Document:

Exhibit 10.43
 

 

CREDIT AGREEMENT

dated as of May 5, 2006

among

OPTION
CARE, INC.,

as the Company,

CERTAIN
SUBSIDIARIES OF OPTION CARE, INC.,

THE
VARIOUS FINANCIAL INSTITUTIONS PARTY HERETO,

as Lenders,

and

LASALLE
BANK NATIONAL ASSOCIATION,

as Administrative Agent

   
 
  
 LASALLE BANK NATIONAL ASSOCIATION,
 as Arranger

 

	
  SECTION 1

  	
   

  	
  DEFINITIONS.

  	
   

  	
  1

  
	
  1.1

  	
   

  	
  Definitions

  	
   

  	
  1

  
	
  1.2

  	
   

  	
  Other Interpretive
  Provisions

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 2

  	
   

  	
  COMMITMENTS
  OF THE LENDERS; BORROWING, CONVERSION AND LETTER OF CREDIT PROCEDURES.

  	
   

  	
  16

  
	
  2.1

  	
   

  	
  Commitments

  	
   

  	
  16

  
	
   

  	
   

  	
  2.1.1

  	
   

  	
  Revolving Loan
  Commitment

  	
   

  	
  17

  
	
   

  	
   

  	
  2.1.2

  	
   

  	
  Reserved

  	
   

  	
  17

  
	
   

  	
   

  	
  2.1.3

  	
   

  	
  L/C
  Commitment

  	
   

  	
  17

  
	
  2.2

  	
   

  	
  Loan Procedures

  	
   

  	
  17

  
	
   

  	
   

  	
  2.2.1

  	
   

  	
  Various Types of
  Loans

  	
   

  	
  18

  
	
   

  	
   

  	
  2.2.2

  	
   

  	
  Borrowing
  Procedures

  	
   

  	
  17

  
	
   

  	
   

  	
  2.2.3

  	
   

  	
  Conversion
  and Continuation Procedures

  	
   

  	
  18

  
	
   

  	
   

  	
  2.2.4

  	
   

  	
  Swing Line Facility

  	
   

  	
  20

  
	
  2.3

  	
   

  	
  Letter of
  Credit Procedures

  	
   

  	
  21

  
	
   

  	
   

  	
  2.3.1

  	
   

  	
  L/C Applications

  	
   

  	
  21

  
	
   

  	
   

  	
  2.3.2

  	
   

  	
  Participations
  in Letters of Credit

  	
   

  	
  21

  
	
   

  	
   

  	
  2.3.3

  	
   

  	
  Reimbursement
  Obligations

  	
   

  	
  22

  
	
   

  	
   

  	
  2.3.4

  	
   

  	
  Funding by
  Lenders to Issuing Lender

  	
   

  	
  22

  
	
  2.4

  	
   

  	
  Commitments
  Several

  	
   

  	
  23

  
	
  2.5

  	
   

  	
  Certain
  Conditions

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 3

  	
   

  	
  EVIDENCING OF
  LOANS.

  	
   

  	
  23

  
	
  3.1

  	
   

  	
  Notes

  	
   

  	
  23

  
	
  3.2

  	
   

  	
  Recordkeeping

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 4

  	
   

  	
  INTEREST.

  	
   

  	
  24

  
	
  4.1

  	
   

  	
  Interest Rates

  	
   

  	
  24

  
	
  4.2

  	
   

  	
  Interest Payment
  Dates

  	
   

  	
  24

  
	
  4.3

  	
   

  	
  Setting and
  Notice of LIBOR Rates

  	
   

  	
  24

  
	
  4.4

  	
   

  	
  Computation
  of Interest

  	
   

  	
  24

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 5

  	
   

  	
  FEES.

  	
   

  	
  25

  
	
  5.1

  	
   

  	
  Non-Use
  Fee

  	
   

  	
  25

  
	
  5.2

  	
   

  	
  Letter of Credit Fees

  	
   

  	
  25

  
	
  5.3

  	
   

  	
  Administrative
  Agent’s Fees

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 6

  	
   

  	
  REDUCTION
  OR TERMINATION OF THE REVOLVING COMMITMENT; PREPAYMENTS.

  	
   

  	
  25

  
	
  6.1

  	
   

  	
  Reduction
  or Termination of the Revolving Commitment

  	
   

  	
  25

  
	
   

  	
   

  	
  6.1.1

  	
   

  	
  Voluntary
  Reduction or Termination of the Revolving Commitment

  	
   

  	
  27

  
	
   

  	
   

  	
  6.1.2

  	
   

  	
  Mandatory
  Reductions of Revolving Commitment

  	
   

  	
  26

  
	
   

  	
   

  	
  6.1.3

  	
   

  	
  All
  Reductions of the Revolving Commitment

  	
   

  	
  26

  

 i
 

 

 

	
  6.2

  	
   

  	
  Prepayments

  	
   

  	
  26

  
	
   

  	
   

  	
  6.2.1

  	
   

  	
  Voluntary
  Prepayments

  	
   

  	
  26

  
	
  6.3

  	
   

  	
  Manner of
  Prepayments

  	
   

  	
  26

  
	
   

  	
   

  	
  6.3.1

  	
   

  	
  All Prepayments

  	
   

  	
  26

  
	
   

  	
   

  	
  6.3.2

  	
   

  	
  Reserved

  	
   

  	
  26

  
	
  6.4

  	
   

  	
  Repayments.

  	
   

  	
  28

  
	
   

  	
   

  	
  6.4.1

  	
   

  	
  Revolving Loans

  	
   

  	
  28

  
	
   

  	
   

  	
  6.4.2

  	
   

  	
  Reserved

  	
   

  	
  27

  
	
   

  	
   

  	
  6.4.3

  	
   

  	
  Reserved

  	
   

  	
  27

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 7

  	
   

  	
  MAKING AND
  PRORATION OF PAYMENTS; SETOFF; TAXES.

  	
   

  	
  27

  
	
  7.1

  	
   

  	
  Making of Payments

  	
   

  	
  27

  
	
  7.2

  	
   

  	
  Application
  of Certain Payments

  	
   

  	
  27

  
	
  7.3

  	
   

  	
  Due Date Extension

  	
   

  	
  27

  
	
  7.4

  	
   

  	
  Setoff

  	
   

  	
  27

  
	
  7.5

  	
   

  	
  Proration of
  Payments

  	
   

  	
  28

  
	
  7.6

  	
   

  	
  Taxes

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 8

  	
   

  	
  INCREASED
  COSTS; SPECIAL PROVISIONS FOR LIBOR LOANS.

  	
   

  	
  30

  
	
  8.1

  	
   

  	
  Increased Costs

  	
   

  	
  30

  
	
  8.2

  	
   

  	
  Basis for
  Determining Interest Rate Inadequate or Unfair

  	
   

  	
  31

  
	
  8.3

  	
   

  	
  Changes in
  Law Rendering LIBOR Loans Unlawful

  	
   

  	
  31

  
	
  8.4

  	
   

  	
  Funding
  Losses

  	
   

  	
  31

  
	
  8.5

  	
   

  	
  Right of
  Lenders to Fund through Other Offices

  	
   

  	
  32

  
	
  8.6

  	
   

  	
  Discretion
  of Lenders as to Manner of Funding

  	
   

  	
  33

  
	
  8.7

  	
   

  	
  Mitigation
  of Circumstances; Replacement of Lenders

  	
   

  	
  32

  
	
  8.8

  	
   

  	
  Conclusiveness
  of Statements; Survival of Provisions

  	
   

  	
  33

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 9

  	
   

  	
  REPRESENTATIONS
  AND WARRANTIES.

  	
   

  	
  34

  
	
  9.1

  	
   

  	
  Organization

  	
   

  	
  33

  
	
  9.2

  	
   

  	
  Authorization;
  No Conflict

  	
   

  	
  33

  
	
  9.3

  	
   

  	
  Validity and
  Binding Nature

  	
   

  	
  33

  
	
  9.4

  	
   

  	
  Financial Condition

  	
   

  	
  34

  
	
  9.5

  	
   

  	
  No Material
  Adverse Change

  	
   

  	
  35

  
	
  9.6

  	
   

  	
  Litigation
  and Contingent Liabilities

  	
   

  	
  35

  
	
  9.7

  	
   

  	
  Ownership of
  Properties; Liens

  	
   

  	
  34

  
	
  9.8

  	
   

  	
  Equity
  Ownership; Subsidiaries

  	
   

  	
  34

  
	
  9.9

  	
   

  	
  Pension
  Plans

  	
   

  	
  34

  
	
  9.10

  	
   

  	
  Investment Company
  Act

  	
   

  	
  35

  
	
  9.11

  	
   

  	
  Public
  Utility Holding Company Act

  	
   

  	
  35

  
	
  9.12

  	
   

  	
  Regulation
  U

  	
   

  	
  35

  
	
  9.13

  	
   

  	
  Taxes

  	
   

  	
  35

  
	
  9.14

  	
   

  	
  Solvency,
  etc

  	
   

  	
  37

  
	
  9.15

  	
   

  	
  Environmental
  Matters

  	
   

  	
  36

  
	
  9.16

  	
   

  	
  Insurance

  	
   

  	
  36

  
	
  9.17

  	
   

  	
  Real Property

  	
   

  	
  38

  

 ii
 

 

 

	
  9.18

  	
   

  	
  Information

  	
   

  	
  37

  
	
  9.19

  	
   

  	
  Intellectual
  Property

  	
   

  	
  37

  
	
  9.20

  	
   

  	
  Burdensome
  Obligations

  	
   

  	
  37

  
	
  9.21

  	
   

  	
  Labor
  Matters

  	
   

  	
  37

  
	
  9.22

  	
   

  	
  No
  Default

  	
   

  	
  37

  
	
  9.23

  	
   

  	
  Reserved

  	
   

  	
  37

  
	
  9.24

  	
   

  	
  Subordinated
  Debt

  	
   

  	
  38

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 10

  	
   

  	
  AFFIRMATIVE
  COVENANTS.

  	
   

  	
  38

  
	
  10.1

  	
   

  	
  Reports,
  Certificates and Other Information

  	
   

  	
  38

  
	
   

  	
   

  	
  10.1.1

  	
   

  	
  Annual Report

  	
   

  	
  38

  
	
   

  	
   

  	
  10.1.2

  	
   

  	
  Interim Reports

  	
   

  	
  38

  
	
   

  	
   

  	
  10.1.3

  	
   

  	
  Compliance
  Certificates

  	
   

  	
  39

  
	
   

  	
   

  	
  10.1.4

  	
   

  	
  Reports to
  the SEC and to Shareholders

  	
   

  	
  39

  
	
   

  	
   

  	
  10.1.5

  	
   

  	
  Notice of
  Default, Litigation and ERISA Matters

  	
   

  	
  39

  
	
   

  	
   

  	
  10.1.6

  	
   

  	
  Borrowing
  Base Certificates

  	
   

  	
  40

  
	
   

  	
   

  	
  10.1.7

  	
   

  	
  Management Reports

  	
   

  	
  40

  
	
   

  	
   

  	
  10.1.8

  	
   

  	
  Projections

  	
   

  	
  40

  
	
   

  	
   

  	
  10.1.9

  	
   

  	
  Subordinated
  Debt Notices

  	
   

  	
  40

  
	
   

  	
   

  	
  10.1.10

  	
   

  	
  Other Information

  	
   

  	
  40

  
	
  10.2

  	
   

  	
  Books,
  Records and Inspections

  	
   

  	
  40

  
	
  10.3

  	
   

  	
  Maintenance
  of Property; Insurance

  	
   

  	
  41

  
	
  10.4

  	
   

  	
  Compliance
  with Laws; Payment of Taxes and Liabilities

  	
   

  	
  42

  
	
  10.5

  	
   

  	
  Maintenance
  of Existence, etc

  	
   

  	
  42

  
	
  10.6

  	
   

  	
  Use of Proceeds

  	
   

  	
  44

  
	
  10.7

  	
   

  	
  Employee Benefit
  Plans

  	
   

  	
  43

  
	
  10.8

  	
   

  	
  Environmental
  Matters

  	
   

  	
  43

  
	
  10.9

  	
   

  	
  Further Assurances

  	
   

  	
  43

  
	
  10.10

  	
   

  	
  Deposit
  Accounts

  	
   

  	
  43

  
	
  10.12

  	
   

  	
  Syndication

  	
   

  	
  44

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 11

  	
   

  	
  NEGATIVE COVENANTS

  	
   

  	
  44

  
	
  11.1

  	
   

  	
  Debt

  	
   

  	
  44

  
	
  11.2

  	
   

  	
  Liens

  	
   

  	
  45

  
	
  11.3

  	
   

  	
  Operating Leases

  	
   

  	
  46

  
	
  11.4

  	
   

  	
  Restricted Payments

  	
   

  	
  46

  
	
  11.5

  	
   

  	
  Mergers,
  Consolidations, Sales

  	
   

  	
  46

  
	
  11.6

  	
   

  	
  Modification
  of Organizational Documents

  	
   

  	
  48

  
	
  11.7

  	
   

  	
  Transactions
  with Affiliates

  	
   

  	
  48

  
	
  11.8

  	
   

  	
  Unconditional
  Purchase Obligations

  	
   

  	
  51

  
	
  11.9

  	
   

  	
  Inconsistent
  Agreements

  	
   

  	
  48

  
	
  11.10

  	
   

  	
  Business
  Activities; Issuance of Equity

  	
   

  	
  48

  
	
  11.11

  	
   

  	
  Investments

  	
   

  	
  49

  
	
  11.12

  	
   

  	
  Restriction
  of Amendments to Certain Documents

  	
   

  	
  49

  
	
  11.13

  	
   

  	
  Fiscal
  Year

  	
   

  	
  50

  

 iii
 

 

 

	
  11.14

  	
   

  	
  Financial Covenants

  	
   

  	
  50

  
	
   

  	
   

  	
  11.14.1

  	
   

  	
  Tangible Net Worth

  	
   

  	
  50

  
	
   

  	
   

  	
  11.14.2

  	
   

  	
  Reserved

  	
   

  	
  52

  
	
   

  	
   

  	
  11.14.3

  	
   

  	
  Interest
  Coverage Ratio

  	
   

  	
  50

  
	
   

  	
   

  	
  11.14.4

  	
   

  	
  Senior Debt
  to EBITDA Ratio

  	
   

  	
  50

  
	
   

  	
   

  	
  11.14.5

  	
   

  	
  Total Debt
  to EBITDA Ratio

  	
   

  	
  50

  
	
   

  	
   

  	
  11.14.6

  	
   

  	
  Capital
  Expenditures

  	
   

  	
  50

  
	
  11.15

  	
   

  	
  Cancellation of
  Debt

  	
   

  	
  50

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 12

  	
   

  	
  EFFECTIVENESS;
  CONDITIONS OF LENDING, ETC.

  	
   

  	
  50

  
	
  12.1

  	
   

  	
  Initial
  Credit Extension

  	
   

  	
  50

  
	
   

  	
   

  	
  12.1.1

  	
   

  	
  Notes

  	
   

  	
  51

  
	
   

  	
   

  	
  12.1.2

  	
   

  	
  Authorization
  Documents

  	
   

  	
  51

  
	
   

  	
   

  	
  12.1.3

  	
   

  	
  Consents, etc

  	
   

  	
  51

  
	
   

  	
   

  	
  12.1.4

  	
   

  	
  Letter of Direction

  	
   

  	
  51

  
	
   

  	
   

  	
  12.1.5

  	
   

  	
  Guaranty and
  Collateral Agreement

  	
   

  	
  51

  
	
   

  	
   

  	
  12.1.6

  	
   

  	
  Perfection
  Certificate

  	
   

  	
  51

  
	
   

  	
   

  	
  12.1.7

  	
   

  	
  Leased Property

  	
   

  	
  51

  
	
   

  	
   

  	
  12.1.8

  	
   

  	
  Subordination
  Agreements

  	
   

  	
  52

  
	
   

  	
   

  	
  12.1.9

  	
   

  	
  Opinions of Counsel

  	
   

  	
  52

  
	
   

  	
   

  	
  12.1.10

  	
   

  	
  Insurance

  	
   

  	
  52

  
	
   

  	
   

  	
  12.1.11

  	
   

  	
  Copies of
  Documents

  	
   

  	
  52

  
	
   

  	
   

  	
  12.1.12

  	
   

  	
  Payment of Fees

  	
   

  	
  52

  
	
   

  	
   

  	
  12.1.15

  	
   

  	
  Environmental
  Reports

  	
   

  	
  53

  
	
   

  	
   

  	
  12.1.16

  	
   

  	
  Search
  Results; Lien Terminations

  	
   

  	
  53

  
	
   

  	
   

  	
  12.1.17

  	
   

  	
  Filings,
  Registrations and Recordings

  	
   

  	
  53

  
	
   

  	
   

  	
  12.1.18

  	
   

  	
  Borrowing
  Base Certificate

  	
   

  	
  53

  
	
   

  	
   

  	
  12.1.19

  	
   

  	
  Closing
  Certificate, Consents and Permits

  	
   

  	
  53

  
	
   

  	
   

  	
  12.1.20

  	
   

  	
  Other

  	
   

  	
  53

  
	
  12.2

  	
   

  	
  Conditions

  	
   

  	
   

  
	
   

  	
   

  	
  12.2.1

  	
   

  	
  Compliance
  with Warranties, No Default, etc

  	
   

  	
  54

  
	
   

  	
   

  	
  12.2.2

  	
   

  	
  Confirmatory
  Certificate

  	
   

  	
  54

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 13

  	
   

  	
  EVENTS OF
  DEFAULT AND THEIR EFFECT.

  	
   

  	
  54

  
	
  13.1

  	
   

  	
  Events of Default

  	
   

  	
  54

  
	
   

  	
   

  	
  13.1.1

  	
   

  	
  Non-Payment
  of the Loans, etc

  	
   

  	
  54

  
	
   

  	
   

  	
  13.1.2

  	
   

  	
  Non-Payment of
  Other Debt

  	
   

  	
  54

  
	
   

  	
   

  	
  13.1.3

  	
   

  	
  Other
  Material Obligations

  	
   

  	
  55

  
	
   

  	
   

  	
  13.1.4

  	
   

  	
  Bankruptcy,
  Insolvency, etc

  	
   

  	
  55

  
	
   

  	
   

  	
  13.1.5

  	
   

  	
  Non-Compliance
  with Loan Documents

  	
   

  	
  55

  
	
   

  	
   

  	
  13.1.6

  	
   

  	
  Representations;
  Warranties

  	
   

  	
  55

  
	
   

  	
   

  	
  13.1.7

  	
   

  	
  Pension Plans

  	
   

  	
  55

  
	
   

  	
   

  	
  13.1.8

  	
   

  	
  Judgments

  	
   

  	
  56

  
	
   

  	
   

  	
  13.1.9

  	
   

  	
  Invalidity
  of Collateral Documents, etc

  	
   

  	
  56

  
	
   

  	
   

  	
  13.1.10

  	
   

  	
  Invalidity
  of Subordination Provisions, etc

  	
   

  	
  56

  

 iv
 

 

 

	
  

  	
   

  	
  13.1.11

  	
   

  	
  Change of Control

  	
   

  	
  56

  
	
   

  	
   

  	
  13.1.12

  	
   

  	
  Material
  Adverse Effect

  	
   

  	
  56

  
	
  13.2

  	
   

  	
  Effect of Event
  of Default

  	
   

  	
  56

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 14

  	
   

  	
  THE
  AGENT.

  	
   

  	
  57

  
	
  14.1

  	
   

  	
  Appointment
  and Authorization

  	
   

  	
  57

  
	
  14.2

  	
   

  	
  Issuing Lender

  	
   

  	
  57

  
	
  14.3

  	
   

  	
  Delegation of Duties

  	
   

  	
  57

  
	
  14.4

  	
   

  	
  Exculpation
  of Administrative Agent

  	
   

  	
  57

  
	
  14.5

  	
   

  	
  Reliance by
  Administrative Agent

  	
   

  	
  58

  
	
  14.6

  	
   

  	
  Notice of Default

  	
   

  	
  58

  
	
  14.7

  	
   

  	
  Credit Decision

  	
   

  	
  59

  
	
  14.8

  	
   

  	
  Indemnification

  	
   

  	
  59

  
	
  14.9

  	
   

  	
  Administrative
  Agent in Individual Capacity

  	
   

  	
  60

  
	
  14.10

  	
   

  	
  Successor
  Administrative Agent

  	
   

  	
  60

  
	
  14.11

  	
   

  	
  Collateral Matters

  	
   

  	
  60

  
	
  14.12

  	
   

  	
  Administrative
  Agent May File Proofs of Claim

  	
   

  	
  61

  
	
  14.13

  	
   

  	
  Other
  Agents; Arrangers and Managers

  	
   

  	
  61

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 15

  	
   

  	
  GENERAL.

  	
   

  	
  62

  
	
  15.1

  	
   

  	
  Waiver; Amendments

  	
   

  	
  62

  
	
  15.2

  	
   

  	
  Confirmations

  	
   

  	
  62

  
	
  15.3

  	
   

  	
  Notices

  	
   

  	
  62

  
	
  15.4

  	
   

  	
  Computations

  	
   

  	
  63

  
	
  15.5

  	
   

  	
  Costs, Expenses
  and Taxes

  	
   

  	
  63

  
	
  15.6

  	
   

  	
  Assignments;
  Participations

  	
   

  	
  63

  
	
   

  	
   

  	
  15.6.1

  	
   

  	
  Assignments

  	
   

  	
  64

  
	
   

  	
   

  	
  15.6.2

  	
   

  	
  Participations

  	
   

  	
  65

  
	
  15.7

  	
   

  	
  Register

  	
   

  	
  65

  
	
  15.8

  	
   

  	
  GOVERNING
  LAW

  	
   

  	
  65

  
	
  15.9

  	
   

  	
  Confidentiality

  	
   

  	
  65

  
	
  15.10

  	
   

  	
  Severability

  	
   

  	
  68

  
	
  15.11

  	
   

  	
  Nature of Remedies

  	
   

  	
  66

  
	
  15.12

  	
   

  	
  Entire Agreement

  	
   

  	
  66

  
	
  15.13

  	
   

  	
  Counterparts

  	
   

  	
  67

  
	
  15.14

  	
   

  	
  Successors and
  Assigns

  	
   

  	
  67

  
	
  15.15

  	
   

  	
  Captions

  	
   

  	
  67

  
	
  15.16

  	
   

  	
  Patriot Act
  Notice

  	
   

  	
  78

  
	
  15.17

  	
   

  	
  INDEMNIFICATION
  BY THE COMPANY

  	
   

  	
  79

  
	
  15.18

  	
   

  	
  Nonliability of
  Lenders

  	
   

  	
  80

  
	
  15.19

  	
   

  	
  FORUM
  SELECTION AND CONSENT TO JURISDICTION

  	
   

  	
  80

  
	
  15.20

  	
   

  	
  WAIVER OF JURY TRIAL

  	
   

  	
  69

  

 

 v

 

	
  ANNEXES

  
	
   

  
	
  ANNEX A

  	
   

  	
  Lenders and Pro
  Rata Shares

  
	
  ANNEX B

  	
   

  	
  Addresses for
  Notices

  
	
   

  	
   

  	
   

  
	
  SCHEDULES

  
	
   

  
	
  SCHEDULE OF SUBSIDIARIES

  
	
  SCHEDULE 9.6

  	
   

  	
  Litigation and Contingent Liabilities

  
	
  SCHEDULE 9.8

  	
   

  	
  Securities

  
	
  SCHEDULE 9.16

  	
   

  	
  Insurance

  
	
  SCHEDULE 9.17

  	
   

  	
  Real Property

  
	
  SCHEDULE 9.21

  	
   

  	
  Labor Matters

  
	
  SCHEDULE 11.1

  	
   

  	
  Existing Debt

  
	
  SCHEDULE 11.2

  	
   

  	
  Existing Liens

  
	
  SCHEDULE 11.11

  	
   

  	
  Investments

  
	
  SCHEDULE 12.1

  	
   

  	
  Debt to be Repaid

  
	
  SCHEDULE 12.1.7(a)

  	
   

  	
  Leased Real Property — Landlord Waiver Delivered at
  Close

  
	
  SCHEDULE 12.1.7(b)

  	
   

  	
  Leased Real Property — Landlord Waiver Delivered
  Post-Close

  
	
   

  	
   

  	
   

  
	
  EXHIBITS

  
	
   

  
	
  EXHIBIT
  A

  	
   

  	
  Form of
  Note (Section 3.1)

  
	
  EXHIBIT B

  	
   

  	
  Form of
  Compliance Certificate (Section 10.1.3)

  
	
  EXHIBIT
  C

  	
   

  	
  Reserved

  
	
  EXHIBIT D

  	
   

  	
  Form of
  Assignment Agreement (Section 15.6.1)

  
	
  EXHIBIT E

  	
   

  	
  Form of
  Notice of Borrowing (Section 2.2.2)

  
	
  EXHIBIT F

  	
   

  	
  Form of
  Notice of Conversion/Continuation (Section 2.2.3)

  

 

 

CREDIT AGREEMENT

THIS CREDIT AGREEMENT dated as of May 5, 2006 (this “Agreement”)
is entered into among OPTION CARE, INC., a Delaware corporation (the “Company”), certain
Subsidiaries of the Company identified on the Schedule of Subsidiaries
attached hereto, the financial institutions that are or may from time to time
become parties hereto (together with their respective successors and assigns,
the “Lenders”) and LASALLE BANK NATIONAL ASSOCIATION (in its individual
capacity, “LaSalle”), as administrative agent for the Lenders.

The Lenders have agreed to make available to the Loan
Parties a revolving credit facility (which includes letters of credit) upon the
terms and conditions set forth herein.

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

SECTION 1            DEFINITIONS.

1.1           Definitions.   When
used herein the following terms shall have the following meanings:

Account Debtor is defined in the
Guaranty and Collateral Agreement.

Account or Accounts is defined in
the UCC.

Acquisition means any transaction or
series of related transactions for the purpose of or resulting, directly or
indirectly, in (a) the acquisition of all or substantially all of the
assets of a Person, or of all or substantially all of any business or division
of a Person, (b) the acquisition of in excess of 50% of the Capital
Securities of any Person, or otherwise causing any Person to become a
Subsidiary, or (c) a merger or consolidation or any other combination with
another Person (other than a Person that is already a Subsidiary).

Administrative Agent means LaSalle
in its capacity as administrative agent for the Lenders hereunder and any
successor thereto in such capacity.

Affected Loan - see Section 8.3.

Affiliate of any Person means (a) any
other Person which, directly or indirectly, controls or is controlled by or is
under common control with such Person, (b) any officer or director of such
Person and (c) with respect to any Lender, any entity administered or
managed by such Lender or an Affiliate or investment advisor thereof and which
is engaged in making, purchasing, holding or otherwise investing in commercial
loans. A Person shall be deemed to be “controlled by” any other Person if such
Person possesses, directly or indirectly, power to vote 5% or more of the
securities (on a fully diluted basis) having ordinary voting power for the
election of directors or managers or power to direct or cause the direction of
the management and 

 

policies of such Person
whether by contract or otherwise. Unless expressly stated otherwise herein,
neither the Administrative Agent nor any Lender shall be deemed an Affiliate of
any Loan Party.

Agent Fee Letter means the Fee
letter dated as of [         ]
between the Company and the Administrative Agent.

Agreement - see the Preamble.

Applicable Margin
means, for any day, the rate per annum set forth below opposite the level (the “Level”)
then in effect, it being understood that the Applicable Margin for (i) LIBOR
Loans shall be the percentage set forth under the column “LIBOR Margin”, (ii) Base
Rate Loans shall be the percentage set forth under the column “Base Rate Margin”,
(iii) the Non-Use Fee Rate shall be the percentage set forth under the
column “Non-Use Fee Rate” and (iv) the L/C Fee shall be the percentage set
forth under the column “L/C Fee Rate”:

	
  Level

  	
   

  	
  Total Debt

  to EBITDA Ratio

  	
   

  	
  LIBOR

  Margin

  	
   

  	
  Base Rate

  Margin

  	
   

  	
  Non-Use

  Fee Rate

  	
   

  	
  L/C Fee

  Rate

  	
   

  
	
  I

  	
   

  	
  Greater than or
  equal to 3.00 to 1.00

  	
   

  	
  1.75

  	
  %

  	
  0.25

  	
  %

  	
  0.225

  	
  %

  	
  1.75

  	
  %

  
	
  II

  	
   

  	
  Greater than or
  equal to 2.00 to 1.00 but less than 3.00 to 1.00

  	
   

  	
  1.25

  	
  %

  	
  0.00

  	
  %

  	
  0.175

  	
  %

  	
  1.25

  	
  %

  
	
  III

  	
   

  	
  Less than 2.00 to 1.00

  	
   

  	
  1.00

  	
  %

  	
  0.00

  	
  %

  	
  0.150

  	
  %

  	
  1.00

  	
  %

  

 

The LIBOR Margin, the Base Rate Margin, the Non-Use
Fee Rate and the L/C Fee Rate shall be adjusted, to the extent applicable, on
the fifth (5th) Business Day after the Company provides or is required to
provide the annual and quarterly financial statements and other information
pursuant to Sections 10.1.1 or 10.1.2, as applicable, and the
related Compliance Certificate, pursuant to Section 10.1.3. Notwithstanding
anything contained in this paragraph to the contrary, (a) if the Company
fails to deliver the financial statements and Compliance Certificate in
accordance with the provisions of Sections 10.1.1, 10.1.2 and 10.1.3,
the LIBOR Margin, the Base Rate Margin, the Non-Use Fee Rate and the L/C Fee
Rate shall be based upon Level I above beginning on the date such financial
statements and Compliance Certificate were required to be delivered until the
fifth (5th) Business Day after such financial statements and Compliance
Certificate are actually delivered, whereupon the Applicable Margin shall be
determined by the then current Level; (b)  no reduction to any Applicable
Margin shall become effective at any time when an Event of Default or Unmatured
Event of Default has occurred and is continuing; and (c) the initial Applicable
Margin on the Closing Date shall be based on Level II until the date on which
the financial statements and Compliance Certificate are required to be
delivered for the Fiscal Quarter ending March 31, 2006.

Asset Disposition means the sale,
lease, assignment or other transfer for value (each, a “Disposition”) by
any Loan Party to any Person (other than a Loan Party) of any asset or right of

 2
 

 

such Loan Party
(including, the loss, destruction or damage of any thereof or any actual or
threatened (in writing to any Loan Party) condemnation, confiscation,
requisition, seizure or taking thereof) other than (a) the Disposition of
any asset which is to be replaced, and is in fact replaced, within 30 days with
another asset performing the same or a similar function, (b) the sale or
lease of inventory in the ordinary course of business and (c) other Dispositions in any Fiscal Year the net proceeds of
which do not in the aggregate exceed $5,000,000.

Assignee - see Section 15.6.1.

Assignment Agreement - see Section 15.6.1.

Attorney Costs means, with respect
to any Person, all reasonable fees and charges of any counsel to such Person,
the reasonable allocable cost of internal legal services of such Person, all
reasonable disbursements of such internal counsel and all court costs and
similar legal expenses.

Bank Product Agreements means those
certain cash management service agreements entered into from time to time
between any Loan Party and a Lender or its Affiliates in connection with any of
the Bank Products.

Bank Product Obligations means all
obligations, liabilities, contingent reimbursement obligations, fees, and
expenses owing by the Loan Parties to any Lender or its Affiliates pursuant to
or evidenced by the Bank Product Agreements and irrespective of whether for the
payment of money, whether direct or indirect, absolute or contingent, due or to
become due, now existing or hereafter arising, and including all such amounts
that a Loan Party is obligated to reimburse to the Administrative Agent or any
Lender as a result of the Administrative Agent or such Lender purchasing
participations or executing indemnities or reimbursement obligations with
respect to the Bank Products provided to the Loan Parties pursuant to the Bank
Product Agreements.

Bank Products means any service or
facility extended to any Loan Party by any Lender or its Affiliates
including:  (a) credit cards, (b) credit
card processing services, (c) debit cards, (d) purchase cards, (e) ACH
transactions, (f) cash management, including controlled disbursement,
accounts or services, or (g) Hedging Agreements.

Base Rate means at any time the
greater of (a) the Federal Funds Rate plus 0.5% per annum and (b) the
Prime Rate.

Base Rate Loan means any Loan which
bears interest at or by reference to the Base Rate.

Base Rate Margin - see the
definition of Applicable Margin.

BSA - see Section 10.4.

Business Day means any day on which
LaSalle is open for commercial banking business in Chicago, Illinois and, in
the case of a Business Day which relates to a LIBOR Loan, on which dealings are
carried on in the London interbank eurodollar market.

 3
 

 

Capital Expenditures means all
expenditures which, in accordance with GAAP, would be required to be
capitalized and shown on the consolidated balance sheet of the Company, including
expenditures in respect of Capital Leases, but excluding expenditures made in
connection with the replacement, substitution or restoration of assets to the
extent financed (a) from insurance proceeds (or other similar recoveries)
paid on account of the loss of or damage to the assets being replaced or
restored or (b) with awards of compensation arising from the taking by
eminent domain or condemnation of the assets being replaced.

Capital Lease means, with respect to
any Person, any lease of (or other agreement conveying the right to use) any
real or personal property by such Person that, in conformity with GAAP, is
accounted for as a capital lease on the balance sheet of such Person.

Capital Securities means, with
respect to any Person, all shares, interests, participations or other
equivalents (however designated, whether voting or non-voting) of such Person’s
capital, whether now outstanding or issued or acquired after the Closing Date,
including common shares, preferred shares, membership interests in a limited
liability company, limited or general partnership interests in a partnership,
interests in a trust, interests in other unincorporated organizations or any
other equivalent of such ownership interest.

Cash Collateralize means to deliver
cash collateral to the Administrative Agent, to be held as cash collateral for
outstanding Letters of Credit, pursuant to documentation satisfactory to the
Administrative Agent. Derivatives of such term have corresponding meanings.

Cash Equivalent Investment means, at
any time, (a) any evidence of Debt, maturing not more than one year after
such time, issued or guaranteed by the United States Government or any agency
thereof, (b) commercial paper, maturing not more than one year from the
date of issue, or corporate demand notes, in each case (unless issued by a
Lender or its holding company) rated at least A-l by Standard & Poor’s
Ratings Services, a division of The McGraw-Hill Companies, Inc. or P-l by
Moody’s Investors Service, Inc., (c) any certificate of deposit, time
deposit or banker’s acceptance, maturing not more than one year after such
time, or any overnight Federal Funds transaction that is issued or sold by any
Lender or its holding company (or by a commercial banking institution that is a
member of the Federal Reserve System and has a combined capital and surplus and
undivided profits of not less than $500,000,000), (d) any repurchase
agreement entered into with any Lender (or commercial banking institution of
the nature referred to in clause (c)) which (i) is secured by a
fully perfected security interest in any obligation of the type described in
any of clauses (a) through (c) above and (ii) has
a market value at the time such repurchase agreement is entered into of not
less than 100% of the repurchase obligation of such Lender (or other commercial
banking institution) thereunder and (e) money market accounts or mutual
funds which invest exclusively in assets satisfying the foregoing requirements,
and (f) other short term liquid investments approved in writing by the
Administrative Agent.

Change of Control means the
occurrence of any of the following events: (a) any Person or group of
Persons (within the meaning of Section 13 or 14 of the Securities Exchange
Act of 1934, but excluding any John N. Kapoor) shall acquire beneficial
ownership (within the meaning 

 4
 

 

of Rule 13d-3
promulgated under such Act) of more than 20% of the outstanding securities (on
a fully diluted basis and taking into account any securities or contract rights
exercisable, exchangeable or convertible into equity securities) of the Company
having voting rights in the election of directors under normal circumstances; (b) the
Company or its Wholly-Owned Subsidiary shall cease to, directly or indirectly,
own and control that percentage of each class of the outstanding Capital
Securities of each Subsidiary that it owns and controls as of the date of this
Agreement; or (c) a period of 180 consecutive days shall have elapsed
during which any three of the four executive officers of the Company as of the
date hereof shall have ceased to hold executive offices with the Company at
least equal in seniority and responsibility to such individuals’ present
offices, excluding any such individual who has been replaced by another
individual or individuals reasonably satisfactory to the Required Lenders.

Closing Date - see Section 12.1.

Code means the Internal Revenue Code
of 1986.

Collateral as defined in the
Guaranty and Collateral Agreement of even date herewith executed by the Loan
Parties.

Collateral Access Agreement means an
agreement in form and substance reasonably satisfactory to the Administrative
Agent pursuant to which a mortgagee or lessor of real property on which
collateral is stored or otherwise located, or a warehouseman, processor or
other bailee of Inventory or other property owned by any Loan Party,
acknowledges the Liens of the Administrative Agent and waives any Liens held by
such Person on such property, and, in the case of any such agreement with a
mortgagee or lessor, permits the Administrative Agent reasonable access to and
use of such real property following the occurrence and during the continuance
of an Event of Default to assemble, complete and sell any Collateral stored or
otherwise located thereon.

Collateral Documents means, collectively,
the Guaranty and Collateral Agreement, each Mortgage, each Collateral Access
Agreement, each Perfection Certificate, each control agreement and any other
agreement or instrument pursuant to which the Company, any Subsidiary or any
other Person grants or purports to grant collateral to the Administrative Agent
for the benefit of the Lenders or otherwise relates to such collateral.

Commitment means, as to any Lender,
such Lender’s commitment to make Loans, and to issue or participate in Letters
of Credit, under this Agreement. The initial amount of each Lender’s commitment
to make Loans is set forth on Annex A.

Company - see the Preamble.

Compliance Certificate means a
Compliance Certificate in substantially the form of Exhibit B.

Computation Period means each period
of four consecutive Fiscal Quarters ending on the last day of a Fiscal Quarter.

 5
 

 

Consolidated Net Income means, with
respect to the Loan Parties for any period, the net income (or loss) of the
Loan Parties for such period, excluding any gains or non-cash losses
from Asset Dispositions, any extraordinary gains or losses and any gains or
losses from discontinued operations.

