Borrower guaranteed (por aval) by the Subsidiary Guarantors,
dated the relevant Funding Date evidencing such Tranche C Loan made on such
Funding Date by such Tranche C Bank, substantially in the form of Exhibit C
(each, a “Tranche C Note” and, collectively, the “Tranche C
Notes” and, together with the Tranche A Notes and the Tranche B Notes, the
“Notes”), payable to the order of such Tranche C Bank and in a principal
amount equal to such Tranche C Loan made on such Funding Date.

27

 

          (d) Promptly upon (i) substitution of the LIBO Rate in accordance with the
provisions of Section 2.07 hereof and/or (ii) the election of the Borrower to
change the duration of an Interest Period for a Tranche A Loan in accordance
with the terms set forth in this Agreement, the Borrower and each Subsidiary
Guarantor (por aval) shall execute and deliver to the Administrative Agent for
the account of each Tranche A Bank, at the Administrative Agent’s request, in
exchange for the Notes evidencing the relevant Loans of such Tranche A Bank
theretofore delivered to such Tranche A Bank, a new Tranche A Note in
substantially the form of Exhibit A payable to such Tranche A Bank, dated the
date of such Tranche A Note being exchanged, in a principal amount equal to the
principal amount then outstanding of such Tranche A Note and otherwise duly
completed.

          SECTION
2.15. Sharing of Payments, Etc. If any Lender shall obtain
at any time any payment (whether voluntary, involuntary, through the exercise
of any right of set-off, or otherwise, other than as a result of an assignment
pursuant to Section 8.07) (a) on account of Obligations due and payable to such
Lender hereunder and under the Notes at such time in excess of its ratable
share (according to the proportion of (i) the amount of such Obligations due
and payable to such Lender at such time to (ii) the aggregate amount of the
Obligations due and payable to all Lenders hereunder and under the Notes at
such time) of payments on account of the Obligations due and payable to all
Lenders hereunder and under the Notes at such time obtained by all of the
Lenders at such time or (b) on account of Obligations owing (but not due and
payable) to such Lender hereunder and under the Notes at such time in excess of
its ratable share (according to the proportion of (i) the amount of such
Obligations owing to such Lender at such time to (ii) the aggregate amount of
the Obligations owing (but not due and payable) to all Lenders hereunder and
under the Notes at such time) of payments on account of the Obligations owing
(but not due and payable) to all Lenders hereunder and under the Notes at such
time obtained by all of the Lenders at such time, such Lender shall forthwith
purchase from the other Lenders such interests or participating interests
in the Obligations due and payable or owing to them, as the case may be, as
shall be necessary to cause such purchasing Lender to share the excess payment
ratably with each of them; provided, however, that if all or any
portion of such excess payment is thereafter recovered from such purchasing
Lender, such purchase from each other Lender shall be rescinded and such other
Lender shall repay to the purchasing Lender the purchase price to the extent of
such Lender’s ratable share (according to the proportion of (i) the purchase
price paid to such Lender to (ii) the aggregate purchase price paid to all
Lenders) of such recovery together with an amount equal to such Lender’s
ratable share (according to the proportion of (i) the amount of such other
Lender’s required repayment to (ii) the total amount so recovered from the
purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered. For the
purposes of this Section 2.15, the respective ratable shares shall be
determined by the Administrative Agent by converting both the Tranche B Loans
and the Tranche C Loans into Dollars based on the USD Equivalent thereof as of
the Closing Date. The Borrower agrees that any Lender so purchasing an
interest or participating interest from another Lender pursuant to this Section
2.15 may, to the fullest extent permitted by law, exercise all its rights of
payment (including the right of set-off) with respect to such interest or
participating interest, as the case may be, as fully as if such Lender were the
direct creditor of the Borrower in the amount of such interest or participating
interest, as the case may be.

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ARTICLE III

CONDITIONS TO EFFECTIVENESS AND LENDING

          SECTION 3.01. Conditions Precedent to Effectiveness of Section
3.01. Section 3.01 of this Agreement shall become effective, on and as of
the first date (the “Closing Date”) on which the following conditions
precedent have been satisfied or waived by the Administrative Agent and each of
the Lenders; provided that such date occurs on or before October 29,
2004:

     (a) There shall have occurred no circumstance, event or occurrence
since December 31, 2003 that would be reasonably likely to have a
Material Adverse Effect.

     (b) There shall have occurred no material adverse change or
disruption in the financial, banking, loan syndication or capital markets
generally, or in the market for loans to or debt securities issued by
companies in Mexico since June 24, 2004 which change or disruption is
deemed material, in the reasonable judgment of the Administrative Agent
or any of the Lenders, in connection with the syndication of the
Facility.

     (c) All governmental and third party consents and approvals
necessary in connection with the transactions contemplated hereby shall
have been obtained (without the imposition of any conditions that are not
acceptable to any of the Lenders) and shall remain in effect, and no law
or regulation shall be applicable, in the reasonable judgment of any of
the Lenders, that restrains, prevents or imposes materially adverse
conditions upon the transactions contemplated hereby.

     (d) There shall exist no action, suit, investigation, litigation or
proceeding affecting any Loan Party or any of their Subsidiaries pending
or threatened before any court, governmental agency or arbitrator that
(i) could be reasonably likely to have a Material Adverse Effect other
than the matters described on Schedule 3.01(d) hereto (the “Disclosed
Litigation”) or (ii) purports to affect the legality, validity or
enforceability of any Loan Documents or the consummation of the
transactions contemplated hereby or thereby, and there shall have been no
adverse change in the status, or financial effect on any Loan Party or
any of their Subsidiaries, of the Disclosed Litigation from that
described on Schedule 3.01(d) hereto.

     (e) The Borrower shall have paid all accrued and documented fees and
out-of-pocket expenses of the Administrative Agent and the Bookrunners
(including the fees and expenses of counsel to the Administrative Agent
and each of the Bookrunners) as of the Closing Date, as contemplated in
the commitment letter among the Borrower, the Administrative Agent, the
Bookrunners and the Parent, dated June 24, 2004.

     (f) On the Closing Date, the following statements shall be true and
the Administrative Agent shall have received a certificate signed by a
duly authorized officer of the Borrower, dated the Closing Date, stating
that:

     (i) the representations and warranties contained in Section
4.01 and Section 6 of the Subsidiary Guaranty are true and correct
as of such date, and all

29

 

related Schedules have been delivered and
such schedules are accurate and complete in all respects as of
such date; and

     (ii) no Default or Event of Default has occurred and is
continuing as of the Closing Date or would occur upon giving effect
to the making of any Loans.

     (g) The Administrative Agent shall have received on or before the
Closing Date the following, each dated such day, in form and substance
satisfactory to the Administrative Agent and in sufficient copies for
each Lender:

     (i) A guaranty in substantially the form of Exhibit F hereto
(together with each other guaranty and guaranty supplement
delivered pursuant to Section 5.01(m), in each case as amended, the
“Subsidiary Guaranty”), duly executed by each Subsidiary
Guarantor.

     (ii) Certified audited Consolidated Balance Sheet of the
Borrower as of December 31, 2003 and the related Consolidated
Statements of Income and Cash Flows of the Borrower for the fiscal
year then ended, and the unaudited quarterly Consolidated Balance
Sheets of the Borrower each as of March 31, 2004 and June 30, 2004
and the related Consolidated Statements of Income and Cash Flows of
the Borrower for the fiscal quarters then ended (collectively, the
“Borrower Financial Statements”); provided, however, that
the Lenders acknowledge that the Parent and the Borrower have
disclosed to them that they will amend and restate the Borrower
Financial Statements to reflect changes and amounts not materially
different than as described in the letter from the Parent to
the U.S. Securities and Exchange Commission (the “SEC”)
dated October 15, 2004, a copy of which is attached hereto as
Exhibit H (the “Accounting Memo”), and that the Borrower
will deliver to the Administrative Agent and each of the Lenders
copies of such amended and restated financial statements promptly
upon the final preparation thereof.

     (iii) The Parent’s Annual Report for the year ended December
31, 2003 on Form 10-K, and Quarterly Reports on Form 10-Q for each
of the periods ended March 31, 2004 and June 30, 2004, filed with
SEC (collectively, the “Parent Financial Statements”);
provided, however, that the Lenders acknowledge that the
Parent has disclosed to them that it will amend and restate the
Parent Financial Statements to reflect changes and amounts not
materially different than as described in the Accounting Memo, and
that the Parent will deliver to each of the Lenders, promptly upon
filing with the SEC, copies of such amended and restated Parent
Financial Statements accompanied by, in the case of the amended and
restated financial statements for the year ended December 31, 2003
filed on Form 10-K, an unqualified audit opinion of the Parent’s
auditors, and, in the case of the amended and restated financial
statements for each of the periods ended March 31, 2004 and June
30, 2004 filed on Form 10-Q, an unqualified review report of the
Parent’s auditors.

30

 

     (iv) Copies of the (A) resolutions of the Board of Directors
and/or Shareholders of each Loan Party approving each Loan Document
to which it is or is to be a party, (B) the current by-laws
(estatutos sociales) of each Loan Party as in effect on the date
the resolutions specified in clause (A) were adopted, (C) a power
of attorney authorizing the relevant officers of each Loan Party to
execute each Loan Document to which it is or is to be a party and
any other document pertaining to the same and (D) all documents
evidencing other necessary corporate action and governmental
approvals, if any, with respect to each Loan Document to which it
is or is to be a party and a certificate of the Secretary or an
Assistant Secretary of each Loan Party certifying the absence of
any change or amendment to the by-laws (estatutos sociales) of each
Loan Party since the date the resolutions specified in clause (A)
were adopted.

     (v) A certificate of the Secretary or an Assistant Secretary
of each Loan Party certifying the names and true signatures of the
officers of such Loan Party authorized to sign each Loan Document
to which it is a party or is to be a party and the other documents
to be delivered hereunder.

     (vi) A letter from the Process Agent indicating its acceptance
of the appointment by each Loan Party pursuant to Section 8.11, and
a Mexican law notarized power of attorney of such Loan Party
appointing such Process Agent as the attorney-in-fact.

     (vii) A favorable opinion of Williams Mullen, New York counsel
for the Loan Parties, satisfactory in form and substance to the
Administrative Agent and each of the Lenders.

     (viii) A favorable opinion of Gallástegui y Lozano, S.C.,
Mexican counsel for the Loan Parties, satisfactory in form and
substance to the Administrative Agent and each of the Lenders.

     (ix) A favorable opinion of Shearman & Sterling LLP, New York
counsel for the Administrative Agent and each of the Lenders,
satisfactory in form and substance to the Administrative Agent and
each of the Lenders.

     (x) A favorable opinion of Ritch Heather y Mueller, S.C.,
Mexican counsel for the Administrative Agent and each of the
Lenders, satisfactory in form and substance to the Administrative
Agent and each of the Lenders.

          SECTION 3.02. Conditions Precedent to Each Borrowing. The
obligation of the Lenders to make Loans on the occasion of each Borrowing shall
be subject to the conditions precedent that the Closing Date shall have
occurred and on the date of such Borrowing (each, a “Funding Date”) (a)
the following statements shall be true (and each of the giving of a Notice of
Borrowing and the acceptance by the Borrower of the proceeds of such Borrowing
shall constitute a representation and warranty by the Borrower that, on the
date of such Notice of Borrowing and on the date of such Borrowing, such
statements are true):

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     (i) the representations and warranties made by the Borrower
hereunder as set forth in Section 4.02 and by each Loan Party in or
pursuant to each Loan Document to which it is or is to be a party and
each of the representations and warranties contained in any certificate
furnished at any time by or on behalf of any Loan Party pursuant to any
Loan Document are true and correct on and as of such date, before and
after giving effect to such Borrowing and to the application of the
proceeds therefrom, as though made on and as of such date (except for
those representations and warranties that are expressly made only as of
an earlier date), and

     (ii) no event has occurred and is continuing, or would result from
such Borrowing or from the application of the proceeds therefrom, that
constitutes a Default.

          (b) The Administrative Agent shall have received a Notice of Borrowing as
required by Section 2.02.

          (c) The Administrative Agent shall have received a Note or Notes to the
order of each Lender reflecting the Loan or Loans made by such Lender with
respect to such Funding Date.

          (d) The Administrative Agent shall have received such other approvals,
opinions or documents as the Administrative Agent or any of the Lenders may
reasonably request.

          (e) The Administrative Agent and each Lender shall have received a
certificate of the Chief Financial Officer of the Parent (i) affirming that the
representations and warranties of the Borrower in the Credit Agreement are true
and correct as of the date of such certificate, without any qualifiers as to
the matters covered by the Accounting Memo, and (ii) attaching as an exhibit
thereto the amended and restated Borrower’s Financial Statements and Parent’s
Financial Statements (which, in the case of the Parent financial statements for
the year ended
December 31, 2003 shall be accompanied by an unqualified audit opinion of
the Parent’s auditors, and, in the case of Parent’s financial statements for
each of the periods ended March 31, 2004 and June 30, 2004, an unqualified
review report of the Parent’s auditors), and the Parent’s Quarterly Report on
Form 10-Q for the period ending September 30, 2004, which shall include an
auditor’s review letter as to no awareness of any necessary material
modifications to the interim financial statements filed with the SEC as part of
such Quarterly Report.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

          SECTION 4.01. Representations and Warranties of the Borrower at the
Closing Date. The Borrower represents and warrants on the Closing Date as
follows:

     (a) Each Loan Party is a limited liability corporation with variable
capital (sociedad anónima de capital variable) duly existing and legally
incorporated under the laws of Mexico and has all requisite corporate
power and authority (including, without limitation, all governmental
licenses, permits and other approvals) to own, lease and

32

 

operate its
properties and to carry on its business as now conducted and as proposed
to be conducted.

     (b) The execution, delivery and performance by each Loan Party of
each Loan Document to which it is or will be a party and the consummation
of the transactions contemplated thereby, (i) are within each Loan
Party’s corporate powers, have been duly authorized by all necessary
corporate action and do not contravene (A) the by-laws (estatutos
sociales) of such Loan Party or (B) any law, regulation or any material
contractual obligation binding on or affecting such Loan Party
(including, without limitation, any contractual obligation involving
payment obligations in excess of U.S. $10,000,000 or the Peso Equivalent
thereof) with respect to such Loan Party and (ii) do not result in the
imposition of any Lien on any asset of such Loan Party.

     (c) No authorization or approval or other action by, or notice to or
filing with, any governmental authority or regulatory body or any other
third party is required for the due execution, delivery and performance
by any Loan Party of any Loan Document (other than filings that such Loan
Party is required to make, for tax purposes, with the Ministry of
Finance, all of which have been duly made or obtained).

     (d) This Agreement and the Subsidiary Guaranty have been, and each
of the Notes when delivered hereunder will have been, duly executed and
delivered by each Loan Party which is party thereto. This Agreement and
the Subsidiary Guaranty are, and each of the Notes when delivered
hereunder will be, the legal, valid and binding obligation of each Loan
Party enforceable against such Loan Party which is party thereto in
accordance with its terms.

     (e) The Consolidated balance sheet of the Borrower and its
Subsidiaries as at December 31, 2003, and the related Consolidated
statements of income and cash flows of the Borrower and its Subsidiaries
for the fiscal year then ended, accompanied by an
opinion of PricewaterhouseCoopers, independent public accountants,
and the Consolidated balance sheet of the Borrower and its Subsidiaries
as at June 30, 2004, and the related Consolidated statements of income
and cash flows of the Borrower and its Subsidiaries for the six months
then ended, duly certified by the chief financial officer of the
Borrower, copies of which have been furnished to the Lender, are complete
and correct and fairly present, subject, in the case of said balance
sheet as at June 30, 2004, and said statements of income and cash flows
for the six months then ended, to year-end audit adjustments, the
Consolidated financial condition of the Borrower and its Subsidiaries as
at such dates and the Consolidated results of operations of the Borrower
and its Subsidiaries for the periods ended on such dates, all in
accordance with Mexican GAAP; provided, however, that until the initial
Funding Date the foregoing representation is subject to the qualification
that the Borrower has acknowledged the lack of proper reconciliation of
certain of its liability accounts with its books and records, that such
reconciliation is undergoing continuing review, and that such lack of
reconciliation may have resulted in understatements of income in some
fiscal quarters and overstatements of income in other fiscal quarters
going back to the fiscal year ended December 31, 2002, all as described
in the Accounting Memo, which the Borrower and

33

 

its auditors reasonably
believe are not material. Since December 31, 2003, there has been no
Material Adverse Change.

     (f) There is no pending or to the best knowledge of the Borrower or
its Material Subsidiaries, threatened action, suit, investigation,
litigation or proceeding (including, without limitation, any
Environmental Action) affecting any Loan Party or any of its Subsidiaries
before any court, governmental agency or arbitrator that (i) if adversely
determined, would be likely to have a Material Adverse Effect, except as
disclosed in Schedule 3.01(d) or (ii) purports to affect the legality,
validity or enforceability of any Loan Documents, or the consummation of
the transactions contemplated hereby.

     (g) The Borrower is not engaged in the business of extending credit
for the purpose of purchasing or carrying margin stock (within the
meaning of Regulation U issued by the Board of Governors of the U.S.
Federal Reserve System), and no proceeds of the Loans will be used to
purchase or carry any margin stock or to extend credit to others for the
purpose of purchasing or carrying any margin stock.

     (h) Each Loan Party and each of their respective Subsidiaries has
filed, has caused to be filed or has been included in all tax returns
(national, departmental, local, municipal and foreign) required to be
filed and has paid all taxes, assessments, fees, related liabilities and
other charges (including interest and penalties) due with respect to the
years covered by such returns, except where such taxes or liabilities are
being contested in good faith and by proper proceedings.

     (i) Each Loan Party and each of their respective Subsidiaries is in
material compliance with all applicable laws, ordinances, rules,
regulations and requirements of all governmental authorities (including,
without limitation, all governmental licenses, certificates, permits,
franchises and other governmental authorizations and approvals,
(including, without limitation, the Concession Titles) necessary to the
ownership of its
properties or to the conduct of its business, Environmental Laws,
and laws with respect to social security and pension fund obligations,
final judgments and court orders.)

     (j) Set forth on Schedule 4.01(j) hereto is a complete and accurate
list of all Material Contracts of the Borrower and its Subsidiaries,
showing as of the date hereof the parties, subject matter and term
thereof. Each such Material Contract has been duly authorized, executed
and delivered by all parties thereto, has not been amended or otherwise
modified in any material respect, is in full force and effect and is
binding upon and enforceable against all parties thereto in accordance
with its terms, and there exists no default by the Borrower under or with
respect to any of its material contractual obligations in any Material
Contract that could reasonably be expected to have a Material Adverse
Effect.

     (k) To the best of any Loan Party’s knowledge, no income, stamp or
other taxes (other than taxes on, or measured by, net income or net
profits) or levies, imposts, deductions, charges, compulsory loans or
withholdings whatsoever are or will be, under applicable law in Mexico,
imposed, assessed, levied or collected by Mexico or any political
subdivision or taxing authority thereof or therein either (i) on or by
virtue of the

34

 

execution, delivery, performance, enforcement or
admissibility into evidence of any Loan Document or (ii) on any payment
to be made by any Loan Party pursuant to any Loan Document other than
withholding taxes payable by any Loan Party pursuant to any Loan Document
on payments of interest, commissions and fees, made by any Loan Party to
a non resident of Mexico for tax purposes.

     (l) Each Loan Party is subject to civil and commercial law with
respect to its obligations under each Loan Document to which it is party,
and the execution, delivery and performance by such Loan Party of each
Loan Document to which it is party constitute private and commercial acts
(jure gestionis acts) rather than public or governmental
acts (jure imperii acts). None of the Loan Parties or any
of their Subsidiaries or any of their respective properties has any
immunity from jurisdiction of any court or from set-off or any legal
process (whether through service or notice, attachment prior to judgment,
attachment in aid of execution, execution or otherwise) under the laws of
Mexico. Each Loan Party’s choice of governing law as New York law and
its consent to submission to the jurisdiction of New York federal and
state courts under the Loan Documents is legal, valid and binding under
Mexican Law.

     (m) The obligations of the Borrower and each of its Subsidiaries
under the Loan Documents constitute direct, unconditional, unsubordinated
and unsecured obligations of the Borrower and its Subsidiaries and do
rank and will rank pari passu in priority of payment and in
all other respects with all other present and future senior unsecured
Debt of the Borrower and such Subsidiaries.

     (n) Each Loan Document is in proper legal form under the law of
Mexico for the enforcement thereof against each Loan Party which is party
thereto under the law of Mexico; and to ensure the legality, validity,
enforceability or admissibility in evidence of each such Loan Document in
Mexico it is not necessary that any such Loan Document or any other
document be registered, filed or recorded with any court or other
authority in
Mexico or that any stamp or similar tax be paid on or in respect of
any Loan Document, except that in the event that any legal proceedings
with respect to any Loan Document are brought in the courts of Mexico, a
Spanish translation of the document required in such proceedings prepared
by a Mexican court-approved translator would have to be approved by the
court after the defendant had been given an opportunity to be heard with
respect to the accuracy of such translation, and the proceedings would
thereafter be based upon the translated documents. Any judgment against
any Loan Party of a state or United States federal court in the State of
New York, United States is capable of being enforced in the courts of
Mexico; except that if any legal proceedings for the enforcement of such
judgment are brought in the courts of Mexico, a Spanish translation of
such judgment prepared by a Mexican court-approved translator would have
to be approved by the court after the defendant has been given an
opportunity to be heard with respect to the accuracy of the translation,
and the proceedings would thereafter be based on the translated judgment.
There is no requirement for the Administrative Agent, nor any Lender, to
be licensed or qualified with any governmental authority solely by reason
of the execution and performance of the Loan Documents.

35

 

     (o) The Borrower, a nonbank entity located outside the United
States, understands that it is the policy of the Board of Governors of
the U.S. Federal Reserve System that extensions of credit by
international banking facilities (as defined in Section 204.8(a) of
Regulation D) may be used only to finance the non-U.S. operations of a
customer (or its foreign affiliates) located outside the United States as
provided in Section 204.8(a)(3)(vi) of Regulation D. Therefore, the
Borrower acknowledges that the proceeds of the Loans by the international
banking facility of any of the Lenders (as defined in Section 204.8(a) of
Regulation D) will be used solely to finance the Borrower’s operations
outside the United States or that of the Borrower’s foreign affiliates.

     (p) Neither the Borrower nor any of its Subsidiaries is an
“investment company”, or an “affiliated person” of, or “promoter” or
“principal underwriter” for, an “investment company”, as such terms are
defined in the Investment Company Act of 1940, as amended.

     (q) No information, exhibit or report furnished by or on behalf of
any Loan Party to all of the Lenders in connection with the negotiation
of any Loan Document or pursuant to the terms of any Loan Document
contained any untrue statement of a material fact or omitted to state a
material fact necessary to make the statements made therein not
misleading; provided, however, that until the initial Funding Date the
foregoing representation is subject to the qualification that the
Borrower has acknowledged the lack of proper reconciliation of certain of
its liability accounts with its books and records, that such
reconciliation is undergoing continuing review, and that such lack of
reconciliation may have resulted in understatements of income in some
fiscal quarters and overstatements of income in other fiscal quarters
going back to the fiscal year ended December 31, 2002, all as described
in the Accounting Memo, which the Borrower and its auditors reasonably
believe are not material..

     (r) There are no strikes, slowdowns or work stoppages, and, to the
best knowledge of the Borrower, none is currently threatened, by the
employees of the
Borrower or any of its Material Subsidiaries that could reasonably
be expected to have a Material Adverse Effect.

     (s) Set forth on Schedule 4.01(s) hereto is a complete and accurate
list of all patents, trademarks, trade names, service marks and
copyrights, and all applications therefor and licenses thereof, of the
Borrower or any of its Subsidiaries, showing as of the date hereof the
jurisdiction in which registered, the registration number, the date of
registration and the expiration date.

     (t) Each Loan Party and each of the Borrower’s Material Subsidiaries
(excluding Multifon, S.A. de C.V., until such time as Multifon, S.A. de
C.V. becomes Solvent pursuant to the requirements of Section 5.01(n)) is
and immediately after the transactions to occur on each Funding Date are
consummated will be Solvent.

     (u) Set forth on Schedule 4.01(u) hereto is a complete and accurate
list of all material real property owned by the Borrower and its Material
Subsidiaries, showing as of the date hereof the jurisdiction in which
such property is located. Each of the

36

 

Borrower and its Material
Subsidiaries has good, marketable and insurable title to such real
property, free and clear of all Liens, other than Liens permitted by
Section 5.02(a).

     (v) Set forth on Schedule 4.01(v) hereto is a complete and accurate
list of all Concession Titles owned by the Borrower and its Material
Subsidiaries, showing as of the date hereof the jurisdiction in which
such Concession Titles are located.

          SECTION 4.02. Representations and Warranties of the Borrower at each
Funding Date. The Borrower represents and warrants as follows on the
occasion of each Borrowing:

     (a) Each of the representations and warranties set forth in Section
4.01 (other than Section 4.01(e) and Section 4.01(q)) made by Borrower
are true and correct on and as of the date of the proposed Borrowing,
before and after giving effect to such Borrowing and to the application
of the proceeds therefrom (except for those representations and
warranties that are expressly made only as of an earlier date).

     (b) The Consolidated balance sheet of the Borrower and its
Subsidiaries as at December 31, 2003, and the related Consolidated
statements of income and cash flows of the Borrower and its Subsidiaries
for the fiscal year then ended, accompanied by an opinion of
PricewaterhouseCoopers, independent public accountants, and the
Consolidated balance sheet of the Borrower and its Subsidiaries as at
June 30, 2004, and the related Consolidated statements of income and cash
flows of the Borrower and its Subsidiaries for the six months then ended,
duly certified by the chief financial officer of the Borrower, copies of
which have been furnished to the Lender, are complete and correct and
fairly present, subject, in the case of said balance sheet as at June 30,
2004, and said statements of income and cash flows for the six months
then ended, to year-end audit adjustments, the Consolidated financial
condition of the Borrower and its Subsidiaries as at such dates and the
Consolidated results of operations of the Borrower
and its Subsidiaries for the periods ended on such dates, all in
accordance with Mexican GAAP.

     (c) No information, exhibit or report furnished by or on behalf of
any Loan Party to all of the Lenders in connection with the negotiation
of any Loan Document or pursuant to the terms of any Loan Document
contained any untrue statement of a material fact or omitted to state a
material fact necessary to make the statements made therein not
misleading

ARTICLE V

COVENANTS OF THE BORROWER

          SECTION 5.01. Affirmative Covenants. So long as any Loan shall
remain unpaid or any of the Lenders shall have any Commitment hereunder, the
Borrower will:

     (a) Compliance with Laws, Etc. Comply, and cause each of its
Subsidiaries to comply, in all material respects, with all applicable
laws, rules, regulations, final judgments and court orders, such
compliance to include compliance with Environmental

37

 

Laws, except where
failure to comply would not reasonably be expected to have a Material
Adverse Effect.

     (b) Payment of Taxes, Etc. Pay and discharge, and cause each
of its Subsidiaries to pay and discharge, before the same shall become
delinquent, (i) all taxes, assessments and governmental charges or levies
imposed upon it or upon its property and (ii) all lawful claims that, if
unpaid, might by law become a Lien upon its property, except where
failure to pay would not be expected to result in a Material Adverse
Effect; provided, however, that neither the Borrower nor
any of its Subsidiaries shall be required to pay or discharge any such
tax, assessment, charge or claim that is being contested in good faith
and by proper proceedings and as to which appropriate reserves are being
maintained in accordance with Mexican GAAP, unless and until any Lien
resulting therefrom attaches to its property and becomes enforceable
against its other creditors.

     (c) Maintenance of Insurance. Maintain, and cause each of
its Subsidiaries to maintain, insurance with responsible and reputable
insurance companies or associations in such amounts and covering such
risks as is usually carried by companies engaged in similar businesses
and owning similar properties in the same general areas in which the
Borrower or such Subsidiary operates.

     (d) Preservation of Corporate Existence, Etc. Preserve and
maintain, and cause each of its Subsidiaries to preserve and maintain,
its corporate existence, rights (charter and statutory), permits,
approvals, licenses, privileges and franchises deemed material to its
business (including, without limitation, the Concession Titles);
provided, however, that the Borrower and its Subsidiaries
may consummate any merger or consolidation permitted under Section
5.02(b), and provided further that neither the Borrower nor
any of its Subsidiaries
shall be required to preserve any right or franchise if the Board of
Directors of the Borrower or such Subsidiary shall determine that the
preservation thereof is no longer desirable in the conduct of the
business of the Borrower or such Subsidiary, as the case may be, and that
the loss thereof is not disadvantageous in any material respect to the
Borrower, such Subsidiary or any of the Lenders.

     (e) Visitation Rights. Upon at least 10 Business Days’ prior
notice and reasonable request (which shall not be required upon the
occurrence and continuance of any Default or Event of Default), permit
the Administrative Agent or any Lender or any agent or representatives
thereof, to examine and make copies of and abstracts from the records and
books of account of, and visit the properties of, the Borrower and any of
its Subsidiaries, and to discuss the affairs, finances and accounts of
the Borrower and any of its Subsidiaries with any of their officers or
directors and with their independent certified public accountants;
provided, however, that all expenses associated with such
inspection shall be for the account of the inspecting Lenders, except in
the case of a Default or Event of Default, in which case, the reasonable
out of pocket expenses associated with such inspection will be for the
account of the Borrower.

     (f) Keeping of Books. Keep, and cause each of its
Subsidiaries to keep, proper books of record and account, in which full
and correct entries shall be made of all

38

 

financial transactions and the
assets and business of the Borrower and each such Subsidiary in
accordance with Mexican GAAP consistently applied.

     (g) Maintenance of Properties, Etc. Maintain and preserve,
and cause each of its Subsidiaries to maintain and preserve, all of its
properties that are deemed by the Borrower as material or fundamental for
the conduct of its business in good working order and condition, ordinary
wear and tear excepted, as well as authorizations, licenses, franchises,
except to the extent the discontinuance of the operation and maintenance
of any such properties, authorizations, licenses and franchises would
not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.

     (h) Transactions with Affiliates. Conduct, and cause each of
its Subsidiaries to conduct, all transactions otherwise permitted under
this Agreement with any of their Affiliates on terms that are fair and
reasonable and no less favorable to the Borrower or such Subsidiary than
it would obtain in a comparable arm’s-length transaction with a Person
not an Affiliate. The limitation set forth in this paragraph 5.01(h)
shall not apply to transactions between the Borrower and any of its
Wholly-Owned Subsidiaries or between Wholly-Owned Subsidiaries.

     (i) Performance of Material Contracts. Perform and observe
all the terms and provisions of each Material Contract to be performed or
observed by it, maintain each such Material Contract in full force and
effect, enforce each such Material Contract in accordance with its terms,
take all such action to such end as may be from time to time requested by
any of the Lenders and, upon request of the Administrative Agent, make to
each other party to each such Material Contract such demands and requests
for information and reports or for action as the Borrower or any of its
Subsidiaries is entitled to make under such Material Contract, and, in
each case, cause
each of its Subsidiaries to do so; except, however, where failure to
comply with or enforce such Material Contracts would not be expected to
result in a Material Adverse Effect.

     (j) Reporting Requirements. Furnish to the Administrative
Agent:

     (i) as soon as available and in any event within 60 days after
the end of each of the first three quarters of each fiscal year of
the Borrower, Consolidated and consolidating balance sheets of the
Borrower and its Subsidiaries as of the end of such quarter and
Consolidated and consolidating statements of income and cash flows
of the Borrower and its Subsidiaries for the period commencing at
the end of the previous fiscal year and ending with the end of such
quarter, duly certified (subject to year-end audit adjustments) by
the chief financial officer of the Borrower as having been prepared
in accordance with Mexican GAAP and certificates of the chief
financial officer of the Borrower as to compliance with the terms
of the Loan Documents and setting forth in reasonable detail the
calculations necessary to demonstrate compliance with Section 5.03;
provided that in the event of any change in Mexican GAAP
used in the preparation of such financial statements, the Borrower
shall also provide, if necessary for the determination of
compliance with Section 5.03, a statement of reconciliation
conforming such financial statements to Mexican GAAP;

39

 

     (ii) as soon as available and in any event within 120 days
after the end of each fiscal year of the Borrower, a copy of the
annual audit report for such year for the Borrower and its
Subsidiaries, containing Consolidated and consolidating balance
sheets of the Borrower and its Subsidiaries as of the end of such
fiscal year and Consolidated and consolidating statements of income
and cash flows of the Borrower and its Subsidiaries for such fiscal
year, in each case accompanied by an opinion acceptable to the
Required Lenders by PricewaterhouseCoopers or other independent
public accountants reasonably acceptable to the Required Lenders;
provided that in the event of any change in Mexican GAAP
used in the preparation of such financial statements, the Borrower
shall also provide, if necessary for the determination of
compliance with Section 5.03, a statement of reconciliation
conforming such financial statements to Mexican GAAP;

     (iii) as soon as available and in any event within 120 days
after the end of each fiscal year of NII Holdings Inc., a copy of
the annual audit report for such year for NII Holdings Inc.,
containing Consolidated and consolidating balance sheets of NII
Holdings Inc. as of the end of such fiscal year and Consolidated
and consolidating statements of income and cash flows of NII
Holdings Inc. for such fiscal year, in each case accompanied by an
opinion acceptable to the Required Lenders by
PricewaterhouseCoopers or other independent public accountants
reasonably acceptable to the Required Lenders;

     (iv) as soon as possible and in any event within fifteen days
after the occurrence of each Default continuing on the date of such
statement, a statement a Responsible Officer setting forth details
of such Default and the action that the Borrower has taken and
proposes to take with respect thereto;

     (v) promptly after the sending or filing thereof, copies of
all reports that the Borrower sends to any of its securityholders
(only to the extent that the Borrower is a publicly held company),
and copies of all reports and registration statements that the
Borrower or any Subsidiary files with the Securities and Exchange
Commission or any national securities exchange, if any;

     (vi) promptly after the commencement thereof and knowledge by
the Borrower of such commencement, notice of all actions and
proceedings before any court, governmental agency or arbitrator
affecting the Borrower or any of its Subsidiaries of the type
described in Section 4.01(f); and

     (vii) such other information respecting the Borrower or any of
its Subsidiaries as any Lender through the Administrative Agent may
from time to time reasonably request.

     (k) Maintenance of Governmental Filings. Maintain in full
force and effect at all times all approvals of and filings with any
governmental authority required under applicable laws or regulations
(including, without limitation, antitrust laws and environmental laws)
for (a) the execution, delivery and performance of obligations under the
Loan Documents by the Borrower and for the validity or enforceability
thereof, and

40

 

(b) except where failure to maintain any such approvals or
filings could not reasonably be expected to have a Material Adverse
Effect, the conduct of its business.

     (l) Pari Passu. Take all actions to ensure that at all times
the Obligations of the Borrower and each of its Subsidiaries under the
Loan Documents constitute unconditional general obligations of the
Borrower and its Subsidiaries ranking at least pari passu
in all respects with all present and future and other senior unsecured,
unsubordinated Debt of the Borrower and such Subsidiaries.

     (m) Covenant to Guaranty Obligations. Upon the occurrence of
any Material Subsidiary of the Borrower becoming a Mexican Subsidiary,
the Borrower will cause each such Mexican Subsidiary (i) within 30 days
of becoming a Mexican Subsidiary, to duly execute and deliver to the
Administrative Agent a guaranty supplement, in form attached as Exhibit F
hereto, guaranteeing the Borrower’s and other Subsidiary Guarantors’
obligations under the Loan Documents and, together with a certified copy
by a Mexican Notary Public of notarized irrevocable powers of attorney
granted by each such Mexican Subsidiary to the Process Agent so that it
may act as process agent on behalf of such Mexican Subsidiary in
connection with such Mexican Subsidiary’s obligations under the
Subsidiary Guaranty and a letter from the Process Agent in the form and
substance satisfactory to the Administrative Agent agreeing to act as
agent to receive service of process on behalf of such Mexican Subsidiary,
and (ii) within 60 days after a Mexican Subsidiary becomes a Subsidiary
Guarantor pursuant to
clause (i) above, deliver to the Administrative Agent, upon the
request of the Administrative Agent in its sole discretion, a signed copy
of a favorable opinion, addressed to the Administrative Agent and the
Lenders, of counsel for the Loan Parties acceptable to the Administrative
Agent, as to such guaranty supplements being legal, valid and binding
obligations of each party thereto enforceable in accordance with their
terms.

          (n) Covenant with Regard to Multifon, S.A. de C.V.  Cause Multifon,
S.A. de C.V. on or prior to the date that is 9 months following the Closing
Date (i) to be Solvent, (ii) to merge with the Borrower or any of its Material
Subsidiaries, or (iii) dissolve; provided, however, that in the case of the
merger or dissolution of Multifon, S.A. de C.V. pursuant to clause (ii) or
clause (iii), all material licenses and approvals held by Multifon, S.A. de
C.V. shall be transferred to or obtained by the Borrower or a Material
Subsidiary on or prior to the date of such merger or dissolution.

          SECTION 5.02. Negative Covenants. So long as any Loan shall remain
unpaid or any of the Lenders shall have any Commitment hereunder, the Borrower
will not:

     (a) Liens, Etc. Create or suffer to exist, or permit any of
its Subsidiaries to create or suffer to exist, any Lien on or with
respect to any of its properties, whether now owned or hereafter
acquired, or assign, or permit any of its Subsidiaries to assign, any
right to receive income, other than:

     (i) Permitted Liens;

41

 

     (ii) purchase money Liens upon or in any real or tangible
personal property (including equipment) acquired or held by the
Borrower or any of its Subsidiaries in the ordinary course of
business to secure the purchase price of such property or to secure
Debt incurred solely for the purpose of financing the acquisition
of such property , or Liens existing on such property at the time
of its acquisition (other than any such Liens created in
contemplation of such acquisition that were not incurred to finance
the acquisition of such property) or extensions, renewals or
replacements of any of the foregoing for the same or a lesser
amount, provided, however, that no such Lien shall
extend to or cover any properties of any character other than the
real property or tangible personal property being acquired, and no
such extension, renewal or replacement shall extend to or cover any
properties not theretofore subject to the Lien being extended,
renewed or replaced, and provided further that the
aggregate principal amount of the indebtedness secured by the Liens
referred to in this clause (ii) shall not exceed U.S. $20,000,000;

     (iii) the Liens existing on the Closing Date and described on
Schedule 5.02(a) hereto;

     (iv) Liens on property of a Person existing at the time such
Person is merged into or consolidated with the Borrower or any
Subsidiary of the Borrower or becomes a Subsidiary of the Borrower;
provided that such Liens were
not created in contemplation of such merger, consolidation or
acquisition and do not extend to any assets other than those of the
Person so merged into or consolidated with the Borrower or such
Subsidiary or acquired by the Borrower or such Subsidiary;

     (v) Liens on cash or Cash Equivalents of the Borrower or any
of its Subsidiaries securing guaranties by the Borrower in favor of
the Mexican government with respect to Concession Titles or rights
granted to the Borrower or such Material Subsidiary;

     (vi) Liens arising under leases of the Borrower or any of its
Subsidiaries for its telecommunication towers;

     (vii) Leases or subleases of property of the Borrower and its
Subsidiaries granted to others in the ordinary course of business
that could not reasonably be expected to have a Material Adverse
Effect;

     (viii) Temporary Liens existing during the period of
construction encumbering property or assets under construction
arising from progress or partial payments by a customer of the
Borrower or any of its Subsidiaries relating to such property
subject to any Capitalized Lease permitted hereunder or operating
lease that could not reasonably be expected to have a Material
Adverse Effect;

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     (ix) Liens arising from filings regarding operating leases in
the ordinary course of business which could not reasonably be
expected to have a Material Adverse Effect;

     (x) Liens arising from the rendering of a final judgment or
order against the Borrower or any of its Subsidiaries that does not
give rise to an Event of Default and which attach to assets which,
in the aggregate, have a fair market value of less than
$10,000,000;

     (xi) Liens securing reimbursement obligations with respect to
performance letters of credit that encumber documents and the
property which is the subject of such performance letters of credit
and the products and proceeds thereof, arising in the ordinary
course of business that could not reasonably be expected to have a
Material Adverse Effect;

     (xii) Liens in favor of customs and revenue authorities
arising as a matter of law to secure payment of customs duties in
connection with the importation of goods;

     (xiii) Liens encumbering customary initial deposits and margin
deposits in cash or Cash Equivalents, and other Liens that are
within the general parameters customary in the industry and
incurred in the ordinary course of business, in each case, securing
Debt in respect of currency swap agreements which are not
speculative; and

(xiv) Liens securing any Debt of the Borrower, provided that
such Liens shall equally and ratably secure the Loans and the
obligations of the Loan Parties under the Loan Documents.

     (b) Mergers, Etc. Merge into or amalgamate or consolidate
with any Person or permit any Person to merge into it, or permit any of
its Material Subsidiaries to merge into, consolidate or amalgamate with
any Person, unless after giving effect to such merger, amalgamation or
consolidation, the Borrower is the surviving corporation, or in the case
of a merger of any Material Subsidiary, such Material Subsidiary is the
surviving corporation, or the surviving corporation immediately becomes a
Material Subsidiary, and continues to be Controlled by the Borrower;
provided that immediately after giving effect thereto, no Default
or Event of Default has occurred and is continuing.

     (c) Accounting Changes. Make or permit, or permit any of its
Subsidiaries to make or permit, any change in accounting policies or
reporting practices, except as required by Mexican GAAP or any
Governmental Authority.

     (d) Sales, Etc., of Assets. (i) Liquidate, wind up or
dissolve itself or spin-off any of its businesses (or suffer any
liquidation or dissolution) or permit any Material Subsidiary to
liquidate, wind up or dissolve itself or spin-off any of its businesses
(or suffer any liquidation or dissolution) or (ii) convey, sell, lease,
assign, transfer or otherwise dispose of, or permit any Material
Subsidiary to convey, sell, lease, assign, transfer or otherwise dispose
of, all or substantially all of its assets other than in

43

 

accordance with
Section 5.02(b) or (iii) convey, sell, lease, assign, transfer or
otherwise dispose of all or substantially all of its Equity Interest in
any of its Material Subsidiaries if, after giving effect to such sale,
lease, assignment, transfer or other disposition, it would cease to
Control such Material Subsidiary.

     (e) Restricted Payments and Intercompany Loans. (i) Upon the
occurrence and during the continuance of an Event of Default under
Section 6.01(a) or 6.01(c)(i) with respect to a failure to comply with
Section 5.03, declare or pay any dividends, purchase, redeem, retire,
defease or otherwise acquire for value any of its Equity Interests now or
hereafter outstanding, return any capital to its stockholders, partners
or members (or the equivalent Persons thereof) as such, make any
distribution of assets, Equity Interests, obligations or securities to
its stockholders, partners or members (or the equivalent Persons thereof)
as such or issue or sell any Equity Interests or accept any capital
contributions (provided, however, that capital
contributions may be made to the Borrower or any Subsidiary Guarantor, so
long as any such contribution will not be made in exchange for any
Restricted Payment (as defined below)), or permit any of its Subsidiaries
to do any of the foregoing, or permit any of its Subsidiaries to
purchase, redeem, retire, defease or otherwise acquire for value any
Equity Interests in the Borrower or to issue or sell any Equity Interests
therein (collectively, “Restricted Payments”) or (ii) at any other
time, make any Restricted Payments to its Parent or any of its Affiliates
or Subsidiaries; provided that the Borrower may make Restricted
Payments to its Parent or any Affiliate of its Parent after the third
anniversary of the Closing Date so long as, after giving effect to such
Restricted Payment, the Borrower will have and has a consolidated
cash balance in the form of cash and Cash Equivalents at such time
of not less than $100,000,000, or (iii) make any intercompany loans to
the Parent or any Affiliate of the Parent (other than any Subsidiary of
the Borrower) or the Borrower, except for intercompany loans to the
Parent or any of its Subsidiaries made during the ordinary course of
business; provided that no intercompany loans shall be made upon
the occurrence and during the continuance of an Event of Default.

     (f) Change in Nature of Business. Make, or permit any of its
Material Subsidiaries to make, any material change in the nature of its
principal or primary business as carried on at the date hereof.

     (g) Subordination. Incur, or permit any of its Subsidiaries
to incur, any Debt owed to an Affiliate (other than Debt owed by the
Borrower to a Subsidiary, a Subsidiary to the Borrower, or a Subsidiary
to another Subsidiary) unless such Debt is subordinated to the
Obligations of the Loan Parties under the Loan Documents pursuant to a
valid, binding enforceable contractual arrangement.

          SECTION 5.03. Financial Covenants. So long as any Loan shall
remain unpaid or any of the Lenders shall have any Commitment hereunder, the
Borrower will:

     (a) Debt to OIBDA Ratio. Maintain at all times a Debt/OIBDA
Ratio of not more than 2.5 to 1.

44

 

     (b) Interest Coverage Ratio. Maintain at all times an
Interest Coverage Ratio of not less than 3.0 to 1.

     (c) Net Worth. Maintain at all times an excess of
Consolidated total assets over Consolidated total liabilities (such
excess, the “Borrower’s Net Worth”), in each case, of the Borrower
and its Subsidiaries of not less than the amount of the Borrower’s Net
Worth in Pesos calculated as of December 31, 2003, MX$7,330,557,000.

