Document:

exv10w1

 

Exhibit 10.1

EXECUTION VERSION

 

AGREEMENT AND PLAN OF MERGER

By and Among

TEVA PHARMACEUTICAL INDUSTRIES LIMITED,

BERYLLIUM MERGER CORPORATION

and

BENTLEY PHARMACEUTICALS, INC.

Dated as of March 31, 2008

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	ARTICLE I DEFINITIONS	 	 	2	 
	 

	 	Section 1.1
	 	Definitions
	 	 	2	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE II THE MERGER	 	 	2	 
	 

	 	Section 2.1
	 	The Merger
	 	 	2	 
	 

	 	Section 2.2
	 	Closing
	 	 	2	 
	 

	 	Section 2.3
	 	Effective Time
	 	 	2	 
	 

	 	Section 2.4
	 	Certificate of Incorporation and By-laws
	 	 	3	 
	 

	 	Section 2.5
	 	Board of Directors
	 	 	3	 
	 

	 	Section 2.6
	 	Officers
	 	 	3	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE III EFFECT OF THE MERGER ON CAPITAL STOCK; EXCHANGE OF CERTIFICATES	 	 	3	 
	 

	 	Section 3.1
	 	Effect on Securities
	 	 	3	 
	 

	 	Section 3.2
	 	Exchange of Company Common Stock
	 	 	5	 
	 

	 	Section 3.3
	 	Stock Options and Restricted Stock Units
	 	 	7	 
	 

	 	Section 3.4
	 	Lost Certificates
	 	 	8	 
	 

	 	Section 3.5
	 	Dissenting Shares
	 	 	8	 
	 

	 	Section 3.6
	 	Transfers; No Further Ownership Rights
	 	 	8	 
	 

	 	Section 3.7
	 	Withholding Rights
	 	 	9	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY	 	 	9	 
	 

	 	Section 4.1
	 	Organization and Qualification; Subsidiaries
	 	 	9	 
	 

	 	Section 4.2
	 	Company Certificate and Company By-laws
	 	 	10	 
	 

	 	Section 4.3
	 	Capitalization
	 	 	10	 
	 

	 	Section 4.4
	 	Authority Relative to Agreement
	 	 	11	 
	 

	 	Section 4.5
	 	No Conflict; Required Filings and Consents
	 	 	12	 
	 

	 	Section 4.6
	 	Permits and Licenses; Compliance with Laws
	 	 	13	 
	 

	 	Section 4.7
	 	Company SEC Documents; Financial Statements
	 	 	14	 
	 

	 	Section 4.8
	 	Absence of Certain Changes or Events
	 	 	15	 
	 

	 	Section 4.9
	 	No Undisclosed Liabilities
	 	 	16	 
	 

	 	Section 4.10
	 	Absence of Litigation
	 	 	16	 
	 

	 	Section 4.11
	 	Employee Matters
	 	 	16	 
	 

	 	Section 4.12
	 	Labor Matters
	 	 	17	 
	 

	 	Section 4.13
	 	Intellectual Property
	 	 	18	 
	 

	 	Section 4.14
	 	Taxes
	 	 	20	 
	 

	 	Section 4.15
	 	Sufficiency of Assets
	 	 	21	 
	 

	 	Section 4.16
	 	Opinion of Financial Advisors
	 	 	21	 
	 

	 	Section 4.17
	 	Anti-takeover Statutes; Company Rights Agreement
	 	 	21	 
	 

	 	Section 4.18
	 	Vote Required
	 	 	22	 

i

 

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	 

	 	Section 4.19
	 	Brokers
	 	 	22	 
	 

	 	Section 4.20
	 	Regulatory Compliance
	 	 	22	 
	 

	 	Section 4.21
	 	Environmental Matters
	 	 	23	 
	 

	 	Section 4.22
	 	Real Property
	 	 	24	 
	 

	 	Section 4.23
	 	Material Contracts
	 	 	25	 
	 

	 	Section 4.24
	 	Insurance
	 	 	26	 
	 

	 	Section 4.25
	 	Transactions with Affiliates
	 	 	27	 
	 

	 	Section 4.26
	 	No Other Representations or Warranties
	 	 	27	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE V REPRESENTATIONS AND WARRANTIES OF BUYER AND ACQUISITION SUB	 	 	27	 
	 

	 	Section 5.1
	 	Organization and Qualification; Subsidiaries
	 	 	27	 
	 

	 	Section 5.2
	 	Authority Relative to Agreement
	 	 	27	 
	 

	 	Section 5.3
	 	No Conflict; Required Filings and Consents
	 	 	28	 
	 

	 	Section 5.4
	 	Compliance with Law
	 	 	29	 
	 

	 	Section 5.5
	 	Absence of Litigation
	 	 	29	 
	 

	 	Section 5.6
	 	Available Funds
	 	 	29	 
	 

	 	Section 5.7
	 	Ownership of Company Common Stock
	 	 	29	 
	 

	 	Section 5.8
	 	Brokers
	 	 	29	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE VI COVENANTS AND AGREEMENTS	 	 	29	 
	 

	 	Section 6.1
	 	Conduct of Business by the Company Pending the Merger
	 	 	29	 
	 

	 	Section 6.2
	 	Proxy Statement
	 	 	33	 
	 

	 	Section 6.3
	 	Stockholders’ Meetings
	 	 	34	 
	 

	 	Section 6.4
	 	Appropriate Action; Consents; Filings; Spin-Off
	 	 	35	 
	 

	 	Section 6.5
	 	Access to Information; Confidentiality
	 	 	37	 
	 

	 	Section 6.6
	 	No Solicitation of Competing Proposal
	 	 	37	 
	 

	 	Section 6.7
	 	Directors’ and Officers’ Indemnification and Insurance
	 	 	40	 
	 

	 	Section 6.8
	 	Notification of Certain Matters
	 	 	42	 
	 

	 	Section 6.9
	 	Public Announcements
	 	 	43	 
	 

	 	Section 6.10
	 	Employee Matters
	 	 	43	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE VII CONDITIONS TO THE MERGER	 	 	45	 
	 

	 	Section 7.1
	 	Conditions to the Obligations of Each Party
	 	 	45	 
	 

	 	Section 7.2
	 	Conditions to the Obligations of Buyer and Acquisition Sub
	 	 	46	 
	 

	 	Section 7.3
	 	Conditions to the Obligations of the Company
	 	 	46	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE VIII TERMINATION, AMENDMENT AND WAIVER	 	 	47	 
	 

	 	Section 8.1
	 	Termination
	 	 	47	 
	 

	 	Section 8.2
	 	Termination Fees
	 	 	49	 
	 

	 	Section 8.3
	 	Amendment
	 	 	50	 
	 

	 	Section 8.4
	 	Waiver
	 	 	50	 
	 

	 	Section 8.5
	 	Expenses
	 	 	50	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE IX GENERAL PROVISIONS	 	 	51	 
	 

	 	Section 9.1
	 	Non-Survival of Representations, Warranties and Agreements
	 	 	51	 
	 

	 	Section 9.2
	 	Notices
	 	 	51	 

ii

 

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	 

	 	Section 9.3
	 	Interpretation; Certain Definitions
	 	 	52	 
	 

	 	Section 9.4
	 	Specific Performance
	 	 	53	 
	 

	 	Section 9.5
	 	Severability
	 	 	53	 
	 

	 	Section 9.6
	 	Assignment
	 	 	53	 
	 

	 	Section 9.7
	 	Entire Agreement; No Third-Party Beneficiaries
	 	 	53	 
	 

	 	Section 9.8
	 	Governing Law
	 	 	53	 
	 

	 	Section 9.9
	 	Consent to Jurisdiction; Enforcement
	 	 	54	 
	 

	 	Section 9.10
	 	Counterparts
	 	 	54	 
	 

	 	Section 9.11
	 	No Strict Construction
	 	 	54	 
	 

	 	Section 9.12
	 	WAIVER OF JURY TRIAL
	 	 	54	 

iii

 

          AGREEMENT AND PLAN OF MERGER, dated as of March 31, 2008 (this “Agreement”), by
and among Teva Pharmaceutical Industries Limited, an Israeli corporation (“Buyer”),
Beryllium Merger Corporation, a Delaware corporation and a wholly-owned subsidiary of Buyer
(“Acquisition Sub”), and Bentley Pharmaceuticals, Inc., a Delaware corporation (the
“Company”).

W I T N E S S E T H

          WHEREAS, in furtherance of the acquisition of the Company by Buyer, the respective boards of
directors of the Company and Acquisition Sub each have approved and deemed advisable, and the board
of directors of Buyer, as the sole stockholder of Acquisition Sub, has approved this Agreement and
the merger of the Acquisition Sub with and into the Company (the “Merger”), upon the terms
and subject to the conditions and limitations set forth herein and in accordance with the General
Corporation Law of the State of Delaware (“Delaware Law”), and in compliance with laws,
rules, regulations, orders, judgments or decrees promulgated by any Governmental Authority of the
countries where the Company and its subsidiaries are located; and

          WHEREAS, the respective boards of directors of the Company, Buyer and Acquisition Sub deem it
advisable and in the best interests of their respective stockholders that the parties consummate
the transactions contemplated hereby, upon the terms and subject to the conditions provided for
herein;

          WHEREAS, the board of directors of the Company has resolved to recommend to its stockholders
the approval and adoption of this Agreement and the transactions contemplated hereby (including the
Merger), upon the terms and subject to the conditions set forth in this Agreement;

          WHEREAS, the Company is contemplating distributing to its existing stockholders prior to the
Effective Time all of the shares of common stock of CPEX (together with the related transactions,
actions, agreements and undertakings in connection therewith, in each case required pursuant to the
Spin-Off Agreements, the “Spin-Off”);

          WHEREAS, as a condition to Buyer entering into this Agreement and incurring the obligations
set forth herein, concurrently with the execution and delivery of this Agreement, Buyer is entering
into a Voting Agreement with certain stockholders of the Company (the “Voting Agreement”)
pursuant to which, among other things, each of such stockholders has agreed, subject to the terms
thereof, to vote all shares of common stock of the Company owned by each of them in favor of the
Merger and the transactions contemplated hereby; and

 

 

          WHEREAS, Buyer, Acquisition Sub and the Company desire to make certain representations,
warranties, covenants and agreements in connection with the Merger and the other transactions
contemplated hereby and also to prescribe various conditions to the Merger and the other
transactions contemplated hereby.

          NOW, THEREFORE, in consideration of the foregoing and the mutual representations, warranties,
covenants and agreements and subject to the conditions herein contained and intending to be legally
bound hereby, the parties hereto hereby agree as follows:

ARTICLE I

DEFINITIONS

          Section 1.1 Definitions. Defined terms used in this Agreement have the meanings ascribed
to them by definition in this Agreement or in Appendix A.

ARTICLE II

THE MERGER

          Section 2.1 The Merger. Upon the terms and subject to the conditions of this Agreement,
and in accordance with Delaware Law, at the Effective Time, Acquisition Sub shall be merged with
and into the Company, whereupon the separate existence of Acquisition Sub shall cease, and the
Company shall continue under the name “Teva Spanish Holdco, Inc.” as the surviving corporation (the
“Surviving Corporation”) and shall continue to be governed by the laws of the State of
Delaware.

          Section 2.2 Closing. Subject to the satisfaction or, if permissible, waiver of the
conditions set forth in Article VII hereof, the closing of the Merger (the “Closing”) will
take place at 9:00 a.m., New York time, on a date to be specified by the parties hereto, but no
later than the second business day after the satisfaction or waiver of the conditions set forth in
Section 7.1, Section 7.2 and Section 7.3 hereof at the offices of Willkie Farr & Gallagher LLP, 787
Seventh Avenue, New York, New York, unless another time, date or place is agreed to in writing by
the parties hereto (such date being the “Closing Date”).

          Section 2.3 Effective Time.

          (a) Concurrently with the Closing, the Company, Buyer and Acquisition Sub shall cause a
certificate of merger (the “Certificate of Merger”) with respect to the Merger to be
executed and filed with the Secretary of State of the State of Delaware (the “Secretary of
State”) as provided under Delaware Law. The Merger shall become effective on the date and time
at which the Certificate of Merger has been duly filed with the Secretary of State or at such other
date and time as is agreed between the parties and specified in the Certificate of Merger, and such
date and time is hereinafter referred to as the “Effective Time.”

2

 

          (b) From and after the Effective Time, the Surviving Corporation shall possess all properties,
rights, privileges, powers and franchises of the Company and Acquisition Sub, and all of the
claims, obligations, liabilities, debts and duties of the Company and Acquisition Sub shall become
the claims, obligations, liabilities, debts and duties of the Surviving Corporation.

          Section 2.4 Certificate of Incorporation and By-laws.

          (a) At the Effective Time, the Restated Certificate of Incorporation of the Company, as
amended (the “Company Certificate”), shall be amended so as to read in its entirety as the
Certificate of Incorporation of Acquisition Sub (except that the name of the Surviving Corporation
shall be Teva Spanish Holdco, Inc.) and, as so amended, such Company Certificate shall be the
certificate of incorporation of the Surviving Corporation until thereafter changed or amended as
provided therein and by applicable Law, subject to Section 6.7.

          (b) At the Effective Time, and without any further action on the part of the Company and
Acquisition Sub, the Amended and Restated By-laws of the Company (the “Company By-laws”)
shall be amended so as to read in their entirety as the By-laws of Acquisition Sub (except that the
name of the Surviving Corporation shall be Teva Spanish Holdco, Inc.) and, as so amended, shall be
the By-laws of the Surviving Corporation until thereafter changed or amended as provided therein or
by applicable Law, subject to Section 6.7.

          Section 2.5 Board of Directors. Subject to applicable Law, the board of directors of the
Surviving Corporation effective as of, and immediately following, the Effective Time shall consist
of the members of the board of directors of Acquisition Sub immediately prior to the Effective
Time.

          Section 2.6 Officers. The officers of the Surviving Corporation effective as of, and
immediately following, the Effective Time shall be the officers of Acquisition Sub immediately
prior to the Effective Time.

ARTICLE III

EFFECT OF THE MERGER ON CAPITAL STOCK; EXCHANGE OF CERTIFICATES

          Section 3.1 Effect on Securities. At the Effective Time, by virtue of the Merger and
without any action on the part of the Company, Acquisition Sub or the holders of any securities of
the Company or Acquisition Sub:

          (a) Cancellation of Treasury Stock and Buyer-Owned Stock. Each share of common stock
of the Company, par value $0.02 per share, including the associated Company Rights (as defined
herein) (the “Company Common Stock”), owned by the Company or any of its wholly-owned
subsidiaries or held by Buyer or any of its wholly-owned subsidiaries immediately prior to the
Effective Time shall automatically be cancelled, retired and shall cease

3

 

to exist, and no
consideration or payment shall be delivered in exchange therefor or in respect thereof.

          (b) Conversion of Company Securities.

          (i) Each share of Company Common Stock issued and outstanding immediately prior to
the Effective Time (other than shares cancelled pursuant to Section 3.1(a) hereof and
Dissenting Shares) shall be converted into the right to receive the Merger Consideration,
in cash, without interest. As of the date hereof, prior to any adjustments pursuant to
Section 3.1(c), and without giving effect to (i) any change in the number of outstanding
Company Common Stock, Restricted Stock Units or Company Options, and (ii) the equitable
adjustment to the exercise prices of the Company Options or the number of outstanding
Company Options and Restricted Stock Units, in each case that will be effected in
connection with the Spin-Off pursuant to Article V of the Employee Matters Agreement (the
“Equity Adjustment”), the Merger Consideration would be equal to $15.02 per share
of Company Common Stock. “Merger Consideration” shall mean the quotient obtained
by dividing (a) the sum of (i) the Aggregate Purchase Price and (ii) product of (1) the
weighted average exercise price for all In-the-Money Options immediately following the
Equity Adjustment (the “Equity Adjustment Date”), multiplied by (2) the aggregate
number of shares of Company Common Stock into which all In-the-Money Options are
convertible as of the Equity Adjustment Date, by (b) the result of subtracting (i) the
number of shares of Company Common Stock into which all Out-of-the-Money Options would be
convertible as of the Equity Adjustment Date from (ii) the aggregate number of shares of
Company Common Stock on a fully diluted basis (including all Company Options and
Restricted Stock Units) as of the Equity Adjustment Date. “Aggregate Purchase
Price” shall mean $360,000,000 (three hundred and sixty million dollars), as may be
adjusted by application of Section 3.1(c).

          (ii) Each share of Company Common Stock to be converted into the right to receive the
applicable Merger Consideration pursuant to Section 3.1(b)(i) shall be automatically
cancelled and shall cease to exist and the holders of certificates (the
“Certificates”) or book-entry shares (“Book-Entry Shares”) that
immediately prior to the Effective Time represented such Company Common Stock shall cease
to have any rights with respect to such Company Common Stock other than the right to
receive, upon surrender of such Certificates or Book-Entry Shares in accordance with
Section 3.2 of this Agreement, the Merger Consideration, without interest thereon.

          (c) Merger Consideration Adjustment. The Aggregate Purchase Price shall be adjusted
in the following manner:

          (i) As soon as practicable prior to the Effective Time, but in any event at least 14
days prior to the Stockholders’ Meeting, the Company shall provide

4

 

Buyer with a schedule
setting forth the determination of the CPEX Value, which determination shall be final and
binding on the Company and Buyer for purposes of this Agreement.

          (ii) The Aggregate Purchase Price shall be reduced by the sum of (A) the product of
(i) the excess, if any, of (x) the CPEX Value over (y) the sum of (1) $65,000,000 and (2)
the amount determined under clause (B) below, and (ii) the applicable Tax rate(s) as would
be imposed by Section 11(b)(1) of the Code assuming no taxable income other than the
excess determined under clause (A)(i) above, and (B) the product of (i) the excess, if
any, of (x) the CPEX Value over (y) $34,000,000 and (ii) 8.5%.

          (d) Conversion of Acquisition Sub Capital Stock. At the Effective Time, by virtue of
the Merger and without any action on the part of the holder thereof, each share of common stock,
par value of $0.01 per share, of Acquisition Sub issued and outstanding immediately prior to the
Effective Time shall be converted into and become one (1) fully paid share of common stock, par
value $0.01 per share, of the Surviving Corporation and constitute the only outstanding shares of
capital stock of the Surviving Corporation.

          (e) Adjustments. Without limiting the other provisions of this Agreement, if at any
time during the period between the date of this Agreement and the Effective Time, any change in the
number of outstanding shares of Company Common Stock shall occur as a result of a reclassification,
recapitalization, stock split (including a reverse stock split), or combination, exchange or
readjustment of shares, or any stock dividend or stock distribution with a record date during such
period, in each case, other than pursuant to the Spin-Off, the applicable Merger Consideration as
provided in Section 3.1(b) shall be equitably adjusted to reflect such change.

          Section 3.2 Exchange of Company Common Stock.

          (a) Designation of Paying Agent; Deposit of Exchange Fund. Prior to the Effective
Time, Buyer shall designate a paying agent (the “Paying Agent”) reasonably acceptable to
the Company for the payment of the applicable Merger Consideration as provided in Section
3.1(b)(i). At or prior to the Effective Time, Buyer shall deposit, or cause to be deposited with
the Paying Agent for the benefit of holders of shares of Company Common Stock, cash constituting an
amount equal to the Merger Consideration (such Merger Consideration as deposited with the Paying
Agent, the “Exchange Fund”). The Exchange Fund shall not be used for any purpose that is
not expressly provided for in this Agreement.

          (b) As promptly as practicable following Effective Time, the Surviving Corporation shall cause
the Paying Agent to mail (and to make available for collection by hand) to each holder of record of
a Certificate or Book-Entry Share, which immediately prior to the Effective Time represented
outstanding shares of Company Common Stock (x) a letter of transmittal, which shall specify that
delivery shall be effected, and risk of loss and title to the

5

 

Certificates or Book-Entry Shares, as
applicable, shall pass, only upon proper delivery of the Certificates (or affidavits of loss in
lieu thereof) or Book-Entry Shares to the Paying Agent and which shall be in the form and have such
other provisions as Buyer and the Company may reasonably specify and (y) instructions for use in
effecting the surrender of the Certificates or Book-Entry Shares in exchange for the applicable
Merger Consideration into which the number of shares of Company Common Stock previously represented
by such Certificate or Book-Entry Shares shall have been converted pursuant to this Agreement
(which instructions shall provide that at the election of the surrendering holder, Certificates or
Book-Entry Shares may be surrendered, and the applicable Merger Consideration in exchange therefor
collected, by hand delivery).

          (c) After the Effective Time, upon surrender of a Certificate (or affidavit of loss in lieu
thereof) or Book-Entry Share for cancellation to the Paying Agent, together with a letter of
transmittal duly completed and validly executed in accordance with the instructions thereto, and
such other documents as may be required pursuant to such instructions, the holder of such
Certificate or Book-Entry Share shall be entitled to receive in exchange therefor the applicable
Merger Consideration for each share of Company Common Stock formerly represented by such
Certificate or Book-Entry Share, to be mailed (or made available for collection by hand if so
elected by the surrendering holder) as soon as reasonably practicable, after which the Certificate
(or affidavit of loss in lieu thereof) or Book-Entry Share so surrendered shall be forthwith
cancelled. The Paying Agent shall accept such Certificates (or affidavits of loss in lieu thereof)
or Book-Entry Shares upon compliance with such reasonable terms and conditions as the Paying Agent
may impose to effect an orderly exchange thereof in accordance with normal exchange practices. No
interest shall be paid or accrued for the benefit of holders of the Certificates or Book-Entry
Shares on the applicable Merger Consideration (or the cash pursuant to Section 3.2(d)) payable upon
the surrender of the Certificates or Book-Entry Shares.

          (d) Termination of Exchange Fund. Any portion of the Exchange Fund which remains
undistributed to the holders of the Certificates or Book-Entry Shares for twelve (12) months after
the Effective Time shall be delivered to Buyer (or its designee), upon demand, and any such holders
prior to the Merger who have not theretofore complied with this Article III shall thereafter look
only to Buyer (subject to abandoned property, escheat or other similar laws), as general creditors
thereof for payment of their claim for cash, without interest, to which such holders may be
entitled.

          (e) No Liability. None of Buyer, Acquisition Sub, the Company, the Surviving
Corporation or the Paying Agent shall be liable to any person in respect of any cash held in the
Exchange Fund delivered to a public official pursuant to any applicable abandoned property, escheat
or similar Law. If any Certificates or Book-Entry Shares shall not have been surrendered prior to
one year after the Effective Time (or immediately prior to such earlier date on which any cash in
respect of such Certificate or Book-Entry Share would otherwise escheat to or become the property
of any Governmental Authority), any such cash in respect of such Certificate or Book-Entry Share
shall, to the extent permitted by applicable Law, become the

6

 

property of Buyer, free and clear of
all claims or interest of any person previously entitled thereto.

          (f) Investment of Exchange Fund. The Paying Agent shall invest the cash included in
the Exchange Fund as directed by Buyer or, after the Effective Time, the Surviving Corporation in
(i) direct obligations of the United States of America, (ii) obligations for which the full faith
and credit of the United States of America is pledged to provide for payment of all principal and
interest, or (iii) commercial paper obligations receiving the highest rating from either Moody’s
Investor Services, Inc. or Standard & Poor’s, a division of The McGraw Hill Companies, or a
combination thereof. Any interest and other income resulting from such investments shall be paid
to and be income of Buyer. If for any reason (including losses) the cash in the Exchange Fund
shall be insufficient to fully satisfy all of the payment obligations to be made in cash by the
Paying Agent hereunder, Buyer shall promptly deposit cash into the Exchange Fund in an amount which
is equal to the deficiency in the amount of cash required to fully satisfy such cash payment
obligations.

          Section 3.3 Stock Options and Restricted Stock Units.

          (a) Treatment of Options. Each Company Option outstanding immediately prior to the
Effective Time, whether vested or unvested, shall, by virtue of the Merger and without any action
on the part of any holder of any Company Option, become fully vested and be cancelled and converted
into the right to receive at the Effective Time, as promptly as reasonably practicable following
the Effective Time, a cash payment with respect thereto equal to the product of (a) the excess, if
any, of the Merger Consideration over the exercise price per share of such Company Option
multiplied by (b) the number of shares of Company Common Stock issuable upon exercise of such
Company Option (the “Option Cash Payment”), less any applicable withholding taxes. If the
applicable exercise price of any Company Option equals or exceeds the Merger Consideration, such
Company Option shall be cancelled at the Effective Time without payment of consideration, and all
rights with respect to such Company Option shall terminate as of the Effective Time. As of the
Effective Time, all Company Options shall no longer be outstanding and shall automatically cease to
exist, and each holder of a Company Option shall cease to have any rights with respect thereto,
except the right to receive the Option Cash Payment, if any.

          (b) Treatment of Restricted Stock Units. As of the Effective Time, each Restricted
Stock Unit that is issued and outstanding immediately prior to the Effective Time, shall, by
virtue of the Merger and without any action on the part of any holder of any Restricted Stock Unit,
become fully vested and be cancelled and converted into the right to receive at the Effective Time,
as promptly as reasonably practicable following the Effective Time, a cash payment with respect
thereto equal to the Merger Consideration (the “Restricted Stock Unit Payment”), less any
applicable withholding taxes. As of the Effective Time, all Restricted Stock Units shall no longer
be outstanding and shall automatically cease to exist, and each holder of a Restricted Stock Unit
shall cease to have any rights with respect thereto, except the right to receive the Restricted
Stock Unit Payment.

7

 

          (c) Necessary Action. Prior to the Effective Time, the Company shall take any and all
actions necessary to effectuate the provisions of this Section 3.3, including, without limitation,
providing holders of Company Options and Restricted Stock Units with notice of their rights with
respect to any such Company Options and Restricted Stock Units as provided herein.

          Section 3.4 Lost Certificates. If any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming such Certificate to
be lost, stolen or destroyed and, if required by the Surviving Corporation, the posting by such
person of a bond, in such reasonable amount as the Surviving Corporation may direct, as indemnity
against any claim that may be made against it with respect to such Certificate, the Paying Agent
will issue in exchange for such lost, stolen or destroyed Certificate the applicable Merger
Consideration to which the holder thereof is entitled pursuant to this Article III.

          Section 3.5 Dissenting Shares. Notwithstanding Section 3.1(b) hereof, to the extent that
holders thereof are entitled to appraisal rights under Section 262 of Delaware Law, shares of
Company Common Stock issued and outstanding immediately prior to the Effective Time and held by a
holder who has properly exercised and perfected his or her demand for appraisal rights under
Section 262 of Delaware Law (the “Dissenting Shares”) shall not be converted into the right
to receive the applicable Merger Consideration, but, instead, the holders of such Dissenting Shares
shall be entitled to receive such consideration as shall be determined pursuant to Section 262 of
Delaware Law; provided, however, that if any such holder shall have failed to
perfect or shall have effectively withdrawn or lost his or her right to appraisal and payment under
Delaware Law, such holder’s shares of Company Common Stock shall thereupon be deemed to have been
converted as of the Effective Time into the right to receive the applicable Merger Consideration,
without any interest thereon, and such shares shall not be deemed to be Dissenting Shares. The
Company shall give Buyer (i) prompt notice of any demands for appraisal filed pursuant to Section
262 of Delaware Law received by the Company, withdrawals of such demands and any other instruments
served or delivered in connection with such demands pursuant to Delaware Law and received by the
Company and (ii) the opportunity to participate in all negotiations and proceedings with respect to
demands made pursuant to Section 262 of Delaware Law. The Company shall not (x) make any payment
with respect to any such demand, (y) offer to settle, settle or approve any withdrawal or other
treatment of, any such demand or (z) waive any failure to timely deliver a written demand for
appraisal or timely take any other action to perfect appraisal rights in accordance with Delaware
Law, except in each case with the prior written consent of Buyer, which consent shall not be
unreasonably withheld, delayed or conditioned; provided that no such consent shall be
required if such actions are required by Delaware Law or court order. Any payments required to be
made with respect to the Dissenting Shares shall be made by Buyer (and not the Company or
Acquisition Sub) and the Merger Consideration shall be reduced, on a dollar for dollar basis, as if
the holder of such Dissenting Shares had not been a stockholder on the Closing Date.

          Section 3.6 Transfers; No Further Ownership Rights. After the Effective Time, there shall
be no registration of transfers on the stock transfer books of the Company of shares of Company
Common Stock that were outstanding immediately prior to the Effective Time. If Certificates are
presented to the Surviving Corporation for transfer following the Effective Time, they shall be
cancelled against delivery of the applicable Merger Consideration, for each share of Company Common
Stock formerly represented by such Certificates.