Contingent Liability means, with
respect to any Person, each obligation and liability of such Person and all
such obligations and liabilities of such Person incurred pursuant to any
agreement, undertaking or arrangement by which such Person:  (a) guarantees, endorses or otherwise
becomes or is contingently liable upon (by direct or indirect agreement,
contingent or otherwise, to provide funds for payment, to supply funds to, or
otherwise to invest in, a debtor, or otherwise to assure a creditor against
loss) the indebtedness, dividend, obligation or other liability of any other
Person in any manner (other than by endorsement of instruments in the course of
collection), including any indebtedness, dividend or other obligation which may
be issued or incurred at some future time; (b) guarantees the payment of
dividends or other distributions upon the Capital Securities of any other
Person; (c) undertakes or agrees (whether contingently or otherwise):  (i) to purchase, repurchase, or
otherwise acquire any indebtedness, obligation or liability of any other Person
or any property or assets constituting security therefor, (ii) to advance
or provide funds for the payment or discharge of any indebtedness, obligation
or liability of any other Person (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise), or to maintain solvency,
assets, level of income, working capital or other financial condition of any
other Person, or (iii) to make payment to any other Person other than for
value received; (d) agrees to lease property or to purchase securities,
property or services from such other Person with the purpose or intent of
assuring the owner of such indebtedness or obligation of the ability of such
other Person to make payment of the indebtedness or obligation; (e) to
induce the issuance of, or in connection with the issuance of, any letter of
credit for the benefit of such other Person; or (f) undertakes or agrees
otherwise to assure a creditor against loss. The amount of any Contingent
Liability shall (subject to any limitation set forth herein) be deemed to be
the outstanding principal amount (or maximum permitted principal amount, if
larger) of the indebtedness, obligation or other liability guaranteed or
supported thereby.

Controlled Group means all members
of a controlled group of corporations, all members of a controlled group of
trades or businesses (whether or not incorporated) under common control and all
members of an affiliated service group which, together with the Company or any
of its Subsidiaries, are treated as a single employer under Section 414 of
the Code or Section 4001 of ERISA.

Debt of any Person means, without
duplication, (a) all indebtedness of such Person for borrowed money,
whether or not evidenced by bonds, debentures, notes or similar instruments, (b) all
obligations of such Person as lessee under Capital Leases which have been or
should be recorded as liabilities on a balance sheet of such Person in
accordance with GAAP, (c) all obligations of such Person to pay the
deferred purchase price of property or services (excluding trade accounts
payable in the ordinary course of business) which have been or should be
recorded as liabilities on a balance sheet of such Person in accordance with
GAAP, (d) all indebtedness secured by a Lien on the property of such
Person, whether or not such indebtedness shall have been assumed by such Person,
(e) all obligations, contingent or otherwise, with 

 6
 

 

respect to the face
amount of all letters of credit (whether or not drawn) and banker’s acceptances
issued for the account of such Person (including the Letters of Credit), (f) all
Hedging Obligations of such Person, (g) all suretyship liabilities of such
Person and (h) all Debt of any partnership of which such Person is a
general partner.

Debt to be Repaid means Debt listed
on Schedule 12.1.

Designated Proceeds - see Section 6.2.2(a).

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

EBITDA means, for any period,
Consolidated Net Income for such period plus, to the extent deducted in
determining such Consolidated Net Income, Interest Expense, income tax expense,
depreciation and amortization for such period.

Environmental Claims means all
claims, however asserted, by any governmental, regulatory or judicial authority
or other Person alleging potential liability or responsibility for violation of
any Environmental Law, or for release or injury to the environment.

Environmental Laws means all present
or future federal, state or local laws, statutes, common law duties, rules,
regulations, ordinances and codes, together with all administrative or judicial
orders, consent agreements, directed duties, requests, licenses, authorizations
and permits of, and agreements with, any governmental authority, in each case
relating to any matter arising out of or relating to public health and safety,
or pollution or protection of the environment or workplace, including any of
the foregoing relating to the presence, use, production, generation, handling,
transport, treatment, storage, disposal, distribution, discharge, emission,
release, threatened release, control or cleanup of any Hazardous Substance.

ERISA means the Employee Retirement
Income Security Act of 1974.

Event of Default means any of the
events described in Section 13.1.

Excluded Taxes means taxes based
upon, or measured by, the Lender’s or Administrative Agent’s (or a branch of
the Lender’s or Administrative Agent’s) overall net income, overall net
receipts, or overall net profits (including franchise taxes imposed in lieu of
such taxes), but only to the extent such taxes are imposed by a taxing
authority (a) in a jurisdiction in which such Lender or Administrative
Agent is organized, (b) in a jurisdiction which the Lender’s or
Administrative Agent’s principal office is located, or (c) in a
jurisdiction in which such Lender’s or Administrative Agent’s lending office
(or branch) in respect of which payments under this Agreement are made is
located.

Federal Funds Rate means, for any
day, a fluctuating interest rate 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 which is a 

 7
 

 

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 the Administrative Agent. The Administrative Agent’s determination
of such rate shall be binding and conclusive absent manifest error.

Fiscal Quarter means a fiscal
quarter of a Fiscal Year.

Fiscal Year means the fiscal year of
the Loan Parties, which period shall be the 12-month period ending on December 31st
of each year. References to a Fiscal Year with a number corresponding to any
calendar year (e.g., “Fiscal Year 2003”) refer to the Fiscal Year ending
on December 31st of such
calendar year.

FRB means the Board of Governors of
the Federal Reserve System or any successor thereto.

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

Group - see Section 2.2.1.

Guaranty and Collateral Agreement
means the Guaranty and Collateral Agreement dated as of the date hereof
executed and delivered by the Loan Parties, together with any joinders thereto
and any other guaranty and collateral agreement executed by a Loan Party, in
each case in form and substance satisfactory to the Administrative Agent.

Hazardous Substances means (a) any
petroleum or petroleum products, radioactive materials, asbestos in any form
that is or could become friable, urea formaldehyde foam insulation, dielectric
fluid containing levels of polychlorinated biphenyls, radon gas and mold; (b) any
chemicals, materials, pollutant or substances defined as or included in the
definition of “hazardous substances”, “hazardous waste”, “hazardous materials”,
“extremely hazardous substances”, “restricted hazardous waste”, “toxic
substances”, “toxic pollutants”, “contaminants”, “pollutants” or words of
similar import, under any applicable Environmental Law; and (c) any other
chemical, material or substance, the exposure to, or release of which is
prohibited, limited or regulated by any governmental authority or for which any
duty or standard of care is imposed pursuant to, any Environmental Law.

Health Care Laws means any and all
federal, state and local laws and regulations governing the licensure,
certification, good standing, accreditation and approval of the provision of
health care goods and services provided by any Loan Party or any Subsidiary,
including but not limited to laws and regulations relating to licensure or
operation, certificates of need, certificates of operations, insurance, fraud
and abuse, kickbacks, false claims, physician self-referral arrangements,
Medicaid, Medicare, the Civilian Health and Medical Program of the 

 8
 

 

Uniformed Services, the
Civilian Health and Medical Program of Veterans Affairs, the federal Food, Drug &
Cosmetic Act, and the rules and regulations promulgated by the Food and
Drug Administration and the Health Care Financing Administration.

Hedging Agreement means any interest
rate, currency or commodity swap agreement, cap agreement or collar agreement,
and any other agreement or arrangement designed to protect a Person against
fluctuations in interest rates, currency exchange rates or commodity prices.

Hedging Obligation means, with
respect to any Person, any liability of such Person under any Hedging
Agreement.

Indemnified Liabilities - see Section 15.17.

Interest Coverage Ratio means, for
any Computation Period, the ratio of (a) EBITDA for such Computation
Period to (b) Interest Expense for such Computation Period.

Interest Expense means for any
period the consolidated interest expense of the Loan Parties for such period
(including all imputed interest on Capital Leases).

Interest Period means, as to any
LIBOR Loan, the period commencing on the date such Loan is borrowed or
continued as, or converted into, a LIBOR Loan and ending on the date one, two,
three or six months thereafter as selected by the Company pursuant to Section 2.2.2
or 2.2.3, as the case may be; provided that:

(a)           if any Interest Period would otherwise end on a day that
is not a Business Day, such Interest Period shall be extended to the following
Business Day unless the result of such extension would be to carry such
Interest Period into another calendar month, in which event such Interest
Period shall end on the preceding Business Day;

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

(c)           the Company may not select any Interest Period for a
Revolving  Loan which would extend beyond
the scheduled Termination Date.

Inventory is defined in the Guaranty
and Collateral Agreement.

Investment means, with respect to
any Person, any investment in another Person, whether by acquisition of any
debt or Capital Security, by making any loan or advance, by becoming obligated
with respect to a Contingent Liability in respect of obligations of such other
Person (other than travel and similar advances to employees in the ordinary
course of business) or by making an Acquisition.

 9
 

 

Issuing Lender means LaSalle, in its
capacity as the issuer of Letters of Credit hereunder, or any Affiliate of
LaSalle that may from time to time issue Letters of Credit, and their
successors and assigns in such capacity.

LaSalle - see the Preamble.

L/C Application means, with respect
to any request for the issuance of a Letter of Credit, a letter of credit
application in the form being used by the Issuing Lender at the time of such
request for the type of letter of credit requested.

L/C Fee Rate - see the definition of
Applicable Margin.

Lender - see the Preamble. References
to the “Lenders” shall include the Issuing Lender; for purposes of
clarification only, to the extent that LaSalle (or any successor Issuing
Lender) may have any rights or obligations in addition to those of the other
Lenders due to its status as Issuing Lender, its status as such will be
specifically referenced. In addition to the foregoing, for the purpose of
identifying the Persons entitled to share in the Collateral and the proceeds
thereof under, and in accordance with the provisions of, this Agreement and the
Collateral Documents, the term “Lender” shall include Affiliates of a Lender
providing a Bank Product.

Lender Party - see Section 15.17.

Letter of Credit - see Section 2.1.2.

LIBOR Loan means any Loan which
bears interest at a rate determined by reference to the LIBOR Rate.

LIBOR Margin - see the definition of
Applicable Margin.

LIBOR Office means with respect to
any Lender the office or offices of such Lender which shall be making or
maintaining the LIBOR Loans of such Lender hereunder. A LIBOR Office of any
Lender may be, at the option of such Lender, either a domestic or foreign
office.

LIBOR Rate means a rate of interest
equal to (a) the per annum rate of interest at which United States dollar
deposits in an amount comparable to the amount of the relevant LIBOR Loan and
for a period equal to the relevant Interest Period are offered in the London
Interbank Eurodollar market at 11:00 A.M. (London time) two (2) Business
Days prior to the commencement of such Interest Period (or three (3) Business
Days prior to the commencement of such Interest Period if banks in London,
England were not open and dealing in offshore United States dollars on such
second preceding Business Day), as displayed in the Bloomberg Financial Markets system (or other authoritative
source selected by the Administrative Agent in its sole discretion) or, if the Bloomberg Financial Markets system or
another authoritative source is not available, as the LIBOR Rate is otherwise
determined by the Administrative Agent in its sole and absolute discretion,
divided by (b) a number determined by subtracting from 1.00 the then
stated maximum reserve percentage for determining reserves to be maintained by
member banks of the Federal Reserve System for Eurocurrency funding or liabilities
as defined in 

 10
 

 

Regulation D (or any
successor category of liabilities under Regulation D), such rate to remain
fixed for such Interest Period. The Administrative Agent’s determination of the
LIBOR Rate shall be conclusive, absent manifest error.

Lien means, with respect to any
Person, any interest granted by such Person in any real or personal property,
asset or other right owned or being purchased or acquired by such Person
(including an interest in respect of a Capital Lease) which secures payment or
performance of any obligation and shall include any mortgage, lien,
encumbrance, title retention lien, charge or other security interest of any
kind, whether arising by contract, as a matter of law, by judicial process or
otherwise.

Loan Documents means this Agreement,
the Notes, the Letters of Credit, the L/C Applications, the Agent Fee Letter,
the Collateral Documents, the Subordination Agreements and all documents,
instruments and agreements delivered in connection with the foregoing.

Loan Party means the Company and
each Subsidiary other than Option Care Enterprises, Inc., a Pennsylvania
corporation.

Loan or Loans means, as the context
may require, Revolving Loans and/or Swing Line Loans.

Mandatory Prepayment Event - see Section 6.2.2.

Margin Stock means any “margin stock”
as defined in Regulation U.

Material Adverse Effect means (a) a
material adverse change in, or a material adverse effect upon, the financial
condition, operations, assets, business or properties of the Loan Parties taken
as a whole, (b) a material impairment of the ability of the Loan Parties
taken as a whole to perform any of the Obligations under any Loan Document or (c) a
material adverse effect upon any substantial portion of the collateral under
the Collateral Documents or upon the legality, validity, binding effect or
enforceability against any Loan Party of any Loan Document.

Mortgage means a mortgage, deed of
trust, leasehold mortgage or similar instrument granting the Administrative
Agent a Lien on real property of any Loan Party.

Multiemployer Pension Plan means a
multiemployer plan, as defined in Section 4001(a)(3) of ERISA, to
which the Company or any other member of the Controlled Group may have any
liability.

Net Worth means, as of any date, the
sum of the capital stock and additional paid-in capital plus retained earnings
(or minus accumulated deficit) calculated in conformity with GAAP.

Non-U.S. Participant - see Section 7.6(d).

Non-Use Fee Rate - see the
definition of Applicable Margin.

 11

 

Note means a promissory note
substantially in the form of Exhibit A.

Notice of Borrowing - see Section 2.2.2.

Notice of Conversion/Continuation -
see Section 2.2.3.

Obligations means all obligations
(monetary (including post-petition interest, allowed or not) or otherwise) of
any Loan Party under this Agreement and any other Loan Document including
Attorney Costs and any reimbursement obligations of each Loan Party in respect
of Letters of Credit and surety bonds, all Hedging Obligations permitted
hereunder which are owed to any Lender or its Affiliate or Administrative Agent, and all Bank
Products Obligations, all in each case howsoever created, arising or evidenced,
whether direct or indirect, absolute or contingent, now or hereafter existing,
or due or to become due.

OFAC - see Section 10.4.

Operating Lease means any lease of
(or other agreement conveying the right to use) any real or personal property
by any Loan Party, as lessee, other than any Capital Lease.

PBGC means the Pension Benefit
Guaranty Corporation and any entity succeeding to any or all of its functions
under ERISA.

Participant - see Section 15.6.2.

Pension Plan means a “pension plan”,
as such term is defined in Section 3(2) of ERISA, which is subject to
Title IV of ERISA or the minimum funding standards of ERISA (other than a
Multiemployer Pension Plan), and as to which the Company or any member of the
Controlled Group may have any liability, including any liability by reason of
having been a substantial employer within the meaning of Section 4063 of
ERISA at any time during the preceding five years, or by reason of being deemed
to be a contributing sponsor under Section 4069 of ERISA.

Perfection Certificate means a
perfection certificate executed and delivered to the Administrative Agent by a
Loan Party.

Permitted Lien means a Lien
expressly permitted hereunder pursuant to Section 11.2.

Person means any natural person,
corporation, partnership, trust, limited liability company, association,
governmental authority or unit, or any other entity, whether acting in an
individual, fiduciary or other capacity.

Prime Rate means, for any day, the
rate of interest in effect for such day as publicly announced from time to time
by the Administrative Agent as its prime rate (whether or not such rate is actually
charged by the Administrative Agent), which is not intended to be the
Administrative Agent’s lowest or most favorable rate of interest at any one
time. Any change in the Prime Rate announced by the Administrative Agent shall
take effect at the opening of 

 12
 

 

business on the day
specified in the public announcement of such change; provided that the
Administrative Agent shall not be obligated to give notice of any change in the
Prime Rate.

Pro Rata Share means, with respect
to a Lender’s obligation to make Revolving Loans, participate in Letters of
Credit, reimburse the Issuing Lender, and receive payments of principal,
interest, fees, costs, and expenses with respect thereto, (x) prior to the
Revolving Commitment being terminated or reduced to zero, the percentage
obtained by dividing (i) such Lender’s Revolving Commitment, by (ii) the
aggregate Revolving Commitment of all Lenders and (y) from and after the
time the Revolving Commitment has been terminated or reduced to zero, the
percentage obtained by dividing (i) the aggregate unpaid principal amount
of such Lender’s Revolving Outstandings (after settlement and repayment of all
Swing Line Loans by the Lenders) by (ii) the aggregate unpaid principal
amount of all Revolving Outstandings.

Refunded Swing Line Loan - see Section 2.2.4(c).

Regulation D means Regulation D
of the FRB.

Regulation U means Regulation U of
the FRB.

Replacement Lender - see Section 8.7(b).

Reportable Event means a reportable
event as defined in Section 4043 of ERISA and the regulations issued
thereunder as to which the PBGC has not waived the notification
requirement  of Section 4043(a), or
the failure of a Pension Plan to meet the minimum funding standards of Section 412
of the Code (without regard to whether the Pension Plan is a plan described in Section 4021(a)(2) of
ERISA) or under Section 302 of ERISA.

Required Lenders means (i) so
long as there are three or fewer Lenders, Lenders whose Pro Rata Shares equal
100% as determined pursuant to clause (d) of the definition of Pro Rata
Share and (ii) at any other time, Lenders whose Pro Rata Shares exceed
662⁄3% as determined pursuant to clause (d) of the definition of “Pro
Rata Share”.

Revolving Commitment means
$35,000,000, as reduced from time to time pursuant to Section 6.1.

Revolving Loan - see Section 2.1.1.

Revolving Loan Availability means
the Revolving Commitment.

Revolving Outstandings means, at any
time, the sum of (a) the aggregate principal amount of all outstanding
Revolving Loans, plus (b) the Stated Amount of all Letters of Credit.

SEC means the Securities and
Exchange Commission or any other governmental authority succeeding to any of
the principal functions thereof.

Senior Debt means all Debt of the
Loan Parties other than Subordinated Debt.

 13
 

 

Senior Debt to EBITDA Ratio means,
as of the last day of any Fiscal Quarter, the ratio of (a) Senior Debt as
of such day to (b) EBITDA for the Computation Period ending on such day.

Senior Officer means, with respect
to any Loan Party, any of the chief executive officer, the chief financial
officer, the chief operating officer or the treasurer of such Loan Party.

Stated Amount means, with respect to
any Letter of Credit at any date of determination, (a) the maximum
aggregate amount available for drawing thereunder under any and all
circumstances plus (b) the aggregate amount of all unreimbursed payments
and disbursements under such Letter of Credit.

Subordinated Debt means any
unsecured Debt of the Loan Parties which has subordination terms, covenants,
pricing and other terms which have been approved in writing by the Required
Lenders.

Subordinated Debt Documents means
all documents and instruments relating to the Subordinated Debt and all
amendments and modifications thereof approved by the Administrative Agent.

Subordination Agreements means all
subordination agreements executed by a holder of Subordinated Debt in favor of
the Administrative Agent and the Lenders from time to time after the Closing
Date in form and substance and on terms and conditions satisfactory to
Administrative Agent.

Subsidiary means, with respect to
any Person, a corporation, partnership, limited liability company or other
entity of which such Person owns, directly or indirectly, such number of
outstanding Capital Securities as have more than 50% of the ordinary voting
power for the election of directors or other managers of such corporation,
partnership, limited liability company or other entity. Unless the context
otherwise requires, each reference to Subsidiaries herein shall be a reference
to Subsidiaries of the Company, if any.

Swing Line Availability means the
lesser of (a) the Swing Line Commitment Amount and (b) Revolving Loan
Availability (less Revolving Outstandings at such time).

Swing Line Commitment Amount means (i) from
the date of this Agreement until LaSalle has assigned a portion of its initial
Pro Rata Share of the Revolving Commitment, $-0-, and (ii) upon
and after such time as LaSalle has assigned a portion of its initial Pro Rata
Share of the Revolving Commitment, $2,500,000, as reduced from time to time
pursuant to Section 6.1, which commitment constitutes a subfacility
of the Revolving Commitment of the Swing Line Lender.

Swing Line Lender means LaSalle.

Swing Line Loan - see Section 2.2.4.

 14
 

 

Tangible Net Worth of any Person
means an amount equal to: (a) Net Worth of such Person; less (b) Intangible
Assets of such Person; less (c) all obligations owed to such Person
or any of its Subsidiaries by any Affiliate of such Person or any of its
Subsidiaries; and less (d) all loans by such Person to its
officers, stockholders, Subsidiaries or employees.

Taxes means any and all present and
future taxes, duties, levies, imposts, deductions, assessments, charges or
withholdings, and any and all liabilities (including interest and penalties and
other additions to taxes) with respect to the foregoing, but excluding Excluded
Taxes.

Termination Date means the earlier
to occur of (a) May 5, 2011 or (b) such other date on which the
Commitments terminate pursuant to Section 6 or Section 13.

Termination Event means, with
respect to a Pension Plan that is subject to Title IV of ERISA, (a) a
Reportable Event, (b) the withdrawal of Company or any other member of the
Controlled Group from such Pension Plan during a plan year in which Company or
any other member of the Controlled Group was a “substantial employer” as
defined in Section 4001(a)(2) of ERISA or was deemed such under Section 4068(f) of
ERISA, (c) the termination of such Pension Plan, the filing of a notice of
intent to terminate the Pension Plan or the treatment of an amendment of such
Pension Plan as a termination under Section 4041 of ERISA, (d) the
institution by the PBGC of proceedings to terminate such Pension Plan or (e) any
event or condition that might constitute grounds under Section 4042 of
ERISA for the termination of, or appointment of a trustee to administer, such
Pension Plan.

Total Debt means all Debt of the
Loan Parties, determined on a consolidated basis, excluding (a) contingent
obligations in respect of Contingent Liabilities (except to the extent
constituting Contingent Liabilities in respect of Debt of a Person other than
any Loan Party), (b) Hedging Obligations, (c) Debt of the Company to Subsidiaries and Debt of
Subsidiaries to the Company or to other Subsidiaries and (d) contingent obligations in respect of undrawn letters of
credit.

Total Debt to EBITDA Ratio means, as
of the last day of any Fiscal Quarter, the ratio of (a) Total Debt as of
such day to (b) EBITDA for the Computation Period ending on such day.

Total Plan Liability means, at any
time, the present value of all vested and unvested accrued benefits under all
Pension Plans, determined as of the then most recent valuation date for each
Pension Plan, using PBGC actuarial assumptions for single employer plan
terminations.

type - see Section 2.2.1.

UCC is defined in the Guaranty and
Collateral Agreement.

Unfunded Liability means the amount
(if any) by which the present value of all vested and unvested accrued benefits
under all Pension Plans exceeds the fair market value of all assets allocable
to those benefits, all determined as of the then most recent valuation date for
each Pension Plan, using PBGC actuarial assumptions for single employer plan
terminations.

 15
 

 

Unmatured Event of Default means any
event that, if it continues uncured, will, with lapse of time or notice or
both, constitute an Event of Default.

Withholding Certificate - see Section 7.6(d).

Wholly-Owned Subsidiary means, as to
any Person, a Subsidiary all of the Capital Securities of which (except
directors’ qualifying Capital Securities) are at the time directly or
indirectly owned by such Person and/or another Wholly-Owned Subsidiary of such
Person.

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

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

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

(d)           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.”

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

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

(g)           This
Agreement and the other Loan Documents are the result of negotiations among and
have been reviewed by counsel to the Administrative Agent, the Loan Parties,
the Lenders and the other parties thereto and are the products of all parties. Accordingly,
they shall not be construed against the Administrative Agent or the Lenders
merely because of the Administrative Agent’s or Lenders’ involvement in their
preparation.

SECTION 2                                   COMMITMENTS
OF THE LENDERS; BORROWING, CONVERSION AND LETTER OF CREDIT PROCEDURES.

2.1           Commitments.   On
and subject to the terms and conditions of this Agreement, each of the Lenders,
severally and for itself alone, agrees
to make loans to, and to issue or participate in letters of credit for the
account of, the Loan Parties as follows:

 16
 

 

2.1.1        Revolving
Loan Commitment.   Each Lender with a Revolving Loan Commitment agrees
to make loans on a revolving
basis (“Revolving Loans”) from time to time until the Termination Date
in such Lender’s Pro Rata Share of such aggregate amounts as the Company may
request from all Lenders; provided that the Revolving Outstandings will
not at any time exceed Revolving Loan Availability (less the amount of any
Swing Line Loans outstanding at such time). Provided no Event of Default has
occurred and is continuing, the Company may, at any time or times within two
years of the date of this Agreement, elect to increase the Revolving Commitment
by a minimum of $20,000,000 per election, up to a maximum Revolving Commitment
of $100,000,000; provided that the arrangement and closing fees incurred in
connection with such increase shall be determined based upon then prevailing
market conditions. LaSalle, as arranger, will act on a best efforts basis to
arrange for Lenders to provide such increase, with any arrangement fees to be
agreed to between LaSalle, as arranger, LaSalle, as Administrative Agent, and
the Company, which would be in part subject to prevailing market conditions at
such time. Notwithstanding any other term of this Agreement, neither LaSalle,
as arranger or Administrative Agent, nor any Lender (including LaSalle) shall
be obligated to provide any of such increase unless it first approves, in its
sole discretion, of such increase in writing.

2.1.2        Reserved.

2.1.3        L/C
Commitment.   Subject to Section 2.3.1, the Issuing Lender
agrees to issue letters of credit, in each case
containing such terms and conditions as are permitted by this Agreement and are
reasonably satisfactory to the Issuing Lender (each, a “Letter of Credit”),
at the request of and for the account of the Loan Parties from time to time
before the scheduled Termination Date and, as more fully set forth in Section 2.3.2,
each Lender agrees to purchase a participation in each such Letter of Credit; provided
that (a) the aggregate Stated Amount of all Letters of Credit shall not at
any time exceed $2,500,000 and (b) the Revolving Outstandings shall not at
any time exceed Revolving Loan Availability (less the amount of any Swing Line
Loans outstanding at such time).

2.2           Loan
Procedures.

2.2.1        Various
Types of Loans.   Each Revolving Loan shall be either a Base Rate Loan
or a LIBOR Loan (each a “type”
of Loan), as the Company shall specify in the related notice of borrowing or
conversion pursuant to Section 2.2.2 or 2.2.3. LIBOR
Loans having the same Interest Period which expire on the same day are
sometimes called a “Group” or collectively “Groups”. Base Rate
Loans and LIBOR Loans may be outstanding at the same time, provided that
not more than seven (7) different Groups of LIBOR Loans shall be
outstanding at any one time. All borrowings, conversions and repayments of
Revolving Loans shall be effected so that each Lender will have a ratable share
(according to its Pro Rata Share) of all types and Groups of Loans.

2.2.2        Borrowing
Procedures.   The Company shall give written notice (each such written
notice, a “Notice of Borrowing”)
substantially in the form of Exhibit E or telephonic notice
(followed immediately by a Notice of Borrowing) to the Administrative Agent of
each 

 17
 

 

proposed borrowing not
later than (a) in the case of a Base Rate borrowing, 11:00 A.M.,
Chicago time, on the proposed date of such borrowing, and (b) in the case
of a LIBOR borrowing, 11:00 A.M., Chicago time, at least three Business
Days prior to the proposed date of such borrowing. Each such notice shall be
effective upon receipt by the Administrative Agent, shall be irrevocable, and
shall specify the date, amount and type of borrowing and, in the case of a
LIBOR borrowing, the initial Interest Period therefor. Promptly upon receipt of
such notice, the Administrative Agent shall advise each Lender thereof. Not
later than 1:00 P.M., Chicago time, on the date of a proposed borrowing,
each Lender shall provide the Administrative Agent at the office specified by
the Administrative Agent with immediately available funds covering such Lender’s
Pro Rata Share of such borrowing and, so long as the Administrative Agent has
not received written notice that the conditions precedent set forth in Section 12
with respect to such borrowing have not been satisfied, the Administrative
Agent shall pay over the funds received by the Administrative Agent to the Loan
Parties on the requested borrowing date. Each borrowing shall be on a Business
Day. Each LIBOR borrowing shall be in an aggregate amount of at least $1,000,000 and an integral multiple of
at least $100,000.

2.2.3        Conversion
and Continuation Procedures.   (a)  Subject to Section 2.2.1,
the Company may, upon irrevocable
written notice to the Administrative Agent in accordance with clause (b) below:

(i)            elect,
as of any Business Day, to convert any Loans (or any part thereof in an
aggregate amount not less than $1,000,000 a higher integral multiple of $100,000) into Loans of the other type; or

(ii)           elect,
as of the last day of the applicable Interest Period, to continue any LIBOR
Loans having Interest Periods expiring on such day (or any part thereof in an
aggregate amount not less than $1,000,000 or a higher integral multiple of $100,000) for a new
Interest Period;

provided that after giving effect to
any prepayment, conversion or continuation, the aggregate principal amount of
each Group of LIBOR Loans shall be at least $1,000,000 and an integral multiple of $100,000.

(b)           The
Company shall give written notice (each such written notice, a “Notice of
Conversion/Continuation”) substantially in the form of Exhibit F
or telephonic notice (followed immediately by a Notice of
Conversion/Continuation) to the Administrative Agent of each proposed
conversion or continuation not later than (i) in the case of conversion
into Base Rate Loans, 11:00 A.M., Chicago time, on the proposed date of
such conversion and (ii) in the case of conversion into or continuation of
LIBOR Loans, 11:00 A.M., Chicago time, at least three Business Days prior
to the proposed date of such conversion or continuation, specifying in each
case:

(i)            the
proposed date of conversion or continuation;

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

 18
 

 

(iii)          the
type of Loans resulting from the proposed conversion or continuation; and

(iv)          in
the case of conversion into, or continuation of, LIBOR Loans, the duration of
the requested Interest Period therefor.

(c)           If
upon the expiration of any Interest Period applicable to LIBOR Loans, the
Company has failed to select timely a new Interest Period to be applicable to
such LIBOR Loans, the Company shall be deemed to have elected to convert such
LIBOR Loans into Base Rate Loans effective on the last day of such Interest
Period.

(d)           The
Administrative Agent will promptly notify each Lender of its receipt of a
notice of conversion or continuation pursuant to this Section 2.2.3
or, if no timely notice is provided by the Company, of the details of any
automatic conversion.

(e)           Any
conversion of a LIBOR Loan on a day other than the last day of an Interest
Period therefor shall be subject to Section 8.4.

2.2.4        Swing
Line Facility.

(a)           The
Administrative Agent shall notify the Swing Line Lender upon the Administrative
Agent’s receipt of any Notice of Borrowing. Subject to the terms and conditions
hereof, the Swing Line Lender may, in its sole discretion, make available from
time to time until the Termination Date advances (each, a “Swing Line Loan”)
in accordance with any such notice, notwithstanding that after making a
requested Swing Line Loan, the sum of the Swing Line Lender’s Pro Rata Share of
the Revolving Outstanding and all outstanding Swing Line Loans, may exceed the
Swing Line Lender’s Pro Rata Share of the Revolving Commitment. The provisions
of this Section 2.2.4 shall not relieve Lenders of their
obligations to make Revolving Loans under Section 2.1.1; provided
that if the Swing Line Lender makes a Swing Line Loan pursuant to any such
notice, such Swing Line Loan shall be in lieu of any Revolving Loan that
otherwise may be made by the Lenders pursuant to such notice. The aggregate
amount of Swing Line Loans outstanding shall not exceed at any time Swing Line
Availability. Until the Termination Date, the Loan Parties may from time to
time borrow, repay and reborrow under this Section 2.2.4. Each
Swing Line Loan shall be made pursuant to a Notice of Borrowing delivered by
the Company to the Administrative Agent in accordance with Section 2.2.2.
Any such notice must be given no later than 2:00 P.M., Chicago time, on
the Business Day of the proposed Swing Line Loan. Unless the Swing Line Lender
has received at least one Business Day’s prior written notice from the Required
Lenders instructing it not to make a Swing Line Loan, the Swing Line Lender
shall, notwithstanding the failure of any condition precedent set forth in Section 12.2,
be entitled to fund that Swing Line Loan, and to have such Lender make
Revolving Loans in accordance with Section 2.2.4(c) or
purchase participating interests in accordance with Section 2.2.4(d).
 Notwithstanding any other provision of
this Agreement or the other Loan Documents, each Swing Line Loan shall
constitute a Base Rate Loan. The Loan Parties shall repay the aggregate
outstanding principal amount of each Swing Line Loan upon demand therefor by
the Administrative Agent.

 19

 

(b)           The entire unpaid
balance of each Swing Line Loan and all other noncontingent Obligations shall
be immediately due and payable in full in immediately available funds on the
Termination Date if not sooner paid in full.

(c)           The Swing Line
Lender, at any time and from time to time no less frequently than once weekly,
shall on behalf of the Loan Parties (and the Loan Parties hereby irrevocably
authorizes the Swing Line Lender to so act on its behalf) request each Lender
with a Revolving Commitment (including the Swing Line Lender) to make a
Revolving Loan to the Loan Parties (which shall be a Base Rate Loan) in an
amount equal to that Lender’s Pro Rata Share of the principal amount of all
Swing Line Loans (the “Refunded Swing Line Loan”) outstanding on the date
such notice is given. Unless any of the events described in Section 13.1.4
has occurred (in which event the procedures of Section 2.2.4(d) shall
apply) and regardless of whether the conditions precedent set forth in this
Agreement to the making of a Revolving Loan are then satisfied, each Lender
shall disburse directly to the Administrative Agent, its Pro Rata Share on
behalf of the Swing Line Lender, prior to 2:00 P.M., Chicago time, in
immediately available funds on the date that notice is given (provided
that such notice is given by 12:00 p.m., Chicago time, on such date). The
proceeds of those Revolving Loans shall be immediately paid to the Swing Line
Lender and applied to repay the Refunded Swing Line Loan.

(d)           If, prior to
refunding a Swing Line Loan with a Revolving Loan pursuant to Section 2.2.4(c),
one of the events described in Section 13.1.4 has occurred, then,
subject to the provisions of Section 2.2.4(e) below, each
Lender shall, on the date such Revolving Loan was to have been made for the benefit
of the Loan Parties, purchase from the Swing Line Lender an undivided
participation interest in the Swing Line Loan in an amount equal to its Pro
Rata Share of such Swing Line Loan. Upon request, each Lender shall promptly
transfer to the Swing Line Lender, in immediately available funds, the amount
of its participation interest.

(e)           Each Lender’s
obligation to make Revolving Loans in accordance with Section 2.2.4(c) and
to purchase participation interests in accordance with Section 2.2.4(d) shall
be absolute and unconditional and shall not be affected by any circumstance,
including (i) any setoff, counterclaim, recoupment, defense or other right
that such Lender may have against the Swing Line Lender, the Company or any
other Person for any reason whatsoever; (ii) the occurrence or continuance
of any Unmatured Event of Default or Event of Default; (iii) any inability
of the Company to satisfy the conditions precedent to borrowing set forth in
this Agreement at any time or (iv) any other circumstance, happening or
event whatsoever, whether or not similar to any of the foregoing. If and to the
extent any Lender shall not have made such amount available to the
Administrative Agent or the Swing Line Lender, as applicable, by 2:00 P.M.,
Chicago time, the amount required pursuant to Sections 2.2.4(c) or
2.2.4(d), as the case may be, on the Business Day on which such Lender
receives notice from the Administrative Agent of such payment or disbursement
(it being understood that any such notice received after noon, Chicago time, on
any Business Day shall be deemed to have been received on the next following
Business Day), such Lender agrees to pay interest on such amount to the
Administrative Agent for the Swing Line Lender’s account forthwith on demand,
for each day from the date such amount was to have been delivered to the
Administrative Agent to the date such amount is paid, at a rate per annum equal
to (a) for the first three days after demand, the 

 20
 

 

Federal Funds Rate from
time to time in effect and (b) thereafter, the Base Rate from time to time
in effect.

2.3           Letter of Credit
Procedures.

2.3.1        L/C Applications.   The
Company shall give notice to the Administrative Agent and the Issuing Lender of the proposed issuance of each Letter
of Credit on a Business Day which is at least three Business Days (or such
lesser number of days as the Administrative Agent and the Issuing Lender shall
agree in any particular instance in their sole discretion) prior to the
proposed date of issuance of such Letter of Credit. Each such notice shall be
accompanied by such documentation as the Administrative Agent or the Issuing
Lender may request in support thereof, it being understood that such
documentation shall specify, among other things, the date on which the proposed
Letter of Credit is to be issued, the expiration date of such Letter of Credit
(which shall not be later than the scheduled Termination Date (unless such
Letter of Credit is Cash Collateralized)) and whether such Letter of Credit is
to be transferable in whole or in part. Any Letter of Credit outstanding after
the scheduled Termination Date which is Cash Collateralized for the benefit of
the Issuing Lender shall be the sole responsibility of the Issuing Lender. So
long as the Issuing Lender has not received written notice that the conditions
precedent set forth in Section 12 with respect to the issuance of
such Letter of Credit have not been satisfied, the Issuing Lender shall issue
such Letter of Credit on the requested issuance date. The Issuing Lender shall
promptly advise the Administrative Agent of the issuance of each Letter of
Credit and of any amendment thereto, extension thereof or event or circumstance
changing the amount available for drawing thereunder. In the event of any
inconsistency between the terms of the documentation described above supporting
the notice of proposed issuance of a Letter of Credit and the terms of this
Agreement, the terms of this Agreement shall control.