ARTICLE VI

EVENTS OF DEFAULT

          SECTION 6.01. Events of Default. If any of the following events
(“Events of Default”) shall occur and be continuing:

     (a) The Borrower shall fail to pay any principal of, or interest on,
any Loan when the same becomes due and payable; or the Borrower shall
fail to make any other payment of fees or other amounts under this
Agreement or any of the Notes within three Business Days after the same
becomes due and payable; or

     (b) Any representation or warranty made by any Loan Party under any
Loan Document or by any Loan Party (or any of its officers) in connection
with any Loan
Documents or certificates or other documentation delivered pursuant
hereto, shall prove to have been incorrect in any material respect when
made; or

     (c) (i) The Borrower shall fail to perform or observe any term,
covenant or agreement contained in Section 5.01(d),(h) or (j), 5.02 or
5.03, or (ii) any Loan Party shall fail to perform or observe any other
term, covenant or agreement contained in any other Loan Document on its
part to be performed or observed if such failure shall remain unremedied
for 30 or more days after a Responsible Officer has knowledge thereof or
notice thereof is given to the Borrower; or

     (d) (i) The Borrower or any of its Material Subsidiaries shall fail
to pay any principal of or premium or interest on any Debt that is
outstanding in a principal or notional amount of at least U.S. $
10,000,000 (or its equivalent in other currencies) in the aggregate (but
excluding Debt outstanding hereunder) of the Borrower or such Material
Subsidiary (as the case may be), or (ii) any Non-Material Subsidiary or
Non-Material Subsidiaries shall fail to pay any principal of or premium
or interest on any Debt that is outstanding in a principal or notional
amount, individually or in the aggregate, of at least U.S. $ 10,000,000
(or its equivalent in other currencies) and such failure to pay would be
expected to have a Material Adverse Effect, in each case, when the same
becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such failure shall
continue after the applicable grace period, if any, specified in the
agreement or instrument relating to such Debt; or any other event shall
occur or condition shall exist under any agreement or instrument relating
to any such Debt and shall continue after the applicable grace period, if
any, specified in such agreement or instrument, if the effect of such
event or condition is to accelerate, or to

45

 

permit the acceleration of,
the maturity of such Debt and in the case of such Debt of any
Non-Material Subsidiary, such acceleration or permission to accelerate
would be expected to have a Material Adverse Effect; or any such Debt
shall be declared to be due and payable, or required to be prepaid or
redeemed (other than by a regularly scheduled required prepayment or
redemption), purchased or defeased, or an offer to prepay, redeem,
purchase or defease such Debt shall be required to be made, in each case
prior, to the stated maturity thereof and, in the case of such Debt of
any Non-Material Subsidiary, such declaration, prepayment, redemption,
purchase or defeasance or offer to prepay, redeem, purchase or defease
would be expected to have a Material Adverse Effect; or

     (e) The Borrower or any of its Material Subsidiaries shall generally
not pay its debts as such debts become due, or shall admit in writing its
inability to pay its debts generally, or shall make a general assignment
for the benefit of creditors; or any proceeding shall be instituted by or
against the Borrower or any of its Material Subsidiaries seeking to
adjudicate it concurso mercantil, bankrupt or insolvent, or seeking
liquidation, winding-up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment
of a receiver, trustee, custodian, síndico, conciliador or other similar
official for it or for any substantial part of its property and, in the
case of any such proceeding instituted against it (but not instituted by
it), either such proceeding shall remain undismissed or unstayed for a
period of 30 or more days, or any of the actions sought in
such proceeding (including, without limitation, the entry of an
order for relief against, or the appointment of a receiver, trustee,
custodian, síndico, conciliador or other similar official for, it or for
any substantial part of its property) shall occur; or the Borrower or any
of its Material Subsidiaries shall take any corporate action to authorize
any of the actions set forth above in this subsection (e); or

     (f) Judgments or orders for the payment of money in excess of U.S. $
10,000,000 (or its equivalent in other currencies) in the aggregate shall
be rendered against (i) the Borrower or any of its Material Subsidiaries,
or (ii) any Non-Material Subsidiary and, in the case of clause (ii), such
judgment or order would be expected to have a Material Adverse Effect
and in the case of clauses (i) and (ii), (x) enforcement proceedings
shall have been commenced by any creditor upon such judgment or order and
such proceedings shall not have been suspended or (y) there shall be any
period of 30 or more consecutive days during which a stay or enforcement
of such judgment or order, by reason of a pending appeal or otherwise,
shall not be in effect; or

     (g) Any non-monetary judgment or order shall be rendered against the
Borrower or any of its Subsidiaries that could be reasonably expected to
have a Material Adverse Effect, and there shall be any period of 30 or
more consecutive days during which a stay of enforcement of such judgment
or order, by reason of a pending appeal or otherwise, shall not be in
effect; or

     (h) The obligations of the Borrower under this Agreement and the
Notes or the obligations of any Subsidiary Guarantor shall fail to rank
at least pari passu with all other

46

 

senior unsecured,
unsubordinated Debt of the Borrower or such Subsidiary Guarantor, as the
case may be; or

     (i) Any material provision of any Loan Document shall cease to be
valid and binding on or enforceable against any Loan Party which is party
thereto, or any Loan Party shall so assert or state in writing, or the
obligations of such Loan Party under any Loan Document shall in any way
become illegal; or

     (j) Any authority asserting or exercising governmental or police
powers in Mexico or any Person acting or purporting to act under such
authority shall have taken any action to condemn, seize or appropriate,
or to assume custody or control of, all or a substantial portion of the
property of the Borrower or the occurrence of any other adverse
governmental action or event that would prevent any Loan Party from
performing its obligations under any Loan Document to which it is a
party; or

     (k) Any material license, approval, right, privilege, franchise or
concession (including, without limitation, the Concession Titles)
necessary for any Loan Party and any of the Material Subsidiaries to
conduct its business shall have been terminated, cancelled or modified in
a manner which would likely result in a Material Adverse Effect or any
governmental authority shall terminate or cancel any authorization or
approval granted with respect to the Loan Documents or modify any such
authorization or approval in a manner which would likely result in a
Material Adverse Effect, unless (a) such termination, cancellation or
modification is capable of being cured within a
mutually acceptable cure period, to be agreed upon by such Loan
Party and the Administrative Agent, from the date of its occurrence in
the ordinary course of such Loan Party’s business and (b) such Loan Party
or any of the Material Subsidiaries, as the case may be, is taking prompt
action to cure such termination, cancellation or modification;

then, and in any such event, the Required Lenders (i) may declare their

Commitment and their obligation to make Loans to be terminated, whereupon the
same shall forthwith terminate, and (ii) may, by notice to the Borrower,
declare all or any portion of the Notes, all interest thereon and all other
amounts payable under this Agreement to be forthwith due and payable, whereupon
the Notes, all such interest and all such amounts shall become and be forthwith
due and payable, without presentment, demand, protest or further notice of any
kind, all of which are hereby expressly waived by the Borrower;
provided, however, that in the event of an actual or deemed entry
of an order for relief with respect to any Loan Party under clause (e) above,
(A) the Commitments and the obligation of each of the Lenders to make Loans
shall automatically be terminated and (B) the Notes, all such interest and all
such amounts shall automatically become and be due and payable, without
presentment, demand, protest or any notice of any kind, all of which are hereby
expressly waived by the Borrower.

ARTICLE VII

THE ADMINISTRATIVE AGENT

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          SECTION 7.01. Authorization and Action. Each of the Lenders hereby
appoints and authorizes the Administrative Agent to take such action as agent
on its behalf and to exercise such powers and discretion under this Agreement
and the Notes as are delegated to the Administrative Agent by the terms hereof
and thereof, together with such powers and discretion as are reasonably
incidental thereto. As to any matters not expressly provided for by the Loan
Documents (including, without limitation, enforcement or collection of the
Notes), the Administrative Agent shall not be required to exercise any
discretion or take any action, but shall be required to act or to refrain from
acting (and shall be fully protected in so acting or refraining from acting)
upon the instructions of the Required Lenders, and such instructions shall be
binding upon all Lenders and all holders of Notes; provided,
however, that the Administrative Agent shall not be required to take any
action that exposes the Administrative Agent to personal liability or that is
contrary to this Agreement or applicable law. The Administrative Agent agrees
to give to each of the Lenders prompt notice of each notice given to it by the
Borrower pursuant to the terms of this Agreement.

          SECTION 7.02. Delegation of Duties. The Administrative Agent may
execute any of its duties under the Loan Documents by and through agents,
attorneys in fact or affiliates.

          SECTION 7.03. Administrative Agent’s Reliance, Etc.  Neither the
Administrative Agent nor any of its respective directors, officers, agents or
employees shall be liable for any action taken or omitted to be taken by it or
them under or in connection with the Loan Documents, except for its or their
own gross negligence or willful misconduct. Without limitation of the
generality of the foregoing, the Administrative Agent: (a) may treat the payee
of any Tranche A Note, Tranche B Note or Tranche C Note as the holder
thereof until the Administrative Agent receives and accepts an Assignment and
Acceptance entered into by such Lender that is the payee of such Tranche A
Note, Tranche B Note or Tranche C Note, as the case may be, as assignor, and an
Eligible Assignee, as assignee, as provided in Section 8.07; (b) may consult
with legal counsel (including counsel for the Loan Parties or of any Lender),
independent public accountants and other experts selected by it and shall not
be liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts; (c) makes
no warranty or representation to any of the Lenders and shall not be
responsible to any of the Lenders for any statements, warranties or
representations (whether written or oral) made in or in connection with the
Loan Documents; (d) shall not have any duty to ascertain or to inquire as to
the performance or observance of any of the terms, covenants or conditions of
any Loan Document on the part of any Loan Party or to inspect the property
(including the books and records) of any Loan Party; (e) shall not be
responsible to any of the Lenders for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of, any Loan Document or any
other instrument or document furnished pursuant thereto; and (f) shall incur no
liability under or in respect of any Loan Document by acting upon any notice,
consent, certificate or other instrument or writing (which may be by telegram,
telecopy or telex) believed by it to be genuine and signed or sent by the
proper party or parties.

          SECTION 7.04. Citibank, N.A. and Affiliates. With respect to its
Commitments, the Loans made by it and the Notes issued to it, Citibank, N.A.
shall have the same rights and powers under the Loan Documents as any other
Lender and may exercise the same as though it were not an Administrative Agent;
and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated,
include Citibank, N.A. in its individual capacity. Citibank, N.A. and its

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affiliates may accept deposits from, lend money to, act as trustee under
indentures of, accept investment banking engagements from and generally engage
in any kind of business with, any Loan Party, any of its Subsidiaries and any
Person that may do business with or own securities of such Loan Party or any
such Subsidiary, all as if Citibank, N.A. was not the Administrative Agent, and
without any duty to account therefor to the Lenders.

          SECTION 7.05. Lender Credit Decision. Each of the Lenders
acknowledges that it has, independently and without reliance upon the
Administrative Agent or any of the Lenders and based on the financial
statements referred to in Section 4.01 and such other documents and information
as it has deemed appropriate, made its own credit analysis and decision to
enter into this Agreement. Each Lender also acknowledges that it will,
independently and without reliance upon any Agent or any other Lender and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement.

          SECTION 7.06. Indemnification. (a) Each Lender severally agrees
to indemnify the Administrative Agent (to the extent not promptly reimbursed by
the Borrower) from and against such Lender’s ratable share (determined as
provided below) of any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever that may be imposed on, incurred by or asserted
against the Administrative Agent in any way relating to or arising out of the
Loan Documents or any action taken or omitted by the Administrative Agent under
the Loan Documents (collectively, the “Indemnified Costs”);
provided, however, that no
Lender shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from such Administrative Agent’s gross negligence or
willful misconduct as found in a final, non-appealable judgment by a court of
competent jurisdiction. Without limitation of the foregoing, each Lender
agrees to reimburse the Administrative Agent promptly upon demand for its
ratable share of any costs and expenses (including, without limitation, fees
and expenses of counsel) payable by the Borrower under Section 8.04, to the
extent that the Administrative Agent is not promptly reimbursed for such costs
and expenses by the Borrower. In the case of any investigation, litigation or
proceeding giving rise to any Indemnified Costs, this Section 7.06 applies
whether any such investigation, litigation or proceeding is brought by any of
the Lenders or any other Person.

          (b) For purposes of this Section 7.06, the Lenders’ respective ratable
shares of any amount shall be determined, at any time, according to the sum of
(i) the aggregate principal amount of the Loans outstanding at such time and
owing to the respective Lenders, and (ii) the aggregate unused portions of
their respective Commitment at such time; provided, however, that
the respective ratable shares shall be determined by the Administrative Agent
by converting the Tranche B Loans or the Tranche C Loans, as the case may be,
into Dollars based on the USD Equivalent thereof as of the Closing Date. The
failure of any Lender to reimburse the Administrative Agent promptly upon
demand for its ratable share of any amount required to be paid by the Lenders
to the Administrative Agent as provided herein shall not relieve any other
Lender of its obligation hereunder to reimburse the Administrative Agent for
its ratable share of such amount, but no Lender shall be responsible for the
failure of any other Lender to reimburse the Administrative Agent for such
other Lender’s ratable share of such amount. Without prejudice to the survival
of any other agreement of any Lender hereunder, the agreement and

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obligations
of each Lender contained in this Section 7.06 shall survive the payment in full
of principal, interest and all other amounts payable hereunder and under the
other Loan Documents.

          SECTION 7.07. Successor Agents. The Administrative Agent may
resign at any time by giving written notice thereof to the Lenders and the
Borrower and may be removed at any time with or without cause by the Required
Lenders. Upon any such resignation or removal, the Required Lenders shall have
the right to appoint a successor Administrative Agent. If no successor
Administrative Agent shall have been so appointed by the Required Lenders, and
shall have accepted such appointment, within 30 days after the retiring
Administrative Agent’s giving of notice of resignation or the Required Lenders’
removal of the retiring Administrative Agent, then the retiring Administrative
Agent may, on behalf of all of the Lenders, appoint a successor Administrative
Agent, which shall be a commercial bank organized under the laws of the United
States or of any State thereof and having a combined capital and surplus of at
least $250,000,000. Upon the acceptance of any appointment as Administrative
Agent hereunder by a successor Administrative Agent, such successor
Administrative Agent shall succeed to and become vested with all the rights,
powers, discretion, privileges and duties of the retiring Administrative Agent,
and the retiring Administrative Agent shall be discharged from its duties and
obligations under the Loan Documents. If within 45 days after written notice
is given of the retiring Administrative Agent’s resignation or removal under
this Section 7.07 no successor Administrative Agent shall have been appointed
and shall have accepted such appointment, then on such 45th day (a) the
retiring Administrative Agent’s resignation or removal shall become effective,
(b) the retiring Administrative Agent shall thereupon be
discharged from its duties and obligations under the Loan Documents and
(c) the Required Lenders shall thereafter perform all duties of the retiring
Administrative Agent under the Loan Documents until such time, if any, as the
Required Lenders appoint a successor Administrative Agent as provided above.
After any retiring Administrative Agent’s resignation or removal hereunder as
Administrative Agent shall have become effective, the provisions of this
Article VII shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Administrative Agent under this Agreement.

ARTICLE VIII

MISCELLANEOUS

          SECTION 8.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement or the Notes or any other Loan Document, and no
consent to any departure by the Borrower therefrom, shall in any event be
effective unless the same shall be in writing and signed by the Required
Lenders, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given;
provided, however, that no amendment, waiver or consent shall,
unless in writing and signed by all the Lenders, (i) increase or decrease the
Tranche A Commitments, the Tranche B Commitments or the Tranche C Commitments,
as the case may be, (except for a ratable decrease in all the Tranche A
Commitments, Tranche B Commitments or Tranche C Commitments, as the case may
be), or subject any Lender to any additional obligations, (ii) reduce the
principal of, or interest on, any of the Loans or Notes or any fees,
commissions or other amounts payable hereunder, (iii) postpone any date fixed
for any payment of principal of, or interest on, any of the Loans or Notes

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or
any fees, commissions or other amounts payable hereunder, (iv) change the
definition of “Required Lenders” or any other provision hereof specifying the
number or percentage of Lenders required to amend, waive or otherwise modify
any rights hereunder or make any determination or grant any consent hereunder,
without the written consent of each Lender, (v) release any Loan Party from any
of its obligations under the Loan Documents or reduce any such obligations,
(vi) waive any of the conditions specified in Section 3.01 or Section 3.02, or
(vii) amend this Section 8.01; and provided further that no
amendment, waiver or consent shall, unless in writing and signed by the
Administrative Agent in addition to the Lenders required above to take such
action, affect the rights or duties of the Administrative Agent under this
Agreement or the other Loan Documents.

          SECTION
8.02. Notices, Etc.  (a) All notices and other
communications provided for hereunder shall be in writing (including
telecopier, telegraphic or telex communication) and telecopied, telegraphed or
telexed or hand delivered (by a reputable commercial courier service) if to the
Borrower, at its address at Blvd. M. Ávila Camacho No. 36, 9o. Piso Lomas de
Chapultepec, C.P. 11000, México, D.F. MÉXICO, Attention: Treasury Director,
with copies to the Vice President and General Counsel; if to the Administrative
Agent or any of the Lenders, at their Applicable Lending Offices specified
opposite their names on the Schedule I; if to any Lender which becomes a Lender
under Section 8.07, at its Applicable Lending Office specified in the
Assignment and Acceptance pursuant to which it became a Lender; or, as to the
Borrower or any of the Lenders, at such other address as shall be designated by
such party in a written notice to the other party. All such notices and
communications shall,
(i) when telecopied, telegraphed or telexed, be effective when confirmed
by telecopier, delivered by the telegraph company or confirmed by telex
answerback, respectively, or (ii) when hand delivered, be effective when
actually delivered to the address for notices herein. Delivery by telecopier
of an executed counterpart of any amendment or waiver of any provision of this
Agreement or the Notes or of any Exhibit hereto to be executed and delivered
hereunder shall be effective as delivery of a manually executed counterpart
thereof.

          (b) The Borrower hereby agrees that it will provide to the Administrative
Agent all information, documents and other materials that it is obligated to
furnish to the Administrative Agent pursuant to the Loan Documents, including,
without limitation, all notices, requests, financial statements, financial and
other reports, certificates and other information materials, but excluding any
such communication that (a) relates to a request for a new, or a conversion of
an existing, borrowing or other extension of credit (including any election of
an interest rate or interest period relating thereto), (b) relates to the
payment of any principal or other amount due under this Agreement prior to the
scheduled date therefor, (c) provides notice of any default or event of default
under this Agreement or (d) is required to be delivered to satisfy any
condition precedent to the effectiveness of this Agreement and/or any borrowing
or other extension of credit thereunder (all such non-excluded communications
being referred to herein collectively as “Communications”), by
transmitting the Communications in an electronic/soft medium in a format
acceptable to the Administrative Agent to oploanswebadmin@citigroup.com.
In addition, the Borrower agrees to continue to provide the Communications to
the Administrative Agent in the manner specified in the Loan Documents but
only to the extent requested by the Administrative Agent.

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          (c) The Borrower further agrees that the Administrative Agent may make the
Communications available to the Lenders by posting the Communications on
Intralinks or a substantially similar electronic transmission systems (the
“Platform”). The Borrower acknowledges that the distribution of material
through an electronic medium is not necessarily secure and that there are
confidentiality and other risks associated with such distribution.

          (d) THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE”. THE AGENT
PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE
COMMUNICATIONS, OR THE ADEQUACY OF THE PLATFORM AND EXPRESSLY DISCLAIM
LIABILITY FOR ERRORS OR OMISSIONS IN THE COMMUNICATIONS. NO WARRANTY OF ANY
KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING, WITHOUT LIMITATION, ANY
WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT
OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY
THE AGENT PARTIES IN CONNECTION WITH THE COMMUNICATIONS OR THE PLATFORM. IN NO
EVENT SHALL THE ADMINISTRATIVE AGENT OR ANY OF ITS AFFILIATES OR ANY OF THEIR
RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, ADVISORS OR REPRESENTATIVES
(COLLECTIVELY, “AGENT PARTIES”) HAVE ANY LIABILITY TO THE BORROWER, ANY
LENDER OR ANY OTHER PERSON OR ENTITY FOR DAMAGES OF ANY KIND, INCLUDING,
WITHOUT LIMITATION, DIRECT OR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL
DAMAGES, LOSSES OR EXPENSES (WHETHER IN TORT, CONTRACT OR OTHERWISE) ARISING
OUT OF THE
BORROWER’S OR THE ADMINISTRATIVE AGENT’S TRANSMISSION OF COMMUNICATIONS
THROUGH THE INTERNET, EXCEPT TO THE EXTENT THE LIABILITY OF ANY AGENT PARTY IS
FOUND IN A FINAL NON-APPEALABLE JUDGMENT BY A COURT OF COMPETENT JURISDICTION
TO HAVE RESULTED PRIMARILY FROM SUCH AGENT PARTY’S GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT.

          (e) The Administrative Agent agrees that the receipt of the Communications
by the Administrative Agent at its e-mail address set forth above shall
constitute effective delivery of the Communications to the Administrative Agent
for purposes of the Loan Documents. Each Lender agrees that notice to it (as
provided in the next sentence) specifying that the Communications have been
posted to the Platform shall constitute effective delivery of the
Communications to such Lender for purposes of the Loan Documents. Each Lender
agrees to notify the Administrative Agent in writing (including by electronic
communication) from time to time of such Lender’s e-mail address to which the
foregoing notice may be sent by electronic transmission and (ii) that the
foregoing notice may be sent to such e-mail address.

          (f) Nothing herein shall prejudice the right of the Administrative Agent
or any Lender to give any notice or other communication pursuant to any Loan
Document in any other manner specified in such Loan Document.

          SECTION 8.03. No Waiver; Remedies. No failure on the part of any
of the Lenders to exercise, and no delay in exercising, any right hereunder or
under any Note shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right preclude any

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other or further exercise
thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.

          SECTION 8.04. Costs and Expenses. (a) The Borrower agrees to pay
or reimburse on demand (i) all customary reasonable and duly documented legal
and other out-of-pocket costs and expenses of the Administrative Agent and the
Bookrunners in connection with the preparation, execution, delivery,
negotiation and syndication of the Loan Documents (including the reasonable and
duly documented fees and expenses of special New York and Mexican counsel to
the Administrative Agent), (ii) all reasonable and duly documented legal and
other out-of-pocket costs and expenses of the Administrative Agent in
connection with the modification, administration, waiver or amendment of the
Loan Documents (including reasonable and duly documented fees and expenses of
special New York and Mexican counsel to the Administrative Agent) and (iii) all
reasonable and duly documented legal and other out-of-pocket costs and expenses
of the Administrative Agent and each of the Lenders in connection with the
enforcement of the Loan Documents, whether in any action, suit or litigation,
or any bankruptcy, insolvency or other similar proceeding affecting creditors’
rights generally (including, without limitation, the reasonable fees and
expenses of counsel for the Administrative Agent and each of the Lenders in
connection with the enforcement of rights under this Section 8.04(a)).

          (b) The Borrower agrees to indemnify, defend and save and hold harmless
the Administrative Agent, each of the Lenders and each of their Affiliates and
their respective officers, directors, employees, agents and advisors (each, an
“Indemnified Party”) from
and against, and shall pay on demand, any and all claims, damages, losses,
claims, liabilities and reasonable and duly documented expenses (including,
without limitation, reasonable fees and expenses of counsel) that may be
incurred by or asserted or awarded against any Indemnified Party, in each case
arising out of or in connection with or by reason of (including, without
limitation, in connection with any investigation by governmental or regulatory
authority, litigation or proceeding or preparation of a defense in connection
therewith) (i) the Tranche A Facility, the Tranche B Facility or the Tranche C
Facility, as the case may be, the actual or proposed use of the proceeds of the
Loans, the Loan Documents or any of the transactions contemplated thereby. The
Borrower also agrees not to assert any claim against the Administrative Agent,
any Lenders or any of their Affiliates, or any of their respective officers,
directors, employees, agents and advisors, on any theory of liability, for
special, indirect, consequential or punitive damages arising out of or
otherwise relating to the Loans, the actual or proposed use of the proceeds of
the Loans, the Loan Documents or any of the transactions contemplated by the
Loan Documents, provided that the Borrower shall have no obligation
hereunder to the Administrative Agent or any Lender with respect to the
indemnified liabilities, and shall not be barred from asserting claims, arising
from the gross negligence or willful misconduct of the Administrative Agent or
any such Lender, as the case may be.

          (c) If any payment of principal of any Loans is made by the Borrower to or
for the account of any of the Lenders other than on the last day of an Interest
Period for such Loans, as a result of a payment pursuant to Section 2.08 or
2.10, acceleration of the maturity of the Notes pursuant to Section 6.01 or for
any other reason, or if the Borrower fails to make any payment or prepayment of
any Loans for which a notice of prepayment has been given or that is otherwise
required to be made, whether pursuant to Section 2.05, 2.08, 6.01 or otherwise,
the

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Borrower shall, upon demand by any of the Lenders, pay to such Lender any
amounts required to compensate such Lender for any additional losses, costs or
expenses that it may reasonably incur as a result of such payment or failure to
pay or prepay, including, without limitation, any loss (including loss of
anticipated profits), cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Lender to fund or
maintain such Loans and in respect of any Tranche B Loans, as such costs are
calculated using the Discount Rate.

          (d) Without prejudice to the survival of any other agreement of any Loan
Party hereunder or under any other Loan Document, the agreements and
obligations of the Borrower contained in Sections 2.08 and 2.11 and this
Section 8.04 shall survive the payment in full of principal, interest and all
other amounts payable hereunder and under any of the other Loan Documents.

          SECTION 8.05. Right of Set-off. Upon the occurrence and during the
continuance of any Event of Default, the Administrative Agent and each of the
Lenders and each of their respective Affiliates are hereby authorized at any
time and from time to time, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other indebtedness at any time owing by the
Administrative Agent and each of the Lenders or such Affiliate to or for the
credit or the account of the Borrower against any and all of the obligations of
the Borrower now or hereafter existing under this Agreement and any Note held
by the Administrative Agent and each of the Lenders, whether or not the
Administrative Agent and each of the Lenders shall have made any demand
under this Agreement or such Note and although such obligations may be
unmatured. The Administrative Agent and each of the Lenders agree promptly to
notify the Borrower after any such set-off and application, provided that the
failure to give such notice shall not affect the validity of such set-off and
application. The rights of the Administrative Agent and each of the Lenders
and their respective Affiliates under this Section are in addition to other
rights and remedies (including, without limitation, other rights of set-off)
that the Administrative Agent and each of the Lenders and their respective
Affiliates may have.

          SECTION 8.06. Binding Effect. This Agreement shall become
effective (other than Section 2.01, which shall only become effective upon
satisfaction of the conditions precedent set forth in Section 3.01) when it
shall have been executed by the Borrower, the Administrative Agent and each of
the Lenders, and thereafter shall be binding upon and inure to the benefit of
the Borrower, the Administrative Agent and each of the Lenders and their
respective successors and assigns, except that the Borrower shall not have the
right to assign its rights hereunder or any interest herein without the prior
written consent of the Administrative Agent and each of the Lenders.

          SECTION 8.07. Assignments and Participations. (a) Each Lender may
assign to one or more Eligible Assignees all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of its Tranche A Commitment, Tranche B Commitment or Tranche C
Commitment, as the case may be, the Loans owing to it and the Tranche A Notes,
Tranche B Notes or the Tranche C Notes, as the case may be, or Notes held by
it); provided, however, that (i) except in the case of an
assignment to a Person that, immediately prior to such assignment, was a
Lender, an Affiliate of any Lender or an Approved Fund of any

54

 

Lender or an
assignment of all of a Lender’s rights and obligations under this Agreement,
the aggregate amount of the Commitments being assigned to such Eligible
Assignee pursuant to such assignment (determined as of the date of the
Assignment and Acceptance with respect to such assignment) shall in no event be
less than in the case of Tranche A Loans, U.S. $5,000,000 or an integral
multiple of U.S. $1,000,000 in excess thereof, in the cases of Tranche B Loans
or Tranche C Loans, Ps$50,000,000 or an integral multiple of Ps$10,000,000 in
excess thereof, (ii) each such assignment shall be to an Eligible Assignee, and
(iii) so long as no Default shall have occurred and be continuing, no such
assignments shall be permitted without the prior written consent of the
Borrower and the Administrative Agent (each of which consents shall not be
unreasonably withheld); provided, however, that the Borrower
shall be deemed to have consented to an assignment if it fails to respond to a
written request for a consent within 10 (ten) Business Days of delivery of such
request; and provided further that the Lenders shall also have
the right, without any consent, to assign all or part of their rights or
obligations under the Loan Documents, if a Default or an Event of Default shall
have occurred and be continuing, to any Person.

          (b) By executing and delivering an Assignment and Acceptance, such Lender
assignor thereunder and the assignee thereunder confirm to and agree with each
other and the other parties hereto as follows: (i) other than as provided in
such Assignment and Acceptance, such assigning Lender makes no representation
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other instrument or document furnished pursuant
hereto; (ii) such
assigning Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any Loan Party or the
performance or observance by any Loan Party of any of its obligations under
this Agreement or any other Loan Document or any other instrument or document
furnished pursuant hereto or thereto; (iii) such assignee confirms that it has
received a copy of this Agreement, together with copies of the financial
statements referred to in Section 4.01 and such other documents and information
as it has deemed appropriate to make its own credit analysis and decision to
enter into such Assignment and Acceptance; (iv) such assignee will,
independently and without reliance upon such assigning Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement; and (v) such assignee agrees that it will perform in accordance with
their terms all of the obligations that by the terms of this Agreement are
required to be performed by it as a Lender.

          (c) Within five Business Days after its receipt of notice of an assignment
hereunder and any Tranche A Notes, Tranche B Notes or Tranche C Notes, as the
case may be, or Notes subject to such assignment, the Borrower, at its own
expense, shall execute and deliver to the Lender assignee in exchange for each
surrendered Tranche A Note, Tranche B Note or Tranche C Note, as the case may
be, a new Tranche A Note, Tranche B Note or Tranche C Note, as the case may be,
to the order of such assignee in an amount equal to the outstanding amount of
the Tranche A Note, Tranche B Note or Tranche C Note, as the case may be,
assumed by it pursuant to such Assignment and Acceptance. Such new Tranche A
Note, Tranche B Note or Tranche C Note, as the case may be, or Notes shall be
in an aggregate principal amount equal to the aggregate principal amount of
such surrendered Tranche A Note, Tranche B Note or Tranche C Note, as the case
may be, or Notes, shall be dated the effective date of such Assignment and

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Acceptance and shall otherwise be in substantially the form of Exhibit A,
Exhibit B or Exhibit C, as the case may be, hereto.

          (d) The Administrative Agent shall maintain at its address referred to in
Section 8.02(a) copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and addresses of
the Lenders and the Commitments under the Facility of, and principal amount of
the Loans owing under the Facility to, each Lender from time to time (the
“Register”). The entries in the Register shall be conclusive and binding for
all purposes, absent manifest error, and the Borrower, and the Lenders shall
treat each Person whose name is recorded in the Register as a Lender hereunder
for all purposes of this Agreement. The Register shall be available for
inspection by the Borrower or any Lender at any reasonable time from time to
time upon reasonable prior notice.

          (e) The Lenders may sell participations to one or more banks or other
entities (other than any Loan Party or any of its Affiliates) in or to all or a
portion of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitment, any Loans owing to it and the
Tranche A Notes, Tranche B Notes or Tranche C Notes, as the case may be, or
Notes held by it); provided, however, that (i) each of the
Lenders’ obligations under this Agreement (including, without limitation, its
Commitment to the Borrower hereunder) shall remain unchanged, (ii) each of the
Lenders shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) each of the Lenders shall remain the
holder of any such Note for all purposes of this Agreement, (iv) the Borrower
shall continue to deal solely and directly with the Lenders in connection with
the Lenders’ rights and obligations under this Agreement and (v) no
participant under any such participation shall have any rights, claims or
causes of action against the Borrower, any Subsidiary or Affiliates or the
Administrative Agent or any right to approve any amendment or waiver of any
provision of this Agreement or any Note, or any consent to any departure by any
Loan Party therefrom, except to the extent that such amendment, waiver or
consent would reduce the principal of, or interest on, the Notes or any other
amounts payable hereunder, in each case to the extent subject to such
participation, or postpone any date fixed for any payment of principal of, or
interest on, the Notes or any other amounts payable hereunder, in each case to
the extent subject to such participation.

          (f) Each of the Lenders may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
8.07, disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Borrower furnished to any of the
Lenders by or on behalf of the Borrower upon delivery to the Borrower by such
assignee, participant or proposed assignee or participant of a confidentiality
agreement in the form attached hereto as Exhibit G.

          (g) Notwithstanding any other provision set forth in this Agreement, any
of the Lenders may at any time create a security interest in all or any portion
of its rights under this Agreement (including, without limitation, the Loans
owing to it and any Note held by it) in favor of any Federal Reserve Bank in
accordance with Regulation A of the Board of Governors of the U.S. Federal
Reserve System.

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          SECTION 8.08. Governing Law. This Agreement and the Notes shall be
governed by, and construed in accordance with, the laws of the State of New
York.

          SECTION 8.09. Confidentiality . (a) Each of the Administrative
Agent, the Bookrunners, the Joint Lead Arrangers, the Syndication Agent and the
Lenders agrees to maintain the confidentiality of the Information (as defined
below), except that Information may be disclosed (a) to its and its Affiliates’
directors, officers, employees and agents, including accountants, legal counsel
and other advisors (it being understood that the Persons to whom such
disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential); (b) to the
extent requested by any regulatory authority; (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process; (d)
to any other party to this Agreement; (e) in connection with the exercise of
any remedies hereunder or any suit, action or proceeding relating to this
Agreement or the enforcement of rights hereunder; (f) subject to
confidentiality or non-disclosure agreement containing provisions substantially
the same as those of this Section 8.09 and substantially in the form of Exhibit
G hereto to (i) any purchaser or assignee of or participant in or any
prospective purchaser or assignee of or participant in, any of its rights or
obligations under this Agreement or (ii) any direct or indirect contractual
counterparty or prospective counterparty (or such contractual counterparty’s or
prospective counterparty’s professional advisor) to any credit derivative
transaction relating to the Obligations; (g) with the consent of the Parent;
(h) to the extent such Information (i) becomes publicly available other than as
result of a breach of this Section 8.09 or (ii) becomes available to the
Administrative Agent, the Bookrunners, the Joint Lead Arrangers, the
Syndication Agent or any Lender on a non-confidential basis from a source other
than the Parent or its Subsidiaries; or (j) to any nationally recognized rating
agency that
requires access to information about a Lender’s or its Affiliates’
investment portfolio in connection with ratings issued with respect to such
Lender or its Affiliates. To the extent that disclosure of any Information is
required pursuant to clause (b) or (c) above, so long as any of the
Administrative Agent, the Bookrunner, the Joint Lead Arranger, the Syndication
Agent or the Lender is not prohibited from so doing by any applicable laws,
rules, regulations, final judgments or court orders, such Administrative Agent,
Bookrunner, Joint Lead Arranger, Syndication Agent or Lender will notify the
Borrower thereof in writing at its address for notices set forth in the Credit
Agreement Section 8.02(a), provided that the Borrower shall have no right to
seek any action or remedy or have any claim or cause of action against any of
the Administrative Agent, the Bookrunners, the Joint Lead Arrangers, the
Syndication Agent or the Lenders in the event that such Administrative Agent,
Bookrunner, Joint Lead Arranger, Syndication Agent or Lender, as the case may
be, shall fail to so notify to the Borrower. For the purposes of this Section,
“Information” means all information furnished by the Borrower or any of its
Subsidiaries to any Lender, the Administrative Agent, the Bookrunners, the
Joint Lead Arrangers or the Syndication Agent relating to the Parent and its
Subsidiaries or their business, other than any such information that is
available to the Administrative Agent, the Bookrunners, the Joint Lead
Arrangers, the Syndication Agent or any Lender on a non-confidential basis
prior to disclosure by the Parent and it Subsidiaries. Any Person required to
maintain the confidentiality of Information as provided in this Section 8.09,
shall be considered to have complied with its obligation to do so if such
Person has exercised the same degree of care to maintain the confidentiality of
such Information as such Person would accord to its own confidential
information, which in no event shall be less than a reasonable degree of care.

57

 

          (k) The undertakings of this Section 8.09 shall survive the termination of
the Loan Documents and/or the Facility.

          SECTION 8.10. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.

          SECTION 8.11. Jurisdiction; Waiver of Immunities. (a) Each of the
parties hereto hereby irrevocably and unconditionally submits, for itself and
its property, to the jurisdiction of any New York State court or federal court
of the United States sitting in New York City, and any appellate court from any
thereof, in any action or proceeding arising out of or relating to this
Agreement or the Notes, or for recognition or enforcement of any judgment, and
each of the parties hereto hereby irrevocably and unconditionally agrees that
all claims in respect of any such action or proceeding may be heard and
determined in any such New York State court or, to the extent permitted by law,
in such federal court. Each of the parties hereto agrees that a final judgment
in any such action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided by
law.

          (b) The Borrower hereby irrevocably appoints CT Corporation System with an
office on the date hereof at 111 Eighth Avenue, 13th Floor, New York, New York
10011, United States, as its agent to receive on behalf of the Borrower and its
property service of copies of the
summons and complaint and any other process which may be served in any
such action or proceeding. Such service may be made by mailing or delivering a
copy of such process to the Borrower in care of the Process Agent at the
Process Agent’s above address, and the Borrower hereby irrevocably authorizes
and directs the Process Agent to receive such service on its behalf and forward
such service to the Borrower. As an alternative method of service, the
Borrower also irrevocably consents to the service of any and all process in any
such action or proceeding by the mailing of copies of such process to the
Borrower at its address specified in Section 8.02.

          (c) Each of the parties hereto irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection that it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or the Notes in any New
York State or federal court. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court and for
purposes of the submission to jurisdiction agreed in paragraph (a) above, to
the forum to which it may be entitled to pursuant to applicable law.

          (d) To the extent that the Borrower has or hereafter may acquire any
immunity from jurisdiction of any court or from any legal process in the U.S.
or Mexico (whether through service or notice, attachment prior to judgment,
attachment in aid of execution, execution or otherwise) with respect to itself
or its property, the Borrower hereby irrevocably and unconditionally waives
such immunity in respect of its obligations under this Agreement and the Notes
and, without limiting the generality of the foregoing, agrees that the waivers
set forth in

58

 

this subsection (d) shall have the fullest scope permitted under
the Foreign Sovereign Immunities Act of 1976 of the United States and are
intended to be irrevocable for purposes of such Act.

          (e) For purposes of notices in Mexico in the event of lawsuits and
collections, the Borrower hereby irrevocably designates the following domicile:

Blvd. M. Ávila Camacho No. 36, 9o.

Piso Lomas de Chapultepec, C.P. 11000,

México, D.F. MÉXICO

Attention: Vice President and General Counsel

          (f) Nothing in this Section 8.11 shall affect the right of any of the
Lenders to serve legal process in any other manner permitted by law or affect
the right of any of the Lenders to bring any action or proceeding against the
Borrower or its property in the courts sitting in Mexico.

          SECTION 8.12. Judgment Currency. (a) If, for the purposes of
obtaining judgment in any court, it is necessary to convert a sum due hereunder
or under the Notes in U.S. Dollars into another currency, the parties hereto
agree, to the fullest extent that they may effectively do so, that the rate of
exchange used shall be that at which, in accordance with normal banking
procedures, the Lenders could purchase U.S. Dollars with such other currency in
New York City on the Business Day preceding that on which final, non-appealable
judgment is given.

          (b) The obligations of the Borrower in respect of any sum due to any of
the Lenders hereunder or under the Notes shall, notwithstanding any judgment in
a currency other than U.S. Dollars, be discharged only to the extent that, on
the Business Day following receipt by the Lenders of any sum adjudged to be so
due in such other currency, any of the Lenders may, in accordance with normal,
reasonable banking procedures, purchase U.S. Dollars with such other currency.
If the amount of U.S. Dollars so purchased is less than the sum originally due
to any of the Lenders, in U.S. Dollars, the Borrower agrees, to the fullest
extent that it may effectively do so, as a separate obligation and
notwithstanding any such judgment, to indemnify the Lenders against such loss.

          SECTION 8.13. Waiver of Jury Trial. Each of the Borrower and each
of the Lenders hereby irrevocably waives all right to trial by jury in any
action, proceeding or counterclaim (whether based on contract, tort or
otherwise) arising out of or relating to this Agreement or the Notes or the
actions of the Lenders in the negotiation, administration, performance or
enforcement thereof.

          SECTION 8.14. Patriot Act Notice. Each Lender and the
Administrative Agent (for itself and not on behalf of any Lender) hereby
notifies the Loan Parties that pursuant to the requirements of the Patriot Act,
it is required to obtain, verify and record information that identifies each
Loan Party, which information includes the name and address of such Loan Party
and other information that will allow such Lender or the Administrative Agent,
as applicable, to identify such Loan Party in accordance with the Patriot Act.
The Borrower shall, and shall cause each of its Subsidiaries to, provide, to
the extent commercially reasonable, such information and take such actions as
are reasonably requested by the Administrative Agent or any Lender in order

59

 

to
assist the Administrative Agent and the Lenders in maintaining compliance with
the Patriot Act.

60

 

          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.

	 	 	 	 	 
	 	COMUNICACIONES NEXTEL DE 

MÉXICO, S.A. DE C.V.

as Borrower

 	 
	 	By:  	 	 
	 	 	Title: 	 

	 	 	 	 	 
	 	By:  	
 	 
	 	 	Title: 	 

61

 

	 	 	 	 	 

	 	 	 	 	 
	 	CITIBANK, N.A.

as Administrative Agent

 	 
	 	By:  	 	 
	 	 	Title: 	 
	 	 	 	 

62

 

	 	 	 	 	 

	 	 	 	 	 
	 	CITIGROUP GLOBAL MARKETS, INC.

as Bookrunner and Joint Lead Arranger

and Lender

 	 
	 	By:  	 	 
	 	 	Title: 	 
	 	 	 	 

63

 

	 	 	 	 	 

	 	 	 	 	 
	 	SCOTIABANK INVERLAT, S.A.

as Syndication Agent, Bookrunner,

Joint Lead Arranger and Lender

 	 
	 	By:  	 	 
	 	 	Title: 	 
	 	 	 	 

64

 

	 	 	 	 	 

	 	 	 	 	 
	 	ABN AMRO BANK N.V.

as Lender

 	 
	 	By:  	 	 
	 	 	Title: 	 

	 	 	 	 	 
	 	By:  	
 	 
	 	 	Title: 	 

65

 

	 	 	 	 	 

	 	 	 	 	 
	 	BANCO MERCANTIL DEL NORTE, S.A.

as Lender

 	 
	 	By:  	 	 
	 	 	Title: 	 

	 	 	 	 	 
	 	By:  	
 	 
	 	 	Title: 	 

66

 

	 	 	 	 	 

	 	 	 	 	 
	 	BANCO NACIONAL DE COMERCIO 

EXTERIOR, S.N.C.

as Lender

 	 
	 	By:  	 	 
	 	 	Title: 	 

	 	 	 	 	 
	 	By:  	
 	 
	 	 	Title: 	 

67

 

	 	 	 	 	 

	 	 	 	 	 
	 	BANCO NACIONAL DE MEXICO, S.A.

as Lender

 	 
	 	By:  	 	 
	 	 	Title: 	 

	 	 	 	 	 
	 	By:  	
 	 
	 	 	Title: 	 

68

 

	 	 	 	 	 

	 	 	 	 	 
	 	BAYERISCHE HYPO – UND VEREINSBANK A.G.

as Lender

 	 
	 	By:  	 	 
	 	 	Title: 	 

	 	 	 	 	 
	 	By:  	
 	 
	 	 	Title: 	 

69

 

	 	 	 	 	 

	 	 	 	 	 
	 	CITIBANK N.A., NASSAU, BAHAMAS

BRANCH

as Lender

 	 
	 	By:  	 	 
	 	 	Title: 	 

70

 

	 	 	 	 	 

	 	 	 	 	 
	 	EXPORT DEVELOPMENT CANADA

as Lender

 	 
	 	By:  	 	 
	 	 	Title: 	 

	 	 	 	 	 
	 	By:  	
 	 
	 	 	Title: 	 

71

 

	 	 	 	 	 

	 	 	 	 	 
	 	HSBC MEXICO, S.A.

as Lender

 	 
	 	By:  	 	 
	 	 	Title: 	 

72

 

	 	 	 	 	 

	 	 	 	 	 
	 	SOCIETE GENERALE

as Lender

 	 
	 	By:  	 	 
	 	 	Title: 	 

73exv4w1

 

Exhibit 4.1

EXECUTION COPY

Published CUSIP Number: 29256KAA3

CREDIT AGREEMENT

Dated as of October 4, 2004

among

ENCORE MEDICAL IHC, INC.,

as the Borrower,

ENCORE MEDICAL CORPORATION,

as Holdings,

BANK OF AMERICA, N.A.,

as Administrative Agent,

Swing Line Lender and L/C Issuer,

and

The Other Lenders Party Hereto

BANC OF AMERICA SECURITIES LLC,

as

Sole Lead Arranger and Sole Book Manager

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	Section
	 	 	 	Page

	ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS
	1.01

	 	Defined Terms
	 	 	1	 
	1.02

	 	Other Interpretive Provisions
	 	 	29	 
	1.03

	 	Accounting Terms
	 	 	30	 
	1.04

	 	Rounding
	 	 	30	 
	1.05

	 	Times of Day
	 	 	31	 
	1.06

	 	Letter of Credit Amounts
	 	 	31	 
	1.07

	 	Currency Equivalents Generally
	 	 	31	 
	ARTICLE II

THE COMMITMENTS AND CREDIT EXTENSIONS
	2.01

	 	The Loans
	 	 	31	 
	2.02

	 	Borrowings, Conversions and Continuations of Loans
	 	 	32	 
	2.03

	 	Letters of Credit
	 	 	33	 
	2.04

	 	Swing Line Loans
	 	 	41	 
	2.05

	 	Prepayments
	 	 	44	 
	2.06

	 	Termination or Reduction of Commitments
	 	 	48	 
	2.07

	 	Repayment of Loans
	 	 	48	 
	2.08

	 	Interest
	 	 	50	 
	2.09

	 	Fees
	 	 	50	 
	2.10

	 	Computation of Interest and Fees
	 	 	51	 
	2.11

	 	Evidence of Indebtedness
	 	 	51	 
	2.12

	 	Payments Generally; Administrative Agent’s Clawback
	 	 	52	 
	2.13

	 	Sharing of Payments by Lenders
	 	 	54	 
	ARTICLE III

TAXES, YIELD PROTECTION AND ILLEGALITY
	3.01

	 	Taxes
	 	 	55	 
	3.02

	 	Illegality
	 	 	57	 
	3.03

	 	Inability to Determine Rates
	 	 	57	 
	3.04

	 	Increased Costs; Reserves on Eurodollar Rate Loans
	 	 	57	 
	3.05

	 	Compensation for Losses
	 	 	59	 
	3.06

	 	Mitigation Obligations; Replacement of Lenders
	 	 	60	 
	3.07

	 	Survival
	 	 	60	 
	ARTICLE IV

CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
	4.01

	 	Conditions of Initial Credit Extension
	 	 	60	 

i

 

	 	 	 	 	 	 	 
	Section
	 	 	 	Page

	4.02

	 	Conditions to all Credit Extensions
	 	 	65	 
	ARTICLE V

REPRESENTATIONS AND WARRANTIES
	5.01

	 	Existence, Qualification and Power; Compliance with Laws
	 	 	65	 
	5.02

	 	Authorization; No Contravention
	 	 	66	 
	5.03

	 	Governmental Authorization; Other Consents
	 	 	66	 
	5.04

	 	Binding Effect
	 	 	67	 
	5.05

	 	Financial Statements; No Material Adverse Effect
	 	 	67	 
	5.06

	 	Litigation
	 	 	68	 
	5.07

	 	No Default
	 	 	68	 
	5.08

	 	Ownership of Property; Liens; Investments
	 	 	68	 
	5.09

	 	Environmental Compliance
	 	 	69	 
	5.10

	 	Insurance
	 	 	70	 
	5.11

	 	Taxes
	 	 	70	 
	5.12

	 	ERISA Compliance
	 	 	70	 
	5.13

	 	Subsidiaries; Equity Interests; Loan Parties
	 	 	71	 
	5.14

	 	Margin Regulations; Investment Company Act; Public Utility Holding Company Act
	 	 	71	 
	5.15

	 	Disclosure
	 	 	72	 
	5.16

	 	Compliance with Laws
	 	 	72	 
	5.17

	 	Intellectual Property; Licenses, Etc
	 	 	72	 
	5.18

	 	Solvency
	 	 	72	 
	5.19

	 	Casualty, Etc
	 	 	72	 
	5.20

	 	Perfection
	 	 	73	 
	5.21

	 	Food and Drug
	 	 	73	 
	5.22

	 	Clinical Trials
	 	 	74	 
	5.23

	 	Other Corrective Actions
	 	 	74	 
	5.24

	 	State Food and Drug Laws
	 	 	74	 
	5.25

	 	HIPAA
	 	 	75	 
	5.26

	 	Medicare, Medicaid and Fraud and Abuse
	 	 	75	 
	5.27

	 	Absence of Certain Business Practices
	 	 	76	 
	ARTICLE VI

AFFIRMATIVE COVENANTS

	6.01

	 	Financial Statements
	 	 	77	 
	6.02

	 	Certificates; Other Information
	 	 	78	 
	6.03

	 	Notices
	 	 	81	 
	6.04

	 	Payment of Obligations
	 	 	82	 
	6.05

	 	Preservation of Existence, Etc
	 	 	83	 
	6.06

	 	Maintenance of Properties
	 	 	83	 
	6.07

	 	Maintenance of Insurance
	 	 	83	 
	6.08

	 	Compliance with Laws
	 	 	83	 
	6.09

	 	Books and Records
	 	 	83	 
	6.10

	 	Inspection Rights
	 	 	83	 
	6.11

	 	Use of Proceeds
	 	 	84	 

ii

 

	 	 	 	 	 	 	 
	Section
	 	 	 	Page

	6.12

	 	Covenant to Guarantee Obligations and Give Security
	 	 	84	 
	6.13

	 	Compliance with Environmental Laws; ERISA
	 	 	86	 
	6.14

	 	Preparation of Environmental Reports
	 	 	86	 
	6.15

	 	Compliance with FDA Laws
	 	 	86	 
	6.16

	 	Compliance with HIPAA and Fraud and Abuse Laws
	 	 	86	 
	6.17

	 	Further Assurances
	 	 	87	 
	6.18

	 	Compliance with Terms of Leaseholds
	 	 	87	 
	6.19

	 	Interest Rate Hedging
	 	 	87	 
	6.20

	 	Bank Accounts
	 	 	87	 
	6.21

	 	Certain Post-Closing Matters
	 	 	87	 
	ARTICLE VII

NEGATIVE COVENANTS
	7.01

	 	Liens
	 	 	88	 
	7.02

	 	Indebtedness
	 	 	90	 
	7.03

	 	Investments
	 	 	91	 
	7.04

	 	Fundamental Changes
	 	 	93	 
	7.05

	 	Dispositions
	 	 	94	 
	7.06

	 	Restricted Payments
	 	 	95	 
	7.07

	 	Change in Nature of Business
	 	 	95	 
	7.08

	 	Transactions with Affiliates
	 	 	96	 
	7.09

	 	Burdensome Agreements
	 	 	96	 
	7.10

	 	Financial Covenants
	 	 	96	 
	7.11

	 	Capital Expenditures
	 	 	97	 
	7.12

	 	Amendments of Organization Documents
	 	 	97	 
	7.13

	 	Accounting Changes
	 	 	97	 
	7.14

	 	Prepayments, Etc. of Indebtedness
	 	 	97	 
	7.15

	 	Amendment, Etc. of Related Documents
	 	 	98	 
	7.16

	 	Partnerships, Etc
	 	 	98	 
	7.17

	 	Speculative Transactions
	 	 	98	 
	7.18

	 	Formation of Subsidiaries
	 	 	98	 
	7.19

	 	Holding Company
	 	 	98	 
	7.20

	 	Designation of Senior Debt
	 	 	98	 
	ARTICLE VIII

EVENTS OF DEFAULT AND REMEDIES

	8.01

	 	Events of Default
	 	 	98	 
	8.02

	 	Remedies Upon Event of Default
	 	 	101	 
	8.03

	 	Application of Funds
	 	 	101	 
	ARTICLE IX

ADMINISTRATIVE AGENT

	9.01

	 	Appointment and Authority
	 	 	102	 
	9.02

	 	Rights as a Lender
	 	 	103	 

iii

 

	 	 	 	 	 	 	 
	Section
	 	 	 	Page

	9.03

	 	Exculpatory Provisions
	 	 	103	 
	9.04

	 	Reliance by Administrative Agent
	 	 	104	 
	9.05

	 	Delegation of Duties
	 	 	104	 
	9.06

	 	Resignation of Administrative Agent
	 	 	105	 
	9.07

	 	Non-Reliance on Administrative Agent and Other Lenders
	 	 	106	 
	9.08

	 	No Other Duties, Etc
	 	 	106	 
	9.09

	 	Administrative Agent May File Proofs of Claim
	 	 	106	 
	9.10

	 	Collateral and Guaranty Matters
	 	 	107	 
	9.11

	 	German Law Provisions
	 	 	107	 
	ARTICLE X

MISCELLANEOUS
	10.01

	 	Amendments, Etc
	 	 	109	 
	10.02

	 	Notices and Other Communications; Facsimile Copies
	 	 	111	 
	10.03

	 	No Waiver; Cumulative Remedies
	 	 	113	 
	10.04

	 	Expenses; Indemnity; Damage Waiver
	 	 	113	 
	10.05

	 	Payments Set Aside
	 	 	115	 
	10.06

	 	Successors and Assigns
	 	 	115	 
	10.07

	 	Treatment of Certain Information; Confidentiality
	 	 	119	 
	10.08

	 	Right of Setoff
	 	 	120	 
	10.09

	 	Interest Rate Limitation
	 	 	120	 
	10.10

	 	Counterparts; Integration; Effectiveness
	 	 	120	 
	10.11

	 	Survival of Representations and Warranties
	 	 	121	 
	10.12

	 	Severability
	 	 	121	 
	10.13

	 	Replacement of Lenders
	 	 	121	 
	10.14

	 	Governing Law; Jurisdiction; Etc
	 	 	122	 
	10.15

	 	Waiver of Jury Trial
	 	 	123	 
	10.16

	 	USA PATRIOT Act Notice
	 	 	123	 
	SIGNATURES	 	 	S-1	 

iv

 

SCHEDULES

	 	 	 
	1

	 	Guarantors
	1.01(a)

	 	Existing Letters of Credit
	2.01

	 	Commitments and Applicable Lending Offices
	4.01(a)(iv)

	 	Mortgaged Property
	5.05

	 	Supplement to Interim Financial Statements
	5.08(b)

	 	Existing Liens
	5.08(c)

	 	Owned Real Property
	5.08(d)(i)

	 	Leased Real Property (Lessee)
	5.08(d)(ii)

	 	Leased Real Property (Lessor)
	5.08(e)

	 	Existing Investments
	5.09

	 	Environmental
	5.13

	 	Subsidiaries and Other Equity Investments; Loan Parties
	5.17

	 	Intellectual Property Matters
	5.21

	 	FDA Matters
	5.22

	 	Clinical Trials
	5.24

	 	State Licenses
	6.21

	 	Certain Post-Closing Matters
	7.02(b)

	 	Existing Indebtedness
	7.03(f)

	 	Certain Investments
	10.02

	 	Administrative Agent’s Office, Certain Addresses for Notices

EXHIBITS

	 	 	 
	Form of
	 	 
	 
	 	 
	A

	 	Committed Loan Notice
	B

	 	Swing Line Loan Notice
	C-1

	 	Term Note
	C-2

	 	Revolving Credit Note
	D

	 	Compliance Certificate
	E

	 	Assignment and Assumption
	F-1

	 	Subsidiary Guaranty
	F-2

	 	Holdings Guaranty
	G

	 	Security Agreement
	H

	 	Intellectual Property Security Agreement
	I

	 	Legal Opinion – Counsel to Loan Parties
	J

	 	German Law Pledge Agreement

v

 

CREDIT AGREEMENT

               This CREDIT AGREEMENT (“Agreement”) is entered into as of October 4, 2004,
among ENCORE MEDICAL CORPORATION, a Delaware corporation (“Holdings”), ENCORE
MEDICAL IHC, INC., a Delaware corporation, and a direct wholly owned subsidiary
of Holdings (the “the Borrower”), each lender from time to time party hereto
(collectively, the “Lenders” and individually, a “Lender”), and BANK OF
AMERICA, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer.