8

 

          Section 3.7 Withholding Rights. Buyer, the Surviving Corporation or the Paying Agent, as
applicable, shall be entitled to deduct and withhold from the consideration otherwise payable
pursuant to this Agreement to any holder of shares of Company Common Stock, Company Options or
Restricted Stock Units, as applicable, such amounts as Buyer, the Surviving Corporation or the
Paying Agent, as the case may be, is required to deduct and withhold with respect to the making of
such payment under the Code or any provision of state, local or foreign tax law. To the extent
that amounts are so withheld and timely paid over to the appropriate taxing authority by Buyer, the
Surviving Corporation or the Paying Agent, such withheld amounts shall be treated for all purposes
of this Agreement as having been paid to the holder of the shares of Company Common Stock, Company
Options or Restricted Stock Units, as applicable.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

          Except as expressly stated, no representations and warranties are being made in this Agreement
by the Company with respect to CPEX or the Drug Delivery Business, including by referencing the
Company’s subsidiaries, but solely to the extent that the matters relating to CPEX and the Drug
Delivery Business that would otherwise be disclosed pursuant to such representations and warranties
would not have any adverse impact on the Company after giving effect to the Spin-Off and would not
reasonably be expected to prevent or materially delay the consummation of the transactions
hereunder. Except as set forth in the disclosure schedule delivered by the Company to Buyer
immediately prior to the execution of this Agreement (the “Company Disclosure Schedule”)
(with specific reference to the particular Section or subsection of this Agreement to which the
information set forth in such disclosure schedule relates, provided, that the information
in any section or paragraph of the Company Disclosure Schedule shall qualify the other Sections and
subsections of this Agreement to the extent that the relevance of such information to such other
Sections and subsections is reasonably apparent from a reading of such information), the Company
represents and warrants to Buyer and Acquisition Sub as follows:

          Section 4.1 Organization and Qualification; Subsidiaries.

          (a) Each of the Company and its subsidiaries is a corporation or legal entity duly organized
or formed, validly existing and in good standing, under the laws of its jurisdiction of
organization or formation, and is duly qualified or licensed as a foreign corporation to do
business, and is in good standing, in each jurisdiction in which the character of the properties
owned, leased or operated by it or the nature of its business makes such qualification or licensing
necessary, except for such failures to be so qualified or licensed and in good standing as have not
had, and would not reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect. Each of the Company and its subsidiaries has the requisite corporate,
partnership or limited liability company power and authority, as applicable, except where the

9

 

failure to have such power and authority has not had, and would not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect.

          (b) Section 4.1(b) of the Company Disclosure Schedule lists each of the Company’s subsidiaries
(excluding CPEX) and, for each such subsidiary, the jurisdiction of incorporation or formation, as
the case may be. All of the issued and outstanding shares of capital stock of, or other equity
interests in, each such subsidiary of the Company have been validly issued and are fully paid and
non-assessable and are owned directly or indirectly by the Company free and clear of all pledges,
liens, charges, encumbrances or security interests of any kind or nature whatsoever, and free of
any restriction on the right to vote, sell or otherwise dispose of such capital stock or other
equity interests.

          Section 4.2 Company Certificate and Company By-laws. The Company has made available to
Buyer a complete and correct copy of the Certificate of Incorporation and the By-laws (or
equivalent organizational documents) of the Company and each of its subsidiaries, each as amended
to date. The Company Certificate and the Company By-laws (or equivalent organizational documents)
of the Company and each of its subsidiaries are in full force and effect. None of the Company or
any of its subsidiaries is in violation of any provision of the Company Certificate or the Company
By-laws (or equivalent organizational documents).

          Section 4.3 Capitalization.

          (a) The authorized capital stock of the Company consists of 100,000,000 shares of Company
Common Stock and 2,000,000 shares of the Company’s preferred stock, par value $1.00 per share (the
“Company Preferred Stock”). As of the close of business on March 29, 2008 (the
“Measurement Date”), (i) 22,495,814 shares of Company Common Stock were outstanding, of
which 22,449,814 were issued and 46,000 were contingently issuable; (ii) no shares of Preferred
Stock were issued and outstanding; and (iii) 492,452 shares of Company Common Stock were held in
treasury. As of the Measurement Date, there were 323,263 shares of Company Common Stock authorized
and reserved for future issuance under Company Equity Plans and outstanding Company Options to
purchase 3,796,177 shares of Company Common Stock with a weighted average exercise price equal to
$9.962 per share and outstanding Restricted Stock Unit awards to issue 233,194 shares of Company
Common Stock, including 46,000 which are vested and are contingently issuable. As of the
Measurement Date, there were 54,167 shares of Company Common Stock authorized and reserved for
future issuance as matching contributions to the Company 401(k) Plan in lieu of cash contributions.
Except as set forth above, as of the Measurement Date, no shares of capital stock of, or other
equity or voting interests in, the Company, or options, restricted stock units, warrants or other
rights to acquire any such stock or securities were issued, reserved for issuance or outstanding.
All outstanding shares of capital stock of the Company are, and all shares that may be issued
pursuant to the Company Option Plans or the Company 401(k) Plan will be, when issued in accordance
with the terms thereof, duly authorized, validly issued, fully paid and non-assessable and not
subject to preemptive rights (either statutory or pursuant to contracts or agreements to which the
Company or any of its subsidiaries is a party).

10

 

          (b) Section 4.3(b) of the Company Disclosure Schedule sets forth, as of the date of this
Agreement, a true and complete list of each person in which the Company owns, directly or
indirectly, any equity, membership, partnership, limited liability, voting or similar interest, and
the percentage ownership of such person.

          (c) Except as set forth in the preceding paragraph, there are no outstanding subscriptions,
options, warrants, calls, convertible securities or other similar rights, agreements, commitments
or contracts of any kind to which the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries is bound obligating the Company or any of its subsidiaries to
issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital
stock of, or other equity or voting interests in, or securities convertible into, or exchangeable
or exercisable for, shares of capital stock of, or other equity or voting interests in, the Company
or any of its subsidiaries or obligating the Company or any of its subsidiaries to issue, grant,
extend or enter into any such security, option, warrant, call, right or contract. Section 4.3(c)
of the Company Disclosure Schedule sets forth, as of the date hereof, a complete and accurate list
of all outstanding Company Options, the number of shares of Company Common Stock subject thereto,
the grant dates, expiration dates, and exercise or base prices (if applicable).

          (d) With respect to Company Options and Restricted Stock Units, as applicable, (i) each grant
of a Company Option or Restricted Stock Unit was duly authorized no later than the date on which
the grant of such Company Option or Restricted Stock Unit was by its terms to be effective (the
“Grant Date”) by all necessary corporate action, including, as applicable, approval by the
board of directors of the Company, or a committee thereof, or a duly authorized delegate thereof,
and any required approval by the stockholders of the Company by the necessary number of votes or
written consents, and the award agreement governing such grant, if any, was duly executed and
delivered by each party thereto within a reasonable time following the Grant Date, (ii) each such
grant was made in accordance with the terms of the applicable Company Option Plan, the Securities
Act, the Exchange Act and all other applicable Law, including the rules of the NYSE, (iii) the per
share exercise price of each Company Option was not less than the fair market value of a share of
Company Common Stock on the applicable Grant Date, (iv) each such grant was properly accounted for
in all material respects in accordance with GAAP in the financial statements (including the related
notes) of the Company and disclosed in the Company SEC Documents prior to the date hereof, in
accordance with the Exchange Act and all other applicable Laws, and (v) no material modifications
have been made to any such grants after the Grant Date.

          Section 4.4 Authority Relative to Agreement. The Company has all necessary corporate power
and authority to (i) execute and deliver this Agreement, (ii) to perform its obligations hereunder,
and (iii) subject to receipt of the Requisite Stockholder Approval, to consummate the Merger and
the other transactions contemplated hereby. Prior to the completion of the Spin-Off, the Company
will have all necessary corporate power and authority to (i) execute and deliver each of the
Spin-Off Agreements, as applicable, and each other agreement, document, or instrument or
certificate contemplated by the Spin-Off Agreements, (ii) to perform its obligations under the
Spin-Off Agreements and (iii) to consummate the Spin-Off and the

11

 

other transactions contemplated
thereby. The execution and delivery of this Agreement by the Company and the consummation by the
Company of the Merger and the other transactions contemplated hereby have been duly and validly
authorized by all necessary corporate action, and no other corporate proceedings on the part of the
Company are necessary to authorize the execution and delivery of this Agreement, or to consummate
the Merger and the other transactions contemplated hereby (other than, with respect to the Merger,
the receipt of the Requisite Stockholder Approval, as well as the filing of the Certificate of
Merger with the Secretary of State). Prior to the completion of the Spin-Off, the execution and
delivery of the Spin-Off Agreements and the consummation by the Company of the Spin-Off and the
other transactions contemplated by the Spin-Off will have been duly and validly authorized by all
necessary corporate action. True and complete copies of each of the Spin-Off Agreements have been
provided to Buyer prior to the date of this Agreement; provided, however, that the
Company reserves the right to amend the Spin-Off Agreements after the date hereof to the extent
permitted by this Agreement. This Agreement has been duly and validly executed and delivered by
the Company and, assuming the due authorization, execution and delivery by Buyer and Acquisition
Sub, this Agreement constitutes a legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms (except as such enforceability may be limited by
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other similar laws of
general applicability relating to or affecting creditor’s rights, and to general equitable
principles). The board of directors of the Company, at a meeting duly called and held, has
unanimously adopted resolutions (x) approving and declaring advisable and fair to, and in the best
interests of, the Company’s stockholders, this Agreement, the Merger and the other transactions
contemplated by this Agreement, and (y) recommending that the stockholders of the Company adopt
this Agreement and approve the Merger and the other transactions contemplated by this Agreement.

          Section 4.5 No Conflict; Required Filings and Consents.

          (a) The execution and delivery of this Agreement and the Spin-Off Agreements by the Company,
as applicable, does not, and the consummation of the Merger, the Spin-Off and the other
transactions contemplated by this Agreement and the Spin-Off Agreements and compliance with the
provisions of this Agreement and the Spin-Off Agreements by the Company, as applicable, will not,
conflict with, or result in any violation or breach of, or default under, or give rise to a right
of, or result in, termination, cancellation or acceleration of any obligation or to the loss of a
benefit under, or result in the creation of any Lien (other than Permitted Liens) in or upon any of
the properties or other assets of the Company or any of its subsidiaries under (i) the Company
Certificate or Company By-laws (or equivalent organizational documents) of the Company or any of
its subsidiaries, (ii) assuming the consents, approvals and authorizations specified in Section
4.5(b) have been received and the waiting periods referred to therein have expired, and any
condition precedent to such consent, approval, authorization or waiver has been satisfied, any Law
applicable to the Company or its subsidiaries or by which any property or asset of the Company or
its subsidiaries is bound or affected, (iii) any Material Contract (as defined below) to which the
Company or any of its subsidiaries is a party or any of their respective properties or other assets
is subject; (iv) any Company Permit, (v) the Spin-Off Agreements, or (vi) any order, writ,
injunction, decree, judgment, ruling, stipulation, or assessment by a Governmental Authority, or
any arbitration award, which in each case is

12

 

applicable by its terms to the Company or any of its
subsidiaries, or their respective properties or other assets, other than, in the case of clauses
(iii), (iv) and (v), any such violation, conflict, default, breach, right, loss, termination,
cancellation, acceleration or Lien that has not had, and would not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect.

          (b) The execution and delivery of this Agreement by the Company does not, and the consummation
by the Company of the Merger and the other transactions contemplated by this Agreement will not,
require any consent, approval, authorization, order, registration, waiver or permit of, or filing
or declaration with or notification to, any Governmental Authority, including the filing of a
pre-merger notification report under the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as
amended (the “HSR Act”), except for applicable requirements of: (i) the Exchange Act, (ii)
any applicable competition, antitrust or investment Laws other than the HSR Act (collectively,
“Antitrust Laws”), and (iii) filing and recordation of the appropriate merger documents as
required by Delaware Law and the rules of the NYSE, except where failure to obtain such consents,
approvals, authorizations or permits, or to make such filings or notifications would not reasonably
be expected to prevent or materially delay the consummation of the transactions hereunder.

          Section 4.6 Permits and Licenses; Compliance with Laws.

          (a) Each of the Company and its subsidiaries is in possession of all franchises, grants,
authorizations, licenses, permits, easements, variances, exceptions, consents, certificates,
approvals and orders of all Governmental Authorities necessary for the Company or its subsidiaries
to own, operate, lease and otherwise hold their respective assets and to conduct their respective
businesses as currently conducted (the “Company Permits”), all such Company Permits are in
full force and effect, and no suspension or cancellation of any Company Permit is pending or, to
the knowledge of the Company, threatened except where the failure to have, or the suspension or
cancellation of, any of the Company Permits has not had, and would not reasonably be expected to
have, individually or in the aggregate, a Company Material Adverse Effect. None of the Company or
its subsidiaries is in conflict with, or in default or violation of, (i) any Laws applicable to the
Company or its subsidiaries or by which any property or asset of the Company or its subsidiaries is
bound or affected, (ii) any of the Company Permits or (iii) any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or obligation to which
the Company or its subsidiaries is a party or by which the Company or its subsidiaries or any
property or asset of the Company or its subsidiaries is bound or affected except for any such
conflicts, defaults of violations that have not had, and would not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect. The Company has made
available to Buyer true and complete copies of all material Company Permits.

          (b) To the knowledge of the Company, no event or condition has occurred or exists which would
result in a violation of, breach, default or loss of a benefit under, or acceleration of an
obligation of the Company or any of its subsidiaries under, any Company

13

 

Permit (in each case, with
or without notice or lapse of time or both), and no such suspension, cancellation, violation,
breach, default, loss of a benefit, or acceleration of an obligation will result from the
transactions contemplated by this Agreement (in each case, with or without notice or lapse of time
or both).

          (c) To the knowledge of the Company, neither the Company nor any of its subsidiaries, nor any
director, officer, agent or employee of the Company or any of its subsidiaries, has (i) used any
funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to
political activity, (ii) made any unlawful payment to foreign or domestic government officials or
employees or to foreign or domestic political parties or campaigns, or (iii) violated any
applicable export control, money laundering or anti-terrorism law or regulation, nor have any of
them otherwise taken any action which would cause the Company or any of its subsidiaries to be in
violation of the Foreign Corrupt Practices Act of 1977.

          Section 4.7 Company SEC Documents; Financial Statements.

          (a) The Company has filed with, or furnished to, the SEC all forms, documents, schedules,
statements and reports (including exhibits and other information incorporated therein and including
the Proxy Statement when filed) required to be filed or furnished by it with the SEC since December
31, 2005 (such documents, together with any documents filed or furnished by the Company with the
SEC on a voluntary basis on Current Reports on Form 8-K, the “Company SEC Documents”). As
of their respective dates, the Company SEC Documents complied in all material respects with the
requirements of the Securities Act, the Exchange Act and the Sarbanes-Oxley Act of 2002, and the
applicable rules and regulations promulgated thereunder, and none of the Company SEC Documents at
the time they were filed or furnished contained any untrue statement of a material fact or omitted
to state any material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made not misleading.

          (b) Each of the consolidated financial statements (including all related notes and schedules)
of the Company included in the Company SEC Documents fairly presented in all material respects the
consolidated financial position of the Company and its consolidated subsidiaries as at the
respective dates thereof and their consolidated results of operations and consolidated cash flows
for the respective periods then ended (subject, in the case of the unaudited statements, to normal
year-end audit adjustments and to any other adjustments described therein including the notes
thereto) in conformity with GAAP (except, in the case of the unaudited statements, as permitted by
Form 10-Q of the SEC) applied on a consistent basis during the periods involved (except as may be
indicated in the notes thereto).

          (c) Management of the Company has (x) implemented disclosure controls and procedures (as
defined in Rule 13a-15(e) of the Exchange Act) that are reasonably designed to ensure that material
information relating to the Company, including its consolidated subsidiaries, is made known to the
chief executive officer and chief financial officer of the Company by

14

 

others within those entities,
and (y) disclosed, based on its most recent evaluation, to the Company’s outside auditors and the
audit committee of the Company’s board of directors (A) all significant deficiencies and material
weaknesses in the design or operation of internal controls over financial reporting (as defined in
Rule 13a-15(f) of the Exchange Act) which are reasonably likely to adversely affect in any material
respect the Company’s ability to record, process, summarize and report financial data and (B) any
fraud, whether or not material, that involves management or other employees who have a significant
role in the Company’s internal control over financial reporting. Since December 31, 2005, any
material change in internal control over financial reporting or failure or inadequacy of disclosure
controls required to be disclosed in any Company SEC Document has been so disclosed.

          (d) Since December 31, 2005, to the knowledge of the Company, (x) none of the Company or any
of its subsidiaries, or any director, officer, employee, auditor, accountant or Representative of
the Company or any of its subsidiaries, has received any material complaint, allegation, assertion
or claim, whether written or oral, regarding the accounting or auditing practices, procedures,
methodologies or methods of the Company or any of its subsidiaries or their respective internal
accounting controls relating to periods after December 31, 2005, including any material complaint,
allegation, assertion or claim that the Company or any of its subsidiaries has engaged in
questionable accounting or auditing practices (except for any of the foregoing that have been
resolved without any material impact and except for any of the foregoing after the date of this
Agreement which have no reasonable basis) and (y) no attorney representing the Company or any of
its subsidiaries has reported evidence of a material violation of securities Laws, breach of
fiduciary duty or similar violation, relating to periods after December 31, 2005, by the Company or
any of its officers, directors, employees or agents to the Company’s board of directors or any
committee thereof or, to the knowledge of the Company, to any director or officer of the Company.

          Section 4.8 Absence of Certain Changes or Events. From December 31, 2007, through the date
of this Agreement, except as otherwise contemplated or permitted by this Agreement, the businesses
of the Company and its subsidiaries have been conducted in the ordinary course of business
consistent with past practice, and there has not been (i) any event, development or state of
circumstances, or combination of the foregoing, that has had or would reasonably be expected to
have, individually or in the aggregate, a Company Material Adverse Effect; (ii) any declaration,
setting aside or payment of any dividend or other distribution with respect to the capital stock of
the Company; (iii) any change by the Company in accounting principles, practices or methods except
as required by applicable Law or GAAP; (iv) any damage, destruction or other casualty loss with
respect to any asset or property owned, leased or otherwise used by the Company or any of its
subsidiaries, whether or not covered by insurance, which has had or would reasonably be expected to
have a Company Material Adverse Effect; (v) any amendment of any of the Company Benefit Plans other
than in the ordinary course of business consistent with past practice; (vi) any granting by the
Company or any of its subsidiaries to any employee of the Company or any of its subsidiaries of any
increase in compensation, except for increases in the ordinary course of business consistent with
past practice; (vii) any granting by the Company or any of its subsidiaries to any employee any
increase in severance or termination pay; (viii) any Lien (other than a Permitted Lien) placed upon
any assets of the Company or any of its subsidiaries, except for such liens, if any, that, do

15

 

not,
individually or in the aggregate, materially interfere with the continued use and operation of the
assets to which they relate; or (ix) any termination of any Material Contract, or any written
notice provided to the Company or any of its subsidiaries of the intent of the counterparty to any
such Material Contract to terminate or amend such contract, other than in the ordinary course of
business.

          Section 4.9 No Undisclosed Liabilities. Except (a) as reflected or reserved against in the
Company’s consolidated balance sheet as of December 31, 2007 included in the Form 10-K (or the
notes thereto), or (b) for liabilities or obligations incurred in the ordinary course of business
consistent with past practice since the date of such balance sheets, as of the date hereof, neither
the Company nor any of its subsidiaries has incurred any material liabilities or obligations of any
nature, whether or not absolute, accrued, contingent, known, unknown or otherwise, that would be
required to be disclosed on a balance sheet prepared in accordance with GAAP.

          Section 4.10 Absence of Litigation. There is no civil, criminal, administrative suit,
claim, action, hearing, proceeding or, to the knowledge of the Company, investigation, pending or,
to the knowledge of the Company, threatened against the Company or its subsidiaries, or any of
their respective properties or assets at law or in equity, and there are no Orders, before any
arbitrator or Governmental Authority, in each case as would have or would reasonably be expected to
have, individually or in the aggregate, a Company Material Adverse Effect.

          Section 4.11 Employee Matters.

          (a) Section 4.11(a) of the Company Disclosure Schedule contains a correct and complete list of
each Company Benefit Plan.

          (b) The Company has made available to Buyer or its counsel with respect to the Company Benefit
Plans a true and complete copy of all material plan documents, if any, including related trust
agreements, funding arrangements, and insurance contracts and all amendments thereto; and, to the
extent applicable, (i) the most recent determination letter, if any, received by the Company or any
of its subsidiaries from the IRS regarding the tax-qualified status of such Company Benefit Plan;
(ii) the most recent financial statements for such Company Benefit Plan, if any; (iii) the most
recent actuarial valuation report, if any; (iv) the current summary plan description and any
summaries of material modifications; and (v) Form 5500 Annual Returns/Reports, including all
schedules and attachments and the certified audit opinions for the most recent plan year.

          (c) Each Company Benefit Plan has been operated and administered in all material respects in
accordance with its terms and applicable Law, including but not limited to ERISA and the Code.
There are no pending or, to the knowledge of the Company, threatened investigations by any
Governmental Authority, termination proceedings or other claims (except routine claims for benefits
payable under the Company Benefit Plans) against or involving any Company Benefit Plan or asserting
any rights to or claims for benefits under any Company Benefit Plan. All contributions (including
all employer contributions and employee salary

16

 

reduction contributions) required to have been made
under any of the Company Benefit Plans to any funds or trusts established thereunder or in
connection therewith have been made by the due date thereof and all contributions for any period
ending on or before the Closing Date which are not yet due will have been paid or accrued prior to
the Closing Date.

          (d) No Company Benefit Plan is a Multiemployer Plan nor is any Company Benefit Plan subject to
Section 302 or Title IV of ERISA or Section 412 or 4971 of the Code. No liability under Title IV
or Section 302 of ERISA has been incurred by the Company or any ERISA Affiliate that has not been
satisfied in full, and no condition exists that presents a material risk to the Company or any
ERISA Affiliate of incurring any such liability.

          (e) Each Company Benefit Plan which is intended to be qualified under Section 401(a) of the
Code, and the trust (if any) forming a part thereof, has received a favorable determination letter
from the IRS as to its qualification under the Code and to the effect that each such trust is
exempt from taxation under Section 501(a) of the Code, and nothing has occurred since the date of
such determination letter that would reasonably be expected to result in the loss of such
qualification or tax-exempt status.

          (f) Except as set forth in Section 4.11(f) of the Company Disclosure Schedule, neither the
execution and delivery of this Agreement nor the consummation of the transactions contemplated
hereby will (i) result in any payment becoming due, or increase the amount of any compensation or
benefits due, to any current or former employee of the Company and its subsidiaries or with respect
to any Company Benefit Plan; (ii) increase any benefits otherwise payable under any Company Benefit
Plan; (iii) result in the acceleration of the time of payment or vesting of any such compensation
or benefits; (iv) result in a non-exempt “prohibited transaction” within the meaning of Section 406
of ERISA or section 4975 of the Code; or (v) result in the payment of any amount that would,
individually or in combination with any other such payment, not be deductible as a result of
Section 280G of the Code.

          (g) Except as has not resulted, and would not reasonably be expected to result, in any
material liability to the Company or any subsidiary, all Company Benefit Plans subject to the laws
of any jurisdiction outside of the United States (i) have been maintained in accordance with all
applicable requirements; (ii) if they are intended to qualify for special tax treatment, meet all
requirements for such treatment; and (iii) if they are intended to be funded and/or book-reserved,
are fully funded and/or book reserved, as appropriate, based upon reasonable actuarial assumptions.

          Section 4.12 Labor Matters.

          (a) There is no material unfair labor practice charge or complaint pending against the Company
or any of its subsidiaries. There is no material labor strike, material slowdown or material work
stoppage or lockout pending or, to the knowledge of the Company, threatened against or affecting
the Company or any of its subsidiaries, and neither the Company

17

 

nor any of its subsidiaries has
experienced any material strike, material slowdown or material work stoppage, lockout or other
material labor dispute by or with respect to its employees within the last three (3) years. There
are no material charges with respect to or relating to the Company or any of its subsidiaries
pending before any Governmental Authority responsible for the prevention of unlawful employment
practices. The Company and each of its subsidiaries are and at all times have been in compliance
in all material respects with all applicable Laws relating to employment of labor including all
applicable Laws relating to wages, hours, collective bargaining, employment discrimination, civil
rights, safety and health, workers’ compensation, pay equity, classification of employees, and the
collection and payment of withholding and/or social security Taxes. As of the date of this
Agreement, neither the Company nor any of its subsidiaries has received written notice from any
Governmental Authority responsible for the enforcement of labor or employment Laws of an intention
to conduct an investigation of the Company or any of its subsidiaries and, to the knowledge of the
Company, no such investigation is in progress.

          (b) The Company and each of its subsidiaries are in material compliance with all collective
bargaining agreements that apply to any of their respective employees.

          (c) As of the date hereof, the Company and its subsidiaries are not delinquent in payments
owed to any present or former officer or employee of the Company or any of its subsidiaries other
than remuneration accrued (but not yet due for payment) in respect of the thirty (30) day period
prior to the date on which this Agreement is executed.

          Section 4.13 Intellectual Property.

          (a) Except as has had not, and would not reasonably be expected to have, individually or in
the aggregate, a Company Material Adverse Effect, (i) the Company and its subsidiaries own, or
possess necessary or required licenses or other necessary or required rights to use in the manner
currently used, all patents, patent rights, trademarks, trademark rights, trade names, trade name
rights, copyrights, domain names, service marks, service mark rights, trade secrets, applications
to register, and registrations for, any of the foregoing know-how and other proprietary rights and
information (the “Intellectual Property Rights”) used in connection with the business of
the Company and its subsidiaries as currently conducted (the “Company Intellectual Property
Rights”), and (ii) the foregoing registrations are in effect and subsisting.

          (b) Except as set forth on Schedule 4.13, and except as has had not, and would not reasonably
be expected to have, individually or in the aggregate, a Company Material Adverse Effect, (i) the
conduct of the business of the Company and its subsidiaries does not infringe, misappropriate, or
otherwise violate any Intellectual Property Rights of any other person; (ii) as of the date hereof,
neither the Company nor any of its subsidiaries has received in the past three (3) years any
written charge, complaint, claim, demand or notice of any claims against the Company or any of its
subsidiaries alleging that the conduct of the Company or any of its subsidiaries infringes or
violates (or in the past infringed or violated) the rights of others in or to any Intellectual
Property Rights or constitutes a misappropriation of (or in the past

18

 

constituted a misappropriation
of) any subject matter of any Intellectual Property Rights of any person or entity, that has not
been settled or otherwise fully resolved; and (iii) to the Company’s knowledge, no person has
infringed, misappropriated, or otherwise violated any Intellectual Property Rights owned by the
Company or any of its subsidiaries.

          (c) Part 1 of Section 4.13 of the Company Disclosure Schedule lists all of the material
patents, registered copyrights, registered and material unregistered trademark rights, and patents,
copyrights and trademarks for which applications for registration have been filed or owned by the
Company or any of its subsidiaries as of the date hereof, setting forth in each case the
jurisdictions in which patents have been issued, patent applications have been filed, copyrights or
trademarks have been registered, and copyright or trademark applications have been filed.

          (d) Part 2 of Section 4.13 of the Company Disclosure Schedule lists all material written
contracts, agreements and licenses in effect as of the date hereof under which any third party has
licensed, granted, or conveyed to the Company or any of its subsidiaries any right, title or
interest in or to any Company Intellectual Property Rights (other than commercial, off-the-shelf
software).

          (e) Part 3 of Section 4.13 of the Company Disclosure Schedule lists all material written
contracts, agreements and licenses in effect as of the date hereof under which the Company or any
of its subsidiaries has licensed, granted, or conveyed to any third party any right, title, or
interest in or to any Intellectual Property Rights owned by the Company or any of its subsidiaries.

          (f) Except as set forth in Part 4 of Section 4.13 of the Company Disclosure Schedule, and
other than commercial, off-the-shelf software, (i) to the Company’s knowledge, the Company and its
subsidiaries have the right to use all Company Intellectual Property Rights free and clear of all
Liens, other than Permitted Liens; (ii) to the Company’s knowledge, no party is challenging the
right, title, or interest of the Company and its subsidiaries in, to, or under any Intellectual
Property Rights owned by the Company or any of its subsidiaries, nor, to the Company’s knowledge,
is there any material basis for any such challenge; and (iii) no Company or subsidiary patents or
patent rights have been or are now involved in any interference, reissue, re-examination, or
opposition proceeding.

          (g) The Company and its subsidiaries have taken reasonable security measures to protect in all
material respects the know-how and trade secrets owned by the Company or any of its subsidiaries.
All current and former officers and employees of, and consultants and independent contractors to,
the Company and its subsidiaries who have contributed in a material manner to the creation or
development of any Company Intellectual Property Right have executed and delivered to the Company
or its subsidiaries an agreement regarding the protection of proprietary information and the
assignment or license to the Company or its subsidiaries of any Intellectual Property Rights
arising from services performed

19

 

for the Company or its subsidiaries by such persons. To the
knowledge of the Company, no current or former officers and employees of, or consultants or
independent contractors to, the Company or its subsidiaries have breached any material term of any
such agreements.