2.3.2        Participations in
Letters of Credit.   Concurrently with the issuance of each Letter of
Credit, the Issuing
Lender shall be deemed to have sold and transferred to each Lender with a Revolving
Loan Commitment, and each such Lender shall be deemed irrevocably and
unconditionally to have purchased and received from the Issuing Lender, without
recourse or warranty, an undivided interest and participation, to the extent of
such Lender’s Pro Rata Share, in such Letter of Credit and the reimbursement
obligations of the Loan Parties with respect thereto. If the Loan Parties do
not pay any reimbursement obligation when due, the Loan Parties shall be deemed
to have immediately requested that the Lenders make a Revolving Loan which is a
Base Rate Loan in a principal amount equal to such reimbursement obligations. The
Administrative Agent shall promptly notify such Lenders of such deemed request
and, without the necessity of compliance with the requirements of Section 2.2.2,
Section 12.2 or otherwise such Lender shall make available to the
Administrative Agent its Pro Rata Share of such Loan. The proceeds of such Loan
shall be paid over by the Administrative Agent to the Issuing Lender for the
account of the Loan Parties in satisfaction of such reimbursement obligations. For
the purposes of this Agreement, the unparticipated portion of each Letter of
Credit shall be deemed to be the Issuing Lender’s “participation” therein. The
Issuing Lender hereby agrees, upon request of the Administrative Agent or any
Lender, to deliver to the Administrative Agent or such Lender a list of all
outstanding Letters of Credit issued by the Issuing Lender, together with 

 21
 

 

such information related
thereto as the Administrative Agent or such Lender may reasonably request.

2.3.3        Reimbursement
Obligations.   (a) The Loan Parties hereby unconditionally and
irrevocably agree to
reimburse the Issuing Lender for each payment or disbursement made by the
Issuing Lender under any Letter of Credit honoring any demand for payment made
by the beneficiary thereunder, in each case on the date that such payment or
disbursement is made. Any amount not reimbursed on the date of such payment or
disbursement shall bear interest from the date of such payment or disbursement
to the date that the Issuing Lender is reimbursed by the Loan Parties therefor,
payable on demand, at a rate per annum equal to the Base Rate from time to time
in effect plus the Base Rate Margin from time to time in effect plus,
beginning on the third Business Day after receipt of notice from the Issuing
Lender of such payment or disbursement, 2%. The Issuing Lender shall notify the
Company and the Administrative Agent whenever any demand for payment is made
under any Letter of Credit by the beneficiary thereunder; provided that
the failure of the Issuing Lender to so notify the Company or the
Administrative Agent shall not affect the rights of the Issuing Lender or the
Lenders in any manner whatsoever.

(b)           The Loan Parties’ reimbursement
obligations hereunder shall be irrevocable and unconditional under all
circumstances, including (a) any lack of validity or enforceability of any
Letter of Credit, this Agreement or any other Loan Document, (b) the
existence of any claim, set-off, defense or other right which any Loan Party
may have at any time against a beneficiary named in a Letter of Credit, any
transferee of any Letter of Credit (or any Person for whom any such transferee
may be acting), the Administrative Agent, the Issuing Lender, any Lender or any
other Person, whether in connection with any Letter of Credit, this Agreement,
any other Loan Document, the transactions contemplated herein or any unrelated
transactions (including any underlying transaction between any Loan Party and
the beneficiary named in any Letter of Credit), (c) the validity,
sufficiency or genuineness of any document which the Issuing Lender has
determined complies on its face with the terms of the applicable Letter of
Credit, even if such document should later prove to have been forged,
fraudulent, invalid or insufficient in any respect or any statement therein
shall have been untrue or inaccurate in any respect, or (d) the surrender
or impairment of any security for the performance or observance of any of the
terms hereof. Without limiting the foregoing, no action or omission whatsoever
by the Administrative Agent or any Lender (excluding any Lender in its capacity
as the Issuing Lender) under or in connection with any Letter of Credit or any
related matters shall result in any liability of the Administrative Agent or
any Lender to any Loan Party, or relieve any Loan Party of any of its
obligations hereunder to any such Person.

2.3.4        Funding
by Lenders to Issuing Lender.   If the Issuing Lender makes any payment
or disbursement under any
Letter of Credit and (a) the Loan Parties have not reimbursed the Issuing
Lender in full for such payment or disbursement by 11:00 A.M., Chicago
time, on the date of such payment or disbursement, (b) a Revolving Loan
may not be made in accordance with Section 2.3.2 or (c) any
reimbursement received by the Issuing Lender from the Loan Parties is or must
be returned or rescinded upon or during any bankruptcy or reorganization of the
Loan Parties or otherwise, each other Lender with a Revolving Loan Commitment
shall be 

 22
 

 

obligated to pay to the
Administrative Agent for the account of the Issuing Lender, in full or partial
payment of the purchase price of its participation in such Letter of Credit,
its Pro Rata Share of such payment or disbursement (but no such payment shall
diminish the obligations of the Loan Parties under Section 2.3.3),
and, upon notice from the Issuing Lender, the Administrative Agent shall
promptly notify each other Lender thereof. Each other Lender irrevocably and
unconditionally agrees to so pay to the Administrative Agent in immediately
available funds for the Issuing Lender’s account the amount of such other
Lender’s Pro Rata Share of such payment or disbursement. If and to the extent
any Lender shall not have made such amount available to the Administrative
Agent by 2:00 P.M., Chicago time, on the Business Day on which such Lender
receives notice from the Administrative Agent of such payment or disbursement
(it being understood that any such notice received after noon, Chicago time, on
any Business Day shall be deemed to have been received on the next following
Business Day), such Lender agrees to pay interest on such amount to the
Administrative Agent for the Issuing Lender’s account forthwith on demand, for
each day from the date such amount was to have been delivered to the
Administrative Agent to the date such amount is paid, at a rate per annum equal
to (a) for the first three days after demand, the Federal Funds Rate from
time to time in effect and (b) thereafter, the Base Rate from time to time
in effect. Any Lender’s failure to make available to the Administrative Agent
its Pro Rata Share of any such payment or disbursement shall not relieve any
other Lender of its obligation hereunder to make available to the
Administrative Agent such other Lender’s Pro Rata Share of such payment, but no
Lender shall be responsible for the failure of any other Lender to make
available to the Administrative Agent such other Lender’s Pro Rata Share of any
such payment or disbursement.

2.4           Commitments
Several.   The failure of any Lender to make a requested Loan on any
date shall not relieve any
other Lender of its obligation (if any) to make a Loan on such date, but no
Lender shall be responsible for the failure of any other Lender to make any
Loan to be made by such other Lender.

2.5           Certain
Conditions.   Except as otherwise provided in Sections 2.2.4 and 2.3.4
of this Agreement, no Lender
shall have an obligation to make any Loan, or to permit the continuation of or
any conversion into any LIBOR Loan, and the Issuing Lender shall not have any
obligation to issue any Letter of Credit, if an Event of Default or Unmatured
Event of Default exists.

SECTION 3            EVIDENCING OF LOANS.

3.1           Notes.   The
Loans of each Lender shall be evidenced by a Note, with appropriate insertions,
payable to the order of such Lender in a face
principal amount equal to the sum of such Lender’s Revolving Loan Commitment.

3.2           Recordkeeping.   The
Administrative Agent, on behalf of each Lender, shall record in its records,
the date and amount of each Loan made by
each Lender, each repayment or conversion thereof and, in the case of each
LIBOR Loan, the dates on which each Interest Period for such Loan shall begin
and end. The aggregate unpaid principal amount so recorded shall be rebuttably
presumptive evidence of the principal amount of the Loans owing and unpaid. The

 23
 

 

failure to so record any
such amount or any error in so recording any such amount shall not, however,
limit or otherwise affect the Obligations of the Loan Parties hereunder or
under any Note to repay the principal amount of the Loans hereunder, together
with all interest accruing thereon.

SECTION 4            INTEREST.

4.1           Interest
Rates.   The Loan Parties promise to pay interest on the unpaid
principal amount of each Loan for the
period commencing on the date of such Loan until such Loan is paid in full as
follows:

(a)           at
all times while such Loan is a Base Rate Loan, at a rate per annum equal to the
sum of the Base Rate from time to time in effect plus the Base Rate Margin from
time to time in effect; and

(b)           at
all times while such Loan is a LIBOR Loan, at a rate per annum equal to the sum
of the LIBOR Rate applicable to each Interest Period for such Loan plus the
LIBOR Margin from time to time in effect;

provided that at any time an Event
of Default exists, unless the Required Lenders otherwise consent, the interest
rate applicable to each Loan shall be increased by 2% (and, in the case of
Obligations not bearing interest, such Obligations shall bear interest at the
Base Rate applicable to Revolving Loans plus 2%), provided  further
that such increase may thereafter be rescinded by the Required Lenders,
notwithstanding Section 15.1. Notwithstanding the foregoing, upon
the occurrence of an Event of Default under Sections 13.1.1 or 13.1.4,
such increase shall occur automatically.

4.2           Interest
Payment Dates.   Accrued interest on each Base Rate Loan shall be
payable in arrears on the last day
of each calendar quarter and at maturity. Accrued interest on each LIBOR Loan
shall be payable on the last day of each Interest Period relating to
such Loan (and, in the case of a LIBOR Loan with a six-month Interest Period,
on the three-month anniversary of the first day of such Interest Period), upon
a prepayment of such Loan, and at maturity. After maturity, and at any time an
Event of Default exists, accrued interest on all Loans shall be payable on
demand.

4.3           Setting
and Notice of LIBOR Rates.   The applicable LIBOR Rate for each
Interest Period shall be determined
by the Administrative Agent, and notice thereof shall be given by the
Administrative Agent promptly to the Company and each Lender. Each
determination of the applicable LIBOR Rate by the Administrative Agent shall be
conclusive and binding upon the parties hereto, in the absence of demonstrable
error. The Administrative Agent shall, upon written request of the Company or
any Lender, deliver to the Company or such Lender a statement showing the
computations used by the Administrative Agent in determining any applicable
LIBOR Rate hereunder.

4.4           Computation
of Interest.   Interest shall be computed for the actual number of days
elapsed on the basis of a
year of 360 days; provided that interest on Base Rate Loans shall be 

 24
 

 

computed for the actual
number of days elapsed on the basis of a year of 365 or 366 days, as appropriate.
The applicable interest rate for each Base Rate Loan shall change
simultaneously with each change in the Base Rate.

SECTION 5            FEES.

5.1           Non-Use
Fee.   The Loan Parties agree to pay to the Administrative Agent for
the account of each Lender a non-use fee,
for the period from the Closing Date to the Termination Date, at the Non-Use
Fee Rate in effect from time to time of such Lender’s Pro Rata Share (as
adjusted from time to time) of the unused amount of the Revolving Commitment. For
purposes of calculating usage under this Section, the Revolving Commitment
shall be deemed used to the extent of Revolving Outstandings. Such non-use fee
shall be payable in arrears on the last day of each calendar quarter and on the
Termination Date for any period then ending for which such non-use fee shall
not have previously been paid. The non-use fee shall be computed for the actual
number of days elapsed on the basis of a year of 360 days.

5.2           Letter
of Credit Fees.   (a)   The Loan Parties agree to pay to the
Administrative Agent for the account of each
Lender a letter of credit fee for each Letter of Credit equal to the L/C Fee
Rate in effect from time to time of such Lender’s Pro Rata Share (as adjusted
from time to time) of the undrawn amount of such Letter of Credit (computed for
the actual number of days elapsed on the basis of a year of 360 days); provided
that, unless the Required Lenders otherwise consent, the rate applicable to
each Letter of Credit shall be increased by 2% at any time that an Event of
Default exists. Such letter of credit fee shall be payable in arrears on the
last day of each calendar quarter and on the Termination Date (or such later
date on which such Letter of Credit expires or is terminated) for the period
from the date of the issuance of each Letter of Credit (or the last day on
which the letter of credit fee was paid with respect thereto) to the date such
payment is due or, if earlier, the date on which such Letter of Credit expired
or was terminated.

(b)           In
addition, with respect to each Letter of Credit, the Loan Parties agree to pay
to the Issuing Lender, for its own account, (i) such fees and expenses as
the Issuing Lender customarily requires in connection with the issuance,
negotiation, processing and/or administration of letters of credit in similar
situations and (ii) a letter of credit fronting fee in the amount and at
the times agreed to by the Company and the Issuing Lender.

5.3           Administrative
Agent’s Fees.   The Loan Parties agree to pay to the Administrative
Agent such agent’s fees as
are mutually agreed to from time to time by the Company and the Administrative
Agent including the fees set forth in the Agent Fee Letter.

SECTION 6                                   REDUCTION
OR TERMINATION OF THE REVOLVING COMMITMENT; PREPAYMENTS.

6.1           Reduction
or Termination of the Revolving Commitment.

6.1.1        Voluntary
Reduction or Termination of the Revolving Commitment.   The Company may
from time to time on at
least five Business Days’ prior written notice received by 

 25
 

 

the Administrative Agent
(which shall promptly advise each Lender thereof) permanently reduce the
Revolving Commitment to an amount not less than the Revolving Outstandings plus
the outstanding amount of all Swing Line Loans. Concurrently with any reduction
of the Revolving Commitment to zero, (a) the Loan Parties shall pay all
interest on the Revolving Loans, all non-use fees through the date of
termination of the Revolving Commitment, and all letter of credit fees and
shall Cash Collateralize in full all obligations arising with respect to the
Letters of Credit and (b) upon payment of all amounts owed by the Loan
Parties to the Administrative Agent and the Lenders hereunder, (i) this
Agreement, except as otherwise provided herein, shall terminate and (ii) the
Administrative Agent shall execute, deliver or file (as appropriate)
documentation terminating the Administrative Agent’s and Lenders’ Liens arising
hereunder.

6.1.2        Mandatory
Reductions of Revolving Commitment.   On the date of any Mandatory
Prepayment Event, the Revolving
Commitment shall be permanently reduced by an amount (if any) equal to the
Designated Proceeds of such Mandatory Prepayment Event.

6.1.3        All
Reductions of the Revolving Commitment.   All reductions of the
Revolving Commitment shall reduce the Commitments ratably
among the Lenders according to their respective Pro Rata Shares.

6.2           Prepayments.

6.2.1        Voluntary
Prepayments.   The Loan Parties may from time to time prepay the Loans
in whole or in part; provided that the Company
shall give the Administrative Agent (which shall promptly advise each Lender)
notice thereof not later than 11:00 A.M., Chicago time, on the day of such
prepayment (which shall be a Business Day), specifying the Loans to be prepaid
and the date and amount of prepayment.

6.2.2        Mandatory Prepayments.   If on any
day on which the Revolving Commitment is reduced pursuant to Section 6.1.2 the
Revolving Outstandings plus the outstanding amount of the Swing Line
Loan exceeds the Revolving Commitment, the Loan Parties shall immediately
prepay Revolving Loans or Cash Collateralize the outstanding Letters of Credit,
or do a combination of the foregoing, in an amount sufficient to eliminate such
excess.

6.3           Manner
of Prepayments.

6.3.1        All
Prepayments.   Any partial prepayment of a Group of LIBOR Loans shall
be subject to the proviso to Section 2.2.3(a).
Any prepayment of a LIBOR Loan on a day other than the last day of an Interest
Period therefor shall include interest on the principal amount being repaid and
shall be subject to Section 8.4. Except as otherwise provided by
this Agreement, all principal payments in respect of the Loans (other than the
Swing Line Loans) shall be applied first, to repay outstanding Base Rate Loans
and then to repay outstanding LIBOR Rate Loans in direct order of Interest
Period maturities.

6.3.2        Reserved.

 26
 

 

6.4           Repayments.

6.4.1        Revolving
Loans.   The Revolving Loans of each Lender shall be paid in full and
the Revolving Commitment shall
terminate on the Termination Date.

6.4.2        Reserved.

6.4.3        Reserved.

SECTION 7            MAKING AND PRORATION OF PAYMENTS;
SETOFF; TAXES.

7.1           Making
of Payments.   All payments of principal or interest on the Notes, and
of all fees, shall be made by the
Loan Parties to the Administrative Agent in immediately available funds at the
office specified by the Administrative Agent not later than noon, Chicago time,
on the date due; and funds received after that hour shall be deemed to have
been received by the Administrative Agent on the following Business Day. The
Administrative Agent shall promptly remit to each Lender its share of all such
payments received in collected funds by the Administrative Agent for the
account of such Lender. All payments under Section 8.1 shall be made by
the Loan Parties directly to the Lender entitled thereto without setoff,
counterclaim or other defense.

7.2           Application
of Certain Payments.   So long as no Unmatured Event of Default  or Event of Default has occurred and is continuing,
(a) payments matching specific scheduled payments then due shall be
applied to those scheduled payments and (b) voluntary and mandatory
prepayments shall be applied as set forth in Sections 6.2 and 6.3.
After the occurrence and during the continuance of an Unmatured Event of
Default or Event of Default, all amounts collected or received by the
Administrative Agent or any Lender as proceeds from the sale of, or other
realization upon, all or any part of the Collateral shall be applied as the
Administrative Agent shall determine in its discretion or, in the absence of a specific
determination by the Administrative Agent, as set forth in the Guaranty and
Collateral Agreement. Concurrently with each remittance to any Lender of
its share of any such payment, the Administrative Agent shall advise such
Lender as to the application of such payment.

7.3           Due
Date Extension.   If any payment of principal or interest with respect
to any of the Loans, or of any fees,
falls due on a day which is not a Business Day, then such due date shall be
extended to the immediately following Business Day (unless, in the case of a
LIBOR Loan, such immediately following Business Day is the first Business Day
of a calendar month, in which case such due date shall be the immediately
preceding Business Day) and, in the case of principal, additional interest
shall accrue and be payable for the period of any such extension.

7.4           Setoff.   The
Company, for itself and each other Loan Party, agrees that the Administrative
Agent and each Lender have all rights of
set-off and bankers’ lien provided by applicable law, and in addition thereto,
the Company, for itself and each other Loan Party, agrees that at any time any
Event of Default exists, the Administrative Agent and each Lender may apply to
the payment of any Obligations of the Company and each other Loan Party
hereunder, whether or not then due, any and all balances, credits, deposits,
accounts or moneys of the Company and each other Loan Party then or thereafter
with the Administrative Agent or such Lender.

 27
 

 

7.5           Proration
of Payments.   If any Lender shall obtain any payment or other recovery
(whether voluntary, involuntary,
by application of offset or otherwise, on account of (a) principal of or
interest on any Loan, but excluding (i) any payment pursuant to Section 8.7
or 15.6 and (ii) payments of interest on any Affected Loan) or (b) its
participation in any Letter of Credit) in excess of its applicable Pro Rata
Share of payments and other recoveries obtained by all Lenders on account of
principal of and interest on the Loans (or such participation) then held by
them, then such Lender shall purchase from the other Lenders such
participations in the Loans (or sub-participations in Letters of Credit) held
by them as shall be necessary to cause such purchasing Lender to share the
excess payment or other recovery ratably with each of them; provided
that if all or any portion of the excess payment or other recovery is
thereafter recovered from such purchasing Lender, the purchase shall be
rescinded and the purchase price restored to the extent of such recovery.

7.6           Taxes.

(a)           All
payments made by the Loan Parties hereunder or under any Loan Documents shall
be made without setoff, counterclaim, or other defense. To the extent permitted
by applicable law, all payments hereunder or under the Loan Documents
(including any payment of principal, interest, or fees) to, or for the benefit,
of any person shall be made by the Loan Parties free and clear of and without
deduction or withholding for, or account of, any Taxes now or hereinafter
imposed by any taxing authority.

(b)           If
the Loan Parties make any payment hereunder or under any Loan Document in
respect of which it is required by applicable law to deduct or withhold any
Taxes, the Loan Parties shall increase the payment hereunder or under any such Loan
Document such that after the reduction for the amount of Taxes withheld (and
any taxes withheld or imposed with respect to the additional payments required
under this Section 7.6(b)), the amount paid to the Lenders or the
Administrative Agent equals the amount that was payable hereunder or under any
such Loan Document without regard to this Section 7.6(b). To the
extent the Loan Parties withhold any Taxes on payments hereunder or under any
Loan Document, the Loan Parties shall pay the full amount deducted to the
relevant taxing authority within the time allowed for payment under applicable
law and shall deliver to the Administrative Agent within 30 days after they
have made payment to such authority a receipt issued by such authority (or
other evidence satisfactory to the Administrative Agent) evidencing the payment
of all amounts so required to be deducted or withheld from such payment.

(c)           If
any Lender or the Administrative Agent is required by law to make any payments
of any Taxes on or in relation to any amounts received or receivable hereunder
or under any other Loan Document, or any Tax is assessed against a Lender or
the Administrative Agent with respect to amounts received or receivable
hereunder or under any other Loan Document, the Loan Parties will indemnify
such person against (i) such Tax (and any reasonable counsel fees and
expenses associated with such Tax) and (ii) any taxes imposed as a result
of the receipt of the payment under this Section 7.6(c). A
certificate prepared in good faith as to the amount of such payment by such
Lender or the Administrative Agent shall, absent manifest error, be final,
conclusive, and binding on all parties.

 28
 

 

(d)           (i)            To the extent permitted by
applicable law, each Lender that is not a United States person within the
meaning of Code Section 7701(a)(30) (a “Non-U.S. Participant”)
shall deliver to the Company and the Administrative Agent on or prior to the
Closing Date (or in the case of a Lender that is an Assignee, on the date of
such assignment to such Lender) two accurate and complete original signed
copies of IRS Form W-8BEN, W-8ECI, or W-8IMY (or any
successor or other applicable form prescribed by the IRS) certifying to such
Lender’s entitlement to a complete exemption from, or a reduced rate in, United
States withholding tax on interest payments to be made hereunder or any Loan. If
a Lender that is a Non-U.S. Participant is claiming a complete exemption from
withholding on interest pursuant to Code Sections 871(h) or 881(c), the
Lender shall deliver (along with two accurate and complete original signed
copies of IRS Form W-8BEN) a certificate in form and substance
reasonably acceptable to Administrative Agent (any such certificate, a “Withholding
Certificate”). In addition, each Lender that is a Non-U.S. Participant  agrees that from time to time after the
Closing Date, (or in the case of a Lender that is an Assignee, after the date
of the assignment to such Lender), when a lapse in time (or change in
circumstances occurs) renders the prior certificates hereunder obsolete or
inaccurate in any material respect, such Lender shall, to the extent permitted
under applicable law, deliver to the Company and the Administrative Agent two
new and accurate and complete original signed copies of an IRS Form W-8BEN,
W-8ECI, or W-8IMY (or any successor or other applicable forms
prescribed by the IRS), and if applicable, a new Withholding Certificate, to
confirm or establish the entitlement of such Lender or the Administrative Agent
to an exemption from, or reduction in, United States withholding tax on
interest payments to be made hereunder or any Loan.

(ii)           Each
Lender that is not a Non-U.S. Participant (other than any such Lender which is
taxed as a corporation for U.S. federal income tax purposes) shall provide two
properly completed and duly executed copies of IRS Form W-9 (or any
successor or other applicable form) to the Company and the Administrative Agent
certifying that such Lender is exempt from United States backup withholding tax.
To the extent that a form provided pursuant to this Section 7.6(d)(ii) is
rendered obsolete or inaccurate in any material respects as result of change in
circumstances with respect to the status of a Lender, such Lender shall, to the
extent permitted by applicable law, deliver to the Company and the
Administrative Agent revised forms necessary to confirm or establish the
entitlement to such Lender’s or Agent’s exemption from United States backup
withholding tax.

(iii)          The
Loan Parties shall not be required to pay additional amounts to a Lender, or
indemnify any Lender, under this Section 7.6 to the extent that
such obligations would not have arisen but for the failure of such Lender to
comply with Section 7.6(d).

(iv)          Each
Lender agrees to indemnify the Administrative Agent and hold the Administrative
Agent harmless for the full amount of any and all present or future Taxes and
related liabilities (including penalties, interest, additions to tax and
expenses, and any Taxes imposed by any jurisdiction on amounts payable to the
Administrative Agent under this Section 7.6) which are imposed on
or with respect to principal, interest or fees payable to such Lender hereunder
and which are not paid by the Loan Parties pursuant to this Section 7.6,
whether or not 

 29
 

 

such Taxes or related
liabilities were correctly or legally asserted. This indemnification shall be
made within 30 days from the date the Administrative Agent makes written demand
therefor.

SECTION 8                                   INCREASED
COSTS; SPECIAL PROVISIONS FOR LIBOR LOANS.

8.1           Increased
Costs.   (a)   If, after the date hereof, the adoption of, or any
change in, any applicable law, rule or
regulation, or any change in the interpretation or administration of any
applicable law, rule or regulation by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Lender with any request or directive (whether or
not having the force of law) of any such authority, central bank or comparable
agency:  (i) shall impose, modify or
deem applicable any reserve (including any reserve imposed by the FRB, but
excluding any reserve included in the determination of the LIBOR Rate pursuant
to Section 4), special deposit or similar requirement against
assets of, deposits with or for the account of, or credit extended by any
Lender; or (ii) shall impose on any Lender any other condition affecting
its LIBOR Loans, its Note or its obligation to make LIBOR Loans; and the result
of anything described in clauses (i) and (ii) above is to increase
the cost to (or to impose a cost on) such Lender (or any LIBOR Office of such
Lender) of making or maintaining any LIBOR Loan, or to reduce the amount of any
sum received or receivable by such Lender (or its LIBOR Office) under this
Agreement or under its Note with respect thereto, then upon demand by such
Lender (which demand shall be accompanied by a statement setting forth the
basis for such demand and a calculation of the amount thereof in reasonable
detail, a copy of which shall be furnished to the Administrative Agent), the
Loan Parties shall pay directly to such Lender such additional amount as will
compensate such Lender for such increased cost or such reduction, so long as
such amounts have accrued on or after the day which is 180 days prior to the
date on which such Lender first made demand therefor.

(b)           If
any Lender shall reasonably determine that any change in, or the adoption or
phase-in of, any applicable law, rule or regulation regarding capital
adequacy, or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or the compliance by any Lender or
any Person controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) of any such
authority, central bank or comparable agency, has or would have the effect of
reducing the rate of return on such Lender’s or such controlling Person’s
capital as a consequence of such Lender’s obligations hereunder or under any
Letter of Credit to a level below that which such Lender or such controlling
Person could have achieved but for such change, adoption, phase-in or
compliance (taking into consideration such Lender’s or such controlling Person’s
policies with respect to capital adequacy) by an amount deemed by such Lender
or such controlling Person to be material, then from time to time, upon demand
by such Lender (which demand shall be accompanied by a statement setting forth the
basis for such demand and a calculation of the amount thereof in reasonable
detail, a copy of which shall be furnished to the Administrative Agent), the
Loan Parties shall pay to such Lender such additional amount as will compensate
such Lender or such controlling Person for such reduction so long as such
amounts have accrued on or after the day which is 180 days prior to the date on
which such Lender first made demand therefor.

 30

 

8.2           Basis for
Determining Interest Rate Inadequate or Unfair.   If:

(a)           the Administrative
Agent reasonably determines (which determination shall be binding and
conclusive on the Loan Parties) that by reason of circumstances affecting the
interbank LIBOR market adequate and reasonable means do not exist for
ascertaining the applicable LIBOR Rate; or

(b)           the Required Lenders
advise the Administrative Agent that the LIBOR Rate as determined by the
Administrative Agent will not adequately and fairly reflect the cost to such
Lenders of maintaining or funding LIBOR Loans for such Interest Period (taking
into account any amount to which such Lenders may be entitled under Section 8.1)
or that the making or funding of LIBOR Loans has become impracticable as a
result of an event occurring after the date of this Agreement which in the
opinion of such Lenders materially affects such Loans;

then the Administrative Agent shall
promptly notify the other parties thereof and, so long as such circumstances
shall continue, (i) no Lender shall be under any obligation to make or
convert any Base Rate Loans into LIBOR Loans and (ii) on the last day of
the current Interest Period for each LIBOR Loan, such Loan shall, unless then
repaid in full, automatically convert to a Base Rate Loan.

8.3           Changes in Law
Rendering LIBOR Loans Unlawful.   If any change in, or the adoption of
any new, law or
regulation, or any change in the interpretation of any applicable law or
regulation by any governmental or other regulatory body charged with the administration
thereof, should make it (or in the good faith judgment of any Lender cause a
substantial question as to whether it is) unlawful for any Lender to make,
maintain or fund LIBOR Loans, then such Lender shall promptly notify each of
the other parties hereto and, so long as such circumstances shall continue, (a) such
Lender shall have no obligation to make or convert any Base Rate Loan into a
LIBOR Loan (but shall make Base Rate Loans concurrently with the making of or
conversion of Base Rate Loans into LIBOR Loans by the Lenders which are not so
affected, in each case in an amount equal to the amount of LIBOR Loans which
would be made or converted into by such Lender at such time in the absence of
such circumstances) and (b) on the last day of the current Interest Period
for each LIBOR Loan of such Lender (or, in any event,  on such earlier date as may be required by
the relevant law, regulation or interpretation), such LIBOR Loan shall, unless
then repaid in full, automatically convert to a Base Rate Loan. Each Base Rate
Loan made by a Lender which, but for the circumstances described in the
foregoing sentence, would be a LIBOR Loan (an “Affected Loan”) shall
remain outstanding for the period corresponding to the Group of LIBOR Loans of
which such Affected Loan would be a part absent such circumstances.

8.4           Funding Losses.   The
Loan Parties hereby agree that upon demand by any Lender (which demand shall be accompanied by a statement setting forth
the basis for the amount being claimed, a copy of which shall be furnished to
the Administrative Agent), the Loan Parties will indemnify such Lender against
any net loss or expense which such Lender may sustain or incur (including any
net loss or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by such Lender to fund or maintain any LIBOR
Loan), as 

 31
 

 

reasonably determined by
such Lender, as a result of (a) any payment, prepayment or conversion of
any LIBOR Loan of such Lender on a date other than the last day of an Interest
Period for such Loan (including any conversion pursuant to Section 8.3)
or (b) any failure of the Loan Parties to borrow, convert or continue any
Loan on a date specified therefor in a notice of borrowing, conversion or
continuation pursuant to this Agreement. For this purpose, all notices to the
Administrative Agent pursuant to this Agreement shall be deemed to be
irrevocable.

8.5           Right of Lenders
to Fund through Other Offices.   Each Lender may, if it so elects,
fulfill its commitment
as to any LIBOR Loan by causing a foreign branch or Affiliate of such Lender to
make such Loan; provided that in such event for the purposes of this
Agreement such Loan shall be deemed to have been made by such Lender and the
obligation of the Loan Parties to repay such Loan shall nevertheless be to such
Lender and shall be deemed held by it, to the extent of such Loan, for the
account of such branch or Affiliate.

8.6           Discretion of
Lenders as to Manner of Funding.   Notwithstanding any provision of
this Agreement to the
contrary, each Lender shall be entitled to fund and maintain its funding of all
or any part of its Loans in any manner it sees fit, it being understood,
however, that for the purposes of this Agreement all determinations hereunder
shall be made as if such Lender had actually funded and maintained each LIBOR
Loan during each Interest Period for such Loan through the purchase of deposits
having a maturity corresponding to such Interest Period and bearing an interest
rate equal to the LIBOR Rate for such Interest Period.

8.7           Mitigation of
Circumstances; Replacement of Lenders.   (a)   Each Lender shall
promptly notify the
Company and the Administrative Agent of any event of which it has knowledge
which will result in, and will use reasonable commercial efforts available to
it (and not, in such Lender’s sole judgment, otherwise disadvantageous to such
Lender) to mitigate or avoid, (i) any obligation by the Loan Parties to
pay any amount pursuant to Sections 7.6 or 8.1 or (ii) the
occurrence of any circumstances described in Sections 8.2 or 8.3
(and, if any Lender has given notice of any such event described in clause (i) or
(ii) above and thereafter such event ceases to exist, such Lender shall
promptly so notify the Company and the Administrative Agent). Without limiting
the foregoing, each Lender will designate a different funding office if such
designation will avoid (or reduce the cost to the Loan Parties of) any event
described in clause (i) or (ii) above and such designation will not,
in such Lender’s sole judgment, be otherwise disadvantageous to such Lender.

(b)           If the Loan Parties
become obligated to pay additional amounts to any Lender pursuant to Sections
7.6 or 8.1, or any Lender gives notice of the occurrence of any
circumstances described in Sections 8.2 or 8.3, the Company may
designate another bank which is acceptable to the Administrative Agent and the
Issuing Lender in their reasonable discretion (such other bank being called a “Replacement
Lender”) to purchase the Loans of such Lender and such Lender’s rights
hereunder, without recourse to or warranty by, or expense to, such Lender, for
a purchase price equal to the outstanding principal amount of the Loans payable
to such Lender plus any accrued but unpaid interest on such Loans and all
accrued but unpaid fees owed to such Lender and any other amounts payable to
such Lender under this Agreement, and to assume all the obligations of such
Lender hereunder, and, upon such purchase and assumption 

 32
 

 

(pursuant to an Assignment Agreement), such Lender shall no longer be a
party hereto or have any rights hereunder (other than rights with respect to
indemnities and similar rights applicable to such Lender prior to the date of
such purchase and assumption) and shall be relieved from all obligations to the
Loan Parties hereunder, and the Replacement Lender shall succeed to the rights
and obligations of such Lender hereunder.

8.8           Conclusiveness of
Statements; Survival of Provisions.   Determinations and statements of
any Lender pursuant to Sections
8.1, 8.2, 8.3 or 8.4 shall be conclusive absent
demonstrable error. Lenders may use reasonable averaging and attribution
methods in determining compensation under Sections 8.1 and 8.4,
and the provisions of such Sections shall survive repayment of the Obligations,
cancellation of any Notes, expiration or termination of the Letters of Credit and
termination of this Agreement.

SECTION 9            REPRESENTATIONS AND WARRANTIES.

To induce the Administrative Agent and the Lenders to
enter into this Agreement and to induce the Lenders to make Loans and issue and
participate in Letters of Credit hereunder, the Loan Parties represent and
warrant to the Administrative Agent and the Lenders that:

9.1           Organization.   Each
Loan Party is validly existing and in good standing under the laws of its
jurisdiction of organization; and
each Loan Party is duly qualified to do business in each jurisdiction where,
because of the nature of its activities or properties, such qualification is
required, except for such jurisdictions where the failure to so qualify would
not have a Material Adverse Effect.

9.2           Authorization; No
Conflict.   Each Loan Party is duly authorized to execute and deliver
each Loan Document to which
it is a party, the Loan Parties are duly authorized to borrow monies hereunder
and each Loan Party is duly authorized to perform each other Obligation under
each Loan Document to which it is a party. The execution, delivery and
performance by each Loan Party of each Loan Document to which it is a party,
and the borrowings by the Loan Parties hereunder, do not and will not (a) require
any consent or approval of any governmental agency or authority (other than any
consent or approval which has been obtained and is in full force and effect), (b) conflict
with (i) any provision of law, (ii) the charter, by-laws or other
organizational documents of any Loan Party or (iii) any agreement,
indenture, instrument or other document, or any judgment, order or decree,
which is binding upon any Loan Party or any of their respective properties or (c) require,
or result in, the creation or imposition of any Lien on any asset of any Loan
Party (other than Liens in favor of the Administrative Agent created pursuant
to the Collateral Documents).

9.3           Validity and
Binding Nature.   Each of this Agreement and each other Loan Document
to which any Loan Party is a
party is the legal, valid and binding obligation of such Person, enforceable
against such Person in accordance with its terms, subject to bankruptcy,
insolvency and similar laws affecting the enforceability of creditors’ rights
generally and to general principles of equity.

 33
 

 

9.4           Financial
Condition.   The audited consolidated financial statements of the Loan
Parties as at Company’s Fiscal
Year End, 2005, copies of which have been delivered to the Administrative
Agent, were prepared in accordance with GAAP and present fairly the
consolidated financial condition of the Loan Parties as at such date and the
results of their operations for the period then ended.

9.5           No Material
Adverse Change.   Since the date of the Company’s last financial
statement audit, there has
been no material adverse change in the financial condition, operations, assets,
business, properties of the Loan Parties taken as a whole.

9.6           Litigation and
Contingent Liabilities.   No litigation (including derivative actions),
arbitration proceeding
or governmental investigation or proceeding is pending or, to the Company’s
knowledge, threatened against any Loan Party which might reasonably be expected
to have a Material Adverse Effect, except as set forth in Schedule 9.6. Other
than any liability incident to such litigation or proceedings, no Loan Party
has any material contingent liabilities not listed on Schedule 9.6 or
permitted by Section 11.1.

9.7           Ownership of
Properties; Liens.   Each Loan Party owns good and, in the case of real
property,  marketable title to all of its
properties and assets, real and personal, tangible and intangible, of any
nature whatsoever (including patents, trademarks, trade names, service marks
and copyrights), free and clear of all Liens, charges and claims (including
infringement claims with respect to patents, trademarks, service marks,
copyrights and the like) except as permitted by Section 11.2.

9.8           Equity Ownership;
Subsidiaries.   All issued and outstanding Capital Securities of each
Loan Party are duly
authorized and validly issued, fully paid, non-assessable, and, other than with
respect to the Company, free and clear of all Liens other than those in favor
of the Administrative Agent, and such securities were issued in compliance with
all applicable state and federal laws concerning the issuance of securities. Schedule
9.8 sets forth the authorized Capital Securities of each Loan Party as of
the Closing Date. All of the issued and outstanding Capital Securities of each
Wholly-Owned Subsidiary are, directly or indirectly, owned by the Company. As
of the Closing Date, except as set forth on Schedule 9.8, there are no
pre-emptive or other outstanding rights, options, warrants, conversion rights
or other similar agreements or understandings for the purchase or acquisition
of any Capital Securities of any Loan Party.