               Pursuant to the Merger Agreement dated as of August 8, 2004 (as amended,
supplemented or otherwise modified in accordance with its terms, to the extent
permitted in accordance with the Loan Documents (as hereinafter defined), the
“Merger Agreement”) among Holdings, Empi, Inc., a Minnesota corporation (the
“Company”) and MPI Holdings, LLC, Holdings has agreed to consummate a merger
(the “Merger”) with the Company that will be effectuated through the merger of
Encore Medical Merger Sub, Inc., a wholly owned subsidiary of the Borrower,
into the Company, with the Company being the surviving corporation and a direct
wholly owned subsidiary of the Borrower.

               The Borrower has requested that immediately upon the consummation of the
Merger, the Lenders lend to the Borrower up to $150,000,000 to pay to the
holders of the outstanding capital stock of the Company the cash consideration
for their shares in the Merger, to pay transaction fees and expenses, to
refinance certain Indebtedness of the Company and to refinance certain
Indebtedness of the Borrower.

               The Borrower has also requested that the Lenders provide a $30,000,000
revolving credit facility and a $150,000,000 term loan facility, and the
Lenders have indicated their willingness to lend and the L/C Issuer has
indicated its willingness to so issue Letters of Credit, in each case, on the
terms and subject to the conditions set forth herein.

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

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

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

               “Accounts” has the meaning specified in Section 1 of the Security
Agreement.

               “Adjustment Escrow Agreement” means that certain agreement dated as of
October 4, 2004, among Holdings, MPI Holdings, LLC and the escrow agent
specified therein.

               “Administrative Agent” means Bank of America in its capacity as
administrative agent under any of the Loan Documents, or any successor
administrative agent.

 

 

               “Administrative Agent’s Office” means the Administrative Agent’s address
and, as appropriate, account as set forth on Schedule 10.02, or such other
address or account as the Administrative Agent may from time to time notify to
the Borrower and the Lenders.

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

               “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.
Notwithstanding the foregoing, neither any Agent nor any Lender shall be deemed
to be an Affiliate of any Loan Party or any Subsidiary of any Loan Party.

               “Agents” means, collectively, the Administrative Agent and the Arranger.

               “Aggregate Commitments” means the Commitments of all the Lenders.

               “Aggregate Credit Exposures” means, at any time, the sum of (i) the unused
portion of the Revolving Credit Commitment then in effect, (ii) the unused
portion of each Term Commitment then in effect and (iii) the Total Outstandings
at such time.

               “Agreement” means this Credit Agreement.

               “Agreement Value” means, with respect to each Swap Contract on any date of
determination, an amount equal to the greater of:

     (a) (i) in the case of any Swap Contract documented pursuant to the
ISDA Master Agreement, the amount, if any, that would be payable by any
of the Loan Parties or any of their Subsidiaries to its counterparty to
such Swap Contract, as if (A) such Swap Contract was being terminated
early on such date of determination, (B) such Loan Party or such
Subsidiary, as the case may be, was the sole Affected Party (as defined
in the applicable Master Agreement) and (C) the Administrative Agent was
the sole party determining such payment amount (with the Administrative
Agent making such determination pursuant to the provisions of the form of
Master Agreement); or (ii) in the case of a Swap Contract traded on an
exchange, the mark-to-market value of such Swap Contract, which will be
the unrealized loss on such Swap Contract to the Loan Party or the
Subsidiary of a Loan Party party to such Swap Contract (determined by the
Administrative Agent based on the settlement price of such Swap Contract
on such date); or

     (b) in all other cases, the mark-to-market value of such Swap
Contract, which will be the unrealized loss on such Swap Contract to the
Loan Party or the Subsidiary of a Loan Party party to such Swap Contract
(determined by the Administrative Agent based on the amount, if any, by
which (i) the present value of the future cash flows to be paid by such
Loan Party or such Subsidiary of a Loan Party, as the case may be,
exceeds (ii) the present value of the future cash flows to be received by
such Loan Party or such Subsidiary of a Loan Party pursuant to such Swap
Contract).

2

 

               “Applicable Percentage” means, with respect to any Lender at any time, the
percentage (carried out to the ninth decimal place) of the Aggregate
Commitments represented by such Lender’s Commitment under the applicable
Facility or Facilities at such time (which for this purpose includes Loans
outstanding thereunder). If the Commitment of each Lender to make Loans and
the obligation of the L/C Issuer to make L/C Credit Extensions have been
terminated pursuant to Section 8.02, or if the Aggregate Commitments have
expired, then the Applicable Percentage of each Lender shall be determined
based on the Applicable Percentage of such Lender most recently in effect,
giving effect to any subsequent assignments. The initial Applicable Percentage
of each Lender is set forth opposite the name of such Lender on Schedule 2.01
or in the Assignment and Assumption pursuant to which such Lender becomes a
party hereto, as applicable.

               “Applicable Rate” means (a) for the first six months after the Closing
Date, (i) in respect of the Term Facility, 3.00% per annum in the case of
Eurodollar Rate Loans, and 2.00% per annum, in the case of Base Rate Loans, and
(ii) in the case of the Revolving Credit Facility, 3.00% per annum, in the case
of Eurodollar Rate Loans and Letters of Credit, and 2.00% per annum, in the
case of Base Rate Loans and (b) thereafter, (i)(A) in respect of the Term
Facility, 3.00% per annum in the case of Eurodollar Rate Loans, and 2.00% per
annum, in the case of Base Rate Loans, if the Total Leverage Ratio is equal to
or greater than 4.0:1.0 or (B) in respect of the Term Facility, 2.75% per annum
in the case of Eurodollar Rate Loans, and 1.75% per annum, in the case of Base
Rate Loans, if the Total Leverage Ratio is less than 4.0:1.0 and (ii) in the
case of the Revolving Credit Facility, the following percentages per annum,
based upon the Total Leverage Ratio as set forth in the most recent Compliance
Certificate received by the Administrative Agent pursuant to Section 6.02(b):

	 	 	 	 	 	 	 
	Applicable Rate

	 	 	 	 	Eurodollar Rate	 	 
	 	 	 	 	+	 	 
	Pricing	 	 	 	Letters of	 	 
	Level
	 	Total Leverage Ratio
	 	Credit
	 	Base Rate

	1
	 	Greater than 5.50:1.00	 	3.25%	 	2.25%
	2
	 	Greater than 4.50:1.00	 	3.00%	 	2.00%
	 
	 	but less than or equal	 	 	 	 
	 
	 	to 5.50:1.00	 	 	 	 
	3
	 	Greater than 3.50:1.00	 	2.75%	 	1.75%
	 
	 	but less than or equal	 	 	 	 
	 
	 	to 4.50:1.00	 	 	 	 
	4
	 	Greater than 2.50:1.00	 	2.50%	 	1.50%
	 
	 	but less than or equal	 	 	 	 
	 
	 	to 3.50:1.00	 	 	 	 
	5
	 	Less than or equal to	 	2.25%	 	1.25%
	 
	 	2.50:1.00	 	 	 	 

               Any increase or decrease in the Applicable Rate resulting from a change in
the Total Leverage Ratio shall become effective as of the first Business Day
immediately following

3

 

the date a Compliance Certificate is delivered pursuant to Section
6.02(b); provided, however, that if a Compliance Certificate is not delivered
when due in accordance with such Section, then Pricing Level 1 shall apply as
of the first Business Day after the date on which such Compliance Certificate
was required to have been delivered.

               “Appropriate Lender” means, at any time, (a) with respect to the Term
Facility or the Revolving Credit Facility, a Lender that has a Commitment with
respect to such Facility at such time, (b) with respect to the Letter of Credit
Sublimit, (i) the L/C Issuer and (ii) if any Letters of Credit have been issued
pursuant to Section 2.03(a), the Revolving Credit Lenders and (c) with respect
to the Swing Line Facility, (i) the Swing Line Lender and (ii) if any Swing
Line Loans are outstanding pursuant to Section 2.04(a), the Revolving Credit
Lenders.

               “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.

               “Arranger” means BAS, in its capacity as sole lead arranger and sole book
manager.

               “Assignment and Assumption” means an assignment and assumption entered
into by a Lender and an Eligible Assignee (with the consent of any party whose
consent is required by Section 10.06(b), and accepted by the Administrative
Agent, in substantially the form of Exhibit E or any other form approved by the
Administrative Agent.

               “Attributable Indebtedness” means, on any date, (a) in respect of any
Capitalized 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 or similar payments under the relevant lease or
other applicable agreement or instrument that would appear on a balance sheet
of such Person prepared as of such date in accordance with GAAP if such lease
or other agreement or instrument were accounted for as a Capitalized Lease.

               “Audited Financial Statements” means the audited consolidated balance
sheets of Holdings and its Subsidiaries, and the Company and its Subsidiaries,
in each case for the three fiscal years ended December 31, 2003, and the
related consolidated statements of income or operations, shareholders’ equity
and cash flows for such fiscal years of Holdings and its Subsidiaries, and the
Company and its Subsidiaries, including the notes thereto.

               “Availability Period” means the period from and including the Closing Date
to in the case of the Revolving Credit Facility, the earliest of (i) the
Maturity Date for such Facility, (ii) the date of termination of the Revolving
Credit Commitments pursuant to Section 2.06, and (iii) the date of termination
of the commitment of each Revolving Credit Lender to make Revolving Credit
Loans and of the obligation of the L/C Issuer to make L/C Credit Extensions
pursuant to Section 8.02.

               “Bank of America” means Bank of America, N.A. and its successors.

               “BAS” means Banc of America Securities LLC and its successors.

4

 

               “Base Rate” means for any day a fluctuating rate per annum equal to the
higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of
interest in effect for such day as publicly announced from time to time by Bank
of America as its “prime rate.” The “prime rate” is a rate set by Bank of
America based upon various factors including Bank of America’s costs and
desired return, general economic conditions and other factors, and is used as a
reference point for pricing some loans, which may be priced at, above, or below
such announced rate. Any change in such rate announced by Bank of America
shall take effect at the opening of business on the day specified in the public
announcement of such change.

               “Base Rate Loan” means a Loan that bears interest based on the Base Rate.

               “Borrower” has the meaning specified in the introductory paragraph hereto.

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

               “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, the state where the Administrative Agent’s Office is located
and, if such day relates to any Eurodollar Rate Loan, means any such day on
which dealings in Dollar deposits are conducted by and between banks in the
London interbank eurodollar market.

               “Capital Expenditures” means, with respect to any Person for any period,
any expenditure in respect of the purchase or other acquisition of any fixed or
capital asset (excluding normal replacements and maintenance which are properly
charged to current operations); provided that the term “Capital Expenditures”
shall exclude (a) any expenditures for the Information Technology Upgrade in an
aggregate amount under this clause (a) not to exceed $3,000,000 per Fiscal Year
and (b) Investments permitted by Section 7.03(i).

               “Capitalized Leases” means all leases that have been or should be, in
accordance with GAAP, recorded as capitalized leases.

               “Cash Collateral Account” means a blocked, non-interest bearing deposit
account at Bank of America in the name of the Collateral Agent and under the
sole dominion and control of the Collateral Agent, and otherwise established in
a manner satisfactory to the Administrative Agent.

               “Cash Collateralize” has the meaning specified in Section 2.03(g).

               “Cash Equivalents” means any of the following types of Investments, to the
extent owned by Holdings or any of its Subsidiaries free and clear of all Liens
(other than Liens created under the Collateral Documents):

     (a) readily marketable obligations issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof having maturities of not more than 360 days from
the date of acquisition thereof; provided that the full faith and credit
of the United States of America is pledged in support thereof;

5

 

     (b) time deposits with, or insured certificates of deposit or
bankers’ acceptances of, any commercial bank that (i) (A) is a Lender or
(B) is organized under the laws of the United States of America, any
state thereof or the District of Columbia or is the principal banking
subsidiary of a bank holding company organized under the laws of the
United States of America, any state thereof or the District of Columbia,
and is a member of the Federal Reserve System, (ii) issues (or the parent
of which issues) commercial paper rated as described in clause (c) of
this definition and (iii) has combined capital and surplus of at least
$1,000,000,000, in each case with maturities of not more than 180 days
from the date of acquisition thereof;

     (c) commercial paper issued by any Person organized under the laws
of any state of the United States of America and rated at least “Prime-1”
(or the then equivalent grade) by Moody’s or at least “A-1” (or the then
equivalent grade) by S&P, in each case with maturities of not more than
180 days from the date of acquisition thereof;

     (d) Investments, classified in accordance with GAAP as Current
Assets of Holdings or any of its Subsidiaries, in money market investment
programs registered under the Investment Company Act of 1940, which are
administered by financial institutions that have the highest rating
obtainable from either Moody’s or S&P, and the portfolios of which are
limited solely to Investments of the character, quality and maturity
described in clauses (a), (b) and (c) of this definition; and

     (e) in the case of any Foreign Subsidiary: (i) local currency held
by such Foreign Subsidiary from time to time in the ordinary course of
business; (ii) securities issued or directly and fully guaranteed by the
sovereign nation or any agency thereof (provided that the full faith and
credit of such sovereign nation is pledged in support thereof) in which
such Foreign Subsidiary is organized and is conducting business having
maturities of not more than one year from the date of acquisition and
(iii) investments of the type and maturity described in clauses (b) and
(c) above of foreign obligors, which investments or obligors satisfy the
requirements and have ratings described in such clauses; provided that
the aggregate amount of any obligations and investments that are at any
time outstanding pursuant to subclauses (ii) and (iii) of this clause (e)
may not exceed the U.S. dollar equivalent of $10,000,000.

               “Cash Management Bank” means any Lender or Affiliate of a Lender in its
capacity as a provider of cash management services to any Loan Party.

               “Cash Management Obligations” means the Obligations of any Loan Party for
cash management services that are provided by a Cash Management Bank and that
are secured by the Collateral Documents.

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

6

 

               “Change of Control” means, an event or series of events by which:

     (a) 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 30% or more of the equity securities of Holdings entitled
to vote for members of the board of directors or equivalent governing
body of such Person 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

     (b) during any period of 12 consecutive months, a majority of the
members of the board of directors or other equivalent governing body of
Holdings cease to be composed of individuals (i) who were members of that
board or equivalent governing body on the first day of such period, (ii)
whose election or nomination to that board or equivalent governing body
was approved by individuals referred to in clause (i) above constituting
at the time of such election or nomination at least a majority of that
board or equivalent governing body or (iii) whose election or nomination
to that board or other equivalent governing body was approved by
individuals referred to in clauses (i) and (ii) above constituting at the
time of such election or nomination at least a majority of that board or
equivalent governing body (excluding, in the case of both clause (ii) and
clause (iii), any individual whose initial nomination for, or assumption
of office as, a member of that board or equivalent governing body occurs
as a result of an actual or threatened solicitation of proxies or
consents for the election or removal of one or more directors by any
person or group other than a solicitation for the election of one or more
directors by or on behalf of the board of directors), or

     (c) any Person or two or more Persons acting in concert shall have
acquired by contract or otherwise, or shall have entered into a contract
or arrangement that, upon consummation thereof, will result in its or
their acquisition of the power to exercise, directly or indirectly, a
controlling influence over the management or policies of Holdings, or
control over the equity securities of such Person entitled to vote for
members of the board of directors or equivalent governing body of such
Person 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) representing 30% or more of the combined voting power
of such securities,

     (d) Holdings shall cease, directly or indirectly, to own and control
legally and beneficially all of the Equity Interests in the Borrower; or

     (e) a “change of control” or any comparable term under, and as
defined in, Senior Subordinated Notes Indenture shall have occurred.

7

 

               “Closing Date” means the first date all the conditions precedent in
Section 4.01 are satisfied or waived in accordance with Section 10.01.

               “Code” means the Internal Revenue Code of 1986, as amended from time to
time and any successor statute and the regulations promulgated thereunder.

               “Collateral” means all of the “Collateral” and “Mortgaged
Property”
referred to in the Collateral Documents and all of the other property and
assets that are or are intended under the terms of the Collateral Documents to
be subject to Liens in favor of the Administrative Agent for the benefit of the
Secured Parties.

               “Collateral Documents” means, collectively, the Security Agreement, the
Intellectual Property Security Agreement, the Mortgages, the German Law Pledge
Agreement, each of the mortgages, collateral assignments, Security Agreement
Supplements, IP Security Agreement Supplements, security agreements, pledge
agreements or other similar agreements delivered to the Administrative Agent
and the Lenders pursuant to Section 6.12, and each of the other agreements,
instruments or documents that creates or purports to create a Lien in favor of
the Administrative Agent for the benefit of the Secured Parties.

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

               “Committed Loan Notice” means a notice of (a) a Term Loan Borrowing, (b) a
Revolving Credit Borrowing, (c) a conversion of Loans from one Type to the
other, or (d) a continuation of Eurodollar Rate Loans, pursuant to Section
2.02(a), which, if in writing, shall be substantially in the form of Exhibit A.

               “Company” has the meaning specified in the Preliminary Statements to this
Agreement.

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

               “Consolidated EBITDA” means, for any period, for Holdings 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: (i) Consolidated Interest Charges
for such period, (ii) the provision for the total amount of Federal, state,
local and foreign income tax expense by Holdings and its Subsidiaries for such
period, as set forth on the related statement of income or operations, (iii)
depreciation and amortization expense, (iv) any extraordinary or other
non-recurring charges, expenses or losses of Holdings and its Subsidiaries
reducing such Consolidated Net Income and gains on the sales of assets not in
the ordinary course of business (including, whether or not otherwise includable
as a separate item in the statement of such Consolidated Net Income for such
period) up to a maximum aggregate amount under this clause (iv) of $10,000,000
(of which no more than an aggregate of $5,000,000 can be cash charges, expenses
or losses), (v) the Company’s costs incurred in connection with its withdrawn
initial public offering and this Transaction through the Closing Date; provided
that the maximum amount of costs incurred under this clause (v) shall not
exceed $15,000,000 (of which no more than an aggregate of $12,000,000 can be
cash costs), (vi) restructuring and

8

 

integration costs incurred in connection with the Transaction through
December 31, 2005; provided that the maximum amount of costs incurred under
this clause (vi) shall not exceed $5,000,000, (vii) non-cash stock option-based
compensation expenses and (viii) transaction fees and expenses related to
attempted or completed acquisitions (other than the Transaction) up to a
maximum aggregate amount of $1,000,000 during any period of four consecutive
Fiscal Quarters and minus, without duplication, (b) the following to the extent
included in calculating such Consolidated Net Income: (i) Federal, state, local
and foreign income tax credits of Holdings and its Subsidiaries for such period
and (ii) all non cash items increasing Consolidated Net Income for such period;
provided that “Consolidated EBITDA” shall, for purposes of calculating
compliance with the financial ratios in Section 7.10, be (1) increased for any
applicable period in which the purchase or other acquisition of all of the
Equity Interests in, or all or substantially all of the property and assets of,
or a division or business unit of, any Person, has occurred, by the
Consolidated EBITDA of the Person or assets being acquired using the historical
financial statements (including audited financial statements, to the extent
available) for such Person and (2) decreased for any applicable period in which
the Disposition of all of the Equity Interests in, or all or substantially all
of the property and assets of, or a division or business unit of, any Person,
has occurred, by, in each case, the Consolidated EBITDA of the Person or assets
being Disposed of using the historical financial statements (including audited
financial statements, to the extent available) for such Person, and all such
adjustments to the Consolidated EBITDA of Holdings and its Subsidiaries as
specified in the foregoing clauses (1) and (2) shall be accompanied by a
certification of a Responsible Officer of Holdings stating that such
adjustments have been prepared in accordance with GAAP (where applicable).

               “Consolidated Interest Charges” means, for any period, for Holdings and
its Subsidiaries on a consolidated basis, the sum of (a) all interest, premium
payments, debt discount, fees, charges and related expenses of Holdings and its
Subsidiaries in connection with borrowed money (including capitalized interest)
or in connection with the deferred purchase price of assets, in each case to
the extent treated as interest in accordance with GAAP and (b) the portion of
rent expense of Holdings and its Subsidiaries with respect to such period under
Capitalized Leases that is treated as interest in accordance with GAAP.

               “Consolidated Net Income” means, for any period, for Holdings and its
Subsidiaries on a consolidated basis, the net income of Holdings and its
Subsidiaries (excluding extraordinary gains but including extraordinary losses)
for that period.

               “Contaminant” means any waste, pollutant, hazardous substance, toxic
substance, hazardous waste, special waste, petroleum or petroleum-derived
substance or waste, asbestos in any form or condition, polychlorinated
biphenyls (“PCBs”), or any constituent of any such substance or waste.

               “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” 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

9

 

exercise voting power, by contract or otherwise. “Controlling” and
“Controlled” have meanings correlative thereto.

               “Credit Extension” means each of the following: (a) a Borrowing and (b)
an L/C Credit Extension.

               “Current Assets” means, with respect to any Person, all assets of such
Person that, in accordance with GAAP, would be classified as current assets on
the balance sheet of a company conducting a business the same as or similar to
that of such Person, after deducting appropriate and adequate reserves
therefrom in each case in which a reserve is proper in accordance with GAAP.

               “Current Liabilities” means, with respect to any Person, all items
(including, without limitation, taxes accrued as estimated and trade payables
otherwise excluded from Indebtedness under clause (d) of the definition
thereof) that, in accordance with GAAP, would be classified on the balance
sheet of such Person as current liabilities of such Person.

               “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” means (a) when used with respect to Obligations other than
Letter of Credit Fees, an interest rate equal to (i) the Base Rate plus (ii)
the Applicable Rate, if any, applicable to the Base Rate for Term Loans plus
(iii) 2.0% per annum; provided, however, that with respect to a Eurodollar Rate
Loan, the Default Rate shall be an interest rate equal to the interest rate
(including any Applicable Rate) otherwise applicable to such Loan plus 2.0% per
annum and (b) when used with respect to Letter of Credit Fees, a rate equal to
the Applicable Rate plus 2.0% per annum.

               “Defaulting Lender” means any Lender that (a) has failed to fund any
portion of the Term Loans, Revolving Credit Loans, participations in L/C
Obligations or participations in Swing Line Loans required to be funded by it
hereunder within one Business Day of the date required to be funded by it
hereunder, (b) has otherwise failed to pay over to the Administrative Agent or
any other Lender any other amount required to be paid by it hereunder within
one Business Day of the date when due, unless the subject of a good faith
dispute, or (c) has been deemed insolvent or become the subject of a bankruptcy
or insolvency proceeding.

               “Disposition” or “Dispose” means the sale, transfer, license, lease or
other disposition (including any sale and leaseback transaction) of any
property by any Person (or the granting of any option or other right to do any
of the foregoing), 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.

10

 

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

               “Domestic Subsidiary” means any Subsidiary that is organized under the
laws of the United States, any State thereof or the District of Columbia.

               “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)
approved by (i) the Administrative Agent, (ii) unless an Event of Default has
occurred and is continuing, the Borrower and (iii) in the case of any
assignment of a Revolving Commitment, the L/C Issuer and the Swing Line Lender
(each such approval not to be unreasonably withheld or delayed; it being
understood that if the Administrative Agent does not provide either a negative
or affirmative response to an approval request within 10 days, such approval
shall be deemed to have been given); provided that notwithstanding the
foregoing, “Eligible Assignee” shall not include the Borrower or any of the
Borrower’s Affiliates or Subsidiaries.

               “Empi Existing Credit Agreement” means that certain Credit Agreement dated
as of November 24, 2003 among the Company, Empi Corp., the agents and lenders
party thereto and JPMorgan Chase Bank, as administrative agent.

               “Encore Existing Credit Agreement” means that certain Amended and Restated
Credit Agreement dated as of September 26, 2003 among Holdings, each of
Holdings’ subsidiaries party thereto, the agents and lenders party thereto and
Bank of America, as agent.

               “Environmental Laws” means any and all Federal, state, local, and foreign
statutes, laws, regulations, ordinances, rules, including common law,
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.

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

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

               “Equipment” has the meaning specified in Section 1(a) of the Security
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

11

 

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, without limitation, 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 the Borrower within the meaning of
Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for
purposes of provisions relating to Section 412 of the Code).

               “ERISA Event” means (a) a Reportable Event with respect to a Pension Plan;
(b) a withdrawal by the Borrower 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 the Borrower 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 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 the Borrower
or any ERISA Affiliate.

               “Eurodollar Rate” means, for any Interest Period with respect to a
Eurodollar Rate Loan, the rate per annum equal to the British Bankers
Association LIBOR Rate (“BBA LIBOR”), as published by Reuters (or other
commercially available source providing quotations of BBA LIBOR as designated
by the Administrative Agent from time to time) at approximately 11:00 a.m.,
London time, two Business Days prior to the commencement of such Interest
Period, for Dollar deposits (for delivery on the first day of such Interest
Period) with a term equivalent to such Interest Period. If such rate is not
available at such time for any reason, then the “Eurodollar Rate” for such
Interest Period shall be the rate per annum determined by the Administrative
Agent to be the rate at which deposits in Dollars for delivery on the first day
of such Interest Period in same day funds in the approximate amount of the
Eurodollar Rate Loan being made, continued or converted by Bank of America and
with a term equivalent to such Interest Period would be offered by Bank of
America’s London Branch to major banks in the London interbank eurodollar
market at their request at approximately 4:00 p.m. (London time) two Business
Days prior to the commencement of such Interest Period.

               “Eurodollar Rate Loan” means a Loan that bears interest at a rate based on
the Eurodollar Rate.

12

 

               “Event of Default” has the meaning specified in Section 8.01.

               “Excess Cash Flow” means, for any period (without duplication), (a)
Consolidated Net Income for such period, plus (b) an amount equal to the
aggregate amount of all noncash charges deducted in determining the
Consolidated Net Income for such period, plus (c) an amount (whether positive
or negative) equal to the change in consolidated Current Liabilities of
Holdings and its Subsidiaries during such period, less (d) an amount equal to
the aggregate amount of all noncash credits included in determining the
Consolidated Net Income for such period, less (e) an amount (whether positive
or negative) equal to the change in consolidated Current Assets (excluding cash
and Cash Equivalents) of Holdings and its Subsidiaries during such period, less
(f) an amount equal to the aggregate amount of all Capital Expenditures made in
cash by Holdings and its Subsidiaries during such period in accordance with
this Agreement, less (g) an amount equal to any expenditures for the
Information Technology Upgrade not to exceed $3,000,000 in any Fiscal Year less
(h) an amount equal to the aggregate amount of all Required Principal Payments
made by Holdings and its Subsidiaries during such period in accordance with
this Agreement, and the aggregate principal amount of all prepayments made
pursuant to Section 2.05 during such period (so long as each such prepayment
resulted in a corresponding permanent commitment reduction pursuant to Section
2.06 at the time of such prepayment).

               “Excluded Taxes” means, with respect to the Administrative Agent, any
Lender, the L/C Issuer or any other recipient of any payment to be made by or
on account of any obligation of the Borrower hereunder, (a) taxes imposed on or
measured by its overall net income (however denominated), and franchise taxes
imposed on it (in lieu of net income taxes), by the jurisdiction (or any
political subdivision thereof) under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable Lending Office is located, (b) any branch
profits taxes imposed by the United States or any similar tax imposed by any
other jurisdiction in which the Borrower is located and (c) in the case of a
Foreign Lender (other than an assignee pursuant to a request by the Borrower
under Section 10.13), any withholding tax that is imposed on amounts payable to
such Foreign Lender at the time such Foreign Lender becomes a party hereto (or
designates a new Lending Office) or is attributable to such Foreign Lender’s
failure or inability, other than as a result of a Change in Law, to comply with
Section 3.01(e), except to the extent that such Foreign Lender (or its
assignor, if any) was entitled, at the time of designation of a new Lending
Office (or assignment), to receive additional amounts from the Borrower with
respect to such withholding tax pursuant to Section 3.01(a); provided, that
this clause (c) shall not apply to any tax imposed on a Foreign Lender in
connection with an interest or participation in any Loan or other obligation
that such Foreign Lender was required to acquire pursuant to Section 2.13.

               “Existing Credit Agreements” means, collectively, the Encore Existing
Credit Agreement and the Empi Existing Credit Agreement

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

               “Extraordinary Receipt” means any cash received by or paid to or for the
account of any Person not in the ordinary course of business (net of all
out-of-pocket expenses, if any,

13

 

incurred by Holdings or its Subsidiaries in connection therewith),
including, without limitation, 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 received from 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 2.05(b)(ii) or (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.

               “Facility” means the Term Facility, the Revolving Credit Facility, the
Swing Line Sublimit or the Letter of Credit Sublimit, as the context may
require.

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

               “Fee Letter” means the letter agreement, dated August 6, 2004 among
Holdings, the Administrative Agent, the Arranger and Bank of America Bridge
LLC.

               “Fiscal Quarter” means one of four quarters, consisting of a period of
thirteen weeks in a Fiscal Year, with the first of such quarters beginning on
the first day of a Fiscal Year and the last of such quarters ending on December
31 of such Fiscal Year.

               “Fiscal Year” means a fiscal year of Holdings and its Subsidiaries ending
on December 31 in any calendar year.

               “Fixed Charge Coverage Ratio” means, for any period, the ratio of (a)
Consolidated EBITDA for the period of the four prior Fiscal Quarters ending on
such date to (b) the sum of (i) Consolidated Interest Charges for such period,
(ii) the aggregate principal amount of all regularly scheduled principal
payments or redemptions of outstanding debt for borrowed money made during such
period, (iii) all Federal and state income taxes of Holdings and its
Subsidiaries paid in cash for such period and (iv) the aggregate amount of all
Restricted Payments paid in cash by or on behalf of the Borrower during such
period plus (v) any contingent consideration based on future operating
performance of an acquired entity or assets or other purchase price adjustment
or indemnification obligation paid (or less any such amounts

14

 

received) by or on behalf of Holdings or any of its Subsidiaries during
such period, following the consummation of an acquisition based on criteria set
forth in the documentation governing or relating to such acquisition; provided
that, for the period of the first four Fiscal Quarters of the Borrower
following the Closing Date, the Fixed Charge Coverage Ratio shall be determined
on a pro-forma basis, as though the Merger had been consummated on the first
day of the applicable testing period.

               “Foreign Government Scheme or Arrangement” has the meaning specified in
Section 5.12(d).

               “Foreign Lender” means any Lender that is organized under the laws of a
jurisdiction other than the United States. For purposes of this definition,
the United States, each State thereof and the District of Columbia shall be
deemed to constitute a single jurisdiction.

               “Foreign Plan” has the meaning specified in Section 5.12(d).

               “Foreign Subsidiary” means, at any time, each of the direct or indirect
Subsidiaries of Holdings that is not a Domestic Subsidiary at such time.

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

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

               “Funded Debt” means, with respect to any Person (a) Indebtedness in
respect of the Credit Extensions, in the case of the Borrower and (b) all other
Indebtedness of such Person that by its terms matures more than one year after
the date of determination or matures within one year from such date but is
renewable or extendible, at the option of such Person, to a date more than one
year after such date or arises under a revolving credit or similar agreement
that obligates the lender or lenders to extend credit during a period of more
than one year after such date.

               “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.

               “German Law Pledge Agreement” has the meaning specified in Section
4.01(a)(vi).

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

15

 

pertaining to government (including any supra-national bodies such as the
European Union or the European Central Bank).

               “Granting Lender” has the meaning specified in Section 10.06(h).

               “Guarantors” means, collectively, Holdings, the Subsidiaries of the
Borrower listed on Schedule I and each other Subsidiary of Holdings that shall
be required to execute and deliver a guaranty or guaranty supplement pursuant
to Section 6.12.

               “Guarantee” means, as to any Person, any (a) 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) 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. The term “Guarantee” as a verb has a
corresponding meaning.

               “Guaranty” means, collectively, each Guaranty made by the Guarantors in
favor of the Secured Parties, substantially in the form of Exhibit F-1 or F-2,
as applicable, together with each other guaranty and guaranty supplement
delivered pursuant to Section 6.12.

               “Hedge Bank” means any Person that is a Lender or an Affiliate of a
Lender, in its capacity as a party to a Secured Hedge Agreement.

               “Holdings” has the meaning specified in the introductory paragraph hereto.

               “Honor Date” has the meaning specified in Section 2.03(c)(i).

               “Immaterial Subsidiary” means, as of any date of determination, any direct
or indirect Subsidiary of Holdings that (a) has assets with an aggregate fair
market value of less than $500,000 or (b) had revenues of less than $500,000
during the most recently completed 12-month period.

16

 

               “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) the maximum amount of 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 (i) trade accounts payable in
the ordinary course of business and not past due for more than 60 days
after the date on which each such trade payable or account payable was
created (except for any such past due accounts which such Person is
contesting in good faith by appropriate proceedings diligently pursued
and for which such Person has established proper reserves as required
under GAAP) and (ii) earn-outs and other contingent payments in respect
of acquisitions until such liability on account of any such earn-out or
contingent payment becomes fixed and determinable);

     (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 or other title retention
agreements), whether or not such indebtedness shall have been assumed by
such Person or is limited in recourse, to the extent of the book value of
such property as would be shown on a balance sheet of such Person
prepared in accordance with GAAP;

     (f) all Attributable Indebtedness;

     (g) all obligations of such Person to purchase, redeem, retire,
defease or otherwise make any payment in respect of any Equity Interests
in such Person or any other Person or any warrants, rights or options to
acquire such Equity Interests, valued, in the case of redeemable
preferred interests, 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.

17

 

               “Indemnification Escrow Agreement” means that certain agreement dated as
of October 4, 2004, among Holdings, MPI Holdings, LLC and the escrow agent
specified therein.

               “Indemnified Taxes” means Taxes other than Excluded Taxes.

               “Indemnitees” has the meaning specified in Section 10.04(b).

               “Information” has the meaning specified in Section 10.07.

               “Information Memorandum” means the information memorandum dated September,
2004 used by the Arranger in connection with the syndication of the
Commitments.

               “Information Technology Upgrade” means the implementation of Oracle
applications and other applications to support the business of Holdings and its
Subsidiaries, including customization of programming, servers and other
hardware components, implementation services, application software and data
storage to support the implementation.

               “Intellectual Property Security Agreement” has the meaning specified in
Section 4.01(a)(v).

               “Interest Payment Date” means, (a) as to any Loan other than a Base Rate
Loan, the last day of each Interest Period applicable to such Loan and the
Maturity Date of the Facility under which such Loan was made; provided,
however, that if any Interest Period for a Eurodollar Rate Loan exceeds three
months, the respective dates that fall every three months after the beginning
of such Interest Period shall also be Interest Payment Dates; and (b) as to any
Base Rate Loan (including a Swing Line Loan), the last Business Day of each
March, June, September and December and the Maturity Date of the Facility under
which such Loan was made.

               “Interest Period” means, as to each Eurodollar Rate Loan, the period
commencing on the date such Eurodollar Rate Loan is disbursed or converted to
or continued as a Eurodollar Rate Loan and ending on the date one, two, three
or six months thereafter, as selected by the Borrower in its Committed Loan
Notice; provided that:

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

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

     (iii) no Interest Period shall extend beyond the Maturity Date of
the Facility under which such Loan was made.

               “Inventory” has the meaning specified in Section 1(b) of the
Security Agreement.

18

 

               “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 Equity Interests or debt 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 incurs debt of
the type referred to in clause (h) of the definition of “Indebtedness” set
forth in this Section 1.01 in respect of such 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 or all or a substantial part of
the business of, such Person. 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. For the
avoidance of doubt, it is understood that the following shall not constitute
“Investments” hereunder: (a) acquisitions of Equipment to be used in the
business of Holdings or any of its Subsidiaries, so long as the acquisition
costs thereof constitute Capital Expenditures permitted hereunder and (b)
acquisitions of Inventory in the ordinary course of business of Holdings and
its Subsidiaries.

               “IP Security Agreement Supplement” has the meaning specified in Section
1(f)(vi) of the Security Agreement.

               “IRS” means the United States Internal Revenue Service.

               “ISDA Master Agreement” means the Master Agreement (Multicurrency-Cross
Border) published by the International Swap and Derivatives Association, Inc.,
as in effect from time to time.

               “ISP” means, with respect to any Letter of Credit, the “International
Standby Practices 1998” published by the Institute of International Banking Law
& Practice (or such later version thereof as may be in effect at the time of
issuance).

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

               “Laws” means, collectively, all 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 whether or not having the force of law.

               “L/C Advance” means, with respect to each Revolving Credit Lender, such
Lender’s funding of its participation in any L/C Borrowing in accordance with
its Applicable Percentage.

19

 

               “L/C Borrowing” means an extension of credit resulting from a drawing
under any Letter of Credit which has not been reimbursed on the date when made
or refinanced as a Revolving Credit Borrowing.

               “L/C Credit Extension” means, with respect to any Letter of Credit, the
issuance thereof or extension of the expiry date thereof, or the increase of
the amount thereof.

               “L/C Issuer” means Bank of America in its capacity as issuer of Letters of
Credit hereunder, or any successor issuer of Letters of Credit hereunder.

               “L/C Obligations” means, as at any date of determination, the aggregate
amount available to be drawn under all outstanding Letters of Credit plus the
aggregate of all Unreimbursed Amounts, including all L/C Borrowings. For
purposes of computing the amount available to be drawn under any Letter of
Credit, the amount of such Letter of Credit shall be determined in accordance
with Section 1.06. For all purposes of this Agreement, if on any date of
determination a Letter of Credit has expired by its terms but any amount may
still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP,
such Letter of Credit shall be deemed to be “outstanding” in the amount so
remaining available to be drawn.

               “Lender” has the meaning specified in the introductory paragraph hereto
and, as the context requires, includes the Swing Line Lender.

               “Lending Office” means, as to any Lender, the office or offices of such
Lender described as such in such Lender’s Administrative Questionnaire, or such
other office or offices as a Lender may from time to time notify the Borrower
and the Administrative Agent.

               “Letter of Credit” means any letter of credit issued hereunder and shall
include the Existing Letters of Credit. A Letter of Credit may be a commercial
letter of credit or a standby letter of credit.

               “Letter of Credit Application” means an application and agreement for the
issuance or amendment of a Letter of Credit in the form from time to time in
use by the L/C Issuer.

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

               “Letter of Credit Fee” has the meaning specified in Section 2.03(i).

               “Letter of Credit Sublimit” means an amount equal to $5,000,000. The
Letter of Credit Sublimit is part of, and not in addition to, the Revolving
Credit Facility.

               “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

20

 

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” means an extension of credit by a Lender to the Borrower under
Article II in the form of a Term Loan, a Revolving Credit Loan or a Swing Line
Loan.

               “Loan Documents” means, collectively, (a) for purposes of this Agreement
and the Notes and any amendment, supplement or other modification hereof or
thereof and for all other purposes other than for purposes of the Guaranty and
the Collateral Documents, (i) this Agreement, (ii) the Notes, (iii) the
Guaranty, (iv) the Collateral Documents, (v) the Fee Letter and (vi) each
Issuer Document and (b) for purposes of the Guaranty and the Collateral
Documents, (i) this Agreement, (ii) the Notes, (iii) the Guaranty, (iv) the
Collateral Documents, (v) each Issuer Document, (vi) the Fee Letter and (vii)
each Secured Hedge Agreement.

               “Loan Parties” means, collectively, the Borrower and each Guarantor.

               “Material Adverse Effect” means (a) a material adverse change in, or a
material adverse effect upon, the operations, business, properties, actual
liabilities or condition (financial or otherwise) of Holdings and its
Subsidiaries taken as a whole; (b) a material impairment of the rights and
remedies of the Administrative Agent or any Lender under any Loan Document, or
of the ability of any Loan Party to perform its material obligations under any
Loan Document 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.

               “Maturity Date” means (a) with respect to the Revolving Credit Facility,
the earlier of (i) October 4, 2009 and (ii) the date of termination in whole of
the Term Commitments, the Revolving Credit Commitments, the Letter of Credit
Commitments, and the Swing Line Commitments pursuant to Section 2.06 or 8.02,
and (b) with respect to the Term Facility, the earlier of (i) October 4, 2010
and (ii) the date of termination in whole of the Term Commitments, the
Revolving Credit Commitments, the Letter of Credit Commitments, and the Swing
Line Commitments pursuant to Section 2.06 or 8.02.

               “Maximum Rate” has the meaning specified in Section 10.09.

               “Merger” has the meaning specified in the Preliminary Statements to this
Agreement.

               “Merger Agreement” has the meaning specified in the Preliminary Statements
to this Agreement.

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

               “Mortgage” has the meaning specified in Section 4.01(a)(iv).

               “Multiemployer Plan” means any employee benefit plan of the type described
in Section 4001(a)(3) of ERISA, to which the Borrower 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.

21

 

               “Net Cash Proceeds” means:

     (a) with respect to any Disposition by any Loan Party or any of its
Subsidiaries, or any Extraordinary Receipt received or paid to the
account of any Loan Party or any of its Subsidiaries, the excess, if any,
of (i) the sum of cash and Cash Equivalents received in connection with
such transaction (including any cash or Cash Equivalents received by way
of deferred payment pursuant to, or by monetization of, a note receivable
or otherwise, but only as and when so received) over (ii) the sum of (A)
the principal amount of any Indebtedness that is secured by the
applicable asset and that is required to be repaid in connection with
such transaction (other than Indebtedness under the Loan Documents), (B)
the out-of-pocket expenses incurred by such Loan Party or such Subsidiary
in connection with such transaction and (C) income taxes reasonably
estimated to be actually payable within two years of the date of the
relevant transaction as a result of any gain recognized in connection
therewith; and

     (b) with respect to the sale or issuance of any Equity Interest by
Holdings, or the incurrence or issuance of any Indebtedness by any Loan
Party or any of its Subsidiaries, the excess of (i) the sum of the cash
and Cash Equivalents received in connection with such transaction over
(ii) the underwriting discounts and commissions, and other out-of-pocket
expenses, incurred by Holdings in connection therewith.

               “Note” means a Term Note or a Revolving Credit Note, as the context may
require.

               “Obligations” means all advances to, and debts, liabilities, obligations,
covenants and duties of, any Loan Party arising under any Loan Document or
otherwise with respect to any Loan or Letter of Credit, whether direct or
indirect (including those acquired by assumption), absolute or contingent, due
or to become due, now existing or hereafter arising and including interest and
fees that accrue after the commencement by or against any Loan Party or any
Affiliate thereof of any proceeding under any Debtor Relief Laws naming such
Person as the debtor in such proceeding, regardless of whether such interest
and fees are allowed claims in such proceeding. Without limiting the generality
of the foregoing, the Obligations of the Loan Parties under the Loan Documents
include (a) the obligation to pay principal, interest, Letter of Credit
commissions, charges, expenses, fees, attorneys’ fees and disbursements,
indemnities and other amounts payable by any Loan Party under any Loan Document
and (b) the obligation of any Loan Party to reimburse any amount in respect of
any of the foregoing that any Lender, in its sole discretion, may elect to pay
or advance on behalf of such Loan Party.

               “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 or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or

22

 

organization and, if applicable, any certificate or articles of formation
or organization of such entity.

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

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

               “Participant” has the meaning specified in Section 10.06(d).

               “Partnership” means Encore Medical, L.P., a Delaware limited partnership.

               “Partnership Agreement” means that certain Agreement of Limited
Partnership of the Partnership dated as of February 7, 2002 between Encore
Medical GP, as sole general partner, and Encore Medical Partners, Inc., as
limited partner (as amended (including Amendment and Consent No. 1 dated the
Closing Date), amended and restated, supplemented and otherwise modified from
time to time).

               “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 the Borrower or
any ERISA Affiliate or to which the Borrower 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.

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

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

               “Pledged Debt” has the meaning specified in Section 1(d)(v) of the
Security Agreement.

               “Pledged Equity” has the meaning specified in Section 1(d)(iv) of the
Security Agreement.

23

 

               “Pledged Partnership Interests” has the meaning specified in Section
1(d)(vi) of the Security Agreement.