          (h) Except as set forth in the named agreements listed on Part 5 of Section 4.13 of the
Company Disclosure Schedule and except as would not have, and would not reasonably be expected to
have, individually or in the aggregate, a Company Material Adverse Effect: (i) the Company and its
subsidiaries have not entered into any agreement to indemnify any other person against any claim of
infringement or misappropriation of any Intellectual Property Rights; and (ii) there are no
settlements, covenants not to sue, consents or judgments by the Company or its subsidiaries
regarding Intellectual Property Rights.

          (i) Except as has not had, and would not reasonably be expected to have, individually or in
the aggregate, a Company Material Adverse Effect, neither the execution, delivery or performance of
this Agreement by the Company nor the consummation by the Company of the transactions contemplated
by this Agreement will contravene, conflict with, or result in any limitation on the Company’s or
any of its subsidiaries’ right, title, or interest in or to any Company Intellectual Property
Rights.

          Section 4.14 Taxes. Except as has not had, and would not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect, (i) the Company and each of
its subsidiaries have prepared (or caused to be prepared) and timely filed (or caused to be timely
filed) (taking into account any extension of time within which to file without surcharge or
penalty) all Tax Returns required to be filed by any of them and all such filed Tax Returns (taking
into account all amendments thereto) are complete and accurate; (ii) the Company and each of its
subsidiaries have timely paid all Taxes that are shown on such Tax Returns to be payable by them
and all other Taxes required to be paid; (iii) as of the date of this Agreement, there are not
pending or, to the knowledge of the Company, threatened in writing any audits, examinations,
investigations or other proceedings in respect of Taxes; (iv) there are no Liens for Taxes on any
of the assets of the Company or any of its subsidiaries other than Liens for Taxes not yet due and
payable, or for which adequate accruals or reserves have been established; (v) during the two-year
period ending on the date hereof, neither the Company nor any of its subsidiaries was a
distributing corporation or a controlled corporation (within the meaning of Section 355(a)(1)(A) of
the Code) in a transaction intended to be governed by Section 355 of the Code; (vi) neither the
Company nor any of its subsidiaries has participated in a “reportable transaction” within the
meaning of Treasury Regulations Section 1.6011-4(b)(1); (vii) since January 1, 2005, no claim has
been made by any Tax authority in a jurisdiction where the Company or any of its subsidiaries has
not filed a Tax Return that it is or may be subject to Tax by such jurisdiction; (viii) neither the
Company nor any of its subsidiaries has waived any statute of limitations with respect to Taxes or
agreed to any extension of time with respect to any Tax assessment or deficiency; and (ix) the
Company and its subsidiaries have withheld and timely paid over to the proper Governmental
Authorities all Taxes required to have been withheld and paid over, and complied in all respects
with all information reporting and backup withholding requirements, including maintenance of
required records with respect thereto, in connection with amounts paid to any shareholder,
employee, independent contractor, creditor, or

20

 

other third party. As of the Closing Date, the
Company and its subsidiaries shall have available to reduce the Tax liability to be incurred by
them as a result of the formation of CPEX and the Spin-Off, as set forth in the Spin-Off
Agreements, Tax attributes equal at least to: (A) with respect to U.S. federal income Tax, the
dollar amount set forth in Section 3.1(c)(ii)(A)(i)(y)(1), and (B) with respect to New Hampshire
business profits Tax, the dollar amount set forth in Section 3.1(c)(ii)(B)(i)(y). None of the
Company and its subsidiaries (A) has an excess loss account within the meaning of Treasury
Regulations Section 1.1502-19 with respect to the stock of any of the Company’s subsidiaries, and
(B) other than with respect to the formation of CPEX and the Spin-Off, as set forth in the Spin-Off
Agreements, has any deferred intercompany gain or loss arising as a result of a deferred
intercompany transaction within the meaning of Treasury Regulations Section 1.1502-13, that would
be triggered by the Spin-Off.

          Section 4.15 Sufficiency of Assets. The Company and its subsidiaries own or lease, and at
the Closing will own, lease or will contractually obtain pursuant to a Transition Services
Agreement, to be entered into by and between the Company and CPEX in connection with the Spin-Off
(the “Transition Services Agreement”), all buildings, machinery, equipment, properties and
other assets (tangible and intangible) necessary for the Company and its subsidiaries to conduct
their business in the manner currently conducted and in which it has been conducted during the 12
months prior to the date of this Agreement (the “Necessary Assets”), except where failure
to so own, lease or contractually obtain the Necessary Assets has not had, and would not reasonably
be expected to have, individually or in the aggregate, a Company Material Adverse Effect.

          Section 4.16 Opinion of Financial Advisors. The board of directors of the Company has
received the opinion of Deutsche Bank Securities Inc. on or prior to the date of this Agreement, to
the effect that, as of the date of such opinion, the applicable Merger Consideration as provided in
Section 3.1(b) payable to each holder of outstanding Company Common Stock is fair to the
stockholders of the Company from a financial point of view.

          Section 4.17 Anti-takeover Statutes; Company Rights Agreement.

          (a) The Company has taken all action necessary to exempt the Merger, this Agreement, the
Voting Agreement and the transactions contemplated hereby and thereby from the provisions of (i)
Section 203 of the Delaware Law, and (ii) Article XIII of the Company Certificate, and such action
is effective as of the date hereof. No other “fair price”, “moratorium”, “control share
acquisition” or other similar anti-takeover statute or regulation or any anti-takeover provision in
the Company Certificate or the Company By-laws (or other organizational documents of the Company)
is, or at the Effective Time will be, applicable to the Company, the Company Common Stock, the
Merger or the other transactions contemplated by this Agreement.

          (b) The Company has taken all actions necessary to (i) render the Renewed Rights Agreement
dated as of December 21, 2004 between the Company and American Stock Transfer & Trust Company
(including all Exhibits thereto) (the “Company Rights Agreement”) inapplicable to this
Agreement, the Merger and compliance with the terms of this Agreement,

21

 

and (ii) provide that the “Expiration
Date” (as defined in the Company Rights Agreement) will occur immediately prior to the
Effective Time.

     Section 4.18
Vote Required. The affirmative vote of the holders of outstanding Company Common Stock,
voting together as a single class, representing at least a majority of all the votes entitled to be
cast thereupon by holders of Company Common Stock (the “Requisite Stockholder Approval”) is
the only vote of holders of securities of the Company that is necessary to approve and adopt this
Agreement and the transactions contemplated hereby, including the Merger. There are no voting
trusts, proxies or similar agreements, arrangements or commitments to which the Company or any of
its subsidiaries is a party with respect to the voting of any shares of capital stock of the
Company or any of its subsidiaries, other than the Voting Agreement. There are no bonds,
debentures, notes or other instruments of indebtedness of the Company or any of its subsidiaries
that have the right to vote, or that are convertible or exchangeable into or exercisable for
securities or other rights having the right to vote, on any matters on which stockholders of the
Company may vote.

     Section 4.19
Brokers. No broker, finder or investment banker is entitled to any brokerage, finder’s or
other fee or commission in connection with the Merger based upon arrangements made by or on behalf
of the Company other than as provided in the letter of engagement by and between the Company and
Deutsche Bank Securities, Inc., which letter has been provided to Buyer prior to the date of this
Agreement.

     Section 4.20 Regulatory Compliance

     (a) All biological, drug and other products that were and are being manufactured or developed
by the Company or any of its subsidiaries (“Company Products”) that are subject to the
jurisdiction of the Agencia Española del Medicamento y Productos Sanitarios (“AEMPS”), the
U.S. Food and Drug Administration (“FDA”) or other Governmental Authorities are being
manufactured, marketed, labeled, stored and tested, in compliance in all material respects with all
applicable rules and regulations of the AEMPS, the FDA and all other requirements of applicable
Governmental Authorities, including, without limitation, the Ley 29/2006 of 26 July and the related
rules and regulations (“Ley 29/2006”). Within the last five (5) years, neither the Company
nor any of its subsidiaries has received any written notice from the AEMPS, the FDA or any other
Governmental Authority or third party regarding the compliance with such laws of its manufacturing,
labeling, storing, testing, distributing or marketing practices
or threatening to revoke, suspend, cancel, withdraw, curtail, or seek damages related to any
certification, license, or approval issued by such Governmental Authority.

     (b) All human clinical trials conducted by or on behalf of the Company or its subsidiaries
have been, and are being, conducted in compliance in all material respects with applicable Law
(including the applicable requirements of Ley 29/2006 and Royal Decree 223/2004 (Spain)).

22

 

     (c) All manufacturing operations conducted by, or, to the Company’s knowledge, for the benefit
of, the Company and/or any of its subsidiaries with respect to Company Products being used in human
clinical trials have been and are being conducted in accordance, in all material respects, with the
applicable prevailing mandatory manufacturing practices and good manufacturing practices. In
addition, the Company and its subsidiaries are in compliance in all material respects with all
applicable registration and listing requirements set forth in applicable Laws (including Ley
29/2006 and Royal Decree 223/2004 (Spain)).

     (d) Neither the Company nor any of its subsidiaries nor, to the knowledge of the Company, any
of the Representatives, agents or subcontractors of the Company or its subsidiaries, have been
convicted of any crime or engaged in any conduct which could result in debarment or
disqualification by any Governmental Authority, or that reasonably would be expected to result in
criminal liability or debarment or disqualification by any Governmental Authority.

     (e) Neither the Company nor any of its subsidiaries, nor to the knowledge of Company, any of
its Representatives or licensees or assignees of Company Intellectual Property Rights, has received
any written notice that any Governmental Authority has initiated, or threatened to initiate, any
action to suspend any clinical trial, suspend or terminate any Investigational New Drug Application
sponsored by the Company or any of its subsidiaries or otherwise restrict the preclinical research
on or clinical study of any Company Product or any biological or drug product being developed by
the Company or any of its subsidiaries or any licensee or assignee of the Material Company IP
Rights based on such intellectual property, or to recall, suspend or otherwise restrict the
manufacture of any Company Product with the exception of Mio-Relax and Relaxibis.

     (f) In relation to the Autorización Ambiental Integrada being applied for by Arnage A.P.I.
S.L. (“Arnage API”), to the Company’s knowledge, there is no reason to believe the
Autorización Ambiental Integrada will not be granted so as to permit Arnage API to continue its
activities as currently carried on and allow the new facility to operate as currently planned.

     Section 4.21
Environmental Matters.

     (a) The following terms shall be defined as follows:

     (i) “Environmental Laws” shall mean any applicable, federal, state or local
or foreign governmental laws, statutes or regulations, or applicable common law, governing
human health or the protection of the environment, or that regulate the handling, use,
manufacturing, processing, storage, treatment, transportation, discharge, release,
emission or disposal of Hazardous Materials, including but not limited to the federal
Comprehensive Environmental Response, Compensation, and Liability Act of 1980, 42 U.S.C.
Section 9601, et seq., as amended (“CERCLA”), the federal Resource Conservation
and Recovery Act, 42 U.S.C. Section 6901, et seq., as amended (“RCRA”)

23

 

and Law
26/2007 of 23 October 2007 on Environmental Liability (Spain) and the related final rules
and regulations.

     (ii) “Hazardous Materials” shall mean any material that is regulated under or
subject to Environmental Laws as a “hazardous constituent,” “hazardous substance,”
“hazardous material,” “acutely hazardous material,” “extremely hazardous material,”
“hazardous waste,” “hazardous waste constituent,” “acutely hazardous waste,” “extremely
hazardous waste,” “infectious waste,” “medical waste,” “biomedical waste,” “pollutant,”
“toxic pollutant,” “radioactive” or “contaminant.” The term “Hazardous Materials”
shall include any “hazardous substances” as regulated under CERCLA, any “hazardous wastes”
or “solid wastes” as regulated under RCRA, any asbestos or asbestos containing materials,
any polychlorinated biphenyls, and any petroleum or petroleum by-product.

     (iii) “Environmental Permits” shall mean all permits, consents, licenses and
approvals required by Environmental Laws for the current operation of the business of the
Company and its subsidiaries or the condition or use of any properties currently used and
occupied by the Company or any of its subsidiaries.

     (b) To the knowledge of the Company, except as would not reasonably be expected to have a
material adverse impact on the Company’s assets or business: (i) the Company and its subsidiaries
are in compliance with all Environmental Laws applicable to the operations of the Company and its
subsidiaries; (ii) neither the Company nor any of its subsidiaries, has discharged emitted,
released, leaked or spilled Hazardous Materials in violation of Environmental Law or in quantities
reportable under applicable Environmental Law at any of the facilities operated by the Company or
its subsidiaries (the “Company’s Facilities”); (iii) as of the date hereof, no civil,
criminal or administrative action, or any formal investigation, is pending against the Company or
any of its subsidiaries for violation of Environmental Laws; (iv) none of the Company’s Facilities
(a) contains or includes any asbestos, polychlorinated biphenyls, or any underground storage tanks
in violation of applicable Environmental Law, or (b) is included or proposed in writing for
inclusion on the
National Priorities List or equivalent applicable state or foreign jurisdiction list; and (v)
the Company and its subsidiaries have all Environmental Permits required for its current
operations. The Company has made available to Buyer copies of all material environmental reports,
site assessments, and permits pertaining to the Company’s and its subsidiaries’ properties that is
within its possession.

     Section 4.22 Real Property.

     (a) Section 4.22(a) of the Company Disclosure Schedule contains a true and complete
description of all real property owned by the Company and its subsidiaries (the “Owned Real
Property”) as of the date hereof. The Company and its subsidiaries have good and valid title
to all of the Owned Real Property free and clear of Liens (other than Permitted Liens). None of
the Owned Real Property is subject to any option, lease, license, sublease or other

24

 

occupancy
agreement granting to any third party a right to use, occupy or enjoy any portion of the Owned Real
Property or to obtain title to the Owned Real Property.

     (b) Section 4.22(b) of the Company Disclosure Schedule contains a true and complete list of
all leases, licenses, subleases and occupancy agreements, together with any amendments thereto (the
“Leases”), with respect to all real property leased, licensed, subleased or otherwise used
or occupied by the Company and its subsidiaries as lessee or sublessee (the “Leased Real
Property” and, together with the Owned Real Property, the “Company Real Property”).
True, complete and accurate copies of the Leases have been made available to Buyer and Acquisition
Sub prior to the date hereof.

     (c) To the knowledge of the Company, the Owned Real Property and the Company’s current
operation thereof is in compliance in all material respects with all applicable zoning, building,
setback requirements and other applicable regulations of any Governmental Authority and all
certificates of occupancy required to operate the Owned Real Property in its current manner have
been issued by the applicable Governmental Authority and remain in full force and effect.

     (d) To the knowledge of the Company, no condemnation, requisition or taking by any public
authority has been threatened or contemplated, and the Company has not received any notice of such
condemnation, requisition or taking by a Governmental Authority with respect to the Owned Real
Property.

     (e) Except as has not had, and would not reasonably be expected to have, a Company Material
Adverse Effect: (i) each of the Leases constitutes the valid and legally binding obligation of the
Company or one of its subsidiaries, as applicable, enforceable in
accordance with its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer and similar laws of general
applicability relating to or affecting creditors’ rights or by general equity principles, and (ii)
each of the Leases is in full force and effect.

     (f) To the knowledge of the Company, there is no violation or default (nor does there exist
any condition, which with the passage of time or the giving of notice or both, would cause such a
violation or default) by the Company or any of its subsidiaries, under any of the Leases except for
such violations or defaults that, individually or in the aggregate, have not had and would not
reasonably be expected to have a Company Material Adverse Effect.

     Section 4.23 Material Contracts.

     (a) The Company has made available to Buyer or its advisors complete and accurate copies of
the Material Contracts and all amendments or modifications thereto that exist as of the date of
this Agreement.

25

 

     (b) With respect to each Material Contract: (i) such Material Contract is in full force and
effect and constitutes a legal, valid and binding agreement of the Company or its subsidiaries and,
to the knowledge of the Company, the other parties thereto, subject to the effect, if any, of (A)
bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium or other similar laws
relating to or affecting the rights or remedies of creditors or (B) general principles of equity,
regardless of whether asserted in a proceeding in equity or at law; (ii) neither the Company nor
any of its subsidiaries is, and to the Company’s knowledge, no third party to such Material
Contract is, in breach in any material respect or default of such Material Contract; and (iii) to
the knowledge of the Company no event has occurred that with notice or lapse of time would
constitute a breach in any material respect or default thereunder by the Company or any of its
subsidiaries or would permit the modification or premature termination of such Material Contract by
any other party thereto.

     (c) “Material Contract” means any oral or written legally binding, contract, agreement
or commitment to which the Company or any of its subsidiaries is a party (i) that is a commercial
agreement (and not a confidentiality or non-disclosure agreement) to which any of the customers or
suppliers listed in Section 4.23(c) of the Company Disclosure Schedule is a party; (ii) that is
disclosed in Part 2 or Part 3 of Section 4.13 of the Company Disclosure Schedule; (iii) evidencing
indebtedness for borrowed or loaned money or lines of credit (including security and pledge
agreements) of $250,000 or more, including guarantees of such indebtedness by the Company or any of
its subsidiaries; (iv) creating or relating to any partnership or joint venture by the Company or
any of its subsidiaries with any third party; (v) which provides for the sale or acquisition of any
other person or the business or any other material assets, whether by merger, consolidation or
otherwise outside of the ordinary course of the Company’s business; (vi) requiring aggregate
capital expenditures by
the Company or any of its subsidiaries in excess of $500,000 other than expenditures set forth
on the operating budget provided to Buyer prior to the date hereof; (vii) which provides for a loan
or advance to any person (other than to officers, directors and employees in the ordinary course of
business and in compliance with applicable Law); (viii) relating to the export of products from
Spain and that contain covenants not to (or otherwise restricting or limiting Company’s or any of
its affiliates’ ability to) compete in any line of business or geographical area, including any
covenant not to compete with respect to the manufacture, marketing, distribution or sale of any
product or product line; or (ix) relating to the issuance, ownership, disposition or voting of any
equity securities, or securities convertible into or exchangeable for equity securities, of the
Company or any of its subsidiaries or the granting of registration rights with respect thereto.

     Section 4.24
Insurance. The Company and its subsidiaries maintain policies of fire and casualty,
general liability, directors’ and officers’ and errors and omissions in such amounts, with such
deductibles and against such risks and losses as are reasonable for the business and assets of the
Company and its subsidiaries, and, to the knowledge of the Company, in accordance with industry
standards and consistent with past practice. All such policies are in full force and effect, and
all premiums due and payable thereon have been paid. True and complete copies of the Company’s
insurance policies have been delivered or made available to Buyer and Acquisition Sub prior to the
date hereof.

26

 

     Section 4.25
Transactions with Affiliates. There are no transactions, agreements, arrangements or
understandings, that would be required to be disclosed under Item 404 of Regulation S-K under the
Securities Act, between the Company or any of its subsidiaries, on the one hand, and, on the other
hand, any (i) present or former director or executive officer of the Company or any of its
subsidiaries, or any of such director’s or executive officer’s family members, (ii) record or
beneficial owner of more than 5% of the Shares, or (iii) affiliate of such officer, director or
beneficial owner, that are in existence or have been terminated since January 1, 2006 (other than
employment contracts entered into in the ordinary course of business consistent with past practice
and filed as an exhibit to a Company SEC Document prior to the date hereof).

     Section 4.26
No Other Representations or Warranties. Except for the representations and warranties
contained in this Agreement, neither the Company nor any other person on behalf of the Company
makes any express or implied representation or warranty with respect to the Company or with respect
to any other information provided to Buyer or Acquisition Sub in connection with the transactions
contemplated hereby. Neither the Company nor any other person will have or be subject to any
liability to Buyer, Acquisition Sub or any other person resulting from the distribution to Buyer or
Acquisition Sub, or Buyer’s or Acquisition Sub’s use of, any such information, including any
information, documents, projections, forecasts of other material made available to Buyer or
Acquisition Sub in certain “data rooms” or management presentations in expectation of the
transactions contemplated by this Agreement, unless any such information is expressly included in a
representation or warranty contained in this Article IV.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF BUYER AND ACQUISITION SUB

     The following representations and warranties are made jointly and severally by Buyer and
Acquisition Sub:

     Section 5.1
Organization and Qualification; Subsidiaries. Each of Buyer and Acquisition Sub is a
corporation or legal entity duly organized or formed, validly existing and in good standing, under
the laws of its jurisdiction of organization or formation and has the requisite corporate power and
authority and all necessary governmental approvals to own, lease and operate its properties and to
carry on its business as it is now being conducted, except where the failure to have such power,
authority and governmental approvals would not prevent or materially delay the consummation of the
transactions contemplated hereby.

     Section 5.2
Authority Relative to Agreement. Each of Buyer and Acquisition Sub has all necessary
corporate power and authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the Merger and the other transactions contemplated hereby. The
execution and delivery of this Agreement by Buyer and Acquisition Sub and the consummation by Buyer
and Acquisition Sub of the Merger and the other transactions contemplated hereby have been duly and
validly authorized by all necessary

27

 

corporate action of Buyer and Acquisition Sub (and, with
respect to Acquisition Sub, by its sole stockholder), and no other corporate proceedings on the
part of Buyer or Acquisition Sub are necessary to authorize the execution and delivery of this
Agreement or to consummate the Merger and the other transactions contemplated hereby (other than,
with respect to the Merger, the filing of the Certificate of Merger with the Secretary of State).
This Agreement has been duly and validly executed and delivered by Buyer and Acquisition Sub and,
assuming the due authorization, execution and delivery by the Company, this Agreement constitutes a
legal, valid and binding obligation of Buyer and Acquisition Sub, enforceable against Buyer and
Acquisition Sub in accordance with its terms (except as such enforceability may be limited by
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other similar laws of
general applicability relating to or affecting creditor’s rights, and to general equitable
principles).

     Section 5.3
No Conflict; Required Filings and Consents.

     (a) The execution and delivery of this Agreement by Buyer and Acquisition Sub does not, and
the performance of this Agreement by Buyer and Acquisition Sub will not, (i) conflict with or
violate the certificate of incorporation or by-laws (or equivalent organizational documents) of (A)
Buyer or (B) Acquisition Sub, (ii) assuming the consents, approvals and authorizations specified in
Section 5.3(b) have been received and the waiting periods referred to therein have expired, and any
condition precedent to such consent, approval, authorization, or
waiver by Buyer has been satisfied, conflict with or violate any Law applicable to Buyer or
Acquisition Sub or by which any property or asset of Buyer or Acquisition Sub is bound or affected
or (iii) result in any breach of or constitute a default (or an event which with notice or lapse of
time or both would become a default) under, or give to others any right of termination, amendment,
acceleration or cancellation of, or result in the creation of a Lien on any property or asset of
Buyer or Acquisition Sub pursuant to, any note, bond, mortgage, indenture or credit agreement, or
any other contract, agreement, lease, license, permit, franchise or other instrument or obligation
to which Buyer or Acquisition Sub is a party or by which Buyer or Acquisition Sub or any property
or asset of Buyer or Acquisition Sub is bound or affected, other than, in the case of clauses (ii)
and (iii), for any such conflicts, violations, breaches, defaults or other occurrences of the type
referred to above which would not prevent or materially delay the consummation of the transactions
contemplated hereby.

     (b) The execution and delivery of this Agreement by Buyer and Acquisition Sub does not, and
the consummation by Buyer and Acquisition Sub of the Merger and the other transactions contemplated
by this Agreement, will not, require any consent, approval, authorization, order, registration,
waiver or permit of, or filing or declaration with or notification to, any Governmental Authority,
including the filing of a pre-merger notification report under the HSR Act, except for applicable
requirements of the Exchange Act, the Antitrust Laws, and the filing and recordation of appropriate
merger documents as required by Delaware Law and the rules of the NYSE, and except where failure to
obtain such consents, approvals, authorizations or permits, or to make such filings or
notifications, would not prevent or materially delay the consummation of the transactions
contemplated hereby.

28

 

     Section 5.4
Compliance with Law. Neither Buyer nor Acquisition Sub is in conflict with, or in default
or violation of, any Law applicable to Buyer or Acquisition Sub or by which any property or asset
of Buyer or Acquisition Sub is bound or affected that would prevent or materially delay the
consummation of the transactions contemplated hereby.

     Section 5.5
Absence of Litigation. There is no claim, action, proceeding, or investigation pending or,
to the knowledge of Buyer, threatened against any of Buyer or Acquisition Sub or any of their
respective properties or assets at law or in equity, and there are no Orders before any arbitrator
or Governmental Authority, in each case, that would prevent or materially delay the consummation of
the transactions contemplated hereby.

     Section 5.6
Available Funds. Buyer has as of the date of this Agreement, and shall have on the Closing
Date, sufficient funds to enable Buyer to pay the Merger Consideration, and to consummate all of
the transactions contemplated hereby. Buyer’s and Acquisition Sub’s obligations under this
Agreement are not subject to any conditions regarding, Buyer, its Affiliates’, Acquisition Sub, or
any other person’s ability to obtain financing for the consummation of the transaction contemplated
hereby.

     Section 5.7
Ownership of Company Common Stock. Neither Buyer nor Acquisition Sub are or were, within
the last three (3) years, an “interested stockholder” with respect to the Company Common Stock
within the meaning of Section 203 of the DGCL.

     Section 5.8
Brokers. No broker, finder or investment banker is entitled to any brokerage, finder’s or
other fee or commission in connection with the Merger based upon arrangements made by or on behalf
of Buyer.

ARTICLE VI

COVENANTS AND AGREEMENTS

     Section 6.1
Conduct of Business by the Company Pending the Merger. The Company covenants and agrees
that, between the date of this Agreement and the Effective Time or the date, if any, on which this
Agreement is terminated pursuant to Section 8.1, except (i) as may be required by Law, (ii) as may
be agreed to in writing by Buyer (which consent shall not be unreasonably withheld, delayed or
conditioned), (iii) as may be expressly permitted by this Agreement, (iv) except as may be required
pursuant to the Spin-Off Agreements or (v) as set forth in Section 6.1 of the Company Disclosure
Schedule, the business of the Company and its subsidiaries, other than CPEX (which shall not be
restricted by this Section 6.1, but solely to the extent that an action set forth below taken (in
the case of negative covenants) or not taken (in the case of affirmative covenants) by CPEX would
not have any adverse impact on the Company after giving effect to the Spin-Off and would not
reasonably be expected to prevent or materially delay the consummation of the transactions
hereunder), shall be conducted only in, and such entities shall not take any action except in, the
ordinary and usual course of business, in a manner consistent with past practice in all material
respects and in compliance with all applicable Laws in all material respects and, to the extent
consistent therewith, each of the Company and its subsidiaries shall use their respective
commercially reasonable efforts to (x) subject to prudent

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management of workforce needs and ongoing
programs currently in force, preserve its business organization intact and maintain its existing
relations and goodwill with customers, suppliers, distributors, creditors, lessors, employees and
business associates, (y) maintain and keep material properties and assets in good repair and
condition, subject to ordinary course wear and tear, and (z) maintain in effect all material
governmental permits necessary to the current operation of the business the Company or any of its
subsidiaries. The Company agrees with Buyer that, except as set forth in clauses (i) through (iv)
above, the Company shall not (and, as applicable, shall cause its subsidiaries not to):

     (a) amend or otherwise change the Company Certificate, the Company By-laws, or such equivalent
organizational documents of any of its subsidiaries;

     (b) issue, deliver, sell, pledge, dispose, encumber, grant or subject to any Lien any shares
of its or its subsidiaries’ capital stock, any other voting securities, any options, warrants,
convertible securities or other rights of any kind to acquire any shares of its or its
subsidiaries’ capital stock, or any “phantom” stock, “phantom” stock rights, stock appreciation
rights, stock based performance units, or other equity-based awards, including pursuant to
contracts as in effect on the date hereof; provided, however, that (i) the Company
may issue shares upon exercise of any Company Option or payment of any Restricted Stock Unit
outstanding as of the date hereof, and (ii) the Company may issue shares as required by the
Equity-Providing Employment Agreements, provided that any such shares to be issued under
the Equity-Providing Employment Agreements shall be issued prior to the Equity Adjustment Date, or
if issued thereafter shall be taken into account for purposes of Section 3.1(b) as though issued
prior to the Equity Adjustment Date;

     (c) (i) declare, authorize, make or pay any dividend or other distribution payable in cash,
stock, property or otherwise, with respect to the Company’s or any of its subsidiaries’ capital
stock, other than dividends paid by any subsidiary of the Company to the Company or any
wholly-owned subsidiary of the Company, (ii) split, combine or reclassify any of its capital stock
or issue, authorize the issuance of any other securities in respect of, in lieu of or in
substitution for, shares of its capital stock or alter any term of any of the Company’s or any of
its subsidiaries’ outstanding securities, (iii) effect any recapitalization, reclassification or
like change in the capitalization of the Company or any of its subsidiaries or (iv) purchase,
redeem or otherwise acquire any shares of its capital stock or any other securities thereof or any
rights, warrants or options to acquire any such shares or other securities, except for issuances,
purchases, redemptions or other acquisitions of capital stock or other securities required under
the terms of any plans (including Company Benefit Plans) existing on the date hereof between the
Company or any of its subsidiaries, on the one hand, and any director or employee of the Company or
any of its subsidiaries, on the other hand; provided, however, that dividends,
issuances or distributions may be made in connection with the Spin-Off, but only to the extent made
in accordance with Spin-Off Agreements;

     (d) except (i) as required pursuant to existing written agreements executed prior to, or
Company Benefit Plans in effect as of, the date hereof, or (ii) insofar as it creates no

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additional
liability to the Company or any subsidiary, (A) increase the compensation or other benefits payable
or to become payable (including unusual or extraordinary bonuses) to (x) directors or executive
officers of the Company or any of its subsidiaries or (y) employees of the Company or any of its
subsidiaries except, in the case of this clause (y), in the ordinary course of business consistent
with past practice (including, for this purpose, the normal salary and bonus review process
conducted each year), (B) grant any severance or termination pay to (except pursuant to existing
agreements, plans or policies), or enter into any severance agreement with any (x) director or
executive of the Company or any of its subsidiaries or (y) employee of the Company or any of its
subsidiaries except, in the case of this clause (y), in the ordinary course of business consistent
with past practice, (C) enter into any employment agreement with any employee of the Company, (D)
establish, adopt, enter into or amend any collective bargaining agreement, plan, trust, fund,
policy or arrangement for the benefit of any current or former directors, officers or employees or
any of their beneficiaries, except as would not result in a
material increase to the Company in the cost of maintaining such collective bargaining
agreement, plan, trust, fund, policy or arrangement, or (E) establish, adopt, amend or terminate
any Company Benefit Plan, or any other plan, policy or arrangement that would have been a Company
Benefit Plan had it existed as of the date hereof.