9.9           Pension Plans.   (a)   The
Unfunded Liability of all Pension Plans does not in the aggregate exceed twenty percent of the Total Plan Liability for
all such Pension Plans. Each Pension Plan complies in all material respects
with all applicable requirements of law and regulations. No contribution
failure under Section 412 of the Code, Section 302 of ERISA or the
terms of any Pension Plan has occurred with respect to any Pension Plan,
sufficient to give rise to a Lien under Section 302(f) of ERISA, or
otherwise to have a Material Adverse Effect. There are no pending or, to the
knowledge of Company, threatened, claims, actions, investigations or lawsuits
against any Pension Plan, any fiduciary of any Pension Plan, or Company or
other any member of the Controlled Group with respect to a Pension Plan or a
Multiemployer Pension Plan which could reasonably be expected to have a
Material Adverse Effect. Neither the Company 

 34
 

 

nor any other member of
the Controlled Group has engaged in any prohibited transaction (as defined in Section 4975
of the Code or Section 406 of ERISA) in connection with any Pension Plan
or Multiemployer Pension Plan which would subject that Person to any material
liability. Within the past five years, neither the Company nor any other member
of the Controlled Group has engaged in a transaction which resulted in a
Pension Plan with an Unfunded Liability being transferred out of the Controlled
Group, which could reasonably be expected to have a Material Adverse Effect. No
Termination Event has occurred or is reasonably expected to occur with respect
to any Pension Plan, which could reasonably be expected to have a Material
Adverse Effect.

(b)           All
contributions (if any) have been made to any Multiemployer Pension Plan that
are required to be made by the Company or any other member of the Controlled
Group under the terms of the plan or of any collective bargaining agreement or
by applicable law; neither the Company nor any other member of the Controlled
Group has withdrawn or partially withdrawn from any Multiemployer Pension Plan,
incurred any withdrawal liability with respect to any such plan or received
notice of any claim or demand for withdrawal liability or partial withdrawal
liability from any such plan, and no condition has occurred which, if
continued, could result in a withdrawal or partial withdrawal from any such
plan; and neither the Company nor any other member of the Controlled Group has
received any notice that any Multiemployer Pension Plan is in reorganization,
that increased contributions may be required to avoid a reduction in plan
benefits or the imposition of any excise tax, that any such plan is or has been
funded at a rate less than that required under Section 412 of the Code,
that any such plan is or may be terminated, or that any such plan is or may
become insolvent.

9.10         Investment
Company Act.   No Loan Party is an “investment company” or a company “controlled”
by an “investment company” or a
“subsidiary” of an “investment company,” within the meaning of the Investment
Company Act of 1940.

9.11         Public
Utility Holding Company Act.   No Loan Party 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.

9.12         Regulation
U.   The Loan Parties are not engaged principally, or as one of their
important activities, in the business of
extending credit for the purpose of purchasing or carrying Margin Stock.

9.13         Taxes.   Each
Loan Party has timely filed all tax returns and reports required by law to have
been filed by it and has paid all taxes and
governmental charges due and payable with respect to such return, except any
such taxes or charges which are being diligently contested in good faith by
appropriate proceedings and for which adequate reserves in accordance with GAAP
shall have been set aside on its books. The Loan Parties have made adequate
reserves on their books and records in accordance with GAAP for all taxes that
have accrued but which are not yet due and payable. No Loan Party has
participated in any transaction that relates to a year of the taxpayer (which
is still open under the applicable statute of limitations) which is a 

 35
 

 

“reportable transaction”
within the meaning of Treasury Regulation Section 1.6011-4(b)(2) (irrespective
of the date when the transaction was entered into).

9.14         Solvency,
etc.   On the Closing Date, and immediately prior to and after giving
effect to the issuance of each Letter of
Credit and each borrowing hereunder and the use of the proceeds thereof, with
respect to each Loan Party, individually, (a) the fair value of its assets
is greater than the amount of its liabilities (including disputed, contingent
and unliquidated liabilities) as such value is established and liabilities
evaluated in accordance with GAAP, (b) the present fair saleable value of
its assets is not less than the amount that will be required to pay the
probable liability on its debts as they become absolute and matured, (c) it
is able to realize upon its assets and pay its debts and other liabilities
(including disputed, contingent and unliquidated liabilities) as they mature in
the normal course of business, (d) it does not intend to, and does not
believe that it will, incur debts or liabilities beyond its ability to pay as
such debts and liabilities mature and (e) it is not engaged in business or
a transaction, and is not about to engage in business or a transaction, for
which its property would constitute unreasonably small capital.

9.15         Environmental
Matters. The on-going operations of each Loan Party comply in all respects
with all Environmental Laws,
except such non-compliance which could not (if enforced in accordance with
applicable law) reasonably be expected to result, either individually or in the
aggregate, in a Material Adverse Effect. Each Loan Party has obtained, and
maintained in good standing, all licenses, permits, authorizations,
registrations and other approvals required under any Environmental Law and
required for their respective ordinary course operations, and for their
reasonably anticipated future operations, and each Loan Party is in compliance
with all terms and conditions thereof, except where the failure to do so could
not reasonably be expected to result in material liability to any Loan Party
and could not reasonably be expected to result, either individually or in the
aggregate, in a Material Adverse Effect. No Loan Party or any of its properties
or operations is subject to, or reasonably anticipates the issuance of, any
written order from or agreement with any Federal, state or local governmental
authority, nor subject to any judicial or docketed administrative or other
proceeding, respecting any Environmental Law, Environmental Claim or Hazardous
Substance. There are no Hazardous Substances or other conditions or
circumstances existing with respect to any property, arising from operations
prior to the Closing Date, or relating to any waste disposal, of any Loan Party
that would reasonably be expected to result, either individually or in the
aggregate, in a Material Adverse Effect. No Loan Party has any underground
storage tanks that are not properly registered or permitted under applicable
Environmental Laws or that at any time have released, leaked, disposed of or
otherwise discharged Hazardous Substances.

9.16         Insurance.
Set forth on Schedule 9.16 is a complete and accurate summary of the
property and casualty insurance program of
the Loan Parties as of the Closing Date (including the names of all insurers,
policy numbers, expiration dates, amounts and types of coverage, annual
premiums, exclusions, deductibles, self-insured retention, and a description in
reasonable detail of any self-insurance program, retrospective rating plan,
fronting arrangement or other risk assumption arrangement involving any Loan
Party). Each Loan Party and its properties are insured with financially sound
and reputable insurance companies which are not Affiliates of the Loan Parties,
in such amounts, with such deductibles and covering such risks as are
customarily 

 36
 

 

carried by companies
engaged in similar businesses and owning similar properties in localities where
such Loan Parties operate.

9.17         Real
Property.   Set forth on Schedule 9.17 is a complete and
accurate list, as of the Closing Date, of the address of all real property owned or
leased by any Loan Party, together with, in the case of leased property, the
name and mailing address of the lessor of such property.

9.18         Information.   To
the knowledge of the Loan Parties, all information heretofore or
contemporaneously herewith furnished in
writing by any Loan Party to the Administrative Agent or any Lender for
purposes of or in connection with this Agreement and the transactions
contemplated hereby is, and all written information hereafter furnished by or
on behalf of any Loan Party to the Administrative Agent or any Lender pursuant
hereto or in connection herewith will be, true and accurate in every material
respect on the date as of which such information is dated or certified, and
none of such information is or will be incomplete by omitting to state any
material fact necessary to make such information not misleading in light of the
circumstances under which made (it being recognized by the Administrative Agent
and the Lenders that any projections and forecasts provided by the Company are
based on good faith estimates and assumptions believed by the Company to be
reasonable as of the date of the applicable projections or assumptions and that
actual results during the period or periods covered by any such projections and
forecasts may differ from projected or forecasted results).

9.19         Intellectual
Property.   Each Loan Party owns and possesses or has a license or
other right to use all patents,
patent rights, trademarks, trademark rights, trade names, trade name rights,
service marks, service mark rights and copyrights as are necessary for the
conduct of the businesses of the Loan Parties, without any infringement upon
rights of others which could reasonably be expected to have a Material Adverse
Effect.

9.20         Burdensome
Obligations.   No Loan Party is a party to any agreement or contract or
subject to any restriction
contained in its organizational documents which could reasonably be expected to
have a Material Adverse Effect.

9.21         Labor
Matters.   Except as set forth on Schedule 9.21, no Loan Party
is subject to any labor or  collective bargaining agreement. There are no
existing or threatened strikes, lockouts or other labor disputes involving any
Loan Party that singly or in the aggregate could reasonably be expected to have
a Material Adverse Effect. Hours worked by and payment made to employees of the
Loan Parties are not in violation of the Fair Labor Standards Act or any other
applicable law, rule or regulation dealing with such matters.

9.22         No
Default.   No Event of Default or Unmatured Event of Default exists or
would result from the incurrence by any
Loan Party of any Debt hereunder or under any other Loan Document.

9.23         Compliance with Health Care Laws.   Each Loan Party shall conduct its business
in compliance in all material
respects with all Health Care Laws applicable to such Loan Party’s business.
Each Loan Party shall act promptly and appropriately to respond to and
remediate any 

 37
 

 

violation
of any Health Care Law of which it has knowledge. Each Loan Party shall
promptly report to the Administrative Agent, any such violation and any such
response and remediation.

9.24         Reserved.

SECTION 10          AFFIRMATIVE COVENANTS.

Until the expiration or termination of the Commitments
and thereafter until all Obligations hereunder and under the other Loan
Documents are paid in full and all Letters of Credit have been terminated, the
Company agrees that, unless at any time the Required Lenders shall otherwise
expressly consent in writing, it will:

10.1         Reports,
Certificates and Other Information.   Furnish to the Administrative
Agent and each Lender:

10.1.1      Annual Report.   (a)   Promptly when available and in any event within 90
days after the close of each Fiscal
Year, a copy of the Company’s Form 10-K, which includes the annual audit report of the Loan Parties for such
Fiscal Year, including therein consolidated balance sheets and statements of
earnings and cash flows of the Loan Parties as at the end of such Fiscal
Year,  certified without adverse
reference to going concern value and without qualification by independent
auditors of recognized standing selected by the Company and reasonably
acceptable to the Administrative Agent, together with (i) a written
statement from such accountants to the effect that in making the examination
necessary for the signing of such annual audit report by such accountants,
nothing came to their attention that caused them to believe that the Company
was not in compliance with any provision of Sections 11.1, 11.3, 11.4
or 11.14 of this Agreement insofar as such provision relates to
accounting matters or, if something has come to their attention that caused
them to believe that the Company was not in compliance with any such provision,
describing such non-compliance in reasonable detail and (ii) a comparison
with the previous Fiscal Year; and (b) promptly upon request by the
Administrative Agent, a consolidating balance sheet of the Loan Parties as of
the end of such Fiscal Year and consolidating statement of earnings and cash
flows for the Loan Parties for such Fiscal Year, certified by a Senior Officer
of the Company.

10.1.2      Interim Reports.   (a)   Promptly when available and in any event within 45
days after the end of each Fiscal
Quarter, a copy of the Company’s Form 10-Q, which includes consolidated balance sheets of the Loan Parties as
of the end of such Fiscal Quarter, together with consolidated statements of
earnings and cash flows for such Fiscal Quarter and for the period beginning
with the first day of such Fiscal Year and ending on the last day of such
Fiscal Quarter, together with a comparison with the corresponding period of the
previous Fiscal Year, certified by a Senior Officer of the Company; (b) promptly
upon request by the Administrative Agent, consolidating balance sheets of the
Loan Parties as of the end of the immediately preceding Fiscal Quarter,
together with consolidating statements of earnings and cash flows for such
Fiscal Quarter; and (c) promptly when available and in any event within 30
days after the end of each month, consolidated and consolidating balance sheets
of the Loan Parties as of the end of such month, together with consolidated
statements of earnings and a consolidated statement of cash flows for such
month and for the period beginning with the first day of such 

 38
 

 

Fiscal
Year and ending on the last day of such month, together with a comparison with
the corresponding period of the previousFiscal Year, certified by a Senior
Officer of the Company.

10.1.3      Compliance Certificates.   Contemporaneously
with the furnishing of a copy of each annual audit report pursuant to Section 10.1.1
and each set of quarterly statements pursuant to Section 10.1.2, a
duly completed compliance certificate in the form of Exhibit B,
with appropriate insertions, dated the date of such annual report or such
quarterly statements and signed by a Senior Officer of the Company, containing
a computation of each of the financial ratios and restrictions set forth in Section 11.14
and to the effect that such officer has not become aware of any Event of
Default or Unmatured Event of Default that has occurred and is continuing or,
if there is any such event, describing it and the steps, if any, being taken to
cure it.

10.1.4      Reports
to the SEC and to Shareholders.   Promptly upon the filing or sending
thereof, copies of all regular,
periodic or special reports of any Loan Party filed with the SEC; copies of all
registration statements of any Loan Party filed with the SEC (other than on Form S-8);
and copies of all proxy statements or other communications made to security
holders generally.

10.1.5      Notice
of Default, Litigation and ERISA Matters.   Within five Business Days
of becoming aware of any of
the following, written notice describing the same and the steps being taken by
the Company or the Subsidiary affected thereby with respect thereto:

(a)           the occurrence of an
Event of Default or an Unmatured Event of Default;

(b)           any litigation,
arbitration or governmental investigation or proceeding not previously
disclosed by the Company to the Lenders which has been instituted or, to the
knowledge of the Company, is threatened against any Loan Party or to which any
of the properties of any thereof is subject, in each case which might
reasonably be expected to have a Material Adverse Effect;

(c)           the institution of
any steps by any member of the Controlled Group or any other Person to
terminate any Pension Plan, or the failure of any member of the Controlled
Group to make a required contribution to any Pension Plan (if such failure is
sufficient to give rise to a Lien under Section 302(f) of ERISA) or
to any Multiemployer Pension Plan, or the taking of any action with respect to
a Pension Plan which could result in the requirement that the Company furnish a
bond or other security to the PBGC or such Pension Plan, or the occurrence of
any event with respect to any Pension Plan or Multiemployer Pension Plan which
could result in the incurrence by any member of the Controlled Group of any
material liability, fine or penalty (including any claim or demand for
withdrawal liability or partial withdrawal from any Multiemployer Pension
Plan), or any material increase in the contingent liability of the Company with
respect to any post-retirement welfare benefit plan or other employee benefit
plan of the Company or another member of the Controlled Group, or any notice
that any Multiemployer Pension Plan is in reorganization, that increased
contributions may be required to avoid a reduction in plan benefits or the
imposition of an excise tax, that any such plan is or has 

 39
 

 

been funded at
a rate less than that required under Section 412 of the Code, that any
such plan is or may be terminated, or that any such plan is or may become
insolvent;

(d)           any cancellation or
material adverse change in any insurance maintained by any Loan Party; or

(e)           any other event
(including any violation of any Environmental Law or the assertion of any
Environmental Claim) which might reasonably be expected to have a Material
Adverse Effect.

10.1.6      Reserved.

10.1.7      Management
Reports.   Promptly upon receipt thereof, copies of all detailed
financial and management reports
submitted to the Company by independent auditors in connection with each annual
or interim audit made by such auditors of the books of the Company.

10.1.8      Projections.   As
soon as practicable, and in any event not later than 30 days after the
commencement of each Fiscal Year,
financial projections for the Loan Parties for such Fiscal Year (including
monthly operating and cash flow budgets) prepared in a manner consistent with
the projections delivered by the Company to the Lenders prior to the Closing
Date or otherwise in a manner reasonably satisfactory to the Administrative
Agent, accompanied by a certificate of a Senior Officer of the Company on
behalf of the Company to the effect that (a) such projections were
prepared by the Company in good faith, (b) the Company has a reasonable
basis for the assumptions contained in such projections and (c) such projections
have been prepared in accordance with such assumptions.

10.1.9      Subordinated
Debt Notices.   Promptly following receipt, copies of any notices
(including notices of default
or acceleration) received from any holder or trustee of, under or with respect to
any Subordinated Debt.

10.1.10          Other Information.   Promptly
from time to time, such other information concerning the Loan Parties as any Lender or the Administrative
Agent may reasonably request.

10.2         Books,
Records and Inspections.   Keep, and cause each other Loan Party to
keep, its books and records in accordance
with sound business practices sufficient to allow the preparation of financial
statements in accordance with GAAP; permit, and cause each other Loan Party to
permit, any Lender or the Administrative Agent or any representative thereof to
inspect the properties and operations of the Loan Parties; and permit, and
cause each other Loan Party to permit, at any reasonable time and with
reasonable notice (or at any time without notice if an Event of Default
exists), any Lender or the Administrative Agent or any representative thereof
to visit any or all of its offices, to discuss its financial matters with its
officers and its independent auditors (and the Company hereby authorizes such
independent auditors to discuss such financial matters with any Lender or the
Administrative Agent or any representative thereof), and to examine (and, at
the expense of the Loan Parties, photocopy extracts from) any of its books or
other records; and permit, and cause each other Loan Party to permit, the
Administrative Agent 

 40
 

 

and its representatives
to inspect the Inventory and other tangible assets of the Loan Parties, to
perform appraisals of the equipment of the Loan Parties, and to inspect, audit,
check and make copies of and extracts from the books, records, computer data,
computer programs, journals, orders, receipts, correspondence and other data
relating to Inventory, Accounts and any other collateral. All such inspections
or audits by the Administrative Agent shall be at the Loan Parties’ expense, provided that so long as no Event of
Default or Unmatured Event of Default exists, the Loan Parties shall not be
required to reimburse the Administrative Agent for inspections or audits more
frequently than once each Fiscal Year.

10.3         Maintenance
of Property; Insurance.   (a)   Keep, and cause each other Loan
Party to keep, all property useful
and necessary in the business of the Loan Parties in good working order and
condition, ordinary wear and tear excepted.

(b)           Maintain,
and cause each other Loan Party to maintain, with responsible insurance
companies, such insurance coverage as may be required by any law or
governmental regulation or court decree or order applicable to it and such
other insurance, to such extent and against such hazards and liabilities, as is
customarily maintained by companies similarly situated, but which shall insure
against all risks and liabilities of the type identified on Schedule 9.16
and shall have insured amounts no less than, and deductibles no higher than,
those set forth on such schedule; and, upon request of the Administrative Agent
or any Lender, furnish to the Administrative Agent or such Lender a certificate
setting forth in reasonable detail the nature and extent of all insurance
maintained by the Loan Parties. The Company shall (i) cause each issuer of
an insurance policy to provide the Administrative Agent with an endorsement (i) showing
the Administrative Agent as loss payee with respect to each policy of property
or casualty insurance and [(ii) shall use reasonable efforts to provide the
Administrative Agent with an endorsement] naming the Administrative Agent as an
additional insured with respect to each policy of liability insurance, (ii) providing
that 30 days’ notice will be given to the Administrative Agent prior to any
cancellation of, material reduction or change in coverage provided by or other
material modification to such policy and (iii) reasonably acceptable in
all other respects to the Administrative Agent. The Company shall execute and
deliver to the Administrative Agent a collateral assignment, in form and
substance satisfactory to the Administrative Agent, of each key man insurance
policy maintained by the Company.

(c)           UNLESS
THE COMPANY PROVIDES THE ADMINISTRATIVE AGENT WITH EVIDENCE OF THE INSURANCE
COVERAGE REQUIRED BY THIS AGREEMENT, THE ADMINISTRATIVE AGENT MAY PURCHASE
INSURANCE AT THE COMPANY’S EXPENSE TO PROTECT THE ADMINISTRATIVE AGENT’S AND
THE LENDERS’ INTERESTS IN THE COLLATERAL. THIS INSURANCE MAY, BUT NEED NOT,
PROTECT ANY LOAN PARTY’S INTERESTS. THE COVERAGE THAT THE ADMINISTRATIVE AGENT
PURCHASES MAY NOT PAY ANY CLAIM THAT IS MADE AGAINST ANY LOAN PARTY IN
CONNECTION WITH THE COLLATERAL. THE COMPANY MAY LATER CANCEL ANY INSURANCE
PURCHASED BY THE ADMINISTRATIVE AGENT, BUT ONLY AFTER PROVIDING THE
ADMINISTRATIVE AGENT WITH EVIDENCE THAT THE COMPANY HAS OBTAINED INSURANCE AS
REQUIRED BY THIS AGREEMENT. IF THE 

 41
 

 

ADMINISTRATIVE
AGENT PURCHASES INSURANCE FOR THE COLLATERAL, THE COMPANY WILL BE RESPONSIBLE
FOR THE COSTS OF THAT INSURANCE, INCLUDING INTEREST AND ANY OTHER CHARGES THAT MAY BE
IMPOSED WITH THE PLACEMENT OF THE INSURANCE, UNTIL THE EFFECTIVE DATE OF THE
CANCELLATION OR EXPIRATION OF THE INSURANCE. THE COSTS OF THE INSURANCE MAY BE
ADDED TO THE PRINCIPAL AMOUNT OF THE LOANS OWING HEREUNDER. THE COSTS OF THE
INSURANCE MAY BE MORE THAN THE COST OF THE INSURANCE THE LOAN PARTIES MAY BE
ABLE TO OBTAIN ON THEIR OWN.

10.4         Compliance
with Laws; Payment of Taxes and Liabilities.   (a)   Comply, and
cause each other Loan Party to
comply, in all material respects with all applicable laws, rules, regulations,
decrees, orders, judgments, licenses and permits, except where failure to
comply could not reasonably be expected to have a Material Adverse Effect; (b) without
limiting clause (a) above, ensure, and cause each other Loan Party
to ensure, that no person who owns a controlling interest in or otherwise
controls a Loan Party is or shall be (i) listed on the Specially
Designated Nationals and Blocked Person List maintained by the Office of
Foreign Assets Control (“OFAC”), Department of the Treasury, and/or any
other similar lists maintained by OFAC pursuant to any authorizing statute,
Executive Order or regulation or (ii) a person designated under Section 1(b),
(c) or (d) of Executive Order No. 13224 (September 23,
2001), any related enabling legislation or any other similar Executive Orders, (c) without
limiting clause (a) above, comply, and cause each other Loan Party
to comply, with all applicable Bank Secrecy Act (“BSA”) and anti-money
laundering laws and regulations and (d) pay, and cause each other Loan
Party to pay, prior to delinquency, all taxes and other governmental charges
against it or any collateral, as well as claims of any kind which, if unpaid,
could become a Lien on any of its property; provided that the foregoing
shall not require any Loan Party to pay any such tax or charge so long as it
shall contest the validity thereof in good faith by appropriate proceedings and
shall set aside on its books adequate reserves with respect thereto in
accordance with GAAP and, in the case of a claim which could become a Lien on
any collateral, such contest proceedings shall stay the foreclosure of such
Lien or the sale of any portion of the collateral to satisfy such claim.

10.5         Maintenance
of Existence, etc.   Maintain and preserve, and (subject to Section 11.5)
cause each other Loan
Party to maintain and preserve, (a) its existence and good standing in the
jurisdiction of its organization and (b) its qualification to do business
and good standing in each jurisdiction where the nature of its business makes
such qualification necessary (other than such jurisdictions in which the
failure to be qualified or in good standing could not reasonably be expected to
have a Material Adverse Effect).

10.6         Use
of Proceeds.   Use the proceeds of the Loans, and the Letters of
Credit, solely for working capital purposes,
for Acquisitions permitted by Section 11.5, for Capital
Expenditures and for other general business purposes; and not use or permit any
proceeds of any Loan to be used, either directly or indirectly, for the
purpose, whether immediate, incidental or ultimate, of “purchasing or carrying”
any Margin Stock.

 42

 

10.7         Employee Benefit
Plans.

(a)           Maintain, and cause
each other member of the Controlled Group to maintain, each Pension Plan in
substantial compliance with all applicable requirements of law and regulations.

(b)           Make, and cause each
other member of the Controlled Group to make, on a timely basis, all required
contributions to any Multiemployer Pension Plan.

(c)           Not, and not permit
any other member of the Controlled Group to (i) seek a waiver of the
minimum funding standards of ERISA, (ii) terminate or withdraw from any
Pension Plan or Multiemployer Pension Plan or (iii) take any other action
with respect to any Pension Plan that would reasonably be expected to entitle
the PBGC to terminate, impose liability in respect of, or cause a trustee to be
appointed to administer, any Pension Plan, unless the actions or events
described in clauses (i), (ii) and (iii) individually or in the
aggregate would not have a Material Adverse Effect.

10.8         Environmental
Matters.   If any release or threatened release or other disposal of
Hazardous Substances shall
occur or shall have occurred on any real property or any other assets of any
Loan Party, the Company shall, or shall cause the applicable Loan Party to,
cause the prompt containment and removal of such Hazardous Substances and the
remediation of such real property or other assets as necessary to comply with
all Environmental Laws and to preserve the value of such real property or other
assets. Without limiting the generality of the foregoing, the Company shall,
and shall cause each other Loan Party to, comply with any Federal or state
judicial or administrative order requiring the performance at any real property
of any Loan Party of activities in response to the release or threatened
release of a Hazardous Substance. To the extent that the transportation of
Hazardous Substances is permitted by this Agreement, the Company shall, and
shall cause its Subsidiaries to, dispose of such Hazardous Substances, or of
any other wastes, only at licensed disposal facilities operating in compliance
with Environmental Laws.

10.9         Further Assurances.   Take,
and cause each other Loan Party to take, such actions as are necessary or as
the Administrative Agent or the
Required Lenders may reasonably request from time to time to ensure that the
Obligations of each Loan Party under the Loan Documents are secured by
substantially all of the assets of the Company and each domestic Subsidiary (as
well as all Capital Securities of each domestic Subsidiary and 65% of all
Capital Securities of each direct foreign Subsidiary and including, upon the
acquisition or creation thereof, any Subsidiary acquired or created after the
Closing Date), in each case as the Administrative Agent may determine,
including (a) the execution and delivery of a counterpart agreement
relating to this Agreement, guaranties, security agreements, pledge agreements,
mortgages, deeds of trust, financing statements and other documents, and the
filing or recording of any of the foregoing and (b) the delivery of
certificated securities and other Collateral with respect to which perfection
is obtained by possession.

10.10       Reserved.

10.11       Reserved.

 43
 

 

10.12       Syndication.   (a)   Enter
into such modifications to the Loan Documents as the Administrative Agent may reasonably request as necessary for the
initial syndication of the Loans and the Commitments, (b) allow the
Administrative Agent to conduct a field examination of the Loan Parties, the
results of which shall be satisfactory to the Administrative Agent in its sole
discretion and (c) in the event such initial syndication shall prove to be
impracticable in the Administrative Agent’s reasonable determination, enter
into such modifications (including adjustments to the Base Rate Margin and/or
LIBOR Margin) as the Administrative Agent may reasonably request as necessary
to make the syndication of the Loans and the Commitments reasonably
practicable.

SECTION 11          NEGATIVE COVENANTS

Until
the expiration or termination of the Commitments and thereafter until all
Obligations hereunder and under the other Loan Documents are paid in full and
all Letters of Credit have been terminated, the Company agrees that, unless at
any time the Required Lenders shall otherwise expressly consent in writing, it
will:

11.1         Debt.   Not,
and not permit any other Loan Party to, create, incur, assume or suffer to
exist any Debt, except:

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

(b)           Debt secured by
Liens permitted by Section 11.2(d), and extensions, renewals and
refinancings thereof; provided that the aggregate amount of all such
Debt at any time outstanding shall not exceed $5,000,000;

(c)           Debt of the Company
to any domestic Wholly-Owned Subsidiary or Debt of any domestic Wholly-Owned
Subsidiary to the Company or another domestic Wholly-Owned Subsidiary; provided
that such debt shall be subordinate to the Obligations of the Company
hereunder;

(d)           Subordinated Debt;

(e)           Hedging Obligations
approved by Administrative Agent and incurred in favor of a Lender or an Affiliate
thereof for bona fide hedging purposes and not for speculation;

(f)            Debt described on Schedule
11.1 and any extension, renewal or refinancing thereof so long as the
principal amount thereof is not increased;

(g)           the Debt to be
Repaid (so long as such Debt is repaid on the Closing Date with the proceeds of
the initial Loans hereunder);

(h)           Contingent
Liabilities arising with respect to customary indemnification obligations in
favor of sellers or which need not be recorded as liabilities on a balance 

 44
 

 

sheet in
accordance with GAAP in connection with Acquisitions permitted under Section 11.5
and purchasers in connection with dispositions permitted under Section 11.5;
and

(i)            other unsecured
subordinated Debt, in addition to the Debt listed above, in an aggregate
outstanding amount not at any time exceeding $10,000,000 (or, in the case of
unsecured convertible notes, in an aggregate outstanding amount not at any time
exceeding $100,000,000.

11.2         Liens.   Not,
and not permit any other Loan Party or Option Care Enterprises, Inc., a
Pennsylvania corporation, to, create or permit
to exist any Lien on any of its real or personal properties, assets or rights
of whatsoever nature (whether now owned or hereafter acquired), except:

(a)           Liens for taxes or
other governmental charges not at the time delinquent or thereafter payable
without penalty or being contested in good faith by appropriate proceedings
and, in each case, for which it maintains adequate reserves;

(b)           Liens arising in the
ordinary course of business (such as (i) Liens of carriers, warehousemen,
mechanics and materialmen and other similar Liens imposed by law and (ii) Liens
in the form of deposits or pledges incurred in connection with worker’s compensation,
unemployment compensation and other types of social security (excluding Liens
arising under ERISA) or in connection with surety bonds, bids, performance
bonds and similar obligations) for sums not overdue or being contested in good
faith by appropriate proceedings and not involving any advances or borrowed
money or the deferred purchase price of property or services and, in each case,
for which it maintains adequate reserves;

(c)           Liens described on Schedule
11.2 as of the Closing Date;

(d)           subject to the
limitation set forth in Section 11.1(b), (i) Liens arising in
connection with Capital Leases (and attaching only to the property being
leased), (ii) Liens existing on property at the time of the acquisition
thereof by any Loan Party (and not created in contemplation of such
acquisition) and (iii) Liens that constitute purchase money security
interests on any property securing debt incurred for the purpose of financing
all or any part of the cost of acquiring such property, provided that
any such Lien attaches to such property within 20 days of the acquisition
thereof and attaches solely to the property so acquired;

(e)           attachments, appeal
bonds, judgments and other similar Liens, for sums not exceeding
$5,000,000  arising in connection with
court proceedings, provided the execution or other enforcement of such
Liens is effectively stayed and the claims secured thereby are being actively
contested in good faith and by appropriate proceedings;

(f)            easements, rights
of way, restrictions, minor defects or irregularities in title and other
similar Liens not interfering in any material respect with the ordinary conduct
of the business of any Loan Party;

 45
 

 

(g)           Liens arising under
the Loan Documents;
and

(h)           the
replacement, extension or renewal of any Lien permitted by clause (c) above
upon or in the same property subject thereto arising out of the extension,
renewal or replacement of the Debt secured thereby (without increase in the
amount thereof).

11.3         Operating
Leases.   Not permit the aggregate amount of all rental payments under
Operating Leases made (or scheduled
to be made) by the Loan Parties (on a consolidated basis) to exceed $15,000,000 in any Fiscal Year.

11.4         Restricted Payments.   Not,
and not permit any other Loan Party to, (a) purchase or redeem any of its Capital Securities, (b) with
the exception of annual payments to EJ Financial Enterprises Inc. not to exceed
$200,000, pay any management fees or similar fees to any of its equityholders
or any Affiliate thereof, (c) make any redemption, prepayment, defeasance,
repurchase or any other payment in respect of any Subordinated Debt or (d) set
aside funds for any of the foregoing. Notwithstanding the foregoing, (i) so long as no Event of Default or Unmatured
Event of Default exists or would result therefrom, the Company may redeem
up to a maximum of $15,000,000 of (x) the 2.25% Convertible Senior Notes
issued by the Company in the initial aggregate principal amount of $86,300,000
on November 2, 2004 or (y) the Company’s equity securities; (ii) the Company may make regularly scheduled payments
of interest in respect of Subordinated Debt to the extent permitted under the
subordination provisions thereof; and (iii) the Company may pay cash
dividends on its common Capital Securities on a basis consistent with its past
practices.

11.5         Mergers,
Consolidations, Sales.   Not, and not permit any other Loan Party to, (a) be
a party to any merger or
consolidation, or purchase or otherwise acquire all or substantially all of the
assets or any Capital Securities of any class of, or any partnership or joint
venture interest in, any other Person, (b) sell, transfer, convey or lease
all or any substantial part of its assets or Capital Securities (including the
sale of Capital Securities of any Subsidiary) except for sales of inventory in
the ordinary course of business, or (c) sell or assign with or without
recourse any receivables, except in the case of any of clauses (a) through
(c) above for (i) any such merger, consolidation, sale, transfer,
conveyance, lease or assignment of or by any Wholly-Owned Subsidiary into the
Company or into any other domestic Wholly-Owned Subsidiary; (ii) any such
purchase or other acquisition by the Company or any domestic Wholly-Owned
Subsidiary of the assets or Capital Securities of any Wholly-Owned Subsidiary; (iii) sales and dispositions of assets
(including the Capital Securities of Subsidiaries) for at least fair market
value (as determined by the Board of Directors of the Company) so long as the
net book value of all assets sold or otherwise disposed of in any Fiscal Year
does not exceed 10% of the net book value of the consolidated assets of the
Loan Parties as of the last day of the preceding Fiscal Year; and (iv) any Acquisition by the Company or any
domestic Wholly-Owned Subsidiary where:

(A)   the business or division acquired are for
use, or the Person acquired is engaged, in the businesses engaged in by the
Loan Parties on the Closing Date;

(B)   immediately before and after giving effect
to such Acquisition, no Event of Default or Unmatured Event of Default shall
exist;

 46
 

 

(C)   the aggregate consideration to be paid by
the Loan Parties (including any Debt assumed or issued in connection therewith,
the amount thereof to be calculated in accordance with GAAP but excluding any
contingent liabilities which, as of the date of such Acquisition, need not be
recorded as liabilities on a balance sheet of such Person in accordance with
GAAP and the amount of any consideration paid in Capital Securities of the
Company) in connection with (i) such Acquisition (or any series of related
Acquisitions) is less than $15,000,000 and (ii) all such Acquisitions in
any Fiscal Year is less than $50,000,000;

(D)   immediately after giving effect to such
Acquisition, the Company is in pro forma compliance with all the financial
ratios and restrictions set forth in Section 11.14;

(E)   in the case of the Acquisition of any
Person, the board of directors or similar governing body of such Person has
approved such Acquisition;

(F)   reasonably prior to such Acquisition, the
Administrative Agent shall have received complete executed or conformed copies
of each material document, instrument and agreement to be executed in connection
with such Acquisition together with all lien search reports and lien release
letters and other documents as the Administrative Agent may require to evidence
the termination of Liens on the assets or business to be acquired;

(G)   not less than five Business Days prior to
such Acquisition, the Administrative Agent shall have received an acquisition
summary with respect to the Person and/or business or division to be acquired,
such summary to include a reasonably detailed description thereof (including financial
information) and operating results (including financial statements for the most
recent 12 month period for which they are available and as otherwise
available), the terms and conditions, including economic terms, of the proposed
Acquisition, and the Company’s calculation of pro forma EBITDA relating
thereto;

(H)   the Administrative Agent and Required
Lenders shall have approved the Company’s computation of pro forma EBITDA;

(I)   consents have been obtained in favor of the
Administrative Agent and the Lenders to the collateral assignment of rights and
indemnities under the related acquisition documents and opinions of counsel for
the Loan Parties and (if delivered to the Loan Party) the selling party in
favor of the Administrative Agent and the Lenders have been delivered;

(J)   within five Business Days of the closing of
such Acquisition, the target company (if such Acquisition is structured as a
purchase of equity) or the Loan Party (if such Acquisition is structured as a
purchase of assets or a merger and a Loan Party is the surviving entity)
executes and delivers to Administrative Agent (a) such documents necessary
to grant to Administrative Agent for the benefit of the Lenders a first
priority Lien in all of the assets of such target company or surviving company,
and their respective Subsidiaries, each in form and substance satisfactory to
Administrative Agent and (b) an unlimited Guaranty of the Obligations, or
at the option of Administrative Agent in Administrative Agent’s absolute
discretion, a joinder agreement satisfactory to Administrative Agent in which such
target company or surviving

 47
 

 

company, and their
respective Subsidiaries becomes a borrower under this Agreement and assumes
primary, joint and several liability for the Obligations; and

(K)   if the Acquisition is structured as a
merger, the Company or a Wholly-Owned Subsidiary is the surviving entity.

11.6         Modification
of Organizational Documents.   Not permit the charter, by-laws or other
organizational documents
of any Loan Party to be amended or modified in any way which could reasonably
be expected to materially adversely affect the interests of the Lenders; not
change, or allow any Loan Party to change, its state of formation or its
organizational form.

11.7         Transactions
with Affiliates.   Not, and not permit any other Loan Party to, enter
into, or cause, suffer or permit
to exist any transaction, arrangement or contract with any of its other
Affiliates (other than the Loan Parties) which is on terms which are less
favorable than are obtainable from any Person which is not one of its
Affiliates.

11.8         Unconditional
Purchase Obligations.   Not, and not permit any other Loan Party to,
enter into or be a party to
any contract for the purchase of materials, supplies or other property or
services if such contract requires that payment be made by it regardless of
whether delivery is ever made of such materials, supplies or other property or
services.

11.9         Inconsistent
Agreements.   Not, and not permit any other Loan Party to, enter into
any agreement containing any
provision which would (a) be violated or breached by any borrowing by the
Loan Parties hereunder or by the performance by any Loan Party of any of its
Obligations hereunder or under any other Loan Document, (b) prohibit any
Loan Party from granting to the Administrative Agent and the Lenders, a Lien on
any of its assets or (c) create or permit to exist or become effective any
encumbrance or restriction on the ability of any Subsidiary to (i) pay
dividends or make other distributions to the Company or any other Subsidiary,
or pay any Debt owed to the Company or any other Subsidiary, (ii) make
loans or advances to any Loan Party or (iii) transfer any of its assets or
properties to any Loan Party, other than (A) customary restrictions and
conditions contained in agreements relating to the sale of all or a substantial
part of the assets of any Subsidiary pending such sale, provided that
such restrictions and conditions apply only to the Subsidiary to be sold and
such sale is permitted hereunder (B) restrictions or conditions imposed by
any agreement relating to purchase money Debt, Capital Leases and other secured
Debt permitted by this Agreement if such restrictions or conditions apply only
to the property or assets securing such Debt and (C) customary provisions
in leases and other contracts restricting the assignment thereof.