               “Proprietary Rights” of any Person means, collectively, all trademarks,
service marks, trade names, copyrights, patents, patent rights, franchises,
licenses and other intellectual property rights owned by such Person, or which
such Person possesses the right to use.

               “Reduction Amount” has the meaning set forth in Section 2.05(b)(viii).

               “Register” has the meaning specified in Section 10.06(c).

               “Related Documents” means the Merger Agreement, the Voting Agreement, the
Adjustment Escrow Agreement and the Indemnification Escrow Agreement.

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

               “Release” means a release, spill, emission, leaking, pumping, injection,
deposit, disposal, discharge, dispersal, leaching, or migration of a
Contaminant into the indoor or outdoor environment or into or out of any real
property or other property, including the movement of Contaminants through or
in the air, soil, surface water, groundwater, or real property or other
property.

               “Reorganization” means the transaction occurring on or prior to the
Closing Date pursuant to which the Borrower acquires ownership of all of the
shares of capital stock of each direct Subsidiary of Holdings (other than the
Borrower), such that the Borrower owns directly or indirectly all of the shares
of capital stock of the Subsidiaries of Holdings (other than the Borrower).

               “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.

               “Request for Credit Extension” means (a) with respect to a Borrowing,
conversion or continuation of Term Loans or Revolving Credit Loans, a Committed
Loan Notice, (b) with respect to an L/C Credit Extension, a Letter of Credit
Application, and (c) with respect to a Swing Line Loan, a Swing Line Loan
Notice.

               “Required Lenders” means, as of any date of determination, Lenders having
more than 50% of the sum of the (a) Total Outstandings (with the aggregate
amount of each Lender’s risk participation and funded participation in L/C
Obligations and Swing Line Loans being deemed “held” by such Lender for
purposes of this definition) and (b) aggregate unused Revolving Credit
Commitments; provided that the unused Revolving Credit Commitment of, and the
portion of the Total Outstandings held or deemed held by, any Defaulting Lender
shall be excluded for purposes of making a determination of Required Lenders.

24

 

               “Required Principal Payments” means, with respect to any Person for any
period, the sum of all regularly scheduled principal payments or redemptions of
outstanding Funded Debt made during such period.

               “Responsible Officer” means the chief executive officer, president, chief
financial officer, executive vice president or treasurer 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 any dividend or other distribution (whether in
cash, securities or other property) with respect to any capital stock or other
Equity Interest of any Person or any of its Subsidiaries, or any payment
(whether in cash, securities or other property), including any sinking fund or
similar deposit, on account of the purchase, redemption, retirement,
defeasance, acquisition, cancellation or termination of any such capital stock
or other Equity Interest, or on account of any return of capital to any
Person’s stockholders, partners or members (or the equivalent of any thereof),
or any option, warrant or other right to acquire any such dividend or other
distribution or payment.

               “Revolving Credit Borrowing” means a borrowing consisting of simultaneous
Revolving Credit Loans of the same Type and, in the case of Eurodollar Rate
Loans, having the same Interest Period made by each of the Revolving Credit
Lenders pursuant to Section 2.01(b).

               “Revolving Credit Commitment” means, as to each Revolving Credit Lender,
its obligation to (a) make Revolving Credit Loans to the Borrower pursuant to
Section 2.01(b), (b) purchase participations in L/C Obligations, and (c)
purchase participations in Swing Line Loans, in an aggregate principal amount
at any one time outstanding not to exceed the amount set forth opposite such
Lender’s name on Schedule 2.01 under the caption “Revolving Credit Commitment”
or in the Assignment and Assumption pursuant to which such Lender becomes a
party hereto, as applicable, as such amount may be adjusted from time to time
in accordance with this Agreement.

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

               “Revolving Credit Lender” means, at any time, any Lender that has a
Revolving Credit Commitment at such time.

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

               “Revolving Credit Note” means a promissory note of the Borrower payable to
the order of any Revolving Credit Lender, in substantially the form of Exhibit
C-2 hereto, evidencing the aggregate indebtedness of the Borrower to such
Revolving Credit Lender resulting from the Revolving Credit Loans made by such
Revolving Credit Lender.

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

25

 

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

               “Secured Hedge Agreement” means any interest rate Swap Contract required
or permitted under Article VI or VII that is entered into by and between the
Borrower and any Hedge Bank.

               “Secured Obligations” has the meaning specified in Section 2 of the
Security Agreement.

               “Secured Parties” means, collectively, the Administrative Agent, the
Lenders, the Hedge Banks, each co-agent or sub-agent appointed by the
Administrative Agent from time to time pursuant to Section 9.05, and the other
Persons the Obligations owing to which are or are purported to be secured by
the Collateral under the terms of the Collateral Documents.

               “Security Agreement” has the meaning specified in Section 4.01(a)(iii).

               “Security Agreement Supplement” has the meaning specified in Section 24(b)
of the Security Agreement.

               “Solvent” and “Solvency” mean, with respect to any Person on any date of
determination, that on such date (a) the fair value of the property of such
Person is greater than the total amount of liabilities, including, without
limitation, contingent liabilities, of such Person, (b) the present fair
salable value of the assets of such Person is not less than the amount that
will be required to pay the probable liability of such Person on its debts as
they become absolute and matured, (c) such Person does not intend to, and does
not believe that it will, incur debts or liabilities beyond such Person’s
ability to pay such debts and liabilities as they mature and (d) such Person is
not engaged in business or a transaction, and is not about to engage in
business or a transaction, for which such Person’s property would constitute an
unreasonably small capital. The amount of contingent liabilities at any time
shall be computed as the amount that, in the light of all the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability.

               “Specified Payment” means that portion (in an amount not to exceed
$6,000,000) of that certain tax refund received by or on behalf of the Company
in respect of periods prior to and including the Closing Date, required to be
paid to certain former shareholders of the Company pursuant to Section 1.5(e)
of the Merger Agreement.

               “Subordinated Notes” means the 9.75% unsecured senior subordinated notes
of the Borrower due October 2012 in an aggregate principal amount of
$165,000,000, issued and sold on the Closing Date pursuant to the Subordinated
Notes Indenture on terms satisfactory to the Administrative Agent.

               “Subordinated Notes Documents” means the Subordinated Notes Indenture, the
Subordinated Notes and all other agreements, instruments and other documents
pursuant to which the Subordinated Notes have been or will be issued or
otherwise setting forth the terms of the Subordinated Notes, in each case as
such agreement, instrument or other document may be

26

 

amended, supplemented or otherwise modified from time to time in
accordance with the terms thereof, but to the extent permitted under the terms
of the Loan Documents.

               “Subordinated Notes Indenture” means that certain indenture dated as of
the Closing Date between the Borrower and Wells Fargo Bank Texas, National
Association, as trustee, relating to the issuance and sale of the Subordinated
Notes.

               “Subsidiary” of a Person means a corporation, partnership, joint venture,
limited liability company or other business entity of which a majority of the
shares of securities or other interests having ordinary voting power for the
election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or
both, by such Person. Unless otherwise specified, all references herein to a
“Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries
of Holdings.

               “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).

               “Swing Line” means the revolving credit facility made available by the
Swing Line Lender pursuant to Section 2.04.

               “Swing Line Borrowing” means a borrowing of a Swing Line Loan pursuant to
Section 2.04.

27

 

               “Swing Line Lender” means Bank of America in its capacity as provider of
Swing Line Loans, or any successor swing line lender hereunder.

               “Swing Line Loan” has the meaning specified in Section 2.04(a).

               “Swing Line Loan Notice” means a notice of a Swing Line Borrowing pursuant
to Section 2.04(b), which, if in writing, shall be substantially in the form of
Exhibit B.

               “Swing Line Sublimit” means an amount equal to the lesser of (a)
$5,000,000 and (b) the Revolving Credit Commitments. The Swing Line Sublimit
is part of, and not in addition to, the Revolving Credit Facility.

               “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 (including, without
limitation, sale and leaseback transactions), in each case, creating
obligations that do not appear on the balance sheet of such Person but which,
upon the application of any Debtor Relief Laws to such Person or any of its
Subsidiaries, would be characterized as the indebtedness of such Person
(without regard to accounting treatment).

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

               “Term Borrowing” means a borrowing consisting of simultaneous Term Loans
of the same Type and, in the case of Eurodollar Rate Loans, having the same
Interest Period made by each of the Term Lenders pursuant to Section 2.01(a).

               “Term Commitment” means, as to each Term Lender, its obligation to make a
Term Loan to the Borrower pursuant to Section 2.01(a) in an aggregate principal
amount at any one time outstanding not to exceed the amount set forth opposite
such Lender’s name on Schedule 2.01 under the caption “Term Commitment” or in
the Assignment and Assumption pursuant to which such Lender becomes a party
hereto, as applicable, as such amount may be adjusted from time to time in
accordance with this Agreement.

               “Term Facility” means, at any time, the aggregate Term Commitments or Term
Loans, as applicable, of all Lenders at such time.

               “Term Loan” means an advance made by any Term Lender under the Term
Facility.

               “Term Lender” means, at any time, any Lender that has a Term Commitment or
Term Loan, as applicable, at such time.

               “Term Note” means a promissory note of the Borrower payable to the order
of any Term Lender, in substantially the form of Exhibit C-1 hereto, evidencing
the aggregate indebtedness of the Borrower to such Term Lender resulting from
the Term Loans made by such Term Lender.

28

 

               “Threshold Amount” means $2,000,000.

               “Total Leverage Ratio” means, as of any date of determination, the ratio
of (a) Indebtedness as of such date to (b) Consolidated EBITDA for the period
of the four Fiscal Quarters most recently ended; provided that, for the period
of the first four Fiscal Quarters of the Borrower following the Closing Date,
the Total Leverage Ratio shall be determined on a pro-forma basis, as though
the Merger had been consummated on the first day of the applicable testing
period.

               “Total Outstandings” means the aggregate Outstanding Amount of all Loans
and all L/C Obligations.

               “Transaction” means, collectively, (a) the consummation of the Merger, (b)
the issuance and sale of the Subordinated Notes, (c) the entering into by the
Loan Parties and their applicable Subsidiaries of the Loan Documents, the
Subordinated Notes Documents and the Related Documents to which they are or are
intended to be a party, (d) the refinancing of certain outstanding Indebtedness
of Holdings and its Subsidiaries and the termination of all commitments
thereunder, (e) the refinancing of certain outstanding indebtedness of the
Company and its Subsidiaries and the termination of all commitments thereunder,
(f) the organization of the Borrower and (g) the payment of the fees and
expenses incurred in connection with the consummation of the foregoing.

               “Type” means, with respect to a Loan, its character as a Base Rate Loan or
a Eurodollar Rate Loan.

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

               “Unreimbursed Amount” has the meaning specified in Section 2.03(c)(i).

               “Voting Agreement” means that certain agreement dated as of August 8,
2004, among Holdings, MPI Holdings, LLC, GE Capital Equity Investments, Inc.,
H. Philip Vierling and Patrick D. Spangler.

               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 phrase “to the knowledge of” Holdings, Borrower, the Subsidiaries
or any combination thereof will be deemed to mean the knowledge of a particular
fact or other matter if any Responsible Officer is aware of such fact or
matter.

               (b) The definitions of terms herein shall apply equally to the singular
and plural forms of the terms defined. Whenever the context may require, any
pronoun shall include the corresponding masculine, feminine and neuter forms.
The words “include,” “includes” and “including” shall be deemed to be followed
by the phrase “without limitation.” The word “will” shall be construed to have
the same meaning and effect as the word “shall.” Unless the context requires
otherwise, (i) any definition of or reference to any agreement, instrument or
other document (including any Organization Document) shall be construed as
referring to such agreement, instrument or other document as from time to time
amended, supplemented or

29

 

otherwise modified (subject to any restrictions on
such amendments, supplements or modifications set forth herein or in any other
Loan Document), (ii) any reference herein to any Person shall be construed to
include such Person’s successors and assigns, (iii) the words “herein,”
“hereof” and “hereunder,” and words of similar import when used in any Loan
Document, shall be construed to refer to such Loan Document in its entirety and
not to any particular provision thereof, (iv) all references in a Loan Document
to Articles, Sections, Exhibits and Schedules shall be construed to refer to
Articles and Sections of, and Exhibits and Schedules to, the Loan Document in
which such references appear, (v) any reference to any law shall include all
statutory and regulatory provisions consolidating, amending replacing or
interpreting such law and any reference to any law or regulation shall, unless
otherwise specified, refer to such law or regulation as amended, modified or
supplemented from time to time, and (vi) the words “asset” and “property” shall
be construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, securities,
accounts and contract rights.

               (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) Generally. 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, as in effect
from time to time, applied in a manner consistent with that used in preparing
the Audited Financial Statements, except as otherwise specifically prescribed
herein.

               (b) Changes in GAAP. 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 Borrower or the Required Lenders shall so request, the
Administrative Agent, the Lenders and the Borrower 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
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 Borrower shall provide to the Administrative Agent
and 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.

               1.04 Rounding. Any financial ratios required to be maintained by the Borrower 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 is expressed herein and rounding the result up or
down to the nearest number (with a rounding-up if there is no nearest number).

30

 

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

               1.06 Letter of Credit Amounts. Unless otherwise specified, all references
herein to the amount of a Letter of Credit at any time shall be deemed to be
the stated amount of such Letter of Credit in effect at such time; provided,
however, that with respect to any Letter of Credit that, by its terms or the
terms of any Issuer Document related thereto, provides for one or more
automatic increases in the stated amount thereof, the amount of such Letter of
Credit shall be deemed to be the maximum stated amount of such Letter of Credit
after giving effect to all such increases, whether or not such maximum stated
amount is in effect at such time. Further, and notwithstanding anything to the
contrary contained herein, it is understood that the Existing Letter of Credit
is denominated in Euros and will be valued in Dollars for purposes of repayment
in a manner reasonably determined by the L/C Issuer and the Administrative
Agent.

               1.07 Currency Equivalents Generally. Any amount specified in this
Agreement (other than in Articles II, IX and X) or any of the other Loan
Documents to be in Dollars shall also include the equivalent of such amount in
any currency other than Dollars, such equivalent amount to be determined at the
rate of exchange quoted by Bank of America in New York at the close of business
on the Business Day immediately preceding any date of determination thereof, to
prime banks in New York, New York for the spot purchase in the New York foreign
exchange market of such amount in U.S. dollars with such other currency.

ARTICLE II

THE COMMITMENTS AND CREDIT EXTENSIONS

               2.01 The Loans. (a) The Term Borrowing. Subject to the terms and
conditions set forth herein, each Term Lender severally agrees to make a single
loan (consisting of a Term Loan pursuant to the Term Facility in an amount
equal to its Applicable Percentage of the Term Facility) to the Borrower on the
Closing Date. The Term Borrowing shall consist of Term Loans made
simultaneously by the Term Lenders in accordance with their respective
Applicable Percentage of the Term Facility. Amounts borrowed under this
Section 2.01(a) and repaid or prepaid may not be reborrowed. Term Loans may be
Base Rate Loans or Eurodollar Rate Loans, as further provided herein.

               (b) The Revolving Credit Borrowings. Subject to the terms and conditions
set forth herein, each Revolving Credit Lender severally agrees to make loans
(each such loan, a “Revolving Credit Loan”) to the Borrower from time to time,
on any Business Day during the Availability Period, in an aggregate amount not
to exceed at any time outstanding the amount of such Lender’s Revolving Credit
Commitment; provided, however, that after giving effect to any Revolving Credit
Borrowing, (i) the Total Outstandings shall not exceed the Aggregate
Commitments, and (ii) the aggregate Outstanding Amount of the Revolving Credit
Loans of any Lender, plus such Lender’s Applicable Percentage of the
Outstanding Amount of all L/C Obligations, plus such Lender’s Applicable
Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed
such Lender’s Revolving Credit Commitment. Within the limits of each Lender’s
Revolving Credit Commitment, and subject to the other terms and conditions
hereof, the Borrower may borrow under this Section 2.01(b), prepay under
Section 2.05, and

31

 

reborrow under this Section 2.01(b). Revolving Credit Loans
may be Base Rate Loans or Eurodollar Rate Loans, as further provided herein.

               2.02 Borrowings, Conversions and Continuations of Loans.

               (a) Each Term Borrowing, each Revolving Credit Borrowing, each conversion
of Term Loans or Revolving Credit Loans from one Type to the other, and each
continuation of Eurodollar Rate Loans shall be made upon the Borrower’s
irrevocable notice to the Administrative Agent, which may be given by
telephone. Each such notice must be received by the Administrative Agent not
later than 11:00 a.m. (i) three Business Days prior to the requested date of
any Borrowing of, conversion to or continuation of Eurodollar Rate Loans or of
any conversion of Eurodollar Rate Loans to Base Rate Loans, and (ii) on the
requested date of any Borrowing of Base Rate Loans. Each telephonic notice by
the Borrower pursuant to this Section 2.02(a) must be confirmed promptly by
delivery to the Administrative Agent of a written Committed Loan Notice,
appropriately completed and signed by a Responsible Officer of the Borrower.
Each Borrowing of, conversion to or continuation of Eurodollar Rate Loans shall
be in a principal amount of $1,000,000 or a whole multiple of $100,000 in
excess thereof. Except as provided in Sections 2.03(c) and 2.04(c), each
Borrowing of or conversion to Base Rate Loans shall be in a principal amount of
$500,000 or a whole multiple of $100,000 in excess thereof. Each Committed
Loan Notice (whether telephonic or written) shall specify (i) whether the
Borrower is requesting a Term Loan Borrowing, a Revolving Credit Borrowing, a
conversion of Term Loans or Revolving Credit Loans from one Type to the other,
or a continuation of Eurodollar Rate Loans, (ii) the requested date of the
Borrowing, conversion or continuation, as the case may be (which shall be a
Business Day), (iii) the principal amount of Loans to be borrowed, converted or
continued, (iv) the Type of Loans to be borrowed or to which existing Term
Loans or Revolving Credit Loans are to be converted, and (v) if applicable, the
duration of the Interest Period with respect thereto. If the Borrower fails to
specify a Type of Loan in a Committed Loan Notice or if the Borrower fails to
give a timely notice requesting a conversion or continuation, then the
applicable Term Loans or Revolving Credit Loans shall be made as, or converted
to, Base Rate Loans. Any such automatic conversion to Base Rate Loans shall be
effective as of the last day of the Interest Period then in effect with respect
to the applicable Eurodollar Rate Loans. If the Borrower requests a Borrowing
of, conversion to, or continuation
of Eurodollar Rate Loans in any such Committed Loan Notice, but fails to
specify an Interest Period, it will be deemed to have specified an Interest
Period of one month.

               (b) Following receipt of a Committed Loan Notice, the Administrative Agent
shall promptly notify each Lender of the amount of its Applicable Percentage of
the applicable Term Loans or Revolving Credit Loans, and if no timely notice of
a conversion or continuation is provided by the Borrower, the Administrative
Agent shall notify each Lender of the details of any automatic conversion to
Base Rate Loans described in Section 2.02(a). In the case of a Term Loan
Borrowing or a Revolving Credit Borrowing, each Appropriate Lender shall make
the amount of its Loan available to the Administrative Agent in immediately
available funds at the Administrative Agent’s Office not later than 3:00 p.m.
on the Business Day specified in the applicable Committed Loan Notice. Upon
satisfaction of the applicable conditions set forth in Section 4.02 (and, if
such Borrowing is the initial Credit Extension, Section 4.01), the
Administrative Agent shall make all funds so received available to the Borrower
in like funds as received by the Administrative Agent either by (i) crediting
the account of the Borrower on the

32

 

books of Bank of America with the amount of
such funds or (ii) wire transfer of such funds, in each case in accordance with
instructions provided to (and reasonably acceptable to) the Administrative
Agent by the Borrower; provided, however, that if, on the date the Committed
Loan Notice with respect to such Borrowing is given by the Borrower, there are
L/C Borrowings outstanding, then the proceeds of such Borrowing first shall be
applied to the payment in full of any such L/C Borrowings and second, shall be
made available to the Borrower as provided above.

               (c) Except as otherwise provided herein, a Eurodollar Rate Loan may be
continued or converted only on the last day of an Interest Period for such
Eurodollar Rate Loan. During the existence of a Default, no Loans may be
requested as, converted to or continued as Eurodollar Rate Loans without the
consent of the Required Lenders.

               (d) The Administrative Agent shall promptly notify the Borrower and the
Lenders of the interest rate applicable to any Interest Period for Eurodollar
Rate Loans upon determination of such interest rate. At any time that Base
Rate Loans are outstanding, the Administrative Agent shall notify the Borrower
and the Lenders of any change in Bank of America’s prime rate used in
determining the Base Rate promptly following the public announcement of such
change.

               (e) After giving effect to all Term Borrowings, all Revolving Credit
Borrowings, all conversions of Term Loans or Revolving Credit Loans from one
Type to the other, and all continuations of Term Loans or Revolving Credit
Loans as the same Type, there shall not be more than ten Interest Periods in
effect.

               (f) The failure of any Lender to make the Loan to be made by it as part of
any Borrowing shall not relieve any other Lender of its obligation, if any,
hereunder to make its Loan on the date of such Borrowing, but no Lender shall
be responsible for the failure of any other Lender to make the Loan to be made
by such other Lender on the date of any Borrowing.

               (g) Anything in this Section 2.02 to the contrary notwithstanding, the
Borrower may not select (i) Eurodollar Rate for the initial Credit Extension
hereunder and (ii)
Interest Periods for Eurodollar Rate Loans that have a duration of more
than one month during the period from the date hereof to April 31, 2005 (or
such earlier date as shall be specified in its sole discretion by the
Administrative Agent in a written notice to the Borrower and the Lenders)

               2.03 Letters of Credit.

               (a) The Letter of Credit Commitment.

          (i) Subject to the terms and conditions set forth herein, (A) the
L/C Issuer agrees, in reliance upon the agreements of the other Revolving
Credit Lenders set forth in this Section 2.03, (1) from time to time on
any Business Day during the period from the Closing Date until the Letter
of Credit Expiration Date, to issue Letters of Credit for the account of
the Borrower or certain Subsidiaries, and to amend Letters of Credit
previously issued by it, in accordance with Section 2.03(b), and (2) to
honor drawings under the Letters of Credit; and (B) the Revolving Credit
Lenders severally agree to participate in Letters of Credit issued for
the account of the Borrower or its Subsidiaries

33

 

and any drawings
thereunder; provided that after giving effect to any L/C Credit Extension
with respect to any Letter of Credit, (x) the Total Outstandings shall
not exceed the Aggregate Commitments, (y) the aggregate Outstanding
Amount of the Revolving Credit Loans of any Lender, plus such Lender’s
Applicable Percentage of the Outstanding Amount of all L/C Obligations,
plus such Lender’s Applicable Percentage of the Outstanding Amount of all
Swing Line Loans shall not exceed such Lender’s Revolving Credit
Commitment, and (z) the Outstanding Amount of the L/C Obligations shall
not exceed the Letter of Credit Sublimit. Each request by the Borrower
for the issuance or amendment of a Letter of Credit shall be deemed to be
a representation by the Borrower that the L/C Credit Extension so
requested complies with the conditions set forth in the proviso to the
preceding sentence. Within the foregoing limits, and subject to the
terms and conditions hereof, the Borrower’s ability to obtain Letters of
Credit shall be fully revolving, and accordingly the Borrower may, during
the foregoing period, obtain Letters of Credit to replace Letters of
Credit that have expired or that have been drawn upon and reimbursed.
All Existing Letters of Credit shall be deemed to have been issued
pursuant hereto, and from and after the Closing Date shall be subject to
and governed by the terms and conditions hereof.

          (ii) The L/C Issuer shall not issue any Letter of Credit if:

          (A) the expiry date of such requested Letter of Credit would
occur more than twelve months after the date of issuance, unless
the Required Lenders have approved such expiry date; or

          (B) the expiry date of such requested Letter of Credit would
occur after the Letter of Credit Expiration Date, unless all the
Lenders have approved such expiry date.

          (iii) The L/C Issuer shall not be under any obligation to issue any
Letter of Credit if:

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

          (B) the issuance of such Letter of Credit would violate any
Laws or one or more policies of the L/C Issuer;

34

 

          (C) except as otherwise agreed by the Administrative Agent and
the L/C Issuer, such Letter of Credit is in an initial stated
amount less than $100,000;

          (D) such Letter of Credit contains any provisions for
automatic reinstatement of the stated amount after any drawing
thereunder; or

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

          (F) a default of any Lender’s obligations to fund under
Section 2.03(c) exists or any Lender is at such time a Defaulting
Lender hereunder, unless the L/C Issuer has entered into
satisfactory arrangements with the Borrower or such Lender to
eliminate the L/C Issuer’s risk with respect to such Lender.

          (iv) The L/C Issuer shall not amend any Letter of Credit if the L/C
Issuer would not be permitted at such time to issue such Letter of Credit
in its amended form under the terms hereof.

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

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

               (b) Procedures for Issuance and Amendment of Letters of Credit.

          (i) Each Letter of Credit shall be issued or amended, as the case
may be, upon the request of the Borrower delivered to the L/C Issuer
(with a copy to the Administrative Agent) in the form of a Letter of
Credit Application, appropriately completed and signed by a Responsible
Officer of the Borrower. Such Letter of Credit Application must be
received by the L/C Issuer and the Administrative Agent not later than
11:00 a.m. at least two Business Days (or such later date and time as the
Administrative Agent and the L/C Issuer may agree in a particular
instance in their sole discretion) prior to the proposed issuance date or
date of amendment, as the case may be. In the case of a request for an
initial issuance of a Letter of Credit, such Letter of Credit Application
shall specify in form and detail satisfactory to the L/C Issuer: (A) the
proposed issuance date of the requested Letter of Credit (which shall be
a Business Day); (B) the amount thereof; (C) the expiry date thereof; (D)
the name and address of the beneficiary thereof; (E) the documents to be
presented by such beneficiary in case of any drawing thereunder; (F) the
full text of any certificate to be presented by such beneficiary in case
of any drawing

35

 

thereunder; and (G) such other matters as the L/C Issuer
may require. In the case of a request for an amendment of any
outstanding Letter of Credit, such Letter of Credit Application shall
specify in form and detail satisfactory to the L/C Issuer (A) the Letter
of Credit to be amended; (B) the proposed date of amendment thereof
(which shall be a Business Day); (C) the nature of the proposed
amendment; and (D) such other matters as the L/C Issuer may require.
Additionally, the Borrower shall furnish to the L/C Issuer and the
Administrative Agent such other documents and information pertaining to
such requested Letter of Credit issuance or amendment, including any
Issuer Documents, as the L/C Issuer or the Administrative Agent may
require.

          (ii) Promptly after receipt of any Letter of Credit Application, the
L/C Issuer will confirm with the Administrative Agent (by telephone or in
writing) that the Administrative Agent has received a copy of such Letter
of Credit Application from the Borrower and, if not, the L/C Issuer will
provide the Administrative Agent with a copy thereof. Unless the L/C
Issuer has received written notice from any Lender, the Administrative
Agent or any Loan Party, at least one Business Day prior to the requested
date of issuance or amendment of the applicable Letter of Credit, that
one or more applicable conditions contained in Article IV shall not then
be satisfied, then, subject to the terms and conditions hereof, the L/C
Issuer shall, on the requested date, issue a Letter of Credit for the
account of the Borrower or enter into the applicable amendment, as the
case may be, in each case in accordance with the L/C Issuer’s usual and
customary business practices. Immediately upon the issuance of each
Letter of Credit, each Revolving Credit Lender shall be deemed to, and
hereby irrevocably and unconditionally agrees to, purchase from the L/C
Issuer a risk participation in such Letter of Credit in an amount equal
to the product of such Lender’s Applicable Percentage times the amount of
such Letter of Credit.

          (iii) Promptly after its delivery of any Letter of Credit or any
amendment to a Letter of Credit to an advising bank with respect thereto
or to the beneficiary thereof, the L/C Issuer will also deliver to the
Borrower and the Administrative Agent a true and complete copy of such
Letter of Credit or amendment.

               (c) Drawings and Reimbursements; Funding of Participations.

          (i) Upon receipt from the beneficiary of any Letter of Credit of any
notice of a drawing under such Letter of Credit, the L/C Issuer shall
notify the Borrower and the Administrative Agent thereof. Not later than
11:00 a.m. on the date of any payment by the L/C Issuer under a Letter of
Credit (each such date, an “Honor Date”), the Borrower shall reimburse
the L/C Issuer through the Administrative Agent in an amount equal to the
amount of such drawing. If the Borrower fails to so reimburse the L/C
Issuer by such time, the Administrative Agent shall promptly notify each
Revolving Credit Lender of the Honor Date, the amount of the unreimbursed
drawing (the “Unreimbursed Amount”), and the amount of such Revolving
Credit Lender’s Applicable Percentage thereof. In such event, the
Borrower shall be deemed to have requested a Revolving Credit Borrowing
of Base Rate Loans to be disbursed on the Honor Date in an amount equal
to the Unreimbursed Amount, without regard to the minimum and multiples
specified in Section 2.02 for the principal amount of Base Rate Loans,
but subject to the

36

 

amount of the unutilized portion of the Revolving
Credit Commitments and the conditions set forth in Section 4.02 (other
than the delivery of a Committed Loan Notice). Any notice given by the
L/C Issuer or the Administrative Agent pursuant to this Section
2.03(c)(i) may be given by telephone if immediately confirmed in writing;
provided that the lack of such an immediate confirmation shall not affect
the conclusiveness or binding effect of such notice.

          (ii) Each Revolving Credit Lender shall upon any notice pursuant to
Section 2.03(c)(i) make funds available to the Administrative Agent for
the account of the L/C Issuer at the Administrative Agent’s Office in an
amount equal to its Applicable Percentage of the Unreimbursed Amount not
later than 1:00 p.m. on the Business Day specified in such notice by the
Administrative Agent, whereupon, subject to the provisions of Section
2.03(c)(iii), each Revolving Credit Lender that so makes funds available
shall be deemed to have made a Base Rate Loan to the Borrower in such
amount. The Administrative Agent shall remit the funds so received to
the L/C Issuer.

          (iii) With respect to any Unreimbursed Amount that is not fully
refinanced by a Revolving Credit Borrowing of Base Rate Loans because the
conditions set forth in Section 4.02 cannot be satisfied or for any other
reason, the Borrower shall be deemed to have incurred from the L/C Issuer
an L/C Borrowing in the amount of the Unreimbursed Amount that is not so
refinanced, which L/C Borrowing shall be due and payable on demand
(together with interest) and shall bear interest at the Default Rate. In
such event, each Revolving Credit Lender’s payment to the Administrative
Agent for the account of the L/C Issuer pursuant to Section 2.03(c)(ii)
shall be deemed payment in respect of its participation in such L/C
Borrowing and shall constitute an L/C Advance from such Lender in
satisfaction of its participation obligation under this Section 2.03.

          (iv) Until each Revolving Credit Lender funds its Revolving Credit
Loan or L/C Advance pursuant to this Section 2.03(c) to reimburse the L/C
Issuer for any amount drawn under any Letter of Credit, interest in
respect of such Lender’s Applicable Percentage of such amount shall be
solely for the account of the L/C Issuer.

          (v) Each Revolving Credit Lender’s obligation to make Revolving
Credit Loans or L/C Advances to reimburse the L/C Issuer for amounts
drawn under Letters of Credit, as contemplated by this Section 2.03(c),
shall be absolute and unconditional and shall not be affected by any
circumstance, including (A) any setoff, counterclaim, recoupment, defense
or other right which such Lender may have against the L/C Issuer, the
Borrower or any other Person for any reason whatsoever; (B) the
occurrence or continuance of a Default, or (C) any other occurrence,
event or condition, whether or not similar to any of the foregoing;
provided, however, that each Revolving Credit Lender’s obligation to make
Revolving Credit Loans pursuant to this Section 2.03(c) is subject to the
conditions set forth in Section 4.02 (other than delivery by the Borrower
of a Committed Loan Notice ). No such making of an L/C Advance shall
relieve or otherwise impair the obligation of the Borrower to reimburse
the L/C Issuer for the amount of any payment made by the L/C Issuer under
any Letter of Credit, together with interest as provided herein.

37

 

          (vi) If any Revolving Credit Lender fails to make available to the
Administrative Agent for the account of the L/C Issuer any amount
required to be paid by such Lender pursuant to the foregoing provisions
of this Section 2.03(c) by the time specified in Section 2.03(c)(ii), the
L/C Issuer shall be entitled to recover from such Lender (acting through
the Administrative Agent), on demand, such amount with interest thereon
for the period from the date such payment is required to the date on
which such payment is immediately available to the L/C Issuer at a rate
per annum equal to the greater of the Federal Funds Rate and a rate
determined by the L/C Issuer in accordance with banking industry rules on
interbank compensation. A certificate of the L/C Issuer submitted to any
Revolving Credit Lender (through the Administrative Agent) with respect
to any amounts owing under this Section 2.03(c)(vi) shall be conclusive
absent manifest error.

               (d) Repayment of Participations.

          (i) At any time after the L/C Issuer has made a payment under any
Letter of Credit and has received from any Revolving Credit Lender such
Lender’s L/C Advance in respect of such payment in accordance with
Section 2.03(c), if the Administrative Agent receives for the account of
the L/C Issuer any payment in respect of the related Unreimbursed Amount
or interest thereon (whether directly from the Borrower or otherwise,
including proceeds of Cash Collateral applied thereto by the
Administrative Agent), the Administrative Agent will distribute to such
Lender its Applicable Percentage thereof (appropriately adjusted, in the
case of interest payments, to reflect the period of time during which
such Lender’s L/C Advance was outstanding) in the same funds as those
received by the Administrative Agent.

          (ii) If any payment received by the Administrative Agent for the
account of the L/C Issuer pursuant to Section 2.03(c)(i) is required to
be returned under any of the circumstances described in Section 10.05
(including pursuant to any settlement entered into by the L/C Issuer in
its discretion), each Revolving Credit Lender shall pay to the
Administrative Agent for the account of the L/C Issuer its Applicable
Percentage thereof on demand of the Administrative Agent, plus interest
thereon from the date of such
demand to the date such amount is returned by such Lender, at a rate
per annum equal to the Federal Funds Rate from time to time in effect.
The obligations of the Lenders under this clause shall survive the
payment in full of the Obligations and the termination of this Agreement.

               (e) Obligations Absolute. The obligation of the Borrower to reimburse the
L/C Issuer for each drawing under each Letter of Credit and to repay each L/C
Borrowing shall be absolute, unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement under all
circumstances, including the following:

          (i) any lack of validity or enforceability of such Letter of Credit,
this Agreement, or any other Loan Document;

          (ii) the existence of any claim, counterclaim, setoff, defense or
other right that the Borrower or any Subsidiary may have at any time
against any beneficiary or any

38

 

transferee of such Letter of Credit (or
any Person for whom any such beneficiary or any such transferee may be
acting), the L/C Issuer or any other Person, whether in connection with
this Agreement, the transactions contemplated hereby or by such Letter of
Credit or any agreement or instrument relating thereto, or any unrelated
transaction;

          (iii) any draft, demand, certificate or other document presented
under such Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect; or any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under such
Letter of Credit;

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

          (v) any exchange, release or nonperfection of any Collateral, or any
release or amendment or waiver of or consent to departure from the
Guaranty or any other guarantee, for all or any of the Obligations of the
Borrower or any Subsidiary in respect of such Letter of Credit; or

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

               The Borrower shall promptly examine a copy of each Letter of Credit and
each amendment thereto that is delivered to it and, in the event of any claim
of noncompliance with the Borrower’s instructions or other irregularity, the
Borrower will immediately notify the L/C Issuer. The Borrower shall be
conclusively deemed to have waived any such claim against the L/C Issuer and
its correspondents unless such notice is given as aforesaid.

               (f) Role of L/C Issuer. Each Lender and the Borrower agree that, in
paying any drawing under a Letter of Credit, the L/C Issuer shall not have any
responsibility to obtain any document (other than any sight draft, certificates
and documents expressly required by the Letter of Credit) or to ascertain or
inquire as to the validity or accuracy of any such document or the authority of
the Person executing or delivering any such document. None of the L/C Issuer,
the Administrative Agent, any of their respective Related Parties nor any
correspondent, participant or assignee of the L/C Issuer shall be liable to any
Lender for (i) any action taken or omitted in connection herewith at the
request or with the approval of the Lenders or the Required Lenders, as
applicable; (ii) any action taken or omitted in the absence of gross negligence
or willful misconduct; or (iii) the due execution, effectiveness, validity or
enforceability of any document or instrument related to any Letter of Credit or
Issuer Document. The Borrower hereby assumes all risks of the acts or
omissions of any beneficiary or transferee with respect to its use of any
Letter of Credit; provided, however, that this assumption is not intended to,
and

39

 

shall not, preclude the Borrower’s pursuing such rights and remedies as it
may have against the beneficiary or transferee at law or under any other
agreement. None of the L/C Issuer, the Administrative Agent, any of their
respective Related Parties nor any correspondent, participant or assignee of
the L/C Issuer shall be liable or responsible for any of the matters described
in clauses (i) through (v) of Section 2.03(e); provided, however, that anything
in such clauses to the contrary notwithstanding, the Borrower may have a claim
against the L/C Issuer, and the L/C Issuer may be liable to the Borrower, to
the extent, but only to the extent, of any direct, as opposed to consequential
or exemplary, damages suffered by the Borrower which the Borrower proves were
caused by the L/C Issuer’s willful misconduct or gross negligence or the L/C
Issuer’s willful failure to pay under any Letter of Credit after the
presentation to it by the beneficiary of a sight draft and certificate(s)
strictly complying with the terms and conditions of a Letter of Credit. In
furtherance and not in limitation of the foregoing, the L/C Issuer may accept
documents that appear on their face to be in order, without responsibility for
further investigation, regardless of any notice or information to the contrary,
and the L/C Issuer shall not be responsible for the validity or sufficiency of
any instrument transferring or assigning or purporting to transfer or assign a
Letter of Credit or the rights or benefits thereunder or proceeds thereof, in
whole or in part, which may prove to be invalid or ineffective for any reason.

               (g) Cash Collateral. Upon the request of the Administrative Agent, (i) if
the L/C Issuer has honored any full or partial drawing request under any Letter
of Credit and such drawing has resulted in an L/C Borrowing, or (ii) if, as of
the Letter of Credit Expiration Date, any L/C Obligation for any reason remains
outstanding, the Borrower shall, in each case, immediately Cash Collateralize
the then Outstanding Amount of all L/C Obligations. Sections 2.05 and 8.02(c)
set forth certain additional requirements to deliver Cash Collateral hereunder.
For purposes of this Section 2.03, Section 2.05 and Section 8.02(c). “Cash
Collateralize” means to pledge and deposit with or deliver to the
Administrative Agent, for the benefit of the L/C Issuer and the Lenders, as
collateral for the L/C Obligations, cash or deposit account balances pursuant
to documentation in form and substance satisfactory to the Administrative Agent
and the L/C Issuer (which documents are hereby consented to by the Lenders).
Derivatives of such term have corresponding meanings. The Borrower hereby
grants to the Administrative Agent, for the benefit of the L/C Issuer and the
Lenders, a security interest in all such cash, deposit accounts and all
balances therein and all proceeds of the foregoing. Cash Collateral shall be
maintained in blocked, non-interest bearing deposit accounts at Bank of
America. If at any time the Administrative Agent determines that any funds held
as Cash Collateral are subject to any
right or claim of any Person other than the Administrative Agent or that
the total amount of such funds is less than the aggregate Outstanding Amount of
all L/C Obligations, the Borrower will, forthwith upon demand by the
Administrative Agent, pay to the Administrative Agent, as additional funds to
be deposited and held in the deposit accounts at Bank of America as aforesaid,
an amount equal to the excess of (a) such aggregate Outstanding Amount over (b)
the total amount of funds, if any, then held as Cash Collateral that the
Administrative Agent determines to be free and clear of any such right and
claim. Upon the drawing of any Letter of Credit for which funds are on deposit
as Cash Collateral, such funds shall be applied, to the extent permitted under
applicable law, to reimburse the L/C Issuer.

               (h) Applicability of ISP98 and UCP. Unless otherwise expressly agreed by
the L/C Issuer and the Borrower when a Letter of Credit is issued (including
any such agreement applicable to an Existing Letter of Credit), (i) the rules
of the ISP shall apply to each standby

40

 

Letter of Credit, and (ii) the rules of
the Uniform Customs and Practice for Documentary Credits, as most recently
published by the International Chamber of Commerce at the time of issuance
shall apply to each commercial Letter of Credit.

               (i) Letter of Credit Fees. The Borrower shall pay to the Administrative
Agent for the account of each Revolving Credit Lender in accordance with its
Applicable Percentage (i) a Letter of Credit fee (the “Letter of Credit Fee”)
for each Letter of Credit equal to the Applicable Rate times the daily amount
available to be drawn under such Letter of Credit. For purposes of computing
the daily amount available to be drawn under any Letter of Credit, the amount
of such Letter of Credit shall be determined in accordance with Section 1.06.
Letter of Credit Fees shall be (i) computed on a quarterly basis in arrears and
(ii) due and payable on the first Business Day after the end of each March,
June, September and December, commencing with the first such date to occur
after the issuance of such Letter of Credit, on the Letter of Credit Expiration
Date and thereafter on demand. If there is any change in the Applicable Rate
during any quarter, the daily amount available to be drawn under each Letter of
Credit shall be computed and multiplied by the Applicable Rate separately for
each period during such quarter that such Applicable Rate was in effect.
Notwithstanding anything to the contrary contained herein, while any Event of
Default exists, all Letter of Credit Fees shall accrue at the Default Rate.

               (j) Fronting Fee and Documentary and Processing Charges Payable to L/C
Issuer. The Borrower shall pay directly to the L/C Issuer for its own account
a fronting fee with respect to each Letter of Credit, at the rate per annum
equal to 0.25% per annum, computed on the daily amount available to be drawn
under such Letter of Credit and on a quarterly basis in arrears, and due and
payable on the first Business Day after the end of each March, June, September
and December, commencing with the first such date to occur after the issuance
of such Letter of Credit, on the Letter of Credit Expiration Date and
thereafter on demand. For purposes of computing the daily amount available to
be drawn under any Letter of Credit, the amount of such Letter of Credit shall
be determined in accordance with Section 1.06. In addition, the Borrower shall
pay directly to the L/C Issuer for its own account the customary issuance,
presentation, amendment and other processing fees, and other standard costs and
charges, of the L/C Issuer relating to letters of credit as from time to time
in effect. Such customary fees and standard costs and charges are due and
payable on demand and are nonrefundable.

               (k) Conflict with Issuer Documents. In the event of any conflict between
the terms hereof and the terms of any Issuer Document, the terms hereof shall
control.

               (l) Letters of Credit Issued for Subsidiaries. Notwithstanding that a
Letter of Credit issued or outstanding hereunder is in support of any
obligations of, or is for the account of, a Subsidiary, the Borrower shall be
obligated to reimburse the L/C Issuer hereunder for any and all drawings under
such Letter of Credit. The Borrower hereby acknowledges that the issuance of
Letters of Credit for the account of Subsidiaries inures to the benefit of the
Borrower, and that the Borrower’s business derives substantial benefits from
the businesses of such Subsidiaries.

               2.04 Swing Line Loans.

41

 

               (a) The Swing Line. Subject to the terms and conditions set forth herein,
the Swing Line Lender agrees, in reliance upon the agreements of the other
Revolving Credit Lenders set forth in this Section 2.04, to make loans (each
such loan, a “Swing Line Loan”) to the Borrower from time to time on any
Business Day during the Availability Period in an aggregate amount not to
exceed at any time outstanding the amount of the Swing Line Sublimit,
notwithstanding the fact that such Swing Line Loans, when aggregated with the
Applicable Percentage of the Outstanding Amount of Loans and L/C Obligations of
the Lender acting as Swing Line Lender, may exceed the amount of such Lender’s
Commitment; provided, however, that after giving effect to any Swing Line Loan,
(i) the Total Outstandings shall not exceed the Aggregate Commitments, and (ii)
the aggregate Outstanding Amount of the Revolving Credit Loans of any Lender,
plus such Lender’s Applicable Percentage of the Outstanding Amount of all L/C
Obligations, plus such Lender’s Applicable Percentage of the Outstanding Amount
of all Swing Line Loans shall not exceed such Lender’s Revolving Credit
Commitment, and provided further that the Borrower shall not use the proceeds
of any Swing Line Loan to refinance any outstanding Swing Line Loan. Within
the foregoing limits, and subject to the other terms and conditions hereof, the
Borrower may borrow under this Section 2.04, prepay under Section 2.05, and
reborrow under this Section 2.04. Each Swing Line Loan shall be a Base Rate
Loan. Immediately upon the making of a Swing Line Loan, each Revolving Credit
Lender shall be deemed to, and hereby irrevocably and unconditionally agrees
to, purchase from the Swing Line Lender a risk participation in such Swing Line
Loan in an amount equal to the product of such Lender’s Applicable Percentage
times the amount of such Swing Line Loan.

               (b) Borrowing Procedures. Each Swing Line Borrowing shall be made upon
the Borrower’s irrevocable notice to the Swing Line Lender and the
Administrative Agent, which may be given by telephone. Each such notice must be
received by the Swing Line Lender and the Administrative Agent not later than
1:00 p.m. on the requested borrowing date, and shall specify (i) the amount to
be borrowed, which shall be a minimum of $100,000 and (ii) the requested
borrowing date, which shall be a Business Day. Each such telephonic notice
must be confirmed promptly by delivery to the Swing Line Lender and the
Administrative Agent of a written Swing Line Loan Notice, appropriately
completed and signed by a Responsible Officer of the Borrower. Promptly after
receipt by the Swing Line Lender of any telephonic Swing Line Loan Notice, the
Swing Line Lender will confirm with the Administrative Agent (by telephone or
in writing) that
the Administrative Agent has also received such Swing Line Loan Notice
and, if not, the Swing Line Lender will notify the Administrative Agent (by
telephone or in writing) of the contents thereof. Unless the Swing Line Lender
has received notice (by telephone or in writing) from the Administrative Agent
(including at the request of any Revolving Credit Lender) prior to 2:00 p.m. on
the date of the proposed Swing Line Borrowing (A) directing the Swing Line
Lender not to make such Swing Line Loan as a result of the limitations set
forth in the proviso to the first sentence of Section 2.04(a), or (B) that one
or more of the applicable conditions specified in Article IV is not then
satisfied, then, subject to the terms and conditions hereof, the Swing Line
Lender will, not later than 3:00 p.m. on the borrowing date specified in such
Swing Line Loan Notice, make the amount of its Swing Line Loan available to the
Borrower at its office by crediting the account of the Borrower on the books of
the Swing Line Lender in immediately available funds.

42

 

               (c) Refinancing of Swing Line Loans.

          (i) The Swing Line Lender at any time in its sole and absolute
discretion may request, on behalf of the Borrower (which hereby
irrevocably authorizes the Swing Line Lender to so request on its
behalf), that each Revolving Credit Lender make a Base Rate Loan in an
amount equal to such Lender’s Applicable Percentage of the amount of
Swing Line Loans then outstanding. Such request shall be made in writing
(which written request shall be deemed to be a Committed Loan Notice for
purposes hereof) and in accordance with the requirements of Section 2.02,
without regard to the minimum and multiples specified therein for the
principal amount of Base Rate Loans, but subject to the unutilized
portion of the Aggregate Revolving Credit Commitments and the conditions
set forth in Section 4.02. The Swing Line Lender shall furnish the
Borrower with a copy of the applicable Committed Loan Notice promptly
after delivering such notice to the Administrative Agent. Each Revolving
Credit Lender shall make an amount equal to its Applicable Percentage of
the amount specified in such Committed Loan Notice available to the
Administrative Agent in immediately available funds for the account of
the Swing Line Lender at the Administrative Agent’s Office not later than
1:00 p.m. on the day specified in such Committed Loan Notice, whereupon,
subject to Section 2.04(c)(ii), each Revolving Credit Lender that so
makes funds available shall be deemed to have made a Base Rate Loan to
the Borrower in such amount. The Administrative Agent shall remit the
funds so received to the Swing Line Lender.

          (ii) If for any reason any Swing Line Loan cannot be refinanced by
such a Revolving Credit Borrowing in accordance with Section 2.04(c)(i),
the request for Base Rate Loans submitted by the Swing Line Lender as set
forth herein shall be deemed to be a request by the Swing Line Lender
that each of the Revolving Credit Lenders fund its risk participation in
the relevant Swing Line Loan and each Revolving Credit Lender’s payment
to the Administrative Agent for the account of the Swing Line Lender
pursuant to Section 2.04(c)(i) shall be deemed payment in respect of such
participation.