     (e) except as may be required under the Company Benefit Plans or the Equity-Providing
Employment Agreements, grant, confer or award options, convertible securities, restricted stock
units or other rights to acquire any of its or its subsidiaries’ capital stock or take any action
to cause to be exercisable any otherwise unexercisable option under any Company Option Plan;
provided that any equity based grants to be made under the Equity-Providing Employment
Agreements shall be made prior to the Equity Adjustment Date, or if made thereafter shall be taken
into account for purposes of Section 3.1(b) as though made prior to the Equity Adjustment Date;

     (f) (i) other than between the Company and any of its subsidiaries, or among wholly owned
subsidiaries, make any loans, advances or capital contributions to, any other person, other than
(but only as permitted under applicable Law), to employees and consultants in respect of expenses
incurred in the ordinary course of business consistent with past practice, the Company’s expense
reimbursement policies or the applicable consulting arrangement as in effect on the date hereof; or
(ii) pay any management, consulting or similar fee to any affiliate or stockholder (other than
employees or directors of the Company in accordance with the ordinary course of business consistent
with past practice);

     (g) acquire or agree to acquire (including by merger, consolidation, or acquisition of equity
or debt securities or assets) any corporation, partnership, limited liability company, other
business organization or any division thereof, or any material amount of assets in connection with
acquisitions or investments which is material to the Company and its subsidiaries, taken as a
whole;

     (h) incur any long-term indebtedness for borrowed money or guarantee any such indebtedness for
any person except for indebtedness (i) incurred under the Company’s

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existing credit facilities or
incurred to replace or renew any existing indebtedness, (ii) incurred in the ordinary course of
business and in an amount that, in the aggregate, does not exceed $1,000,000, (iii) for which CPEX
shall be the sole obligor (and for which the Company and its subsidiaries other than CPEX shall not
be obligated, including pursuant to any guarantee thereof) following the Spin-Off, or (iv) incurred
in order to satisfy any Tax obligation related solely to the distribution of the shares of CPEX
pursuant to the Spin-Off (including any gain under Treasury Regulation Section 1.1502-13 with
respect to the CPEX Sub Preferred Stock (as defined in the Spin-Off Agreements) which is taken into
account at the time of the Spin-Off) that may come due prior to the Effective Time
(provided, that such indebtedness may be prepaid at any time without penalty);

     (i) (i) cancel any indebtedness payable to the Company, or (ii) waive or assign any claims or
rights of substantial value other than in the ordinary course of business;

     (j) make any new, or enter into any commitment for, capital expenditure or expenditures which,
in the aggregate, are in excess of $1,000,000, except for capital expenditures or expenditures made
in the ordinary course of business consistent with past practice (including any capital expenditure
set forth on any operating budget in effect at the time this Agreement is executed) and disclosed
to Buyer prior to the date hereof;

     (k) make or change any material Tax election, adopt or change any accounting method for Tax
purposes, file any material amended Tax Return, enter into any closing agreement with respect to,
or otherwise settle, any material Tax claim or assessment relating to the Company or any of its
subsidiaries, surrender any right to claim a refund of material Taxes, or consent to any extension
or waiver of the limitation period applicable to any Tax claim or assessment relating to the
Company or any of its subsidiaries;

     (l) (i) modify, amend or terminate any Material Contract other (A) than in the ordinary course
of business consistent with past practice, or (B) if so modified, amended or terminated would,
individually or in the aggregate, reasonably be expected to (x) have a Company Material Adverse
Effect, (y) impair in any material respect the ability of the Company to perform its obligations
under this Agreement or (z) prevent or materially delay the consummation of the transactions
contemplated by this Agreement or (ii) modify or amend the Spin-Off Agreements in a manner adverse
to the Company or Buyer;

     (m) make any material change to its methods, principles or practices of accounting in effect
at December 31, 2007 or revalue any material assets of the Company or any of its subsidiaries,
except (i) as required by GAAP (or any interpretation thereof) or Regulation S-X of the Exchange
Act, or as required by a Governmental Authority or quasi-Governmental Authority (including the
Financial Accounting Standards Board or any similar organization), (ii) to permit the audit of the
Company’s financial statements in compliance with GAAP, or (iii) as required by a change in
applicable Law;

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     (n) other than in the ordinary course of business consistent with past practice, (i) sell,
lease, license, transfer, exchange or swap, sell and leaseback, mortgage or otherwise encumber
(including securitizations), or subject to any Lien (other than Permitted Liens) or otherwise
dispose of any material portion of its properties or assets, except (A) for transactions among the
Company and its wholly-owned subsidiaries or among the Company’s wholly-owned subsidiaries, (B)
pursuant to existing agreements in effect prior to the execution of this Agreement, (C) as may be
required by applicable Law or any Governmental Authority in order to permit or facilitate the
consummation of the transactions contemplated hereby, or (D) properties or assets exclusively
related to or used in the Drug Delivery Business in accordance with the Spin-Off Agreements; or
(ii) enter into, modify, amend or terminate any material Lease;

     (o) other than in the ordinary course of business consistent with past practice, settle any
action, suit, investigation or other proceeding which, in the aggregate, require an out-of-pocket
expense in excess of $500,000;

     (p) sell, transfer or license to any person or otherwise extend, amend or modify any material
rights to the Company Intellectual Property Rights other than (i) in the ordinary course of
business consistent with past practice, (ii) pursuant to the Spin-Off Agreements, or (iii) as
between the Company and its subsidiaries, or among wholly-owned subsidiaries of the Company; or

     (q) authorize or enter into any written agreement or otherwise make any commitment to do any
of the foregoing.

     Section 6.2
Proxy Statement.

     (a) Covenants of the Company with Respect to the Proxy Statement. The Company shall
prepare and shall cause to be filed with the SEC as promptly as practicable following the date of
this Agreement a proxy statement (together with any amendments thereof or supplements thereto, the
“Proxy Statement”) relating to the meeting of the Company’s stockholders to be held to
consider the adoption and approval of this Agreement and the Merger. The Company shall include in
the Proxy Statement the text of this Agreement and the Company Recommendation (unless the board of
directors of the Company has changed, qualified, withheld or withdrawn, or publicly proposed to
change, qualify, withhold or withdraw the Company Recommendation, to the extent permitted under
Section 6.6(d)) and shall use all commercially reasonable efforts to respond as promptly as
practicable to any comments by the SEC staff in respect of the Proxy Statement. None of the
information included in the Proxy Statement will, at the time of the mailing of the Proxy Statement
or any amendments or supplements thereto, and at the time of the Stockholders’ Meeting, contain any
untrue statement of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the circumstances under
which they were made, not misleading; provided, however, that no covenant is hereby
made by the Company with respect to any of the Buyer Information. The Proxy Statement will comply
as to form in all material respects with the provisions of the Exchange Act and the rules and
regulations promulgated thereunder.

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     (b) Covenants of Buyer with Respect to the Proxy Statement. Buyer agrees and
covenants that none of the information with respect to Buyer or its subsidiaries (the “Buyer
Information”) supplied or to be supplied by Buyer for inclusion in the Proxy Statement will, at
the time of the mailing of the Proxy Statement or any amendments or supplements thereto, and at the
time of the Stockholders’ Meeting, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances under which
they were made, not misleading.

     (c) Cooperation. The Company, Buyer and Acquisition Sub shall cooperate and consult
with each other in preparation of the Proxy Statement. The Company shall promptly (but in no event
later than two (2) business days after receipt) notify Buyer or its counsel upon the receipt of any
comments from the SEC or the staff of the SEC (whether oral or written) or any request from the SEC
or the staff of the SEC for amendments or supplements to the Proxy Statement and shall provide
Buyer with copies of all correspondence between the Company and its Representatives, on the one
hand, and the SEC and the staff of the SEC, on the other hand. Notwithstanding the foregoing,
prior to filing or mailing the Proxy Statement (or any amendment or supplement thereto) or
responding to any comments of the SEC or the staff of the SEC with respect thereto, the Company
shall provide Buyer a reasonable opportunity to review and comment on such document or response;
provided that Buyer shall use commercially reasonable efforts to provide or cause to be
provided its comments to the Company as promptly as reasonably practicable after such document or
response is transmitted to Buyer for its review. Without limiting the generality of the foregoing,
each of Buyer and Acquisition Sub will furnish to the Company the information relating to it
required by the Exchange Act and the rules and regulations promulgated thereunder to be set forth
in the Proxy Statement.

     (d) Mailing of Proxy Statement; Amendments. As promptly as reasonably practicable
after the Proxy Statement has been cleared by the SEC, the Company shall mail the Proxy Statement
to the holders of Company Common Stock as of the record date established for the Stockholders’
Meeting. If at any time prior to the Effective Time any event or circumstance relating to the
Company or Buyer or any of either the Company or Buyer’s subsidiaries, or their respective officers
or directors, should be discovered by the Company or Buyer, respectively, which, pursuant to the
Securities Act or Exchange Act, should be set forth in an amendment or a supplement to the Proxy
Statement, such party shall promptly inform the other. Each of Buyer, Acquisition Sub and the
Company agree to correct any material information provided by it for use in the Proxy Statement
which shall have become false or misleading. All documents (including the Proxy Statement) that
each of the Company and Buyer is responsible for filing with the SEC in connection with the Merger
will comply as to form in all material respects with the applicable requirements of the Securities
Act and the Exchange Act.

     Section 6.3
Stockholders’ Meetings. Subject to Section 6.6 hereof, the Company shall, as promptly as
reasonably practicable following the date of this Agreement establish a record date for, duly call,
give notice of, convene and hold a meeting of its stockholders, for the purpose of voting upon the
adoption of this Agreement and approval of the Merger (the
“Stockholders’ Meeting”), and the
Company shall hold the Stockholders’ Meeting; provided, however, that if the Spin-Off has not been
completed prior to the date of the

34

 

Stockholders’ Meeting, the Company shall be permitted to delay
or postpone convening the Stockholders’ Meeting to a date that is 14 days following the completion
of the Spin-Off. At such Stockholders’ Meeting, the Company shall, subject to Section 6.6(d)
hereof, recommend to its stockholders the adoption of this
Agreement and the other transactions contemplated by this Agreement and approval of the Merger (the
“Company Recommendation”) and, subject to Section 6.6(d), the Company shall also (i) use
all reasonable efforts to solicit or cause to be solicited from its stockholders proxies in favor
of adoption of this Agreement and consummation of the Merger and (ii) take all other reasonable
action necessary to secure the Requisite Stockholder Approval; provided, however, that the Company
shall not be obligated to recommend to its Stockholders the adoption of this Agreement or approval
of the Merger at its Stockholders’ Meeting to the extent that the board of directors of the Company
makes a Change of Recommendation in accordance with Section 6.6(d).

     Section 6.4
Appropriate Action; Consents; Filings; Spin-Off.

     (a) The parties hereto will use their respective reasonable best efforts to consummate and
make effective the transactions contemplated hereby and to cause the conditions to the Merger set
forth in Article VII to be satisfied including (i) the obtaining of all necessary actions or
nonactions, consents and approvals from Governmental Authorities or other persons necessary in
connection with the consummation of the transactions contemplated by this Agreement and the making
of all necessary registrations and filings (including filings with Governmental Authorities if any)
and the taking of all reasonable steps as may be necessary to obtain an approval from, or to avoid
an action or proceeding by, any Governmental Authority or other persons necessary in connection
with the consummation of the transactions contemplated by this Agreement, (ii) the defending of any
lawsuits or other legal proceedings, whether judicial or administrative, challenging this Agreement
or the consummation of the transactions performed or consummated by such party in accordance with
the terms of this Agreement, including seeking to have any stay or temporary restraining order
entered by any court or other Governmental Authority vacated or reversed, and (iii) the execution
and delivery of any additional instruments necessary to consummate the Merger and other
transactions to be performed or consummated by such party in accordance with the terms of this
Agreement and to fully carry out the purposes of this Agreement. Each of the parties hereto shall,
as promptly as practicable, make its respective filings, and thereafter make any other required
submissions under the Antitrust Laws with respect to the transactions contemplated hereby.

     (b) Buyer and Acquisition Sub agree to use reasonable best efforts to obtain all consents
under any antitrust, competition or pharmaceutical Law that may be required by any foreign or U.S.
federal, state or local antitrust or competition Governmental Authority, or by the FDA or similar
Governmental Authority, in each case with competent jurisdiction, so as to enable the parties to
close the transactions contemplated by this Agreement as promptly as practicable, including
committing to or effecting, by consent decree, hold separate orders, trust, or otherwise, as is
commercially reasonable, the sale or disposition of such assets or businesses as are required to be
divested (the “Divestiture”) to avoid the entry of, or to effect the dissolution of or
vacate or lift, any Order, that would otherwise have the effect of preventing or materially
delaying the consummation of the Merger and the other transactions
contemplated by this

35

 

Agreement. Buyer shall have the sole and exclusive right, to propose,
negotiate, offer to commit and effect, by consent decree, hold separate order or otherwise, the
Divestiture of such assets of Buyer, the Company, or their respective subsidiaries or otherwise
offer to take or offer to commit (and if such offer is accepted, commit to and effect) to take any
action as may be required to avoid the entry of, dissolve, vacate or lift any such Order. Further,
and for the avoidance of doubt, Buyer will take any and all commercially reasonable actions
necessary in order to ensure that (x) no requirement for any non-action, a consent or approval of
any State Attorney General or other Governmental Authority, (y) no decree, judgment, injunction,
temporary restraining order or any other order in any suit or proceeding, and (z) no other matter
relating to any antitrust or competition Law which would preclude consummation of the Merger by the
Termination Date. Notwithstanding the foregoing, in no event shall any of Buyer, Acquisition Sub,
the Company or their respective affiliates be required to take or agree to take any such action,
that, individually or together with any other such actions, would reasonably be expected to have a
material adverse effect on the financial condition, business, assets or results of operations of
the Company and its subsidiaries taken as a whole, or an effect of similar magnitude on Buyer and
its subsidiaries.

     (c) Each of Buyer and the Company shall give (or shall cause its respective subsidiaries to
give) any notices to third parties, and Buyer and the Company shall use, and cause each of its
subsidiaries to use, its reasonable best efforts to obtain any third party consents not covered by
paragraphs (a) and (b) above, necessary, proper or advisable to consummate the Merger. Each of the
parties hereto will furnish to the other such necessary information and reasonable assistance as
the other may request in connection with the preparation of any required governmental filings or
submissions and will cooperate in responding promptly to any inquiry from a Governmental Authority,
including promptly informing the other party of such inquiry, consulting in advance before making
any presentations or submissions to a Governmental Authority (considering in good faith the views
of the other party in any such presentation or submission), supplying each other with copies of all
material correspondence, filings or communications between either party and any Governmental
Authority with respect to this Agreement.

     (d) The Company shall use its reasonable best efforts to complete the Spin-Off as promptly as
practicable; provided that nothing in this Section 6.4(d) shall require the board of
directors of the Company to take any action that would be inconsistent with its fiduciary duties
under applicable Law.

     (e) Each of Buyer and Acquisition Sub, on the one hand, and the Company on the other hand,
covenants and agrees that between the date hereof and the Effective Time or the date, if any, on
which this Agreement is terminated pursuant to Section 8.1, each of Buyer, Acquisition Sub and the
Company shall not, and shall not permit any of their respective subsidiaries to, take or agree to
take any action that would prevent or materially delay the consummation of the transactions
contemplated hereby.

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     Section 6.5
Access to Information; Confidentiality.

     (a) From the date hereof to the Effective Time or the date, if any, on which this Agreement is
terminated pursuant to Section 8.1, to the extent permitted by applicable Law, the Company will
provide to Buyer (and its officers, directors, employees, accountants, consultants, legal counsel,
agents and other representatives, collectively, “Representatives”) reasonable access during
normal business hours to the Company’s and its subsidiaries’ properties, books, contracts and
records, personnel and other information as Buyer may reasonably request regarding the business,
assets, liabilities, employees and other aspects of the Company; provided, however,
that the Company shall not be required to provide access to any information or documents which
would, in the reasonable judgment of the Company, (i) breach any agreement with any third-party,
(ii) constitute a waiver of the attorney-client or other privilege held by the Company, or (iii)
otherwise violate any applicable Laws. For the avoidance of doubt, and notwithstanding the
foregoing, the Company has not provided, shall not be required to provide, and following the
Spin-Off the Company shall not have access to, the properties, books, contracts and records and
other information as it relates to the business, assets, liabilities, employees and other aspects
of the Drug Delivery Business, and neither the Company nor CPEX shall have any obligation at any
time to grant such access to Buyer; provided, however, that the Company shall
reasonably cooperate to provide requested information and access with respect to CPEX to the extent
reasonably related to the transactions contemplated by this Agreement. The Company shall cause the
officers, employees, consultants, agents, accountants, attorneys and other Representatives of the
Company and its subsidiaries to reasonably cooperate with Buyer and Buyer’s Representatives in
connection with such investigation and examination, and Buyer and its Representatives shall
cooperate with the Company and its Representatives and shall use their reasonable efforts to
minimize any disruption to the business.

     (b) The parties shall comply with, and shall cause their respective Representatives to comply
with, all of their respective obligations under the Confidentiality Agreement.

     Section 6.6
No Solicitation of Competing Proposal.

     (a) From and after the date of this Agreement until the earlier of the Effective Time or the
date, if any, on which this Agreement is terminated pursuant to Section 8.1, and except as
otherwise provided for in this Agreement (including the other subsections of this Section 6.6), the
Company agrees that it shall not, nor shall it authorize or knowingly permit any of its
Representatives, or any of its subsidiaries, affiliates or any of their respective Representatives
to, directly or indirectly: (i) solicit, initiate or knowingly facilitate or encourage (including
by way of providing material nonpublic information), or agree to, approve or endorse, any Competing
Proposal, (ii) enter into, continue or otherwise participate in any negotiations regarding, or
furnish to any person any material nonpublic information with respect to, any Competing Proposal,
(iii) enter into, continue or otherwise engage in discussions with any person
with respect to, any Competing Proposal, (iv) approve or recommend any Competing Proposal, (v)
enter into any letter of intent or similar document or any agreement or commitment to (x)
facilitate or consummate any Competing Proposal, (y) approve or endorse any Competing Proposal, (z)
in connection with any Competing Proposal, require it to abandon, terminate or fail to consummate
the Merger, (vi) amend or grant any waiver or release or approve any transaction

37

 

or redeem any
Company Rights under the Company Rights Agreement, except in connection with the transactions
contemplated by this Agreement, or (vii) resolve, propose or agree to take any of the actions
prohibited by clauses (i) through (vi) of this sentence. The Company shall, and shall cause its
Representatives, subsidiaries, affiliates and their respective Representatives to, immediately
cease and cause to be terminated all existing solicitations, discussions or negotiations with
respect to any person conducted heretofore by the Company, any of its subsidiaries or affiliates or
their respective Representatives with respect to any Competing Proposal, and shall demand the
return or destruction of any information previously provided with respect to such activities,
discussions or negotiations, subject to the restrictions set forth in any applicable
confidentiality agreements. Notwithstanding anything to the contrary contained herein, the Company
shall be permitted to terminate, amend, modify, waive or fail to enforce any provision of any
“standstill” or similar obligation of any person in order that such person may submit a Competing
Proposal if the board of directors of the Company determines in good faith after consultation with
the Company’s outside legal and financial advisors that failure to take such action would be
inconsistent with the directors’ exercise of their fiduciary duties to the Company’s stockholders
under applicable Law.

     (b) Notwithstanding the limitations set forth in Section 6.6(a), if the Company receives a
bona fide written Competing Proposal that the board of directors of the Company determines in good
faith after consultation with the Company’s outside legal and financial advisors (i) constitutes a
Superior Proposal or (ii) could reasonably be expected to result in a Superior Proposal, the
Company may, if its board of directors determines in good faith after consultation with the
Company’s outside legal and financial advisors that failure to take such action would be
inconsistent with its fiduciary duties under applicable Law, and subject to compliance with Section
6.6(e), take the following actions: (x) furnish nonpublic information with respect to the Company
and its subsidiaries to the third party making such Competing Proposal and (y) engage in
discussions or negotiations with the third party with respect to the Competing Proposal, in each
case if, and only if, (A) all such information has previously been provided to Buyer or is provided
to Buyer prior to or substantially concurrent with the time it is provided to such third party and
(B) prior thereto, the Company and such third party enter into a confidentiality and standstill
with such person that contains confidentiality and standstill provisions that are no less favorable
in the aggregate to the Company than those contained in the Confidentiality Agreement (an
“Acceptable Confidentiality Agreement”).

     (c) Except as set forth in Section 6.6(d), neither the board of directors of the Company nor
any committee thereof shall (i)(A) change, qualify, withhold or withdraw, or publicly propose to
change, qualify, withhold or withdraw the Company Recommendation or (B) recommend, adopt or
approve, or propose publicly to recommend, adopt or approve, any Competing Proposal (any action
described in this clause (i) being referred to as a “Change of 
Recommendation”) or (ii) approve or recommend, or propose to approve or recommend, or
allow the Company or any of its affiliates to execute or enter into, any letter of intent,
memorandum of understanding, agreement in principle, merger agreement, acquisition agreement,
option agreement, joint venture agreement, partnership agreement or other similar agreement
constituting or related to, any Competing Proposal (other than an Acceptable Confidentiality

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Agreement referred to in Section 6.6(b)) (each of the documents referred to in this clause (ii)
shall be an “Acquisition Agreement”).

     (d) Notwithstanding the provisions of Section 6.6(c), if at any time prior to obtaining the
Requisite Stockholder Approval, the board of directors of the Company has concluded in good faith
(after consultation with the Company’s outside legal and financial advisors and after complying
with and giving effect to all proposed adjustments to this Agreement offered by Buyer pursuant to
this Section 6.6(d)) (i)(x) in response to a bona fide written Competing Proposal that was
unsolicited, that such proposal is a Superior Proposal, and (y) that the failure of the board of
directors of the Company to change, qualify, withhold or withdraw the Company Recommendation would
be inconsistent with the directors’ exercise of their fiduciary duties to the Company’s
stockholders under applicable Law, or (ii) in the absence of a Competing Proposal, the failure of
the board of directors of the Company to take such action would be inconsistent with the directors’
exercise of their fiduciary duties to the Company’s stockholders under applicable Law, the board of
directors of the Company may, subject to complying with Section 8.2(a), (1) change, qualify,
withhold or withdraw the Company Recommendation and/or (2) in the case of clause (i) of this
sentence, terminate this Agreement to enter into a binding written agreement with respect to such
Superior Proposal in accordance with Section 8.1(g); provided, that the Company shall not
terminate this Agreement pursuant to the foregoing clause (2) and any purported termination
pursuant to the foregoing clause (2) shall be void and of no force or effect unless, in advance of
or concurrently with such termination, the Company (X) pays the Company Termination Fee, as
required by Section 8.2, and (Y) simultaneously with such termination enters into an Acquisition
Agreement with respect to a Competing Proposal and terminates this Agreement pursuant to Section
8.1(g); provided, further that prior to taking any of the actions described in
clauses (i) and (ii) of this sentence, the Company shall have given Buyer at least three (3)
business days’ written notice (it being understood and agreed that any material amendment to the
amount or form of consideration of the Superior Proposal shall require a new notice and a new three
(3) business day period) of the material terms of the Superior Proposal and the Company’s intention
to accept such Superior Proposal, and the Company shall, during such three (3) business day period,
negotiate in good faith with Buyer to make such adjustments to the Merger Consideration and other
terms and conditions of this Agreement such that such Competing Proposal would no longer constitute
a Superior Proposal. The board of directors of the Company shall promptly consider in good faith
(in consultation with its outside legal counsel and financial advisors) any proposed alteration of
the terms of this Agreement or the Merger proposed by Buyer in response to any Competing Proposal.

     (e) In addition to the obligations of the Company set forth in Section 6.6(a), (b) and (c),
the Company shall promptly (but in any event within 24 hours of receipt) notify
Buyer of any (i) Competing Proposal, (ii) the material terms and conditions of any such
Competing Proposal (including any material changes thereto), and (iii) the identity of the person
making any such Competing Proposal. The Company shall promptly provide to Buyer any non-public
information concerning the Company provided to any other person in connection with any Competing
Proposal that was not previously provided to Buyer and any such non-public information shall be
held by Buyer subject to the terms of the Confidentiality Agreement.

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     (f) Nothing contained in this Section 6.6 shall prohibit the Company or the board of directors
of the Company from (i) disclosing to the Company’s stockholders a position contemplated by Rules
14d-9 and 14e-2(a) promulgated under the Exchange Act or (ii) making any disclosure to its
stockholders if the board of directors of the Company has reasonably determined in good faith,
after consultation with outside legal counsel, that the failure to do so would be inconsistent with
any applicable Law. The disclosures under this Section 6.6(f) shall not be a basis, in themselves,
for Buyer to terminate this Agreement pursuant to Section 8.1(f) so long as any such disclosure
rejects any Competing Proposal and reaffirms the Company Recommendation.

     (g) As used in this Agreement, “Competing Proposal” shall mean any proposal or offer
from any third party (other than a proposal or offer by Buyer or any of its subsidiaries) relating
to, or any inquiry that would reasonably be expected to lead to (i) a merger, consolidation,
recapitalization, liquidation, dissolution, joint venture, binding share exchange, business
combination or similar transaction involving the Company or any of its significant subsidiaries
pursuant to which any person or the stockholders of any person would own twenty-five percent (25%)
or more of any class of equity securities of the Company or any of its significant subsidiaries or
of any resulting parent company of the Company; or (ii) any direct or indirect acquisition or
purchase by any person, in one transaction or a series of transactions, that would constitute
twenty-five percent (25%) or more of the revenues, net income or assets of the Company and its
subsidiaries, taken as a whole (but exclusive of CPEX), or twenty-five percent (25%) or more of any
class of equity securities of the Company or any of its significant subsidiaries.

     (h) As used in this Agreement, “Superior Proposal” shall mean a Competing Proposal for
or in respect of, or that if consummated would be reasonably likely to result in the ownership of,
at least a majority of, the outstanding Company Common Stock (or of the surviving entity in a
merger or the direct or indirect parent of the surviving entity in a merger) or all or
substantially all of the Company’s and its subsidiaries’, taken as a whole (but exclusive of CPEX),
assets, made by any person on terms that the board of directors of the Company determines in good
faith, after consultation with the Company’s financial and legal advisors, and considering such
factors as the board of directors of the Company in good faith considers to be appropriate
(including the conditionality and the timing, the likelihood of consummation of such proposal and
the financing thereof), to be more favorable to the Company and its stockholders than the
transactions contemplated by this Agreement and the Merger. Reference to “this Agreement” and “the
Merger” in this Section 6.6(h) shall be deemed to include any proposed alteration of the terms of
this Agreement or the
Merger that is agreed to by Buyer after it receives written notice from the Company pursuant
to Section 6.6(e) of the existence of, the identity of the person making and the material terms and
conditions of, any Competing Proposal.

     Section 6.7
Directors’ and Officers’ Indemnification and Insurance.