11.10       Business
Activities; Issuance of Equity.   Not, and not permit any other Loan
Party to, engage in any line of
business other than the businesses engaged in on the date hereof and businesses
reasonably related thereto. Not, and not permit any other Loan Party to, issue
any Capital Securities other than (a) any issuance of shares of the
Company’s common Capital Securities pursuant to any employee or director option
program, benefit plan or compensation program, including the Company’s employee
stock option plan, stock grants or similar programs, (b) any issuance by a
Subsidiary to the Company or another Subsidiary in accordance with 

 48
 

 

Section 11.4
or (c) any issuance of shares of the Company’s Capital Securities in
connection with an Acquisition permitted under Section 11.5.

11.11       Investments.   Not,
and not permit any other Loan Party to, make or permit to exist any Investment
in any other Person, except the
following:

(a)           contributions by the
Company to the capital of any Wholly-Owned Subsidiary, or by any Subsidiary to
the capital of any other domestic Wholly-Owned Subsidiary, so long as the
recipient of any such capital contribution has guaranteed the Obligations and
such guaranty is secured by a pledge of all of its Capital Securities and
substantially all of its real and personal property, in each case in accordance
with Section 10.10;

(b)           Investments
constituting Debt permitted by Section 11.1;

(c)           Contingent
Liabilities constituting Debt permitted by Section 11.1 or Liens
permitted by Section 11.2;

(d)           Cash Equivalent
Investments;

(e)           bank deposits in the
ordinary course of business, provided that the amount of any such
deposits (excluding
amounts in payroll accounts or for accounts payable, in each case to the extent
that checks have been issued to third parties) which are maintained with
any one bank shall not exceed $500,000 in average daily balance for any one
month period, unless such depositary bank shall have entered into an agreement
providing the Administrative Agent with “control” of such accounts as defined
in the UCC;

(f)            Investments in
securities of Account Debtors received pursuant to any plan of reorganization
or similar arrangement upon the bankruptcy or insolvency of such account
debtors;

(g)           Investments to
consummate Acquisitions permitted by Section 11.5; and

(h)           Investments listed
on Schedule 11.11 as of the Closing Date.

provided that (x) any
Investment which when made complies with the requirements of the definition of
the term “Cash Equivalent Investment” may continue to be held
notwithstanding that such Investment if made thereafter would not comply with
such requirements; (y) no Investment otherwise permitted by clause (b),
(c), or (g) shall be permitted to be made if, immediately before or after
giving effect thereto, any Event of Default or Unmatured Event of Default exists.

11.12       Restriction
of Amendments to Certain Documents.   Not amend or otherwise modify, or
waive any rights under
the 2.25% Convertible Senior Notes issued by the Company in the initial
aggregate principal amount of $86,300,000 on November 2, 2004, except any 

 49
 

 

amendment, modification
or waiver which would not have a Material Adverse Effect or would negatively
affect or impair the ability of the Loan Parties to satisfy their obligations
under this Agreement.

11.13       Fiscal
Year.   Not change its Fiscal Year.

11.14       Financial
Covenants.

11.14.1    Tangible
Net Worth.   Not permit the Tangible Net Worth of the Loan Parties,
calculated on a consolidated basis,
to be less than (i) from the date of this Agreement until December 31,
2006, $15,000,000 and (ii) for each Fiscal Year of the Company following
2006,  the sum of (x) the minimum
Tangible Net Worth of the Loan Parties allowed by this Section 11.14.1 for
the preceding Fiscal Year plus (y) an amount equal to 50% of the
Loan Parties’ Consolidated Net Income for the preceding Fiscal Year.

11.14.2    Reserved.

11.14.3    Interest
Coverage Ratio.   Not permit the Interest Coverage Ratio for any
Computation Period to be less 2.00
to 1.00 for such Computation Period.

11.14.4    Senior
Debt to EBITDA Ratio.   Not permit the Senior Debt to EBITDA Ratio as
of the last day of any Computation
Period to exceed 2.50 to 1.00 for such Computation Period.

11.14.5    Total
Debt to EBITDA Ratio.   Not permit the Total Debt to EBITDA Ratio as of
the last day of any Computation
Period to exceed 3.50 to 1.00 for such Computation Period.

11.14.6    Reserved.

11.15       Cancellation
of Debt.   Not, and not permit any other Loan Party to, cancel any
claim or debt owing to it, except
for reasonable consideration or in the ordinary course of business, and except
for the cancellation of debts or claims not to exceed $5,000,000 in any Fiscal
Year.

SECTION 12          EFFECTIVENESS; CONDITIONS OF LENDING,
ETC.

The obligation of each Lender to make its Loans and of
the Issuing Lender to issue Letters of Credit is subject to the following
conditions precedent:

12.1         Initial
Credit Extension.   The obligation of the Lenders to make the initial
Loans and the obligation of the Issuing
Lender to issue its initial Letter of Credit (whichever first occurs) is, in
addition to the conditions precedent specified in Section 12.2,
subject to the conditions precedent that (a) all Debt to be Repaid has
been (or concurrently with the initial borrowing will be) paid in full, and
that all agreements and instruments governing the Debt to be Repaid and that
all Liens securing such Debt to be Repaid have been (or concurrently with the
initial borrowing will be) terminated and (b) the Administrative Agent
shall be satisfied in all of its legal and business due diligence and shall
have received all of the following, each duly 

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executed and dated the
Closing Date (or such earlier date as shall be satisfactory to the
Administrative Agent), in form and substance satisfactory to the Administrative
Agent (and the date on which all such conditions precedent have been satisfied
or waived in writing by the Administrative Agent and the Lenders is called the “Closing
Date”):

12.1.1      Notes.   A
Note for each Lender.

12.1.2      Authorization
Documents.   For each Loan Party, such Person’s (a) charter (or
similar formation document),
certified by the appropriate governmental authority; (b) good standing
certificates in its state of incorporation (or formation) and in each other
state requested by the Administrative Agent; (c) bylaws (or similar
governing document); (d) resolutions of its board of directors (or similar
governing body) approving and authorizing such Person’s execution, delivery and
performance of the Loan Documents to which it is party and the transactions
contemplated thereby; and (e) signature and incumbency certificates of its
officers executing any of the Loan Documents (it being understood that the
Administrative Agent and each Lender may conclusively rely on each such
certificate until formally advised by a like certificate of any changes
therein), all certified by its secretary or an assistant secretary (or similar
officer) as being in full force and effect without modification.

12.1.3      Consents,
etc.   Certified copies of all documents evidencing any necessary
corporate or partnership action, consents
and governmental approvals (if any) required for the execution, delivery and
performance by the Loan Parties of the documents referred to in this Section 12.

12.1.4      Letter
of Direction.   A letter of direction containing funds flow information
with respect to the proceeds of the
Loans on the Closing Date.

12.1.5      Guaranty
and Collateral Agreement.   A counterpart of the Guaranty and
Collateral Agreement executed by
each Loan Party, together with all instruments, transfer powers and other items
required to be delivered in connection therewith.

12.1.6      Perfection
Certificate.   A Perfection Certificate completed and executed by each
Loan Party.

12.1.7      Leased
Property.   Additionally, (a) in the case of the leased real
property listed on Schedule 12.1.7(a) attached
hereto, a Collateral Access Agreement from the landlord of such property
waiving or subordinating any landlord’s Lien in respect of personal property
kept at the premises subject to such lease, (b) in the case of the leased
real property listed on Schedule 12.1.7(b) attached hereto, within 90 days
following the Closing Date Collateral Access Agreements from the landlords of
such property representing at least 60% of the total value as shown on Schedule
12.1.7(b), waiving or subordinating any landlord’s Lien in respect of personal
property kept at the premises subject to such lease, and (c) in the case
of any mortgaged real property, a waiver from the mortgagee thereof waiving any
Lien in respect of personal property kept at the premises subject to such
Mortgage, permitting access to the location by the Administrative Agent and its
agents and containing such other terms and provisions as may be required by the
Administrative Agent. Notwithstanding the foregoing, if at any time any entity 

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other than LaSalle
becomes a Lender hereunder, the Loan Parties shall, within 90 days of receiving
notice of such additional Lender, cause each of the landlords on Schedule
12.1.7(b) who have not previously executed a Collateral Access Agreement
(as described above) to do so and to deliver such agreement to the
Administrative Agent. Promptly upon entering into any lease for real property
not described in either Schedule 12.1.7(a) or (b) or allowing the
termination of any lease referred to in Schedule 12.1.7.(b), the Loan Parties
shall revise Schedule 12.1.7(b) to add or delete such leased property, as
appropriate, and deliver a revised Schedule 12.1.7(b) to the
Administrative Agent, which revised Schedule 12.1.7(b) shall be deemed to
be Schedule 12.1.7(b) as referred to in this Agreement. If (i) such
revision to Schedule 12.1.7(b) causes the percentage of the total value
shown on Schedule 12.1.7(b) with respect to which a Collateral Access
Agreement has been executed by the relevant landlords to be less than 60%, the
Loan Parties shall cause such of the remaining landlords to execute a
Collateral Access Agreement as are necessary so that the percentage of the
total value shown on Schedule 12.1.7(b) with respect to which a Collateral
Access Agreement has been executed is greater than 60% and (ii) in
addition to the foregoing, after the date of this Agreement if the Loan Parties
enter into any lease for real property where greater than $1,000,000 in total
value of the Loan Parties’ personal property is kept or if the value of the
Loan Parties’ personal property kept at any currently leased real property
exceeds $1,000,000, the Loan Parties shall cause the landlord for such real
property to execute a Collateral Access Agreement. The provisions of this Section 12.1.7
may be waived or modified in the Administrative Agent’s sole discretion. For
purposes of this Section 12.1.7, “value” of the Loan Parties’ property
shall mean the value assigned by the relevant Loan Party to such items for
purposes of reporting to such Loan Party’s insurers the value with respect to
the applicable location.

12.1.8      Subordination
Agreements.   Subordination Agreements with respect to all Subordinated
Debt.

12.1.9      Opinions
of Counsel.   Opinions of counsel for each Loan Party, including local
counsel reasonably requested by
the Administrative Agent.

12.1.10    Insurance.   Evidence
of the existence of insurance required to be maintained pursuant to Section 10.3(b),
together with evidence that the
Administrative Agent has been named as a lender’s loss payee and an additional
insured on all related insurance policies and a collateral assignment, in form
and substance satisfactory to the Administrative Agent, of each key man
insurance policy maintained by the Company.

12.1.11    Copies
of Documents.   Copies of the audited consolidated financial statements
for the Loan Parties for the Fiscal
Years ending 2002, 2003, 2004 and 2005.

12.1.12    Payment
of Fees.   Evidence of payment by the Loan Parties of all accrued and
unpaid fees, costs and expenses to
the extent then due and payable on the Closing Date, together with all Attorney
Costs of the Administrative Agent to the extent invoiced prior to the Closing
Date, plus such additional amounts of Attorney Costs as shall constitute
the Administrative Agent’s reasonable estimate of Attorney Costs incurred or to
be incurred by the Administrative 

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Agent through the closing
proceedings (provided that such estimate shall not thereafter preclude
final settling of accounts between the Loan Parties and the Administrative
Agent).

12.1.13    Solvency Certificate.   A
Solvency Certificate executed by a Senior Officer of the Company certifying, among other things, that the
Company’s EBITDA for the twelve calendar months ended February 28, 2006 is
equal to or greater than $40,000,000.

12.1.14    Pro Forma.   A consolidated pro forma
balance sheet of the Company as at the Closing Date (based on the February 28, 2006 month’s end),
adjusted to give effect to the consummation of the financings contemplated
hereby as if such financings had occurred on such date, consistent in all
material respects with the sources and uses of cash as previously described to
the Lenders and the forecasts previously provided to the Lenders.

12.1.15    Environmental
Reports.   Environmental site assessment reports requested by the
Administrative Agent.

12.1.16    Search
Results; Lien Terminations.   Certified copies of Uniform Commercial
Code search reports dated a date
reasonably near to the Closing Date, listing all effective financing statements
which name any Loan Party (under their present names and any previous names) as
debtors, together with (a) copies of such financing statements, (b) payoff
letters evidencing repayment in full of all Debt to be Repaid, the termination
of all agreements relating thereto and the release of all Liens granted in
connection therewith, with Uniform Commercial Code or other appropriate
termination statements and documents effective to evidence the foregoing (other
than Liens permitted by Section 11.2) and (c) such other
Uniform Commercial Code termination statements as the Administrative Agent may
reasonably request.

12.1.17    Filings,
Registrations and Recordings.   The Administrative Agent shall have
received each document (including
Uniform Commercial Code financing statements) required by the Collateral
Documents or under law or reasonably requested by the Administrative Agent to
be filed, registered or recorded in order to create in favor of the
Administrative Agent, for the benefit of the Lenders, a perfected Lien on the
collateral described therein, prior to any other Liens (subject only to Liens
permitted pursuant to Section 11.2), in proper form for filing,
registration or recording.

12.1.18    Collection
and Disbursements.   The Loan Parties shall have cash collection and
disbursement systems satisfactory
to the Administrative Agent in its sole discretion.

12.1.19    Closing
Certificate, Consents and Permits.   A certificate executed by an
officer of the Company on behalf of the Company certifying
the matters set forth in Section 12.2.1 as of the Closing Date.

12.1.20    Other.   Such
other documents as the Administrative Agent or any Lender may reasonably
request.

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12.2         Conditions.   The
obligation (a) of each Lender to make each Loan and (b) of the
Issuing Lender to issue each Letter of
Credit is subject to the following further conditions precedent that:

12.2.1      Compliance
with Warranties, No Default, etc.   Both before and after giving effect
to any borrowing and the
issuance of any Letter of Credit, the following statements shall be true and
correct:

(a)           the representations
and warranties of each Loan Party set forth in this Agreement and the other
Loan Documents shall be true and correct in all respects with the same effect
as if then made (except to the extent stated to relate to a specific earlier
date, in which case such representations and warranties shall be true and
correct as of such earlier date); and

(b)           no Event of Default
or Unmatured Event of Default shall have then occurred and be continuing.

12.2.2      Confirmatory
Certificate.   If requested by the Administrative Agent or any Lender,
the Administrative Agent
shall have received (in sufficient counterparts to provide one to each
Lender) a certificate dated the date of such requested Loan or Letter of Credit
and signed by a duly authorized representative of the Company as to the matters
set out in Section 12.2.1 (it being understood that each request by
the Company for the making of a Loan or the issuance of a Letter of Credit
shall be deemed to constitute a representation and warranty by the Loan Parties
that the conditions precedent set forth in Section 12.2.1 will be
satisfied at the time of the making of such Loan or the issuance of such Letter
of Credit), together with such other documents as the Administrative Agent or
any Lender may reasonably request in support thereof.

SECTION 13          EVENTS OF DEFAULT AND THEIR EFFECT.

13.1         Events
of Default.   Each of the following shall constitute an Event of
Default under this Agreement:

13.1.1      Non-Payment
of the Loans, etc.   Default in the payment when due of the principal
of any Loan; or default, and
continuance thereof for five days, in the payment when due of any interest, fee,
reimbursement obligation with respect to any Letter of Credit or other amount
payable by the Loan Parties hereunder or under any other Loan Document.

13.1.2      Non-Payment
of Other Debt.   Any default shall occur under the terms applicable to
any Debt of any Loan Party
in an aggregate amount (for all such Debt so affected and including undrawn
committed or available amounts and amounts owing to all creditors under any
combined or syndicated credit arrangement) exceeding $5,000,000 and such
default shall (a) consist of the failure to pay such Debt when due,
whether by acceleration or otherwise, or (b) accelerate the maturity of
such Debt or permit the holder or holders thereof, or any trustee or agent for
such holder or holders, to cause such Debt to become due and payable (or
require any Loan Party to purchase or redeem such Debt or post cash collateral
in respect thereof) prior to its expressed maturity.

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13.1.3      Other
Material Obligations.   Default in the payment when due, or in the
performance or observance of, any
material obligation of, or condition agreed to by, any Loan Party with respect
to any material purchase or lease of goods or services where such default,
singly or in the aggregate with all other such defaults, might reasonably be
expected to have a Material Adverse Effect.

13.1.4      Bankruptcy,
Insolvency, etc.   Any Loan Party becomes insolvent or generally fails
to pay, or admits in writing
its inability or refusal to pay, debts as they become due; or any Loan Party
applies for, consents to, or acquiesces in the appointment of a trustee,
receiver or other custodian for such Loan Party or any property thereof, or
makes a general assignment for the benefit of creditors; or, in the absence of
such application, consent or acquiescence, a trustee, receiver or other
custodian is appointed for any Loan Party or for a substantial part of the
property of any thereof and is not discharged within 60 days; or any
bankruptcy, reorganization, debt arrangement, or other case or proceeding under
any bankruptcy or insolvency law, or any dissolution or liquidation proceeding,
is commenced in respect of any Loan Party, and if such case or proceeding is
not commenced by such Loan Party, it is consented to or acquiesced in by such
Loan Party, or remains for 60 days undismissed; or any Loan Party takes any
action to authorize, or in furtherance of, any of the foregoing.

13.1.5      Non-Compliance
with Loan Documents.   (a)   Failure by any Loan Party to comply
with or to perform any
covenant set forth in Sections 10.1.5, 10.3(b) or 10.5 or Section 11
and, in the case of any such failure capable of cure, the continuance of such
failure described in this clause (a) for 10 days; or (b) failure by
any Loan Party to comply with or to perform any other provision of this
Agreement or any other Loan Document (and not constituting an Event of Default
under any other provision of this Section 13) and continuance of
such failure described in this clause (b) for 30 days.

13.1.6      Representations;
Warranties.   Any representation or warranty made by any Loan Party
herein or any other Loan
Document is breached or is false or misleading in any material respect, or any
schedule, certificate, financial statement, report, notice or other writing
furnished by any Loan Party to the Administrative Agent or any Lender in
connection herewith is false or misleading in any material respect on the date
as of which the facts therein set forth are stated or certified.

13.1.7      Pension
Plans.   (a)   Any Person institutes steps to terminate a Pension
Plan if as a result of such termination
the Company or any member of the Controlled Group could be required to make a
contribution to such Pension Plan, or could incur a liability or obligation to
such Pension Plan, in excess of $5,000,000; (b) a contribution failure
occurs with respect to any Pension Plan sufficient to give rise to a Lien under
Section 302(f) of ERISA; (c) the Unfunded Liability exceeds
twenty percent of the Total Plan Liability, or (d) there shall occur any
withdrawal or partial withdrawal from a Multiemployer Pension Plan and the
withdrawal liability (without unaccrued interest) to Multiemployer Pension
Plans as a result of such withdrawal (including any outstanding withdrawal
liability that the Company or any member of the Controlled Group have incurred
on the date of such withdrawal) exceeds $5,000,000.

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13.1.8      Judgments.   Final
judgments which exceed an aggregate of $10,000,000 shall be rendered against
any Loan Party and shall not have
been paid, discharged or vacated or had execution thereof stayed pending appeal
within 30 days after entry or filing of such judgments.

13.1.9      Invalidity
of Collateral Documents, etc.   Any Collateral Document shall cease to
be in full force and effect;
or any Loan Party (or any Person by, through or on behalf of any Loan Party)
shall contest in any manner the validity, binding nature or enforceability of
any Collateral Document.

13.1.10    Invalidity of Subordination
Provisions, etc.   Any subordination provision in any document or
instrument governing
Subordinated Debt, or any subordination provision in any guaranty by any
Subsidiary of any Subordinated Debt, shall cease to be in full force and
effect, or any Loan Party or any other Person (including the holder of any
applicable Subordinated Debt) shall contest in any manner the validity, binding
nature or enforceability of any such provision.

13.1.11    Change of Control.   A
Change of Control shall occur.

13.1.12    Material
Adverse Effect.   The occurrence of any event having a Material Adverse
Effect.

13.2         Effect
of Event of Default.   If any Event of Default described in Section 13.1.4
shall occur in respect of the
Loan Parties, the Commitments shall immediately terminate and the Loans and all
other Obligations hereunder shall become immediately due and payable and the
Loan Parties shall become immediately obligated to Cash Collateralize all
Letters of Credit, all without presentment, demand, protest or notice of any
kind; and, if any other Event of Default shall occur and be continuing, the
Administrative Agent may (and, upon the written request of the Required Lenders
shall) declare the Commitments to be terminated in whole or in part and/or
declare all or any part of the Loans and all other Obligations hereunder to be
due and payable and/or demand that the Loan Parties immediately Cash
Collateralize all or any Letters of Credit, whereupon the Commitments shall
immediately terminate (or be reduced, as applicable) and/or the Loans and other
Obligations hereunder shall become immediately due and payable (in whole or in
part, as applicable) and/or the Loan Parties shall immediately become obligated
to Cash Collateralize the Letters of Credit (all or any, as applicable), all
without presentment, demand, protest or notice of any kind. The Administrative
Agent shall promptly advise the Company of any such declaration, but failure to
do so shall not impair the effect of such declaration. Any cash collateral
delivered hereunder shall be held by the Administrative Agent (without
liability for interest thereon) and applied to the Obligations arising in
connection with any drawing under a Letter of Credit. After the expiration or
termination of all Letters of Credit, such cash collateral shall be applied by
the Administrative Agent to any remaining Obligations hereunder and any excess
shall be delivered to the Company or as a court of competent jurisdiction may
elect.

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SECTION 14          THE AGENT.

14.1         Appointment
and Authorization.   Each Lender hereby irrevocably (subject to Section 14.10)
appoints, designates and
authorizes the Administrative Agent to take such action on its behalf under the
provisions of this Agreement and each other Loan Document and to exercise such
powers and perform such duties as are expressly delegated to it by the terms of
this Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere in this Agreement or in any other Loan Document, the
Administrative Agent shall not have any duty or responsibility except those
expressly set forth herein, nor shall the Administrative Agent have or be
deemed to have any fiduciary relationship with any Lender or participant, and
no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Administrative Agent. Without limiting the
generality of the foregoing sentence, the use of the term “agent” herein and in
other Loan Documents with reference to the Administrative Agent is not intended
to connote any fiduciary or other implied (or express) obligations arising
under agency doctrine of any applicable law. Instead, such term is used merely
as a matter of market custom, and is intended to create or reflect only an
administrative relationship between independent contracting parties.

14.2         Issuing
Lender.   The Issuing Lender shall act on behalf of the Lenders (according
to their Pro Rata Shares) with respect
to any Letters of Credit issued by it and the documents associated therewith. The
Issuing Lender shall have all of the benefits and immunities (a) provided
to the Administrative Agent in this Section 14 with respect to any
acts taken or omissions suffered by the Issuing Lender in connection with
Letters of Credit issued by it or proposed to be issued by it and the
applications and agreements for letters of credit pertaining to such Letters of
Credit as fully as if the term “Administrative Agent”, as used in this Section 14,
included the Issuing Lender with respect to such acts or omissions and (b) as
additionally provided in this Agreement with respect to the Issuing Lender.

14.3         Delegation
of Duties.   The Administrative Agent may execute any of its duties
under this Agreement or any other
Loan Document by or through agents, employees or attorneys-in-fact
and shall be entitled to advice of counsel and other consultants or experts
concerning all matters pertaining to such duties. The Administrative Agent
shall not be responsible for the negligence or misconduct of any agent or
attorney-in-fact that it selects in the absence of gross negligence
or willful misconduct.

14.4         Exculpation
of Administrative Agent.   None of the Administrative Agent nor any of
its directors, officers, employees
or agents shall (a) be liable for any action taken or omitted to be taken
by any of them under or in connection with this Agreement or any other Loan
Document or the transactions contemplated hereby (except to the extent
resulting from its own gross negligence or willful misconduct in connection
with its duties expressly set forth herein as determined by a final,
nonappealable judgment by a court of competent jurisdiction), or (b) be
responsible in any manner to any Lender or participant for any recital,
statement, representation or warranty made by any Loan Party or Affiliate of
the Company, or any officer thereof, contained in this Agreement or in any
other Loan Document, or in any certificate, report, 

 57
 

 

statement or other
document referred to or provided for in, or received by the Administrative
Agent under or in connection with, this Agreement or any other Loan Document,
or the validity, effectiveness, genuineness, enforceability or sufficiency of
this Agreement or any other Loan Document (or the creation, perfection or
priority of any Lien or security interest therein), or for any failure of the
Company or any other party to any Loan Document to perform its Obligations
hereunder or thereunder. The Administrative Agent shall not be under any
obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books or
records of the Company or any of the Company’s Subsidiaries or Affiliates.

14.5         Reliance
by Administrative Agent.   The Administrative Agent shall be entitled
to rely, and shall be fully protected
in relying, upon any writing, communication, signature, resolution,
representation, notice, consent, certificate, electronic mail message,
affidavit, letter, telegram, facsimile, telex or telephone message, statement
or other document or conversation believed by it to be genuine and correct and
to have been signed, sent or made by the proper Person or Persons, and upon
advice and statements of legal counsel (including counsel to the Company),
independent accountants and other experts selected by the Administrative Agent.
The Administrative Agent shall be fully justified in failing or refusing to
take any action under this Agreement or any other Loan Document unless it shall
first receive such advice or concurrence of the Required Lenders as it deems
appropriate and, if it so requests, confirmation from the Lenders of their
obligation to indemnify the Administrative Agent against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action. The Administrative Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement or any
other Loan Document in accordance with a request or consent of the Required
Lenders and such request and any action taken or failure to act pursuant
thereto shall be binding upon each Lender. For purposes of determining
compliance with the conditions specified in Section 12, 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 written notice from
such Lender prior to the proposed Closing Date specifying its objection
thereto.

14.6         Notice
of Default.   The Administrative Agent shall not be deemed to have
knowledge or notice of the occurrence
of any Event of Default or Unmatured Event of Default except with respect to
defaults in the payment of principal, interest and fees required to be paid to
the Administrative Agent for the account of the Lenders, unless the
Administrative Agent shall have received written notice from a Lender or the
Company referring to this Agreement, describing such Event of Default or
Unmatured Event of Default and stating that such notice is a “notice of default”.
The Administrative Agent will notify the Lenders of its receipt of any such
notice. The Administrative Agent shall take such action with respect to such
Event of Default or Unmatured Event of Default as may be requested by the
Required Lenders in accordance with Section 13; provided
that unless and until the Administrative Agent has received any such request,
the Administrative Agent may (but shall not be obligated to) take such action,
or refrain from taking such action, with respect to such Event of Default or
Unmatured Event of Default as it shall deem advisable or in the best interest
of the Lenders.

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14.7         Credit
Decision.   Each Lender acknowledges that the Administrative Agent has
not made any representation or
warranty to it, and that no act by the Administrative Agent hereafter taken,
including any consent and acceptance of any assignment or review of the affairs
of the Loan Parties, shall be deemed to constitute any representation or
warranty by the Administrative Agent to any Lender as to any matter, including
whether the Administrative Agent has disclosed material information in its
possession. Each Lender represents to the Administrative Agent that it has,
independently and without reliance upon the Administrative Agent and based on
such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, prospects, operations,
property, financial and other condition and creditworthiness of the Loan
Parties, and made its own decision to enter into this Agreement and to extend
credit to the Loan Parties hereunder. Each Lender also represents that it will,
independently and without reliance upon the Administrative Agent and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement and the other Loan Documents, and to
make such investigations as it deems necessary to inform itself as to the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Loan Parties. Except for notices, reports and other
documents expressly herein required to be furnished to the Lenders by the
Administrative Agent, the Administrative Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, prospects, operations, property, financial or other
condition or creditworthiness of the Loan Parties which may come into the
possession of the Administrative Agent.

14.8         Indemnification.   Whether
or not the transactions contemplated hereby are consummated, each Lender shall indemnify upon demand the
Administrative Agent and its directors, officers, employees and agents (to the
extent not reimbursed by or on behalf of the Loan Parties and without limiting
the obligation of the Loan Parties to do so), according to its applicable Pro
Rata Share, from and against any and all Indemnified Liabilities (as
hereinafter defined); provided that no Lender shall be liable for any
payment to any such Person of any portion of the Indemnified Liabilities to the
extent determined by a final, nonappealable judgment by a court of competent
jurisdiction to have resulted from the applicable Person’s own gross negligence
or willful misconduct. No action taken in accordance with the directions of the
Required Lenders shall be deemed to constitute gross negligence or willful
misconduct for purposes of this Section. Without limitation of the foregoing,
each Lender shall reimburse the Administrative Agent upon demand for its
ratable share of any costs or out-of-pocket expenses (including
Attorney Costs and Taxes) incurred by the Administrative Agent in connection
with the preparation, execution, delivery, administration, modification,
amendment or enforcement (whether through negotiations, legal proceedings or
otherwise) of, or legal advice in respect of rights or responsibilities under,
this Agreement, any other Loan Document, or any document contemplated by or
referred to herein, to the extent that the Administrative Agent is not
reimbursed for such expenses by or on behalf of the Loan Parties. The
undertaking in this Section shall survive repayment of the Loans,
cancellation of the Notes, expiration or termination of the Letters of Credit,
any foreclosure under, or modification, release or discharge of, any or all of
the Collateral Documents, termination of this Agreement and the resignation or
replacement of the Administrative Agent.

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14.9         Administrative
Agent in Individual Capacity.   LaSalle and its Affiliates may make
loans to, issue letters of credit
for the account of, accept deposits from, acquire equity interests in and
generally engage in any kind of banking, trust, financial advisory,
underwriting or other business with the Loan Parties and Affiliates as though
LaSalle were not the Administrative Agent hereunder and without notice to or
consent of any Lender. Each Lender acknowledges that, pursuant to such
activities, LaSalle or its Affiliates may receive information regarding the
Company or its Affiliates (including information that may be subject to
confidentiality obligations in favor of the Company or such Affiliate) and
acknowledge that the Administrative Agent shall be under no obligation to
provide such information to them. With respect to their Loans (if any),  LaSalle and its Affiliates shall have the
same rights and powers under this Agreement as any other Lender and may
exercise the same as though LaSalle were not the Administrative Agent, and the
terms “Lender” and “Lenders” include LaSalle and its Affiliates, to the extent
applicable, in their individual capacities.

14.10       Successor
Administrative Agent.   The Administrative Agent may resign as
Administrative Agent upon 30 days’
notice to the Lenders. If the Administrative Agent resigns under this
Agreement, the Required Lenders shall, with (so long as no Event of Default
exists) the consent of the Company (which shall not be unreasonably withheld or
delayed), appoint from among the Lenders a successor agent for the Lenders. If
no successor agent is appointed prior to the effective date of the resignation
of the Administrative Agent, the Administrative Agent may appoint, after
consulting with the Lenders and the Company, a successor agent from among the
Lenders. Upon the acceptance of its appointment as successor agent hereunder,
such successor agent shall succeed to all the rights, powers and duties of the
retiring Administrative Agent and the term “Administrative Agent” shall mean
such successor agent, and the retiring Administrative Agent’s appointment,
powers and duties as Administrative Agent shall be terminated. After any
retiring Administrative Agent’s resignation hereunder as Administrative Agent,
the provisions of this Section 14 and Sections 15.5 and 15.16
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. If no successor agent
has accepted appointment as Administrative Agent by the date which is 30 days
following a retiring Administrative Agent’s notice of resignation, the retiring
Administrative Agent’s resignation shall nevertheless thereupon become
effective and the Lenders shall perform all of the duties of the Administrative
Agent hereunder until such time, if any, as the Required Lenders appoint a
successor agent as provided for above.

14.11       Collateral
Matters.   The Lenders irrevocably authorize the Administrative Agent,
at its option and in its discretion,
(a) to release any Lien granted to or held by the Administrative Agent
under any Collateral Document (i) upon termination of the Commitments and
payment in full of all Loans and all other obligations of the Loan Parties
hereunder and the expiration or termination of all Letters of Credit; (ii) constituting
property sold or to be sold or disposed of as part of or in connection with any
disposition permitted hereunder; or (iii) subject to Section 15.1,
if approved, authorized or ratified in writing by the Required Lenders; or (b) to
subordinate its interest in any Collateral to any holder of a Lien on such
Collateral which is permitted by Section 11.2(d)(i) or (d)(iii) 
(it being understood that the Administrative Agent may conclusively rely on a
certificate from the Company in determining whether the Debt secured by any
such Lien is permitted by Section 11.1(b)). Upon request by the
Administrative Agent at any time, the 

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Lenders will confirm in
writing the Administrative Agent’s authority to release, or subordinate its
interest in, particular types or items of Collateral pursuant to this Section 14.11.
Each Lender hereby authorizes the Administrative Agent to give blockage notices
in connection with any Subordinated Debt at the direction of Required Lenders
and agrees that it will not act unilaterally to deliver such notices.

14.12       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 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 Loan Parties) 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, 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 Administrative Agent (including
any claim for the reasonable compensation, expenses, disbursements and advances
of the Lenders and the Administrative Agent and their respective agents and
counsel and all other amounts due the Lenders and the Administrative Agent
under Sections 5, 15.5 and 15.17) allowed in such judicial
proceedings; 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
Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under Sections 5, 15.5 and 15.17.

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.

14.13       Other Agents; Arrangers
and Managers.   None of the Lenders or other Persons identified on the
facing page or
signature pages of this Agreement as a “syndication agent,” “documentation
agent,” “co-agent,” “book manager,” “lead manager,” “arranger,” “lead arranger”
or “co-arranger”, if any, shall have any right, power, obligation, liability,
responsibility or duty under this Agreement other than, in the case of such
Lenders, those applicable to all Lenders as such. Without limiting the
foregoing, none of the Lenders or other Persons so identified shall have or be
deemed to have any fiduciary relationship with any Lender. Each 

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Lender acknowledges that
it has not relied, and will not rely, on any of the Lenders or other Persons so
identified in deciding to enter into this Agreement or in taking or not taking
action hereunder.

SECTION 15          GENERAL.

15.1         Waiver;
Amendments.   No delay on the part of the Administrative Agent or any
Lender in the exercise of any
right, power or remedy shall operate as a waiver thereof, nor shall any single
or partial exercise by any of them of any right, power or remedy preclude other
or further exercise thereof, or the exercise of any other right, power or
remedy. No amendment, modification or waiver of, or consent with respect to,
any provision of this Agreement or the other Loan Documents shall in any event
be effective unless the same shall be in writing and acknowledged by Lenders
having an aggregate Pro Rata Shares of not less than the aggregate Pro Rata
Shares expressly designated herein with respect thereto or, in the absence of
such designation as to any provision of this Agreement, by the Required
Lenders, and then any such amendment, modification, waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given. No amendment, modification, waiver or consent shall (a) extend or
increase the Commitment of any Lender without the written consent of such
Lender, (b) extend the date scheduled for payment of any principal
(excluding mandatory prepayments) of or interest on the Loans or any fees
payable hereunder without the written consent of each Lender directly affected
thereby, (c) reduce the principal amount of any Loan, the rate of interest
thereon or any fees payable hereunder, without the consent of each Lender
directly affected thereby (except for periodic adjustments of interest rates
and fees resulting from a change in the Applicable Margin as provided for in
this Agreement); or (d) release any party from its obligations under the
Guaranty or all or any substantial part of the Collateral granted under the
Collateral Documents, change the definition of Required Lenders, any provision
of this Section 15.1 or reduce the aggregate Pro Rata Share
required to effect an amendment, modification, waiver or consent, without, in
each case, the written consent of all Lenders. No provision of Section 14
or other provision of this Agreement affecting the Administrative Agent in its
capacity as such shall be amended, modified or waived without the consent of
the Administrative Agent. No provision of this Agreement relating to the rights
or duties of the Issuing Lender in its capacity as such shall be amended,
modified or waived without the consent of the Issuing Lender. No provision of
this Agreement relating to the rights or duties of the Swing Line Lender in its
capacity as such shall be amended, modified or waived without the consent of
the Swing Line Lender.

15.2         Confirmations.   The
Loan Parties and each holder of a Note agree from time to time, upon written
request received by it from the other,
to confirm to the other in writing (with a copy of each such confirmation to
the Administrative Agent) the aggregate unpaid principal amount of the Loans
then outstanding under such Note.

15.3         Notices.   Except
as otherwise provided in Sections 2.2.2 and 2.2.3, all
notices hereunder shall be in writing
(including facsimile transmission) and shall be sent to the applicable party at
its address shown on Annex B or at such other address as such party may,
by written notice received by the other parties, have designated as its address
for such purpose. 

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Notices sent by facsimile
transmission shall be deemed to have been given when sent; notices sent by mail
shall be deemed to have been given three Business Days after the date when sent
by registered or certified mail, postage prepaid; and notices sent by hand
delivery or overnight courier service shall be deemed to have been given when
received. For purposes of Sections 2.2.2 and 2.2.3, the
Administrative Agent shall be entitled to rely on telephonic instructions from
any person that the Administrative Agent in good faith believes is an
authorized officer or employee of the Company, and the Loan Parties shall hold
the Administrative Agent and each other Lender harmless from any loss, cost or
expense resulting from any such reliance.

15.4         Computations.   Where
the character or amount of any asset or liability or item of income or
expense is required to be determined,
or any consolidation or other accounting computation is required to be made,
for the purpose of this Agreement, such determination or calculation shall, to
the extent applicable and except as otherwise specified in this Agreement, be
made in accordance with GAAP, consistently applied; provided that if the
Company notifies the Administrative Agent that the Company wishes to amend any
covenant in Sections 10 or 11.14 (or any related definition) to eliminate or to
take into account the effect of any change in GAAP on the operation of such
covenant (or if the Administrative Agent notifies the Company that the Required
Lenders wish to amend Sections 10 or 11.14 (or any related definition) for such
purpose), then the Company’s compliance with such covenant shall be determined
on the basis of GAAP in effect immediately before the relevant change in GAAP
became effective, until either such notice is withdrawn or such covenant (or
related definition) is amended in a manner satisfactory to the Company and the
Required Lenders.