          (iii) If any Revolving Credit Lender fails to make available to the
Administrative Agent for the account of the Swing Line Lender any amount
required to be paid by such Lender pursuant to the foregoing provisions
of this Section 2.04(c) by the time specified in Section 2.04(c)(i), the
Swing Line Lender shall be entitled to recover
from such Lender (acting through the Administrative Agent), on
demand, such amount with interest thereon for the period from the date
such payment is required to the date on which such payment is immediately
available to the Swing Line Lender at a rate per annum equal to the
greater of the Federal Funds Rate and a rate determined by the Swing Line
Lender in accordance with banking industry rules on interbank
compensation. A certificate of the Swing Line Lender submitted to any
Lender (through the Administrative Agent) with respect to any amounts
owing under this clause (iii) shall be conclusive absent manifest error.

          (iv) Each Revolving Credit Lender’s obligation to make Revolving
Credit Loans or to purchase and fund risk participations in Swing Line
Loans pursuant to this Section 2.04(c) shall be absolute and
unconditional and shall not be affected by any circumstance, including
(A) any setoff, counterclaim, recoupment, defense or other right

43

 

which
such Lender may have against the Swing Line Lender, the Borrower or any
other Person for any reason whatsoever, (B) the occurrence or continuance
of a Default, or (C) any other occurrence, event or condition, whether or
not similar to any of the foregoing; provided, however, that each
Revolving Credit Lender’s obligation to make Revolving Credit Loans
pursuant to this Section 2.04(c) is subject to the conditions set forth
in Section 4.02. No such funding of risk participations shall relieve or
otherwise impair the obligation of the Borrower to repay Swing Line
Loans, together with interest as provided herein.

               (d) Repayment of Participations.

          (i) At any time after any Revolving Credit Lender has purchased and
funded a risk participation in a Swing Line Loan, if the Swing Line
Lender receives any payment on account of such Swing Line Loan, the Swing
Line Lender will distribute to such Lender its Applicable Percentage of
such payment (appropriately adjusted, in the case of interest payments,
to reflect the period of time during which such Lender’s risk
participation was funded) in the same funds as those received by the
Swing Line Lender.

          (ii) If any payment received by the Swing Line Lender in respect of
principal or interest on any Swing Line Loan is required to be returned
by the Swing Line Lender under any of the circumstances described in
Section 10.05 (including pursuant to any settlement entered into by the
Swing Line Lender in its discretion), each Revolving Credit Lender shall
pay to the Swing Line Lender its Applicable Percentage thereof on demand
of the Administrative Agent, plus interest thereon from the date of such
demand to the date such amount is returned, at a rate per annum equal to
the Federal Funds Rate. The Administrative Agent will make such demand
upon the request of the Swing Line Lender. The obligations of the
Lenders under this clause shall survive the payment in full of the
Obligations and the termination of this Agreement.

               (e) Interest for Account of Swing Line Lender. The Swing Line Lender
shall be responsible for invoicing the Borrower for interest on the Swing Line
Loans. Until each Revolving Credit Lender funds its Base Rate Loan or risk
participation pursuant to this Section 2.04 to refinance such Lender’s
Applicable Percentage of any Swing Line Loan, interest in respect of such
Applicable Percentage shall be solely for the account of the Swing Line Lender.

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

               2.05 Prepayments.

               (a) Optional. (i) the Borrower may, upon notice to the Administrative
Agent, at any time or from time to time voluntarily prepay Loans in whole or in
part without premium or penalty; provided that (1) such notice must be received
by the Administrative Agent not later than 11:00 a.m. (A) three Business Days
prior to any date of prepayment of Eurodollar Rate Loans and (B) on the date of
prepayment of Base Rate Loans; (2) any prepayment of Eurodollar Rate Loans
shall be in a principal amount of $1,000,000 or a whole multiple of $100,000 in

44

 

excess thereof; and (3) any prepayment of Base Rate Loans shall be in a
principal amount of $500,000 or a whole multiple of $100,000 in excess thereof
or, in each case, if less, the entire principal amount thereof then
outstanding. Each such notice shall specify the date and amount of such
prepayment and the Type(s) of Loans to be prepaid. The Administrative Agent
will promptly notify each Lender of its receipt of each such notice, and of the
amount of such Lender’s Applicable Percentage of such prepayment. If such
notice is given by the Borrower, the Borrower shall make such prepayment and
the payment amount specified in such notice shall be due and payable on the
date specified therein. Any prepayment of a Eurodollar Rate Loan shall be
accompanied by all accrued interest thereon, together with any additional
amounts required pursuant to Section 3.05. Each prepayment of the outstanding
Term Loans pursuant to this Section 2.05(a) shall be applied to the Term
Facility and to the principal repayment installments thereof on a pro-rata
basis, and each such prepayment shall be paid to the Lenders in accordance with
their respective Applicable Percentages.

               (ii) The Borrower may, upon notice to the Swing Line Lender (with a copy to
the Administrative Agent), at any time or from time to time, voluntarily prepay
Swing Line Loans in whole or in part without premium or penalty; provided that
(1) such notice must be received by the Swing Line Lender and the
Administrative Agent not later than 1:00 p.m. on the date of the prepayment,
and (2) any such prepayment shall be in a minimum principal amount of $100,000.
Each such notice shall specify the date and amount of such prepayment. If
such notice is given by the Borrower, the Borrower shall make such prepayment
and the payment amount specified in such notice shall be due and payable on the
date specified therein.

               (b) Mandatory. (i) Within five Business Days after financial statements
have been delivered pursuant to Section 6.01(a) and the related Compliance
Certificate has been delivered pursuant to Section 6.02(b), the Borrower shall
prepay an aggregate principal amount of Loans equal to, in the case where the
Total Leverage Ratio is (1) 3.5:1.0 or more, 75% of, and (2) less than 3.5:1.0,
50% of, in each case, Excess Cash Flow for the fiscal year covered by such
financial statements, commencing with the period ending on December 31, 2005.

               (ii) If any Loan Party or any of its Subsidiaries Disposes of any property
or assets (other than any Disposition of any property or assets permitted by
Section 7.05(b), (c), (d) and (e)) which in the aggregate results in the
realization by any Loan Party or such Subsidiary of
Net Cash Proceeds (determined as of the date of such Disposition, whether

or not such Net Cash Proceeds are then received by such Loan Party or
Subsidiary), in excess of $250,000, the Borrower shall prepay an aggregate
principal amount of Loans equal to 100% of all Net Cash Proceeds received
therefrom immediately upon receipt thereof by such Loan Party or Subsidiary;
provided, however, that, with respect to any Net Cash Proceeds realized (x)
under a Disposition described in this Section 2.05(b)(ii) or (y) proceeds of
insurance and condemnation awards described in Section 2.05(b)(v), at the
option of the Borrower (as elected by the Borrower in writing to the
Administrative Agent on or within 5 Business Days after the date of such
Disposition or the receipt of such insurance proceeds or condemnation awards),
and so long as no Default shall have occurred and be continuing, such party may
reinvest all or any portion of such Net Cash Proceeds in operating assets so
long as within 180 days following receipt of such Net Cash Proceeds such
purchase shall have been consummated or a binding contract in respect of the
application of such proceeds is entered into within such 180 day period and the
application thereof is made within 90 days thereafter; provided further,
however, that any Net Cash Proceeds

45

 

not so reinvested shall be immediately
applied to the prepayment of the Loans as set forth in this Section 2.05.

               (iii) Upon the sale or issuance by Holdings or any of its Subsidiaries of
any of its Equity Interests, the Borrower shall prepay an aggregate principal
amount of Loans equal to, in the case where the Total Leverage Ratio is (1)
3.5:1.0 or more, 75% of, and (2) less than 3.5:1.0, 50% of, in each case, all
Net Cash Proceeds received therefrom immediately upon receipt thereof by such
Loan Party or Subsidiary.

               (iv) Upon the incurrence or issuance by any Loan Party or any of its
Subsidiaries of any Indebtedness (other than Indebtedness expressly permitted
to be incurred or issued pursuant to Section 7.02, other than Section
7.02(b)(J)(2)), the Borrower shall prepay an aggregate principal amount of
Loans equal to 100% of all Net Cash Proceeds received therefrom immediately
upon receipt thereof by such Loan Party or such Subsidiary.

               (v) Upon any Extraordinary Receipt received by or paid to or for the
account of any Loan Party or any of its Subsidiaries (other than the Specified
Payment), and not otherwise included in clause (ii), (iii) or (iv) of this
Section 2.05(b), the Borrower shall prepay an aggregate principal amount of
Loans equal to 100% of all Net Cash Proceeds received therefrom to the extent
not reinvested in operating assets within 180 days following receipt of such
Net Cash Proceeds or in respect of which a binding contract for the application
of such proceeds is not entered into within such 180 day period and the
application thereof is not made within 90 days thereafter by any Loan Party or
such Subsidiary.

               (vi) If for any reason the Total Outstandings at any time exceed the
Aggregate Commitments then in effect, the Borrower shall immediately prepay
Loans and/or Cash Collateralize the L/C Obligations in an aggregate amount
equal to such excess; provided, however, that the Borrower shall not be
required to Cash Collateralize the L/C Obligations pursuant to this Section
2.05(b)(vi) unless after the prepayment in full of the Loans the Total
Outstandings exceed the Aggregate Commitments then in effect.

               (vii) Each prepayment of Loans pursuant to this Section 2.05(b) shall be
applied, first, to the Term Facility and to the principal repayment
installments thereof on a pro-
rata basis and shall be paid to each Lender in accordance with its
respective Applicable Percentage and, thereafter, to the Revolving Credit
Facility in the manner set forth in clause (viii) of this Section 2.05(b).

               (viii) Prepayments of the Revolving Credit Facility made pursuant to clause
(i), (ii), (iii), (iv), (v), (vi) or (vii) of this Section 2.05(b), first,
shall be applied to prepay L/C Borrowings outstanding at such time until all
such L/C Borrowings are paid in full, second, shall be applied to prepay Swing
Line Loans outstanding at such time until all such Swing Line Loans are paid in
full, third, shall be applied to prepay Revolving Credit Loans outstanding at
such time until all such Revolving Credit Loans are paid in full and, fourth,
shall be used to Cash Collateralize the L/C Obligations; and, in the case of
prepayments of the Revolving Credit Facility required pursuant to clause (i),
(ii), (iii), (iv) or (v) of this Section 2.05(b), the amount remaining, if any,
after the prepayment in full of all Loans and L/C Borrowings outstanding at
such time and the L/C Obligations have been Cash Collateralized in full (the
sum of such

46

 

prepayment amounts, cash collateralization amounts and remaining
amount being, collectively, the “Reduction Amount”) may be retained by the
Borrower for use in the ordinary course of its business, and the Revolving
Credit Facility shall be automatically and permanently reduced by the Reduction
Amount as set forth in Section 2.06(b)(ii); provided that the Revolving Credit
Facility shall not be reduced below $15,000,000. Upon the drawing of any
Letter of Credit, which has been Cash Collateralized, such funds shall be
applied (without any further action by or notice to or from the Borrower or any
other Loan Party) to reimburse the L/C Issuer or the Revolving Credit Lenders,
as applicable.

               (ix) Notwithstanding any of the other provisions of clause (ii), (iii),
(iv) or (v) of this Section 2.05(b), so long as no Default shall have occurred
and be continuing, if, on any date on which a prepayment would otherwise be
required to be made pursuant to clause (ii), (iii), (iv) or (v) of this Section
2.05(b), the aggregate amount of Net Cash Proceeds required by such clause to
be applied to prepay Loans on such date is less than or equal to $1,000,000,
the Borrower may defer such prepayment until the first date on which the
aggregate amount of Net Cash Proceeds or other amounts otherwise required under
clause (ii), (iii), (iv) or (v) of this Section 2.05(b) to be applied to prepay
Loans exceeds $1,000,000. During such deferral period the Borrower may apply
all or any part of such aggregate amount to prepay Revolving Credit Loans and
may, subject to the fulfillment of the applicable conditions set forth in
Article IV, reborrow such amounts (which amounts, to the extent originally
constituting Net Cash Proceeds, shall be deemed to retain their original
character as Net Cash Proceeds when so reborrowed) for application as required
by this Section 2.05(b). Upon the occurrence of a Default, the Borrower shall
immediately prepay the Loans in the amount of all Net Cash Proceeds received by
the Borrower and other amounts, as applicable, that are required to be applied
to prepay Loans under this Section 2.05(b) (without giving effect to the first
and second sentences of this clause (x)) but which have not previously been so
applied.

               (x) Anything contained in this Section 2.05(b) to the contrary
notwithstanding, (A) if, following the occurrence of any “Asset Sale” (as such
term is defined in the Subordinated Notes Indenture) by any Loan Party or any
of its Subsidiaries, the Borrower is required to commit by a particular date (a
“Commitment Date”) to apply or cause its Subsidiaries to apply an amount equal
to any of the “Net Proceeds” (as defined in the Subordinated Notes Indenture)
thereof in a particular manner, or to apply by a particular date (an
“Application Date”) an amount equal to any such “Net Proceeds” in a
particular manner, in either case in order to excuse the Borrower from being
required to make an “Asset Sale Offer” (as defined in the Subordinated Notes
Indenture) in connection with such “Asset Sale”, and the Borrower shall have
failed to so commit or to so apply an amount equal to such “Net Proceeds” at
least 60 days before the applicable Commitment Date or Application Date, as the
case may be, or (B) if the Borrower at any other time shall have failed to
apply or commit or cause to be applied an amount equal to any such “Net
Proceeds”, and, within 60 days thereafter assuming no further application or
commitment of an amount equal to such “Net Proceeds” the Borrower would
otherwise be required to make an “Asset Sale Offer” in respect thereof, then in
either such case the Borrower shall immediately pay or cause to be paid to the
Administrative Agent an amount equal to such “Net Proceeds” to be applied to
the payment of the Loans and L/C Borrowings and to Cash Collateralize the L/C
Obligations in the manner set forth in Section 2.05(b) in such amounts as shall
excuse the Borrower from making any such “Asset Sale Offer”.

47

 

               2.06 Termination or Reduction of Commitments.

               (a) Optional. The Borrower may, upon notice to the Administrative Agent,
terminate the unused portions of the Term Commitments, the Letter of Credit
Sublimit, or the unused Revolving Credit Commitments, or from time to time
permanently reduce the unused portions of the Term Commitments, the Letter of
Credit Sublimit, or the unused Revolving Credit Commitments; provided that (i)
any such notice shall be received by the Administrative Agent not later than
11:00 a.m. five Business Days prior to the date of termination or reduction,
(ii) any such partial reduction shall be in an aggregate amount of $10,000,000
or any whole multiple of $1,000,000 in excess thereof and (iii) the Borrower
shall not terminate or reduce the unused portions of the Term Commitments, the
Letter of Credit Sublimit, or the unused Revolving Credit Commitments if, after
giving effect thereto and to any concurrent prepayments hereunder, the Total
Outstandings would exceed the Aggregate Commitments.

               (b) Mandatory. (i) The Term Facility shall be automatically and
permanently reduced on the date of the Term Borrowing (after giving effect to
the Term Borrowing), and from time to time thereafter upon each repayment or
prepayment of the outstanding Term Loans, by an amount equal to the amount by
which (A) the Term Facility immediately prior to such reduction exceeds (B) the
aggregate principal amount of all Term Loans outstanding at such time.

               (ii) The Revolving Credit Facility shall be automatically and permanently
reduced on each date on which the prepayment of Revolving Credit Loans
outstanding thereunder is required to be made pursuant to Section
2.05(b)(i),(ii), (iii), (iv) or (v) by an amount equal to the applicable
Reduction Amount; provided that the Revolving Credit Facility shall not be
reduced below $15,000,000.

               (iii) If after giving effect to any reduction or termination of unused
Revolving Credit Commitments under this Section 2.06, the Letter of Credit
Sublimit or the Swing Line
Sublimit exceeds the amount of the Aggregate Revolving Credit Commitments,
such Sublimit shall be automatically reduced by the amount of such excess.

               (c) Application of Commitment Reductions; Payment of Fees. The
Administrative Agent will promptly notify the Lenders of any termination or
reduction of unused portions of the Term Commitments, the Letter of Credit
Sublimit, or the unused Revolving Credit Commitment under this Section 2.06.
Each reduction of the unused portion of the Term Commitments pursuant to
Section 2.06(a) shall be applied to the Term Facility and to the principal
repayment installments thereof on a pro rata basis. Upon any reduction of
unused Commitments under a Facility, the Commitment of each Lender under such
Facility shall be reduced by such Lender’s Applicable Percentage of the amount
by which such Facility is reduced. All fees accrued until the effective date
of any termination of the Aggregate Commitments shall be paid on the effective
date of such termination.

               2.07 Repayment of Loans.

               (a) Term Loans. The Borrower shall repay to the Administrative Agent for
the ratable account of the Term Lenders the aggregate principal amount of all
Term Loans

48

 

outstanding on the following dates in the respective amounts set
forth opposite such dates (which amounts shall be reduced as a result of the
application of prepayments in accordance with the order of priority set forth
in Section 2.05):

	 	 	 	 	 
	Date
	 	Amount

	March 30, 2005
	 	$	1,875,000	 
	June 30, 2005
	 	$	1,875,000	 
	September 30, 2005
	 	$	1,875,000	 
	December 31, 2005
	 	$	1,875,000	 
	March 30, 2006
	 	$	1,875,000	 
	June 30, 2006
	 	$	1,875,000	 
	September 30, 2006
	 	$	1,875,000	 
	December 31, 2006
	 	$	1,875,000	 
	March 30, 2007
	 	$	1,875,000	 
	June 30, 2007
	 	$	1,875,000	 
	September 30, 2007
	 	$	1,875,000	 
	December 31, 2007
	 	$	1,875,000	 
	March 30, 2008
	 	$	3,750,000	 
	June 30, 2008
	 	$	3,750,000	 
	September 30, 2008
	 	$	3,750,000	 
	December 31, 2008
	 	$	3,750,000	 
	March 30, 2009
	 	$	3,750,000	 
	June 30, 2009
	 	$	3,750,000	 
	September 30, 2009
	 	$	3,750,000	 
	December 31, 2009
	 	$	3,750,000	 
	March 30, 2010
	 	$	24,375,000	 
	June 30, 2010
	 	$	24,375,000	 
	September 30, 2010
	 	$	24,375,000	 
	October 4, 2010
	 	$	24,375,000	 

provided, however, that the final principal repayment installment of the Loans
shall be repaid on the Maturity Date for the Term Facility and in any event
shall be in an amount equal to the aggregate principal amount of all Term Loans
outstanding on such date.

               (b) Revolving Credit Loans. The Borrower shall repay to the
Administrative Agent for the ratable account of the Revolving Credit Lenders on
the Maturity Date for the Revolving Credit Facility the aggregate principal
amount of all Revolving Credit Advances outstanding on such date.

               (c) Swing Line Loans. The Borrower shall repay each Swing Line Loan on
the earlier to occur of (i) the first Business Day of the next succeeding
calendar month after the date on which such Loan is made and (ii) the Maturity
Date for the Revolving Credit Facility.

49

 

               2.08 Interest.

               (a) Subject to the provisions of Section 2.08(b), (i) each Eurodollar Rate
Loan shall bear interest on the outstanding principal amount thereof for each
Interest Period at a rate
per annum equal to the Eurodollar Rate for such Interest Period plus the
Applicable Rate; (ii) each Base Rate Loan shall bear interest on the
outstanding principal amount thereof from the applicable borrowing date at a
rate per annum equal to the Base Rate plus the Applicable Rate; and (iii) each
Swing Line Loan shall bear interest on the outstanding principal amount thereof
from the applicable borrowing date at a rate per annum equal to the Base Rate
plus the Applicable Rate.

               (b) (i) If any amount of principal of any Loan is not paid when due
(without regard to any applicable grace periods), whether at stated maturity,
by acceleration or otherwise, such amount shall thereafter bear interest at a
fluctuating interest rate per annum at all times equal to the Default Rate to
the fullest extent permitted by applicable Laws.

               (ii) If any amount (other than principal of any Loan) payable by the
Borrower under any Loan Document is not paid when due (without regard to any
applicable grace periods), whether at stated maturity, by acceleration or
otherwise, then upon the request of the Required Lenders such amount shall
thereafter bear interest at a fluctuating interest rate per annum at all times
equal to the Default Rate to the fullest extent permitted by applicable Laws.

               (iii) Upon the request of the Required Lenders, while any Event of Default
exists, the Borrower shall pay interest on the principal amount of all
outstanding Obligations hereunder at a fluctuating interest rate per annum at
all times equal to the Default Rate to the fullest extent permitted by
applicable Laws.

               (iv) Accrued and unpaid interest on past due amounts (including interest
on past due interest) shall be due and payable upon demand.

               (c) Interest on each Loan shall be due and payable in arrears on each
Interest Payment Date applicable thereto and at such other times as may be
specified herein. Interest hereunder shall be due and payable in accordance
with the terms hereof before and after judgment, and before and after the
commencement of any proceeding under any Debtor Relief Law.

               2.09 Fees. In addition to certain fees described in Sections 2.03(i) and
(j):

               (a) Commitment Fee. The Borrower shall pay to the Administrative Agent
for the account of each Revolving Credit Lender in accordance with its
Applicable Percentage, a commitment fee equal to 0.50% per annum times the
actual daily amount by which the aggregate Revolving Credit Commitments exceed
the sum of (A) the Outstanding Amount of Revolving Credit Loans (excluding
Swing Line Borrowings) and (B) the Outstanding Amount of L/C Obligations;
provided, however, that any commitment fee accrued with respect to any of the
Commitments of a Defaulting Lender during the period prior to the time such
Lender became a Defaulting Lender and unpaid at such time shall not be payable
by the Borrower so long as such Lender shall be a Defaulting Lender except to
the extent that such commitment fee shall otherwise have been due and payable
by the Borrower prior to such time; and provided further

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that no commitment fee shall accrue on any of the Commitments of a
Defaulting Lender so long as such Lender shall be a Defaulting Lender. The
commitment fee shall accrue at all times during the Availability Period,
including at any time during which one or more of the conditions in Article IV
is not met, and shall be due and payable quarterly in arrears on the last
Business Day of each March, June, September and December, commencing with the
first such date to occur after the Closing Date, and on the Maturity Date for
the applicable Facility. The commitment fee shall be calculated quarterly in
arrears.

          (b) Other Fees. (i) The Borrower shall pay to the Arranger and the
Administrative Agent for their own respective accounts fees in the amounts and
at the times specified in the Fee Letter. Such fees shall be fully earned when
paid and shall not be refundable for any reason whatsoever.

          (ii) The Borrower shall pay to the Agents such 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.

          2.10 Computation of Interest and Fees. All computations of interest for
Base Rate Loans when the Base Rate is determined by Bank of America’s “prime
rate” shall be made on the basis of a year of 365 or 366 days, as the case may
be, and actual days elapsed. All other computations of fees and interest shall
be made on the basis of a 360-day year and actual days elapsed (which results
in more fees or interest, as applicable, being paid than if computed on the
basis of a 365-day year). Interest shall accrue on each Loan for the day on
which the Loan is made, and shall not accrue on a Loan, or any portion thereof,
for the day on which the Loan or such portion is paid, provided that any Loan
that is repaid on the same day on which it is made shall, subject to Section
2.12(a), bear interest for one day. Each determination by the Administrative
Agent of an interest rate or fee hereunder shall be conclusive and binding for
all purposes, absent manifest error.

          2.11 Evidence of Indebtedness.

          (a) The Credit Extensions made by each Lender shall be evidenced by one or
more accounts or records maintained by such Lender and by the Administrative
Agent in the ordinary course of business. The accounts or records maintained
by the Administrative Agent and each Lender shall be conclusive absent manifest
error of the amount of the Credit Extensions made by the Lenders to the
Borrower and the interest and payments thereon. Any failure to so record or
any error in doing so shall not, however, limit or otherwise affect the
obligation of the Borrower hereunder to pay any amount owing with respect to
the Obligations. In the event of any conflict between the accounts and records
maintained by any Lender and the accounts and records of the Administrative
Agent in respect of such matters, the accounts and records of the
Administrative Agent shall control in the absence of manifest error. Upon the
request of any Lender made through the Administrative Agent, the Borrower shall
execute and deliver to such Lender (through the Administrative Agent) a Note,
which shall evidence such Lender’s Loans in addition to such accounts or
records. Each Lender may attach schedules to its Note and endorse thereon the
date, Type (if applicable), amount and maturity of its Loans and payments with
respect thereto.

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          (b) In addition to the accounts and records referred to in Section
2.11(a), each Lender and the Administrative Agent shall maintain in accordance
with its usual practice accounts or records evidencing the purchases and sales
by such Lender of participations in Letters of Credit and Swing Line Loans. In
the event of any conflict between the accounts and records maintained by the
Administrative Agent and the accounts and records of any Lender in respect of
such matters, the accounts and records of the Administrative Agent shall
control in the absence of manifest error.

          (c) Entries made in good faith by the Administrative Agent in the Register
pursuant to Section 2.11(b), and by each Lender in its account or accounts
pursuant to Section 2.11(a), shall be prima facie evidence of the amount of
principal and interest due and payable or to become due and payable from the
Borrower to, in the case of the Register, each Lender and, in the case of such
account or accounts, such Lender, under this Agreement and the other Loan
Documents, absent manifest error; provided that the failure of the
Administrative Agent or such Lender to make an entry, or any finding that an
entry is incorrect, in the Register or such account or accounts shall not limit
or otherwise affect the obligations of the Borrower under this Agreement and
the other Loan Documents.

          2.12 Payments Generally; Administrative Agent’s Clawback.

          (a) General. All payments to be made by the Borrower shall be made
without condition or deduction for any counterclaim, defense, recoupment or
setoff. Except as otherwise expressly provided herein, all payments by the
Borrower hereunder shall be made to the Administrative Agent, for the account
of the respective Lenders to which such payment is owed, at the Administrative
Agent’s Office in Dollars and in immediately available funds not later than
2:00 p.m. on the date specified herein. The Administrative Agent will promptly
distribute to each Lender its Applicable Percentage (or other applicable share
as provided herein) of such payment in like funds as received by wire transfer
to such Lender’s Lending Office. All payments received by the Administrative
Agent after 2:00 p.m. shall be deemed received on the next succeeding Business
Day and any applicable interest or fee shall continue to accrue.

          (b) (i) Funding by Lenders; Presumption by Administrative Agent. Unless
the Administrative Agent shall have received notice from a Lender prior to the
proposed date of any Borrowing that such Lender will not make available to the
Administrative Agent such Lender’s share of such Borrowing, the Administrative
Agent may assume that such Lender has made such share available on such date in
accordance with Section 2.02 and may, in reliance upon such assumption, make
available to the Borrower a corresponding amount. In such event, if a Lender
has not in fact made its share of the applicable Borrowing available to the
Administrative Agent, then the applicable Lender and the Borrower severally
agree to pay to the Administrative Agent forthwith on demand such corresponding
amount in immediately available funds with interest thereon, for each day from
and including the date such amount is made available to the Borrower to but
excluding the date of payment to the Administrative Agent, at (A) in the case
of a payment to be made by such Lender, the greater of the Federal Funds Rate
and a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation and (B) in the case of a payment to be
made by the Borrower, the interest rate applicable to Base Rate Loans. If the
Borrower and such Lender shall pay such interest to the Administrative Agent
for the same or an overlapping period, the Administrative

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Agent shall promptly remit to the Borrower the amount of such interest
paid by the Borrower for such period. If such Lender pays its share of the
applicable Borrowing to the Administrative Agent, then the amount so paid shall
constitute such Lender’s Loan included in such Borrowing. Any payment by the
Borrower shall be without prejudice to any claim the Borrower may have against
a Lender that shall have failed to make such payment to the Administrative
Agent.

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

          A notice of the Administrative Agent to any Lender or the Borrower with
respect to any amount owing under this subsection (b) shall be conclusive,
absent manifest error.

          (c) Failure to Satisfy Conditions Precedent. If any Lender makes
available to the Administrative Agent funds for any Loan to be made by such
Lender as provided in the foregoing provisions of this Article II, and such
funds are not made available to the Borrower by the Administrative Agent
because the conditions to the applicable Credit Extension set forth in Article
IV are not satisfied or waived in accordance with the terms hereof, the
Administrative Agent shall return such funds (in like funds as received from
such Lender) to such Lender, without interest.

          (d) Obligations of Lenders Several. The obligations of the Lenders
hereunder to make Loans and to fund participations in Letters of Credit and
Swing Line Loans and to make payments pursuant to Section 10.04(c) are several
and not joint. The failure of any Lender to make any Loan or to fund any such
participation or make payments pursuant to Section 10.04(c) on any date
required hereunder shall not relieve any other Lender of its corresponding
obligation to do so on such date, and no Lender shall be responsible for the
failure of any other Lender to so make its Loan or purchase its participation
or make payments pursuant to Section 10.04(c).

          (e) Funding Source. Nothing herein shall be deemed to obligate any Lender
to obtain the funds for any Loan in any particular place or manner or to
constitute a representation by any Lender that it has obtained or will obtain
the funds for any Loan in any particular place or manner.

          (f) Authorization. The Borrower hereby authorizes each Lender, if and to
the extent payment owed to such Lender is not made when due hereunder or, in
the case of a Lender,

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under the Note held by such Lender, to charge from time to time against
any or all of the Borrower’s accounts with such Lender any amount so due.

          (g) Insufficient Payment. Whenever any payment received by the
Administrative Agent under this Agreement or any of the other Loan Documents is
insufficient to pay in full all amounts due and payable to the Agents and the
Lenders under or in respect of this Agreement and the other Loan Documents on
any date, such payment shall be distributed by the Administrative Agent and
applied by the Agents and the Lenders in the order of priority set forth in
Section 8.03. If the Administrative Agent receives funds for application to
the Obligations of the Loan Parties under or in respect of the Loan Documents
under circumstances for which the Loan Documents do not specify the manner in
which such funds are to be applied, the Administrative Agent may, but shall not
be obligated to, elect to distribute such funds to each of the Lenders in
accordance with such Lender’s Applicable Percentage of the sum of (A) the
Outstanding Amount of all Loans outstanding at such time and (b) the
Outstanding Amount of all L/C Obligations outstanding at such time, in
repayment or prepayment of such of the outstanding Loans or other Obligations
then owing to such Lender.

          2.13 Sharing of Payments by Lenders. If any Lender shall, by exercising
any right of setoff or counterclaim or otherwise, obtain payment in respect of
any principal of or interest on any of the Loans made by it, or the
participations in L/C Obligations or in Swing Line Loans held by it resulting
in such Lender’s receiving payment of a proportion of the aggregate amount of
such Loans or participations and accrued interest thereon greater than its pro
rata share thereof of the applicable Facility as provided herein, then the
Lender receiving such greater proportion shall (a) notify the Administrative
Agent of such fact, and (b) purchase (for cash at face value) participations in
the Loans and subparticipations in L/C Obligations and Swing Line Loans of the
other Lenders, or make such other adjustments as shall be equitable, so that
the benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Committed Loans and other amounts owing them, provided that:

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

     (ii) the provisions of this Section shall not be construed to apply
to (x) any payment made by the Borrower pursuant to and in accordance
with the express terms of this Agreement or (y) any payment obtained by a
Lender as consideration for the assignment of or sale of a participation
in any of its Loans or subparticipations in L/C Obligations or Swing Line
Loans to any assignee or participant, other than to the Borrower or any
Subsidiary thereof (as to which the provisions of this Section shall
apply).

          Each Loan Party consents to the foregoing and agrees, to the extent it may
effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against such
Loan Party rights of setoff and counterclaim

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with respect to such participation as fully as if such Lender were a
direct creditor of such Loan Party in the amount of such participation.

ARTICLE III

TAXES, YIELD PROTECTION AND ILLEGALITY

          3.01 Taxes.

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

          (b) Payment of Other Taxes by the Borrower. Without limiting the
provisions of subsection (a) above, the Borrower shall timely pay any Other
Taxes to the relevant Governmental Authority in accordance with applicable law.

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

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

          (e) Status of Lenders. Any Foreign Lender that is entitled to an
exemption from or reduction of withholding tax under the laws of the United
States, or any treaty to which the United States is a party, with respect to
payments hereunder or under any other Loan

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Document shall deliver to the Borrower (with a copy to the Administrative
Agent), at the time or times prescribed by applicable law or reasonably
requested by the Borrower or the Administrative Agent, such properly completed
and executed documentation prescribed by applicable law as will permit such
payments to be made without withholding or at a reduced rate of withholding.
In addition, any Lender, if requested by the Borrower or the Administrative
Agent, shall deliver such other documentation prescribed by applicable law or
reasonably requested by the Borrower or the Administrative Agent as will enable
the Borrower or the Administrative Agent to determine whether or not such
Lender is subject to backup withholding or information reporting requirements.

Without limiting the generality of the foregoing, any Foreign Lender shall
deliver to the Borrower and the Administrative Agent (in such number of copies
as shall be requested by the recipient) on or prior to the date on which such
Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the request of the Borrower or the Administrative Agent, but
only if such Foreign Lender is legally entitled to do so), whichever of the
following is applicable:

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

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

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

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

          (f) Treatment of Certain Refunds. If the Administrative Agent, any Lender
or the L/C Issuer determines, in its sole discretion, that it has received a
refund of any Taxes or Other Taxes as to which it has been indemnified by the
Borrower or with respect to which the Borrower has paid additional amounts
pursuant to this Section, it shall pay to the Borrower an amount equal to such
refund (but only to the extent of indemnity payments made, or additional
amounts paid, by the Borrower under this Section with respect to the Taxes or
Other Taxes giving rise to such refund), net of all out-of-pocket expenses of
the Administrative Agent, such Lender or the L/C Issuer, as the case may be,
and without interest (other than any interest paid by the relevant Governmental
Authority with respect to such refund), provided that the Borrower, upon the
request of the Administrative Agent, such Lender or the L/C Issuer, agrees to
repay the amount paid over to the Borrower (plus any penalties, interest or
other charges imposed by the

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relevant Governmental Authority) to the Administrative Agent, such Lender
or the L/C Issuer in the event the Administrative Agent, such Lender or the L/C
Issuer is required to repay such refund to such Governmental Authority. This
subsection shall not be construed to require the Administrative Agent, any
Lender or the L/C Issuer (i) to conduct its business or to arrange or alter in
any respect its tax or financial affairs so that it is entitled to receive such
refund other than performing ministerial acts necessary to be entitled to
receive such refund or (ii) to make available its tax returns (or any other
information relating to its taxes that it deems confidential) to the Borrower
or any other Person.

          3.02 Illegality. If any Lender determines that any Law has made it
unlawful, or that any Governmental Authority has asserted that it is unlawful,
for any Lender or its applicable Lending Office to make, maintain or fund
Eurodollar Rate Loans, or to determine or charge interest rates based upon the
Eurodollar Rate, or any Governmental Authority has imposed material
restrictions on the authority of such Lender to purchase or sell, or to take
deposits of, Dollars in the London interbank market, then, on notice thereof by
such Lender to the Borrower through the Administrative Agent, any obligation of
such Lender to make or continue Eurodollar Rate Loans or to convert Base Rate
Loans to Eurodollar Rate Loans shall be suspended until such Lender notifies
the Administrative Agent and the Borrower that the circumstances giving rise to
such determination no longer exist. Upon receipt of such notice, the Borrower
shall, upon demand from such Lender (with a copy to the Administrative Agent),
prepay or, if applicable, convert all Eurodollar Rate Loans of such Lender to
Base Rate Loans, either on the last day of the Interest Period therefor, if
such Lender may lawfully continue to maintain such Eurodollar Rate Loans to
such day, or immediately, if such Lender may not lawfully continue to maintain
such Eurodollar Rate Loans. Upon any such prepayment or conversion, the
Borrower shall also pay accrued interest on the amount so prepaid or converted.

          3.03 Inability to Determine Rates. If the Required Lenders determine that
for any reason in connection with any request for a Eurodollar Rate Loan or a
conversion to or continuation thereof that (a) Dollar deposits are not being
offered to banks in the London interbank eurodollar market for the applicable
amount and Interest Period of such Eurodollar Rate Loan, (b) adequate and
reasonable means do not exist for determining the Eurodollar Rate for any
requested Interest Period with respect to a proposed Eurodollar Rate Loan, or
(c) the Eurodollar Rate for any requested Interest Period with respect to a
proposed Eurodollar Rate Loan does not adequately and fairly reflect the cost
to such Lenders of funding such Loan, or that Dollar deposits are not being
offered to banks in the London interbank eurodollar market for the applicable
amount and the Interest Period of such Eurodollar Rate Loan, the Administrative
Agent will promptly so notify the Borrower and each Lender. Thereafter, the
obligation of the Lenders to make or maintain Eurodollar Rate Loans shall be
suspended until the Administrative Agent (upon the instruction of the Required
Lenders) revokes such notice. Upon receipt of such notice, the Borrower may
revoke any pending request for a Borrowing of, conversion to or continuation of
Eurodollar Rate Loans or, failing that, will be deemed to have converted such
request into a request for a Committed Borrowing of Base Rate Loans in the
amount specified therein.

          3.04 Increased Costs; Reserves on Eurodollar Rate Loans.

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

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     (i) impose, modify or deem applicable any reserve, special deposit,
compulsory loan, insurance charge or similar requirement against assets
of, deposits with or for the account of, or credit extended or
participated in by, any Lender (except any reserve requirement
contemplated by Section 3.04(e)) or the L/C Issuer;

     (ii) subject any Lender or the L/C Issuer to any tax of any kind
whatsoever with respect to this Agreement, any Letter of Credit, any
participation in a Letter of Credit or any Eurodollar Loan made by it, or
change the basis of taxation of payments to such Lender or the L/C Issuer
in respect thereof (except for Indemnified Taxes or Other Taxes which
shall be governed by Section 3.01 and any change in the rate of any
Excluded Tax payable by such Lender or the L/C Issuer); or

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

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

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

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

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

          (e) Reserves on Eurodollar Rate Loans. The Borrower shall pay to each
Lender, as long as such Lender shall be required to maintain reserves with
respect to liabilities or assets consisting of or including Eurocurrency funds
or deposits (currently known as “Eurocurrency liabilities”), additional
interest on the unpaid principal amount of each Eurodollar Rate Loan equal to
the actual costs of such reserves allocated to such Loan by such Lender (as
determined by such Lender in good faith, which determination shall be
conclusive), which shall be due and payable on each date on which interest is
payable on such Loan, provided the Borrower shall have received at least 10
days’ prior notice (with a copy to the Administrative Agent) of such additional
interest from such Lender. If a Lender fails to give notice 10 days prior to
the relevant Interest Payment Date, such additional interest shall be due and
payable 10 days from receipt of such notice.

          3.05 Compensation for Losses. Upon demand of any Lender (with a copy to
the Administrative Agent) from time to time, the Borrower shall promptly
compensate such Lender for and hold such Lender harmless from any loss, cost or
expense incurred by it as a result of:

     (a) any continuation, conversion, payment or prepayment of any Loan
other than a Base Rate Loan on a day other than the last day of the
Interest Period for such Loan (whether voluntary, mandatory, automatic,
by reason of acceleration, or otherwise); or

     (b) any failure by the Borrower (for a reason other than the failure
of such Lender to make a Loan) to prepay, borrow, continue or convert any
Loan other than a Base Rate Loan on the date or in the amount notified by
the Borrower; or

     (c) any assignment of a Eurodollar Rate Loan on a day other than the
last day of the Interest Period therefor as a result of a request by the
Borrower pursuant to Section 10.13;

including any loss or expense arising from the liquidation or reemployment of
funds obtained by it to maintain such Loan or from fees payable to terminate
the deposits from which such funds were obtained. The Borrower shall also pay
any customary administrative fees charged by such Lender in connection with the
foregoing.

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For purposes of calculating amounts payable by the Borrower to the Lenders
under this Section 3.05, each Lender shall be deemed to have funded each
Eurodollar Rate Loan made by it at the Eurodollar Rate for such Loan by a
matching deposit or other borrowing in the London interbank eurodollar market
for a comparable amount and for a comparable period, whether or not such
Eurodollar Rate Loan was in fact so funded.

          3.06 Mitigation Obligations; Replacement of Lenders.

          (a) Designation of a Different Lending Office. If any Lender requests
compensation under Section 3.04, or the Borrower is required to pay any
additional amount to any Lender or any Governmental Authority for the account
of any Lender pursuant to Section 3.01, or if any Lender gives a notice
pursuant to Section 3.02, then such Lender shall use reasonable efforts to
designate a different Lending Office for funding or booking its Loans hereunder
or to assign its rights and obligations hereunder to another of its offices,
branches or affiliates, if, in the judgment of such Lender, such designation or
assignment (i) would eliminate or reduce amounts payable pursuant to Section
3.01 or 3.04, as the case may be, in the future, or eliminate the need for the
notice pursuant to Section 3.02, as applicable, and (ii) in each case, would
not subject such Lender to any unreimbursed cost or expense and would not
otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay
all reasonable costs and expenses incurred by any Lender in connection with any
such designation or assignment.

          (b) Replacement of Lenders. If any Lender requests compensation under
Section 3.04, or if the Borrower is required to pay any additional amount to
any Lender or any Governmental Authority for the account of any Lender pursuant
to Section 3.01, the Borrower may replace such Lender in accordance with
Section 10.13.

          3.07 Survival. All of the Borrower’s obligations under this Article III
shall survive termination of the Aggregate Commitments and repayment of all
other Obligations hereunder.

ARTICLE IV

CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

          4.01 Conditions of Initial Credit Extension. The obligation of the L/C
Issuer and each Lender to make its initial Credit Extension hereunder is
subject to satisfaction (subject to Section 6.21) of the following conditions
precedent:

     (a) The Administrative Agent’s receipt of the following, each of
which shall be originals or telecopies (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 satisfactory to the
Administrative Agent and each of the Lenders:

     (i) executed counterparts of this Agreement and the Guaranty,
sufficient in number for distribution to the Administrative Agent,
each Lender and the Borrower;

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     (ii) a Note executed by the Borrower in favor of each Lender
requesting a Note;

     (iii) a security agreement, in substantially the form of
Exhibit G hereto (together with each other security agreement and
security agreement supplement delivered pursuant to Section 6.12,
in each case as amended, the “Security Agreement”), duly executed
by each Loan Party, together with:

     (A) certificates representing the Pledged Equity
referred to therein accompanied by undated stock powers
executed in blank and instruments evidencing the Pledged Debt
indorsed in blank,

     (B) copies of proper financing statements, duly prepared
for filing under the Uniform Commercial Code of all
jurisdictions that the Administrative Agent may deem
necessary in order to perfect and protect the first priority
liens and security interests created under the Security
Agreement, covering the Collateral described in the Security
Agreement,

     (C) evidence of the insurance required by the terms of
the Security Agreement, and

     (D) evidence that all other action that the
Administrative Agent may deem necessary in order to perfect
and protect the first priority liens and security interests
created under the Security Agreement has been taken
(including, without limitation, receipt of duly executed
payoff letters, UCC-3 termination statements and landlords’
and bailees’ waiver and consent agreements);

     (iv) deeds of trust, trust deeds, mortgages, leasehold
mortgages and leasehold deeds of trust, in a form satisfactory to
the Administrative Agent and covering the properties listed on
Schedule 4.01(a)(iv) (together with the Assignments of Leases and
Rents referred to therein and each other mortgage delivered
pursuant to Section 6.12, in each case as amended, the
“Mortgages”), duly executed by the appropriate Loan Party, together
with:

     (A) evidence that counterparts of the Mortgages have
been duly executed, acknowledged and delivered and are in
form suitable for filing or recording in all filing or
recording offices that the Administrative Agent may deem
necessary in order to create a valid first and subsisting
Lien on the property described therein in favor of the
Administrative Agent for the benefit of the Secured Parties
and that all filing and recording taxes and fees have been
paid,

     (B) evidence of the insurance required by the terms of
the Mortgages, and

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     (C) evidence that all other action that the
Administrative Agent may deem necessary in order to create
valid first and subsisting Liens on the property described in
the Mortgages has been taken;

     (v) an intellectual property security agreement, in
substantially the form of Exhibit H hereto (together with each
other intellectual property security agreement and intellectual
property security agreement supplement delivered pursuant to
Section 6.12, in each case as amended, the “Intellectual Property
Security Agreement”), duly executed by each Loan Party, together
with evidence that all action that the Administrative Agent may
deem necessary in order to perfect and protect the first priority
liens and security interests created under the Intellectual
Property Security Agreement has been taken;

     (vi) a pledge agreement, in substantially the form of Exhibit
J hereto (the “German Law Pledge Agreement”), duly executed by the
applicable Loan Party, together with evidence that all action that
the Administrative Agent may deem necessary in order to perfect and
protect the first priority liens and security interests created
thereunder has been taken;

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

     (viii) such documents and certifications as the Administrative
Agent may reasonably require to evidence that each Loan Party is
duly organized or formed, and that each of the Borrower and the
Guarantors is validly existing, in good standing and qualified to
engage in business in each jurisdiction where its ownership, lease
or operation of properties or the conduct of its business requires
such qualification, except to the extent that failure to do so
could not reasonably be expected to have a Material Adverse Effect;

     (ix) a favorable opinion of (a) Jackson Walker, LLP, counsel
to the Loan Parties, addressed to the Administrative Agent and each
Lender, in substantially the form of Exhibit I and (b) other
special counsel to the Loan Parties in Tennessee, South Dakota,
Minnesota and Nevada, addressed to Administrative Agent and each
Lender, as to the matters that the Administrative Agent may deem
necessary;

     (x) a certificate of a Responsible Officer of each Loan Party
either (A) attaching copies of all 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 (B) stating
that no such consents, licenses or approvals are so required;

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     (xi) a certificate signed by a Responsible Officer of the
Borrower certifying that the conditions specified in Sections
4.02(a) and (b) have been satisfied;

     (xii) a certificate signed by a Responsible Officer of the
Borrower certifying (A) that there has been no event or
circumstance since the date of the Audited Financial Statements
that has had or could be reasonably expected to have, either
individually or in the aggregate, a Material Adverse Effect; (B)
that the (1) Total Leverage Ratio is not greater than 5.60:1.0 and
(2) ratio of all Credit Extensions to Consolidated EBITDA for the
period of the four Fiscal Quarters most recently ended is not
greater than 2.80:1.0, in each case under clauses (1) and (2), as
calculated as of the Closing Date on a pro-forma basis giving
effect to the Transaction with supporting calculations in
reasonable detail; (C) that the pro forma financial statements
delivered pursuant to clause (xii)(D) below and the forecasts
delivered pursuant to clause (xii)(E) below were prepared in good
faith on the basis of the assumptions stated therein, which
assumptions were fair in light of the then existing conditions; and
(D) as to the Solvency of each Loan Party before and after giving
effect to the Transaction;

     (xiii) such financial, business and other information
regarding each Loan Party and its Subsidiaries as the Lenders shall
have requested, including, without limitation, (A) information as
to possible contingent liabilities, tax matters, environmental
matters, obligations under Plans and Multiemployer Plans,
collective bargaining agreements and other arrangements with
employees, (B) the Audited Financial Statements, (C) interim
financial statements dated the end of the most recent Fiscal
Quarter for which financial statements are available (or, in the
event the Lenders’ due diligence review reveals material changes
since such financial statements, as of a later date within 45 days
of the day of the initial Credit Extension), (D) pro forma
financial statements as to Holdings and its Subsidiaries giving
effect to the Transaction for the most recently completed fiscal
year and the period commencing with the end of the most recently
completed fiscal year and ending with the most recently completed
fiscal month and (E) forecasts prepared by management of the
Borrower, in form and substance satisfactory to the Lead Arranger
and the Lenders, of balance sheets, income statements and cash flow
statements on a quarterly basis for the first year following the
day of the initial Credit Extension and on an annual basis for each
year thereafter until the Maturity Date of the Term Facility;

     (xiv) evidence that all insurance required to be maintained
pursuant to the Loan Documents has been obtained and is in effect,
and endorsements naming the Administrative Agent, on behalf of and
for the benefit of the Lenders, as an additional insured or loss
payee, as the case may be, under such insurance policies;

     (xv) certified copies of a certificate of merger or other
confirmation satisfactory to the Administrative Agent of the
consummation of the Merger from the Secretary of States of Delaware
and Minnesota;

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     (xvi) certified copies of each of the Related Documents, duly
executed by the parties thereto and in form and substance
satisfactory to the Administrative Agent, together with all
agreements, instruments and other documents delivered in connection
therewith as the Administrative Agent shall request;

     (xvii) a Notice of Borrowing and, if applicable, Notice of
Issuance, relating to the initial Credit Extension;

     (xviii) evidence that the Existing Credit Agreements have been
or concurrently with the Closing Date are terminated and all Liens
securing obligations thereunder have been or concurrently with the
Closing Date are released; and

     (xix) such other assurances, certificates, documents, consents
or opinions as the Administrative Agent, the L/C Issuer, the Swing
Line Lender or any Lender reasonably may require.