     (a) Buyer and Acquisition Sub agree that all rights to exculpation and indemnification for
acts or omissions occurring at or prior to the Effective Time, whether

40

 

asserted or claimed prior
to, at or after the Effective Time (including any matters arising in connection with the
transactions contemplated by this Agreement), now existing in favor of the current or former
directors, officers or employees, as the case may be, of the Company or its subsidiaries (other
than CPEX) as provided in their respective articles of association, certificates of incorporation
or bylaws (or comparable organization documents) or agreements shall survive the Merger and shall
continue in full force and effect. The Surviving Corporation shall (and Buyer shall cause the
Surviving Corporation to) indemnify, defend and hold harmless, and advance expenses to Indemnitees
with respect to all acts or omissions by them in their capacities as such at any time prior to the
Effective Time, to the fullest extent required by: (i) the Company Certificate or Company By-Laws
and the organizational documents of the Company’s subsidiaries (other than CPEX), each as in effect
on the date of this Agreement; and (ii) any indemnification agreements of the Company or its
subsidiaries (other than CPEX) as in effect on the date of this Agreement, copies of which have
been made available to Buyer. For the avoidance of doubt, nothing in this Section 6.7(a) shall
affect the rights of any employee of CPEX existing pursuant to (i) the Company Certificate or
Company By-Laws and the organizational documents of the Company’s subsidiaries (other than CPEX),
each as in effect on the date of this Agreement; and (ii) any indemnification agreements of the
Company or its subsidiaries (other than CPEX) as in effect on the date of this Agreement.

     (b) Without limiting the provisions of Section 6.7(a), during the period beginning as of the
Effective Time and ending on the sixth anniversary of the Effective Time, Buyer will: (i) indemnify
and hold harmless each Indemnitee against and from any costs or expenses (including attorneys’
fees), judgments, fines, losses, claims, damages, liabilities and amounts paid in settlement in
connection with any claim, action, suit, proceeding or investigation, whether civil, criminal,
administrative or investigative, to the extent such claim, action, suit, proceeding or
investigation arises out of or pertains to: (A) any action or omission or alleged action or
omission in such Indemnitee’s capacity as a director, officer or employee of the Company or any of
its subsidiaries or affiliates; or (B) the Merger, the Merger Agreement and any transactions
contemplated hereby; and (ii) pay in advance of the final disposition of any such claim, action,
suit, proceeding or investigation the expenses (including attorneys’ fees) of any Indemnitee upon
receipt of an undertaking by or on behalf of such Indemnitee to repay such amount if it shall
ultimately be determined that such Indemnitee is not entitled to be indemnified; provided,
however, that the Surviving Corporation will not be liable for any settlement effected
without the Surviving Corporation’s prior written consent (which shall not be unreasonably
withheld, delayed or conditioned) and will not be obligated to pay the fees and expenses of more
than one counsel for all Indemnitees in any jurisdiction with respect to any single such
claim, action, suit, proceeding or investigation; provided that in the event any
Indemnitee’s interests conflict with those of another Indemnitee with respect to any single such
claim, action, suit, proceeding or investigation, the Surviving Corporation will be obligated to
pay fees and expenses of one separate counsel for each such Indemnitee. Notwithstanding anything
to the contrary contained in this Section 6.7(b) or elsewhere in this Agreement, the Surviving
Corporation shall not (and Buyer shall cause the Surviving Corporation not to) settle or compromise
or consent to the entry of any judgment or otherwise seek termination with respect to any claim,
action, suit, proceeding or investigation for which indemnification may be sought under this
Section 6.7(b) unless such settlement, compromise, consent or termination includes an

41

 

unconditional
release of all Indemnitees from all liability arising out of such claim, action, suit, proceeding
or investigation.

     (c) For six (6) years after the Effective Time, (i) Buyer shall maintain, or shall cause the
Surviving Corporation to maintain, in effect the Company’s current directors’ and officers’
liability insurance, as disclosed or made available to Buyer prior to the date hereof (or such
other insurance that is no less favorable to the Indemnitees than the Company’s current directors’
and officers’ liability insurance), in respect of acts or omissions occurring at or prior to the
Effective Time, covering each Indemnitee currently covered by the Company’s directors’ and
officers’ liability insurance policy, on terms with respect to such coverage and amounts no less
favorable than those of such policy in effect on the date hereof; or (ii) Buyer or the Surviving
Corporation may substitute therefor a single premium tail policy with respect to such directors’
and officers’ liability insurance, as disclosed to Buyer prior to the date hereof, from an
insurance carrier with the same or better AM Best rating as the Company’s current insurance carrier
for such insurance policy, with a claims period of six (6) years from the Effective Time, and
policy limits, terms and conditions (including deductibles and exclusions) at least as favorable to
the directors and officers covered under such insurance policy as the limits, terms and conditions
in the existing policies of the Company; provided, that in connection with this Section
6.7(c), neither the Surviving Corporation nor Buyer shall be obligated to pay annual premiums (in
connection with any directors’ and officers’ liability insurance policy described in clause (c)(i)
above) in excess of the annual premiums set forth in Section 6.7(c)(i) of the Company Disclosure
Schedule, or pay a one-time premium (in connection with a single premium tail policy described in
clause (c)(ii) above) in excess of the amount set forth in Section 6.7(c)(ii) of the Company
Disclosure Schedule. It is understood and agreed that in the event such coverage cannot be
obtained for such amount or less, then the Surviving Corporation shall obtain the maximum amount of
coverage as may be obtained for such amount.

     (d) Notwithstanding anything contained in Section 9.1 or Section 9.6 hereof to the contrary,
this Section 6.7 shall survive the consummation of the Merger and shall be binding, jointly and
severally, on all successors and assigns of Buyer, the Surviving Corporation and its subsidiaries,
and shall be enforceable by the Indemnitees and their successors, heirs or representatives. In the
event that the Surviving Corporation or any of its successors or assigns consolidates with or
merges into any other person and shall not be the continuing or surviving corporation or entity of
such consolidation or merger or transfers or conveys all or a majority of its properties and assets
to any person, then, and in each such case, proper provision shall be
made so that the successors and assigns of the Surviving Corporation shall succeed to the
obligations set forth in this Section 6.7.

     Section 6.8
Notification of Certain Matters. The Company shall give prompt notice to Buyer, and Buyer
shall give prompt notice to the Company, of (i) any notice or other communication received by such
party from any Governmental Authority in connection with the this Agreement, the Merger or the
transactions contemplated hereby, or from any person alleging that the consent of such person is or
may be required in connection with the Merger or the transactions contemplated hereby, if the
subject matter of such communication or the failure of such party to obtain such consent could be
material to the Company, the Surviving Corporation

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or Buyer and (ii) any inaccuracy of any
representation or warranty made by such party that would reasonably be expected to cause the
condition set forth in Section 7.2(a) or 7.3(a), respectively, not to be satisfied. The Company
shall give prompt notice to Buyer of, and cooperate with Buyer in connection with, (i) any actions,
suits, claims, investigations or proceedings commenced, pending, relating to, involving or, to the
Company’s knowledge, threatened against or otherwise affecting the Company, any of its subsidiaries
or their respective officers, directors or employees, which relate to this Agreement, the Merger or
the transactions contemplated hereby and (ii) any stockholder litigation or claims against the
Company, any of its subsidiaries or their respective officers, directors or employees relating to
this Agreement, the Merger or the transactions contemplated hereby. No settlement in connection
with any claim, suit, hearing, proceeding or litigation referred to in clause (i) or (ii) above
shall be agreed to without Buyer’s prior written consent, which consent shall not be unreasonably
withheld, conditioned or delayed.

     Section 6.9
Public Announcements. Buyer and the Company shall consult with each other before issuing,
and give each other the opportunity to review and comment upon, any press release or otherwise
making any public statements with respect to the transactions contemplated by this Agreement,
including the Merger, and shall not issue any such press release or make any such public statement
without the prior consent of the other (which consent shall not be unreasonably withheld or
delayed), except as may be required by Law or any stock exchange listing agreement to which Buyer
or the Company is a party. Notwithstanding the foregoing, the Company shall be permitted to make
such announcements and disclosures as it reasonably deems necessary or advisable to the extent such
statements relate solely to the Spin-Off or the Drug Delivery Business. The parties agree that all
formal Company employee communication programs or announcements with respect to the transactions
contemplated by this Agreement, including the Merger, shall be in the forms mutually agreed to by
the parties (such agreement not to be unreasonably withheld, delayed or conditioned). The parties
agree that the initial press release to be issued with respect to the transactions contemplated by
this Agreement shall be in the form heretofore agreed to by the parties.

     Section 6.10
Employee Matters.

     (a) As of the Effective Time, all rights and obligations arising from any employment contract
or employment relationship existing in the Company or in any of its subsidiaries, shall be
transferred to the Surviving Corporation.

     (b) During the twelve (12) month period commencing on the Effective Time, Buyer shall provide
or shall cause the Surviving Corporation to provide to (after giving effect to the Spin-Off) each
current employee, officer, director or consultant of the Company and any of its subsidiaries at
Closing (each, a “Company Employee” and collectively, the “Company Employees”) (i)
compensation no less favorable than the compensation being provided to Company Employees
immediately prior to the Effective Time (including equity-based compensation, as valued by Buyer in
good faith), and (ii) benefits under employee benefit plans that are the same or substantially
comparable in the aggregate to, in the sole discretion of Buyer, either (A) those currently
provided by the Company and its Subsidiaries to such employees under

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the Company Benefit Plans as
of the Closing Date (excluding equity-based plans) or (B) those provided by Buyer and its
Subsidiaries to comparably situated employees from time to time during such twelve (12) month
period.

     (c) For purposes of eligibility, vesting, determination of the level of benefits and benefit
accrual under the Employee Benefit Plans of Buyer, the Company, the Company’s subsidiaries and
their respective affiliates providing benefits to any Company Employees after the Closing (the
“New Plans”), and for purposes of accrual of vacation and other paid time off and severance
benefits under New Plans, each Company Employee shall be credited with his or her years of service
with the Company, the Company subsidiaries and their respective affiliates (and any additional
service with any predecessor employer) before the Closing, to the same extent as such Company
Employee was entitled, before the Closing, to credit for such service under any similar Company
Benefit Plan. In addition, and without limiting the generality of the foregoing: (i) each Company
Employee shall be immediately eligible to participate, without any waiting time, in any and all New
Plans to the extent coverage under such New Plan replaces coverage under a comparable Company
Benefit Plan in which such Company Employee participated immediately before the replacement; and
(ii) for purposes of each New Plan providing medical, dental, pharmaceutical and/or vision benefits
to any Company Employee, Buyer shall cause all pre-existing condition exclusions and
actively-at-work requirements of such New Plan to be waived for such employee and his or her
covered dependents, and Buyer shall cause any eligible expenses incurred by such employee and his
or her covered dependents under any Company Benefit Plan during the portion of the plan year of the
New Plan ending on the date such employee’s participation in the corresponding New Plan begins to
be taken into account under such New Plan for purposes of satisfying all deductible, coinsurance
and maximum out-of-pocket requirements applicable to such employee and his or her covered
dependents for the applicable plan year as if such amounts had been paid in accordance with such
New Plan.

     (d) Without limiting the generality of the foregoing, as of the Effective Time, Buyer shall
cause the Surviving Corporation to honor in accordance with their terms all employment, change in
control, severance and other compensation agreements and arrangements existing prior to the
execution of this Agreement which are between the Company and any subsidiary and any Company
Employee and set forth in Section 6.10(d) of the Company Disclosure Schedule (each, a “Company
Executive Agreement”); subject, in each case, to any amendment or termination thereof that may
be permitted by the terms of such agreements or arrangements; provided, that no such
amendment or termination shall be effected by Buyer or the Surviving Corporation if it would
adversely affect an employee’s (or former employee’s) rights resulting from the or relating to the
Merger, this Agreement or the other transactions contemplated hereby. The Company and Buyer hereby
agree that the occurrence of the Closing shall constitute a “Change in Control” for
purposes of any Company Executive Agreement set forth in Section 6.10(d) of the Company Disclosure
Schedule.

     (e)
Following the Effective Time, Buyer shall cause the Surviving Corporation and its subsidiaries to
honor any Company collective bargaining agreements, and to

44

 

preserve the status and
functions of any union representative of the current Company Employees, or any current Company
Employee serving as a liaison between the Company Employees and applicable unions, on the same
terms and subject to the same conditions as existed prior to the Effective Time.

          (f) If requested by Buyer at least five (5) business days prior to the Closing Date, the
Company shall take (or cause to be taken) all actions reasonably necessary or appropriate to
terminate, effective no later than the Effective Time, any Company Benefit Plan that contains a
cash or deferred arrangement intended to qualify under Section 401(k) of the Code (a “Company
401(k) Plan”). If the Company is required to terminate any Company 401(k) Plan, then the
Company shall provide to Buyer prior to the Closing Date written evidence of the adoption by the
Board of Directors of the Company of resolutions authorizing the termination of such Company 401(k)
Plan (the form and substance of which resolutions shall be subject to the prior review and approval
of Buyer, which approval shall not be unreasonably withheld or delayed).

          (g) This Section 6.10 shall be binding upon and inure solely to the benefit of each of the
parties to this Agreement, and nothing in this Section 6.10, expressed or implied, is intended to
confer upon any other person any rights or remedies of any nature whatsoever under
or by reason of this Section 6.10. Without limiting the foregoing, no provision of this
Section 6.10 will create any third party beneficiary rights in any current or former employee,
director or consultant of the Company or its subsidiaries in respect of continued employment (or
resumed employment) or any other matter. Nothing in this Section 6.10 is intended to amend any
Company Benefit Plan, or interfere with Buyer’s or the Surviving Corporation’s right from and after
the Effective Time to amend or terminate any Company Benefit Plan or the employment or provision of
services by any director, employee, independent contractor or consultant.

          (h) For the avoidance of doubt, this Section 6.10 shall not apply to any current or former
employees, officers, directors or consultants of CPEX.

ARTICLE VII

CONDITIONS TO THE MERGER

          Section 7.1 Conditions to the Obligations of Each Party. The obligations of the Company
and Buyer to consummate the Merger are subject to the satisfaction or waiver by the Company and
Buyer of the following conditions:

          (a) the Requisite Stockholder Approval shall have been obtained in accordance with Delaware
Law and the rules and regulations of the NYSE;

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          (b) all consents required under any Antitrust Law shall have been obtained and any applicable
waiting period thereunder shall have expired or been terminated;

          (c) no Governmental Authority shall have enacted, issued, promulgated, enforced or entered any
Law or Order which is then in effect and has the effect of making the Merger illegal or otherwise
prohibiting the consummation of the Merger; and

          (d) the Company shall have completed the Spin-Off.

          Section 7.2 Conditions to the Obligations of Buyer and Acquisition Sub. The obligations of
Buyer and Acquisition Sub to consummate the Merger are subject to the satisfaction or waiver by
Buyer of the following further conditions:

          (a) (i) each of the representations and warranties of the Company contained in Section 4.3(a)
shall be true and correct (other than de minimis deviations therefrom) as of the date of set forth
in Section 4.3(a) and (ii) each of the representations and warranties of the Company contained in
this Agreement shall be true and correct as of the date of this Agreement and as of the Effective
Time with the same effect as though made as of the Effective Time (except to the extent expressly
made as of an earlier date, in which case as of such date), except for such failures to be true and
correct as have not had or would not reasonably be expected to
have, individually or in the aggregate, a Company Material Adverse Effect; provided,
that for purposes of determining whether the condition in clause (ii) is satisfied, references to
“Company Material Adverse Effect” and “material” or “materiality” qualification contained in such
representations and warranties shall be ignored;

          (b) the Company shall have performed or complied in all material respects with all agreements
and covenants required by this Agreement to be performed or complied with by it on or prior to the
Effective Time;

          (c) from the date of hereof to the Closing Date, there shall not have occurred an event that,
individually or in the aggregate, has had, or would reasonably be expected to have a Company
Material Adverse Effect; and

          (d) the Company shall have delivered to Buyer a certificate, dated the Effective Time and
signed by its chief executive officer and chief financial officer on behalf of the Company,
certifying to the effect that the conditions set forth in Sections 7.2(a), (b) and (c) have been
satisfied.

          Section 7.3 Conditions to the Obligations of the Company. The obligations of the Company
to consummate the Merger are subject to the satisfaction, or waiver by the Company, of the
following further conditions:

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          (a) each of the representations and warranties of Buyer and Acquisition Sub contained in this
Agreement that is qualified as to materiality shall be true and correct, and each of the
representations and warranties of Buyer and Acquisition Sub contained in this Agreement that are
not so qualified shall be true and correct except for such failures to be true and correct as would
not prevent or materially delay the consummation of the transactions contemplated hereby, in each
case, as of the date of this Agreement and as of the Effective Time with the same effect as though
made on and as of the Effective Time (except to the extent expressly made as of an earlier date, in
which case as of such date);

          (b) Buyer and Acquisition Sub shall have performed or complied in all material respects with
all agreements and covenants required by this Agreement to be performed or complied with by them on
or prior to the Effective Time; and

          (c) Buyer shall have delivered to the Company a certificate, dated the Effective Time and
signed by its chief executive officer or another senior officer on behalf of Buyer, certifying to
the effect that the conditions set forth in Section 7.3(a) and Section 7.3(b) have been satisfied.

ARTICLE VIII

TERMINATION, AMENDMENT AND WAIVER

          Section 8.1 Termination. Notwithstanding anything contained in this Agreement to the
contrary, this Agreement may be terminated and abandoned at any time prior to the Effective Time,
whether before or after any approval of the matters presented in connection with the Merger by the
stockholders of the Company, as follows:

          (a) by mutual written consent of each of Buyer and the Company;

          (b) by either Buyer or the Company, if (i) the Effective Time shall not have occurred on or
before October 1, 2008 (the “Termination Date”) and (ii) the party seeking to terminate
this Agreement pursuant to this Section 8.1(b) shall not have breached in any material respect its
obligations under this Agreement in any manner that shall have proximately caused the failure to
consummate the Merger on or before such date.

          (c) by either Buyer or the Company, if any Governmental Authority of competent jurisdiction
shall have issued an Order or taken any other action permanently restraining, enjoining or
otherwise prohibiting the transactions contemplated by this Agreement, and such Order or other
action shall have become final and non-appealable, provided that the party seeking to
terminate this Agreement pursuant to this Section 8.1(c) shall have used its reasonable best
efforts to remove such Order or other action; provided, however, that the right to
terminate this Agreement under this Section 8.1(c) shall not be available to a party if the
issuance

47

 

of such final, non-appealable Order was primarily due to the failure of such party to
perform any of its obligations under this Agreement, including, without limitation, the obligation
of Buyer and Acquisition Sub to take any and all commercially reasonable steps in accordance with
Section 6.4(b) of this Agreement so as to allow the parties to close the transactions contemplated
by this Agreement as promptly as practicable;

          (d) by Buyer or the Company if the Requisite Stockholder Approval shall not have been obtained
by reason of the failure to obtain such Requisite Stockholder Approval at a duly held Stockholders’
Meeting or at any adjournment or postponement thereof;

          (e) by the Company, if Buyer shall have breached or failed to perform any of its
representations, warranties, covenants or other agreements set forth in this Agreement, which
breach or failure to perform (1) would result in a failure of a condition set forth in Section
7.3(a) or Section 7.3(b) and (2) cannot be cured on or before the Termination Date,
provided that the Company shall have given Buyer written notice, delivered at least thirty
(30) days prior to such termination, stating the Company’s intention to terminate this Agreement
pursuant to this Section 8.1(e) and the basis for such termination;

          (f) by Buyer, if the Company shall have breached or failed to perform any of its
representations, warranties, covenants or other agreements set forth in this Agreement, which
breach or failure to perform (1) would result in a failure of a condition set forth in Section
7.2(a) or Section 7.2(b) and (2) cannot be cured on or before the Termination Date,
provided that Buyer shall have given the Company written notice, delivered at least thirty
(30) days prior to such termination, stating Buyer’s intention to terminate this Agreement pursuant
to this Section 8.1(f) and the basis for such termination;

          (g) by the Company, at any time prior to obtaining the Requisite Stockholder Approval, if the
Company or any of its affiliates shall enter into any Acquisition Agreement, pursuant to Section
6.6; provided, however, that the Company shall not terminate this Agreement
pursuant to this paragraph, and any purported termination pursuant to this paragraph shall be void
and of no force or effect, unless in advance of or concurrently with such termination the Company
pays the Company Termination Fee as provided in Section 8.2; or

          (h) by Buyer, if (i) the Company shall have made a Change of Recommendation, pursuant to
Section 6.6; (ii) the board of directors of the Company fails to expressly reaffirm the Company
Recommendation within five (5) business days after a written request by Buyer to do so, (iii) the
Company fails to use its reasonable best efforts to effect the Spin-Off; or (iv) the Company
materially breaches its obligations under Section 6.6.

In the event of termination of this Agreement pursuant to this Section 8.1, this Agreement shall
terminate without any liability or obligation on the part of Buyer, Acquisition Sub or the Company
under this Agreement, other than (a) with respect to a willful and material breach by a

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party of
any of its representations, warranties, covenants or agreements set forth in this Agreement, in
which case such party shall be fully liable for any losses, liabilities, claims, damages or
expenses, including reasonable legal fees and expenses, incurred or suffered by the other party or
parties as a result of such failure or breach, (b) with respect to the Confidentiality Agreement
(which shall terminate in accordance with its terms), and (c) the provisions of Section 8.2
(including with respect to any Company Termination Fee that may be payable pursuant thereto),
Section 8.5 and Article IX.

          Section 8.2 Termination Fees.

          (a) If,

          (i) (x) prior to the termination of this Agreement, any Competing Proposal is made to
the Company or is publicly proposed or publicly disclosed prior to, obtaining the
Requisite Stockholders’ Approval, (y) this Agreement is terminated by the Company or Buyer
pursuant to Section 8.1(b) (but only if at such time Buyer would not be prohibited from
terminating this Agreement by application of Section 8.1(b)(ii)) or (d) and (z) within
twelve (12) months after such termination, (1) the Company enters into any definitive
agreement providing for the consummation of a Competing Proposal
(whether or not such agreement shall have been entered into with the person who made
the Competing Proposal referred to in the foregoing clause (x)) or (2) the transactions
contemplated by any such Competing Proposal (whether or not such Competing Proposal was
the Competing Proposal referred to in the foregoing clause (x)) are otherwise consummated;

          (ii) this Agreement is terminated by the Company pursuant to Section 8.1(g);

          (iii) this Agreement is terminated by Buyer pursuant to Section 8.1(h); or

          (iv) this Agreement is terminated by the Company or Buyer pursuant to Section 8.1(b)
(but only if at such time the terminating party would not be prohibited from terminating
this Agreement by application of Section 8.1(b)(ii)) and at the time of such termination,
(i) the Company has failed to effect the Spin-Off and (ii) (x) the SEC has previously
indicated that it has no additional comments to the Registration Statement on Form 10 last
filed by CPEX, and (y) Duff & Phelps LLC is prepared to deliver its opinion that the
Company has sufficient surplus under Delaware Law to make the distribution of CPEX common
stock and that each of the Company and CPEX will be solvent and adequately capitalized
after giving effect to the distribution;

49

 

then in any such event the Company shall pay to Buyer a fee of U.S.$13,000,000 (thirteen million
dollars) in cash (the “Company Termination Fee”) and the Company shall have no further
liability with respect to this Agreement or the transactions contemplated hereby to Buyer (provided
that nothing herein shall release any party from liability for intentional breach or fraud), such
payment to be made in the case of (x) termination pursuant to Section 8.2(a)(i), no later than the
date of the first to occur of the events referred to in Section 8.2(a)(i)(z), (y) termination
pursuant to Section 8.2(a)(ii), in advance or concurrent with such termination, or (z) termination
pursuant to Section 8.2(a)(iii), or (iv), within two (2) business days after the termination of
this Agreement; it being understood that in no event shall the Company be required to pay the fee
referred to in this Section 8.2(a) on more than one occasion. Any such payment shall be reduced by
any amounts as may be required to be deducted or withheld therefrom under applicable Tax Law.

          Section 8.3 Amendment. This Agreement may be amended by mutual agreement of the parties
hereto by action taken by or on behalf of their respective boards of directors at any time prior to
the Effective Time; provided, however, that, after the adoption and approval of
this Agreement and the Merger by stockholders of the Company, there shall not be any amendment that
by Law or in accordance with the rules of any stock exchange requires further approval by the
stockholders of the Company without such further approval of such stockholders nor any amendment or
change not permitted under applicable Law. This Agreement may not be amended except by an
instrument in writing signed by the parties hereto.

          Section 8.4 Waiver. At any time prior to the Effective Time, subject to applicable Law,
any party hereto may (a) extend the time for the performance of any obligation or other act of any
other party hereto, (b) waive any inaccuracy in the representations and warranties of the other
party contained herein or in any document delivered pursuant hereto or (c) subject to the proviso
of Section 8.3, waive compliance with any agreement or condition contained herein. Any such
extension or waiver shall only be valid if set forth in an instrument in writing signed by the
party or parties to be bound thereby.

          Notwithstanding the foregoing, no failure or delay by the Company, Buyer or Acquisition Sub in
exercising any right hereunder shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise of any other right hereunder. Any agreement
on the part of a party hereto to any such extension or waiver shall be valid only if set forth in
an instrument in writing signed on behalf of such party.

          Section 8.5 Expenses. All Expenses incurred in connection with this Agreement and the
transactions contemplated by this Agreement shall be paid by the party incurring such expenses;
provided, however, that (i) if this Agreement is terminated by Buyer or the Company
pursuant to Section 8.1(b) (but only if at such time the terminating party would not be prohibited
from terminating this Agreement by application of Section 8.1(b)(ii)), and at the time of such
termination (A) all conditions to this Agreement shall have been satisfied or waived (other than
those that are satisfied by action taken at the Closing) other than the condition set forth in
Section 7.1(d), and (B) the Company has failed to effect the Spin-Off due the failure of one or
more of the conditions set forth in Section 8.2(a)(iv)(ii)(x) or (y); and (ii) in the event that
this Agreement is terminated (A) under the provisions referred to in clause (y) of Section
8.2(a)(i)

50

 

(or could have been terminated under such section) and the circumstances referred to in
clause (x) of Section 8.2(a)(i) shall have occurred prior to such termination but the Company
Termination Fee has not been paid and is not payable because the circumstances referred to in
clause (z) of Section 8.2(a)(i) shall not have occurred, or (B) pursuant to Section 8.1(d), then in
either of cases (i) or (ii), the Company shall pay a fee in the amount of $2.0 million to reimburse
Buyer for expenses and other costs incurred in connection with this Agreement and the transactions
contemplated hereby (which expenses and costs need not be documented). Such payment shall be made
within two (2) business days after the termination of this Agreement; it being understood that in
no event shall the Company be required to make such payment in circumstances where the Company
Termination Fee is payable; it being further understood that in the event the Company Termination
Fee becomes due and payable, such fee shall be reduced by any amounts paid pursuant to this Section
8.5.

ARTICLE IX

GENERAL PROVISIONS

          Section 9.1 Non-Survival of Representations, Warranties and Agreements. The
representations, warranties and agreements in this Agreement and any certificate delivered
pursuant hereto by any person shall terminate at the Effective Time or upon the termination of this
Agreement pursuant to Section 8.1, as the case may be, except that this Section 9.1 shall not limit
any covenant or agreement of the parties which by its terms contemplates performance after the
Effective Time or after termination of this Agreement, including, without limitation, those
contained in Section 6.7 and Section 6.10.

          Section 9.2 Notices. Any notice required to be given hereunder shall be sufficient if in
writing, and sent by facsimile transmission (provided that any notice received by facsimile
transmission or otherwise at the addressee’s location on any business day after 5:00 p.m.
(addressee’s local time) shall be deemed to have been received at 9:00 a.m. (addressee’s local
time) on the next business day), by reliable overnight delivery service (with proof of service),
hand delivery or certified or registered mail (return receipt requested and first-class postage
prepaid), addressed as follows (or at such other address for a party as shall be specified in a
notice given in accordance with this Section 9.2):

          if to Buyer or Acquisition Sub:

Teva Pharmaceutical Industries Limited

5 Basel Street

Petach Tikva 49131

Attention:     General Counsel and Secretary

Facsimile:       011 972 3 924 6026

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          with copies to (which shall not constitute notice):

Willkie Farr & Gallagher LLP

787 Seventh Avenue

New York, NY 10019

Attention:       Peter H. Jakes, Esq.

                          Jeffrey S. Hochman, Esq.

Facsimile:      (212) 728-8111

          if to the Company:

Bentley Pharmaceuticals, Inc.

Bentley Park

2 Holland Way

Exeter, NH 03833

Attention:       Chief Executive Officer

Facsimile:      (603) 658-6101

          with copies to:

Skadden, Arps, Slate, Meagher & Flom LLP

Four Times Square

New York, New York 10036-6522

Attention:       Eileen T. Nugent, Esq.

                          Marie L. Gibson, Esq.