15.5         Costs,
Expenses and Taxes.   The Loan Parties agree to pay on demand all
reasonable out-of-pocket costs and
expenses of the Administrative Agent (including Attorney Costs, which shall be
limited to $40,000, and any Taxes) in connection with the preparation,
execution, syndication, delivery and administration (including perfection and
protection of any Collateral and the costs of Intralinks (or other similar
service), if applicable) of this Agreement, the other Loan Documents and all
other documents provided for herein or delivered or to be delivered hereunder
or in connection herewith (including any amendment, supplement or waiver to any
Loan Document), whether or not the transactions contemplated hereby or thereby
shall be consummated, and all reasonable out-of-pocket costs and expenses
(including Attorney Costs and any Taxes) incurred by the Administrative Agent
and each Lender after an Event of Default in connection with the collection of
the Obligations or the enforcement of this Agreement the other Loan Documents
or any such other documents or during any workout, restructuring or
negotiations in respect thereof. In addition, the Loan Parties agree to pay,
and to save the Administrative Agent and the Lenders harmless from all
liability for, any fees of the Company’s auditors in connection with any
reasonable exercise by the Administrative Agent and the Lenders of their rights
pursuant to Section 10.2. All Obligations provided for in this Section 15.5
shall survive repayment of the Loans, cancellation of the Notes, expiration or
termination of the Letters of Credit and termination of this Agreement.

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15.6         Assignments;
Participations.

15.6.1      Assignments.   (a)   Any
Lender may at any time assign to one or more Persons (any such Person, an “Assignee”) all or any portion of
such Lender’s Loans and Commitments, with the prior written consent of the
Administrative Agent, the Issuing Lender (for an assignment of the Revolving
Loans and the Revolving Commitment) and, so long as no Event of Default exists,
the Company (which consents shall not be unreasonably withheld or delayed and
shall not be required for an assignment by a Lender to a Lender or an Affiliate
of a Lender). Except as the Administrative Agent may otherwise agree, any such
assignment shall be in a minimum aggregate amount equal to $5,000,000 or, if
less, the remaining Commitment and Loans held by the assigning Lender. The
Company and the Administrative Agent shall be entitled to continue to deal
solely and directly with such Lender in connection with the interests so
assigned to an Assignee until the Administrative Agent shall have received and
accepted an effective assignment agreement in substantially the form of Exhibit D
hereto (an “Assignment Agreement”) executed, delivered and fully
completed by the applicable parties thereto and a processing fee of $3,500. No
assignment may be made to any Person if at the time of such assignment the Loan
Parties would be obligated to pay any greater amount under Sections 7.6
or 8 to the Assignee than the Loan Parties are then obligated to pay to
the assigning Lender under such Sections (and if any assignment is made in
violation of the foregoing, the Loan Parties will not be required to pay such
greater amounts). Any attempted assignment not made in accordance with this Section 15.6.1
shall be treated as the sale of a participation under Section 15.6.2.
The Company shall be deemed to have granted its consent to any assignment
requiring its consent hereunder unless the Company has expressly objected to
such assignment within three Business Days after notice thereof.

(b)           From and after the date on which the
conditions described above have been met, (i) such Assignee shall be
deemed automatically to have become a party hereto and, to the extent that
rights and obligations hereunder have been assigned to such Assignee pursuant
to such Assignment Agreement, shall have the rights and obligations of a Lender
hereunder and (ii) the assigning Lender, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such Assignment
Agreement, shall be released from its rights (other than its indemnification
rights) and obligations hereunder. Upon the request of the Assignee (and, as
applicable, the assigning Lender) pursuant to an effective Assignment
Agreement, the Loan Parties shall execute and deliver to the Administrative
Agent for delivery to the Assignee (and, as applicable, the assigning Lender) a
Note in the principal amount of the Assignee’s Pro Rata Share of the Revolving
Commitment (and, as applicable, a Note in the principal amount of the Pro Rata
Share of the Revolving Commitment retained by the assigning Lender). Each such
Note shall be dated the effective date of such assignment. Upon receipt by the
assigning Lender of such Note, the assigning Lender shall return to the Loan
Parties any prior Note held by it.

(c)           Any
Lender may at any time pledge or assign a security interest in all or any portion
of its rights under this Agreement to secure obligations of such Lender,
including any pledge or assignment to secure obligations to a Federal Reserve
Bank, and this Section shall not apply to any such pledge or assignment of
a security interest; provided that no such pledge or assignment of a
security interest shall release a Lender from any of its obligations hereunder
or substitute any such pledgee or assignee for such Lender as a party hereto.

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15.6.2      Participations.   Any
Lender may at any time sell to one or more Persons participating interests in
its Loans, Commitments or other
interests hereunder (any such Person, a “Participant”). In the event of
a sale by a Lender of a participating interest to a Participant, (a) such
Lender’s obligations hereunder shall remain unchanged for all purposes, (b) the
Company and the Administrative Agent shall continue to deal solely and directly
with such Lender in connection with such Lender’s rights and obligations
hereunder and (c) all amounts payable by the Loan Parties shall be
determined as if such Lender had not sold such participation and shall be paid
directly to such Lender. No Participant shall have any direct or indirect
voting rights hereunder except with respect to any event described in Section 15.1
expressly requiring the unanimous vote of all Lenders or, as applicable, all
affected Lenders. Each Lender agrees to incorporate the requirements of the
preceding sentence into each participation agreement which such Lender enters
into with any Participant. The Loan Parties agree that if amounts outstanding
under this Agreement are due and payable (as a result of acceleration or
otherwise), each Participant shall be deemed to have the right of set-off in respect
of its participating interest in amounts owing under this Agreement and with
respect to any Letter of Credit to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under this
Agreement; provided that such right of set-off shall be subject to the
obligation of each Participant to share with the Lenders, and the Lenders agree
to share with each Participant, as provided in Section 7.5. The
Loan Parties also agree that each Participant shall be entitled to the benefits
of Section 7.6 or 8 as if it were a Lender (provided
that on the date of the participation no Participant shall be entitled to any
greater compensation pursuant to Section 7.6 or 8 than would
have been paid to the participating Lender on such date if no participation had
been sold and that each Participant complies with Section 7.6(d) as
if it were an Assignee).

15.7         Register.   The
Administrative Agent shall maintain a copy of each Assignment Agreement
delivered and accepted by it and register
(the “Register”) for the recordation of names and addresses of the
Lenders and the Commitment of each Lender from time to time and whether such
Lender is the original Lender or the Assignee. No assignment shall be effective
unless and until the Assignment Agreement is accepted and registered in the
Register. All records of transfer of a Lender’s interest in the Register shall
be conclusive, absent manifest error, as to the ownership of the interests in
the Loans. The Administrative Agent shall not incur any liability of any kind
with respect to any Lender with respect to the maintenance of the Register.

15.8         GOVERNING LAW.   THIS AGREEMENT AND EACH NOTE SHALL BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL
LAWS OF THE STATE OF ILLINOIS APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED
ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.

15.9         Confidentiality.   As required by federal law and the Administrative
Agent’s policies and practices, the
Administrative Agent may need to obtain, verify, and record certain customer identification information and
documentation in connection with opening or maintaining accounts, or
establishing or continuing to provide services. The Administrative Agent
and each Lender agree to use commercially reasonable efforts (equivalent to the
efforts 

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the Administrative Agent
or such Lender applies to maintain the confidentiality of its own confidential
information) to maintain as confidential all information provided to them by
any Loan Party and designated as confidential, except that the Administrative
Agent and each Lender may disclose such information (a) to Persons employed
or engaged by the Administrative Agent or such Lender in evaluating, approving,
structuring or administering the Loans and the Commitments; (b) to any
permitted assignee or participant or potential assignee or participant that has
agreed to comply with the covenant contained in this Section 15.9
(and any such assignee or participant or potential assignee or participant may
disclose such information to Persons employed or engaged by them as described
in clause (a) above); (c) as required or requested by any federal or
state regulatory authority or examiner, or any insurance industry association,
or as reasonably believed by the Administrative Agent or such Lender to be
compelled by any court decree, subpoena or legal or administrative order or
process; (d) as, on the advice of the Administrative Agent’s or such
Lender’s counsel, is required by law; (e) in connection with the exercise
of any right or remedy under the Loan Documents or in connection with any
litigation to which the Administrative Agent or such Lender is a party; (f) to
any nationally recognized rating agency that requires access to information
about a Lender’s investment portfolio in connection with ratings issued with
respect to such Lender; (g) to any Affiliate of the Administrative Agent,
the Issuing Lender or any other Lender who may provide Bank Products to the
Loan Parties; or (h) that ceases to be confidential through no fault of
the Administrative Agent or any Lender. Notwithstanding the foregoing, the
Company consents to the publication by the Administrative Agent or any Lender
of a tombstone or similar advertising material relating to the financing
transactions contemplated by this Agreement, and the Administrative Agent
reserves the right to provide to industry trade organizations information
necessary and customary for inclusion in league table measurements.

15.10       Severability.   Whenever
possible each provision of this Agreement shall be interpreted in such manner
as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by
or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement. All obligations
of the Loan Parties and rights of the Administrative Agent and the Lenders expressed
herein or in any other Loan Document shall be in addition to and not in
limitation of those provided by applicable law.

15.11       Nature of Remedies.   The
liabilities of the Loan Parties under this Agreement shall be joint and several. All Obligations of the Loan Parties
and rights of the Administrative Agent and the Lenders expressed herein or in
any other Loan Document shall be in addition to and not in limitation of those
provided by applicable law. No failure to exercise and no delay in exercising,
on the part of the Administrative Agent or any Lender, any right, remedy, power
or privilege hereunder, shall operate as a waiver thereof; nor shall any single
or partial exercise of any right, remedy, power or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other right,
remedy, power or privilege.

15.12       Entire Agreement.   This
Agreement, together with the other Loan Documents, embodies the entire agreement and understanding among the
parties hereto and supersedes all prior or contemporaneous agreements and
understandings of such Persons, verbal or written, 

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relating to the subject
matter hereof and thereof (except as relates to the fees described in Section 5.3)
and any prior arrangements made with respect to the payment by the Loan Parties
of (or any indemnification for) any fees, costs or expenses payable to or
incurred (or to be incurred) by or on behalf of the Administrative Agent or the
Lenders.

15.13       Counterparts.   This
Agreement may be executed in any number of counterparts and by the
different parties hereto on
separate counterparts and each such counterpart shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same Agreement. Receipt of an executed signature page to this Agreement by
facsimile or other electronic transmission shall constitute effective delivery
thereof. Electronic records of executed Loan Documents maintained by the
Lenders shall deemed to be originals.

15.14       Successors and
Assigns.   This Agreement shall be binding upon the Loan Parties,
the Lenders and the
Administrative Agent and their respective successors and assigns, and shall
inure to the benefit of the Loan Parties, the Lenders and the Administrative
Agent and the successors and assigns of the Lenders and the Administrative
Agent. No other Person shall be a direct or indirect legal beneficiary of, or
have any direct or indirect cause of action or claim in connection with, this
Agreement or any of the other Loan Documents. The Loan Parties may not assign
or transfer any of their rights or Obligations under this Agreement without the
prior written consent of the Administrative Agent and each Lender.

15.15       Captions.   Section captions
used in this Agreement are for convenience only and shall not affect the construction of this
Agreement.

15.16       Customer
Identification - USA Patriot Act Notice.   Each Lender and LaSalle (for itself and
not on behalf of any
other party) hereby notifies the Loan Parties 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 the Loan Parties, which information
includes the name and address of the Loan Parties and other information that
will allow such Lender or LaSalle, as applicable, to identify the Loan Parties
in accordance with the Act.

15.17       INDEMNIFICATION BY THE COMPANY.   IN CONSIDERATION OF THE EXECUTION AND DELIVERY OF THIS AGREEMENT
BY THE ADMINISTRATIVE AGENT AND THE LENDERS AND THE AGREEMENT TO EXTEND THE
COMMITMENTS PROVIDED HEREUNDER, THE COMPANY HEREBY AGREES TO INDEMNIFY,
EXONERATE AND HOLD THE ADMINISTRATIVE AGENT, EACH LENDER AND EACH OF THE
OFFICERS, DIRECTORS, EMPLOYEES, AFFILIATES AND AGENTS OF THE ADMINISTRATIVE
AGENT AND EACH LENDER (EACH A “LENDER PARTY”) FREE AND HARMLESS FROM AND
AGAINST ANY AND ALL ACTIONS, CAUSES OF ACTION, SUITS, LOSSES, LIABILITIES, DAMAGES
AND EXPENSES, INCLUDING ATTORNEY COSTS (COLLECTIVELY, THE “INDEMNIFIED
LIABILITIES”), INCURRED BY THE LENDER PARTIES OR ANY OF THEM AS A RESULT OF, OR
ARISING OUT OF, OR RELATING TO (A) ANY TENDER OFFER, 

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MERGER,
PURCHASE OF CAPITAL SECURITIES, PURCHASE OF ASSETS OR OTHER SIMILAR TRANSACTION
FINANCED OR PROPOSED TO BE FINANCED IN WHOLE OR IN PART, DIRECTLY OR
INDIRECTLY, WITH THE PROCEEDS OF ANY OF THE LOANS, (B) THE USE, HANDLING,
RELEASE, EMISSION, DISCHARGE, TRANSPORTATION, STORAGE, TREATMENT OR DISPOSAL OF
ANY HAZARDOUS SUBSTANCE AT ANY PROPERTY OWNED OR LEASED BY ANY LOAN PARTY, (C) ANY
VIOLATION OF ANY ENVIRONMENTAL LAWS WITH RESPECT TO CONDITIONS AT ANY PROPERTY
OWNED OR LEASED BY ANY LOAN PARTY OR THE OPERATIONS CONDUCTED THEREON, (D) THE
INVESTIGATION, CLEANUP OR REMEDIATION OF OFFSITE LOCATIONS AT WHICH ANY LOAN
PARTY OR THEIR RESPECTIVE PREDECESSORS ARE ALLEGED TO HAVE DIRECTLY OR
INDIRECTLY DISPOSED OF HAZARDOUS SUBSTANCES OR (E) THE EXECUTION,
DELIVERY, PERFORMANCE OR ENFORCEMENT OF THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT BY ANY OF THE LENDER PARTIES, EXCEPT FOR ANY SUCH INDEMNIFIED
LIABILITIES ARISING ON ACCOUNT OF THE APPLICABLE LENDER PARTY’S GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT AS DETERMINED BY A FINAL, NONAPPEALABLE
JUDGMENT BY A COURT OF COMPETENT JURISDICTION. IF AND TO THE EXTENT THAT THE
FOREGOING UNDERTAKING MAY BE UNENFORCEABLE FOR ANY REASON, THE COMPANY
HEREBY AGREES TO MAKE THE MAXIMUM CONTRIBUTION TO THE PAYMENT AND SATISFACTION
OF EACH OF THE INDEMNIFIED LIABILITIES WHICH IS PERMISSIBLE UNDER APPLICABLE
LAW. ALL OBLIGATIONS PROVIDED FOR IN THIS SECTION 15.17 SHALL
SURVIVE REPAYMENT OF THE LOANS, CANCELLATION OF THE NOTES, EXPIRATION OR
TERMINATION OF THE LETTERS OF CREDIT, ANY FORECLOSURE UNDER, OR ANY
MODIFICATION, RELEASE OR DISCHARGE OF, ANY OR ALL OF THE COLLATERAL DOCUMENTS
AND TERMINATION OF THIS AGREEMENT.

15.18       Nonliability of
Lenders.   The relationship between the Loan Parties on the one hand
and the Lenders and the
Administrative Agent on the other hand shall be solely that of borrower and
lender. Neither the Administrative Agent nor any Lender has any fiduciary
relationship with or duty to any Loan Party arising out of or in connection
with this Agreement or any of the other Loan Documents, and the relationship between
the Loan Parties, on the one hand, and the Administrative Agent and the
Lenders, on the other hand, in connection herewith or therewith is solely that
of debtor and creditor. Neither the Administrative Agent nor any Lender
undertakes any responsibility to any Loan Party to review or inform any Loan
Party of any matter in connection with any phase of any Loan Party’s business
or operations. The Company agrees, on behalf of itself and each other Loan
Party, that neither the Administrative Agent nor any Lender shall have
liability to any Loan Party (whether sounding in tort, contract or otherwise)
for losses suffered by any Loan Party in connection with, arising out of, or in
any way related to the transactions contemplated and the relationship
established by the Loan Documents, or any act, omission or event occurring in
connection therewith, unless it is determined in a final non-appealable
judgment by a court of competent jurisdiction that such losses resulted from
the gross negligence or willful misconduct of the party from which recovery 

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is sought. NO LENDER PARTY SHALL BE LIABLE FOR ANY DAMAGES
ARISING FROM THE USE BY OTHERS OF ANY INFORMATION OR OTHER MATERIALS OBTAINED
THROUGH INTRALINKS OR OTHER SIMILAR INFORMATION TRANSMISSION SYSTEMS IN
CONNECTION WITH THIS AGREEMENT, NOR SHALL ANY LENDER PARTY HAVE ANY LIABILITY
WITH RESPECT TO, AND THE COMPANY ON BEHALF OF ITSELF AND EACH OTHER LOAN PARTY,
HEREBY WAIVES, RELEASES AND AGREES NOT TO SUE FOR ANY SPECIAL, PUNITIVE,
EXEMPLARY, INDIRECT OR CONSEQUENTIAL DAMAGES RELATING TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT OR ARISING OUT OF ITS ACTIVITIES IN CONNECTION HEREWITH OR
THEREWITH (WHETHER BEFORE OR AFTER THE CLOSING DATE). The Loan
Parties acknowledges that it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents to which
they are party. No joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions contemplated hereby
among the Lenders or among the Loan Parties and the Lenders

15.19       FORUM SELECTION AND CONSENT TO JURISDICTION.   ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT, SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS
OF THE STATE OF ILLINOIS OR IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF ILLINOIS; PROVIDED THAT NOTHING IN THIS AGREEMENT SHALL BE
DEEMED OR OPERATE TO PRECLUDE THE ADMINISTRATIVE AGENT FROM BRINGING SUIT OR
TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION. THE COMPANY HEREBY
EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE
STATE OF ILLINOIS AND OF THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF ILLINOIS FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE.
THE COMPANY FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY
REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE
STATE OF ILLINOIS. THE COMPANY HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY
SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM.

15.20       WAIVER OF JURY TRIAL.   EACH OF THE COMPANY, THE ADMINISTRATIVE AGENT AND EACH LENDER HEREBY WAIVES ANY
RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHTS UNDER THIS AGREEMENT, ANY NOTE, ANY OTHER LOAN DOCUMENT AND ANY
AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE
FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ARISING FROM ANY
LENDING 

 69
 

 

RELATIONSHIP
EXISTING IN CONNECTION WITH ANY OF THE FOREGOING, AND AGREES THAT ANY SUCH
ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.

[signature pages follow]

 70

 

The parties hereto
have caused this Agreement to be duly executed and delivered by their duly
authorized officers as of the date first set forth above.

	
   

  	
  OPTION CARE, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  [SUBSIDIARIES]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Title:

  	
   

  

 

 

Signature Page to Credit

Agreement

 

 

	
  

  	
  LASALLE BANK NATIONAL ASSOCIATION, as Administrative
  Agent, as Issuing Lender and as a Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Title:

  	
   

  

 

 

	
  

  	
  [OTHER LENDERS]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Title:

  	
   

  

 

 

ANNEX A

LENDERS AND PRO RATA SHARES

	
  Lender

  	
   

  	
  Revolving

  Commitment Amount

  	
   

  	
  Pro Rata Share

  	
   

  
	
  LaSalle Bank
  National Association

  	
   

  	
  $

  	
  35,000,000

  	
  *

  	
  100

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TOTALS

  	
   

  	
  $

  	
  35,000,000

  	
   

  	
  100

  	
  %

  

*                    Includes
Swing Line Commitment Amount of $2,500,000, conditioned on syndication.

 

ANNEX B

ADDRESSES
FOR NOTICES

OPTION CARE, INC., AND SUBSIDIARIES

485 Half Day Road

Suite 300

Buffalo Grove, IL 60089

Attention: Joseph
Bonaccorsi

Telephone: (847) 229-7794

Facsimile: (847) 913-9024

LASALLE BANK NATIONAL ASSOCIATION,
as Administrative Agent, Issuing Lender and a Lender

Notices of
Borrowing , Conversion, Continuation and Letter of Credit Issuance

135 South LaSalle Street

Chicago, Illinois 60603

Attention: Geraldine Rudig

Telephone: (312) 904-5644

Facsimile:  (312) 904-6457

All Other Notices

135 South LaSalle Street

Chicago, Illinois 60603

Attention: Geraldine Rudig

Telephone: (312) 904-5644

Facsimile:  (312) 904-6457

 

EXHIBIT A

FORM OF

NOTE

	
  

  	
  May 5, 2006

  
	
  $35,000,000

  	
  Chicago, Illinois

  

 

The undersigned, for value
received, promise to pay to the order of LaSalle Bank National Association (the
“Lender”) at the principal office of LaSalle Bank National Association
(the “Administrative Agent”) in Chicago, Illinois the aggregate unpaid amount
of all Loans made to the undersigned by the Lender pursuant to the Credit
Agreement referred to below (as shown on the schedule attached hereto (and any
continuation thereof) or in the records of the Lender), such principal amount
to be payable on the dates set forth in the Credit Agreement.

The undersigned further
promise to pay interest on the unpaid principal amount of each Loan from the
date of such Loan until such Loan is paid in full, payable at the rate(s) and
at the time(s) set forth in the Credit Agreement. Payments of both
principal and interest are to be made in lawful money of the United States of
America.

This Note evidences
indebtedness incurred under, and is subject to the terms and provisions of, the
Credit Agreement, dated as of May 5, 2006 (as amended, restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”;
terms not otherwise defined herein are used herein as defined in the Credit
Agreement), among the undersigned, certain financial institutions (including
the Lender) and the Administrative Agent, to which Credit Agreement reference
is hereby made for a statement of the terms and provisions under which this
Note may or must be paid prior to its due date or its due date accelerated.

This Note is made under and
governed by the laws of the State of Illinois applicable to contracts made and
to be performed entirely within such State.

	
   

  	
  OPTION CARE, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  [SUBSIDIARIES]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Title:

  	
   

  

 

 

EXHIBIT B

FORM OF COMPLIANCE CERTIFICATE

To:                          LaSalle Bank National Association, as
Administrative Agent

Please refer to the Credit
Agreement dated as of May 5, 2006 (as amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”) among Option Care, Inc. (the “Company”),
certain Subsidiaries of the Company, various financial institutions and LaSalle
Bank National Association, as Administrative Agent. Terms used but not
otherwise defined herein are used herein as defined in the Credit Agreement.

I.                                                         Reports.
Enclosed herewith is a copy of the [annual
audited/quarterly/monthly] report of the Company as at                       ,
       (the “Computation Date”), which
report fairly presents in all material respects the financial condition and
results of operations [(subject to the
absence of footnotes and to normal year-end adjustments)] of the
Company as of the Computation Date and has been prepared in accordance with
GAAP consistently applied.

II.                                                     Financial
Tests. The Company hereby certifies and warrants to you that the following
is a true and correct computation as at the Computation Date of the following
ratios and/or financial restrictions contained in the Credit Agreement:

	
  A.

  	
  Section 11.14.1 — Tangible Net Worth

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  1.

  	
  Tangible Net Worth

  	
  $

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.

  	
  Minimum required

  	
  $15,000,000

  
	
   

  	
   

  	
   

  	
   

  
	
  B.

  	
  Section 11.14.2 - Reserved

  	
   

  
	
   

  	
   

  	
   

  
	
  C.

  	
  Section 11.14.3 - Minimum Interest Coverage
  Ratio

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  1.

  	
  EBITDA

  	
  $

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.

  	
  Interest Expense

  	
  $

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.

  	
  Ratio of (1) to (2)

  	
          to 1.00

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.

  	
  Minimum required

  	
  2.00 to 1.00

  
	
   

  	
   

  	
   

  	
   

  
	
  D.

  	
  Section 11.14.4 - Maximum Senior Debt to
  EBITDA Ratio

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  1.

  	
  Senior Debt

  	
  $

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.

  	
  EBITDA

  	
  $

  
	
   

  	
   

  	
  (from Item C(1) above)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.

  	
  Ratio of (1) to (2)

  	
          to 1.00

  
	
   

  	
   

  	
   

  	
   

  

 

 

	
  

  	
  4.

  	
  Maximum allowed

  	
  2.50 to 1.00

  
	
   

  	
   

  	
   

  	
   

  
	
  E.

  	
  Section 11.14.5 - Maximum Total Debt to
  EBITDA Ratio

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  1.

  	
  Total Debt

  	
  $

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.

  	
  EBITDA

  	
  $

  
	
   

  	
   

  	
  (from Item C(1) above)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.

  	
  Ratio of (1) to (2)

  	
           to 1.00

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.

  	
  Maximum allowed

  	
  3.50 to 1.00

  

 

The Company further
certifies to you that no Event of Default or Unmatured Event of Default has
occurred and is continuing.

The Company has caused this
Certificate to be executed and delivered by its duly authorized officer on                     ,
         .

	
   

  	
  OPTION CARE, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Title:

  	
   

  

 

 

EXHIBIT C

Reserved

 

EXHIBIT D

FORM OF

ASSIGNMENT AGREEMENT

Date:                                 

To:          Option Care, Inc.

and

LaSalle Bank
National Association, as Administrative Agent

Re:          Assignment under the Credit
Agreement referred to below

Gentlemen and Ladies:

Please refer to Section 15.6.1
of the Credit Agreement dated as of May 5, 2006 (as amended or otherwise
modified from time to time, the “Credit Agreement”) among Option Care, Inc.
(the “Company”), certain Subsidiaries of the Company, various financial
institutions and LaSalle Bank National Association, as administrative agent (in
such capacity, the “Administrative Agent”). Unless otherwise defined
herein or the context otherwise requires, terms used herein have the meanings
provided in the Credit Agreement.

                     
(the “Assignor”) hereby sells and assigns, without recourse, to                      
(the “Assignee”), and the Assignee hereby purchases and assumes from the
Assignor, that interest in and to the Assignor’s rights and obligations under
the Credit Agreement as of the date hereof equal to       %
of all of the Loans, of the participation interests in the Letters of Credit
and of the Commitments, such sale, purchase, assignment and assumption to be
effective as of                   ,
       , or such later date on which the
Company and the Administrative Agent shall have consented hereto (the “Effective
Date”). After giving effect to such sale, purchase, assignment and
assumption, the Assignee’s and the Assignor’s respective Percentages for
purposes of the Credit Agreement will be as set forth opposite their names on
the signature pages hereof.

The Assignor
hereby instructs the Administrative Agent to make all payments from and after
the Effective Date in respect of the interest assigned hereby directly to the
Assignee. The Assignor and the Assignee agree that all interest and fees
accrued up to, but not including, the Effective Date are the property of the
Assignor, and not the Assignee. The Assignee agrees that, upon receipt of any
such interest or fees, the Assignee will promptly remit the same to the
Assignor.

The Assignor
represents and warrants that it is the legal and beneficial owner of the
interest being assigned by it hereunder and that such interest is free and
clear of any adverse claim.

 

The Assignee
represents and warrants to the Company and the Administrative Agent that, as of
the date hereof, the Loan Parties will not be obligated to pay any greater
amount under Section 7.6 or 8 of the Credit Agreement than the Loan
Parties are obligated to pay to the Assignor under such Section. [The Assignee
has delivered, or is delivering concurrently herewith, to the Company and the
Administrative Agent the forms required by Section 7.6 of the Credit
Agreement.] [INSERT IF ASSIGNEE IS ORGANIZED UNDER THE LAWS OF A JURISDICTION
OTHER THAN THE UNITED STATES OF AMERICA OR A STATE THEREOF.]  The [Assignee/Assignor] [Borrower] shall pay
the fee payable to the Administrative Agent pursuant to Section 15.6.1.

The Assignee
hereby confirms that it has received a copy of the Credit Agreement. Except as
otherwise provided in the Credit Agreement, effective as of the Effective Date:

(a)                                  the
Assignee (i) shall be deemed automatically to have become a party to the
Credit Agreement and to have all the rights and obligations of a “Lender” under
the Credit Agreement as if it were an original signatory thereto to the extent
specified in the second paragraph hereof; and (ii) agrees to be bound by
the terms and conditions set forth in the Credit Agreement as if it were an
original signatory thereto; and

(b)                                 the
Assignor shall be released from its obligations under the Credit Agreement to
the extent specified in the second paragraph hereof.

The Assignee
hereby advises each of you of the following administrative details with respect
to the assigned Loans and Commitment:

(A)          Institution
Name:

Address:

Attention:

Telephone:

Facsimile:

(B)           Payment
Instructions:

This Assignment
shall be governed by and construed in accordance with the laws of the State of
Illinois

Please evidence
your receipt hereof and your consent to the sale, assignment, purchase and
assumption set forth herein by signing and returning counterparts hereof to the
Assignor and the Assignee.

 

 

	
  Percentage =      %

  	
  [ASSIGNEE]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
  Adjusted Percentage =      %

  	
  [ASSIGNOR]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  

 

	
  ACKNOWLEDGED AND CONSENTED TO

  this        day of                   ,
          

  	
   

  
	
   

  
	
  LASALLE BANK NATIONAL ASSOCIATION, as Administrative
  Agent

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ACKNOWLEDGED AND CONSENTED TO

  this        day of                   ,
          

  	
   

  
	
   

  	
   

  	
   

  
	
  OPTION CARE, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  

 

 

EXHIBIT E

FORM OF NOTICE OF
BORROWING

To:                          LaSalle Bank National Association, as
Administrative Agent

Please refer to the Credit
Agreement dated as of May 5, 2006 (as amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”) among Option Care, Inc.
(the “Company”), certain Subsidiaries of the Company, various financial
institutions and LaSalle Bank National Association, as Administrative Agent. Terms
used but not otherwise defined herein are used herein as defined in the Credit
Agreement.

The undersigned hereby gives
irrevocable notice, pursuant to Section 2.2.2 of the Credit
Agreement, of a request hereby for a borrowing as follows:

(i)            The requested borrowing date for the proposed borrowing
(which is a Business Day) is                           ,
        .

(ii)           The aggregate amount of the proposed borrowing is $                    .

(iii)          The type of Revolving Loans comprising the proposed
borrowing are [Base Rate] [LIBOR] Loans.

(iv)          The duration of the Interest Period for each LIBOR Loan made
as part of the proposed borrowing, if applicable, is                   
months (which shall be 1, 2, 3 or 6 months).

The undersigned hereby
certifies that on the date hereof and on the date of borrowing set forth above,
and immediately after giving effect to the borrowing requested hereby: (i) there
exists and there shall exist no Unmatured Event of Default or Event of Default
under the Credit Agreement; and (ii) each of the representations and
warranties contained in the Credit Agreement and the other Loan Documents is
true and correct as of the date hereof, except to the extent that such
representation or warranty expressly relates to another date and except for
changes therein expressly permitted or expressly contemplated by the Credit
Agreement.

The Company has caused this
Notice of Borrowing to be executed and delivered by its officer thereunto duly
authorized on                              ,
               .

	
  

  	
  OPTION CARE, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Title:

  	
   

  

 

 

EXHIBIT F

FORM OF NOTICE OF
CONVERSION/CONTINUATION

To:                          LaSalle Bank National Association, as
Administrative Agent

Please refer to the Credit
Agreement dated as of May 5, 2006 (as amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”) among Option Care, Inc.
(the “Company”), certain Subsidiaries of the Company, various financial
institutions and LaSalle Bank National Association, as Administrative Agent. Terms
used but not otherwise defined herein are used herein as defined in the Credit
Agreement.

The undersigned hereby gives
irrevocable notice, pursuant to Section 2.2.3 of the Credit
Agreement, of its request to:

(a)           on [    date   
] convert $[            ]of
the aggregate outstanding principal amount of the [            ]
Loan, bearing interest at the [            ]
Rate, into a(n) [            ]
Loan [and, in the case of a LIBOR Loan, having an Interest Period of [            
month(s)];

[(b)          on [    date   
] continue $[            ]of
the aggregate outstanding principal amount of the [            ]
Loan, bearing interest at the LIBOR Rate, as a LIBOR Loan having an Interest
Period of [            ]
month(s)].

The undersigned hereby represents and warrants that all of the
conditions contained in Section 12.2 of the Credit Agreement have been
satisfied on and as of the date hereof, and will continue to be satisfied on
and as of the date of the conversion/continuation requested hereby, before and
after giving effect thereto.

The Company has caused this
Notice of Conversion/Continuation to be executed and delivered by its officer
thereunto duly authorized on                          ,
            .

	
  

  	
  OPTION CARE, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Title:Exhibit 10.44

 

 

 

 

 

GUARANTY AND COLLATERAL AGREEMENT

dated
as of May 5, 2006

among

OPTION CARE, INC.,

and

THE OTHER PARTIES HERETO,

as Grantors,

and

LASALLE BANK NATIONAL ASSOCIATION,

as the Administrative Agent

 

 

 

GUARANTY AND COLLATERAL AGREEMENT

THIS GUARANTY AND
COLLATERAL AGREEMENT dated as of May 5, 2006 (this “Agreement”) is
entered into among OPTION CARE, INC., a Delaware corporation (the “Company”), and each other Person signatory hereto as a Grantor (collectively
with the Company and any other  Person
that becomes a party hereto as provided herein, the “Grantors”) in favor
of LASALLE BANK NATIONAL ASSOCIATION, as the Administrative Agent for all the
Lenders party to the Credit Agreement (as hereafter defined).

The Lenders have
severally agreed to extend credit to the Grantors pursuant to the Credit
Agreement. The Grantors are engaged in interrelated businesses, and each
Grantor will derive substantial direct and indirect benefit from extensions of
credit under the Credit Agreement. It is a condition precedent to each Lender’s
obligation to extend credit under the Credit Agreement that the Grantors shall
have executed and delivered this Agreement to the Administrative Agent for the
ratable benefit of all the Lenders.

In consideration of the
premises and to induce the Administrative Agent and the Lenders to enter into
the Credit Agreement and to induce the Lenders to extend credit thereunder,
each Grantor hereby agrees with the Administrative Agent, for the ratable
benefit of the Lenders, as follows:

SECTION 1  DEFINITIONS.

1.1           Unless otherwise
defined herein, terms defined in the Credit Agreement and used herein shall
have the meanings given to them in the Credit Agreement, and the following
terms are used herein as defined in the UCC: Accounts, Certificated
Security,  Commercial Tort Claims,
Deposit Accounts, Documents, Electronic Chattel Paper, Equipment, Farm
Products, Goods, Health Care Insurance Receivables, Instruments, Inventory,
Leases, Letter-of-Credit Rights, Money, Payment Intangibles, Supporting
Obligations, Tangible Chattel Paper.

1.2           When used herein the
following terms shall have the following meanings:

Agreement
has the meaning set forth in the preamble hereto.

Chattel Paper
means all “chattel paper” as such term is defined in Section 9-102(a)(11)
of the UCC and, in any event, including with respect to any Grantor, all
Electronic Chattel Paper and Tangible Chattel Paper.

Collateral
means (a) all of the personal property now owned or at any time hereafter
acquired by any Grantor or in which any Grantor now has or at any time in the
future may acquire any right, title or interest, including all of each Grantor’s
Accounts, Chattel Paper, Commercial Tort Claims, Deposit Accounts, Documents,
Equipment, Farm Products, Fixtures, General Intangibles, Health Care Insurance
Receivables, Goods, Instruments, Intellectual Property, Inventory, Investment
Property, Leases, Letter-of-Credit Rights, Money, Supporting Obligations and
Identified Claims, (b) all books and records pertaining to any of the
foregoing, (c) all Proceeds and products of any of the foregoing, and (d) all
collateral security and guaranties given by any Person with respect to any of
the foregoing. Where the context requires,

 

terms relating to the Collateral or any part thereof,
when used in relation to a Grantor, shall refer to such Grantor’s Collateral or
the relevant part thereof.

Copyrights
means all copyrights arising under the laws of the United States, any other
country or any political subdivision thereof, whether registered or
unregistered and whether published or unpublished, including those listed on Schedule
5, all registrations and recordings thereof, and all applications in
connection therewith, including all registrations, recordings and applications
in the United States Copyright Office, and the right to obtain all renewals of
any of the foregoing.

Copyright Licenses
means all written agreements naming any Grantor as licensor or licensee,
including those listed on Schedule 5, granting any right under any
Copyright, including the grant of rights to manufacture, distribute, exploit
and sell materials derived from any Copyright.

Credit Agreement
means the Credit Agreement of even date herewith among the Grantors, the
Lenders and the Administrative Agent, as amended, supplemented, restated or
otherwise modified from time to time.

Fixtures
means all of the following, whether now owned or hereafter acquired by a
Grantor: plant fixtures; business fixtures; other fixtures and storage
facilities, wherever located; and all additions and accessories thereto and
replacements therefor.

General Intangibles
means all “general intangibles” as such term is defined in Section 9-102(a)(42)
of the UCC and, in any event, including with respect to any Grantor, all
Payment Intangibles, all contracts and Contract Rights, agreements, instruments
and indentures in any form, and portions thereof, to which such Grantor is a
party or under which such Grantor has any right, title or interest or to which
such Grantor or any property of such Grantor is subject, as the same from time
to time may be amended, supplemented or otherwise modified, including, without
limitation, (a) all rights of such Grantor to receive moneys due and to
become due to it thereunder or in connection therewith, (b) all rights of
such Grantor to damages arising thereunder and (c) all rights of such
Grantor to perform and to exercise all remedies thereunder; provided,
that the foregoing limitation shall not affect, limit, restrict or impair the
grant by such Grantor of a security interest pursuant to this Agreement in any
Receivable or any money or other amounts due or to become due under any such
Payment Intangible, contract, agreement, instrument or indenture.

Governmental Account
Debtors means an Account Debtor that is a Government
Reimbursement Program.