          (b) All fees required to be paid on or before the Closing Date shall have
been paid.

          (c) There shall exist no action, suit, investigation, litigation or
proceeding affecting any Loan Party or any of its Subsidiaries pending or
threatened before any Governmental Authority or arbitrator that (i) could be
reasonably likely to have a Material Adverse Effect, (ii) purports to affect
the Transaction or any portion thereof or the ability of the Borrower or any
other Loan Party to perform their respective obligations under the Loan
Documents, or (iii) purports to affect the legality, validity or enforceability
of any Loan Document or the consummation of the Transaction.

          (d) All governmental authorizations and all third party consents and
approvals necessary in connection with the Transaction shall have been obtained
(without the imposition of any conditions that are not acceptable to the
Lenders) and shall remain in effect; all applicable waiting periods in
connection with the Transaction shall have expired without any action being
taken by any Governmental Authority, and no Law shall be applicable in the
judgment of the Lenders, in each case that restrains, prevents or imposes
materially adverse conditions upon the Transaction or the rights of the Loan
Parties or their Subsidiaries freely to transfer or otherwise dispose of, or to
create any Lien on, any properties now owned or hereafter acquired by any of
them.

          (e) The Merger shall have been consummated strictly in accordance with the
terms of the Merger Agreement, without any waiver or amendment not consented to
by the Lenders of any term, provision or condition set forth therein, and in
compliance with all applicable requirements of Law.

          (f) The Borrower shall have received $165,000,000 in gross proceeds from
the sale of the Subordinated Notes.

          (g) The Reorganization shall have been consummated.

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Without limiting the generality of the provisions of Section 9.04, for purposes
of determining compliance with the conditions specified in this Section 4.01,
each Lender that has signed this Agreement shall be deemed to have consented
to, approved or accepted or to be satisfied with, each document or other matter
required thereunder to be consented to or approved by or acceptable or
satisfactory to a Lender unless the Administrative Agent shall have received
notice from such Lender prior to the proposed Closing Date specifying its
objection thereto.

          4.02 Conditions to all Credit Extensions. The obligation of each Lender
to honor any Request for Credit Extension (other than a Committed Loan Notice
requesting only a conversion of Loans to the other Type, or a continuation of
Eurodollar Rate Loans) is subject to the following conditions precedent:

     (a) The representations and warranties of the Borrower and each
other Loan Party contained in Article V or any other Loan Document, or
which are contained in any document furnished at any time under or in
connection herewith or therewith, shall be true and correct in all
material respects on and as of the date of such Credit Extension, except
to the extent that such representations and warranties specifically refer
to an earlier date, in which case they shall be true and correct in all
material respects as of such earlier date, and except that for purposes
of this Section 4.02, the representations and warranties contained in
Sections 5.05(a) and (b) shall be deemed to refer to the most recent
statements furnished pursuant to Sections 6.01(a) and (b), respectively.

     (b) No Default shall exist, or would result from such proposed
Credit Extension or from the application of the proceeds therefrom.

     (c) The Administrative Agent and, if applicable, the L/C Issuer or
the Swing Line Lender shall have received a Request for Credit Extension
in accordance with the requirements hereof.

     (d) The Administrative Agent shall have received such other
approvals, opinions or documents as any Lender through the Administrative
Agent may reasonably request.

          Each Request for Credit Extension (other than a Committed Loan Notice
requesting only a conversion of Loans to the other Type or a continuation of
Eurodollar Rate Loans) submitted by the Borrower shall be deemed to be a
representation and warranty that the conditions specified in Sections 4.02(a)
and (b) have been satisfied on and as of the date of the applicable Credit
Extension.

ARTICLE V

REPRESENTATIONS AND WARRANTIES

          Each of Holdings and the Borrower represents and warrants to the Agents
and the Lenders that:

          5.01 Existence, Qualification and Power; Compliance with Laws. Each Loan
Party and each of its Subsidiaries (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

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requisite power and authority and all requisite governmental licenses,
authorizations, consents and approvals to (i) own or lease its assets and carry
on its business and (ii) execute, deliver and perform its obligations under the
Loan Documents and Related 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 (such compliance to include, without limitation,
compliance with the Racketeer Influenced and Corrupt Organizations Chapter of
the Organized Crime Control Act of 1970, and with the Uniting and Strengthening
America by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001, Pub. L. 107-56 and all other laws and regulations
relating to money laundering and terrorist activities); 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.

          5.02 Authorization; No Contravention. The execution, delivery and
performance by each Loan Party of each Loan Document and Related Document to
which such Person is or is to be a party, and the consummation of the
Transaction, are within such Loan Party’s corporate or other similar
organizational powers, have been duly authorized by all necessary corporate or
other 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 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. No Loan Party or any of its
Subsidiaries is in violation of any Law or in breach of any such Contractual
Obligation, the violation or breach of which could be reasonably likely to have
a Material Adverse Effect.

          5.03 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 (i) the execution, delivery or performance by, or enforcement
against, any Loan Party of this Agreement or any other Loan Document or Related
Document, or for the consummation of the Transaction, (ii) the grant by any
Loan Party of the Liens granted by it pursuant to the Collateral Documents,
(iii) the perfection or maintenance of the Liens created under the Collateral
Documents (including the first priority nature thereof) other than the filing
of the Uniform Commercial Code financing statements referred to in the Security
Agreement, the recording of the Intellectual Property Security Agreements with
the U.S. Patent and Trademark Office and the U.S. Copyright Office and the
recording of the Mortgages or (iv) the exercise by the Administrative Agent or
any Lender of its rights under the Loan Documents or the remedies in respect of
the Collateral pursuant to the Collateral Documents. All applicable waiting
periods in connection with the Transaction have expired or terminated without
any action having been taken by any Governmental Authority restraining,
preventing or imposing materially adverse conditions upon the Transaction or
the rights of the Loan Parties or their Subsidiaries freely to transfer or
otherwise dispose of, or to create any Lien on, any properties now owned or
hereafter acquired by any of them. The Merger has been consummated in
accordance with the Merger Agreement and applicable Law.

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

          5.05 Financial Statements; No Material Adverse Effect.

          (a) The Audited Financial Statements (i) were prepared in accordance with
GAAP consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein; (ii) fairly present the financial condition
of Holdings and its Subsidiaries as of the date thereof and their results of
operations for the period covered thereby in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly
noted therein; and (iii) show all material indebtedness and other liabilities,
direct or contingent, of Holdings and its Subsidiaries as of the date thereof,
including liabilities for taxes, material commitments and Indebtedness.

          (b) The unaudited consolidated financial statements of Holdings and its
Subsidiaries, dated July 3, 2004, and the Company and its Subsidiaries, dated
June 30, 2004, and the related consolidated statements of income or operations,
shareholders’ equity and cash flows for the Fiscal Quarter ended on that date
(i) were prepared in accordance with GAAP consistently applied throughout the
period covered thereby, except as otherwise expressly noted therein, and (ii)
fairly present the financial condition of Holdings 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. Schedule 5.05 sets forth
all material Indebtedness and other liabilities, direct or contingent, of
Holdings and its consolidated Subsidiaries as of the date of such financial
statements, including liabilities for taxes, material commitments and
Indebtedness.

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

          (d) The consolidated pro forma balance sheet of Holdings and its
Subsidiaries, dated July 3, 2004, and the related consolidated pro forma
statements of income and cash flows of Holdings and its Subsidiaries for the
two quarters then ended, certified by the Chief Financial Officer of the
Borrower, copies of which have been furnished to each Lender, fairly present
the consolidated pro forma financial condition of Holdings and its Subsidiaries
as at such date and the consolidated pro forma results of operations of
Holdings and its Subsidiaries for the period ended on such date, in each case
giving effect to the Transaction, all in accordance with GAAP.

          (e) The consolidated forecasted balance sheets, statements of income and
statements of cash flows of Holdings and its Subsidiaries delivered to the
Lenders pursuant to Section 4.01 or 5.05 were prepared in good faith on the
basis of the assumptions stated therein, which assumptions were fair in light
of the conditions existing at the time of delivery of such forecasts, and
represented, at the time of delivery, the Borrower’s best estimate of its
future financial performance.

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          5.06 Litigation. There is no pending, or to the best of Holdings’
knowledge threatened, action, suit, proceeding, or counterclaim by any Person,
or investigation by any Governmental Authority, or any basis for any of the
foregoing, which could reasonably be expected to have a Material Adverse
Effect.

          5.07 No Default. Neither Holdings nor any Subsidiary is in default under
or with respect to, or a party 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 continuing or would
result from the consummation of the Transaction.

          5.08 Ownership of Property; Liens; Investments.

          (a) Each Loan Party and each of its Subsidiaries has good and indefeasible
title in fee simple to, or valid leasehold interests in, all real property 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.

          (b) Set forth on Schedule 5.08(b) hereto is a complete and accurate list
of all record Liens on the property or assets of any Loan Party or any of its
Subsidiaries, showing as of the date hereof the lienholder thereof, the
principal amount of the obligations secured thereby and the property or assets
of such Loan Party or such Subsidiary subject thereto. The property of Holdings
and its Subsidiaries is subject to no Liens, other than Liens set forth on
Schedule 5.08(b), and as otherwise permitted by Section 7.01.

          (c) Set forth on Schedule 5.08(c) hereto is a complete and accurate list
of all real property owned by any Loan Party or any of its Subsidiaries,
showing as of the date hereof the street address, county or other relevant
jurisdiction, state, record owner and book and management’s estimate of the
fair value thereof. Each Loan Party or such Subsidiary has good, marketable
and insurable fee simple title to such real property, free and clear of all
Liens, other than Liens created or permitted by the Loan Documents.

          (d) (i) Set forth on Schedule 5.08(d)(i) hereto is a complete and
accurate list of all leases of real property under which any Loan Party or any
of its Subsidiaries is the lessee, showing as of the date hereof the street
address, county or other relevant jurisdiction, state, lessor, lessee,
expiration date and annual rental cost thereof. Each such lease is the legal,
valid and binding obligation of the lessor thereof, enforceable in accordance
with its terms, except as such could not reasonably be expected to have a
Material Adverse Effect.

          (ii) Set forth on Schedule 5.08(d)(ii) hereto is a complete and accurate
list of all leases of real property under which any Loan Party is the lessor,
showing as of the date hereof the street address, county or other relevant
jurisdiction, state, lessor, lessee, expiration date and annual rental cost
thereof. Each such lease is the legal, valid and binding obligation of the
lessee thereof, enforceable in accordance with its terms, except as such could
not reasonably be expected to have a Material Adverse Effect.

          (e) Set forth on Schedule 5.08(e) hereto is a complete and accurate list
of all Investments held by any Loan Party or any of its Subsidiaries on the
date hereof, showing as of the date hereof the amount, obligor or issuer and
maturity, if any, thereof.

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          5.09 Environmental Compliance.

          (a) Holdings and its Subsidiaries have complied in all material respects
with all Environmental Laws and neither Holdings nor any of its Subsidiaries
nor any of its or their presently or previously owned real property or
presently conducted or prior operations, is subject to any enforcement order
from or liability agreement with any Governmental Authority or private Person
respecting (i) compliance with any Environmental Law or (ii) any potential
liabilities and costs or remedial action arising from the Release or threatened
Release of a Contaminant that could reasonably be expected to result in a
Material Adverse Effect.

          (b) Holdings and its Subsidiaries have each obtained all permits necessary
for its current operations under Environmental Laws, and all such permits are
in good standing, and Holdings and the Borrower are each in compliance with all
material terms and conditions of such permits, except to the extent that any
such noncompliance could reasonably be expected to result in a Material Adverse
Effect.

          (c) Neither Holdings nor any of its Subsidiaries, nor to Holdings’
knowledge, any of its or its Subsidiaries’ predecessors in interest has in
violation of any Environmental Law stored, treated, or disposed of any
hazardous waste (as defined pursuant to 40 CFR Part 261 or any equivalent
Environmental Law) that could reasonably be expected to result in a Material
Adverse Effect.

          (d) Neither Holdings nor any of its Subsidiaries has received any summons,
complaint, order, or similar written notice indicating that it is not currently
in compliance with, or that any Governmental Authority is investigating its
compliance with, any Environmental Laws or that it is or may be liable to any
other Person as a result of a Release, threatened Release of or exposure to a
Contaminant.

          (e) To Holdings’ knowledge, none of the present or past operations of
Holdings or any of its Subsidiaries is the subject of any current investigation
by any Governmental Authority evaluating whether any remedial action is needed
to respond to a Release or threatened Release of a Contaminant.

          (f) Except as set forth on Schedule 5.09, there is not now, nor to
Holdings’ knowledge has there ever been, on or in the real property of Holdings
or any of its Subsidiaries, in violation of Environmental Laws:

     (i) any underground storage tanks or surface impoundments,

     (ii) any asbestos-containing material, or

     (iii) any polychlorinated biphenyls (PCBs) used in hydraulic oils,
electrical transformers, or other equipment.

          (g) Except as set forth on Schedule 5.09, neither Holdings nor any of its
Subsidiaries has filed any notice under any requirement of Environmental Law
reporting a spill or accidental and unpermitted Release or discharge of a
Contaminant into the environment.

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          (h) Neither Holdings nor any of its Subsidiaries has entered into any
negotiations or settlement agreements with any Person (including the prior
owner of its property) imposing material obligations or liabilities on Holdings
or any of its Subsidiaries with respect to any remedial action in response to
the Release of a Contaminant or environmentally related claim.

          (i) No Environmental Lien has attached to the real property of Holdings or
any of its Subsidiaries.

          5.10 Insurance. The properties of Holdings and its Subsidiaries are
insured with financially sound and reputable insurance companies not Affiliates
of Holdings and/or are self-insured, 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 Holdings, the
Borrower or the applicable Subsidiary operates.

          5.11 Taxes. Each of Holdings and its Subsidiaries have filed all federal
and other tax returns and reports required to be filed (or appropriate
extensions have been timely filed), and have paid all federal and other taxes,
assessments, fees, and other governmental charges levied or imposed upon it or
its properties, income, or assets otherwise due and payable unless such unpaid
taxes and assessments would constitute a Lien permitted under the Loan
Documents. The Merger will not be taxable to Holdings or any of its
Subsidiaries.

          5.12 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 or opinion letter from the IRS or an application for
such a letter is currently being processed by the IRS with respect thereto and,
to the knowledge of the Borrower, nothing has occurred which would prevent, or
cause the loss of, such qualification. The Borrower 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 knowledge of the Borrower, threatened
claims, actions or lawsuits, or action by any Governmental Authority, with
respect to any Plan that could be reasonably be expected to have a Material
Adverse Effect. There has been no prohibited transaction or 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) Except for instances, if any, which together do not give rise to
liability in excess of $1,000,000 in the aggregate, (i) no ERISA Event has
occurred or is reasonably expected to occur; (ii) no Pension Plan has an
“accumulated funding deficiency” (as defined in Section 412 of the Code),
whether or not waived, and no application for a waiver of the minimum funding
standard has been filed with respect to any Pension Plan; (iii) neither the
Borrower 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

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delinquent under Section 4007 of ERISA); (iv) neither the Borrower 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 Borrower nor any
ERISA Affiliate has engaged in a transaction that could be subject to Sections
4069 or 4212(c) of ERISA.

          (d) With respect to each scheme or arrangement mandated by a government
other than the United States (a “Foreign Government Scheme or Arrangement”) and
with respect to each employee benefit plan maintained or contributed to by any
Loan Party or any Subsidiary of any Loan Party that is not subject to United
States law (a “Foreign Plan”):

     (A) Any employer and employee contributions required by law or by
the terms of any Foreign Government Scheme or Arrangement or any Foreign
Plan have been made, or, if applicable, accrued, in accordance with
normal accounting practices.

     (B) The fair market value of the assets of each funded Foreign Plan,
the liability of each insurer for any Foreign Plan funded through
insurance or the book reserve established for any Foreign Plan, together
with any accrued contributions, is sufficient to procure or provide for
the accrued benefit obligations, as of the date hereof, with respect to
all current and former participants in such Foreign Plan according to the
actuarial assumptions and valuations most recently used to account for
such obligations in accordance with applicable generally accepted
accounting principles.

     (C) Each Foreign Plan required to be registered has been registered
and has been maintained in good standing with applicable regulatory
authorities.

          5.13 Subsidiaries; Equity Interests; Loan Parties. As of the Closing
Date, no Loan Party has Subsidiaries other than those specifically disclosed in
Part (a) of Schedule 5.13, and all of the outstanding Equity Interests in such
Subsidiaries have been validly issued, are fully paid and non-assessable and
are owned by a Loan Party in the amounts specified on Part (a) of Schedule 5.13
free and clear of all Liens except those created under the Collateral
Documents. Each Loan Party has no equity investments in any other corporation
or entity. All of the outstanding Equity Interests in Holdings have been
validly issued, are fully paid and non-assessable. Set forth on Part (b) of
Schedule 5.13 is a complete and accurate list of all Loan Parties, showing as
of the Closing Date (as to each Loan Party) the jurisdiction of its
incorporation, the address of its principal place of business and its U.S.
taxpayer identification number. The copy of the charter of each Loan Party and
each amendment thereto provided pursuant to Section 4.01(a)(viii) is a true and
correct copy of each such document, each of which is valid and in full force
and effect.

          5.14 Margin Regulations; Investment Company Act; Public Utility Holding
Company Act.

          (a) The Borrower is not engaged and will not engage, principally or as one
of its 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

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or carrying margin stock, and no proceeds of any Borrowings or drawings
under any Letter of Credit will be used to purchase or carry any margin stock
or to extend credit to others for the purpose of purchasing or carrying any
margin stock.

          (b) None of the Borrower, any Person Controlling the Borrower, or any
Subsidiary (i) is a “holding company,” or a “subsidiary company” of a “holding
company,” or an “affiliate” of a “holding company” or of a “subsidiary company”
of a “holding company,” within the meaning of the Public Utility Holding
Company Act of 1935, or (ii) is or is required to be registered as an
“investment company” under the Investment Company Act of 1940.

          5.15 Disclosure. None of the representations or warranties made by any
Loan Party in the Loan Documents as of the date such representations and
warranties are made or deemed made, and none of the statements contained in any
exhibit, report, statement, or certificate furnished by or on behalf of any
Loan Party to the Administrative Agent or Lender in connection with the Loan
Documents, contains any untrue statement of a material fact or omits any
material fact required to be stated therein or necessary to make the statements
made therein, in light of the circumstances under which they are made, not
misleading as of the time when made or delivered.

          5.16 Compliance with Laws. None of Holdings or any of its Subsidiaries is
in violation of any law, statute, regulation, ordinance, judgment, order, or
decree applicable to it which violation could reasonably be expected to have a
Material Adverse Effect.

          5.17 Intellectual Property; Licenses, Etc. Schedule 5.17 sets forth (a) a
correct and complete list of all of Holdings’ and each of its Subsidiaries’
Proprietary Rights and (b) all trade names or styles under which Holdings or
any of its Subsidiaries will sell inventory or create accounts, or to which
instruments in payment of accounts may be made payable. None of the
Proprietary Rights listed in Schedule 5.17 is subject to any licensing
agreement or similar arrangement except as set forth on Schedule 5.17. The
Proprietary Rights described on Schedule 5.17 constitute all of the property of
such type necessary to the current and anticipated future conduct of Holdings’
and each of its Subsidiaries’ business. To the best of Holdings’ knowledge, no
slogan or other advertising device, product, process, method, substance, part,
or other material now employed, or now contemplated to be employed, by Holdings
or any of its Subsidiaries infringes in any material respect upon any rights
held by any other Person. No claim or litigation regarding any of the
foregoing is, to the knowledge of Holdings, pending or threatened, and no
patent, invention, device, application, principle or any statute, law, rule,
regulation, standard, or code is pending or, to the knowledge of Holdings,
proposed, which, in either case, could reasonably be expected to have a
Material Adverse Effect.

          5.18 Solvency. Each Loan Party is, individually and together with its
Subsidiaries, Solvent.

          5.19 Casualty, Etc. Neither the business nor the properties of any Loan
Party or any of its Subsidiaries are affected by any fire, explosion, accident,
strike, lockout or other labor dispute, drought, storm, hail, earthquake,
embargo, act of God or of the public enemy or other casualty (whether or not
covered by insurance) that could be reasonably likely to have a Material
Adverse Effect.

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          5.20 Perfection. The provisions of this Agreement and the other Loan
Documents create legal and valid Liens on all the Collateral in favor of the
Administrative Agent for the benefit of the Secured Parties, and such Liens
constitute perfected and continuing Liens on the Collateral, securing the
Obligations, enforceable against the applicable Loan Party and all third
parties, and having priority over all other Liens on the Collateral (a) except
in the case of Liens that would have priority over the Administrative Agent’s
Liens pursuant to any Requirement of Law, (b) except for Liens in certificated
vehicles, and Liens perfected only by possession to the extent the
Administrative Agent has not obtained or does not maintain possession of such
Collateral and (c) except for Liens permitted by Section 7.01(b).

          5.21 Food and Drug. Set forth on Schedule 5.21 is a correct and complete
list of all permits, licenses, and approvals that are required under the laws,
rules, and regulations of the United States Food and Drug Administration (the
“FDA”) that are applicable to Holdings and its Subsidiaries (the “FDA Laws”)
for the operation of the business of Holdings and its Subsidiaries
(collectively, the “FDA Permits”) the failure of which to obtain could
reasonably be expected to result in a Material Adverse Effect. Except as which
could not reasonably be expected to result in a Material Adverse Effect,
Holdings and/or its Subsidiaries has all applicable FDA Permits, all of which
(a) are valid and in full force and effect, (b) have not been reversed, stayed,
set aside, annulled, or suspended, (c) are not subject to any conditions or
requirements that are not generally imposed on the holders thereof, and (d)
constitute the only licenses, permits, authorizations, consents, and approvals
required from the FDA for the operation of the business of Holdings and its
Subsidiaries as currently conducted and as contemplated by the Loan Documents.
Without limitation on the foregoing representations and warranties in this
Section 5.21:

          (a) Holdings and/or its Subsidiaries are in material compliance with all
applicable FDA Laws, including, without limitation, current good manufacturing
practice requirements;

          (b) Holdings and/or its Subsidiaries are registered with the FDA, to the
extent such registration is required by any FDA regulations, and the products
of Holdings, to the extent required by the FDA Laws, have been approved by the
FDA or are the subject of a premarket notification to the FDA and order from
the FDA declaring such product to be substantially equivalent to a legally
marketed predicate device, to the extent such approval or premarket
notification is required by FDA regulations;

          (c) Holdings and/or its Subsidiaries have investigational exemptions for
all products requiring such exemptions, and such products have not been and are
not being sold or distributed outside the terms of such investigational
exemptions;

          (d) except as set forth on Schedule 5.21, there have been no “recalls,”
“product corrections,” “removals,” “corrections,” “market withdrawals,” or
“stock recoveries” as such terms are defined in the regulations promulgated
under the Federal Food, Drug and Cosmetic Act with respect to the products
during the five-year period preceding the date hereof;

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          (e) there are currently no adverse regulatory compliance issues or actions
pending with the FDA and no FDA GMP audits conducted at any of the facilities
of Holdings or any of its Subsidiaries have resulted in any material adverse
compliance enforcement actions;

          (f) Schedule 5.21 contains a list of Holdings or any of its Subsidiaries
that has received an “ISO 9001” certification and “CE” certification; and

          (g) No other permit, license, certificate, authorization or approval is
required for Holdings or any of its Subsidiaries from any Governmental
Authority, except the failure of which to obtain could not reasonably be
expected to result in a Material Adverse Effect.

          5.22 Clinical Trials. (a) As may be required under FDA Laws, Holdings and
its Subsidiaries have received all investigational exemptions from the FDA
(including investigational device exemptions and investigational new drug
exemptions) for all products requiring such exemptions (the “Investigational
Exemptions”), and such products (i) are being used by Holdings and its
Subsidiaries in clinical investigations, trials, studies and otherwise (the
“Clinical Trials”, as set forth on Schedule 5.22) in accordance with the terms
of the applicable Investigational Exemption, and (ii) have not been and are not
being sold or distributed outside the terms of such Investigational Exemptions.

          (b) As required under FDA Laws, the conduct by Holdings and its
Subsidiaries of all Clinical Trials conducted during the five-year period
preceding the date hereof, and currently being conducted, is in material
compliance with all applicable FDA Laws, including, without limitation, current
good clinical practice requirements.

          5.23 Other Corrective Actions. Except as set forth on Schedule 5.21,
there have been no MAUDE reports, adverse event reports, medical incident
reports or “MedWatch Reports” with respect to the products during the five (5)
year period preceding the date hereof.

          5.24 State Food and Drug Laws. (a) Set forth on Schedule 5.24 is a
correct and complete list of all licenses, permits, authorizations, consents,
clearances, and other approvals required under the laws, rules and regulations
of each state in which Holdings and its Subsidiaries transact business and/or
market and distribute the products (the “States”), and that are applicable to
Holdings and its Subsidiaries (the “State Laws”) for the operation of the
business of Holdings and its Subsidiaries and the marketing and distribution of
its products in the United States (collectively, the “State Permits”), the
failure of which to obtain could reasonably be expected to result in a Material
Adverse Effect.

          (b) Each of Holdings and its Subsidiaries have all applicable State
Permits, all of which (a) are valid and in full force and effect, (b) have not
been reversed, stayed, set aside, annulled, or suspended, (c) are not subject
to any conditions or requirements that are not generally imposed on the holders
thereof, and (d) constitute the only licenses, permits, authorizations,
consents, clearances and approvals required from the States for the operation
of the business of Holdings and its Subsidiaries and the marketing and
distribution of the products in the United States as currently conducted and as
contemplated by the Loan Documents, the failure of which to obtain or so be in
effect could not reasonably be expected to result in a Material Adverse Effect.

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          (c) Each of Holdings and its Subsidiaries are in material compliance with
all applicable State Laws, and currently there are no adverse regulatory
compliance issues or actions pending with the States, except as which could not
reasonably be expected to result in a Material Adverse Effect.

          (d) Each of Holdings and its Subsidiaries are registered as a
manufacturing establishment or otherwise with the States to the extent such
registration is required by the State Laws.

          5.25 HIPAA. To the extent Holdings or any of its Subsidiaries is a
“covered entity” as defined in the Privacy Regulations (45 CFR 160.103)
promulgated pursuant to the Health Insurance Portability and Accountability Act
of 1996 (“HIPAA”) or Holdings or any of its Subsidiaries are subject to or
covered by the so called “Administrative Simplification” provisions of HIPAA,
Holdings and its Subsidiaries are HIPAA-Compliant. For purposes hereof,
“HIPAA-Compliant” shall mean that Holdings or its Subsidiaries, as the case may
be, is or will be in compliance in all material respects with each of the
applicable requirements of the so-called “Administrative Simplification”
provisions of HIPAA on and as of each date that any part thereof, or any final
rule or regulations thereunder, becomes effective in accordance with its or
their terms, as the case may be.

          5.26 Medicare, Medicaid and Fraud and Abuse. (a) Holdings and each of its
Subsidiaries that bill the Medicare program are in compliance with the
conditions of participation imposed by the Social Security Act and the
Secretary of Health and Human Services. Holdings and its Subsidiaries, as the
case may be, have a Medicare provider or supplier agreement and a Medicare
provider or supplier number in effect covering each location at which the
Holdings and its Subsidiaries, as the case may be, accepts Medicare patients.
In addition, Holdings and its Subsidiaries have a Medicaid provider agreement
and Medicaid provider number in force in each state in which Holdings or its
Subsidiaries bill the Medicaid program.

          (b) Holdings and each of its Subsidiaries has never entered into or been
subject to any judgment, consent decree, compliance order or administrative
order with respect to any aspect of the business, affairs, properties or assets
of Holdings or its Subsidiaries or received any request for information,
notice, demand letter or administrative inquiry with respect to any claim from
any regulatory agency relating to Medicare or Medicaid. No governmental
orders, permissions, consents, approvals or authorizations are required to be
obtained and no registrations or declarations are required to be filed in
connection with the execution and delivery of this Agreement.

          (c) None of Holdings, any Subsidiary or any of their respective officers
and directors, or any affiliates of Holdings, any Subsidiary or any of their
respective officers and directors, has engaged in any activities which are
prohibited under the federal Medicare and Medicaid statutes (which include, but
are not limited to, 42 U.S.C. §§ 1320a-7, 1320a-7a, 1320a-7b, 1395nn), the
federal CHAMPUS statute, the Federal False Claims Act (31 U.S.C. § 3729), the
regulations promulgated pursuant to such federal statutes, or related state or
local statutes or regulations (“Fraud and Abuse Laws”) including but not
limited to the following:

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     (i) knowingly and willfully making or causing to be made a
false statement or representation of a material fact in any
application for any benefit or payment;

     (ii) knowingly and willfully making or causing to be made any
false statement or representation of a material fact for use in
determining rights to any benefit or payment;

     (iii) presenting or causing to be presented a claim for
reimbursement for services that is for an item or service that was
known or should have been known to be (i) not provided as claimed,
or (ii) false or fraudulent;

     (iv) failing to disclose knowledge of the occurrence of any
event affecting the initial or continued right to any benefit or
payment on its own behalf or on behalf of another, with the intent
to fraudulently secure any such benefit or payment;

     (v) knowingly and willfully offering, paying, soliciting or
receiving any remuneration (including any kickback, bribe, or
rebate), directly or indirectly, overtly or covertly, in cash or in
kind (i) in return for referring an individual to a person for the
furnishing or arranging for the furnishing of any item or service
for which payment may be made in whole or in part by CHAMPUS,
Medicare, Medicaid, or other state health care program, or (ii) in
return for purchasing, leasing, or ordering or arranging for or
recommending purchasing, leasing, or ordering any good, facility,
service, or item for which payment may be made in whole or in part
by CHAMPUS, Medicare, Medicaid or other state health care program;
or

     (vi) knowingly or willfully making or causing to be made or
inducing or seeking to induce the making of any false statement or
representation (or omitting to state a fact required to be stated
therein or necessary to make the statements contained therein not
misleading) of a material fact with respect to (i) a facility in
order that the facility may qualify for CHAMPUS, Medicare, Medicaid
or other state health care program certification, or (ii)
information required to be provided under § 1124A of the Social
Security Act (42 U.S.C. § 1320a-3).

          5.27 Absence of Certain Business Practices. None of Holdings, its
Subsidiaries, or any officer, director, employee or agent of Holdings or any
Subsidiary, nor any other person or entity acting on behalf of Holdings or any
Subsidiary, acting alone or together, has: (i) received, directly or
indirectly, any rebates, payments, commissions, promotional allowances or any
other economic benefits, regardless of their nature or type, from any customer,
governmental employee or other person or entity with whom Holdings or any
Subsidiary does business directly or indirectly, or (ii) directly or
indirectly, agreed to give any gift or similar benefit to any customer,
governmental employee or other person or entity who is or may be in a position
to help or hinder the business of Holdings or any Subsidiary (or assisted
either Holdings or any Subsidiary in connection with any actual or proposed
transaction) which, in the case of either clause (i) or clause (ii) above,
could reasonably be expected to subject Holdings or any

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Subsidiary to any damage or penalty in any civil, criminal or governmental
litigation or proceeding, except as such could not reasonably be expected to
have a Material Adverse Effect.

ARTICLE VI

AFFIRMATIVE COVENANTS

          So long as any Lender shall have any Commitment hereunder, any Loan or
other Obligation hereunder which is accrued and payable shall remain unpaid or
unsatisfied, or any Letter of Credit shall remain outstanding, each of Holdings
and the Borrower shall, and shall (except in the case of the covenants set
forth in Sections 6.01, 6.02, 6.03 and 6.11) cause each Subsidiary to:

          6.01 Financial Statements. Deliver to the Administrative Agent and each
Lender, in form and detail satisfactory to the Administrative Agent:

     (a) as soon as available, but in any event within 90 days after the
end of each fiscal year of Holdings (commencing with the fiscal year
ended 2004), a consolidated balance sheet of Holdings and its
Subsidiaries as at the end of such fiscal year, and the related
consolidated 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, audited and
accompanied by a report and opinion of an independent certified public
accountant of nationally recognized standing reasonably acceptable to the
Administrative Agent, which report and opinion shall be prepared in
accordance with generally accepted auditing standards 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) as soon as available, but in any event within 45 days after the
end of each of the first three Fiscal Quarters of each fiscal year of
Holdings (commencing with the Fiscal Quarter ended April 2, 2005), a
consolidated balance sheet of Holdings and its Subsidiaries as at the end
of such Fiscal Quarter, and the related consolidated statements of income
or operations, shareholders’ equity and cash flows for such Fiscal
Quarter and for the portion of Holdings’ fiscal year then ended, setting
forth in each case in comparative form the figures for the corresponding
Fiscal Quarter of the previous fiscal year and the corresponding portion
of the previous fiscal year, all in reasonable detail and certified by a
Responsible Officer of the Borrower as fairly presenting the financial
condition, results of operations, shareholders’ equity and cash flows of
Holdings and its Subsidiaries in accordance with GAAP, subject only to
normal year-end audit adjustments and the absence of footnotes;

     (c) as soon as available, but in any event within 30 days after the
end of each month (other than for any month ending on the last day of a
Fiscal Quarter), a consolidated balance sheet of Holdings and its
Subsidiaries as of the end of such month and a consolidated statement of
income and a consolidated statement of cash flows of Holdings and its
Subsidiaries for the period commencing at the end of the previous month
and ending with the end of such month and a consolidated statement of
income and a consolidated statement of cash flows of Holdings and its
Subsidiaries for the period

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commencing at the end of the previous fiscal year and ending with
the end of such month, setting forth in each case in comparative form the
corresponding figures for the corresponding month of the preceding fiscal
year, all in reasonable detail and duly certified by the Chief Financial
Officer of the Borrower; and

     (d) as soon as available, but in any event no later than 15 days
after the end of each fiscal year, forecasts prepared by management of
Holdings, in form satisfactory to the Administrative Agent, of
consolidated balance sheets, income statements and cash flow statements
of Holdings and its Subsidiaries on a quarterly basis for the fiscal year
following such fiscal year and on an annual basis for each fiscal year
thereafter until the Maturity Date for the Term Facility.

As to any information contained in materials furnished pursuant to Section
6.02(d), Holdings shall not be separately required to furnish such information
under Section 6.01(a) or (b), but the foregoing shall not be in derogation of
the obligation of Holdings to furnish the information and materials described
in Sections 6.01(a) and (b) at the times specified therein.

          6.02 Certificates; Other Information. Deliver to the Administrative Agent
and each Lender, in form and detail satisfactory to the Administrative Agent:

     (a) concurrently with the delivery of the financial statements
referred to in Section 6.01(a), a certificate of its independent
certified public accountants certifying such financial statements and
stating that in making the examination necessary therefor no knowledge
was obtained of any Default under the financial covenants set forth
herein or, if any such Default shall exist, stating the nature and status
of such event;

     (b) concurrently with the delivery of the financial statements
referred to in Sections 6.01(a) and (b), a duly completed Compliance
Certificate signed by a Responsible Officer of the Borrower;

     (c) promptly after any request by the Administrative Agent, or any
Lender through the Administrative Agent, 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 any Loan
Party by independent accountants in connection with the accounts or books
of any Loan Party or any Subsidiary, or any audit of any of them;

     (d) promptly after the same are available, copies of each annual
report, proxy or financial statement or other report or communication
sent to the stockholders of Holdings, and copies of all annual, regular,
periodic and special reports and registration statements which Holdings
may file or be required to file with the SEC under Section 13 or 15(d) of
the Securities Exchange Act of 1934, or with any Governmental Authority
that may be substituted therefor, or with any national securities
exchange, and in any case not otherwise required to be delivered to the
Administrative Agent pursuant hereto;

     (e) promptly after the furnishing thereof, copies of any statement
or report furnished to any holder of debt securities of any Loan Party or
of any of its Subsidiaries pursuant to the terms of the Subordinated
Notes Indenture or any other indenture, loan or

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credit or similar agreement and not otherwise required to be
furnished to the Lenders pursuant to any other clause of this Section
6.02;

     (f) within 30 days after the end of each fiscal year, a report
summarizing the insurance coverage (specifying type, amount and carrier)
in effect for each Loan Party and its Subsidiaries and containing such
additional information as the Administrative Agent, or any Lender through
the Administrative Agent, may reasonably specify;

     (g) promptly and in any event within five Business Days after
receipt thereof by any Loan Party or any of its Subsidiaries, copies of
each notice or other correspondence received from the SEC (or comparable
agency in any applicable non-U.S. jurisdiction) concerning any
investigation or possible investigation or other inquiry by such agency
regarding financial or other operational results of any Loan Party or any
of its Subsidiaries;

     (h) promptly upon receipt thereof, copies of all notices, requests
and other documents received by any Loan Party or any of its Subsidiaries
under or pursuant to the Subordinated Notes Indenture, any Related
Document or other instrument, indenture, loan or credit or similar
agreement regarding or related to any breach or default by any party
thereto or any other event that could materially impair the value of the
interests or the rights of any Loan Party or otherwise have a Material
Adverse Effect and copies of any amendment, modification or waiver of any
provision of any Related Document or instrument, indenture, loan or
credit or similar agreement and, from time to time upon request by the
Administrative Agent, such information and reports regarding the Related
Documents and such instruments, indentures and loan and credit and
similar agreements as the Administrative Agent may reasonably request;

     (i) promptly after the assertion or occurrence thereof, notice of
any Environmental Action against or of any noncompliance by any Loan
Party or any of its Subsidiaries with any Environmental Law or
Environmental Permit that could (i) reasonably be expected to have a
Material Adverse Effect or (ii) cause any property described in the
Mortgages to be subject to any restrictions on ownership, occupancy, use
or transferability under any Environmental Law;

     (j) as soon as available and in any event within 30 days after the
end of each fiscal year, a report supplementing Schedules 5.08(c),
5.08(d)(i) and (ii), 5.08(e) and 5.13 hereto, including an identification
of all owned and leased real property disposed of by Holdings or any of
its Subsidiaries during such fiscal year, a list and description
(including the street address, county or other relevant jurisdiction,
state, record owner, book value thereof and, in the case of leases of
property, lessor, lessee, expiration date and annual rental cost thereof)
of all real property with a fair market value in excess of $250,000
acquired or leased during such fiscal year and a description of such
other changes in the information included in such Schedules as may be
necessary for such Schedules to be accurate and complete;

     (k) promptly, and in any event within five (5) Business Days after
the receipt thereof by any Loan Party or any of its Subsidiaries, copies
of each notice or other

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correspondence received from the FDA (or
comparable agency or Government Authority in any applicable non-U.S.
jurisdiction) or any State concerning any ongoing or possible
investigation, violation of or other compliance matters (including but
not limited to Corrective Actions) in connection with applicable laws,
regulations and practices, enforcement or other actions or other inquiry
by such agency regarding the Loan Party or any of its Subsidiaries; and

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

                Documents required to be delivered pursuant to Section 6.01(a) or (b) or
Section 6.02(d) (to the extent any such documents are included in materials
otherwise filed with the SEC) may be delivered electronically and if so
delivered, shall be deemed to have been delivered on the date (i) on which
Holdings posts such documents, or provides a link thereto on Holdings’ website
on the Internet at the website address listed on Schedule 10.02; or (ii) on
which such documents are posted on Holdings’ behalf on an Internet or intranet
website, if any, to which each Lender and the Administrative Agent have access
(whether a commercial, third-party website or whether sponsored by the
Administrative Agent); provided that: (i) Holdings shall deliver paper copies
of such documents to the Administrative Agent or any Lender that requests
Holdings to deliver such paper copies until a written request to cease
delivering paper copies is given by the Administrative Agent or such Lender and
(ii) the Borrower shall notify the Administrative Agent (by telecopier or
electronic mail) of the posting of any such documents and provide to the
Administrative Agent by electronic mail electronic versions (i.e., soft copies)
of such documents. Notwithstanding anything contained herein, in every
instance the Borrower shall be required to provide paper copies of the
Compliance Certificates required by Section
6.02(b) to the Administrative Agent. Except for such Compliance
Certificates, the Administrative Agent shall have no obligation to request the
delivery or to maintain copies of the documents referred to above, and in any
event shall have no responsibility to monitor compliance by Holdings or the
Borrower with any such request for delivery, and each Lender shall be solely
responsible for requesting delivery to it or maintaining its copies of such
documents.

                The Borrower hereby acknowledges that (a) the Administrative Agent and/or
the Arranger will make available to the Lenders and the L/C Issuer materials
and/or information provided by or on behalf of Holdings or the Borrower
hereunder (collectively, “Borrower Materials”) by posting the Borrower
Materials on IntraLinks or another similar electronic system (the “Platform”)
and (b) certain of the Lenders may be “public-side” Lenders (i.e., Lenders that
do not wish to receive material non-public information with respect to Holdings
or its securities) (each, a “Public Lender”). The Borrower hereby agrees that
it will use commercially reasonable efforts to identify that portion of the
Borrower Materials that may be distributed to the Public Lenders and that (w)
all such Borrower Materials shall be clearly and conspicuously marked “PUBLIC”
which, at a minimum, shall mean that the word “PUBLIC” shall appear prominently
on the first page thereof; (x) by marking the Borrower Materials “PUBLIC,”
Holdings and the Borrower shall be deemed to have authorized the Administrative
Agent, the Arranger, the L/C Issuer and the Lenders to treat such Borrower
Materials as either publicly available information

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or not material information
(although it may be sensitive and proprietary) with respect to Holdings or its
securities for purposes of United States Federal and state securities laws; (y)
all Borrower Materials marked “PUBLIC” are permitted to be made available
through a portion of the Platform designated “Public Investor”; and (z) the
Administrative Agent and the Arranger shall be entitled to treat any Borrower
Materials that are not marked “PUBLIC” as being suitable only for posting on a
portion of the Platform not designated “Public Investor.”

                6.03 Notices. Promptly notify the Administrative 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 any
Loan Party or any Subsidiary; (ii) any dispute, litigation,
investigation, proceeding or suspension between any Loan Party or any
Subsidiary and any Governmental Authority; or (iii) the commencement of,
or any material development in, any litigation or proceeding affecting
any Loan Party or any Subsidiary, including pursuant to any applicable
Environmental Laws;

     (c) within five Business Days after any Loan Party or any ERISA
Affiliate knows or has reason to know, the occurrence of an ERISA Event
or a prohibited transaction (as defined in Sections 406 of ERISA and 4975
of the Code), and, when known, any action taken or threatened by the IRS,
the United States Department of Labor (or any successor department or
agency; the “DOL”), or the PBGC with respect thereto;

     (d) upon request, or, in the event that such filing reflects a
significant change with respect to the matters covered thereby, within
three Business Days after the filing thereof with the PBGC, the DOL, or
the IRS, as applicable, copies of the following: (i) each annual report
(form 5500 series), including Schedule B thereto, filed with the PBGC,
the DOL, or the IRS with respect to each Plan, (ii) a copy of each
funding waiver request filed with the PBGC, the DOL, or the IRS with
respect to any Plan and all communications received by any Loan Party or
any ERISA Affiliate from the PBGC, the DOL, or the IRS with respect to
such request, and (iii) a copy of each other filing or notice filed with
the PBGC, the DOL, or the IRS, with respect to each Plan by any Loan
Party or any ERISA Affiliate;

     (e) upon request, copies of each actuarial report for any Plan or
Multiemployer Plan and annual report for any Multiemployer Plan, and
within three Business Days after receipt thereof by any Loan Party or any
ERISA Affiliate, copies of the following: (i) any notices of the PBGC’s
intention to terminate a Plan or to have a trustee appointed to
administer such Plan; (ii) any favorable or unfavorable determination
letter from the IRS regarding the qualification of a Plan under Section
401(a) of the Code; or (iii) any notice from a Multiemployer Plan
regarding the imposition of withdrawal liability;

     (f) within three Business Days after the occurrence thereof: (i) any
changes in the benefits of any existing Plan which increase any Loan
Party’s annual costs with

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respect thereto by an amount in excess of
$1,000,000, or the establishment of any new Plan or the commencement of
contributions to any Plan to which any Loan Party or any ERISA Affiliate
was not previously contributing; or (ii) any failure by any Loan Party or
any ERISA Affiliate to make a required installment or any other required
payment in excess of $200,000 under Section 412 of the Code on or before
the due date for such installment or payment;

     (g) within five Business Days after any Loan Party or any ERISA
Affiliate knows or has reason to know that any of the following events
has or will occur: (i) a Multiemployer Plan has been or will be
terminated; (ii) the administrator or plan sponsor of a Multiemployer
Plan intends to terminate a Multiemployer Plan; or (iii) the PBGC has
instituted or will institute proceedings under Section 4042 of ERISA to
terminate a Multiemployer Plan;

     (h) of any material change in accounting policies or financial
reporting practices by any Loan Party or any Subsidiary;

     (i) of the (A) occurrence of any Disposition of property or assets
for which the Borrower is required to make a mandatory repayment pursuant
to Section 2.06(b)(ii), (B) occurrence of any sale of capital stock or
other Equity Interests for which the Borrower is required to make a
mandatory repayment pursuant to Section 2.06(b)(iii), (C) incurrence or
issuance of any Indebtedness for which the Borrower is required to make a
mandatory repayment pursuant to Section 2.05(b)(iv) and (D) receipt of
any Extraordinary Receipt for which the Borrower is required to make a
mandatory repayment pursuant to Section 2.05(b)(v); and

     (j) of any announcement by Moody’s or S&P of any change or possible
change in a Debt Rating.

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

                6.04 Payment of Obligations. Except as otherwise permitted by the terms
of this Agreement, Holdings shall (a) file when due all tax returns and other
reports which it is required to file, (b) pay, or provide for the payment of,
when due, all taxes, fees, assessments, and other governmental charges against
it or upon its property, income, and franchises, make all required withholding
and other tax deposits, and establish adequate reserves for the payment of all
such items, and provide to the Administrative Agent, upon request, satisfactory
evidence of its timely compliance with the foregoing, and (c) pay when due all
obligations owed by it and all claims of materialmen, mechanics, carriers,
warehousemen, landlords, processors, and other like Persons, and all other
Indebtedness owed by it and perform and discharge in a timely manner all other
obligations undertaken by it; provided, however, Holdings need not pay any tax,
fee, assessment, or governmental charge (w) which it is contesting in good
faith by appropriate proceedings diligently pursued, (x) for which it has
established proper reserves as required under

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GAAP, (y) for which no Lien
(other than a Lien permitted under the Loan Documents) results from such
non-payment, and (z) with respect to which any such tax, fee, assessment, or
governmental charge in excess of $250,000, the Borrower has notified the
Administrative Agent in writing of any contest described in clause (w)
preceding.

                6.05 Preservation of Existence, Etc. 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 7.04 or 7.05; provided, however, that Holdings and its Subsidiaries may
consummate the Merger and any other merger or consolidation permitted under
Section 7.04; (b) take all reasonable action to maintain all rights,
privileges, permits, licenses and franchises necessary 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) preserve or renew all of
its registered patents, trademarks, trade names and service marks, the
non-preservation of which could reasonably be expected to have a Material
Adverse Effect.

                6.06 Maintenance of Properties. Maintain all of its property necessary
and useful in the conduct of its business, in good operating condition and
repair, ordinary wear and tear and damage due to casualty excepted.

                6.07 Maintenance of Insurance. Maintain with financially sound and reputable insurance companies not
Affiliates of Holdings, insurance with respect to its properties and business
against loss or damage of the kinds customarily insured against by Persons
engaged in the same or similar business, of such types and in such amounts
(after giving effect to any self-insurance compatible with the following
standards) as are customarily carried under similar circumstances by such other
Persons and providing for not less than 30 days’ prior notice to the
Administrative Agent of termination, lapse or cancellation of such insurance.

                6.08 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.

                6.09 Books and Records. 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 Holdings or such Subsidiary, as the case may be.

                6.10 Inspection Rights. Permit representatives and independent
contractors of each Agent and each Lender 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 and
at such reasonable times during normal business hours and as often as may be
reasonably desired, upon reasonable advance notice to the Borrower; provided
that the Borrower shall be required to pay the cost of any such field
examinations and inspections not more than once in

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any calendar year; provided
further, however, that when an Event of Default exists, the Administrative
Agent or any Lender (or any of their respective representatives or independent
contractors) may do any of the foregoing at the expense of the Borrower at any
time during normal business hours and without advance notice.

                6.11 Use of Proceeds. Use the proceeds of the Credit Extensions for
consummation of the Transaction and paying the related fees and expenses
thereof, refinancing the Existing Credit Agreements and for general corporate
purposes (including, without limitation, for capital expenditures, acquisitions
and working capital) not in contravention of any Law or of any Loan Document.