Facsimile:       (212) 735-2000

          Section 9.3 Interpretation; Certain Definitions. When a reference is made in this
Agreement to an Article, Section or Exhibit, such reference shall be to an Article or Section of,
or an Exhibit to, this Agreement, unless otherwise indicated. The table of contents and headings
for this Agreement are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the words “include,” “includes” or “including” are used
in this Agreement, they shall be deemed to be followed by the words “without limitation.” The
words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of this Agreement.
All terms defined in this Agreement shall have the defined meanings when used in any certificate or
other document made or delivered pursuant hereto unless otherwise defined therein. The definitions
contained in this Agreement are applicable to the singular as well as the plural forms of such
terms and to the masculine as well as to the feminine and neuter genders of such term. Any statute
defined or referred to herein or in any agreement or instrument that is referred to herein means
such statute as from time to time amended, modified or supplemented, including (in the case of
statutes) by succession of

52

 

comparable successor statutes. References to a person are also to its
permitted successors and assigns.

          Section 9.4 Specific Performance. The parties hereto agree that if any of the provisions
of this Agreement were not performed in accordance with their specific terms or were otherwise
breached, irreparable damage would occur, no adequate remedy at law would exist and damages would
be difficult to determine, and that the parties shall be entitled to specific performance of the
terms hereof, in addition to any other remedy at law or equity, without any requirement to the
securing or posting of any bond in connection with such remedy.

          Section 9.5 Severability. If any term or other provision of this Agreement is invalid,
illegal or incapable of being enforced by any rule of Law, or public policy, all other conditions
and provisions of this Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the Merger is not affected in any manner materially adverse to any
party. Upon such determination that any term or other provision is invalid, illegal or incapable
of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as
to effect the original intent of the parties as closely as possible in a mutually acceptable manner
in order that the Merger be consummated as originally contemplated to the fullest extent possible.

          Section 9.6 Assignment. Neither this Agreement nor any rights, interests or obligations
hereunder shall be assigned by any of the parties hereto (whether by operation of Law or otherwise)
without the prior written consent of the other parties hereto, except that Buyer or Acquisition Sub
upon written notice to the Company, may assign, in its sole discretion, any of or all its rights,
interests and obligations under this Agreement to any direct or indirect wholly- owned subsidiary
or affiliate of Buyer, but no such assignment shall relieve Buyer or Acquisition Sub, as
applicable, of any of its obligations hereunder.

          Section 9.7 Entire Agreement; No Third-Party Beneficiaries. This Agreement (including the
exhibits and schedules hereto) and the Confidentiality Agreement constitute the entire agreement,
and supersede all other prior agreements and understandings, both written and oral, between the
parties, or any of them, with respect to the subject matter hereof and thereof, and except for: (a)
the rights of the Company’s stockholders to receive the Merger Consideration at the Effective Time
pursuant to Section 3.1, (b) the right of the Company, on behalf of its stockholders, to pursue
damages in the event of Buyer’s or Acquisition Sub’s breach of this Agreement or fraud, which right
is hereby acknowledged and agreed by Buyer and Acquisition Sub, (c) the provisions of Section 6.7
hereof, and (d) the right of the holders of Company Options and Restricted Stock Units to receive
payment at the applicable time, pursuant to Section 3.3 hereof, is not intended to and shall not
confer upon any person other than the parties hereto any rights or remedies hereunder.

          Section 9.8 Governing Law. This Agreement shall be governed by, and construed in
accordance with the laws of the State of New York, without giving effect to any choice or conflict
of laws provision or rule (whether of the State of New York or any other jurisdiction) that would
cause the application of the Laws of any jurisdiction other than the State of New York, except that
the Merger shall be governed by Delaware Law.

53

 

          Section 9.9 Consent to Jurisdiction; Enforcement.

          (a) Each of the parties hereto agree that irreparable damage would occur in the event that any
of the provisions of this Agreement were not performed in accordance with their specific terms or
were otherwise breached. It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the
terms and provisions of this Agreement exclusively in a state or federal court located in New York.
In addition, each of Buyer, Acquisition Sub and the Company hereby irrevocably submits to the
exclusive jurisdiction of the courts of the Southern District of New York and of the United States
of America located in the Southern District of New York, not to bring any claim regarding such a
dispute in any other court, and to waive unconditionally any objection to the laying of venue in
such forum, including any claim of inconvenient forum. You further agree that service of any
process, summons, notice or document by U.S. registered mail to your address set forth above shall
be effective service of process for any action, suit or proceeding brought against you in any such
court. The parties agree that a final judgment in any such dispute shall be conclusive and may be
enforced in other jurisdictions by suits on the judgment or in any other manner provided by Law.

          (b) Each of Buyer, Acquisition Sub and the Company irrevocably consents to the service of the
summons and complaint and any other process in any other action or proceeding relating to the
transactions contemplated by this Agreement, on behalf of itself or its property, by personal
delivery of copies of such process to such party. Nothing in this Section 9.9 shall affect the
right of any party to serve legal process in any other manner permitted by Law.

          Section 9.10 Counterparts. This Agreement may be executed and delivered (including by
facsimile transmission) in two (2) or more counterparts, and by the different parties hereto in
separate counterparts, each of which when executed and delivered shall be deemed to be an original
but all of which taken together shall constitute one and the same agreement.

          Section 9.11 No Strict Construction. The parties hereto acknowledge that this Agreement
has been prepared jointly by them and shall not be strictly construed against any party hereto.

          Section 9.12 WAIVER OF JURY TRIAL. EACH OF BUYER, ACQUISITION SUB AND THE COMPANY HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER
BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS
OF BUYER OR THE COMPANY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT THEREOF.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

54

 

          IN WITNESS WHEREOF, Buyer, Acquisition Sub and the Company have caused this Agreement to be
executed as of the date first written above by their respective officers thereunto duly authorized.

	 	 	 	 	 	 	 
	 	 	TEVA PHARMACEUTICAL INDUSTRIES LIMITED	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Itzhak Krinsky, Ph.D.
 

	 	 
	 

	 	Name:
	 	Itzhak Krinsky, Ph.D.	 	 
	 

	 	Title:
	 	Corporate Vice President – Business Development	 	 
	 
	 	 	 	 	 	 
	 	 	BERYLLIUM MERGER CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Richard Egosi	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Richard Egosi	 	 
	 

	 	Title:
	 	President and Chief Executive Officer	 	 
	 
	 	 	 	 	 	 
	 	 	BENTLEY PHARMACEUTICALS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ James R. Murphy	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	James R. Murphy	 	 
	 

	 	Title:
	 	Chairman and Chief Executive Officer	 	 

 

 

Appendix A

          As used in the Agreement, the following terms shall have the following meanings:

          “Acceptable Confidentiality Agreement” shall have the meaning set forth in Section
6.6(b).

          “Acquisition Agreement” shall have the meaning set forth in Section 6.6(c).

          “Acquisition Sub” shall have the meaning set forth in the Recitals.

          “AEMPS” shall have the meaning set forth in Section 4.20(a).

          “affiliate” of a specified person, means a person who, directly or indirectly, through
one or more intermediaries controls, is controlled by, or is under common control with, such
specified person.

          “Aggregate Purchase Price” shall have the meaning set forth in Section 3.1(b).

          “Agreement” shall have the meaning set forth in the Recitals.

          “Antitrust Laws” shall have the meaning set forth in Section 4.5(b).

          “Arnage A.P.I.” shall have the meaning set forth in Section 4.20(f).

          “Book-Entry Shares” shall have the meaning set forth in Section 3.1(b)(ii).

          “business day” shall mean any day on which the principal offices of the SEC in
Washington, D.C. are open to accept filings, or, in the case of determining a date when any payment
is due, any day on which banks are not required or authorized to close in the City of New York or
the City of Tel Aviv.

          “Buyer” shall have the meaning set forth in the Recitals.

          “Buyer Information” shall have the meaning set forth in Section 6.2(b).

A-1

 

          “CERCLA” shall have the meaning set forth in Section 4.21(a)(i).

          “Certificate of Merger” shall have the meaning set forth in Section 2.3(a).

          “Certificates” shall have the meaning set forth in Section 3.1(b)(ii).

          “Change
in Control” shall have the meaning set forth in Section 6.10(d).

          “Change of Recommendation” shall have the meaning set forth in Section 6.6(c).

          “Closing” shall have the meaning set forth in Section 2.2.

          “Closing Date” shall have the meaning set forth in Section 2.2.

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

          “Company” shall have the meaning set forth in the Recitals.

          “Company 401(k)_Plan” means the Arnage, Inc. 401(k) Plan.

          “Company Benefit Plans” means all employee benefit plans, programs or arrangements
including all “employee benefit plans” within the meaning of Section 3(3) of ERISA, adopted,
maintained, contributed to or required to be contributed to the Company or its ERISA Affiliates
with or for the benefit of the Company Employees or with respect to which the Company or its ERISA
Affiliates will or may have any material liability.

          “Company By-laws” shall have the meaning set forth in Section 2.4(b).

          “Company Certificate” shall have the meaning set forth in Section 2.4(a).

          “Company Common Stock” shall have the meaning set forth in Section 3.1(a).

          “Company Disclosure Schedule” shall have the meaning set forth in Article IV.

          “Company Employee” shall have the meaning set forth in Section 6.10(b).

2

 

          “Company Employees” shall have the meaning set forth in Section 6.10(b).

          “Company
Executive Agreement” shall have the meaning set forth in Section 6.10(d).

          “Company Intellectual Property Rights” shall have the meaning set forth in Section
4.13(a).

          “Company Material Adverse Effect” means any change, effect, event or circumstance that
is, or would reasonably be expected to be, materially adverse to the business, operations, results
of operations or financial condition of the Company and its subsidiaries taken as a whole, other
than any change, effect or circumstance relating to or resulting from (i) changes in general
political or economic conditions; (ii) changes in the general financial or securities markets
condition; (iii) any events, circumstances, changes or effects that affect the medical or
pharmaceutical industries generally; (iv) any changes in Laws or interpretations thereof; (v) any
changes in GAAP or other accounting principles or requirements; (vi) any outbreak or escalation of
hostilities or war or any act of terrorism; (vii) the announcement of, or compliance with, this
Agreement and the transactions contemplated hereby; (viii) any decline in the market price, or
change in the trading value, of the Company; (ix) any failure by the Company to meet any internal
or public projections, forecasts or estimates of earnings or revenue (provided,
however, that, in the case of clauses (viii) and (ix), the underlying cause for such
decline, change or failure may be considered in determining whether there may be a Company Material
Adverse Effect); or (ix) the assets and liabilities relating to the Drug Delivery Business that are
not part of the Company or its subsidiaries at Closing and that do not otherwise adversely impact
the Company; (but in each of cases (i) through ((ix)), only if (x) such changes, individually or in
the aggregate, do not have a materially disproportionate effect on the Company and its subsidiaries
(taken as a whole), or (y) would not reasonably be expected to prevent or materially delay the
consummation by the Company of the Merger or the other transactions contemplated by this
Agreement).

          “Company Option” shall mean each outstanding option to purchase shares of Company
Common Stock under any of the Company Option Plans.

          “Company Option Plans” shall mean the Company’s Amended and Restated 1991 Stock Option
Plan, 2001 Employee Stock Option Plan, as amended, 2001 Directors’ Stock Option Plan, as amended,
and Amended and Restated 2005 Equity and Incentive Plan.

          “Company Permits” shall have the meaning set forth in Section 4.6.

          “Company Preferred Stock” shall have the meaning set forth in Section 4.3(a).

3

 

          “Company Products” shall have the meaning set forth in Section 4.20(a).

          “Company Real Property” shall have the meaning set forth in Section 4.22(b).

          “Company Recommendation” shall have the meaning set forth in Section 6.3.

          “Company Rights” mean the rights to purchase Series A Junior Participating Preferred
Stock issued under the Company Rights Agreement.

          “Company Rights Agreement” shall have the meaning set forth in Section 4.17(b).

          “Company SEC Documents” shall have the meaning set forth in Section 4.7(a).

          “Company Termination Fee” shall have the meaning set forth in Section 8.2.

          “Company’s Facilities” shall have the meaning set forth in Section 4.21(b).

          “Competing Proposal” shall have the meaning set forth in Section 6.6(g).

          “Confidentiality Agreement” shall mean the confidentiality agreement dated November
30, 2007 between Buyer and the Company, as amended.

          “control” (including the terms “controlled by” and “under common control
with”) means the possession, directly or indirectly, or as trustee or executor, of the power to
direct or cause the direction of the management and policies of a person, whether through the
ownership of voting securities, as trustee or executor, by contract or credit arrangement or
otherwise.

          “CPEX” shall mean CPEX Pharmaceuticals, Inc., a Delaware corporation wholly- owned by
the Company, and its subsidiaries.

          “CPEX Value” shall mean the product of (x) the number of shares of CPEX common stock
distributed to the Company’s stockholders pursuant to the Spin-Off and (y) the volume weighted
average trading price of one share of CPEX common stock on the first day of trading of the CPEX
common stock on the principal market on which such stock trades following the completion of the
Spin-Off.

          “Delaware Law” shall have the meaning set forth in the Recitals.

4

 

          “Dissenting Shares” shall have the meaning set forth in Section 3.5.

          “Divestiture” shall have the meaning set forth in Section 6.4(b).

          “Drug Delivery Business” shall mean the business and operations of the Drug Delivery
segment of the Company as described in the Form 10-K.

          “Effective Time” shall have the meaning set forth in Section 2.3(a).

          “Employee Benefit Plan” means “employee benefit plans” as defined in Section 3(3) of
ERISA.

          “Employee Matters Agreement” shall mean the Employee Matters Agreement, by and between
the Company and CPEX, in the form as provided by the Company to Buyer prior to the date hereof,
with such amendments thereto to the extent permitted by this Agreement.

          “Environmental Laws” shall have the meaning set forth in Section 4.21(a)(i).

          “Environmental Permits” shall have the meaning set forth in Section 4.21(a)(iii).

          “Equity Adjustment” shall have the meaning set forth in Section 3.1(b).

          “Equity Adjustment Date” shall have the meaning set forth in Section 3.1(b).

          “Equity-Providing Employment Agreements” means the agreements set forth in Appendix A
to the Company Disclosure Schedule.

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

          “ERISA Affiliate” means any person or entity required to be aggregated together with
the Company under Sections 414(b), (c), (m) or (o) of the Code.

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

          “Exchange Fund” shall have the meaning set forth in Section 3.2(a).

5

 

          “Expenses” shall mean all reasonable out-of-pocket expenses (including all fees and
expenses of counsel, accountants, investment bankers, experts and consultants to a party hereto and
its affiliates) incurred by a party or on its behalf in connection with or related to the
authorization, preparation, negotiation, execution and performance of this Agreement, the
preparation, printing, filing and mailing of the Proxy Statement, the solicitation of stockholder
and stockholder approvals, the filing of any required notices under any antitrust regulations, any
filings with the SEC and all other matters related to the closing of the Merger and the other
transactions contemplated by this Agreement.

          “Expiration Date” shall have the meaning set forth in Section 4.17(b).

          “FDA” shall have the meaning set forth in Section 4.20(a).

          “Form 10-K” shall mean the Annual Report on Form 10-K filed by the Company for the
fiscal year ended December 31, 2007, as filed prior to the date hereof.

          “GAAP” shall mean United States generally accepted accounting principles.

          “Grant
Date” shall have the meaning set forth in Section 4.3(d).

          “Governmental Authority” shall mean any United States (federal, state or local) or
foreign government (federal, state, regional or local), or governmental, regulatory, judicial or
administrative authority, agency or commission.

          “Hazardous Materials” shall have the meaning set forth in Section 4.21(a)(ii).

          “HSR Act” shall have the meaning set forth in Section 4.5(b).

          “In-the-Money Option” shall mean a Company Option having a per share exercise price
less than the Merger Consideration (it being understood that whether a Company Option is an
In-the-Money Option shall be determined on an iterative basis by initially dividing the Aggregate
Purchase Price by the aggregate number of shares of outstanding Company Common Stock and Restricted
Stock Units exclusive of Company Options (the “basic per share consideration”), recalculating the
basic per share consideration taking into account the Tranche of outstanding Company Options with
the lowest per share exercise price and then repeating this process with each additional Tranche in
increasing order of per share exercise price until no additional Tranches of Company Options become
In-the-Money Options as a result of such calculation).

6

 

          “Indemnitee” shall mean any individual who, on or prior to the Effective Time, was an
officer, director or employee of the Company or served on behalf of the Company as an officer,
director or employee of any of the Company’s subsidiaries or affiliates (other than CPEX) or any of
their predecessors in their capacity as such, and the heirs, executors, trustees, fiduciaries and
administrators of such officer, director or employee.

          “Intellectual Property Rights” shall have the meaning set forth in Section 4.13(a).

          “IRS” shall mean the Internal Revenue Service.

          “knowledge” means, with respect to any matter in question, in respect of the Company,
the knowledge, after reasonable inquiry, of the individuals set forth in Appendix A of the Company
Disclosure Schedule.

          “Law” shall mean any and all domestic (federal, state or local) or foreign laws,
rules, regulations, orders, judgments or decrees promulgated by any Governmental Authority,
including but not limited to pharmaceutical and labor laws of any location where the Company or its
subsidiaries conduct business.

          “Leased Real Property” shall have the meaning set forth in Section 4.22(b).

          “Leases” shall have the meaning set forth in Section 4.22(b).

          “Ley 29/2006” shall have the meaning set forth in Section 4.20(a).

          “Lien” shall mean liens, claims, mortgages, encumbrances, pledges, security interests,
equities, deeds of trust, leases, rights of first refusal, easements, servitudes, transfer
restrictions or charges of any kind.

          “Material Contract” shall have the meaning set forth in Section 4.23(c).

          “Measurement Date” shall have the meaning set forth in Section 4.3(a).

          “Merger” shall have the meaning set forth in the Recitals.

          “Merger Consideration” shall have the meaning set forth in Section 3.1(b).

          “Multiemployer Plan” means a “multiemployer plans” within the meaning of Section 3(37)
of ERISA.

7

 

          “Necessary Assets” shall have the meaning set forth in Section 4.15.

          “New
Plans” shall have the meaning set forth in Section 6.10(c).

          “NYSE” shall mean the New York Stock Exchange.

          “Option Cash Payment” shall have the meaning set forth in Section 3.3(a).

          “Order” shall mean any decree, order, judgment, injunction, temporary restraining
order or other order in any suit or proceeding by or with any Governmental Authority.

          “Out-of-the-Money Option” shall mean each Company Option having a per share exercise
price equal to or in excess of the Merger Consideration.

          “Owned Real Property” shall have the meaning set forth in Section 4.22(a).

          “Paying Agent” shall have the meaning set forth in Section 3.2(a).

          “Permitted Lien” shall mean (i) any Lien for Taxes not yet due, being contested in
good faith by appropriate proceedings or for which adequate accruals or reserves have been
established, (ii) Liens securing indebtedness or liabilities that are reflected in the Company’s
consolidated balance sheet as of December 31, 2007 included in the Form 10-K (or the notes
thereto), (iii) such non-monetary Liens or other imperfections of title, if any, that, do not have,
and would not reasonably be expected to materially impact the value of, or materially adversely
affect the continued used of, the Owned Real Property, including, without limitation, (A) easements
or claims of easements whether shown or not shown by the public records, boundary line disputes,
overlaps, encroachments and any matters not of record which would be disclosed by an accurate
survey or a personal inspection of the property, (B) rights of parties in possession without
options to purchase or rights of first refusal, (C) any supplemental Taxes or assessments not shown
by the public records a Lien not yet due and payable and (D) title to any portion of the premises
lying within the right of way or boundary of any public road or private road, (iv) Liens imposed or
promulgated by Laws with respect to real property and improvements, including zoning regulations,
(v) Liens disclosed on existing title reports or existing surveys (in either case copies of which
title reports and surveys have been delivered or made available to Buyer) and (vi) mechanics’,
carriers’, landlords’, workmen’s, repairmen’s and similar Liens, incurred in the ordinary course of
business not yet due and payable.

          “person” shall mean an individual, a corporation, limited liability company, a
partnership, an association, a trust or any other entity or organization, including, without
limitation, a Governmental Entity.

8

 

          “Proxy Statement” shall have the meaning set forth in Section 6.2(a).

          “RCRA” shall have the meaning set forth in Section 4.21(a)(i).

          “Representatives” shall have the meaning set forth in Section 6.5(a).

          “Requisite Stockholder Approval” shall have the meaning set forth in Section 4.18.

          “Restricted Stock Units” means any restricted stock units granted pursuant to the
Company’s Amended and Restated 2005 Equity and Incentive Plan.

          “Restricted Stock Unit Payment” shall have the meaning set forth in Section 3.3(b).

          “SEC” shall mean the Securities and Exchange Commission.

          “Secretary of State” shall have the meaning set forth in Section 2.3(a).

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

          “Spin-Off” shall have the meaning set forth in the Recitals.

          “Spin-Off Agreements” shall mean the Separation and Distribution Agreement, the
Transition Services Agreement, the Employee Matters Agreement and the Tax Sharing Agreement, by and
between the Company and CPEX, in the form as provided by the Company to Buyer prior to the date
hereof, with such amendments thereto to the extent permitted by this Agreement.

          “Stockholders’ Meeting” shall have the meaning set forth in Section 6.3.

          “subsidiary” of any person, means any corporation, partnership, joint venture or other
legal entity of which such person (either above or through or together with any other subsidiary),
owns, directly or indirectly, more than 50% of the stock or other equity interests, the holders of
which are generally entitled to vote for the election of the board of directors or other governing
body of such corporation or other legal entity.

          “Superior Proposal” shall have the meaning set forth in Section 6.6(h).

9

 

          “Surviving Corporation” shall have the meaning set forth in Section 2.1.

          “Tax” or “Taxes” shall mean any and all taxes, fees, levies, duties, tariffs,
imposts, tasas, contribuciones especiales and other similar charges (together with any and all
interest, penalties and additions to tax), whether disputed or not, imposed by any governmental or
taxing authority including, without limitation: taxes or other charges on or with respect to
income, franchises, windfall or other profits, gross receipts, property, sales, use, capital stock,
payroll, employment, social security, workers’ compensation, unemployment compensation, or net
worth; taxes or other charges in the nature of excise, withholding, ad valorem, stamp, transfer,
value added, or gains taxes; license, registration and documentation fees; and customs’ duties,
tariffs, and similar charges; and liability for the payment of any of the foregoing as a result of
(x) being a member of an affiliated, consolidated, combined or unitary group, (y) being party to
any tax sharing agreement and (z) any express or implied obligation to indemnify any other person
with respect to the payment of any of the foregoing.

          “Tax Returns” shall mean returns, reports and information statements, including any
schedule or attachment thereto, with respect to Taxes required to be filed with the IRS or any
other governmental or taxing authority, domestic or foreign, including consolidated, combined and
unitary tax returns.

          “Tranche” means a set of Company Options all having the same per share exercise price.

          “Termination Date” shall have the meaning set forth in Section 8.1(b).

          “Transition Services Agreement” shall have the meaning set forth in Section 4.15.

          “Voting Agreement” shall have the meaning set forth in the Recitals.

10

 

Appendix B

INDEX OF DEFINED TERMS

Page References Refer to Instance of First Usage

	 	 	 	 	 
	Acceptable Confidentiality Agreement
	 	 	36	 
	Acquisition Agreement
	 	 	37	 
	Acquisition Sub
	 	 	1	 
	AEMPS
	 	 	2	 
	Agreement
	 	 	1	 
	Aggregate Purchase Price
	 	 	4	 
	Antitrust Laws
	 	 	34	 
	Book-Entry Shares
	 	 	4	 
	Buyer
	 	 	1	 
	Buyer Information
	 	 	32	 
	CERCLA
	 	 	22	 
	Certificate of Merger
	 	 	2	 
	Certificates
	 	 	4	 
	Change in Control
	 	 	43	 
	Change of Recommendation
	 	 	37	 
	Closing
	 	 	2	 
	Closing Date
	 	 	2	 
	Company
	 	 	1	 
	Company By-laws
	 	 	3	 
	Company Certificate
	 	 	3	 
	Company Common Stock
	 	 	3	 
	Company Disclosure Schedule
	 	 	9	 
	Company Employee
	 	 	42	 
	Company Employees
	 	 	42	 
	Company Executive Agreement
	 	 	43	 
	Company Intellectual Property Rights
	 	 	18	 
	Company Permits
	 	 	13	 
	Company Preferred Stock
	 	 	10	 
	Company
Products
	 	 	21	 
	Company Real Property
	 	 	23	 
	Company Recommendation
	 	 	33	 
	Company Rights
	 	 	3	 
	Company Rights Agreement
	 	 	21	 
	Company SEC Documents
	 	 	14	 
	Company Termination Fee
	 	 	48	 
	Company’s Facilities
	 	 	22	 
	Competing Proposal
	 	 	38	 
	Delaware Law
	 	 	1	 
	Dissenting Shares
	 	 	7	 
	Divestiture
	 	 	34	 
	Effective Time
	 	 	2	 
	Environmental Laws
	 	 	22	 
	Environmental Permits
	 	 	22	 
	Equity
Adjustment
	 	 	4	 
	Equity
Adjustment Date
	 	 	4	 
	Exchange Fund
	 	 	5	 
	Expiration Date
	 	 	21	 
	FDA
	 	 	34	 
	Grant Date
	 	 	11	 
	Hazardous Materials
	 	 	22	 
	HSR Act
	 	 	12	 
	Intellectual Property Rights
	 	 	18	 
	Leased Real Property
	 	 	23	 
	Leases
	 	 	23	 
	Ley 29/2006
	 	 	21	 
	Material Contract
	 	 	24	 
	Measurement Date
	 	 	10	 
	Merger
	 	 	1	 
	Merger Consideration
	 	 	4	 
	Necessary Assets
	 	 	20	 
	New Plans
	 	 	42	 
	Option Cash Payment
	 	 	7	 
	Owned Real Property
	 	 	23	 
	Paying Agent
	 	 	5	 
	Proxy Statement
	 	 	32	 
	RCRA
	 	 	22	 
	Representatives
	 	 	35	 
	Requisite Stockholder Approval
	 	 	21	 
	Restricted Stock Unit Payment
	 	 	7	 
	Secretary of State
	 	 	2	 
	Spin-Off
	 	 	1	 
	Stockholders’ Meeting
	 	 	33	 
	Superior Proposal
	 	 	38	 
	Surviving Corporation
	 	 	2	 
	Termination Date
	 	 	46	 
	Transition Services Agreement
	 	 	20	 
	Voting Agreement
	 	 	1	 

B-1exv10w1

 

EXHIBIT
10.1

CREDIT AGREEMENT

Dated as of March 28, 2008

          This Credit Agreement (this “Agreement”) is entered into as of the date first written
above among HILLENBRAND INDUSTRIES, INC. (to be renamed Hill-Rom Holdings, Inc. after the Spin
Transaction referenced below), an Indiana corporation (the “Borrower”), the banks,
financial institutions and other institutional lenders (the “Initial Lenders”) and issuers
of letters of credit (“Initial Issuing Banks”) listed on Schedule I hereto, and CITIBANK,
N.A. (“Citibank”), as agent (the “Agent”) for the Lenders (as hereinafter defined).
In consideration of the mutual covenants and agreements herein contained, the parties hereto
covenant and agree as follows:

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

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

     “Advance” means an advance by a Lender to the Borrower as part of a Borrowing
and refers to a Base Rate Advance or a Eurodollar Rate Advance (each of which shall be a
“Type” of Advance).

     “Affiliate” means, as to any Person, any other Person that, directly or
indirectly, controls, is controlled by or is under common control with such Person or is a
director or officer of such Person. For purposes of this definition, the term “control”
(including the terms “controlling”, “controlled by” and “under common control with”) of a
Person means the possession, direct or indirect, of the power to vote 10% or more of the
Voting Stock of such Person or to direct or cause the direction of the management and
policies of such Person, whether through the ownership of Voting Stock, by contract or
otherwise.

     “Agent’s Account” means the account of the Agent maintained by the Agent at
Citibank at its office at Two Penns Way, New Castle, Delaware 19720, Account No. 36852248,
Attention: Bank Loan Syndications, or such other account of the Agent as is designated in
writing from time to time by the Agent to the Borrower and the Lenders for such purpose.

     “Airport Access and Use Agreement” means that certain Airport Access and Use
Agreement dated on or about March 21, 2008 by and between Hill-Rom and Batesville Services.

     “Applicable Lending Office” means, with respect to each Lender, such Lender’s
Domestic Lending Office in the case of a Base Rate Advance and such Lender’s Eurodollar
Lending Office in the case of a Eurodollar Rate Advance.