Government Reimbursement
Program means (i) the Medicare program established under
Title XVIII of the Federal Social Security Act, the Federal Employees Health
Benefit Program under 5 U.S.C. §§ 8902 et seq., the TRICARE program established
by the Department of Defense under 10 U.S.C. §§ 1071 et seq. or the Civilian
Health and Medical Program of the Uniformed Services under 10 U.S.C. §§ 1079
and 1086, (ii) the Medicaid program of any state or the District of
Columbia acting pursuant to a health plan adopted pursuant to Title XIX of the

 2
 

 

Federal Social Security Act or (iii) any agent,
administrator, intermediary or carrier for any of the foregoing.

Identified Claims
means the Commercial Tort Claims described on Schedule 7 as such
schedule shall be supplemented from time to time.

Intellectual Property
means the collective reference to all rights, priorities and privileges
relating to intellectual property, whether arising under United States,
multinational or foreign laws or otherwise, including the Copyrights, the
Copyright Licenses, the Patents, the Patent Licenses, the Trademarks and the
Trademark Licenses, and all rights to sue at law or in equity for any
infringement or other impairment thereof, including the right to receive all
proceeds and damages therefrom.

Intercompany Note
means any promissory note evidencing loans made by any Grantor to any other
Grantor, if any.

Investment Property
means the collective reference to (a) all “investment property” as such
term is defined in Section 9-102(a)(49) of the UCC (other than the
equity interest of any foreign Subsidiary excluded from the definition of
Pledged Equity), (b) all “financial assets” as such term is defined in Section 8-102(a)(9) of
the UCC, and (b) whether or not constituting “investment property” as so
defined, all Pledged Notes and all Pledged Equity.

Issuers
means the collective reference to each issuer of any Investment Property.

Paid in Full
means (a) the payment in full in cash and performance of all Obligations, (b) the
termination of all Commitments and (c) either (i) the cancellation
and return to the Administrative Agent of all Letters of Credit or (ii) the
cash collateralization of all Letters of Credit in accordance with the Credit
Agreement.

Patents
means (a) all letters patent of the United States, any other country or
any political subdivision thereof, all reissues and extensions thereof and all
goodwill associated therewith, including any of the foregoing referred to in Schedule
5, (b) all applications for letters patent of the United States or any
other country and all divisions, continuations and continuations-in-part
thereof, including any of the foregoing referred to in Schedule 5, and (c) all
rights to obtain any reissues or extensions of the foregoing.

Patent Licenses
means all agreements, whether written or oral, providing for the grant by or to
any Grantor of any right to manufacture, use or sell any invention covered in
whole or in part by a Patent, including any of the foregoing referred to in Schedule
5.

Pledged Equity
means the equity interests in each domestic Subsidiary of the Company listed on
Schedule 1, together with any other equity interests, certificates,
options or rights of any nature whatsoever in respect of the equity interests
of any Person that may be issued or granted to, or held by, any Grantor while
this Agreement is in effect; provided that in no event shall the equity
interests of any existing foreign Subsidiary or more than 65% of the total
outstanding equity interests of any foreign Subsidiary acquired after the date
hereof be required to be pledged hereunder.

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Pledged Notes
means all promissory notes listed on Schedule 1, all Intercompany Notes
at any time issued to any Grantor and all other promissory notes issued to or
held by any Grantor (other than (a) promissory notes issued in connection
with extensions of trade credit by any Grantor in the ordinary course of
business and (b) any individual promissory note which is less than
$2,000,000 in principal amount, up to an aggregate of $8,000,000 for all such
promissory notes excluded under this clause (b)).

Proceeds
means all “proceeds” as such term is defined in Section 9-102(a)(64)
of the UCC and, in any event, shall include all dividends or other income from
the Investment Property, collections thereon or distributions or payments with
respect thereto.

Receivable
means any right to payment for goods sold or leased or for services rendered,
whether or not such right is evidenced by an Instrument or Chattel Paper and
whether or not it has been earned by performance (including any Accounts).

Securities Act
means the Securities Act of 1933, as amended.

Trademarks
means (a) all trademarks, trade names, corporate names, the Grantor names,
business names, fictitious business names, trade styles, service marks, logos
and other source or business identifiers, and all goodwill associated
therewith, now existing or hereafter adopted or acquired, all registrations and
recordings thereof, and all applications in connection therewith, whether in
the United States Patent and Trademark Office or in any similar office or
agency of the United States, any State thereof or any other country or any
political subdivision thereof, or otherwise, and all common-law rights related thereto,
including any of the foregoing referred to in Schedule 5, and (b) the
right to obtain all renewals thereof.

Trademark Licenses
means, collectively, each agreement, whether written or oral, providing for the
grant by or to any Grantor of any right to use any Trademark, including any of
the foregoing referred to in Schedule 5.

UCC
means the Uniform Commercial Code as in effect on the date hereof and
from time to time in the State of Illinois, provided that if by reason
of mandatory provisions of law, the perfection or the effect of perfection or
non-perfection of the security interests in any Collateral or the availability
of any remedy hereunder is governed by the Uniform Commercial Code as in effect
on or after the date hereof in any other jurisdiction, “UCC” means the Uniform
Commercial Code as in effect in such other jurisdiction for purposes of the
provisions hereof relating to such perfection or effect of perfection or
non-perfection or availability of such remedy.

SECTION 2  GUARANTY.

2.1           Guaranty.
(a) Each of the Grantors hereby, jointly and severally, unconditionally
and irrevocably, as a primary obligor and not only a surety, guaranties to the
Administrative Agent, for the ratable benefit of the Lenders and their
respective successors, indorsees, transferees and assigns, the prompt and
complete payment and performance by each of the other Grantors when due
(whether at the stated maturity, by acceleration or otherwise) of the
Obligations.

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(b)           Reserved.

(c)           Reserved.

(d)           The guaranty
contained in this Section 2 shall remain in full force and effect
until all of the Obligations shall have been Paid in Full.

(e)           No payment made by
any of the Grantors, any other guarantor or any other Person or received or
collected by the Administrative Agent or any Lender from any of the Grantors,
any other guarantor or any other Person by virtue of any action or proceeding
or any set-off or appropriation or application at any time or from time to time
in reduction of or in payment of the Obligations shall be deemed to modify,
reduce, release or otherwise affect the liability of any Grantor hereunder
which shall, notwithstanding any such payment (other than any payment made by
such Grantor in respect of the Obligations or any payment received or collected
from such Grantor in respect of the Obligations), remain liable for the
Obligations until the Obligations are Paid in Full.

2.2           Reserved.

2.3           No Subrogation.
Notwithstanding any payment made by any Grantor hereunder or any set-off or
application of funds of any Grantor by the Administrative Agent or any Lender,
no Grantor shall be entitled to be subrogated to any of the rights of the
Administrative Agent or any Lender against any Grantor or any collateral
security or guaranty or right of offset held by the Administrative Agent or any
Lender for the payment of the Obligations, nor shall any Grantor seek or be
entitled to seek any contribution or reimbursement from any other Grantor in
respect of payments made by such Grantor hereunder, until all of the
Obligations are Paid in Full, no Letter of Credit shall be outstanding and the
Commitments are terminated. If any amount shall be paid to any Grantor on
account of such subrogation rights at any time when all of the Obligations
shall not have been Paid in Full, such amount shall be held by such Grantor in
trust for the Administrative Agent and the Lenders, segregated from other funds
of such Grantor, and shall, forthwith upon receipt by such Grantor, be turned
over to the Administrative Agent in the exact form received by such Grantor
(duly indorsed by such Grantor to the Administrative Agent, if required), to be
applied against the Obligations, whether matured or unmatured, in such order as
the Administrative Agent may determine.

2.4           Amendments, etc.
with respect to the Obligations. Each Grantor shall remain obligated
hereunder notwithstanding that, without any reservation of rights against any
Grantor and without notice to or further assent by any Grantor, any demand for
payment of any of the Obligations made by the Administrative Agent or any
Lender may be rescinded by the Administrative Agent or such Lender and any of
the Obligations continued, and the Obligations, or the liability of any other
Person upon or for any part thereof, or any collateral security or guaranty therefor
or right of offset with respect thereto, may, from time to time, in whole or in
part, be renewed, extended, amended, modified, accelerated, compromised,
waived, surrendered or released by the Administrative Agent or any Lender, and
the Credit Agreement and the other Loan Documents and any other documents
executed and delivered in connection therewith may be amended, modified,
supplemented or terminated, in whole or in part, as the Administrative Agent
(or the Required Lenders or all the Lenders, as the case may be) may deem
advisable from

 5
 

 

time to time. Neither the Administrative Agent nor any
Lender shall have any obligation to protect, secure, perfect or insure any Lien
at any time held by it as security for the Obligations or for the guaranty
contained in this Section 2 or any property subject thereto.

The Administrative Agent or any Lender may, from time to time, at its
sole discretion and without notice to any Grantor (or any of them), take any or
all of the following actions:  (a) retain
or obtain a security interest in any property to secure any of the Obligations
or any obligation hereunder, (b) retain or obtain the primary or secondary
obligation of any obligor or obligors, in addition to the undersigned, with
respect to any of the Obligations, (c) release or compromise any
obligation of any of the undersigned hereunder or any obligation of any nature
of any other obligor with respect to any of the Obligations, (d) release
any guaranty or right of offset or its security interest in, or surrender, release
or permit any substitution or exchange for, all or any part of any property
securing any of the Obligations or any obligation hereunder, or extend or renew
for one or more periods (whether or not longer than the original period) or
release, compromise, alter or exchange any obligations of any nature of any
obligor with respect to any such property, and (e) resort to the
undersigned (or any of them) for payment of any of the Obligations when due,
whether or not the Administrative Agent or such Lender shall have resorted to
any property securing any of the Obligations or any obligation hereunder or
shall have proceeded against any other of the undersigned or any other obligor
primarily or secondarily obligated with respect to any of the Obligations.

2.5           Waivers. The
Obligations, and any of them, shall conclusively be deemed to have been
created, contracted or incurred, or renewed, extended, amended or waived, in
reliance upon the guaranty contained in this Section 2, and all
dealings between the any of the Grantors, on the one hand, and the
Administrative Agent and the Lenders, on the other hand, likewise shall be
conclusively presumed to have been had or consummated in reliance upon the
guaranty contained in this Section 2. Each Grantor waives (a) diligence,
presentment, protest, demand for payment and notice of default, dishonor or
nonpayment and all other notices whatsoever to or upon any of the Grantors with
respect to the Obligations, (b) notice of the existence or creation or
non-payment of all or any of the Obligations and (c) all diligence in
collection or protection of or realization upon any Obligations or any security
for or guaranty of any Obligations.

2.6           Payments. Each
Grantor hereby guaranties that payments hereunder will be paid to the Administrative
Agent without set-off or counterclaim in Dollars at the office of the
Administrative Agent specified in the Credit Agreement.

SECTION 3  GRANT OF SECURITY INTEREST.

3.1           Grant. Each
Grantor hereby assigns and transfers to the Administrative Agent, and hereby
grants to the Administrative Agent, for the ratable benefit of the Lenders and
(to the extent provided herein) their Affiliates, a continuing security
interest in all of its Collateral, as collateral security for the prompt and
complete payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of the Obligations.

3.2           Reserved.

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SECTION 4  REPRESENTATIONS AND WARRANTIES.

To induce the Administrative Agent and the Lenders to
enter into the Credit Agreement and to induce the Lenders to make their
respective extensions of credit to the Grantors thereunder, each Grantor
jointly and severally hereby represents and warrants to the Administrative
Agent and each Lender that:

4.1           Title; No Other
Liens. Except for Permitted Liens, the Grantors own each item of the
Collateral free and clear of any and all Liens or claims of others. No
financing statement or other public notice with respect to all or any part of
the Collateral is on file or of record in any public office, except filings
evidencing Permitted Liens and filings for which termination statements have
been delivered to the Administrative Agent.

4.2           Perfected First
Priority Liens. The security interests granted pursuant to this Agreement (a) upon
completion of the filings and other actions specified on Schedule 2 will
constitute valid perfected security interests in all of the Collateral in favor
of the Administrative Agent, for the ratable benefit of the Lenders, as
collateral security for the Obligations, enforceable in accordance with the
terms hereof against all creditors of each Grantor and any Persons purporting
to purchase any Collateral from each Grantor and (b) are prior to all
other Liens on the Collateral in existence on the date hereof except for Permitted
Liens for which priority is accorded under applicable law. The filings and
other actions specified on Schedule 2 constitute all of the filings and
other actions necessary to perfect all security interests granted hereunder.

4.3           Grantor
Information. On the date hereof, Schedule 3 sets forth (a) each
Grantor’s jurisdiction of organization, (b) the location of each Grantor’s
chief executive office, (c) each Grantor’s exact legal name as it appears
on its organizational documents and (d) each Grantor’s organizational
identification number (to the extent a Grantor is organized in a jurisdiction
which assigns such numbers) and federal employer identification number.

4.4           Collateral
Locations. On the date hereof, Schedule 4 sets forth (a) each
place of business of each Grantor (including its chief executive office), (b) all
locations where all Inventory and the Equipment owned by each Grantor is kept,
except with respect to Inventory and Equipment with a fair market value of less
than $500,000 (individually for a Grantor) which may be located at other
locations and (c) whether each such Collateral location and place of
business (including each Grantor’s chief executive office) is owned or leased
(and if leased, specifies the name and notice address of each lessor). No
Collateral is located outside the United States or in the possession of any
lessor, bailee, warehouseman or consignee, except as indicated on Schedule 4.

4.5           Certain Property.
None of the Collateral constitutes, or is the Proceeds of, (a) Farm
Products or (b) vessels, aircraft or any other property subject to any
certificate of title or other registration statute of the United States, any
State or other jurisdiction, except for personal vehicles owned by the Grantors
and used by employees of the Grantors in the ordinary course of business with
an aggregate fair market value of less than $250,000 (in the aggregate for all
Grantors).

 7
 

 

4.6           Investment
Property. (a) The Pledged Equity pledged by each Grantor hereunder
constitutes all the issued and outstanding equity interests of each Issuer
owned by such Grantor.

(b)           All of the Pledged
Equity has been duly and validly issued and is fully paid and nonassessable.

(c)           Each of the Pledged
Notes constitutes the legal, valid and binding obligation of the obligor with
respect thereto, enforceable in accordance with its terms (subject to the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors’ rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing).

(d)           Schedule 1
lists all Investment Property owned by each Grantor. Each Grantor is the record
and beneficial owner of, and has good and marketable title to, the Investment
Property pledged by it hereunder, free of any and all Liens or options in favor
of, or claims of, any other Person, except Permitted Liens.

4.7           Receivables.
(a) No amount payable to such Grantor under or in connection with any
Receivable in excess of $100,000 is evidenced by any Instrument or Chattel
Paper which has not been delivered to the Administrative Agent.

(b)           The amounts
represented by such Grantor to the Lenders from time to time as owing to such
Grantor in respect of the Receivables (to the extent such representations are
required by any of the Loan Documents) will at all such times be accurate,
subject to contractual payor discounts or other discounts customary in the
health care industry with respect to Health Care Insurance Receivables,
Government Reimbursement Programs or otherwise, which have been disclosed to
the Administrative Agent.

4.8           Intellectual
Property. (a) Schedule 5 lists all Intellectual Property owned
by such Grantor in its own name on the date hereof.

(b)           On the date hereof,
all material Intellectual Property owned by any Grantor is valid, subsisting,
unexpired and enforceable and has not been abandoned.

(c)           Except as set forth
in Schedule 5, none of the material Intellectual Property is the subject
of any licensing or franchise agreement pursuant to which such Grantor is the
licensor or franchisor.

(d)           Each Grantor owns
and possesses or has a license or other right to use all Intellectual Property
as is necessary for the conduct of the businesses of such Grantor, without any
infringement upon rights of others which could reasonably be expected to have a
Material Adverse Effect.

4.9           Depositary and
Other Accounts. All depositary and other accounts maintained by each
Grantor are described on Schedule 6 hereto, which description includes
for each such account the name of the Grantor maintaining such account, the
name, address,

 8
 

 

telephone and fax numbers of the financial institution
at which such account is maintained, the account number and the account
officer, if any, of such account.

SECTION 5  COVENANTS.

Each Grantor covenants and agrees with the
Administrative Agent and the Lenders that, from and after the date of this
Agreement until the Obligations shall have been Paid in Full:

5.1           Delivery of
Instruments, Certificated Securities and Chattel Paper. If any amount in
excess of $100,000 payable under or in connection with any of the Collateral
shall be or become evidenced by any Instrument, Certificated Security or
Chattel Paper, such Instrument, Certificated Security or Chattel Paper shall be
immediately delivered to the Administrative Agent, duly indorsed in a manner
satisfactory to the Administrative Agent, to be held as Collateral pursuant to
this Agreement. In the event that an Unmatured Event of Default or Event of
Default shall have occurred and be continuing, upon the request of the
Administrative Agent, any Instrument, Certificated Security or Chattel Paper
not theretofore delivered to the Administrative Agent and at such time being held
by any Grantor, without regard to the amount thereof, shall be immediately
delivered to the Administrative Agent, duly indorsed in a manner satisfactory
to the Administrative Agent, to be held as Collateral pursuant to this
Agreement.

5.2           Maintenance of Perfected
Security Interest; Further Documentation. (a) Such Grantor shall
maintain the security interest created by this Agreement as a perfected
security interest having at least the priority described in Section 4.2
and shall defend such security interest against the claims and demands of all
Persons whomsoever.

(b)           Such Grantor will
furnish to the Administrative Agent and the Lenders from time to time
statements and schedules further identifying and describing the assets and
property of such Grantor and such other reports in connection therewith as the
Administrative Agent may reasonably request, all in reasonable detail.

(c)           At any time and from
time to time, upon the written request of the Administrative Agent, and at the
sole expense of such Grantor, such Grantor will promptly and duly execute and
deliver, and have recorded, such further instruments and documents and take
such further actions as the Administrative Agent may reasonably request for the
purpose of obtaining or preserving the full benefits of this Agreement and of
the rights and powers herein granted, including (i) filing any financing
or continuation statements under the UCC (or other similar laws) in effect in
any jurisdiction with respect to the security interests created hereby and (ii) in
the case of Investment Property and any other relevant Collateral, taking any
actions reasonably necessary to enable the Administrative Agent to obtain “control”
(within the meaning of the applicable UCC) with respect thereto.

5.3           Changes in
Locations, Name, etc. Such Grantor shall not, except upon 30 days’ prior
written notice to the Administrative Agent and delivery to the Administrative
Agent of (a) all additional financing statements and other documents
reasonably requested by the Administrative Agent as to the validity, perfection
and priority of the security interests provided

 9
 

 

for herein and (b) if applicable, a written
supplement to Schedule 4 showing any additional location at which
Inventory or Equipment shall be kept:

(i)            permit any of the Inventory or
Equipment to be kept at a location other than those listed on Schedule 4;
provided, that up to $250,000 (individually for a Grantor) in fair
market value of any such Inventory and Equipment may be kept at other
locations;

(ii)           change its jurisdiction of
organization or the location of its chief executive office from that specified
on Schedule 3 or in any subsequent notice delivered pursuant to this Section 5.3;
or

(iii)          change its name, identity or corporate
structure.

5.4           Notices. Such
Grantor will advise the Administrative Agent and the Lenders promptly, in
reasonable detail, of:

(a)           any Lien (other than
Permitted Liens) on any of the Collateral which would adversely affect the
ability of the Administrative Agent to exercise any of its remedies hereunder;
and

(b)           the occurrence of
any other event which could reasonably be expected to have a material adverse
effect on the aggregate value of the Collateral or on the Liens created hereby.

5.5           Investment
Property. (a) If such Grantor shall become entitled to receive or
shall receive any certificate, option or rights in respect of the equity
interests of any Issuer, whether in addition to, in substitution of, as a
conversion of, or in exchange for, any of the Pledged Equity, or otherwise in
respect thereof, such Grantor shall accept the same as the agent of the
Administrative Agent and the Lenders, hold the same in trust for the
Administrative Agent and the Lenders and deliver the same forthwith to the
Administrative Agent in the exact form received, duly indorsed by such Grantor
to the Administrative Agent, if required, together with an undated instrument
of transfer covering such certificate duly executed in blank by such Grantor
and with, if the Administrative Agent so requests, signature guarantied, to be
held by the Administrative Agent, subject to the terms hereof, as additional
Collateral for the Obligations. Upon the occurrence and during the continuance
of an Event of Default, (i) any sums paid upon or in respect of the
Investment Property upon the liquidation or dissolution of any Issuer shall be
paid over to the Administrative Agent to be held by it hereunder as additional
Collateral for the Obligations, and (ii) in case any distribution of
capital shall be made on or in respect of the Investment Property or any
property shall be distributed upon or with respect to the Investment Property
pursuant to the recapitalization or reclassification of the capital of any
Issuer or pursuant to the reorganization thereof, the property so distributed
shall, unless otherwise subject to a perfected Lien in favor of the
Administrative Agent, be delivered to the Administrative Agent to be held by it
hereunder as additional Collateral for the Obligations. Upon the occurrence and
during the continuance of an Event of Default, if any sums of money or property
so paid or distributed in respect of the Investment Property shall be received
by such Grantor, such Grantor shall, until such money or property is paid or
delivered to the Administrative

 10
 

 

Agent, hold such money or property in trust for the
Lenders, segregated from other funds of such Grantor, as additional Collateral
for the Obligations.

(b)           Without the prior
written consent of the Administrative Agent, such Grantor will not (i) vote
to enable, or take any other action to permit, any Issuer to issue any equity
interests of any nature or to issue any other securities or interests
convertible into or granting the right to purchase or exchange for any equity
interests of any nature of any Issuer, except, in each case, as permitted by
the Credit Agreement, including but not limited to the Company’s right to issue
equity interests in connection with any Acquisition permitted by Section 11.5
of the Credit Agreement, (ii) sell, assign, transfer, exchange, or
otherwise dispose of, or grant any option with respect to, the Investment
Property or Proceeds thereof (except pursuant to a transaction expressly
permitted by the Credit Agreement) other than, with respect to Investment
Property not constituting Pledged Equity or Pledged Notes, any such action
which is not prohibited by the Credit Agreement, (iii) create, incur or
permit to exist any Lien or option in favor of, or any claim of any Person with
respect to, any of the Investment Property or Proceeds thereof, or any interest
therein, except for Permitted Liens, or (iv) enter into any agreement or
undertaking restricting the right or ability of such Grantor or the
Administrative Agent to sell, assign or transfer any of the Investment Property
or Proceeds thereof, except, with respect to such Investment Property,
shareholders’ agreements entered into by such Grantor with respect to Persons
in which such Grantor maintains an ownership interest of 50% or less.

(c)           In
the case of each Grantor which is an Issuer, such Issuer agrees that (i) it
will be bound by the terms of this Agreement relating to the Investment
Property issued by it and will comply with such terms insofar as such terms are
applicable to it, (ii) it will notify the Administrative Agent promptly in
writing of the occurrence of any of the events described in Section 5.5(a) with
respect to the Investment Property issued by it and (iii) the terms of Sections
6.3(c) and 6.7 shall apply to such Grantor with respect to all
actions that may be required of it pursuant to Section 6.3(c) or
6.7 regarding the Investment Property issued by it.

5.6           Receivables.
(a) Other than in the ordinary course of business consistent with its past
practice and in amounts which are not material to such Grantor, such Grantor
will not (i) grant any extension of the time of payment of any Receivable,
(ii) compromise or settle any Receivable for less than the full amount
thereof, (iii) release, wholly or partially, any Person liable for the
payment of any Receivable, (iv) allow any credit or discount whatsoever on
any Receivable (subject to contractual payor discounts or other discounts
customary in the health care industry with respect to Health Care Insurance
Receivables, Government Reimbursement Programs or otherwise, which have been
disclosed to the Administrative Agent) or (v) amend, supplement or modify
any Receivable in any manner that could adversely affect the value thereof.

(b)           Such
Grantor will deliver to the Administrative Agent a copy of each material
demand, notice or document received by it that questions or calls into doubt
the validity or enforceability of more than 5% of the aggregate amount of the
then outstanding Receivables for all Grantors.

5.7           Intellectual
Property. (a) Such Grantor (either itself or through licensees) will (i) continue
to use each Trademark material to its business in order to maintain such

 11
 

 

Trademark in full force free from any claim of
abandonment for non-use, (ii) maintain as in the past the quality of
products and services offered under such Trademark, (iii) use such
Trademark with the appropriate notice of registration and all other notices and
legends required by applicable law, (iv) not adopt or use any mark which
is confusingly similar or a colorable imitation of such Trademark unless the
Administrative Agent, for the ratable benefit of the Lenders, shall obtain a
perfected security interest in such mark pursuant to this Agreement, and (v) not
(and not permit any licensee or sublicensee thereof to) do any act or knowingly
omit to do any act whereby such Trademark may become invalidated or impaired in
any way.

(b)           Such Grantor (either
itself or through licensees) will not do any act, or omit to do any act,
whereby any Patent material to its business may become forfeited, abandoned or
dedicated to the public.

(c)           Such Grantor (either
itself or through licensees) (i) will employ each Copyright material to
its business and (ii) will not (and will not permit any licensee or
sublicensee thereof to) do any act or knowingly omit to do any act whereby any
material portion of such Copyrights may become invalidated or otherwise
impaired. Such Grantor will not (either itself or through licensees) do any act
whereby any material portion of such Copyrights may fall into the public
domain.

(d)           Such Grantor (either
itself or through licensees) will not do any act that knowingly uses any
Intellectual Property material to its business to infringe the intellectual
property rights of any other Person.

(e)           Such Grantor will
notify the Administrative Agent and the Lenders immediately if it knows, or has
reason to know, that any application or registration relating to any material
Intellectual Property may become forfeited, abandoned or dedicated to the
public, or of any adverse determination or development (including the institution
of, or any such determination or development in, any proceeding in the United
States Patent and Trademark Office, the United States Copyright Office or any
court or tribunal in any country) regarding, such Grantor’s ownership of, or
the validity of, any material Intellectual Property or such Grantor’s right to
register the same or to own and maintain the same.

(f)            Whenever such
Grantor, either by itself or through any agent, employee, licensee or designee,
shall file an application for the registration of any Intellectual Property
with the United States Patent and Trademark Office, the United States Copyright
Office or any similar office or agency in any other country or any political
subdivision thereof, such Grantor shall report such filing to the Administrative
Agent concurrently with the next delivery of financial statements of the
Company pursuant to Section 10.1 of the Credit Agreement. Upon the
request of the Administrative Agent, such Grantor shall execute and deliver,
and have recorded, any and all agreements, instruments, documents, and papers
as the Administrative Agent may request to evidence the Administrative Agent’s
and the Lenders’ security interest in any Copyright, Patent or Trademark and
the goodwill and general intangibles of such Grantor relating thereto or
represented thereby.

 12

 

(g)           Such Grantor will
take all reasonable and necessary steps to maintain and pursue each application
(and to obtain the relevant registration) and to maintain each registration of
all material Intellectual Property owned by it.

(h)           In the event that
any material Intellectual Property is infringed upon or misappropriated or
diluted by a third party, such Grantor shall (i) take such actions as such
Grantor shall reasonably deem appropriate under the circumstances to protect
such Intellectual Property and (ii) if such Intellectual Property is of
material economic value, promptly notify the Administrative Agent after it
learns thereof and, to the extent, in its reasonable judgment, such Grantor
determines it appropriate under the circumstances, sue for infringement,
misappropriation or dilution, to seek injunctive relief where appropriate and
to recover any and all damages for such infringement, misappropriation or
dilution.

5.8           Reserved.

5.9           Depositary
and Other Deposit Accounts. (a) On or before the Closing Date, the
Grantors shall (i) direct all of their Account Debtors to make all
payments on their Accounts directly to one or more deposit accounts owned and
controlled by the Grantors and maintained with the Administrative Agent and (ii) cause
any Person acting for or in concert with the Grantors that received any monies,
checks, notes, drafts or other payments relating to or as proceeds from Account
Debtors to promptly remit the same to such deposit accounts. Each Grantor
agrees to indemnify and hold the Administrative Agent and Lenders harmless from
any and all liabilities, claims, losses and demands whatsoever, including
reasonable attorneys’ fees and expenses, arising from or relating to actions of
the Administrative Agent or any Lender pursuant to this Section 5.9 or any
deposit account agreement.

(b)           No Grantor shall
open any depositary or other deposit accounts unless such Grantor shall have
given the Administrative Agent 10 days’ prior written notice of its intention
to open any such new deposit accounts. The Grantors shall deliver to the
Administrative Agent a revised version of Schedule 6 showing any changes
thereto within 5 days of any such change. Each Grantor hereby authorizes the
financial institutions at which such Grantor maintains a deposit account to
provide the Administrative Agent with such information with respect to such
deposit account as the Administrative Agent may from time to time reasonably
request, and each Grantor hereby consents to such information being provided to
the Administrative Agent. Each Grantor will, cause each financial institution
at which such Grantor maintains a depositary or other deposit account that
exceeds $1,000,000 in average daily balance for any one month period to enter
into a bank agency or other similar agreement with the Administrative Agent and
such Grantor, in form and substance satisfactory to the Administrative Agent,
in order to give the Administrative Agent “control” (as defined in the UCC) of
such account.

(c)           The Grantors, jointly and severally, agree
to pay all fees, costs and expenses which the Administrative Agent incurs in
connection with opening and maintaining the deposit accounts described in this Section and
depositing for collection by the Administrative Agent any check or other item
of payment received by the Administrative Agent on account of the Obligations. All
of such fees, costs and expenses shall constitute Obligations hereunder and
shall be payable to the Administrative Agent by the Grantors upon demand. All
checks, drafts, instruments and other items of payment or proceeds of
Collateral shall be endorsed by the

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applicable Grantor to the Administrative
Agent, and, if that endorsement of any such item shall not be made for any
reason, the Administrative Agent is hereby irrevocably authorized to endorse
the same on such Grantor’s behalf. Subject to applicable law regarding
Governmental Account Debtors, and for the purpose of this section, each
Grantor  irrevocably hereby makes,
constitutes and appoints the Administrative Agent (and all Persons designated
by the Administrative Agent for that purpose) as such Grantor’s true and lawful
attorney and agent-in-fact (a) to endorse such Grantor’s name upon said
items of payment and/or proceeds of Collateral and upon any Chattel Paper,
document, Instrument, invoice or similar document or agreement relating to any
Account of the such Grantor or goods pertaining thereto; (b) to take
control in any manner of any item of payment or proceeds thereof; and (c) to
have access to any lock box or postal box into which any of such Grantor’s mail
is deposited, and open and process all mail addressed to the such Grantor and
deposited therein. All amounts received in an Agent Account shall be deemed
received by the Administrative Agent in accordance with Section 7.1
of the Credit Agreement and applied to Obligations. In no event shall any
amount be applied unless and until such amount shall have been credited in
immediately available funds to an Agent Account.

5.10         Other Matters.

(a)           On or prior to the
Closing Date, each of the Grantors shall cause to be delivered to the
Administrative Agent a Collateral Access Agreement with respect to each bailee
with which such Grantor keeps Inventory or other assets as of the Closing Date
with a value in excess of $500,000. If any Grantor shall cause to be delivered
Inventory or other property in excess of $500,000 in value to any bailee after
the Closing Date, such Grantor shall use reasonable efforts to cause such
bailee to sign a Collateral Access Agreement. Such requirement may be waived at
the option of the Administrative Agent. For purposes of this Section 5.10(a),
“value” of Inventory and other property shall mean the value assigned by the
relevant Grantor to such items for purposes of reporting to such Grantor’s
insurers the value with respect to the applicable location.

(b)           Each Grantor
authorizes the Administrative Agent to, at any time and from time to time, file
financing statements, continuation statements, and amendments thereto that
describe the Collateral as “all assets” of each Grantor, or words of similar
effect, and which contain any other information required pursuant to the UCC
for the sufficiency of filing office acceptance of any financing statement,
continuation statement, or amendment, and each Grantor agrees to furnish any
such information to the Administrative Agent promptly upon request. Any such
financing statement, continuation statement, or amendment may be signed by the
Administrative Agent on behalf of any Grantor and may be filed at any time in
any jurisdiction.

(c)           Each Grantor shall,
at any time and from time and to time, take such steps as the Administrative
Agent may reasonably request for the Administrative Agent (i) to obtain an
acknowledgement, in form and substance reasonably satisfactory to the Administrative
Agent, of any bailee having possession of any of the Collateral, stating that
the bailee holds such Collateral for the Administrative Agent, (ii) to
obtain “control” of any letter-of-credit rights, or electronic chattel paper
(as such terms are defined by the UCC with corresponding provisions thereof
defining what constitutes “control” for such items of Collateral), with any
agreements establishing control to be in form and substance reasonably
satisfactory to the Administrative

 14
 

 

Agent, and (iii) otherwise
to insure the continued perfection and priority of the Administrative Agent’s
security interest in any of the Collateral and of the preservation of its
rights therein. If any Grantor shall at any time, acquire a “commercial tort
claim” (as such term is defined in the UCC) in excess of $500,000, such Grantor
shall promptly notify the Administrative Agent thereof in writing and
supplement Schedule 7, therein providing a reasonable description and
summary thereof, and upon delivery thereof to the Administrative Agent, such
Grantor shall be deemed to thereby grant to the Administrative Agent (and such
Grantor hereby grants to the Administrative Agent) a security interest and lien
in and to such commercial tort claim and all proceeds thereof, all upon the
terms of and governed by this Agreement.

(d)           Without limiting the
generality of the foregoing, if any Grantor at any time holds or acquires an
interest in any electronic chattel paper or any “transferable record”, as that
term is defined in Section 201 of the federal Electronic Signatures in
Global and National Commerce Act, or in §16 of the Uniform Electronic
Transactions Act as in effect in any relevant jurisdiction, such Grantor shall
promptly notify the Administrative Agent thereof and, at the request of the
Administrative Agent, shall take such action as the Administrative Agent may
reasonably request to vest in the Administrative Agent “control” under Section 9-105
of the UCC of such electronic chattel paper or control under Section 201
of the federal Electronic Signatures in Global and National Commerce Act or, as
the case may be, §16 of the Uniform Electronic Transactions Act, as so in
effect in such jurisdiction, of such transferable record.

SECTION 6  REMEDIAL PROVISIONS.

6.1           Certain Matters
Relating to Receivables. (a) At any time and from time to time after
the occurrence and during the continuance of an Event of Default, the
Administrative Agent shall have the right to make test verifications of the
Receivables in any manner and through any medium that it reasonably considers
advisable, and each Grantor shall furnish all such assistance and information
as the Administrative Agent may require in connection with such test
verifications. At any time and from time to time after the occurrence and
during the continuance of an Event of Default, upon the Administrative Agent’s
request and at the expense of the relevant Grantor, such Grantor shall cause
independent public accountants or others satisfactory to the Administrative
Agent to furnish to the Administrative Agent reports showing reconciliations,
agings and test verifications of, and trial balances for, the Receivables.

(b)           Subject to
applicable law regarding Governmental Account Debtors, the Administrative Agent
hereby authorizes each Grantor to collect such Grantor’s Receivables, and the
Administrative Agent may curtail or terminate such authority at any time after
the occurrence and during the continuance of an Event of Default. If required
by the Administrative Agent at any time after the occurrence and during the
continuance of an Event of Default, any payments of Receivables, when collected
by any Grantor, (i) shall be forthwith (and, in any event, within 2
Business Days) deposited by such Grantor in the exact form received, duly
indorsed by such Grantor to the Administrative Agent if required, in a
collateral account maintained under the sole dominion and control of the
Administrative Agent, subject to withdrawal by the Administrative Agent for the
account of the Lenders only as provided in Section 6.5, and (ii) until
so turned over, shall be held by such Grantor in trust for the Administrative
Agent and the Lenders, segregated from other funds of such Grantor. Each such
deposit of Proceeds of Receivables shall

 15
 

 

be accompanied by a report identifying in reasonable detail the nature
and source of the payments included in the deposit.

(c)           At any time and from
time to time after the occurrence and during the continuance of an Event of
Default, at the Administrative Agent’s request, each Grantor shall deliver to
the Administrative Agent all original and other documents evidencing, and
relating to, the agreements and transactions which gave rise to the
Receivables, including all original orders, invoices and shipping receipts.

6.2           Communications with
Obligors; Grantors Remain Liable. (a) Subject to applicable law regarding
Governmental Account Debtors, the Administrative Agent in its own name
or in the name of others may at any time after the occurrence and during the
continuance of an Event of Default communicate with obligors under the
Receivables to verify with them to the Administrative Agent’s satisfaction the
existence, amount and terms of any Receivables.

(b)           Upon the request of
the Administrative Agent at any time after the occurrence and during the
continuance of an Event of Default, each Grantor shall notify obligors on the
Receivables that the Receivables have been assigned to the Administrative Agent
for the ratable benefit of the Lenders and that payments in respect thereof
shall be made directly to the Administrative Agent.

(c)           Anything herein to
the contrary notwithstanding, each Grantor shall remain liable in respect of
each of the Receivables to observe and perform all the conditions and
obligations to be observed and performed by it thereunder, all in accordance
with the terms of any agreement giving rise thereto. Neither the Administrative
Agent nor any Lender shall have any obligation or liability under any
Receivable (or any agreement giving rise thereto) by reason of or arising out
of this Agreement or the receipt by the Administrative Agent or any Lender of
any payment relating thereto, nor shall the Administrative Agent or any Lender
be obligated in any manner to perform any of the obligations of any Grantor
under or pursuant to any Receivable (or any agreement giving rise thereto), to
make any payment, to make any inquiry as to the nature or the sufficiency of
any payment received by it or as to the sufficiency of any performance by any
party thereunder, to present or file any claim, to take any action to enforce
any performance or to collect the payment of any amounts which may have been
assigned to it or to which it may be entitled at any time or times.

(d)           For the purpose of
enabling the Administrative Agent to exercise rights and remedies under this
Agreement, each Grantor hereby grants to the Administrative Agent, for the
benefit of the Administrative Agent and the Lenders, an irrevocable,
nonexclusive license (exercisable without payment of royalty or other
compensation to such Grantor) to use, license or sublicense any Intellectual
Property now owned or hereafter acquired by such Grantor, and wherever the same
may be located, and including in such license access to all media in which any
of the licensed items may be recorded or stored and to all computer software
and programs used for the compilation or printout thereof.