                6.12 Covenant to Guarantee Obligations and Give Security. Upon (x) the
request of the Administrative Agent following the occurrence and during the
continuance of a Default, (y) the formation or acquisition of any new direct or
indirect Subsidiaries by any Loan Party or (z) the acquisition of any property
with a fair market value in
excess of $1,000,000 or the construction of any facility with a book value
in excess of $1,000,000 by any Loan Party, and such property, in the judgment
of the Administrative Agent, shall not already be subject to a perfected first
priority security interest in favor of the Administrative Agent for the benefit
of the Secured Parties, then the Borrower shall, in each case at the Borrower’s
expense:

     (i) in connection with the formation or acquisition of a Subsidiary,
within 10 days after such formation or acquisition, cause each such
Subsidiary that is not a Foreign Subsidiary , and cause each direct and
indirect parent of such Subsidiary (if it has not already done so), to
duly execute and deliver to the Administrative Agent a guaranty or
guaranty supplement, in form and substance satisfactory to the
Administrative Agent, guaranteeing the other Loan Parties’ obligations
under the Loan Documents,

     (ii) within 10 days after such request, formation or acquisition,
furnish to the Administrative Agent a description of the real and
personal properties of such Subsidiary in detail satisfactory to the
Administrative Agent,

     (iii) within 30 days after such request, formation or acquisition,
or such longer period, not to exceed an additional sixty (60) days, as
the Administrative Agent may agree in its sole discretion, duly execute
and deliver, and cause each such Subsidiary and each direct and indirect
parent of such Subsidiary (if it has not already done so) to duly execute
and deliver, to the Administrative Agent mortgages, pledges, assignments,
Security Agreement Supplements, IP Security Agreement Supplements and
other security agreements, as specified by and in form and substance
satisfactory to the Administrative Agent (including delivery of all
Pledged Equity in and of such Subsidiary, and other instruments of the
type specified in Section 4.01(a)(iii)), securing payment of all the
Obligations of the applicable Loan Party, such Subsidiary or such parent,
as the case may be, under the Loan Documents and constituting Liens on
all such properties; provided, that, with respect to any Foreign
Subsidiary, no more than 66% of the voting Equity Interests of any
first-tier Foreign Subsidiary shall be required to be pledged as
Collateral,

     (iv) within 30 days after such request, formation or acquisition, or
such longer period, not to exceed an additional sixty (60) days, as the
Administrative Agent may

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agree in its sole discretion, take, and cause
such Subsidiary or such parent to take, whatever action (including,
without limitation, the recording of mortgages, the filing of Uniform
Commercial Code financing statements, the giving of notices and the
endorsement of notices on title documents) may be necessary or advisable
in the opinion of the Administrative Agent to vest in the Administrative
Agent (or in any representative of the Administrative Agent designated by
it) valid and subsisting Liens on the properties purported to be subject
to the mortgages, pledges, assignments, Security Agreement Supplements,
IP Security Agreement Supplements and security agreements delivered
pursuant to this Section 6.12, enforceable against all third parties in
accordance with their terms,

     (v) within 60 days after such request, formation or acquisition,
deliver to the Administrative Agent, upon the request of the
Administrative Agent in its sole discretion, a signed copy of a favorable
opinion, addressed to the Administrative Agent and the other
Secured Parties, of counsel for the Loan Parties acceptable to the
Administrative Agent as to the matters contained in clauses (i), (iii)
and (iv) above, as to such guaranties, guaranty supplements, mortgages,
pledges, assignments, Security Agreement Supplements, IP Security
Agreement Supplements and security agreements being legal, valid and
binding obligations of each Loan Party party thereto enforceable in
accordance with their terms, as to the matters contained in clause (iv)
above, as to such recordings, filings, notices, endorsements and other
actions being sufficient to create valid perfected Liens on such
properties, and as to such other matters as the Administrative Agent may
reasonably request,

     (vi) as promptly as practicable after such request, formation or
acquisition, deliver to the Administrative Agent with respect to each
parcel of real property owned or held by the entity that is the subject
of such request, formation or acquisition title reports, surveys and
engineering, soils and other reports, and environmental assessment
reports, in each case, to the extent already in the possession of
Holdings or any of its Subsidiaries, and each in scope, form and
substance satisfactory to the Administrative Agent, provided, however,
that to the extent that the Borrower delivers a notice of the type
specified in Section 6.02(i), the Borrower shall then obtain and deliver
any of the foregoing reports, surveys or other information (whether or
not then in possession of Holdings or any of its Subsidiaries) upon the
request of the Administrative Agent,

     (vii) upon the occurrence and during the continuance of a Default,
promptly cause to be deposited any and all cash dividends paid or payable
to it or any of its Subsidiaries from any of its Subsidiaries from time
to time into a Cash Collateral Account, and with respect to all other
dividends paid or payable to it or any of its Subsidiaries from time to
time, promptly execute and deliver, or cause such Subsidiary to promptly
execute and deliver, as the case may be, any and all further instruments
and take or cause such Subsidiary to take, as the case may be, all such
other action as the Administrative Agent may deem necessary in order to
obtain and maintain from and after the time such dividend is paid or
payable a perfected, first priority lien on and security interest in such
dividends, and

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     (viii) at any time and from time to time, promptly execute and
deliver any and all further instruments and documents and take all such
other action as the Administrative Agent may deem necessary in obtaining
the full benefits of, or in perfecting and preserving the Liens of, such
guaranties, mortgages, pledges, assignments, Security Agreement
Supplements, IP Security Agreement Supplements and security agreements.

     6.13 Compliance with Environmental Laws; ERISA. (a) Conduct, and
cause each Subsidiary to conduct, its business in compliance with all
Environmental Laws applicable to it, including those relating to the
generation, handling, use, storage, and disposal of any Contaminant, the
failure to comply with which could reasonably be expected to result in a
Material Adverse Effect. The Borrower shall take prompt and appropriate
action to respond to any non-compliance with Environmental Laws.

     (b) (i) Maintain each Plan in compliance in all material respects
with the applicable provisions of ERISA, the Code, and other federal or
state law; (ii) cause each Plan which is qualified under Section 401(a)
of the Code to maintain such qualification; (iii) make all required
contributions to any Plan subject to Section 412 of the Code; (iv) not
engage in a prohibited transaction or violation of the fiduciary
responsibility rules with respect to any Plan; and (v) not engage in a
transaction that could be subject to Section 4069 or 4212(c) of ERISA.

                6.14 Preparation of Environmental Reports. At the request of the
Administrative Agent upon its receipt of a notice of the type specified in
Section 6.02(i), provide to the Lenders within 60 days after such request, at
the expense of the Borrower, an environmental site assessment report for any of
its properties described in such request, prepared by an environmental
consulting firm acceptable to the Administrative Agent, indicating the presence
or absence of Contaminants and the estimated cost of any compliance, removal or
remedial action in connection with any Contaminants on such properties; without
limiting the generality of the foregoing, if the Administrative Agent
determines at any time that a material risk exists that any such report will
not be provided within the time referred to above, the Administrative Agent may
retain an environmental consulting firm to prepare such report at the expense
of the Borrower, and the Borrower hereby grants and agrees to cause any
Subsidiary that owns any property described in such request to grant at the
time of such request to the Administrative Agent, the Lenders, such firm and
any agents or representatives thereof an irrevocable non-exclusive license,
subject to the rights of tenants, to enter onto their respective properties to
undertake such an assessment.

                6.15 Compliance with FDA Laws. Conduct its business in compliance with
all material FDA laws and State Laws applicable to it, including, without
limitation, current GMP requirements, the failure to comply with which could
reasonably be expected to result in a Material Adverse Effect. Holdings and
its Subsidiaries shall take prompt and appropriate action to respond to any
non-compliance with such laws.

                6.16 Compliance with HIPAA and Fraud and Abuse Laws. Conduct its business
in compliance with all material HIPAA and all applicable Fraud and Abuse Laws,
the failure to comply with which could reasonably be expected to result in a
Material Adverse

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Effect. Holdings and its Subsidiaries shall take prompt and
appropriate action to respond to any non-compliance with such laws.

                6.17 Further Assurances. Promptly upon request by the Administrative
Agent, or any Lender through the Administrative Agent, (i) correct any material
defect or error that may be discovered in any Loan Document or in the
execution, acknowledgment, filing or recordation thereof, and (ii) do, execute,
acknowledge, deliver, record, re-record, file, re-file, register and
re-register any and all such further acts, deeds, certificates, assurances and
other instruments as the Administrative Agent, or any Lender through the
Administrative Agent, may reasonably require from time to
time in order to (A) carry out more effectively the purposes of the Loan
Documents, (B) to the fullest extent permitted by applicable law, subject any
Loan Party’s or any of its Subsidiaries’ properties, assets, rights or
interests to the Liens now or hereafter intended to be covered by any of the
Collateral Documents, (C) perfect and maintain the validity, effectiveness and
priority of any of the Collateral Documents and any of the Liens intended to be
created thereunder and (D) assure, convey, grant, assign, transfer, preserve,
protect and confirm more effectively unto the Secured Parties the rights
granted or now or hereafter intended to be granted to the Secured Parties under
any Loan Document or under any other instrument executed in connection with any
Loan Document to which any Loan Party or any of its Subsidiaries is or is to be
a party, and cause each of its Subsidiaries to do so.

                6.18 Compliance with Terms of Leaseholds. Make all payments and otherwise
perform all obligations in respect of all leases of real property to which
Holdings or any of its Subsidiaries is a party, keep such leases in full force
and effect and not allow such leases to lapse or be terminated or any rights to
renew such leases to be forfeited or cancelled, notify the Administrative Agent
of any default by any party with respect to such leases and cooperate with the
Administrative Agent in all respects to cure any such default, and cause each
of its Subsidiaries to do so, except, in any case, where the failure to do so,
either individually or in the aggregate, could not be reasonably likely to have
a Material Adverse Effect.

                6.19 Interest Rate Hedging. Use commercially reasonable efforts to enter
into prior to December 31, 2004, and maintain at all times thereafter, interest
rate Swap Contracts with Persons acceptable to the Administrative Agent, with
an initial average life of no less than three years, such that the interest
rate covering a notional amount of not less than 50% of the Commitments has
been set at a fixed rate.

                6.20 Bank Accounts. Subject to Section 6.21, maintain, and cause each of
its Domestic Subsidiaries to maintain, all deposit and security accounts (other
than (a) any payroll accounts or (b) any accounts with less than $100,000 in
deposits at any time) with Bank of America or another commercial bank located
in the United States which has accepted the assignment of such accounts to the
Administrative Agent for the benefit of the Secured Parties pursuant to the
Security Agreement.

                6.21 Certain Post-Closing Matters. As soon as practicable, and in any
case no later than the dates specified in Schedule 6.21 hereto, take any and
all necessary actions and execute all other documents and instruments as set
forth in Schedule 6.21 hereto.

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ARTICLE VII

NEGATIVE COVENANTS

                So long as any Lender shall have any Commitment hereunder, any Loan or
other Obligation hereunder which is accrued and payable shall remain unpaid or
unsatisfied, or any Letter of Credit shall remain outstanding, each of Holdings
and the Borrower shall not, nor shall it permit any Subsidiary to, directly or
indirectly:

                7.01 Liens. Create, incur, assume or suffer to exist any Lien upon any of
its property, assets or revenues, whether now owned or hereafter acquired, or
sign or file or suffer to exist under the Uniform Commercial Code of any
jurisdiction a financing statement that names Holdings or any of its
Subsidiaries as debtor, or sign or suffer to exist any security agreement
authorizing any secured party thereunder to file such financing statement, or
assign any accounts or other right to receive income, other than the following:

     (a) Liens pursuant to any Loan Document;

     (b) Liens existing on the date hereof and listed on Schedule 5.08(b)
and any renewals or extensions thereof, provided that (i) the property
covered thereby is not changed, (ii) the amount secured by such Lien is
not increased, (iii) none of the Loan Parties or their Subsidiaries that
is not already an obligor on the Closing Date with respect thereto shall
become a direct or contingent obligor and (iv) any renewal or extension
of the obligations secured or benefited thereby is permitted by Section
7.02(b)(B);

     (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) Liens securing the claims or demands of materialmen, mechanics,
carriers, warehousemen, landlords and other similar Persons arising in
the ordinary course of business which are not overdue for a period of
more than 30 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) Liens consisting of deposits made in the ordinary course of
business in connection with, or to secure payment of, obligations under
worker’s compensation, unemployment insurance, social security, and other
similar laws, or to secure the performance of bids, tenders, or contracts
(other than for the repayment of Indebtedness) or to secure indemnity,
performance, or other similar bonds for the performance of bids, tenders,
or contracts (other than for the repayment of Indebtedness) or to secure
statutory obligations (other than liens arising under ERISA or
Environmental Laws) or surety or appeal bonds, or to secure indemnity,
performance, or other similar bonds;

     (f) deposits to secure the performance of utilities obligations,
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;

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     (g) Liens constituting encumbrances in the nature of reservations,
exceptions, encroachments, easements, rights of way, covenants running
with the land, and other similar title exceptions or encumbrances
affecting any real property, provided that any such Liens do not in the
aggregate materially detract from the value of such real property or
materially interfere with its use in the ordinary conduct of the business
of Holdings or any of its Subsidiaries;

     (h) Liens securing Indebtedness permitted under Section 7.02(b)(E);
provided that (i) such Liens do not at any time encumber any property
other than the property financed by such Indebtedness, (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 (iii) with respect to Capitalized Leases, such Liens do
not at any time extend to or cover any Collateral or assets other than
the assets subject to such Capitalized Leases;

     (i) Liens on property of a Person existing at the time such Person
is acquired by or is merged into or consolidated with Holdings or any
Subsidiary of Holdings or becomes a Subsidiary of Holdings; provided that
such Liens were not created in contemplation of such acquisition, merger,
consolidation or investment and do not extend to any assets other than
those of the Person merged into or consolidated with Holdings or such
Subsidiary or acquired by Holdings or such Subsidiary;

     (j) Liens arising from judgments and attachments in connection with
court proceedings, provided that the attachment or enforcement of such
Liens would not result in an Event of Default hereunder and such Liens
are being contested in good faith by appropriate proceedings, adequate
financial reserves have been established in accordance with GAAP, no
material property is subject to a material risk of loss or forfeiture,
the claims in respect of such Liens are fully covered by insurance
(subject to ordinary and customary deductibles), and a stay of execution
pending appeal or proceeding for review is in effect;

     (k) Liens securing Indebtedness incurred by any Foreign Subsidiary;
provided that such Liens do not extend to any of the Collateral;

     (l) exclusive licenses granted in the ordinary course of business
within the limitations set forth in Section 7.05(f) and non-exclusive
licenses, sublicenses, leases or subleases granted to other Persons in
the ordinary course of business;

     (m) Liens arising out of a conditional sale, title retention,
consignment or similar arrangements for the sale of goods entered into by
the Borrower or any of its Subsidiaries in the ordinary course of
business; or

     (n) other Liens securing Indebtedness outstanding in an aggregate
principal amount not to exceed $3,000,000, provided that no such Lien
shall extend to or cover any Collateral.

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

     (a) in the case of the Borrower:

     (A) Indebtedness evidenced by the Subordinated Notes and
guarantees in respect thereof, and

     (b) in the case of the Borrower and its Subsidiaries,

     (A) Indebtedness under the Loan Documents;

     (B) Indebtedness outstanding on the date hereof and listed on
Schedule 7.02 and any refinancings, refundings, renewals or
extensions thereof; provided that (i) the principal amount thereof
is not increased, (ii) the Liens, if any, securing such refunded,
renewed, or extended Indebtedness do not attach to any assets in
addition to those assets, if any, securing the Indebtedness to be
refunded, renewed, or extended, (iii) no Person that is not an
obligor or guarantor of such Indebtedness as of the Closing Date
shall become an obligor or guarantor thereof, and (iv) the
principal terms of such refunding, renewal, or extension are, in
the Administrative Agent’s reasonable discretion, taken as a whole,
no less favorable to the obligor thereof, the Administrative Agent,
or the Lenders than the original Indebtedness;

     (C) Guarantees of the Borrower or any Guarantor in respect of
Indebtedness otherwise permitted hereunder of the Borrower or any
other Guarantor;

     (D) obligations (contingent or otherwise) of the Borrower 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 Capitalized Leases, Synthetic
Lease Obligations and purchase money obligations for fixed or
capital assets within the limitations set forth in Section 7.01(h);
provided that the aggregate amount of all such Indebtedness at any
one time outstanding shall not exceed $2,500,000; provided further
that such Indebtedness may be incurred within 180 days after the
acquisition of such property;

     (F) Indebtedness of (i) any Loan Party (other than Holdings)
owing to any other Loan Party or any Subsidiary, (ii) any Foreign
Subsidiary owed to any

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other Foreign Subsidiary and (iii) any
Foreign Subsidiary owed to any Loan Party; provided that (1) such
Indebtedness under this clause (iii) is otherwise permitted as an
Investment under Section 7.03(c) and (2) the aggregate amount of
all such Indebtedness under this clause (iii) at any one time
outstanding shall not exceed $10,000,000;

     (G) Indebtedness of any Person that becomes a Subsidiary of
the Borrower after the date hereof in accordance with the terms of
Section 7.03(i) which Indebtedness is existing at the time such
Person becomes a Subsidiary of the Borrower (other than
Indebtedness incurred solely in contemplation of such Person
becoming a Subsidiary of the Borrower);

     (H) Indebtedness of Borrower or any of its Subsidiaries which
may be deemed to exist in connection with agreements providing for
indemnification, purchase price adjustments and similar obligations
in connection with acquisitions or Dispositions effected in
accordance with the requirements of this Agreement;

     (I) Indebtedness assumed by any Loan Party on behalf of any
other Loan Party;

     (J) Indebtedness of Foreign Subsidiaries (1) in respect of
local lines of credit, letters of credit, bank guarantees,
factoring arrangements, sale/leaseback transactions and similar
extensions of credit, in each case under this clause (J), which is
(x) incurred in the ordinary course of business and (y)
non-recourse to each Loan Party and (2) incurred in a single
transaction during the period from the Closing Date through
December 31, 2004 in a principal amount not to exceed the U.S.
dollar equivalent of $20,000,000; provided that the proceeds from
the Indebtedness under this sub-clause (2) shall be (i) transferred
to a Domestic Subsidiary of Holdings within such period in
satisfaction of existing intercompany Indebtedness and (ii) then
used to prepay, pursuant to Section 2.05(b)(iv), an aggregate
principal amount of the Loans equal to the amount of such
Indebtedness incurred;

     (K) unsecured Indebtedness in an aggregate principal amount
not to exceed $7,500,000 at any time outstanding; and

     (c) in the case of Holdings:

     (A) Indebtedness of Holdings owing to the Borrower or any
Subsidiary.

                7.03 Investments. Make or hold any Investments, except:

     (a) Investments held by Holdings or such Subsidiary in the form of
Cash Equivalents;

     (b) loans and advances to (i) officers, directors and employees of
Holdings and its Subsidiaries in an aggregate amount not to exceed
$1,000,000 at any time

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outstanding, for travel, entertainment, relocation
and analogous ordinary business purposes, (ii) independent sales Persons
against commissions in an aggregate amount at any time not exceeding
$2,250,000 and (iii) the officers, directors and employees itemized on
Schedule 5.08(e);

     (c) equity Investments of (i) Holdings and the Borrower in any
Subsidiary as existing on the date hereof, (ii) Holdings and the Borrower
in any Guarantor, (iii) any Foreign Subsidiary in any other Foreign
Subsidiary and (iv) Holdings, the Borrower or any Subsidiary in any
Foreign Subsidiary in an aggregate amount invested from the date hereof
not to exceed $10,000,000 less the aggregate amount of any Indebtedness
incurred pursuant to Section 7.02(b)(F)(iii);

     (d) 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;

     (e) Guarantees permitted by Section 7.02;

     (f) Investments set forth on Schedule 7.03(f);

     (g) Investments by the Borrower or any Subsidiary in Swap Contracts
permitted under Section 7.02(b)(D);

     (h) Investments consisting of intercompany debt permitted under
Section 7.02(b)(F);

     (i) the purchase or other acquisition of all of the Equity Interests
in, or all or substantially all of the property and assets of, any Person
or a division or business unit of any Person that, upon the consummation
thereof, will be wholly owned directly by Holdings or one or more of its
wholly owned Subsidiaries (including, without limitation, as a result of
a merger or consolidation); provided that, with respect to each purchase
or other acquisition made pursuant to this Section 7.03(i):

     (A) any such newly created or acquired Subsidiary shall comply
with the requirements of Section 6.12;

     (B) the lines of business of the Person to be (or the property
and assets of which are to be) so purchased or otherwise acquired
shall be substantially the same, or related to, the lines of
business as one or more of the principal businesses of Holdings and
its Subsidiaries in the ordinary course;

     (C) such purchase or other acquisition shall not include or
result in any contingent liabilities that could reasonably be
expected to result in a Material Adverse Effect (as determined in
good faith by the board of directors (or the persons performing
similar functions) of Holdings or such Subsidiary if the board

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of
directors is otherwise approving such transaction and, in each
other case, by a Responsible Officer);

     (D) the total cash consideration (including, without
limitation, all indemnities, earnouts and other contingent payment
obligations to, and the aggregate amounts paid or to be paid under
noncompete, consulting and other affiliated agreements with, the
sellers thereof, all write-downs of property and assets and
reserves for liabilities with respect thereto and all assumptions
of debt, liabilities and other obligations in connection therewith)
paid by or on behalf of Holdings and its Subsidiaries for any such
purchase or other acquisition shall not exceed (1) $7,500,000 for
any single transaction or series of related transaction or (2)
$15,000,000 for all such transactions pursuant to this Section
7.03(i) in any fiscal year;

     (E) (1) immediately before and immediately after giving pro
forma effect to any such purchase or other acquisition, no Default
shall have occurred and be continuing and (2) immediately after
giving effect to such purchase or other acquisition, Holdings and
its Subsidiaries shall be in pro forma compliance with all of the
covenants set forth in Section 7.10, such compliance to be
determined on the basis of the financial information most recently
delivered to the Administrative Agent and the Lenders pursuant to
Section 6.01(a) or (b) as though such purchase or other acquisition
had been consummated as of the first day of the fiscal period
covered thereby; and

     (F) the Borrower shall have delivered to the Administrative
Agent, on behalf of the Lenders, at least five Business Days prior
to the date on which any such purchase or other acquisition is to
be consummated, a certificate of a Responsible Officer, in form and
substance reasonably satisfactory to the Administrative Agent,
certifying that all of the requirements set forth in this clause
(i) have been satisfied or will be satisfied on or prior to the
consummation of such purchase or other acquisition; and

     (j) other Investments not exceeding $3,000,000 in the aggregate in
any fiscal year of the Borrower.

                7.04 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 Subsidiary may merge with (i) the Borrower, provided that
the Borrower shall be the continuing or surviving Person, or (ii) any one
or more other Subsidiaries, provided that when any Guarantor is merging
with another Subsidiary, the Guarantor shall be the continuing or
surviving Person;

     (b) any Guarantor may merge with any other Guarantor;

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     (c) any Loan Party may Dispose of all or substantially all of its
assets (upon voluntary liquidation or otherwise) to the Borrower or any
Guarantor and such Loan Party may thereafter dissolve, liquidate or wind
up its affairs;

     (d) any Foreign Subsidiary may dispose of all or substantially all
its assets to (i) another Foreign Subsidiary or (ii) to a Loan Party for
no consideration, or, in the case of this clause (ii), pursuant to a
Disposition which is in the nature of a liquidation;

     (e) Holdings and its Subsidiaries may consummate the Merger; and

     (f) in connection with any acquisition permitted under Section 7.03,
any Subsidiary of the Borrower may merge into or consolidate with any
other Person or permit any other Person to merge into or consolidate with
it; provided that the Person surviving such merger shall be a wholly
owned Subsidiary of the Borrower.

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

     (a) Dispositions of obsolete or worn out property or property no
longer used or useful to the business, whether now owned or hereafter
acquired, in the ordinary course of business and the abandonment or other
disposition of any intellectual property is, in the reasonable judgment
of the related Board of Directors, no longer economically practicable or
commercially desirable to maintain or useful in the conduct of the
business of Holdings and its Subsidiaries, taken as a whole;

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

     (c) Dispositions of equipment or real property to the extent that
(i) such property is exchanged for credit against the purchase price of
similar replacement property or (ii) the proceeds of such Disposition are
reasonably promptly applied to the purchase price of such replacement
property or other corporate purposes;

     (d) Dispositions of property (i) by any Loan Party to any other Loan
Party, (ii) any Foreign Subsidiary to any other Foreign Subsidiary and
(iii) any Loan Party to any Foreign Subsidiary; provided that the
aggregate amount of all property Disposed of under this clause (iii)
since the date hereof shall not exceed $2,500,000;

     (e) Dispositions permitted by Section 7.04;

     (f) Exclusive licenses not to exceed $1,000,000 in value in the
aggregate, and any non-exclusive licenses, of Proprietary Rights in the
ordinary course of business;

     (g) Dispositions in connection with sale-leaseback transactions or
similar arrangements providing for Holdings or any Subsidiary to lease or
rent property that Holdings or such Subsidiary has sold or will sell or
otherwise transfer to such Person, not to exceed $1,000,000 in the
aggregate in any Fiscal Year; and

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     (h) Dispositions by Holdings and its Subsidiaries not otherwise
permitted under this Section 7.05; provided that the aggregate amount of
all property Disposed of in reliance on this clause (g) in any fiscal
year shall not exceed $1,000,000;

provided, however, that any Disposition pursuant to Section 7.05(a) through
Section 7.05(h) shall be for fair market value.

                7.06 Restricted Payments. Declare or make, directly or indirectly, any
Restricted Payment, or incur any obligation (contingent or otherwise) to do so,
or issue or sell any Equity Interests or accept any capital contributions,
except that, so long as no Default shall have occurred and be continuing at the
time of any action described below or would result therefrom:

     (a) each Subsidiary may make Restricted Payments to the Borrower or
any Subsidiary of the Borrower which is a Guarantor;

     (b) Holdings and each Subsidiary may declare and make dividend
payments or other distributions payable solely in the common stock or
other common Equity Interests of such Person (other than Equity Interests
which are redeemable);

     (c) the Borrower may declare and pay cash dividends to Holdings to
permit Holdings to pay (1) general administrative and operating expenses
incurred in the ordinary course of business in an aggregate amount in any
Fiscal Year not to exceed $2,000,000 and (2) any taxes which are due and
payable by Holdings and the Borrower as part of a consolidated group;

     (d) Holdings and each Subsidiary may repurchase, redeem or otherwise
acquire or retire for value any Equity Interests of Holdings or any
Subsidiary held by any current or former employee or director of Holdings
or any Subsidiary pursuant to the terms of any employee equity
subscription agreement, stock option agreement or similar agreement
entered into in the ordinary course of business in an aggregate amount in
any Fiscal Year not to exceed $1,000,000; provided that Holdings and such
Subsidiaries may carry over and make in subsequent calendar years, in
addition to the amounts permitted for such calendar year, the amount of
such repurchases, redemptions, acquisitions or retirements for value
permitted to be made, but not made, in the immediately preceding three
calendar years;

     (e) the Company may pay the Specified Payment to certain of the
former shareholders of the Company in accordance with the Merger
Agreement upon the receipt
by the Company of a tax refund for periods prior to the Closing Date
in an amount at least equal to the Specified Payment; and

     (f) the Borrower and its Subsidiaries may make other Restricted
Payments in an aggregate amount in any Fiscal Year not to exceed
$2,000,000.

                7.07 Change in Nature of Business. Engage in any material line of
business substantially different from those lines of business conducted by
Holdings and its Subsidiaries on the date hereof or any business reasonably
related or ancillary thereto.

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                7.08 Transactions with Affiliates. Except as set forth below or as
otherwise allowed by this Agreement, neither Holdings nor any of its
Subsidiaries shall, sell, transfer, distribute, or pay any money or property,
including, but not limited to, any fees or expenses of any nature (including,
but not limited to, any fees or expenses for management services), to any
Affiliate that is not a Loan Party, or lend or advance money or property to any
Affiliate that is not a Loan Party (excluding any such loans or advances
existing as of the date hereof), or invest in (by capital contribution or
otherwise) or purchase or repurchase any Equity Interests or Indebtedness, or
any property, of any Affiliate that is not a Loan Party, or become liable on
any Guaranty of the Indebtedness, dividends, or other obligations of any
Affiliate that is not a Loan Party. Notwithstanding the foregoing, if no
Default or Event of Default is in existence or would result therefrom, Holdings
and its Subsidiaries may (i) make payments (A) to Galen Advisors LLC in
connection with the Transaction in an amount not to exceed $1,000,000, and (B)
with respect to any tax sharing agreement or arrangement among the Borrower and
its Subsidiaries and Holdings and any other Person with which the Borrower or
its Subsidiaries is required or permitted to file a consolidated, combined or
unitary tax return or with which the Borrower or any of its Subsidiaries is or
could be part of a consolidated, combined or unitary group for tax purposes in
amounts not otherwise prohibited by the Subordinated Notes Indenture; provided
that any refunds received by any such other Person attributable to the Borrower
or any of its Subsidiaries shall promptly be returned by such other Person to
the Borrower through a capital contribution to, or the purchase of Equity
Interests of, the Borrower, and (ii) engage in transactions with an Affiliate
in the ordinary course of such Person’s business and upon terms no less
favorable to Holdings or such Subsidiary than would be obtained in a comparable
arm’s-length transaction with a third party who is not an Affiliate.

                7.09 Burdensome Agreements. Enter into or permit to exist any Contractual
Obligation (other than this Agreement, the Subordinated Notes Documents or any
other Loan Document) that (a) limits the ability (i) of any Subsidiary to make
Restricted Payments to the Borrower or any Guarantor or to otherwise transfer
property, including in the nature of making or repaying intercompany loans and
advances, to or invest in the Borrower or any Guarantor, except for any
agreement in effect (A) on the date hereof or (B) at the time any Subsidiary
becomes a Subsidiary of the Borrower, so long as such agreement was not entered
into solely in contemplation of such Person becoming
a Subsidiary of Holdings, (ii) of any Subsidiary to Guarantee the
Indebtedness of the Borrower or (iii) of Holdings or any Subsidiary to create,
incur, assume or suffer to exist Liens on property of such Person; 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
7.02(b)(E) solely to the extent any such negative pledge relates to the
property financed by or the subject of such Indebtedness; or (b) 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.

                7.10 Financial Covenants.

                (a) Total Leverage Ratio. Permit the Total Leverage Ratio as of the end
of any period of four Fiscal Quarters of the Borrower set forth below to be
greater than the ratio set forth below opposite such period:

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	 	 	Maximum
	 	 	Total
	 	 	Leverage
	Four Fiscal Quarters Ending on or about
	 	Ratio

	December 31, 2004 through September 30, 2005
	 	 	6.0:1.0	 
	December 31, 2005 through September 30, 2006
	 	 	5.5:1.0	 
	December 31, 2006 through September 30, 2007
	 	 	4.5:1.0	 
	December 31, 2007 through September 30, 2008
	 	 	3.5:1.0	 
	December 31, 2008 and each Fiscal Quarter
thereafter
	 	 	3.0:1.0	 

                (b) Fixed Charge Coverage Ratio. Permit the Fixed Charge Coverage Ratio
as of the end of any Fiscal Quarter of the Borrower (commencing with December
31, 2004) to be less than 1.25:1.0.

                7.11 Capital Expenditures. Make or become legally obligated to make any
Capital Expenditure, except for Capital Expenditures in the ordinary course of
business not exceeding, in the aggregate for Holdings and it Subsidiaries,
during each fiscal year set forth below, the amount set forth opposite such
Fiscal Year:

	 	 	 	 	 
	Fiscal Year
	 	Amount

	2004
	 	$	11,100,000	 
	2005
	 	$	13,800,000	 
	2006
	 	$	13,000,000	 
	2007
	 	$	10,400,000	 
	2008
	 	$	10,700,000	 
	2009
	 	$	10,700,000	 
	2010
	 	$	10,700,000	 

provided, however, that so long as no Default has occurred and is continuing or
would result from such expenditure, 25% of any portion of any amount set forth
above, if not expended in the fiscal year for which it is permitted above, may
be carried over for expenditure in the next following fiscal year.

                7.12 Amendments of Organization Documents. Amend any of its Organization
Documents other than in a manner that does not adversely affect the rights of
the Lenders or the Administrative Agent under the Loan Documents.

                7.13 Accounting Changes. Make any change in (i) accounting policies or
reporting practices, except (1) as required by generally accepted accounting
principles or (2) solely with respect to any reporting to the SEC, any changes
required by the SEC or (ii) fiscal year.

                7.14 Prepayments, Etc. of Indebtedness. Prepay, redeem, purchase, defease
or otherwise satisfy prior to the scheduled maturity thereof in any manner, or
make any payment in violation of any subordination terms of, any Indebtedness,
except (i) the prepayment of the

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Credit Extensions in accordance with the terms
of this Agreement and (ii) regularly scheduled or required repayments or
redemptions of Indebtedness listed on Schedule 7.02, or amend, modify or change
in any manner any term or condition of any such Indebtedness listed on Schedule
7.02 in a manner adverse to the Lenders.

                7.15 Amendment, Etc. of Related Documents. Cancel or terminate any
Related Document or consent to or accept any cancellation or termination
thereof, amend, modify or change in any manner any term or condition of any
Related Document or give any consent, waiver or approval thereunder, waive any
default under or any breach of any term or condition of any Related Document,
agree in any manner to any other amendment, modification or change of any term
or condition of any Related Document or take any other action in connection
with any Related Document that would impair the value of the interest or rights
of any Loan Party thereunder or that would impair the rights or interests of
the Administrative Agent or any Lender.

                7.16 Partnerships, Etc. After the Closing Date, become a general partner
in any general or limited partnership or joint venture.

                7.17 Speculative Transactions. Engage, or permit any of its Subsidiaries to engage, in any transaction
involving commodity options or futures contracts or any similar speculative
transactions, which are, in any case, not otherwise made in the ordinary course
of business.

                7.18 Formation of Subsidiaries. Organize, create, acquire, or permit to
exist any Subsidiary other than those listed in Schedule 5.13 and as permitted
under Section 7.03.

                7.19 Holding Company. In the case of Holdings, conduct, transact or
otherwise engage in any business or operations other than those incidental to
its status or obligations as a public company, its ownership of the Equity
Interests of the Borrower and the performance of the Loan Documents.

                7.20 Designation of Senior Debt. Designate any Indebtedness (other than
the Indebtedness under the Loan Documents) of Holdings or any of its
Subsidiaries as “Designated Senior Debt” (or any similar term) under, and as
defined in, the Subordinated Notes Indenture.

ARTICLE VIII

EVENTS OF DEFAULT AND REMEDIES

                8.01 Events of Default. Any of the following shall constitute an Event of
Default:

     (a) Non-Payment. The Borrower or any other Loan Party fails to pay
(i) when and as required to be paid herein, any amount of principal of
any Loan or any L/C Obligation, or (ii) within three days after the same
becomes due, any interest on any Loan or on any L/C Obligation, or any
fee due hereunder, or (iii) within five days after the same becomes due,
any other amount payable hereunder or under any other Loan Document; or

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     (b) Specific Covenants. (i)The Borrower fails to perform or observe
any term, covenant or agreement contained in any of Section 6.01, 6.02,
6.03, 6.05, 6.10, 6.11 or 6.12 or Article VII; or

     (c) Other Defaults. Any Loan Party fails to perform or observe any
other covenant or agreement (not specified in Section 8.01(a) or (b)
above) contained in any Loan Document on its part to be performed or
observed and such failure continues for 30 days; or

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

     (e) Cross-Default. (i) Any Loan Party or any of its Subsidiaries
(A) fails to make any payment when due (whether by scheduled maturity,
required prepayment, acceleration, demand, or otherwise) in respect of
any Indebtedness or Guarantee (other than Indebtedness hereunder and
Indebtedness under Swap Contracts) 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 Guarantee 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 the beneficiary or
beneficiaries of such Guarantee (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) there occurs under any Swap Contract an Early
Termination Date (as defined in such Swap Contract) resulting from (A)
any event of default under such Swap Contract as to which the Borrower or
any Subsidiary is the Defaulting Party (as defined in such Swap Contract)
or (B) any Termination Event (as so defined) under such Swap Contract as
to which the Borrower or any Subsidiary is an Affected Party (as defined
in such Swap Contract) and, in either event, the Swap Termination Value
owed by the Loan Party or such Subsidiary as a result thereof is greater
than the Threshold Amount; or

     (f) Insolvency Proceedings, Etc. Any Loan Party or any of its
Subsidiaries (other than an Immaterial Subsidiary) 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

99

 

appointment continues undischarged or unstayed for 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 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 or any
of its Subsidiaries (other than an Immaterial Subsidiary) 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 30 days after its issue or levy; or

     (h) Judgments. There is entered against any Loan Party or any of
its Subsidiaries (other than an Immaterial Subsidiary) (i) a final
judgment or order for the payment of money in an aggregate amount
exceeding the Threshold Amount (to the extent not covered by independent
third-party insurance as to which the insurer is rated at least “A” by
A.M. Best Company, has been notified of the potential claim and 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 10 consecutive days during which a
stay of enforcement of such judgment, by reason of a pending appeal or
otherwise, is not in effect; or

     (i) ERISA. (i) 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 the Borrower 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) the Borrower 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

     (j) Invalidity of Loan Documents. Any provision of any Loan
Document, at any time after its execution and delivery and for any reason
other than as expressly permitted hereunder or thereunder 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 provision 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

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

     (l) Collateral Document. Any Collateral Document after delivery
thereof pursuant to Section 4.01 or 6.12 shall for any reason (other
than (i) pursuant to the terms thereof or (ii) the failure of the
Administrative Agent to take any action available to it to maintain
perfection of the Administrative Agent’s Liens pursuant to the Loan

100

 

Documents) cease to create a valid and perfected first priority lien on
and security interest in the Collateral purported to be covered thereby
or any Loan Party contests in any manner the validity, perfection or
priority of any Lien on or security interest in the Collateral purported
to be covered thereby;

     (m) Material Adverse Effect. There occurs an event having a Material
Adverse Effect; or

     (n) “Event of Default”. An “Event of Default” (as defined in the
Subordinated Notes Indenture) shall have occurred and be continuing under
the Subordinated Notes Indenture.

                8.02 Remedies Upon Event of Default. If any Event of Default occurs and
is continuing, the Administrative Agent shall, at the request of, or may, with
the consent of, the Required Lenders, take any or all of the following actions:

     (a) declare the commitment of each Lender to make Loans and any
obligation of the L/C Issuer to make L/C Credit Extensions to be
terminated, whereupon such commitments and obligation shall be
terminated;

     (b) declare the unpaid principal amount of all outstanding Loans,
all interest accrued and unpaid thereon, and all other amounts owing or
payable hereunder or under any other Loan Document to be immediately due
and payable, without presentment, demand, protest or other notice of any
kind, all of which are hereby expressly waived by the Borrower;

     (c) require that the Borrower Cash Collateralize the L/C Obligations
(in an amount equal to the then Outstanding Amount thereof); and

     (d) exercise on behalf of itself, the other Agents and the Lenders
all rights and remedies available to it, the other Agents and the Lenders
under the Loan Documents;

provided, however, that upon the occurrence of an actual or deemed entry of an
order for relief with respect to the Borrower under the Bankruptcy Code of the
United States, the obligation of each Lender to make Loans and any obligation
of the L/C Issuer to make L/C Credit Extensions shall automatically terminate,
the unpaid principal amount of all outstanding Loans and all interest and other
amounts as aforesaid shall automatically become due and payable, and the
obligation of the Borrower to Cash Collateralize the L/C Obligations as
aforesaid shall automatically become effective, in each case without further
act of the Administrative Agent or any Lender.

                8.03 Application of Funds. After the exercise of remedies provided for in
Section 8.02 (or after the Loans have automatically become immediately due and
payable and the L/C Obligations have automatically been required to be Cash
Collateralized as set forth in the proviso to Section 8.02), any amounts
received on account of the Obligations shall be applied by the Administrative
Agent in the following order:

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     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 Administrative Agent and amounts
payable under Article III, but other than principal and interest) payable
to the Agents in their capacities as such ratably among them in
proportion to the amounts described in this clause First payable to them;

     Second, to payment of that portion of the Obligations constituting
fees, indemnities and other amounts (other than principal and interest)
payable to the Lenders and the L/C Issuer (including fees, charges and
disbursements of counsel to the respective
Lenders and the L/C Issuer), ratably among them in proportion to the
amounts described in this clause Second payable to them;

     Third, to payment of that portion of the Obligations constituting
accrued and unpaid interest on the Loans, L/C Borrowings and other
Obligations, ratably among the Lenders and the L/C Issuer in proportion
to the respective amounts described in this clause Third payable to them;

     Fourth, to payment of that portion of the Obligations constituting
unpaid principal of the Loans and L/C Borrowings, ratably among the
Lenders and the L/C Issuer in proportion to the respective amounts
described in this clause Fourth held by them;

     Fifth, to the Administrative Agent for the account of the L/C
Issuer, to Cash Collateralize that portion of L/C Obligations comprised
of the aggregate undrawn amount of Letters of Credit;

     Sixth, to the payment of all other Obligations of the Loan Parties
owing under or in respect of the Loan Documents that are due and payable
to the Agents and the other Secured Parties on such date, ratably based
upon the respective aggregate amounts of all such Obligations owing to
the Agents and the other Secured Parties on such date; and

     Last, the balance, if any, after all of the Obligations have been
indefeasibly paid in full, to the Borrower or as otherwise required by
Law.

Subject to Section 2.03(c), amounts used to Cash Collateralize the aggregate
undrawn amount of Letters of Credit pursuant to clause Fifth above shall be
applied to satisfy drawings under such Letters of Credit as they occur. If any
amount remains on deposit as Cash Collateral after all Letters of Credit have
either been fully drawn or expired, such remaining amount shall be applied to
the other Obligations, if any, in the order set forth above.

ARTICLE IX

ADMINISTRATIVE AGENT

                9.01 Appointment and Authority.

                (a) Each of the Lenders and the L/C Issuer hereby irrevocably appoints
Bank of America to act on its behalf as the Administrative Agent hereunder and
under the other Loan Documents and authorizes the Administrative Agent to take
such actions on its behalf and to exercise such powers as are delegated to the
Administrative Agent by the terms hereof or thereof,

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together with such actions
and powers as are reasonably incidental thereto. The provisions of this
Article are solely for the benefit of the Administrative Agent, the Lenders and
the L/C Issuer, and neither the Borrower nor any other Loan Party shall have
rights as a third party beneficiary of any of such provisions.

                (b) The Administrative Agent shall also act as the “collateral agent”
under the Loan Documents, and each of the Lenders (in its capacities as a
Lender, Swing Line Lender (if
applicable) and potential Hedge Bank) and the L/C Issuer hereby
irrevocably appoints and authorizes the Administrative Agent to act as the
agent of such Lender and the L/C Issuer for purposes of acquiring, holding and
enforcing any and all Liens on Collateral granted by any of the Loan Parties to
secure any of the Secured Obligations, together with such powers and discretion
as are reasonably incidental thereto. In this connection, the Administrative
Agent, as “collateral agent” and any co-agents, sub-agents and
attorneys-in-fact appointed by the Administrative Agent pursuant to Section
9.05 for purposes of holding or enforcing any Lien on the Collateral (or any
portion thereof) granted under the Collateral Documents, or for exercising any
rights and remedies thereunder at the direction of the Administrative Agent),
shall be entitled to the benefits of all provisions of this Article IX and
Article X (including, without limitation, Section 10.04(c), as though such
co-agents, sub-agents and attorneys-in-fact were the “collateral agent” under
the Loan Documents) as if set forth in full herein with respect thereto.

                9.02 Rights as a Lender. The Person serving as the Administrative Agent
hereunder shall have the same rights and powers in its capacity as a Lender as
any other Lender and may exercise the same as though it were not the
Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise
expressly indicated or unless the context otherwise requires, include the
Person serving as the Administrative Agent hereunder in its individual
capacity. Such Person and its Affiliates may accept deposits from, lend money
to, act as the financial advisor or in any other advisory capacity for and
generally engage in any kind of business with the Borrower or any Subsidiary or
other Affiliate thereof as if such Person were not the Administrative Agent
hereunder and without any duty to account therefor to the Lenders.

                9.03 Exculpatory Provisions. The Administrative Agent shall not have any
duties or obligations except those expressly set forth herein and in the other
Loan Documents. Without limiting the generality of the foregoing, the
Administrative Agent:

     (a) shall not be subject to any fiduciary or other implied duties,
regardless of whether a Default has occurred and is continuing;

     (b) shall not have any duty to take any discretionary action or
exercise any discretionary powers, except discretionary rights and powers
expressly contemplated hereby or by the other Loan Documents that the
Administrative Agent is required to exercise as directed in writing by
the Required Lenders (or such other number or percentage of the Lenders
as shall be expressly provided for herein or in the other Loan
Documents), provided that the Administrative Agent shall not be required
to take any action that, in its opinion or the opinion of its counsel,
may expose the Administrative Agent to liability or that is contrary to
any Loan Document or applicable law; and

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     (c) shall not, except as expressly set forth herein and in the other
Loan Documents, have any duty to disclose, and shall not be liable for
the failure to disclose, any information relating to the Borrower or any
of its Affiliates that is communicated to
or obtained by the Person serving as the Administrative Agent or any
of its Affiliates in any capacity.

                The Administrative Agent shall not be liable for any action taken or not
taken by it (i) with the consent or at the request of the Required Lenders (or
such other number or percentage of the Lenders as shall be necessary, or as the
Administrative Agent shall believe in good faith shall be necessary, under the
circumstances as provided in Sections 10.01 and 8.02) or (ii) in the absence of
its own gross negligence or willful misconduct. The Administrative Agent shall
be deemed not to have knowledge of any Default (except for Defaults in the
making of regularly scheduled payments of principal and interest) unless and
until notice describing such Default is given to the Administrative Agent by
the Borrower, a Lender or the L/C Issuer.

                The Administrative Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in
or in connection with this Agreement or any other Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein or therein or the occurrence of any Default, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Loan
Document or any other agreement, instrument or document, or the perfection or
priority of any Lien or security interest created or purported to be created by
the Collateral Documents, or (v) the satisfaction of any condition set forth in
Article IV or elsewhere herein, other than to confirm receipt of items
expressly required to be delivered to the Administrative Agent.

                9.04 Reliance by Administrative Agent. The Administrative Agent shall be
entitled to rely upon, and shall not incur any liability for relying upon, any
notice, request, certificate, consent, statement, instrument, document or other
writing (including any electronic message, Internet or intranet website posting
or other distribution) believed by it to be genuine and to have been signed,
sent or otherwise authenticated by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to have been made by the proper Person, and shall not incur any liability
for relying thereon. In determining compliance with any condition hereunder to
the making of a Loan, or the issuance of a Letter of Credit, that by its terms
must be fulfilled to the satisfaction of a Lender or the L/C Issuer, the
Administrative Agent may presume that such condition is satisfactory to such
Lender or the L/C Issuer unless the Administrative Agent shall have received
notice to the contrary from such Lender or the L/C Issuer prior to the making
of such Loan or the issuance of such Letter of Credit. The Administrative
Agent may consult with legal counsel (who may be counsel for the Borrower),
independent accountants and other experts selected by it, and shall not be
liable for any action taken or not taken by it in accordance with the advice of
any such counsel, accountants or experts.

                9.05 Delegation of Duties. The Administrative Agent may perform any and
all of its duties and exercise its rights and powers hereunder or under any
other Loan Document by or through any one or more sub-agents appointed by the
Administrative Agent. The

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Administrative Agent and any such
sub-agent may perform any and all of its duties and exercise its rights
and powers by or through their respective Related Parties. The exculpatory
provisions of this Article shall apply to any such sub-agent and to the Related
Parties of the Administrative Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.