     “Applicable Margin” means as of any date, for Base Rate Advances, 0.00% per
annum and, for Eurodollar Rate Advances, a percentage per annum determined by reference to
the Public Debt Rating in effect on such date as set forth below:

 

 

	 	 	 
	 	 	Applicable
	 	 	Margin for
	Public Debt Rating	 	Eurodollar
	S&P/Moody’s	 	Rate Advances
	Level 1

A- or A3 or above
	 	0.240%
	Level 2

BBB+ or Baa1
	 	0.320%
	Level 3

BBB or Baa2
	 	0.375%
	Level 4

BBB- or Baa3
	 	0.500%
	Level 5

BB+ or Ba1
	 	0.700%
	Level 6

Lower than Level 5
	 	0.875%

     “Applicable Percentage” means, as of any date a percentage per annum determined
by reference to the Public Debt Rating in effect on such date as set forth below:

	 	 	 
	Public Debt Rating	 	Applicable
	S&P/Moody’s	 	Percentage
	Level 1

A- or A3 or above
	 	0.060%
	Level 2

BBB+ or Baa1
	 	0.080%
	Level 3

BBB or Baa2
	 	0.125%
	Level 4

BBB- or Baa3
	 	0.150%
	Level 5

BB+ or Ba1
	 	0.200%
	Level 6

Lower than Level 5
	 	0.250%

     “Applicable Utilization Fee” means, as of any date that the aggregate principal
amount of the Advances plus the aggregate Available Amount of the Letters of Credit
outstanding exceed 50% of the aggregate Revolving Credit Commitments, a percentage per annum
determined by reference to the Public Debt Rating in effect on such date as set forth below:

	 	 	 
	Public Debt Rating	 	Applicable
	S&P/Moody’s	 	Utilization Fee
	Level 1

A- or A3 or above
	 	0.050%
	Level 2

BBB+ or Baa1
	 	0.050%
	Level 3

BBB or Baa2
	 	0.050%
	Level 4

BBB- or Baa3
	 	0.050%
	Level 5

BB+ or Ba1
	 	0.050%
	Level 6

Lower than Level 5
	 	0.075%

2

 

     “Assignment and Acceptance” means an assignment and acceptance entered into by
a Lender and an Eligible Assignee, and accepted by the Agent, in substantially the form of
Exhibit C hereto.

     “Assuming Lender” has the meaning specified in Section 2.18(d).

     “Assumption Agreement” has the meaning specified in Section 2.18(d)(ii).

     “Attributable Indebtedness” means, on any date, in respect of any capital
lease of any Person, the capitalized amount thereof that would appear on a balance sheet of
such Person prepared as of such date in accordance with GAAP.

     “Audited Financial Statements” means the audited consolidated balance sheet of
the Borrower and its Subsidiaries as filed in the 10-K filing with the SEC for the year
ended September 30, 2007, and the related consolidated statements of income or operations,
shareholders’ equity and cash flows for such fiscal year of the Borrower and its
Subsidiaries, including the notes thereto.

     “Available Amount” of any Letter of Credit means, at any time, the maximum
amount available to be drawn under such Letter of Credit at such time (assuming compliance
at such time with all conditions to drawing).

     “Bankruptcy Law” means any proceeding of the type referred to in Section
6.01(e) or Title 11, U.S. Code, or any similar foreign, federal or state law for the relief
of debtors.

     “Base Rate” means a fluctuating interest rate per annum in effect from time to
time, which rate per annum shall at all times be equal to the higher of:

     (a) the rate of interest announced publicly by Citibank in New York, New York,
from time to time, as Citibank’s base rate; and

     (b) 1/2 of one percent per annum above the Federal Funds Rate.

     “Base Rate Advance” means an Advance that bears interest as provided in Section
2.07(a)(i).

     “Batesville Services” means Batesville Services, Inc., an Indiana corporation.

     “BHI” means Batesville Holdings, Inc., an Indiana corporation (to be renamed
Hillenbrand, Inc. in connection with the Spin Transaction).

     “Borrowing” means a borrowing consisting of simultaneous Advances of the same
Type made by each of the Lenders.

     “Borrowing Minimum” means $10,000,000.

     “Borrowing Multiple” means $1,000,000.

3

 

     “Business Day” means a day of the year on which banks are not required or
authorized by law to close in New York City and, if the applicable Business Day relates to
any Eurodollar Rate Advances, on which dealings are carried on in the London interbank
market.

     “Change of Control” means, with respect to any Person, an event or series of
events by which:

     (a) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, but excluding any such Person and its subsidiaries, any
employee benefit plan of such Person or its subsidiaries, and any person or entity acting in
its capacity as trustee, agent or other fiduciary or administrator of any such plan) other
than any member or members of the Hillenbrand Family Group becomes the “beneficial owner”
(as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that
a person or group shall be deemed to have “beneficial ownership” of all securities that such
person or group has the right to acquire (such right, an “option right”), whether such right
is exercisable immediately or only after the passage of time), directly or indirectly, of
35% or more of the equity securities of such Person entitled to vote for members of the
board of directors or equivalent governing body of such Person on a fully-diluted basis (and
taking into account all such securities that such person or group has the right to acquire
pursuant to any option right); or

     (b) during any period of 12 consecutive months, a majority of the members of the board
of directors or other equivalent governing body of such Person cease (other than by reason
of death or disability) to be composed of individuals (i) who were members of that board or
equivalent governing body on the first day of such period, (ii) whose election or nomination
to that board or equivalent governing body was approved by individuals referred to in clause
(i) above constituting at the time of such election or nomination at least a majority of
that board or equivalent governing body or (iii) whose election or nomination to that board
or other equivalent governing body was approved by individuals referred to in clauses (i)
and (ii) above constituting at the time of such election or nomination at least a majority
of that board or equivalent governing body (excluding, in the case of both clause (ii) and
clause (iii), any individual whose initial nomination for, or assumption of office as, a
member of that board or equivalent governing body occurs as a result of an actual or
threatened solicitation of proxies or consents for the election or removal of one or more
directors by any person or group other than a solicitation for the election of one or more
directors by or on behalf of the board of directors). For purposes of determining whether a
Change of Control has occurred under this clause (b) for any period beginning on the
Effective Date and ending on the one year anniversary of the Effective Date, the members of
the Borrower’s Board of Directors on the first day of such period shall be deemed to be the
members of such board after giving effect to the Spin Transaction on the Effective Date.

     “Commitment” means a Revolving Credit Commitment or a Letter of Credit
Commitment.

     “Commitment Date” has the meaning specified in Section 2.18(b).

     “Commitment Increase” has the meaning specified in Section 2.18(a).

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

     “Consenting Lender” has the meaning specified in Section 2.19(b).

4

 

     “Consolidated” refers to the consolidation of accounts in accordance with GAAP.

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

     “Convert”, “Conversion” and “Converted” each refers to a
conversion of Advances of one Type into Advances of the other Type pursuant to Section 2.08
or 2.09.

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

     “Disclosed Litigation” has the meaning specified in Section 3.01(b).

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

     “Distribution Agreement” means that certain Distribution Agreement dated as of
March 14, 2008 between the Borrower and BHI pursuant to which the Spin Transaction will be
consummated.

     “Dollars” and the “$” sign each means lawful currency of the United
States of America.

     “Domestic Lending Office” means, with respect to any Lender, the office of such
Lender specified as its “Domestic Lending Office” opposite its name on Schedule I hereto or
in the Assumption Agreement or the Assignment and Acceptance pursuant to which it became a
Lender, or such other office of such Lender as such Lender may from time to time specify to
the Borrower and the Agent.

     “EBITDA” means, for any period, net income (or net loss) plus the sum
of (a) interest expense, (b) income tax expense, (c) depreciation expense and (d)
amortization expense, in each case determined in accordance with GAAP for such period.

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

     “Eligible Assignee” means (i) a Lender; (ii) an Affiliate of a Lender; and
(iii) any other Person approved by the Agent, each Issuing Bank and, unless an Event of
Default has occurred and is continuing at the time any assignment is effected in accordance
with Section 9.07, the Borrower, such approval not to be unreasonably withheld or delayed;
provided, however, that neither the Borrower nor an Affiliate of the
Borrower shall qualify as an Eligible Assignee.

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

5

 

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

     “ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and the regulations promulgated and rulings issued thereunder.

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

     “ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b)
a withdrawal by the Borrower or any ERISA Affiliate from a Pension Plan subject to Section
4063 of ERISA during a plan year in which it was a substantial employer (as defined in
Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as such a
withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by the
Borrower or any ERISA Affiliate from a Multiemployer Plan or notification that a
Multiemployer Plan is in reorganization; (d) the filing of a notice of intent to terminate,
the treatment of a Plan amendment as a termination under Sections 4041 or 4041A of ERISA, or
the commencement of proceedings by the PBGC to terminate a Pension Plan or Multiemployer
Plan; (e) an event or condition which constitutes grounds under Section 4042 of ERISA for
the termination of, or the appointment of a trustee to administer, any Pension Plan or
Multiemployer Plan; (f) the existence of an Unfunded Pension Liability or (g) the conditions
for imposition of a lien under Section 303(k) of ERISA shall have been met with respect to
any Plan or a determination that any Plan is in “at risk” status (within the meaning of
Section 303 of ERISA).

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

     “Eurodollar Lending Office” means, with respect to any Lender, the office of
such Lender specified as its “Eurodollar Lending Office” opposite its name on Schedule I
hereto or in the Assumption Agreement or the Assignment and Acceptance pursuant to which it
became a Lender (or, if no such office is specified, its Domestic Lending Office), or such
other office of such Lender as such Lender may from time to time specify to the Borrower and
the Agent.

     “Eurodollar Rate” means, for any Interest Period for each Eurodollar Rate
Advance comprising part of the same Borrowing, an interest rate per annum (rounded upward to
the nearest whole multiple of 1/16 of 1% per annum) appearing on Reuters LIBOR01 Page (or
any successor page) as the London interbank offered rate for deposits in Dollars at
approximately 11:00 A.M. (London time) two Business Days prior to the first day of such
Interest Period for a term comparable to such Interest Period or, if for any reason such
rate is not available, the average (rounded upward to the nearest whole multiple of 1/16 of
1% per annum, if such average is not such a multiple) of the rate per annum at which
deposits in Dollars are offered by the principal office of each of the Reference Banks in
London, England to prime banks in the London interbank market at 11:00 A.M. (London time)
two Business Days before the first day of such

6

 

Interest Period in an amount substantially
equal to such Reference Bank’s Eurodollar Rate Advance comprising part of such Borrowing to
be outstanding during such Interest Period and for a period equal to such Interest Period.
If the Reuters LIBOR01 Page (or any successor page) is
unavailable, the Eurodollar Rate for any Interest Period for each Eurodollar Rate
Advance comprising part of the same Borrowing shall be determined by the Agent on the basis
of applicable rates furnished to and received by the Agent from one or more Reference Banks
two Business Days before the first day of such Interest Period, subject,
however, to the provisions of Section 2.08.

     “Eurodollar Rate Advance” means a Advance that bears interest as provided in
Section 2.07(a)(ii).

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

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

     “Extension Date” has the meaning specified in Section 2.19(b).

     “Farm Agreement” means that certain Tenants in Common Agreement dated on or
about March 21, 2008 between Hill-Rom Company, Inc., an Indiana corporation, and BCC
JAWACDAH Holdings, LLC, an Indiana limited liability company.

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

     “Fee Letters” means (a) the fee letter between the Borrower and Citigroup
Global Markets Inc. dated February 15, 2008 and (b) the fee letter among the Borrower and
Bank of America, N.A. and Banc of America Securities LLC dated February 15, 2008.

     “GAAP” has the meaning specified in Section 1.03.

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

7

 

     “Guarantee” means, as to any Person, (a) any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any
Indebtedness or other obligation payable or performable by another Person (the “primary
obligor”) in any manner,
whether directly or indirectly, and including any obligation of such Person, direct or
indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of)
such Indebtedness or other obligation, (ii) to purchase or lease property, securities or
services for the purpose of assuring the obligee in respect of such Indebtedness or other
obligation of the payment or performance of such Indebtedness or other obligation, (iii) to
maintain working capital, equity capital or any other financial statement condition or
liquidity or level of income or cash flow of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation, or (iv) entered into for the purpose
of assuring in any other manner the obligee in respect of such Indebtedness or other
obligation of the payment or performance thereof or to protect such obligee against loss in
respect thereof (in whole or in part), or (b) any Lien on any assets of such Person securing
any Indebtedness or other obligation of any other Person, whether or not such Indebtedness
or other obligation is assumed by such Person. The amount of any Guarantee shall be deemed
to be an amount equal to the stated or determinable amount of the related primary
obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated
or determinable, the maximum reasonably anticipated liability in respect thereof as
determined by the guaranteeing Person in good faith. The term “Guarantee” as a verb has a
corresponding meaning.

     “Guaranteed Obligations” has the meaning specified in Section 7.01.

     “Guarantors” means the Subsidiaries of the Borrower listed on Schedule II
hereto and each other Subsidiary of the Borrower that shall be required to execute and
deliver a guaranty pursuant to Section 5.01(k).

     “Guaranty” means the guaranty of the Guarantors set forth in Article VII,
together with each other guaranty and guaranty supplement delivered pursuant to Section
5.01(k), in each case as amended, amended and restated, modified or otherwise supplemented.

     “Guaranty Supplement” has the meaning specified in Section 7.05.

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

     “Hillenbrand Family Group” means the descendants of John A. Hillenbrand and
members of such descendants’ families and trusts for the benefit of such Persons.

     “Hill-Rom” means Hill-Rom Inc., an Indiana corporation.

     “Increase Date” has the meaning specified in Section 2.18(a).

     “Increasing Lender” has the meaning specified in Section 2.18(b).

     “Indebtedness” means, as to any Person at a particular time, without
duplication, all of the following, but only to the extent included as indebtedness or
liabilities in accordance with GAAP:

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

     (b) all direct or contingent obligations of such Person arising under
unreimbursed payments made under letters of credit (including standby and
commercial), bankers’ acceptances and bank guaranties;

     (c) net obligations of such Person under any Swap Contract pertaining to
interest rates;

     (d) all obligations of such Person to pay the deferred purchase price of
property or services (other than trade accounts payable incurred in the ordinary
course of business);

     (e) indebtedness (excluding prepaid interest thereon) secured by a Lien on
property owned or being purchased by such Person (including indebtedness arising
under conditional sales or other title retention agreements), whether or not such
indebtedness shall have been assumed by such Person or is limited in recourse;

     (f) capital leases; and

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

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

     “Information” has the meaning specified in Section 9.08.

     “Information Memorandum” means the information memorandum dated February 20,
2008 used by the Agent in connection with the syndication of the Commitments.

     “Interest Period” means, for each Eurodollar Rate Advance comprising part of
the same Borrowing, the period commencing on the date of such Eurodollar Rate Advance or the
date of the Conversion of any Base Rate Advance into such Eurodollar Rate Advance and ending
on the last day of the period selected by the Borrower pursuant to the provisions below and,
thereafter, each subsequent period commencing on the last day of the immediately preceding
Interest Period and ending on the last day of the period selected by the Borrower pursuant
to the provisions below. The duration of each such Interest Period shall be one, two, three
or six months, and subject to clause (c) of this definition, nine or twelve months or such
other period as may be acceptable to the Agent and all Lenders, as the Borrower may, upon
notice received by the Agent not later than 11:00 A.M. (New York City time) on the third
Business Day prior to the first day of such Interest Period, select; provided,
however, that:

     (a) the Borrower may not select any Interest Period that ends after the
Termination Date;

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     (b) Interest Periods commencing on the same date for Eurodollar Rate Advances
comprising part of the same Borrowing shall be of the same duration;

     (c) in the case of any such Borrowing, the Borrower shall not be entitled to
select an Interest Period having duration of nine or twelve months or such other
period as may be acceptable to the Agent and all Lenders unless, by 2:00 P.M. (New
York City time) on the third Business Day prior to the first day of such Interest
Period, each Lender notifies the Agent that such Lender will be providing funding
for such Borrowing with such Interest Period (the failure of any Lender to so
respond by such time being deemed for all purposes of this Agreement as an objection
by such Lender to the requested duration of such Interest Period); provided
that, if any or all of the Lenders object to the requested duration of such Interest
Period, the duration of the Interest Period for such Borrowing shall be one, two,
three or six months, as specified by the Borrower in the applicable Notice of
Borrowing as the desired alternative to an Interest Period of nine or twelve months
or such other requested period;

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

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

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

     “Issuance” with respect to any Letter of Credit means the issuance, amendment,
renewal or extension of such Letter of Credit.

     “Issuing Bank” means an Initial Issuing Bank or any Eligible Assignee to which
a portion of the Letter of Credit Commitment hereunder has been assigned pursuant to Section
9.07 or any other Lender so long as such Eligible Assignee or Lender expressly agrees to
perform in accordance with their terms all of the obligations that by the terms of this
Agreement are required to be performed by it as an Issuing Bank and notifies the Agent of
its Applicable Lending Office (which information shall be recorded by the Agent in the
Register), for so long as such Initial Issuing Bank, Eligible Assignee or Lender, as the
case may be, shall have a Letter of Credit Commitment.

     “Joint Ownership Agreements” means the four (4) Joint Ownership Agreements with
respect to the joint ownership of the aircraft described therein, dated on or about March
21, 2008 by and among Hill-Rom and Batesville Services.

     “Laws” means, collectively, all international, foreign, Federal, state and
local statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the interpretation or
administration thereof by any Governmental

10

 

Authority charged with the enforcement, interpretation or administration thereof, and
all applicable administrative orders, directed duties, requests, licenses, authorizations
and permits of, and agreements with, any Governmental Authority, in each case whether or not
having the force of law.

     “L/C Cash Deposit Account” means an interest bearing cash deposit account to be
established and maintained by the Agent, over which the Agent shall have sole dominion and
control, upon terms as may be satisfactory to the Agent.

     “L/C Related Documents” has the meaning specified in Section 2.06(b)(i).

     “Lenders” means each Initial Lender, each Issuing Bank, each Assuming Lender
that shall become a party hereto pursuant to Section 2.18 or 2.19 and each Person that shall
become a party hereto pursuant to Section 9.07.

     “Letter of Credit” has the meaning specified in Section 2.01(b).

     “Letter of Credit Agreement” has the meaning specified in Section 2.03(a).

     “Letter of Credit Commitment” means, with respect to each Issuing Bank, the
obligation of such Issuing Bank to issue Letters of Credit for the account of the Borrower
and its specified Subsidiaries in (a) the Dollar amount set forth opposite the Issuing
Bank’s name on Schedule I hereto under the caption “Letter of Credit Commitment” or (b) if
such Issuing Bank has entered into one or more Assignment and Acceptances, the Dollar amount
set forth for such Issuing Bank in the Register maintained by the Agent pursuant to Section
9.07(d) as such Issuing Bank’s “Letter of Credit Commitment”, in each case as such amount
may be reduced prior to such time pursuant to Section 2.05.

     “Letter of Credit Facility” means, at any time, an amount equal to the least of
(a) the aggregate amount of the Issuing Banks’ Letter of Credit Commitments at such time,
(b) $50,000,000 and (c) the aggregate amount of the Revolving Credit Commitments, as such
amount may be reduced at or prior to such time pursuant to Section 2.05.

     “Lien” means any lien, security interest or other charge or encumbrance of any
kind, or any other type of preferential arrangement, including, without limitation, the lien
or retained security title of a conditional vendor.

     “Loan Documents” means this Agreement, each Note, each Letter of Credit
Agreement and the Fee Letters.

     “Loan Party” means the Borrower and each Guarantor.

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

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

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     “Material Subsidiary” means each directly owned Subsidiary of the Borrower
either (a) having (together with its Subsidiaries) assets that constitute 5% or more of the
Consolidated assets of the Borrower and its Subsidiaries or (b) having (together with its
Subsidiaries) revenues that constitute 5% or more of the Consolidated revenues of the
Borrower and its Subsidiaries, in each case during any of the three most recently completed
fiscal years of the Borrower.

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

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

     “Non-Consenting Lender” has the meaning specified in Section 2.19(b).

     “Note” means a promissory note of the Borrower payable to the order of any
Lender, delivered pursuant to a request made under Section 2.16 in substantially the form of
Exhibit A hereto, evidencing the aggregate indebtedness of the Borrower to such Lender
resulting from the Advances made by such Lender to the Borrower.

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

     “Notice of Issuance” has the meaning specified in Section 2.03(a).

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

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

     “PBGC” means the Pension Benefit Guaranty Corporation (or any successor).

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

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

12

 

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

     “Post-Petition Interest” has the meaning specified in Section 7.06.

     “Public Debt Rating” means, as of any date, the rating that has been most
recently announced by either S&P or Moody’s, as the case may be, for any class of non-credit
enhanced long-term senior unsecured debt issued by the Borrower or, if any such rating
agency shall have issued more than one such rating, the lowest such rating issued by such
rating agency. For purposes of the foregoing, (a) if only one of S&P and Moody’s shall have
in effect a Public Debt Rating, the Applicable Margin, the Applicable Percentage and the
Applicable Utilization Fee shall be determined by reference to the available rating; (b) if
neither S&P nor Moody’s shall have in effect a Public Debt Rating, the Applicable Margin,
the Applicable Percentage and the Applicable Utilization Fee will be set in accordance with
Level 6 under the definition of “Applicable Margin”, “Applicable Percentage”
or “Applicable Utilization Fee”, as the case may be; (c) if the ratings established
by S&P and Moody’s shall fall within different levels, the Applicable Margin, the Applicable
Percentage and the Applicable Utilization Fee shall be based upon the higher rating unless
such ratings differ by two or more levels, in which case the applicable level will be deemed
to be one level above the lower of such levels; (d) if any rating established by S&P or
Moody’s shall be changed, such change shall be effective as of the date on which such change
is first announced publicly by the rating agency making such change; and (e) if S&P or
Moody’s shall change the basis on which ratings are established, each reference to the
Public Debt Rating announced by S&P or Moody’s, as the case may be, shall refer to the then
equivalent rating by S&P or Moody’s, as the case may be.

     “Ratable Share” of any amount means, with respect to any Lender at any time,
the product of such amount times a fraction the numerator of which is the amount of
such Lender’s Revolving Credit Commitment at such time (or, if the Revolving Credit
Commitments shall have been terminated pursuant to Section 2.05 or 6.01, such Lender’s
Revolving Credit Commitment as in effect immediately prior to such termination) and the
denominator of which is the aggregate amount of all Revolving Credit Commitments at such
time (or, if the Revolving Credit Commitments shall have been terminated pursuant to Section
2.05 or 6.01, the aggregate amount of all Revolving Credit Commitments as in effect
immediately prior to such termination).

     “Reference Banks” means Citibank, Bank of America, N.A. and JPMorgan Chase
Bank, N.A.

     “Register” has the meaning specified in Section 9.07(d).

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

     “Reportable Event” means any “reportable event”, as defined in Section 4043 of
ERISA, other than an event for which the 30-day notice period has been waived.

     “Required Lenders” means at any time Lenders owed at least a majority in
interest of the then aggregate unpaid principal amount of the Advances owing to Lenders, or,
if no such principal amount is then outstanding, Lenders having at least a majority in
interest of the Revolving Credit Commitments.

13

 

     “Responsible Officer” means the chief financial officer, treasurer, assistant
treasurer or any authorized Senior Vice President or Vice President of the Borrower. Any
document delivered hereunder that is signed by a Responsible Officer of the Borrower shall
be conclusively presumed to have been authorized by all necessary corporate, partnership
and/or other action on the part of the Borrower and such Responsible Officer shall be
conclusively presumed to have acted on behalf of the Borrower.

     “Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any capital stock or other equity interest of
the Borrower or any Subsidiary, or any payment (whether in cash, securities or other
property), including any sinking fund or similar deposit, on account of the purchase,
redemption, retirement, acquisition, cancellation or termination of any such capital stock
or other equity interest or of any option, warrant or other right to acquire any such
capital stock or other equity interest, or on account of any return of capital to the
Borrower’s stockholders, partners or members (or the equivalent Persons thereof).

     “Revolving Credit Commitment” means as to any Lender (a) the Dollar amount set
forth opposite such Lender’s name on Schedule I hereto as such Lender’s “Revolving Credit
Commitment”, (b) if such Lender has become a Lender hereunder pursuant to an Assumption
Agreement, the Dollar amount set forth in such Assumption Agreement or (c) if such Lender
has entered into an Assignment and Acceptance, the Dollar amount set forth for such Lender
in the Register maintained by the Agent pursuant to Section 9.07(d), as such amount may be
reduced pursuant to Section 2.05 or increased pursuant to Section 2.18.

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

     “Single Employer Plan” means a single employer plan, as defined in Section
4001(a)(15) of ERISA, that (a) is maintained for employees of the Borrower or any ERISA
Affiliate and no Person other than the Borrower and the ERISA Affiliates or (b) was so
maintained and in respect of which the Borrower or any ERISA Affiliate could have liability
under Section 4069 of ERISA in the event such plan has been or were to be terminated.

     “Spin Transaction” means (i) the distribution of the Borrower’s entire
ownership interest in BHI through a pro-rata distribution of all of the outstanding shares
of BHI owned by the Borrower on or about the Effective Date to the holders of the Borrower’s
common stock, pursuant to the terms and subject to the conditions set forth in the
Distribution Agreement, (ii) the execution, delivery and performance of the Distribution
Agreement and the agreements related thereto, including but not limited to the Farm
Agreement, the Airport Access and Use Agreement, the employee matters agreement, the
judgment sharing agreement, the tax sharing agreement, the shared services agreements and
the transitional services agreements and (iii) the payment of a dividend in the amount of
$250,000,000 to the Borrower by BHI on or about the Effective Date.

     “Subordinated Obligations” has the meaning specified in Section 7.06.

     “Subsidiary” of any Person means any corporation, partnership, joint venture,
limited liability company, trust or estate of which (or in which) more than 50% of the
shares of securities or other interests having ordinary voting power to elect a majority of
the Board of Directors or other governing body (irrespective of whether at the time capital
stock, securities or other interests of any other class or classes of such entity shall or
might have voting power upon the occurrence of any contingency) are at the time beneficially
owned, or the management of which

14

 

is otherwise controlled, directly or indirectly, by such Person, by such Person and one
or more of its other Subsidiaries or by one or more of such Person’s other Subsidiaries.

     “Substantially-Owned Subsidiary” means any Person at least 90% of the capital
stock or other equity interests of which are directly or indirectly owned by the Borrower.

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

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

     “Termination Date” means the earlier of (a) March 28, 2013, subject to the
extension thereof pursuant to Section 2.19 and (b) the date of termination in whole of the
Commitments pursuant to Section 2.05 or 6.01; provided, however, that the
Termination Date of any Lender that is a Non-Consenting Lender to any requested extension
pursuant to Section 2.19 shall be the Termination Date in effect immediately prior to the
applicable Extension Date for all purposes of this Agreement.

     “Unaudited Financial Statements” means the unaudited consolidated balance sheet
of the Borrower and its Subsidiaries as filed in the 10-Q filing with the SEC for the
quarter ended December 31, 2007, and the related consolidated statements of income or
operations, shareholders’ equity and cash flows for such fiscal quarter of the Borrower and
its Subsidiaries, including the notes thereto.

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

     “Unissued Letter of Credit Commitment” means, with respect to any Issuing Bank,
the obligation of such Issuing Bank to issue Letters of Credit for the account of the
Borrower or its specified Subsidiaries in an amount equal to the excess of (a) the amount of
its Letter of Credit

15

 

Commitment over (b) the aggregate Available Amount of all Letters of Credit issued by
such Issuing Bank.

     “Unused Commitment” means, with respect to each Lender at any time, (a) such
Lender’s Revolving Credit Commitment at such time minus (b) the sum of (i) the
aggregate principal amount of all Advances made by such Lender (in its capacity as a Lender)
and outstanding at such time, plus (ii) such Lender’s Ratable Share of (A) the
aggregate Available Amount of all the Letters of Credit outstanding at such time and (B) the
aggregate principal amount of all Advances made by each Issuing Bank pursuant to Section
2.03(c) that have not been ratably funded by such Lender and outstanding at such time.

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

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

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

ARTICLE II

AMOUNTS AND TERMS OF THE ADVANCES AND LETTERS OF CREDIT

          SECTION 2.01. The Advances and Letters of Credit. (a) The Advances. Each
Lender severally agrees, on the terms and conditions hereinafter set forth, to make Advances to the
Borrower from time to time on any Business Day during the period from the Effective Date until the
Termination Date applicable to such Lender in an amount not to exceed such Lender’s Unused
Commitment. Each Borrowing shall be in an amount not less than the Borrowing Minimum or the
Borrowing Multiple in excess thereof and shall consist of Advances of the same Type and in the same
currency made on the same day by the Lenders ratably according to their respective Revolving Credit
Commitments. Within the limits of each Lender’s Revolving Credit Commitment, the Borrower may
borrow under this Section 2.01(a), prepay pursuant to Section 2.10 and reborrow under this Section
2.01(a).