6.3           Investment
Property. (a) Unless an Event of Default shall have occurred and be
continuing and the Administrative Agent shall have given notice to the relevant
Grantor of the Administrative Agent’s intent to exercise its corresponding
rights pursuant to Section

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6.3(b),
each Grantor shall be permitted to receive all cash dividends and distributions
paid in respect of the Pledged Equity and all payments made in respect of the
Pledged Notes, to the extent permitted in the Credit Agreement, and to exercise
all voting and other rights with respect to the Investment Property; provided,
that no vote shall be cast or other right exercised or action taken which could
impair the Collateral or which would be inconsistent with or result in any
violation of any provision of the Credit Agreement, this Agreement or any other
Loan Document.

(b)           If an Event of
Default shall occur and be continuing and the Administrative Agent shall give
notice of its intent to exercise such rights to the relevant Grantor or
Grantors, (i) the Administrative Agent shall have the right to receive any
and all cash dividends and distributions, payments or other Proceeds paid in
respect of the Investment Property and make application thereof to the
Obligations in such order as the Administrative Agent may determine, and (ii) any
or all of the Investment Property shall be registered in the name of the
Administrative Agent or its nominee, and the Administrative Agent or its
nominee may thereafter exercise (x) all voting and other rights pertaining
to such Investment Property at any meeting of holders of the equity interests
of the relevant Issuer or Issuers or otherwise and (y) any and all rights
of conversion, exchange and subscription and any other rights, privileges or
options pertaining to such Investment Property as if it were the absolute owner
thereof (including the right to exchange at its discretion any and all of the
Investment Property upon the merger, consolidation, reorganization,
recapitalization or other fundamental change in the corporate or other
structure of any Issuer, or upon the exercise by any Grantor or the
Administrative Agent of any right, privilege or option pertaining to such Investment
Property, and in connection therewith, the right to deposit and deliver any and
all of the Investment Property with any committee, depositary, transfer agent,
registrar or other designated agency upon such terms and conditions as the
Administrative Agent may determine), all without liability except to account
for property actually received by it, but the Administrative Agent shall have
no duty to any Grantor to exercise any such right, privilege or option and
shall not be responsible for any failure to do so or delay in so doing.

(c)           Each Grantor hereby
authorizes and instructs each Issuer of any Investment Property pledged by such
Grantor hereunder to (i) comply with any instruction received by it from
the Administrative Agent in writing that (x) states that an Event of
Default has occurred and is continuing and (y) is otherwise in accordance
with the terms of this Agreement, without any other or further instructions
from such Grantor, and each Grantor agrees that each Issuer shall be fully
protected in so complying and (ii) unless otherwise expressly permitted
hereby, pay any dividends, distributions or other payments with respect to the
Investment Property directly to the Administrative Agent.

6.4           Proceeds to be
Turned Over to Administrative Agent. In addition to the rights of the
Administrative Agent and the Lenders specified in Section 6.1 with
respect to payments of Receivables, if an Event of Default shall occur and be
continuing, all Proceeds received by any Grantor consisting of cash, checks and
other cash equivalent items shall be held by such Grantor in trust for the
Administrative Agent and the Lenders, segregated from other funds of such
Grantor, and shall, forthwith upon receipt by such Grantor, be turned over to
the Administrative Agent in the exact form received by such Grantor (duly
indorsed by such Grantor to the Administrative Agent, if required). All
Proceeds received by the Administrative Agent

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hereunder
shall be held by the Administrative Agent in a collateral account maintained under
its sole dominion and control. All Proceeds, while held by the Administrative
Agent in any collateral account (or by such Grantor in trust for the
Administrative Agent and the Lenders) established pursuant hereto, shall
continue to be held as collateral security for the Obligations and shall not
constitute payment thereof until applied as provided in Section 6.5.

6.5           Application of
Proceeds. At such intervals as may be agreed upon by the Company and the
Administrative Agent, or, if an Event of Default shall have occurred and be
continuing, at any time at the Administrative Agent’s election, the
Administrative Agent may apply all or any part of Proceeds from the sale of, or
other realization upon, all or any part of the Collateral in payment of the
Obligations in such order as the Administrative Agent shall determine in its
discretion. Any part of such funds which the Administrative Agent elects not so
to apply and deems not required as collateral security for the Obligations
shall be paid over from time to time by the Administrative Agent to the
applicable Grantor or to whomsoever may be lawfully entitled to receive the
same. Any balance of such Proceeds remaining after the Obligations shall have
been Paid in Full shall be paid over to the applicable Grantor or to whomsoever
may be lawfully entitled to receive the same. In the absence of a specific
determination by the Administrative Agent, the Proceeds from the sale of, or
other realization upon, all or any part of the Collateral in payment of the
Obligations shall be applied in the following order:

FIRST,
to the payment of all fees, costs, expenses and
indemnities of the Administrative Agent (in its capacity as such), including
Attorney Costs, and any other Obligations owing to the Administrative Agent in
respect of sums advanced by the Administrative Agent to preserve the Collateral
or to preserve its security interest in the Collateral, until paid in full;

SECOND,
to the payment of all fees, costs, expenses and
indemnities of the Lenders, pro-rata, until paid in full;

THIRD,
to the payment of all of the Obligations in respect of
the Swing Line Loans to the Swing Line Lender, until paid in full;

FOURTH,
to the payment of all of the Obligations (other than
Bank Product Obligations and Hedging Obligations) consisting of accrued and
unpaid interest owing to any Lender, pro-rata, until paid in full;

FIFTH,
to the payment of all Obligations (other than Bank
Product Obligations and Hedging Obligations) consisting of principal owing to
any Lender, pro-rata, until paid in full;

SIXTH,
to the payment of the Administrative Agent an amount
equal to all Obligations in respect of outstanding Letters of Credit to be held
as cash collateral in respect of such obligations;

SEVENTH,
to the payment of all Bank Products Obligations and
Hedging Obligations owing to any Lender or its Affiliates, pro-rata, until paid
in full;

 18
 

 

EIGHTH,
to the payment of all other Obligations owing to each
Lender, pro-rata, until paid in full; and

NINTH,
to the payment of any remaining Proceeds, if any, to
whomever may be lawfully entitled to receive such amounts.

6.6           Code and Other
Remedies. If an Event of Default shall occur and be continuing, the
Administrative Agent, on behalf of the Lenders, may exercise, in addition to
all other rights and remedies granted to them in this Agreement and in any
other instrument or agreement securing, evidencing or relating to the
Obligations, all rights and remedies of a secured party under the UCC or any
other applicable law, to the extent permitted by applicable law. Without
limiting the generality of the foregoing, the Administrative Agent, without
demand of performance or other demand, presentment, protest, advertisement or
notice of any kind (except any notice required by law referred to below) to or
upon any Grantor or any other Person (all and each of which demands, defenses,
advertisements and notices are hereby waived), may in such circumstances
forthwith collect, receive, appropriate and realize upon the Collateral, or any
part thereof, and/or may forthwith sell, lease, assign, give options to
purchase, or otherwise dispose of and deliver the Collateral or any part
thereof (or contract to do any of the foregoing), in one or more parcels at
public or private sale or sales, at any exchange, broker’s board or office of
the Administrative Agent or any Lender or elsewhere upon such terms and
conditions as it may deem advisable and at such prices as it may deem best, for
cash or on credit or for future delivery with assumption of any credit risk. The
Administrative Agent or any Lender shall have the right upon any such public
sale or sales, and, to the extent permitted by law, upon any such private sale
or sales, to purchase the whole or any part of the Collateral so sold, free of
any right or equity of redemption in any Grantor, which right or equity is
hereby waived and released. Each Grantor further agrees, at the Administrative
Agent’s request, to assemble the Collateral and make it available to the
Administrative Agent at places which the Administrative Agent shall reasonably
select, whether at such Grantor’s premises or elsewhere. The Administrative
Agent shall apply the net proceeds of any action taken by it pursuant to this Section 6.6,
after deducting all reasonable costs and expenses of every kind incurred in
connection therewith or incidental to the care or safekeeping of any of the
Collateral or in any way relating to the Collateral or the rights of the
Administrative Agent and the Lenders hereunder, including Attorney Costs to the
payment in whole or in part of the Obligations, in such order as the
Administrative Agent may elect, and only after such application and after the
payment by the Administrative Agent of any other amount required by any
provision of law, need the Administrative Agent account for the surplus, if
any, to any Grantor. To the extent permitted by applicable law, each Grantor
waives all claims, damages and demands it may acquire against the
Administrative Agent or any Lender arising out of the exercise by them of any
rights hereunder. If any notice of a proposed sale or other disposition of
Collateral shall be required by law, such notice shall be deemed reasonable and
proper if given at least 10 days before such sale or other disposition.

6.7           Remedies
Regarding Pledged Equity. (a) Each Grantor recognizes that the
Administrative Agent may be unable to effect a public sale of any or all the
Pledged Equity, by reason of certain prohibitions contained in the Securities
Act and applicable state securities laws or otherwise, and may be compelled to
resort to one or more private sales thereof to a restricted group of purchasers
which will be obliged to agree, among other things, to acquire such securities
for their own account for investment and not with a view to the distribution or
resale

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thereof. Each
Grantor acknowledges and agrees that any such private sale may result in prices
and other terms less favorable than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner. The
Administrative Agent shall be under no obligation to delay a sale of any of the
Pledged Equity for the period of time necessary to permit the Issuer thereof to
register such securities or other interests for public sale under the
Securities Act, or under applicable state securities laws, even if such Issuer
would agree to do so.

(b)           Each Grantor agrees
to use its best efforts to do or cause to be done all such other acts as may be
necessary to make such sale or sales of all or any portion of the Pledged
Equity pursuant to this Section 6.7 valid and binding and in
compliance with applicable law. Each Grantor further agrees that a breach of
any of the covenants contained in this Section 6.7 will cause
irreparable injury to the Administrative Agent and the Lenders, that the
Administrative Agent and the Lenders have no adequate remedy at law in respect
of such breach and, as a consequence, that each and every covenant contained in
this Section 6.7 shall be specifically enforceable against such
Grantor, and such Grantor hereby waives and agrees not to assert any defenses
against an action for specific performance of such covenants except for a
defense that no Event of Default has occurred under the Credit Agreement.

6.8           Waiver;
Deficiency. Each Grantor waives and agrees not to assert any rights or
privileges which it may acquire under Section 9-626 of the UCC. Each
Grantor shall remain liable for any deficiency if the proceeds of any sale or
other disposition of the Collateral are insufficient to pay the Obligations in
full and the fees and disbursements of any attorneys employed by the
Administrative Agent or any Lender to collect such deficiency.

SECTION 7  THE ADMINISTRATIVE AGENT.

7.1           Administrative
Agent’s Appointment as Attorney-in-Fact, etc. (a) Each Grantor hereby
irrevocably constitutes and appoints the Administrative Agent and any officer
or agent thereof, with full power of substitution, as its true and lawful
attorney-in-fact with full irrevocable power and authority in the place and
stead of such Grantor and in the name of such Grantor or in its own name, for
the purpose of carrying out the terms of this Agreement, to take any and all
appropriate action and to execute any and all documents and instruments which
may be necessary or desirable to accomplish the purposes of this Agreement,
and, without limiting the generality of the foregoing, each Grantor hereby
gives the Administrative Agent the power and right, on behalf of and at the
expense of such Grantor, without notice to or assent by such Grantor, to do any
or all of the following:

(i)            in the name of such Grantor or its
own name, or otherwise, take possession of and indorse and collect any checks,
drafts, notes, acceptances or other instruments for the payment of moneys due
under any Receivable or with respect to any other Collateral and file any claim
or take any other action or proceeding in any court of law or equity or
otherwise deemed appropriate by the Administrative Agent for the purpose of collecting
any and all such moneys due under any Receivable or with respect to any other
Collateral whenever payable;

 20
 

 

(ii)           in the case of any Intellectual
Property, execute and deliver, and have recorded, any and all agreements,
instruments, documents and papers as the Administrative Agent may request to
evidence the Administrative Agent’s security interest in such Intellectual
Property and the goodwill and general intangibles of such Grantor relating
thereto or represented thereby;

(iii)          discharge Liens levied or placed on or
threatened against the Collateral, and effect any repairs or insurance called
for by the terms of this Agreement and pay all or any part of the premiums
therefor and the costs thereof;

(iv)          execute, in connection with any sale
provided for in Section 6.6 or 6.7, any indorsements, assignments
or other instruments of conveyance or transfer with respect to the Collateral;
and

(v)           (1) direct any party liable for
any payment under any of the Collateral to make payment of any and all moneys
due or to become due thereunder directly to the Administrative Agent or as the
Administrative Agent shall direct; (2) ask or demand for, collect, and
receive payment of and receipt for, any and all moneys, claims and other
amounts due or to become due at any time in respect of or arising out of any
Collateral; (3) sign and indorse any invoices, freight or express bills,
bills of lading, storage or warehouse receipts, drafts against debtors,
assignments, verifications, notices and other documents in connection with any
of the Collateral; (4) commence and prosecute any suits, actions or
proceedings at law or in equity in any court of competent jurisdiction to
collect the Collateral or any portion thereof and to enforce any other right in
respect of any Collateral; (5) defend any suit, action or proceeding
brought against such Grantor with respect to any Collateral; (6) settle,
compromise or adjust any such suit, action or proceeding and, in connection
therewith, give such discharges or releases as the Administrative Agent may
deem appropriate; (7) assign any Copyright, Patent or Trademark,
throughout the world for such term or terms, on such conditions, and in such
manner, as the Administrative Agent shall in its sole discretion determine; (8) vote
any right or interest with respect to any Investment Property; (9) order
good standing certificates and conduct lien searches in respect of such
jurisdictions or offices as the Administrative Agent may deem appropriate; and (10) generally
sell, transfer, pledge and make any agreement with respect to or otherwise deal
with any of the Collateral as fully and completely as though the Administrative
Agent were the absolute owner thereof for all purposes, and do, at the
Administrative Agent’s option and such Grantor’s expense, at any time, or from
time to time, all acts and things which the Administrative Agent deems
necessary to protect, preserve or realize upon the Collateral and the
Administrative Agent’s security interests therein and to effect the intent of
this Agreement, all as fully and effectively as such Grantor might do.

Anything in this Section 7.1(a) to
the contrary notwithstanding, the Administrative Agent agrees that it will not
exercise any rights under the power of attorney provided for in this Section 7.1(a) unless
an Event of Default shall have occurred and be continuing.

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(b)           If any Grantor fails
to perform or comply with any of its agreements contained herein, the
Administrative Agent, at its option, but without any obligation so to do, may
perform or comply, or otherwise cause performance or compliance, with such
agreement.

(c)           Each Grantor hereby
ratifies all that such attorneys shall lawfully do or cause to be done by
virtue hereof. All powers, authorizations and agencies contained in this
Agreement are coupled with an interest and are irrevocable until this Agreement
is terminated and the security interests created hereby are released.

7.2           Duty of
Administrative Agent. The Administrative Agent’s sole duty with respect to
the custody, safekeeping and physical preservation of the Collateral in its
possession shall be to deal with it in the same manner as the Administrative
Agent deals with similar property for its own account. Neither the
Administrative Agent or any Lender nor any of their respective officers, directors,
employees or agents shall be liable for any failure to demand, collect or
realize upon any of the Collateral or for any delay in doing so or shall be
under any obligation to sell or otherwise dispose of any Collateral upon the
request of any Grantor or any other Person or to take any other action
whatsoever with regard to the Collateral or any part thereof. The powers
conferred on the Administrative Agent and the Lenders hereunder are solely to
protect the Administrative Agent’s and the Lenders’ interests in the Collateral
and shall not impose any duty upon the Administrative Agent or any Lender to
exercise any such powers. The Administrative Agent and the Lenders shall be
accountable only for amounts that they actually receive as a result of the exercise
of such powers, and neither they nor any of their officers, directors,
employees or agents shall be responsible to any Grantor for any act or failure
to act hereunder.

7.3           Authority of
Administrative Agent. Each Grantor acknowledges that the rights and
responsibilities of the Administrative Agent under this Agreement with respect
to any action taken by the Administrative Agent or the exercise or non-exercise
by the Administrative Agent of any option, voting right, request, judgment or
other right or remedy provided for herein or resulting or arising out of this
Agreement shall, as between the Administrative Agent and the Lenders, be
governed by the Credit Agreement and by such other agreements with respect
thereto as may exist from time to time among them, but, as between the
Administrative Agent and the Grantors, the Administrative Agent shall be
conclusively presumed to be acting as agent for the Lenders with full and valid
authority so to act or refrain from acting, and no Grantor shall be under any
obligation, or entitlement, to make any inquiry respecting such authority.

SECTION 8  MISCELLANEOUS.

8.1           Amendments in
Writing. None of the terms or provisions of this Agreement may be waived,
amended, supplemented or otherwise modified except in accordance with Section 15.1
of the Credit Agreement.

8.2           Notices. All
notices, requests and demands to or upon the Administrative Agent or any
Grantor hereunder shall be addressed to the Company and effected in the manner
provided for in Section 15.3 of the Credit Agreement and each
Grantor hereby appoints the Company as its agent to receive notices hereunder.

 22

 

 

8.3           Indemnification
by Grantors. THE GRANTORS, JOINTLY AND
SEVERALLY, HEREBY AGREE TO INDEMNIFY, EXONERATE AND HOLD EACH LENDER PARTY FREE
AND HARMLESS FROM AND AGAINST ANY AND ALL INDEMNIFIED LIABILITIES, INCURRED BY
THE LENDER PARTIES OR ANY OF THEM AS A RESULT OF, OR ARISING OUT OF, OR
RELATING TO (A) ANY TENDER OFFER, MERGER, PURCHASE OF EQUITY INTERESTS,
PURCHASE OF ASSETS (INCLUDING THE RELATED TRANSACTIONS) OR OTHER SIMILAR
TRANSACTION FINANCED OR PROPOSED TO BE FINANCED IN WHOLE OR IN PART, DIRECTLY
OR INDIRECTLY, WITH THE PROCEEDS OF ANY OF THE LOANS, (B) THE USE,
HANDLING, RELEASE, EMISSION, DISCHARGE, TRANSPORTATION, STORAGE, TREATMENT OR
DISPOSAL OF ANY HAZARDOUS SUBSTANCE AT ANY PROPERTY OWNED OR LEASED BY ANY
GRANTOR, (C) ANY VIOLATION OF ANY ENVIRONMENTAL LAWS WITH RESPECT TO
CONDITIONS AT ANY PROPERTY OWNED OR LEASED BY ANY GRANTOR OR THE OPERATIONS
CONDUCTED THEREON, (D) THE INVESTIGATION, CLEANUP OR REMEDIATION OF
OFFSITE LOCATIONS AT WHICH ANY LOAN PARTY OR THEIR RESPECTIVE PREDECESSORS ARE
ALLEGED TO HAVE DIRECTLY OR INDIRECTLY DISPOSED OF HAZARDOUS SUBSTANCES OR (E) THE
EXECUTION, DELIVERY, PERFORMANCE OR ENFORCEMENT OF THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT BY ANY OF THE LENDER PARTIES, EXCEPT FOR ANY SUCH INDEMNIFIED
LIABILITIES ARISING ON ACCOUNT OF THE APPLICABLE LENDER PARTY’S GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT AS DETERMINED BY A FINAL, NONAPPEALABLE
JUDGMENT BY A COURT OF COMPETENT JURISDICTION. IF AND TO THE EXTENT THAT THE
FOREGOING UNDERTAKING MAY BE UNENFORCEABLE FOR ANY REASON, EACH GRANTOR
HEREBY AGREES TO MAKE THE MAXIMUM CONTRIBUTION TO THE PAYMENT AND SATISFACTION
OF EACH OF THE INDEMNIFIED LIABILITIES WHICH IS PERMISSIBLE UNDER APPLICABLE
LAW. ALL OBLIGATIONS PROVIDED FOR IN THIS SECTION 8.3 SHALL SURVIVE
REPAYMENT OF ALL (AND SHALL BE) OBLIGATIONS (AND TERMINATION OF ALL COMMITMENTS
UNDER THE CREDIT AGREEMENT), ANY FORECLOSURE UNDER, OR ANY MODIFICATION,
RELEASE OR DISCHARGE OF, ANY OR ALL OF THE COLLATERAL DOCUMENTS AND TERMINATION
OF THIS AGREEMENT.

8.4           Enforcement Expenses.
(a) Each Grantor agrees, on a joint and several basis, to pay or reimburse
on demand each Lender and the Administrative Agent for all reasonable
out-of-pocket costs and expenses (including Attorney Costs) incurred in
collecting against any Grantor under the guaranty contained in Section 2
or otherwise enforcing or preserving any rights under this Agreement and the
other Loan Documents.

(b)           Each Grantor agrees
to pay, and to save the Administrative Agent and the Lenders harmless from, any
and all liabilities with respect to, or resulting from any delay in paying, any
and all stamp, excise, sales or other taxes which may be payable or determined
to be payable with respect to any of the Collateral or in connection with any
of the transactions contemplated by this Agreement.

 23
 

 

 

(c)           The agreements in
this Section 8.4 shall survive repayment of all (and shall be)
Obligations (and termination of all commitments under the Credit Agreement),
any foreclosure under, or any modification, release or discharge of, any or all
of the Collateral Documents and termination of this Agreement.

8.5           Captions.
Section captions used in this Agreement are for convenience only and shall
not affect the construction of this Agreement.

8.6           Nature of
Remedies. All Obligations of each Grantor and rights of the Administrative
Agent and the Lenders expressed herein or in any other Loan Document shall be
in addition to and not in limitation of those provided by applicable law. No
failure to exercise and no delay in exercising, on the part of the
Administrative Agent or any Lender, any right, remedy, power or privilege
hereunder, shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power
or privilege.

8.7           Counterparts.
This Agreement may be executed in any number of counterparts and by the
different parties hereto on separate counterparts and each such counterpart
shall be deemed to be an original, but all such counterparts shall together
constitute but one and the same Agreement. Receipt by telecopy of any executed
signature page to this Agreement or any other Loan Document shall
constitute effective delivery of such signature page.

8.8           Severability.
The illegality or unenforceability of any provision of this Agreement or any
instrument or agreement required hereunder shall not in any way affect or
impair the legality or enforceability of the remaining provisions of this
Agreement or any instrument or agreement required hereunder.

8.9           Entire Agreement.
This Agreement, together with the other Loan Documents, embodies the entire
agreement and understanding among the parties hereto and supersedes all prior
or contemporaneous agreements and understandings of such Persons, verbal or
written, relating to the subject matter hereof and thereof and any prior
arrangements made with respect to the payment by any Grantor of (or any
indemnification for) any fees, costs or expenses payable to or incurred (or to
be incurred) by or on behalf of the Administrative Agent or the Lenders.

8.10         Successors;
Assigns. This Agreement shall be binding upon Grantors, the Lenders
and the Administrative Agent and their respective successors and assigns, and
shall inure to the benefit of Grantors, Lenders and the Administrative Agent
and the successors and assigns of the Lenders and the Administrative Agent. No
other Person shall be a direct or indirect legal beneficiary of, or have any
direct or indirect cause of action or claim in connection with, this Agreement
or any of the other Loan Documents. No Grantor may assign or transfer any of
its rights or Obligations under this Agreement without the prior written
consent of the Administrative Agent.

8.11         Governing Law.
THIS AGREEMENT SHALL BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL
LAWS OF THE STATE OF 

 24
 

 

 

ILLINOIS APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY
WITHIN SUCH STATE, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.

8.12         Forum Selection;
Consent to Jurisdiction. ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
UNDER, OR IN CONNECTION WITH THIS AGREEMENT SHALL BE BROUGHT AND MAINTAINED
EXCLUSIVELY IN THE COURTS OF THE STATE OF 

ILLINOIS OR IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF ILLINOIS; PROVIDED THAT NOTHING IN THIS AGREEMENT SHALL BE
DEEMED OR OPERATE TO PRECLUDE THE ADMINISTRATIVE AGENT FROM BRINGING SUIT OR
TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION. EACH GRANTOR HEREBY
EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE
STATE OF ILLINOIS AND OF THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF ILLINOIS FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE.
EACH GRANTOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY
REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE
STATE OF ILLINOIS. EACH GRANTOR HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY
SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM.

8.13         Waiver of Jury
Trial. EACH GRANTOR, THE ADMINISTRATIVE AGENT AND EACH LENDER HEREBY WAIVES
ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND
ANY RIGHTS UNDER THIS AGREEMENT AND ANY AMENDMENT, INSTRUMENT, DOCUMENT OR
AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION
HEREWITH AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A
COURT AND NOT BEFORE A JURY.

8.14         Set-off. Each
Grantor agrees that the Administrative Agent and each Lender have all rights of
set-off and bankers’ lien provided by applicable law, and in addition thereto,
each Grantor agrees that at any time any Event of Default exists, the
Administrative Agent and each Lender may apply to the payment of any
Obligations, whether or not then due, any and all balances, credits, deposits,
accounts or moneys of such Grantor then or thereafter with the Administrative
Agent or such Lender.

8.15         Acknowledgements.
Each Grantor hereby acknowledges that:

(a)           it has been advised by counsel in the
negotiation, execution and delivery of this Agreement and the other Loan Documents
to which it is a party;

(b)           neither the Administrative Agent nor
any Lender has any fiduciary relationship with or duty to any Grantor arising
out of or in connection with this Agreement or any of the other Loan Documents,
and the relationship between the 

 25
 

 

 

Grantors, on
the one hand, and the Administrative Agent and the Lenders, on the other hand,
in connection herewith or therewith is solely that of debtor and creditor; and

(c)           no joint venture is created hereby or
by the other Loan Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Lenders or among the Grantors and the Lenders.

8.16         Additional
Grantors. Each Loan Party that is required to become a party to this
Agreement pursuant to Section 11.5 of the Credit Agreement shall
become a Grantor for all purposes of this Agreement upon execution and delivery
by such Loan Party of a joinder agreement in the form of Annex I hereto.

8.17         Releases.
(a) At such time as the Obligations have been Paid in Full, the Collateral
shall be released from the Liens created hereby, and this Agreement and all
obligations (other than those expressly stated to survive such termination) of
the Administrative Agent and each Grantor hereunder shall terminate, all
without delivery of any instrument or performance of any act by any party, and
all rights to the Collateral shall revert to the Grantors. At the request and
sole expense of any Grantor following any such termination, the Administrative
Agent shall deliver to the Grantors any Collateral held by the Administrative
Agent hereunder, and execute and deliver to the Grantors such documents as the
Grantors shall reasonably request to evidence such termination.

(b)           If any of the
Collateral shall be sold, transferred or otherwise disposed of by any Grantor
in a transaction permitted by the Credit Agreement, then the Administrative
Agent, at the request and sole expense of such Grantor, shall execute and
deliver to such Grantor all releases or other documents reasonably necessary or
desirable for the release of the Liens created hereby on such Collateral.

8.18         Obligations and
Liens Absolute and Unconditional. Each Grantor understands and agrees that
the obligations of each Grantor under this Agreement shall be construed as a
continuing, absolute and unconditional without regard to (a) the validity
or enforceability of any Loan Document, any of the Obligations or any other
collateral security therefor or guaranty or right of offset with respect
thereto at any time or from time to time held by the Administrative Agent or
any Lender, (b) any defense, set-off or counterclaim (other than a defense
of payment or performance) which may at any time be available to or be asserted
by any Grantor or any other Person against the Administrative Agent or any Lender,
or (c) any other circumstance whatsoever (with or without notice to or
knowledge of any Grantor) which constitutes, or might be construed to
constitute, an equitable or legal discharge of any Grantor for the Obligations,
in bankruptcy or in any other instance. When making any demand hereunder or
otherwise pursuing its rights and remedies hereunder against any Grantor, the
Administrative Agent or any Lender may, but shall be under no obligation to,
make a similar demand on or otherwise pursue such rights and remedies as it may
have against any other Grantor or any other Person or against any collateral
security or guaranty for the Obligations or any right of offset with respect
thereto, and any failure by the Administrative Agent or any Lender to make any
such demand, to pursue such other rights or remedies or to collect any payments
from any other Grantor or any other Person or to realize upon any such
collateral security or guaranty or to exercise any such right of offset, or any
release of any other Grantor or any other Person or any 

 26
 

 

 

such
collateral security, guaranty or right of offset, shall not relieve any Grantor
of any obligation or liability hereunder, and shall not impair or affect the
rights and remedies, whether express, implied or available as a matter of law,
of the Administrative Agent or any Lender against any Grantor. For the purposes
hereof “demand” shall include the commencement and continuance of any legal
proceedings.

8.19         Reinstatement.
This Agreement shall remain in full force and effect and continue to be
effective should any petition be filed by or against Grantor or any Issuer for
liquidation or reorganization, should Grantor or any Issuer become insolvent or
make an assignment for the benefit of creditors or should a receiver or trustee
be appointed for all or any significant part of Grantor’s or and Issuer’s
assets, and shall continue to be effective or be reinstated, as the case may
be, if at any time payment and performance of the Obligations, or any part
thereof, is, pursuant to applicable law, rescinded or reduced in amount, or
must otherwise be restored or returned by any obligee of the Obligations,
whether as a “voidable preference”, “fraudulent conveyance”, or otherwise, all
as though such payment or performance had not been made. In the event that any
payment, or any part thereof, is rescinded, reduced, restored or returned, the
Obligations shall be reinstated and deemed reduced only by such amount paid and
not so rescinded, reduced, restored or returned.

[signature pages follow]

 

 27

 

Each of the undersigned has caused this Guaranty and
Collateral Agreement to be duly executed and delivered as of the date first
above written.

	
   

  	
  GRANTORS:

  
	
   

  	
   

  
	
   

  	
  OPTION CARE, INC., a Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  OPTION CARE, INC., a California corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  HOME HEALTH OF OPTION CARE, INC., a Nevada
  corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  OPTIONET, INC., a Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

 

 

	
  

  	
  OPTION CARE OF NEW YORK, INC., a New York
  Corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  OPTION CARE ENTERPRISES, INC., a Delaware
  corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  AT HOME SOLUTIONS, INC., a Montana corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  CYPRESS HOME MEDICAL, INC., a Florida corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  CHARTWELL CARE GIVERS, INC., a Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  CHARTWELL - SOUTHERN NEW ENGLAND LLC, a Delaware
  limited liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

 

 

	
  

  	
  EXCEL HEALTHCARE L.L.C., a Virginia limited
  liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  HOME I.V. INC., a California corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  HEALTHCARE OPTIONS OF MINNESOTA, INC, a Minnesota
  corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  INFUSION SPECIALTIES, INC., a Texas corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  NORTH COUNTY HOME I.V., INC., a California
  corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  OPTION CARE KANSAS CITY, LLC, a Delaware limited
  liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

 

 

	
  

  	
  OPTION HOME HEALTH, INC., an Ohio corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  OPTION CARE HOME HEALTH, L.L.C., a Delaware limited liability
  company

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  OPTION CARE NEVADA, L.L.C., a Delaware limited
  liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  OPTION CARE PHOENIX, LLC, a Delaware limited
  liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  OPTIONMED, INC., a Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  REHAB OPTIONS, INC., a Missouri corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

 

 

	
  

  	
  SALIENT MEDICAL CENTERS, L.L.C., a Delaware limited
  liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SPRINGVILLE PHARMACY INFUSION THERAPY, INC., a New
  York corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  OPTION CARE HOME HEALTH, LLC, a Washington limited
  liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  ADMINISTRATIVE AGENT:

  
	
   

  	
   

  
	
   

  	
  LASALLE BANK NATIONAL ASSOCIATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  

 

 

SCHEDULE 1

INVESTMENT PROPERTY

A.            PLEDGED
EQUITY

	
  Grantor (owner of Record of such Pledged Equity)

  	
   

  	
  Issuer

  	
   

  	
  Pledged Equity

  Description

  	
   

  	
  Percentage

  of Issuer

  	
   

  	
  Certificate

  (Indicate No.)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

B.            PLEDGED
NOTES

	
  Grantor (owner of Record of such Pledged Notes)

  	
   

  	
  Issuer

  	
   

  	
  Pledged Notes

  Description

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

C.            OTHER
INVESTMENT PROPERTY

	
  Grantor

  	
   

  	
  Investment Property Description

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

 

SCHEDULE 2

FILINGS AND PERFECTION

	
  GRANTOR

  	
   

  	
  FILING REQUIREMENT

  OR OTHER ACTION

  	
   

  	
  FILING OFFICE

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

SCHEDULE 3

GRANTOR INFORMATION

	
  GRANTOR

  (exact legal name)

  	
   

  	
  STATE OF

  ORGANIZATION

  	
   

  	
  FEDERAL EMPLOYER

  IDENTIFICATION NUMBER

  	
   

  	
  CHIEF EXECUTIVE OFFICE

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

SCHEDULE 4

A.            COLLATERAL
LOCATIONS

	
  GRANTOR

  	
   

  	
  COLLATERAL

  	
   

  	
  COLLATERAL

  LOCATION

  OR PLACE OF BUSINESS

  (INCLUDING CHIEF

  EXECUTIVE OFFICE)

  	
   

  	
  OWNER/LESSOR

  (IF LEASED)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

B.            COLLATERAL
IN POSSESSION OF LESSOR,
                BAILEE,
CONSIGNEE OR WAREHOUSEMAN

	
  GRANTOR

  	
   

  	
  COLLATERAL

  	
   

  	
  LESSOR/BAILEE/

  CONSIGNEE/WAREHOUSEMAN

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

SCHEDULE 5

INTELLECTUAL PROPERTY

Patents and Patent Licenses

	
  Grantor

  	
   

  	
  Patent

  Number

  	
   

  	
  Patent Application

  Number

  	
   

  	
  Date

  Patent Issued

  	
   

  	
  Date

  Patent Applied

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Trademarks and Trademark Licenses

	
  Grantor

  	
   

  	
  Trademark

  Number

  	
   

  	
  Trademark

  Application

  Number

  	
   

  	
  Trademark

  Registration

  Number

  	
   

  	
  Date of

  Application

  	
   

  	
  Date of

  Registration

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Copyrights

	
  Grantor

  	
   

  	
  Copyright Title

  	
   

  	
  Copyright

  Application

  	
   

  	
  Copyright

  Registration Number

  	
   

  	
  Copyright

  Application Number

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

SCHEDULE 6

DEPOSITARY AND OTHER DEPOSIT ACCOUNTS

	
  GRANTOR

  	
   

  	
  FINANCIAL

  INSTITUTION

  	
   

  	
  ACCOUNT NUMBER

  	
   

  	
  CONTACT

  INFORMATION

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

SCHEDULE 7

COMMERCIAL TORT CLAIMS

 

ANNEX I

FORM OF
JOINDER TO GUARANTY AND COLLATERAL AGREEMENT

This JOINDER AGREEMENT (this “Agreement”) dated
as of [______] is executed by the undersigned for the benefit of LaSalle Bank
National Association, as the Administrative Agent (the “Administrative Agent”)
in connection with that certain Guaranty and Collateral Agreement dated as of May 5,
2006 among the Grantors party thereto and the Administrative Agent (as amended,
restated, supplemented or modified from time to time, the “Guaranty and
Collateral Agreement”). Capitalized terms not otherwise defined herein are
being used herein as defined in the Guaranty and Collateral Agreement.

Each Person signatory
hereto is required to execute this Agreement pursuant to Section 8.16
of the Guaranty and Collateral Agreement.

In consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, each signatory hereby agrees as follows:

1.             Each such Person assumes all the obligations of a
Grantor under the Guaranty and Collateral Agreement and agrees that such person
or entity is a Grantor and bound as a Grantor under the terms of the Guaranty
and Collateral Agreement, as if it had been an original signatory to such
agreement. In furtherance of the foregoing, such Person hereby assigns, pledges
and grants to the Administrative Agent a security interest in all of its right,
title and interest in and to the Collateral owned thereby to secure the
Obligations.

2.             Schedules 1, 2, 3, 4, 5, 6 and 7 of the Guaranty and
Collateral Agreement are hereby amended to add the information relating to each
such Person set out on Schedules 1, 2, 3, 4, 5, 6 and 7 respectively, hereof. Each
such Person hereby makes to the Administrative Agent the representations and
warranties set forth in the Guaranty and Collateral Agreement applicable to
such Person and the applicable Collateral and confirms that such
representations and warranties are true and correct after giving effect to such
amendment to such Schedules.

3.             In furtherance of its obligations under Section 5.2
of the Guaranty and Collateral Agreement, each such Person agrees to deliver to
the Administrative Agent appropriately complete UCC financing statements naming
such person or entity as debtor and the Administrative Agent as secured party,
and describing its Collateral and such other documentation as the
Administrative Agent (or its successors or assigns) may require to evidence,
protect and perfect the Liens created by the Guaranty and Collateral Agreement,
as modified hereby. Each such Person acknowledges the authorizations given to
the Administrative Agent under the Section 5.10(b) of the
Guaranty and Collateral Agreement and otherwise.

4.             Each such Person’s address for notices under the
Guaranty and Collateral Agreement shall be the address of the Company set forth
in the Credit Agreement and each such Person hereby appoints the Company as its
agent to receive notices hereunder.

5.             This Agreement shall be deemed to be part of, and a
modification to, the Guaranty and Collateral Agreement and shall be governed by
all the terms and provisions of the Guaranty 

 

 

and Collateral
Agreement, with respect to the modifications intended to be made to such
agreement, which terms are incorporated herein by reference, are ratified and
confirmed and shall continue in full force and effect as valid and binding
agreements of each such person or entity enforceable against such person or
entity. Each such Person hereby waives notice of the Administrative Agent’s
acceptance of this Agreement. Each such Person will deliver an executed
original of this Agreement to the Administrative Agent.

[add signature block for each new Grantor]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00103-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00103-of-00352.parquet"}]]