                9.06 Resignation of Administrative Agent. The Administrative Agent may at
any time give notice of its resignation to the Lenders, the L/C Issuer and the
Borrower. Upon receipt of any such notice of resignation, the Required Lenders
shall have the right, in consultation with the Borrower, to appoint a
successor, which shall be a bank with an office in the United States, or an
Affiliate of any such bank with an office in the United States. If no such
successor shall have been so appointed by the Required Lenders and shall have
accepted such appointment within 30 days after the retiring Administrative
Agent gives notice of its resignation, then the retiring Administrative Agent
may on behalf of the Lenders and the L/C Issuer, appoint a successor
Administrative Agent meeting the qualifications set forth above; provided that
if the Administrative Agent shall notify the Borrower and the Lenders that no
qualifying Person has accepted such appointment, then such resignation shall
nonetheless become effective in accordance with such notice and (1) the
retiring Administrative Agent shall be discharged from its duties and
obligations hereunder and under the other Loan Documents (except that in the
case of any collateral security held by the Administrative Agent on behalf of
the Lenders or the L/C Issuer under any of the Loan Documents, the retiring
Administrative Agent shall continue to hold such collateral security until such
time as a successor Administrative Agent is appointed) and (2) all payments,
communications and determinations provided to be made by, to or through the
Administrative Agent shall instead be made by or to each Lender and the L/C
Issuer directly, until such time as the Required Lenders appoint a successor
Administrative Agent as provided for above in this Section. Upon the
acceptance of a successor’s appointment as Administrative Agent hereunder, such
successor shall succeed to and become vested with all of the rights, powers,
privileges and duties of the retiring (or retired) Administrative Agent, and
the retiring Administrative Agent shall be discharged from all of its duties
and obligations hereunder or under the other Loan Documents (if not already
discharged therefrom as provided above in this Section). The fees payable by
the Borrower to a successor Administrative Agent shall be the same as those
payable to its predecessor unless otherwise agreed between the Borrower and
such successor. After the retiring Administrative Agent’s resignation
hereunder and under the other Loan Documents, the provisions of this Article
and Section 10.04 shall continue in effect for the benefit of such retiring
Administrative Agent, its sub-agents and their respective Related Parties in
respect of any actions taken or omitted to be taken by any of them while the
retiring Administrative Agent was acting as Administrative Agent.

                Any resignation by Bank of America as Administrative Agent pursuant to
this Section shall also constitute its resignation as L/C Issuer and Swing Line
Lender. Upon the acceptance of a successor’s appointment as Administrative
Agent hereunder, (a) such successor shall succeed to and become vested with all
of the rights, powers, privileges and duties of the retiring L/C Issuer and
Swing Line Lender, (b) the retiring L/C Issuer and Swing Line Lender shall be
discharged from all of their respective duties and obligations hereunder or
under the other Loan Documents, and (c) the successor L/C Issuer shall issue
letters of credit in

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substitution for the Letters of Credit, if any, outstanding at the time of
such succession or make other arrangement satisfactory to the retiring L/C
Issuer to effectively assume the obligations of the retiring L/C Issuer with
respect to such Letters of Credit.

                9.07 Non-Reliance on Administrative Agent and Other Lenders. Each Lender
and the L/C Issuer acknowledges that it has, independently and without reliance
upon the Administrative Agent or any other Lender or any of their Related
Parties and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender and the L/C Issuer also acknowledges that it will,
independently and without reliance upon the Administrative Agent or any other
Lender or any of their Related Parties and based on such documents and
information as it shall from time to time deem appropriate, continue to make
its own decisions in taking or not taking action under or based upon this
Agreement, any other Loan Document or any related agreement or any document
furnished hereunder or thereunder.

                9.08 No Other Duties, Etc. Anything herein to the contrary
notwithstanding, Bank of America, in its capacity as Arranger, shall not have
any powers, duties or responsibilities under this Agreement or any of the other
Loan Documents, except in its capacity, as applicable, as the Administrative
Agent, a Lender or the L/C Issuer hereunder.

                9.09 Administrative Agent May File Proofs of Claim. In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to any Loan Party, the Administrative Agent (irrespective
of whether the principal of any Loan or L/C Obligation shall then be due and
payable as herein expressed or by declaration or otherwise and irrespective of
whether the Administrative Agent shall have made any demand on the Borrower)
shall be entitled and empowered, by intervention in such proceeding or
otherwise

     (a) to file and prove a claim for the whole amount of the principal
and interest owing and unpaid in respect of the Loans, L/C Obligations
and all other Obligations that are owing and unpaid and to file such
other documents as may be necessary or advisable in order to have the
claims of the Lenders and the Agents (including any claim for the
reasonable compensation, expenses, disbursements and advances of the
Lenders and the Agents and their respective agents and counsel and all
other amounts due the Lenders and the Agents under Sections 2.03(i) and
(j), 2.09 and 10.04) allowed in such judicial proceeding; and

     (b) to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the Administrative Agent and, in the event
that the Administrative Agent shall consent to the making of such payments
directly to the Lenders, to pay to the Administrative Agent any amount due for
the reasonable compensation, expenses, disbursements and advances of the Agents
and their respective agents and counsel, and any other amounts due the Agents
under Sections 2.09 and 10.04.

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                Nothing contained herein shall be deemed to authorize the Administrative
Agent to authorize or consent to or accept or adopt on behalf of any Lender any
plan of reorganization, arrangement, adjustment or composition affecting the
Obligations or the rights of any Lender or to authorize the Administrative
Agent to vote in respect of the claim of any Lender in any such proceeding.

                9.10 Collateral and Guaranty Matters. The Lenders and the L/C Issuer
irrevocably authorize the Administrative Agent, at its option and in its
discretion,

     (a) to release any Lien on any property granted to or held by the
Administrative Agent under any Loan Document (i) upon termination of the
Aggregate Commitments and payment in full of all Obligations (other than
contingent indemnification obligations not yet accrued and payable) and
the expiration or termination of all Letters of Credit, (ii) that is sold
or to be sold as part of or in connection with any sale permitted
hereunder or under any other Loan Document, or (iii) if approved,
authorized or ratified in writing in accordance with Section 10.01
hereof;

     (b) to release any Guarantor from its obligations under the Guaranty
if such Person ceases to be a Subsidiary as a result of a transaction
permitted hereunder; and

     (c) to subordinate any Lien on any property granted to or held by
the Administrative Agent under any Loan Document to the holder of any
Lien on such property that is permitted by Section 7.01(h).

                Upon request by the Administrative Agent at any time, the Required Lenders
will confirm in writing the Administrative Agent’s authority to release its
interest in particular types or items of property, or to release any Guarantor
from its obligations under the Guaranty pursuant to this Section 9.10. In each
case as specified in this Section 9.10, the Administrative Agent will, at the
Borrower’s expense, execute and deliver to the applicable Loan Party such
documents as such Loan Party may reasonably request to evidence the release of
such item of Collateral from the assignment and security interest granted under
the Collateral Documents, or to release such Guarantor from its obligations
under the Guaranty, in each case in accordance with the terms of the Loan
Documents and this Section 9.10.

                9.11 German Law Provisions. (a) Declaration of Trust and Appointment as
Administrator in Relation to Collateral Governed by German Law.

	(i)	 	The Administrative Agent declares that it shall
hold and administer any Collateral governed by German law
which is transferred or assigned for security purposes
(Sicherungseigentum/Sicherungsabtretung) or otherwise
granted to it under a non-accessory security right (nicht
akzessorische Sicherheit) as trustee (treuhänderisch) for the
benefit of the Secured Parties; and administer any Collateral
governed by German law which is pledged (Verpfändung) or
otherwise granted to any Secured Party under an accessory
security right (akzessorische Sicherheit).
	 
	(ii)	 	Each Secured Party (other than the Administrative
Agent) hereby authorizes the Administrative Agent to accept as
its representative

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	 	 	(Stellvertreter) any pledge or other
creation of any accessory security right granted to such
Secured Party pursuant to a Collateral Document in relation to
any Loan Document and to act as its representative with regard
to any amendments of, accessions to, release of and any
similar dealings with regard to any pledge or other accessory
security right.
	 
	(iii)	 	Each Secured Party (other than the
Administrative Agent) hereby authorizes the Administrative
Agent to act as its representative (Stellvertreter) with
regard to the release or confirmation of release of any pledge
or other accessory security right (akzessorische Sicherheit)
of such Secured Party pursuant to a Collateral Document in
relation to any Loan Document.
	 
	(iv)	 	Each of the parties to this Agreement agrees that
the Administrative Agent shall have only those duties,
obligations and responsibilities expressly specified in this
Agreement or in the Collateral Documents (and no others shall
be implied).

     (b) Power of Attorney for German Collateral Document. Each Lender
Party hereby irrevocably authorizes the Administrative Agent to act on
its behalf and, if required under applicable law or if otherwise
appropriate, in its name in connection with the preparation, execution
and delivery of each Collateral Document governed by German law and the
perfection and monitoring of each security interest granted under any
Collateral Document governed by German law, including, but not limited
to, any share pledge agreement with respect to shares in a German company
in notarial form, as well as any other pledge, mortgage, assignment or
transfer of title for security purposes. The Administrative Agent shall
be authorized to make all statements necessary or appropriate in this
connection. The Administrative Agent shall be released from the
restrictions of Section 181 German Civil Code (BGB/Bürgerliches
Gesetzbuch) and shall be authorized to delegate this power of attorney.

     (c) Abstract Acknowledgement of Indebtedness/Joint Creditorship.

	(i)	 	Each of the parties hereto agree, and the Loan
Parties acknowledge by way of an abstract acknowledgement of
indebtedness (abstraktes Schuldanerkenntnis), that each and
every obligation of any such Loan Party (and any of its
successors), in the amounts of the Commitments under this
Agreement and the other Loan Documents shall also be owing in
full to the Administrative Agent, and that accordingly the
Administrative Agent will have its own independent right to
demand performance by such Loan Party of those obligations
(the “Acknowledgement"). The Administrative Agent undertakes
with the relevant Loan Party that (1) in case of any
discharge of any obligation owing to any Lender Party, the
Administrative Agent will not, to the extent of such
discharge, make a claim against such Loan Party under the
Acknowledgement and (2) it will not, at any time, make any
claim against

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	 	 	any Loan Party exceeding the amount then owed
by such Loan Party under the Loan Documents.
	 
	(ii)	 	(1) Each Loan Party hereby irrevocably and
unconditionally undertakes to pay to the Administrative Agent,
as creditor in its own right and not as representative of the
other Lender Parties, sums equal to and in the currency of
each amount payable by such Loan Party to each of the Lender
Parties under each of the Loan Documents as and when that
amount falls due for payment under the relevant Loan Document
or would have fallen due but for any discharge resulting from
failure of another Lender Party to take appropriate steps in
insolvency proceedings affecting that Loan Party, to preserve
its entitlement to be paid that amount. (2) Each of the Loan
Parties and each of the Lender Parties (other than the
Administrative Agent) agrees that the Administrative Agent
shall be the joint creditor (together with the relevant Lender
Parties) of each and every obligation of any Loan Party
towards each of the Lender Parties (other than the
Administrative Agent) under the Loan Documents. Accordingly
the Administrative Agent will have its own independent right
to demand performance by the relevant Loan Party of those
obligations irrespective of any discharge of such Loan Party’s
obligation to pay those amounts to the other Lender Parties
resulting from failure by them to take appropriate steps in an
insolvency proceeding of that Loan Party to preserve their
entitlement to be paid those amounts. However, any discharge
of any such obligation to either the Administrative Agent or a
Lender Party (other than the Administrative Agent) shall, to
that extent, discharge the corresponding obligation owing to
the other. (3) Without limiting or affecting the
Administrative Agent’s rights against any Loan Party (whether
under this paragraph or under any other provision of the Loan
Documents), the Administrative Agent agrees with each other
Lender Party (on a several and divided basis) that, subject as
set out in the next sentence, it will not exercise its rights
as a joint creditor with a Lender Party (other than the
Administrative Agent) except with the consent of the relevant
Lender Party. However, for the avoidance of doubt, nothing in
the previous sentence shall in any way limit the
Administrative Agent’s right to act in the protection or
preservation of rights under, or to enforce any Collateral
Document as contemplated by, this deed and/or the relevant
Collateral Document (or to do any act reasonably incidental to
any of the foregoing).

ARTICLE X

MISCELLANEOUS

               10.01 Amendments, Etc. No amendment or waiver of any provision of this
Agreement or any other Loan Document, and no consent to any departure by the
Borrower or any other Loan Party therefrom, shall be effective unless in
writing signed by the Required Lenders and the Borrower or the applicable Loan
Party, as the case may be, and acknowledged by the Administrative Agent, and
each such waiver or consent shall be effective only in the

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specific instance
and for the specific purpose for which given; provided, however, that no such
amendment, waiver or consent shall:

          (a) waive any condition set forth in Section 4.01(a), or, in the
case of the initial Credit Extension, Section 4.02, without the written
consent of each Lender;

          (b) extend or increase the Commitment of any Lender (or reinstate
any Commitment terminated pursuant to Section 8.02) without the written
consent of such Lender;

          (c) postpone any date scheduled for any payment of principal or
interest under Sections 2.07 or 2.08, or any date fixed by the
Administrative Agent for the payment of fees or other amounts due to the
Lenders (or any of them) hereunder or under any other Loan Document
without the written consent of each Lender entitled to such payment;

          (d) reduce the principal of, or the rate of interest specified
herein on, any Loan or L/C Borrowing, or (subject to clause (v) of the
second proviso to this Section 10.01) any fees or other amounts payable
hereunder or under any other Loan Document without the written consent of
each Lender entitled to such amount; provided, however, that only the
consent of the Required Lenders shall be necessary (i) to amend the
definition of “Default Rate” or to waive any obligation of the Borrower
to pay interest or Letter of Credit Fees at the Default Rate or (ii) to
amend any financial covenant hereunder (or any defined term used therein)
even if the effect of such amendment would be to reduce the rate of
interest on any Loan or L/C Borrowing or to reduce any fee payable
hereunder;

          (e) change the order of application of any reduction in the
Commitments or any prepayment of Loans between the Facilities from the
application thereof set forth in the applicable provisions of Section
2.05(b) or 2.06(b), respectively, in any manner that adversely affects
the Lenders under such Facilities or require the permanent reduction of
the Revolving Credit Facility at any time when all or a portion of the
Term Facility remains in effect without the written consent of Lenders
having more than 50% of the Aggregate Credit Exposure then in effect
within each of the following classes of Commitments, Loans and other
Credit Extension: (i) the class consisting of the Revolving Credit
Commitment combined on an aggregate basis, and (ii) the class consisting
of the Term Commitment combined on an aggregate basis. For purposes of
this clause, the aggregate amount of each Revolving Credit Lender’s risk
participation and funded participation in L/C Obligations and Swing Line
Loans shall be deemed to be held by such Lender;

          (f) change any provision of this Section 10.01 or the definition of
“Required Lenders” or any other provision hereof specifying the number or
percentage of Lenders required to amend, waive or otherwise modify any
rights hereunder or make any determination or grant any consent
hereunder, without the written consent of each Lender;

          (g) release all or substantially all of the Collateral in any
transaction or series of related transactions, without the written
consent of each Lender;

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          (h) release all or substantially all of the value of the Guaranty,
without the written consent of each Lender; or

          (i) impose any greater restriction on the ability of any Lender to
assign any of its rights or obligations hereunder without the written
consent of Lenders having more than 50% of the Aggregate Credit Exposures
then in effect within each of the following classes of Commitments, Loans
and other Credit Extensions: (i) the class consisting of the Revolving
Credit Commitment combined on an aggregate basis, and (ii) the class
consisting of the Term Commitment combined on an aggregate basis. For
purposes of this clause, the aggregate amount of each Revolving Credit
Lender’s risk participation and funded participation in L/C Obligations
and Swing Line Loans shall be deemed to be held by such Lender; or

          (j) amend or waive any provision of this Agreement that has the
effect (either immediately or at some later time) of enabling the
Borrower to satisfy a condition precedent to the making of any Revolving
Credit Loan or L/C Credit Extension without the written consent of
Revolving Credit Lenders having more than 50% of the Aggregate Credit
Exposures then in effect within the class consisting of the Revolving
Credit Commitment combined on an aggregate basis. For purposes of this
clause, the aggregate amount of each Revolving Credit Lender’s risk
participation and funded participation in L/C Obligations and Swing Line
Loans shall be deemed to be held by such Lender;

and provided further that (i) no amendment, waiver or consent shall, unless in
writing and signed by the L/C Issuer in addition to the Lenders required above,
affect the rights or duties of the L/C Issuer under this Agreement or any
Issuer Document relating to any Letter of Credit issued or to be issued by it;
(ii) no amendment, waiver or consent shall, unless in writing and signed by the
Swing Line Lender in addition to the Lenders required above, affect the rights
or duties of the Swing Line Lender under this Agreement; (iii) no amendment,
waiver or consent shall, unless in writing and signed by an Agent in addition
to the Lenders required above, affect the rights or duties of, or any fees or
other amounts payable to, such Agent under this Agreement or any other Loan
Document; (iv) Section 10.06(h) may not be amended, waived or otherwise
modified without the consent of each Granting Lender all or any part of whose
Loans are being funded by an SPC at the time of such amendment, waiver or other
modification; and (v) the Fee Letter may be amended, or rights or privileges
thereunder waived, in a writing executed only by the parties thereto.
Notwithstanding anything to the contrary herein, no Defaulting Lender shall
have any right to approve or disapprove any amendment, waiver or consent
hereunder, except that the Commitment of such Lender may not be increased or
extended without the consent of such Lender.

               10.02 Notices and Other Communications; Facsimile Copies.

               (a) Notices Generally. Except in the case of notices and other
communications expressly permitted to be given by telephone (and except as
provided in subsection (b) below), all notices and other communications
provided for herein shall be in writing and shall be delivered by hand or
overnight courier service, mailed by certified or registered mail or sent by
telecopier as follows, and all notices and other communications

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expressly
permitted hereunder to be given by telephone shall be made to the applicable
telephone number, as follows:

          (i) if to the Borrower, Holdings, the Administrative Agent, the L/C
Issuer or the Swing Line Lender, to the address, telecopier number,
electronic mail address or telephone number specified for such Person on
Schedule 10.02; and

          (ii) if to any other Lender, to the address, telecopier number,
electronic mail address or telephone number specified in its
Administrative Questionnaire.

Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, shall be deemed to have been given when received; notices sent
by telecopier shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next business day for the
recipient). Notices delivered through electronic communications to the extent
provided in subsection (b) below shall be effective as provided in such
subsection (b).

               (b) Electronic Communications. Notices and other communications to the
Lenders and the L/C Issuer hereunder may be delivered or furnished by
electronic communication (including e-mail and Internet or intranet websites)
pursuant to procedures approved by the Administrative Agent, provided that the
foregoing shall not apply to notices to any Lender or the L/C Issuer pursuant
to Article II if such Lender or the L/C Issuer, as applicable, has notified the
Administrative Agent that it is incapable of receiving notices under such
Article by electronic communication. The Administrative Agent or the Borrower
may, in its discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant to procedures approved by it,
provided that approval of such procedures may be limited to particular notices
or communications.

               Unless the Administrative Agent otherwise prescribes, (i) notices and
other communications sent to an e-mail address shall be deemed received upon
the sender’s receipt of an acknowledgement from the intended recipient (such as
by the “return receipt requested” function, as available, return e-mail or
other written acknowledgement), provided that if such notice or other
communication is not sent during the normal business hours of the recipient,
such notice or communication shall be deemed to have been sent at the opening
of business on the next business day for the recipient, and (ii) notices or
communications posted to an Internet or intranet website shall be deemed
received upon the deemed receipt by the intended recipient at its e-mail
address as described in the foregoing clause (i) of notification that such
notice or communication is available and identifying the website address
therefor.

               (c) Change of Address, Etc. Each of the Borrower, the Administrative
Agent, the L/C Issuer and the Swing Line Lender may change its address,
telecopier or telephone number for notices and other communications hereunder
by notice to the other parties hereto. Each other Lender may change its
address, telecopier or telephone number for notices and other communications
hereunder by notice to the Borrower, the Administrative Agent, the L/C Issuer
and the Swing Line Lender.

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               (d) Reliance by Administrative Agent, L/C Issuer and Lenders. The
Administrative Agent, the L/C Issuer and the Lenders shall be entitled to rely
and act upon any notices (including telephonic Loan Notices and Swing Line Loan
Notices) purportedly given by or on behalf of the Borrower even if (i) such
notices were not made in a manner specified herein, were incomplete or were not
preceded or followed by any other form of notice specified herein, or (ii) the
terms thereof, as understood by the recipient, varied from any confirmation
thereof. The Borrower shall indemnify the Administrative Agent, the L/C
Issuer, each Lender and the Related Parties of each of them from all losses,
costs, expenses and liabilities resulting from the reliance by such Person on
each notice purportedly given by or on behalf of the Borrower. All telephonic
notices to and other telephonic communications with the Administrative Agent
may be recorded by the Administrative Agent, and each of the parties hereto
hereby consents to such recording.

               10.03 No Waiver; Cumulative Remedies. No failure by any Lender, the L/C
Issuer or the Administrative Agent to exercise, and no delay by any such Person
in exercising, any right, remedy, power or privilege hereunder or any other
Loan Document shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other right,
remedy, power or privilege. The rights, remedies, powers and privileges herein
provided, and provided under each other Loan Document, are cumulative and not
exclusive of any rights, remedies, powers and privileges provided by law.

               10.04 Expenses; Indemnity; Damage Waiver.

               (a) Costs and Expenses. Holdings and the Borrower each agrees, jointly
and severally, to pay (i) all reasonable out-of-pocket expenses incurred by the
Administrative Agent and its Affiliates (including the reasonable fees, charges
and disbursements of counsel for the Administrative Agent), in connection with
the syndication of the credit facilities provided for herein, the preparation,
negotiation, execution, delivery and administration of this Agreement and the
other Loan Documents or any amendments, modifications or waivers of the
provisions hereof or thereof (whether or not the transactions contemplated
hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket
expenses incurred by the L/C Issuer in connection with the issuance, amendment,
renewal or extension of any Letter of Credit or any demand for payment
thereunder and (iii) all out-of-pocket expenses incurred by the Administrative
Agent, any Lender or the L/C Issuer (including the fees, charges and
disbursements of any counsel for the Administrative Agent, any Lender or the
L/C Issuer), in connection with the enforcement of its rights in connection with this
Agreement and the other Loan Documents, including its rights under this
Section.

               (b) Indemnification by the Borrower. Holdings and the Borrower each
agrees, jointly and severally, to indemnify the Administrative Agent (and any
sub-agent thereof), each Agent, each Lender and the L/C Issuer, and each
Related Party of any of the foregoing Persons (each such Person being called an
“Indemnitee”) against, and hold each Indemnitee harmless from, any and all
losses, claims, damages, liabilities and related expenses (including the fees,
charges and disbursements of any counsel for any Indemnitee) incurred by any
Indemnitee or asserted against any Indemnitee by any third party or by
Holdings, the Borrower or any other Loan Party arising out of, in connection
with, or as a result of (i) the execution or delivery of this

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Agreement, any
other Loan Document or any agreement or instrument contemplated hereby or
thereby, the performance by the parties hereto of their respective obligations
hereunder or thereunder or the consummation of the transactions contemplated
hereby or thereby, (ii) any Loan or Letter of Credit or the use or proposed use
of the proceeds therefrom (including any refusal by the L/C Issuer to honor a
demand for payment under a Letter of Credit if the documents presented in
connection with such demand do not strictly comply with the terms of such
Letter of Credit) or (iii) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory, whether brought by a third party or by
Holdings, the Borrower or any other Loan Party or any of Holdings’, the
Borrower’s or such Loan Party’s directors, shareholders or creditors, and
regardless of whether any Indemnitee is a party thereto and whether or not any
of the transactions contemplated hereunder or under any of the other Loan
Documents is consummated, in all cases, whether or not caused by or arising, in
whole or in part, out of the comparative, contributory or sole negligence of
the Indemnitee; provided that such indemnity shall not, as to any Indemnitee,
be available to the extent that such losses, claims, damages, liabilities or
related expenses (x) are determined by a court of competent jurisdiction to
have resulted from the gross negligence or willful misconduct of such
Indemnitee or (y) result from a claim brought by Holdings, the Borrower or any
other Loan Party against an Indemnitee for breach in bad faith of such
Indemnitee’s obligations hereunder or under any other Loan Document, if
Holdings, the Borrower or such Loan Party has obtained a judgment in its favor
on such claim as determined by a court of competent jurisdiction.

               (c) Reimbursement by Lenders. To the extent that Holdings or the Borrower
for any reason fails to indefeasibly pay any amount required under subsection
(a) or (b) of this Section to be paid by it to the Administrative Agent (or any
sub-agent thereof), the L/C Issuer or any Related Party of any of the
foregoing, each Lender severally agrees to pay to the Administrative Agent (or
any such sub-agent), the L/C Issuer or such Related Party, as the case may be,
such Lender’s Applicable Percentage (determined as of the time that the
applicable unreimbursed expense or indemnity payment is sought) of such unpaid
amount, provided that the unreimbursed expense or indemnified loss, claim,
damage, liability or related expense, as the case may be, was incurred by or
asserted against the Administrative Agent (or any such sub-agent) or the L/C
Issuer in its capacity as such, or against any Related Party of any of the
foregoing acting for the Administrative Agent (or any such sub-agent) or L/C
Issuer in connection with such capacity; provided further that to the extent
the L/C Issuer is entitled to indemnification pursuant to this Section 10(c),
each Revolving Credit Lender severally agrees to pay such indemnification. The obligations of the Lenders under this
subsection (c) are subject to the provisions of Section 2.12(d).

               (d) Waiver of Consequential Damages, Etc. To the fullest extent permitted
by applicable law, neither the Borrower nor Holdings shall assert, and each
hereby waives, any claim against any Indemnitee, on any theory of liability,
for special, indirect, consequential or punitive damages (as opposed to direct
or actual damages) arising out of, in connection with, or as a result of, this
Agreement, any other Loan Document or any agreement or instrument contemplated
hereby, the transactions contemplated hereby or thereby, any Loan or Letter of
Credit or the use of the proceeds thereof. No Indemnitee referred to in
subsection (b) above shall be liable for any damages arising from the use by
unintended recipients of any information or other materials distributed by it
through telecommunications, electronic or other information

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transmission
systems in connection with this Agreement or the other Loan Documents or the
transactions contemplated hereby or thereby.

               (e) Payments. All amounts due under this Section shall be payable not
later than ten Business Days after demand therefor.

               (f) Survival. The agreements in this Section shall survive the
resignation of the Administrative Agent and the L/C Issuer, the replacement of
any Lender, the termination of the Aggregate Commitments and the repayment,
satisfaction or discharge of all the other Obligations.

               10.05 Payments Set Aside. To the extent that any payment by or on behalf
of Holdings or the Borrower is made to the Administrative Agent, the L/C Issuer
or any Lender, or the Administrative Agent, the L/C Issuer or any Lender
exercises its right of setoff, and such payment or the proceeds of such setoff
or any part thereof is subsequently invalidated, declared to be fraudulent or
preferential, set aside or required (including pursuant to any settlement
entered into by the Administrative Agent, the L/C Issuer or such Lender in its
discretion) to be repaid to a trustee, receiver or any other party, in
connection with any proceeding under any Debtor Relief Law or otherwise, then
(a) to the extent of such recovery, the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and
effect as if such payment had not been made or such setoff had not occurred,
and (b) each Lender and the L/C Issuer severally agrees to pay to the
Administrative Agent upon demand its applicable share (without duplication) of
any amount so recovered from or repaid by the Administrative Agent, plus
interest thereon from the date of such demand to the date such payment is made
at a rate per annum equal to the Federal Funds Rate from time to time in
effect. The obligations of the Lenders and the L/C Issuer under clause (b) of
the preceding sentence shall survive the payment in full of the Obligations and
the termination of this Agreement.

               10.06 Successors and Assigns.

               (a) Successors and Assigns Generally. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that neither the Borrower nor any other
Loan Party may assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of the Administrative Agent and
each Lender and no Lender may assign or otherwise transfer any of its rights or
obligations hereunder except (i) to an Eligible Assignee in accordance with the
provisions of Section 10.06(b), (ii) by way of participation in accordance with
the provisions of Section 10.06(d), (iii) by way of pledge or assignment of a
security interest subject to the restrictions of Section 10.06(f) or (iv) to an
SPC in accordance with the provisions of Section 10.06(h) (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, Participants to the extent provided in subsection (d)
of this Section and, to the extent expressly contemplated hereby, the Related
Parties of each of the Administrative Agent, the L/C Issuer and the Lenders)
any legal or equitable right, remedy or claim under or by reason of this
Agreement.

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               (b) Assignments by Lenders. Any Lender may at any time assign to one or
more Eligible Assignees all or a portion of its rights and obligations under
this Agreement (including all or a portion of its Commitment and the Loans
(including for purposes of this Section 10.06(b), participations in L/C
Obligations and in Swing Line Loans) 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 Commitment and the Loans at the time owing to it or in the
case of an assignment to a Lender or an Affiliate of a Lender or an Approved
Fund with respect to a Lender, the aggregate amount of the Commitment (which
for this purpose includes Loans outstanding thereunder) or, if the applicable
Commitment is not then in effect, the principal outstanding balance of the Loan
of the assigning Lender subject to each such assignment, determined as of the
date the Assignment and Assumption with respect to such assignment is delivered
to the Administrative Agent or, if “Trade Date” is specified in the Assignment
and Assumption, as of the Trade Date, shall not be less than $1,000,000, unless
each of the Administrative Agent and, in the case of any assignment in respect
of the Revolving Credit Facility for so long as no Event of Default has
occurred and is continuing, the Borrower otherwise consents (each such consent
not to be unreasonably withheld or delayed); (ii) each partial assignment shall
be made as an assignment of a proportionate part of all the assigning Lender’s
rights and obligations under this Agreement with respect to the Loans or the
Commitment assigned, except that this clause (ii) shall not (x) apply to rights
in respect of Swing Line Loans or (y) prohibit any Lender from assigning all or
a portion of its rights and obligations among separate Facilities on a non-pro
rata basis; (iii) any assignment of a Revolving Credit Commitment must be
approved by the Administrative Agent, the L/C Issuer and the Swing Line Lender
unless the Person that is the proposed assignee is itself a Revolving Credit
Lender (whether or not the proposed assignee would otherwise qualify as an
Eligible Assignee); (iv) the parties to each assignment shall execute and
deliver to the Administrative Agent an Assignment and Assumption, together with
a processing and recordation fee of $3,500; provided that (A) no such fee shall
be payable in the case of an assignment to a Lender, an Affiliate of a Lender
or an Approved Fund with respect to a Lender and (B) in the case of
contemporaneous assignments by a Lender to one or more Funds managed by the
same investment advisor (which Funds are not then Lenders hereunder), only a
single such $3,500 fee shall be payable for all such contemporaneous
assignments and (v) the Eligible Assignee, if it shall not be a Lender, shall
deliver to the Administrative Agent an Administrative Questionnaire. Subject
to acceptance and recording thereof by the Administrative Agent pursuant to
subsection (c) of this Section, from and after the effective date specified in each Assignment and Assumption,
the Eligible Assignee thereunder shall be a party to this Agreement and, to the
extent of the interest assigned by such Assignment and Assumption, have the
rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Assumption, be released from its obligations under this
Agreement (and, in the case of an Assignment and Assumption covering all of the
assigning Lender’s rights and obligations under this Agreement, such Lender
shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 3.01, 3.04, 3.05 and 10.04 with respect to facts and
circumstances occurring prior to the effective date of such assignment). Upon
request, the Borrower (at its expense) shall execute and deliver a Note to the
assignee Lender. 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 Section
10.06(d).

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               (c) Register. The Administrative Agent, acting solely for this purpose as
an agent of the Borrower, shall maintain at the Administrative 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 the Commitments of,
and principal amounts of the Loans and L/C Obligations owing to, each Lender
pursuant to the terms hereof from time to time (the “Register”). The entries
in the Register shall be conclusive, and the Borrower, the Agents 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 each of the Borrower and the L/C Issuer at any reasonable time
and from time to time upon reasonable prior notice. In addition, at any time
that a request for a consent for a material or other substantive change to the
Loan Documents is pending, any Lender may request and receive from the
Administrative Agent a copy of the Register. Upon receipt of a duly completed
and executed Assignment and Assumption and compliance by the assigning Lender
and Eligible Assignee with the other applicable provisions of this Section
10.06, the Administrative Agent shall accept such Assignment and Assumption and
record the information contained therein in the Register. No assignment shall
be effective unless it has been recorded in the Register as provided herein.

               (d) Participations. Any Lender may at any time, without the consent of,
or notice to, the Borrower or the Administrative Agent, sell participations to
any Person (other than a natural person or Holdings, the Borrower or any of
Holdings’ Affiliates or Subsidiaries) (each, a “Participant”) in all or a
portion of such Lender’s rights and/or obligations under this Agreement
(including all or a portion of its Commitment and/or the Loans (including such
Lender’s participations in L/C Obligations and/or Swing Line Loans) owing to
it); provided that (i) such Lender’s obligations under this Agreement shall
remain unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations and (iii) the Borrower,
the Agents and the other Lenders shall continue to deal solely and directly
with such Lender in connection with such Lender’s rights and obligations under
this Agreement. Any agreement or instrument pursuant to which a Lender sells
such a participation shall provide that such Lender shall retain the sole right
to enforce this Agreement and to approve any amendment, modification or waiver
of any provision of this Agreement; provided that such agreement or instrument
may provide that such Lender will not, without the consent of the Participant,
agree to any amendment, waiver or other modification described in the first
proviso to Section 10.01 that directly affects such Participant. Subject to
subsection (e) of this Section, the Borrower agrees that each Participant shall
be entitled to the benefits of Sections 3.01, 3.04 and 3.05 to the same extent
as if it were a Lender and had acquired its interest by assignment pursuant to
Section 10.06(b). To the extent permitted by law, each Participant also shall
be entitled to the benefits of Section 10.08 as though it were a Lender,
provided such Participant agrees to be subject to Section 2.13 as though it
were a Lender.

               (e) Limitations upon Participant Rights. A Participant shall not be
entitled to receive any greater payment under Section 3.01 or 3.04 than the
applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with the Borrower’s prior written consent. A
Participant that would be a Foreign Lender if it were a Lender shall not be
entitled to the benefits of Section 3.01 unless the Borrower is notified of the
participation sold to such Participant and

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such Participant agrees, for the
benefit of the Borrower, to comply with Section 3.01(e) as though it were a
Lender.

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

               (g) Electronic Execution of Assignments. The words “execution,” “signed,”
“signature,” and words of like import in any Assignment and Assumption shall be
deemed to include electronic signatures or the keeping of records in electronic
form, each of which shall be of the same legal effect, validity or
enforceability as a manually executed signature or the use of a paper-based
recordkeeping system, as the case may be, to the extent and as provided for in
any applicable law, including the Federal Electronic Signatures in Global and
National Commerce Act, the New York State Electronic Signatures and Records
Act, or any other similar state laws based on the Uniform Electronic
Transactions Act.

               (h) Notwithstanding anything to the contrary contained herein, any Lender
(a “Granting Lender”) may grant to a special purpose funding vehicle identified
as such in writing from time to time by the Granting Lender to the
Administrative Agent and the Borrower (an “SPC”) the option to provide all or
any part of any Loan that such Granting Lender would otherwise be obligated to
make pursuant to this Agreement; provided that (i) nothing herein shall
constitute a commitment by any SPC to fund any Loan, and (ii) if an SPC elects
not to exercise such option or otherwise fails to make all or any part of such
Loan, the Granting Lender shall be obligated to make such Loan pursuant to the
terms hereof or, if it fails to do so, to make such payment to the
Administrative Agent as is required under Section 2.13. Each party hereto
hereby agrees that (i) neither the grant to any SPC nor the exercise by any SPC
of such option shall increase the costs or expenses or otherwise increase or
change the obligations of the Borrower under this Agreement (including its
obligations under Section 3.04), (ii) no SPC shall be liable for any indemnity
or similar payment obligation under this Agreement for which a Lender would be
liable, and (iii) the Granting Lender shall for all purposes, including the
approval of any amendment, waiver or other modification of any provision of any
Loan Document, remain the lender of record hereunder. The making of a Loan by
an SPC hereunder shall utilize the Commitment of the Granting Lender to the
same extent, and as if, such Loan were made by such Granting Lender. In
furtherance of the foregoing, each party hereto hereby agrees (which agreement
shall survive the termination of this Agreement) that, prior to the date that
is one year and one day after the payment in full of all outstanding commercial
paper or other senior debt of any SPC, it will not institute against, or join
any other Person in instituting against, such SPC any bankruptcy,
reorganization, arrangement, insolvency, or liquidation proceeding under the
laws of the United States or any State thereof. Notwithstanding anything to
the contrary contained herein, any SPC may (i) with notice to, but without
prior consent of the Borrower and the Administrative Agent and with the payment
of a processing fee of $3,500, assign all or any portion of its right to
receive payment with respect to any Loan to the Granting Lender and (ii)
disclose on a confidential basis any non-public information relating to its
funding

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of Loans to any rating agency, commercial paper dealer or provider of
any surety or Guarantee or credit or liquidity enhancement to such SPC.

               (i) Resignation as L/C Issuer or Swing Line Lender after Assignment.
Notwithstanding anything to the contrary contained herein, if at any time Bank
of America assigns all of its Commitments and Loans pursuant to Section
10.06(b), Bank of America may, (i) upon 30 days’ notice to the Borrower and the
Lenders, resign as L/C Issuer and/or (ii) upon 30 days’ notice to the Borrower,
resign as Swing Line Lender. In the event of any such resignation as L/C
Issuer or Swing Line Lender, the Borrower shall be entitled to appoint from
among the Lenders a successor L/C Issuer or Swing Line Lender hereunder;
provided, however, that no failure by the Borrower to appoint any such
successor shall affect the resignation of Bank of America as L/C Issuer or
Swing Line Lender, as the case may be. If Bank of America resigns as L/C
Issuer, it shall retain all the rights and obligations of the L/C Issuer
hereunder with respect to all Letters of Credit outstanding as of the effective
date of its resignation as L/C Issuer and all L/C Obligations with respect
thereto (including the right to require the Lenders to make Base Rate Loans or
fund risk participations in Unreimbursed Amounts pursuant to Section 2.03(c)).
If Bank of America resigns as Swing Line Lender, it shall retain all the rights
of the Swing Line Lender provided for hereunder with respect to Swing Line
Loans made by it and outstanding as of the effective date of such resignation,
including the right to require the Lenders to make Base Rate Loans or fund risk
participations in outstanding Swing Line Loans pursuant to Section 2.04(c).

               10.07 Treatment of Certain Information; Confidentiality. Each of the
Administrative Agent, the Lenders and the L/C Issuer agrees to maintain the
confidentiality of the Information, except that Information may be disclosed
(a) to its Affiliates and to its Affiliates’ respective partners, directors,
officers, employees, agents, advisors and representatives (it being understood
that the Persons to whom such disclosure is made will be informed of the
confidential nature of such Information and instructed to keep such Information
confidential); (b) to the extent requested by any regulatory authority
purporting to have jurisdiction over it; (c) to the extent required by
applicable Laws or regulations or by any subpoena or similar legal process; (d)
to any other party to this Agreement; (e) in connection with the exercise of
any remedies hereunder or any suit, action or proceeding relating to this
Agreement or the enforcement of rights hereunder; (f) subject to an agreement
containing provisions substantially the same as those of this Section 10.07, to
(i) any Eligible Assignee of or Participant in, or any prospective Eligible Assignee of or Participant in,
any of its rights or obligations under this Agreement or (ii) any direct or
indirect contractual counterparty or prospective counterparty (or such
contractual counterparty’s or prospective counterparty’s professional advisor)
to any credit derivative transaction relating to obligations of the Loan
Parties; (g) with the consent of the Borrower; (h) to the extent such
Information (x) becomes publicly available other than as a result of a breach
of this Section 10.07 or (y) becomes available to the Administrative Agent, any
Lender, the L/C Issuer or any of their respective Affiliates on a
nonconfidential basis from a source other than the Borrower; (i) to any state,
Federal or foreign authority or examiner (including the National Association of
Insurance Commissioners or any other similar organization) regulating any
Lender; or (j) to any rating agency when required by it (it being understood
that, prior to any such disclosure, such rating agency shall undertake to
preserve the confidentiality of any Information relating to the Loan Parties
received by it from such Lender). In addition, the Administrative Agent, the
L/C Issuer and the Lenders may

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disclose the existence of this Agreement and
information about this Agreement to market data collectors, similar service
providers to the lending industry, and service providers to the Agents and the
Lenders in connection with the administration and management of this Agreement,
the other Loan Documents, the Commitments, and the Credit Extensions. For the
purposes of this Section, “Information” means all information received from any
Loan Party relating to any Loan Party or its business, other than any such
information that has been made available to the public by any Loan Party or is
available to the Administrative Agent, the L/C Issuer or any Lender on a
nonconfidential basis prior to disclosure by any Loan Party. Any Person
required to maintain the confidentiality of Information as provided in this
Section 10.07 shall be considered to have complied with its obligation to do so
if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.

               10.08 Right of Setoff. If an Event of Default shall have occurred and be
continuing, each Lender, the L/C Issuer and each of their respective Affiliates
is hereby authorized at any time and from time to time, to the fullest extent
permitted by applicable law, to set off and apply any and all deposits (general
or special, time or demand, provisional or final, in whatever currency) at any
time held and other obligations (in whatever currency) at any time owing by
such Lender, the L/C Issuer or any such Affiliate to or for the credit or the
account of the Borrower or any other Loan Party against any and all of the
obligations of the Borrower or such Loan Party now or hereafter existing under
this Agreement or any other Loan Document to such Lender or the L/C Issuer,
irrespective of whether or not such Lender or the L/C Issuer shall have made
any demand under this Agreement or any other Loan Document and although such
obligations of the Borrower or such Loan Party may be contingent or unmatured
or are owed to a branch or office of such Lender or the L/C Issuer different
from the branch or office holding such deposit or obligated on such
indebtedness. The rights of each Lender, the L/C Issuer and their respective
Affiliates under this Section are in addition to other rights and remedies
(including other rights of setoff) that such Lender, the L/C Issuer or their
respective Affiliates may have. Each Lender and the L/C Issuer agrees to
notify the Borrower and the Administrative Agent promptly after any such setoff
and application, provided that the failure to give such notice shall not affect
the validity of such setoff and application.

               10.09 Interest Rate Limitation. Notwithstanding anything to the contrary
contained in any Loan Document, the interest paid or agreed to be paid under
the Loan Documents shall not exceed the maximum rate of non-usurious interest
permitted by applicable Law (the “Maximum Rate”). If the Administrative Agent
or any Lender shall receive interest in an amount that exceeds the Maximum
Rate, the excess interest shall be applied to the principal of the Loans or, if
it exceeds such unpaid principal, refunded to the Borrower. In determining
whether the interest contracted for, charged, or received by an Agent or a
Lender exceeds the Maximum Rate, such Person may, to the extent permitted by
applicable Law, (a) characterize any payment that is not principal as an
expense, fee, or premium rather than interest, (b) exclude voluntary
prepayments and the effects thereof, and (c) amortize, prorate, allocate, and
spread in equal or unequal parts the total amount of interest throughout the
contemplated term of the Obligations hereunder.

               10.10 Counterparts; Integration; Effectiveness. This Agreement may be
executed in counterparts (and by different parties hereto in different
counterparts), each of which

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shall constitute an original, but all of which
when taken together shall constitute a single contract. This Agreement and the
other Loan Documents constitute the entire contract among the parties relating
to the subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof. Except
as provided in Section 4.01, this Agreement shall become effective when it
shall have been executed by the Administrative Agent and when the
Administrative Agent shall have received counterparts hereof that, when taken
together, bear the signatures of each of the other parties hereto. Delivery of
an executed counterpart of a signature page of this Agreement by telecopy shall
be effective as delivery of a manually executed counterpart of this Agreement.

               10.11 Survival of Representations and Warranties. All representations and
warranties made hereunder and in any other Loan Document or other document
delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by each Agent
and each Lender, regardless of any investigation made by any Agent or any
Lender or on their behalf and notwithstanding that any Agent or any Lender may
have had notice or knowledge of any Default at the time of any Credit
Extension, and shall continue in full force and effect as long as any Loan or
any other Obligation hereunder shall remain unpaid or unsatisfied or any Letter
of Credit shall remain outstanding.

               10.12 Severability. If any provision of this Agreement or the other Loan
Documents is held to be illegal, invalid or unenforceable, (a) the legality,
validity and enforceability of the remaining provisions of this Agreement and
the other Loan Documents shall not be affected or impaired thereby and (b) the
parties shall endeavor in good faith negotiations to replace the illegal,
invalid or unenforceable provisions with valid provisions the economic effect
of which comes as close as possible to that of the illegal, invalid or
unenforceable provisions. The invalidity of a provision in a particular jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

               10.13 Replacement of Lenders. If any Lender requests compensation under
Section 3.04, or if the Borrower is required to pay any additional amount to
any Lender or any Governmental Authority for the account of any Lender pursuant
to Section 3.01, or if any Lender is a Defaulting Lender, then the Borrower
may, at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in, and
consents required by, Section 10.06), all of its interests, rights and
obligations under this Agreement and the related Loan Documents to an assignee
that shall assume such obligations (which assignee may be another Lender, if a
Lender accepts such assignment), provided that:

               (a) the Borrower shall have paid to the Administrative Agent the
assignment fee specified in Section 10.06(b);

               (b) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans and L/C Advances, accrued interest thereon,
accrued fees and all other amounts payable to it hereunder and under the other
Loan Documents (including any amounts under Section 3.05) from the assignee (to
the extent of such outstanding principal and accrued interest and fees) or the
Borrower (in the case of all other amounts);

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               (c) in the case of any such assignment resulting from a claim for
compensation under Section 3.04 or payments required to be made pursuant to
Section 3.01, such assignment will result in a reduction in such compensation
or payments thereafter; and

               (d) such assignment does not conflict with applicable Laws.

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

               10.14 Governing Law; Jurisdiction; Etc.

               (a) GOVERNING LAW. THIS AGREEMENT AND EACH OTHER LOAN DOCUMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK.

               (b) SUBMISSION TO JURISDICTION. THE BORROWER AND EACH OTHER LOAN PARTY
IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE
NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW
YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT
OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE
PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN
RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH
NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN
SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN
ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT
THAT THE ADMINISTRATIVE AGENT, ANY LENDER OR THE L/C ISSUER MAY OTHERWISE HAVE
TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT AGAINST THE BORROWER OR ANY OTHER LOAN PARTY OR ITS PROPERTIES IN THE
COURTS OF ANY JURISDICTION.

               (c) WAIVER OF VENUE. THE BORROWER AND EACH OTHER LOAN PARTY IRREVOCABLY
AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION. EACH
OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN

122

 

INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

               (d) SERVICE OF PROCESS. THE BORROWER AND EACH OTHER LOAN PARTY HERETO
IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES
IN SECTION 10.02. NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY
HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW

               10.15 Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION.

               10.16 USA PATRIOT Act Notice. Each Lender and the Administrative Agent
(for itself and not on behalf of any Lender) hereby notifies the Borrower that
pursuant to the requirements of the USA Patriot Act (Title III of Pub. L.
107-56 (signed into law October 26, 2001)) (the “Act”), it is required to
obtain, verify and record information that identifies each Loan Party, which
information includes the name and address of each Loan Party and other
information that will allow such Lender or the Administrative Agent, as
applicable, to identify each Loan Party in accordance with the Act.

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

	 	 	 	 	 
	 	 	ENCORE MEDICAL CORPORATION
	 
	 	 	 	 
	

	 	By:
	 	/s/ Harry L. Zimmerman
	

	 	 	 	
 
	

	 	Name:
	 	Harry L. Zimmerman
	

	 	Title:
	 	Executive Vice President – General Counsel
	 
	 	 	 	 
	 	 	ENCORE MEDICAL IHC, INC.
	 
	 	 	 	 
	

	 	By:
	 	/s/ Harry L. Zimmerman
	

	 	 	 	
 
	

	 	Name:
	 	Harry L. Zimmerman
	

	 	Title:
	 	Executive Vice President – General Counsel

 

 

	 	 	 	 	 
	 	 	BANK OF AMERICA, N.A., as
	 	 	Administrative Agent
	 
	 	 	 	 
	

	 	By:
	 	/s/ Paul Folino
	

	 	 	 	
 
	

	 	Name:
	 	Paul Folino
	

	 	Title:
	 	Assistant Vice President

 

 

	 	 	 	 	 
	 	 	BANK OF AMERICA, N.A., as a Lender, L/C
	 	 	Issuer and Swing Line Lender
	 
	 	 	 	 
	

	 	By:
	 	/s/ Daniel H. Pankar
	

	 	 	 	
 
	

	 	Name:
	 	Daniel H. Penkar
	

	 	Title:
	 	Senior Vice President

 

 

Agreed as of the date first above written:

	 	 	 
	CIT LENDING SERVICES CORPORATION
	 
	 	 
	By:

	 	/s/ John P. Sirico, II
	

	 	
 
	

	 	Title: Vice President

 

 

Agreed as of the date first above written:

	 	 	 
	GENERAL ELECTRIC CAPITAL CORPORATION
	 
	 	 
	By:

	 	/s/ Earl F. Smith III
	

	 	
 
	

	 	Title: Duly Authorized Signatory

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