          (b) Letters of Credit. Each Issuing Bank agrees, on the terms and conditions
hereinafter set forth, in reliance upon the agreements of the other Lenders set forth in this
Agreement, to issue letters of credit (each, a “Letter of Credit”) for the account of the
Borrower and its specified Subsidiaries from time to time on any Business Day during the period
from the Effective Date until 30 days before the Termination Date applicable to such Issuing Bank
in an aggregate Available Amount (i) for all Letters of Credit issued by each Issuing Bank not to
exceed at any time the lesser of (x) the Letter of Credit Facility at such time and (y) such
Issuing Bank’s Letter of Credit Commitment at such time and (ii) for each such Letter of Credit not
to exceed an amount equal to the Unused Commitments of the Lenders at such time. No Letter of
Credit shall have an expiration date (including all rights of the Borrower or the beneficiary to
require renewal) later than 10 Business Days before the final Termination
Date, provided that no Letter of Credit may expire after the Termination Date of any
Non-Consenting Lender if, after giving effect to such issuance, the aggregate Revolving Credit
Commitments of the Consenting Lenders (including any replacement Lenders) for the period following
such Termination Date

16

 

would be less than the Available Amount of the Letters of Credit expiring
after such Termination Date. Within the limits referred to above, the Borrower may from time to
time request the issuance of Letters of Credit under this Section 2.01(b). Each letter of credit
listed on Schedule 2.01(b) shall be deemed to constitute a Letter of Credit issued hereunder, and
each Lender that is an issuer of such a Letter of Credit shall, for purposes of Section 2.03, be
deemed to be an Issuing Bank for each such letter of credit, provided than any renewal or
replacement of any such letter of credit shall be issued by an Issuing Bank pursuant to the terms
of this Agreement.

          SECTION 2.02. Making the Advances. (a) Except as otherwise provided in Section
2.03(c), each Borrowing shall be made on notice, given not later than (x) 11:00 A.M. (New York City
time) on the third Business Day prior to the date of the proposed Borrowing in the case of a
Borrowing consisting of Eurodollar Rate Advances or (y) 11:00 A.M. (New York City time) on the date
of the proposed Borrowing in the case of a Borrowing consisting of Base Rate Advances, by the
Borrower to the Agent, which shall give to each Lender prompt notice thereof by telecopier. Each
such notice of a Borrowing (a “Notice of Borrowing”) shall be by telephone, confirmed
immediately in writing, or telecopier in substantially the form of Exhibit B hereto, specifying
therein the requested (i) date of such Borrowing, (ii) Type of Advances comprising such Borrowing,
(iii) aggregate amount of such Borrowing, and (iv) in the case of a Borrowing consisting of
Eurodollar Rate Advances, initial Interest Period for each such Advance. Each Lender shall, before
1:00 P.M. (New York City time) on the date of such Borrowing, make available for the account of its
Applicable Lending Office to the Agent at the applicable Agent’s Account, in same day funds, such
Lender’s ratable portion of such Borrowing. After the Agent’s receipt of such funds and upon
fulfillment of the applicable conditions set forth in Article III, the Agent will make such funds
available to the Borrower at the Agent’s address referred to in Section 9.02 or at the applicable
Payment Office, as the case may be.

          (b) Anything in subsection (a) above to the contrary notwithstanding, (i) the Borrower may not
select Eurodollar Rate Advances for any Borrowing if the aggregate amount of such Borrowing is less
than the Borrowing Minimum or if the obligation of the Lenders to make Eurodollar Rate Advances
shall then be suspended pursuant to Section 2.08 or 2.12 and (ii) the Eurodollar Rate Advances may
not be outstanding as part of more than six separate Borrowings.

          (c) Each Notice of Borrowing shall be irrevocable and binding on the Borrower. In the case of
any Borrowing that the related Notice of Borrowing specifies is to be comprised of Eurodollar Rate
Advances, the Borrower shall indemnify each Lender against any loss, cost or expense incurred by
such Lender as a result of any failure to fulfill on or before the date specified in such Notice of
Borrowing for such Borrowing the applicable conditions set forth in Article III, including, without
limitation, any loss (including loss of anticipated profits), cost or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by such Lender to fund the
Advance to be made by such Lender as part of such Borrowing when such Advance, as a result of such
failure, is not made on such date.

          (d) Unless the Agent shall have received notice from a Lender prior to the time of any
Borrowing that such Lender will not make available to the Agent such Lender’s ratable portion of
such Borrowing, the Agent may assume that such Lender has made such portion available to the Agent
on the date of such Borrowing in accordance with subsection (a) of this Section 2.02, as
applicable, and the Agent may, in reliance upon such assumption, make available to the Borrower on
such date a corresponding amount. If and to the extent that such Lender shall not have so made
such ratable portion
available to the Agent, such Lender and the Borrower severally agree to repay to the Agent
forthwith on demand such corresponding amount together with interest thereon, for each day from the
date such amount is made available to the Borrower until the date such amount is repaid to the
Agent, at (i) in the case of the Borrower, the interest rate applicable at the time to the Advances
comprising such Borrowing

17

 

and (ii) in the case of such Lender, the Federal Funds Rate. If such
Lender shall repay to the Agent such corresponding amount, such amount so repaid shall constitute
such Lender’s Advance as part of such Borrowing for purposes of this Agreement.

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

          SECTION 2.03. Issuance of and Drawings and Reimbursement Under Letters of Credit.
(a) Request for Issuance. (i) Each Letter of Credit shall be issued upon notice, given
not later than 11:00 A.M. (New York City time) on the fifth Business Day prior to the date of the
proposed Issuance of such Letter of Credit (or on such shorter notice as the applicable Issuing
Bank may agree), by the Borrower to any Issuing Bank, and such Issuing Bank shall give the Agent
prompt notice thereof. Each such notice by the Borrower of Issuance of a Letter of Credit (a
“Notice of Issuance”) shall be by telecopier or telephone, confirmed immediately in
writing, specifying therein the requested (A) date of such Issuance (which shall be a Business
Day), (B) Available Amount of such Letter of Credit, (C) expiration date of such Letter of Credit,
(D) name and address of the beneficiary of such Letter of Credit and (E) form of such Letter of
Credit, and such Letter of Credit shall be issued pursuant to such application and agreement for
letter of credit as such Issuing Bank and the Borrower shall agree for use in connection with such
requested Letter of Credit (a “Letter of Credit Agreement”). If the requested form of such
Letter of Credit is acceptable to such Issuing Bank in its reasonable discretion (it being
understood that any such form shall have only explicit documentary conditions to draw and shall not
include discretionary conditions), such Issuing Bank will, upon fulfillment of the applicable
conditions set forth in Section 3.02, make such Letter of Credit available to the Borrower at its
office referred to in Section 9.02 or as otherwise agreed with the Borrower in connection with such
Issuance. In the event and to the extent that the provisions of any Letter of Credit Agreement
shall conflict with this Agreement, the provisions of this Agreement shall govern.

          (b) Participations. By the Issuance of a Letter of Credit (or an amendment to a
Letter of Credit increasing or decreasing the amount thereof) and without any further action on the
part of the applicable Issuing Bank or the Lenders, such Issuing Bank hereby grants to each Lender,
and each Lender hereby acquires from such Issuing Bank, a participation in such Letter of Credit
equal to such Lender’s Ratable Share of the Available Amount of such Letter of Credit. The
Borrower hereby agrees to each such participation. In consideration and in furtherance of the
foregoing, each Lender hereby absolutely and unconditionally agrees to pay to the Agent, for the
account of such Issuing Bank, such Lender’s Ratable Share of each drawing made under a Letter of
Credit funded by such Issuing Bank and not reimbursed by the Borrower on the date made, or of any
reimbursement payment required to be refunded to the Borrower for any reason, which amount will be
advanced, and deemed to be an Advance to the Borrower hereunder, regardless of the satisfaction of
the conditions set forth in Section 3.03. Each Lender acknowledges and agrees that its obligation
to acquire participations pursuant to this paragraph in respect of Letters of Credit is absolute
and unconditional and shall not be affected by any circumstance whatsoever, including any
amendment, renewal or extension of any Letter of Credit or the occurrence and continuance of a
Default or reduction or termination of the Revolving Credit Commitments, and that each such payment
shall be made without any offset, abatement, withholding or reduction whatsoever. Each Lender
further acknowledges and agrees that its participation in each Letter of Credit will be
automatically adjusted to reflect such Lender’s Ratable Share of the Available Amount of such
Letter of Credit at each time such Lender’s Revolving Credit Commitment is amended pursuant to a
Commitment Increase in accordance with Section 2.18, an assignment in accordance with Section 9.07
or otherwise pursuant to this Agreement.

18

 

          (c) Drawing and Reimbursement. The payment by an Issuing Bank of a draft drawn under
any Letter of Credit which is not reimbursed by the Borrower on the date made shall constitute for
all purposes of this Agreement the making by any such Issuing Bank of an Advance, which shall be a
Base Rate Advance, in the amount of such draft, without regard to whether the making of such an
Advance would exceed such Issuing Bank’s Unused Commitment. Each Issuing Bank shall give prompt
notice of each drawing under any Letter of Credit issued by it to the Borrower and the Agent. Upon
written demand by such Issuing Bank made to the Agent, with a copy of such demand to the Borrower,
which the Agent shall promptly forward to each Lender, each Lender shall pay to the Agent such
Lender’s Ratable Share of such outstanding Advance pursuant to Section 2.03(b). Each Lender
acknowledges and agrees that its obligation to make Advances pursuant to this paragraph in respect
of Letters of Credit is absolute and unconditional and shall not be affected by any circumstance
whatsoever, including any amendment, renewal or extension of any Letter of Credit or the occurrence
and continuance of a Default or reduction or termination of the Revolving Credit Commitments, and
that each such payment shall be made without any offset, abatement, withholding or reduction
whatsoever. Promptly after receipt thereof, the Agent shall transfer such funds to such Issuing
Bank. Each Lender agrees to fund its Ratable Share of an outstanding Advance on (i) the Business
Day on which demand therefor is made by such Issuing Bank, provided that notice of such
demand is given not later than 11:00 A.M. (New York City time) on such Business Day, or (ii) the
first Business Day next succeeding such demand if notice of such demand is given after such time.
If and to the extent that any Lender shall not have so made the amount of such Advance available to
the Agent, such Lender agrees to pay to the Agent forthwith on demand such amount together with
interest thereon, for each day from the date of demand by any such Issuing Bank until the date such
amount is paid to the Agent, at the Federal Funds Rate for its account or the account of such
Issuing Bank, as applicable. If such Lender shall pay to the Agent such amount for the account of
any such Issuing Bank on any Business Day, such amount so paid in respect of principal shall
constitute an Advance made by such Lender on such Business Day for purposes of this Agreement, and
the outstanding principal amount of the Advance made by such Issuing Bank shall be reduced by such
amount on such Business Day.

          (d) Letter of Credit Reports. Each Issuing Bank shall furnish (A) to the Agent (with
a copy to the Borrower) on the first Business Day of each month a written report summarizing the
Issuance and expiration dates of Letters of Credit issued by such Issuing Bank during the preceding
month and drawings during such month under all Letters of Credit issued by such Issuing Bank and
(B) to the Agent (with a copy to the Borrower) on the first Business Day of each calendar quarter a
written report setting forth the average daily aggregate Available Amount during the preceding
calendar quarter of all Letters of Credit issued by such Issuing Bank. The Agent shall promptly
forward to each Lender each report delivered to it in accordance with this Section 2.03(d).

          (e) Failure to Make Advances. The failure of any Lender to make the Advance to be
made by it on the date specified in Section 2.03(c) shall not relieve any other Lender of its
obligation hereunder to make its Advance on such date, but no Lender shall be responsible for the
failure of any other Lender to make the Advance to be made by such other Lender on such date.

          SECTION 2.04. Fees. (a) Facility Fee. The Borrower agrees to pay to the
Agent for the account of each Lender a facility fee on the aggregate amount of such Lender’s
Revolving Credit Commitment from the earlier of (x) the date that is 60 days after the date hereof
and (y) the Effective Date, in the case of each Initial Lender and from the effective date
specified in the Assumption Agreement or in the Assignment and Acceptance pursuant to which it became a
Lender (but no sooner than the date upon which such fee becomes payable to the Initial Lenders) in
the case of each other Lender until the Termination Date applicable to such Lender at a rate per
annum equal to the Applicable Percentage in effect from time to time, payable in arrears quarterly
on the last day of each March, June, September and December, commencing June 30, 2008, and on the
final Termination Date.

19

 

          (b) Letter of Credit Fees. (i) The Borrower shall pay to the Agent for the account
of each Lender a commission on such Lender’s Ratable Share of the average daily aggregate Available
Amount of all Letters of Credit issued for the account of the Borrower and outstanding from time to
time at a rate per annum equal to the sum of (x) the Applicable Margin for Eurodollar Rate Advances
in effect from time to time during such calendar quarter plus (y) the Applicable
Utilization Fee in effect from time to time, payable in arrears quarterly on the last day of each
March, June, September and December, commencing with the quarter ended June 30, 2008, and on the
final Termination Date; provided that the Applicable Margin shall be 2% above the
Applicable Margin in effect upon the occurrence and during the continuation of an Event of Default
if the Borrower is required to pay Default Interest pursuant to Section 2.07(b).

     (ii) The Borrower shall pay to each Issuing Bank, for its own account, a fronting fee
equal to 0.125% per annum, payable in arrears quarterly five days after the last day of each
March, June, September and December, commencing with the quarter ended June 30, 2008, and
such other commissions, issuance fees, transfer fees and other fees and charges in
connection with the Issuance or administration of each Letter of Credit as the Borrower and
such Issuing Bank shall agree.

          (c) Agent’s Fees. The Borrower shall pay to the Agent for its own account such fees
as may from time to time be agreed between the Borrower and the Agent.

          SECTION 2.05. Termination or Reduction of the Commitments. The Borrower shall have
the right, upon at least three Business Days’ notice to the Agent, to terminate in whole or
permanently reduce ratably in part the Unused Commitments or the Unissued Letter of Credit
Commitments of the Lenders, provided that each partial reduction shall be in the aggregate
amount of $10,000,000 or an integral multiple of $1,000,000 in excess thereof.

          SECTION 2.06. Repayment of Advances and Letter of Credit Drawings. (a)
Advances. The Borrower shall repay to the Agent for the ratable account of each Lender on
the Termination Date applicable to such Lender the aggregate principal amount of the Advances made
to it by such Lender and then outstanding.

          (b) Letter of Credit Drawings. The obligations of the Borrower under any Letter of
Credit Agreement and any other agreement or instrument relating to any Letter of Credit issued for
the account of the Borrower shall be unconditional and irrevocable, and shall be paid strictly in
accordance with the terms of this Agreement, such Letter of Credit Agreement and such other
agreement or instrument under all circumstances, including, without limitation, the following
circumstances (it being understood that any such payment by the Borrower is without prejudice to,
and does not constitute a waiver of, any rights the Borrower might have or might acquire as a
result of the payment by any Lender of any draft or the reimbursement by the Borrower thereof):

     (i) any lack of validity or enforceability of this Agreement, any Note, any Letter of
Credit Agreement, any Letter of Credit or any other agreement or instrument relating thereto
(all of the foregoing being, collectively, the “L/C Related Documents”);

     (ii) any change in the time, manner or place of payment of, or in any other term of,
all or any of the obligations of the Borrower in respect of any L/C Related Document or any
other amendment or waiver of or any consent to departure from all or any of the L/C Related
Documents;

20

 

     (iii) the existence of any claim, set-off, defense or other right that the Borrower may
have at any time against any beneficiary or any transferee of a Letter of Credit (or any
Persons for which any such beneficiary or any such transferee may be acting), any Issuing
Bank, the Agent, any Lender or any other Person, whether in connection with the transactions
contemplated by the L/C Related Documents or any unrelated transaction;

     (iv) any statement or any other document presented under a Letter of Credit proving to
be forged, fraudulent, invalid or insufficient in any respect or any statement therein being
untrue or inaccurate in any respect;

     (v) payment by any Issuing Bank under a Letter of Credit against presentation of a
draft or certificate that does not strictly comply with the terms of such Letter of Credit;

     (vi) any exchange, release or non-perfection of any collateral, or any release or
amendment or waiver of or consent to departure from any guarantee, for all or any of the
obligations of the Borrower in respect of the L/C Related Documents; or

     (vii) any other circumstance or happening whatsoever, whether or not similar to any of
the foregoing, including, without limitation, any other circumstance that might otherwise
constitute a defense available to, or a discharge of, the Borrower or a guarantor.

          SECTION 2.07. Interest on Advances. (a) Scheduled Interest. The Borrower
shall pay interest on the unpaid principal amount of each Advance made to it and owing to each
Lender from the date of such Advance until such principal amount shall be paid in full, at the
following rates per annum:

     (i) Base Rate Advances. During such periods as such Advance is a Base Rate
Advance, a rate per annum equal at all times to the sum of (x) the Base Rate in effect from
time to time plus (y) the Applicable Margin in effect from time to time plus
(z) the Applicable Utilization Fee in effect from time to time, payable in arrears quarterly
on the last day of each March, June, September and December during such periods and on the
date such Base Rate Advance shall be Converted or paid in full.

     (ii) Eurodollar Rate Advances. During such periods as such Advance is a
Eurodollar Rate Advance, a rate per annum equal at all times during each Interest Period for
such Advance to the sum of (x) the Eurodollar Rate for such Interest Period for such Advance
plus (y) the Applicable Margin in effect from time to time plus (z) the
Applicable Utilization Fee in effect from time to time, payable in arrears on the last day
of such Interest Period and, if such Interest Period has a duration of more than three
months, on each day that occurs during such Interest Period every three months from the
first day of such Interest Period and on the date such Eurodollar Rate Advance shall be
Converted or paid in full.

          (b) Default Interest. Upon the occurrence and during the continuance of an Event of
Default under Section 6.01(a), the Agent may, and upon the request of the Required Lenders shall,
require the Borrower to pay interest (“Default Interest”) on (i) the unpaid overdue
principal amount of each Advance owing to each Lender, payable in arrears on the dates referred to
in clause (a)(i) or (a)(ii) above, at a rate per annum equal at all times to 2% per annum above the
rate per annum required to be paid on such Advance pursuant to clause (a)(i) or (a)(ii) above and
(ii) to the fullest extent permitted by law, the amount of any interest, fee or other amount
payable hereunder that is not paid when due, from the date such amount shall be due until such
amount shall be paid in full, payable in arrears on the date such amount shall be paid in full and
on demand, at a rate per annum equal at all times to 2% per annum above the rate per annum required
to be paid on Base Rate Advances pursuant to clause (a)(i) above; provided,

21

 

however, that following acceleration of the Advances pursuant to Section 6.01, Default
Interest shall accrue and be payable hereunder whether or not previously required by the Agent.

          (c) Regulation D Compensation. Each Lender who is required under regulations of the
Board of Governors of the Federal Reserve System of the United States of America to maintain
reserves with respect to liabilities or assets consisting of or including Eurocurrency Liabilities,
may require the Borrower to pay, contemporaneously with each payment of interest on the Eurodollar
Advances, additional interest on the related Eurodollar Advance of such Lender at a rate per annum
determined by such Lender up to but not exceeding the excess of (i)(A) the applicable Eurodollar
Rate divided by (B) one minus the Eurodollar Rate Reserve Percentage over (ii) the
applicable Eurodollar Rate. Any Lender wishing to require payment of such additional interest (x)
shall so notify the Borrower and the Agent, in which case such additional interest on the
Eurodollar Advances of such Lender shall be payable to such Lender at the place indicated in such
notice with respect to each Interest Period commencing at least three Business Days after the
giving of such notice and (y) shall notify the Borrower at least five Business Days prior to each
date on which interest is payable on the Eurodollar Advances of the amount then due it under this
Section.

          SECTION 2.08. Interest Rate Determination. (a) Each Reference Bank agrees, if
requested by the Agent, to furnish to the Agent timely information for the purpose of determining
each Eurodollar Rate. If any one or more of the Reference Banks shall not furnish such timely
information to the Agent for the purpose of determining any such interest rate, the Agent shall
determine such interest rate on the basis of timely information furnished by the remaining
Reference Banks. The Agent shall give prompt notice to the Borrower and the Lenders of the
applicable interest rate determined by the Agent for purposes of Section 2.07(a)(i) or (ii), and
the rate, if any, furnished by each Reference Bank for the purpose of determining the interest rate
under Section 2.07(a)(ii).

          (b) If, with respect to any Eurodollar Rate Advances, the Required Lenders notify the Agent
that (i) they are unable to obtain matching deposits in the London inter-bank market at or about
11:00 A.M. (London time) on the second Business Day before the making of a Borrowing in sufficient
amounts to fund their respective Advances as a part of such Borrowing during its Interest Period or
(ii) the Eurodollar Rate for any Interest Period for such Advances will not adequately reflect the
cost to such Required Lenders of making, funding or maintaining their respective Eurodollar Rate
Advances for such Interest Period, the Agent shall forthwith so notify the Borrower and the
Lenders, whereupon (A) the Borrower will, on the last day of the then existing Interest Period
therefor, either (x) prepay such Advances or (y) Convert such Advances into Base Rate Advances and
(B) the obligation of the Lenders to make, or to Convert Advances into, Eurodollar Rate Advances
shall be suspended until the Agent shall notify the Borrower and the Lenders that the circumstances
causing such suspension no longer exist.

          (c) If the Borrower shall fail to select the duration of any Interest Period for any
Eurodollar Rate Advances in accordance with the provisions contained in the definition of “Interest
Period” in Section 1.01, the Agent will forthwith so notify the Borrower and the Lenders and
such Advances will automatically, on the last day of the then existing Interest Period therefor,
Convert into Base Rate Advances.

          (d) On the date on which the aggregate unpaid principal amount of Eurodollar Rate Advances
comprising any Borrowing shall be reduced, by payment or prepayment or otherwise, to less than the
Borrowing Minimum, such Advances shall automatically Convert into Base Rate Advances.

          (e) Upon the occurrence and during the continuance of any Event of Default, (i) each
Eurodollar Rate Advance will automatically, on the last day of the then existing Interest Period
therefor,

22

 

be Converted into a Base Rate Advance and (ii) the obligation of the Lenders to make, or
to Convert Advances into, Eurodollar Rate Advances shall be suspended.

          (f) If Reuters LIBOR01 Page (and any successor page) is unavailable and no Reference Bank has
furnished timely information to the Agent for determining the Eurodollar Rate for any Eurodollar
Rate Advances after the Agent has requested such information,

     (i) the Agent shall forthwith notify the Borrower and the Lenders that the interest
rate cannot be determined for such Eurodollar Rate Advances,

     (ii) each such Advance will automatically, on the last day of the then existing
Interest Period therefor, Convert into a Base Rate Advance (or if such Advance is then a
Base Rate Advance, will continue as a Base Rate Advance), and

     (iii) the obligation of the Lenders to make Eurodollar Rate Advances or to Convert
Advances into Eurodollar Rate Advances shall be suspended until the Agent shall notify the
Borrower and the Lenders that the circumstances causing such suspension no longer exist.

          SECTION 2.09. Optional Conversion of Advances. The Borrower may on any Business Day,
upon notice given to the Agent not later than 11:00 A.M. (New York City time) on the third Business
Day prior to the date of the proposed Conversion and subject to the provisions of Sections 2.08 and
2.12, Convert all Advances of one Type comprising the same Borrowing into Advances of the other
Type; provided, however, that any Conversion of Eurodollar Rate Advances into Base
Rate Advances shall be made only on the last day of an Interest Period for such Eurodollar Rate
Advances, any Conversion of Base Rate Advances into Eurodollar Rate Advances shall be in an amount
not less than the minimum amount specified in Section 2.02(b) and no Conversion of any Advances
shall result in more separate Borrowings than permitted under Section 2.02(b). Each such notice of
a Conversion shall, within the restrictions specified above, specify (i) the date of such
Conversion, (ii) the Advances to be Converted, and (iii) if such Conversion is into Eurodollar Rate
Advances, the duration of the initial Interest Period for each such Advance. Each notice of
Conversion shall be irrevocable and binding on the Borrower.

          SECTION 2.10. Optional Prepayments of Advances. The Borrower may, upon notice at
least two Business Days’ prior to the date of such prepayment, in the case of Eurodollar Rate
Advances, and not later than 11:00 A.M. (New York City time) on the date of such prepayment, in the
case of Base Rate Advances, to the Agent stating the proposed date and aggregate principal amount
of the prepayment, and if such notice is given the Borrower shall, prepay the outstanding principal
amount of the Advances comprising part of the same Borrowing in whole or ratably in part, together
with accrued interest to the date of such prepayment on the principal amount prepaid;
provided, however, that (x) each partial prepayment of Advances shall be in an
aggregate principal amount of not less than the Borrowing Minimum or a Borrowing Multiple in
excess thereof and (y) in the event of any such prepayment of a Eurodollar Rate Advance, the
Borrower shall be obligated to reimburse the Lenders in respect thereof pursuant to Section
9.04(c).

          SECTION 2.11. Increased Costs. (a) If, due to either (i) the introduction of or any
change in or in the interpretation of any law or regulation or (ii) the compliance with any
guideline or request from any central bank or other governmental authority including, without
limitation, any agency of the European Union or similar monetary or multinational authority
(whether or not having the force of law), there shall be any increase in the cost to any Lender of
agreeing to make or making, funding or maintaining Eurodollar Rate Advances or of agreeing to issue
or of issuing or maintaining or participating in Letters of Credit (excluding for purposes of this
Section 2.11 any such increased costs resulting from

23

 

(i) Taxes or Other Taxes (as to which Section
2.14 shall govern) and (ii) changes in the basis of taxation of overall net income or overall gross
income by the United States or by the foreign jurisdiction or state under the laws of which such
Lender is organized or has its Applicable Lending Office or any political subdivision thereof),
then the Borrower shall from time to time, upon demand by such Lender (with a copy of such demand
to the Agent), pay to the Agent for the account of such Lender additional amounts sufficient to
compensate such Lender for such increased cost; provided, however, that before
making any such demand, each Lender agrees to use reasonable efforts (consistent with its internal
policy and legal and regulatory restrictions) to designate a different Applicable Lending Office if
the making of such designation would avoid the need for, or reduce the amount of, such increased
cost and would not, in the reasonable judgment of such Lender, be otherwise disadvantageous to such
Lender. A certificate as to the amount of such increased cost, submitted to the Borrower and the
Agent by such Lender, shall be conclusive and binding for all purposes, absent manifest error.

          (b) If any Lender determines that compliance with any law or regulation or any guideline or
request from any central bank or other governmental authority (whether or not having the force of
law) affects or would affect the amount of capital required or expected to be maintained by such
Lender or any corporation controlling such Lender and that the amount of such capital is increased
by or based upon the existence of such Lender’s commitment to lend or to issue or participate in
Letters of Credit hereunder and other commitments of such type or the issuance or maintenance of or
participation in the Letters of Credit (or similar contingent obligations), then, upon demand by
such Lender (with a copy of such demand to the Agent), the Borrower shall pay to the Agent for the
account of such Lender, from time to time as specified by such Lender, additional amounts
sufficient to compensate such Lender or such corporation in the light of such circumstances, to the
extent that such Lender reasonably determines such increase in capital to be allocable to the
existence of such Lender’s commitment to lend or to issue or participate in Letters of Credit
hereunder or to the issuance or maintenance of or participation in any Letters of Credit. A
certificate as to such amounts submitted to the Borrower and the Agent by such Lender shall be
conclusive and binding for all purposes, absent manifest error.

          (c) Failure or delay on the part of any Lender to demand compensation pursuant to this Section
shall not constitute a waiver of such Lender’s right to demand such compensation; provided
that the Borrower shall not be required to compensate such Lender pursuant to this Section for any
increased costs or reductions incurred more than 180 days prior to the date that such Lender
notifies the Borrower of the change in law or circumstance giving rise to such increased costs or
reductions and of such Lender’s intention to claim compensation therefor; provided
further that, if the change in law or circumstance giving rise to such increased costs or
reductions is retroactive, then the 180-day period referred to above shall be extended to include
the period of retroactive effect thereof.

          SECTION 2.12. Illegality. Notwithstanding any other provision of this Agreement, if
any Lender shall notify the Agent that the introduction of or any change in or in the
interpretation of any law or regulation makes it unlawful, or any central bank or other
governmental authority asserts that it is unlawful, for such Lender or its Eurodollar Lending
Office to perform its obligations hereunder to make Eurodollar Rate Advances or to fund or maintain
Eurodollar Rate Advances hereunder, the obligation of such Lender to make Eurodollar Rate Advances
or to Convert Advances into Eurodollar Rate Advances shall be suspended until the Agent shall
notify the Borrower and the Lenders that the circumstances causing such suspension no longer exist.
Upon receipt of such notice, the Borrower shall, upon demand from such Lender (with a copy to the
Agent), prepay or, if applicable, convert all Eurodollar Rate Loans of such Lender to Base Rate
Loans, either on the last day of the Interest Period therefor, if such Lender may lawfully continue
to maintain such Eurodollar Rate Loans to such day, or immediately, if such Lender may not lawfully
continue to maintain such Eurodollar Rate Loans. Upon any such prepayment or conversion, the
Borrower shall also pay accrued interest on the amount so prepaid or converted. Each Lender agrees
to designate a different Applicable Lending Office if such designation will avoid the need

24

 

for such
notice and will not, in the good faith judgment of such Lender, otherwise be materially
disadvantageous to such Lender. As to any such affected Lender, any Eurodollar Rate Loan will be
funded as a Base Rate Loan.

          SECTION 2.13. Payments and Computations. (a) The Borrower shall make each payment
hereunder, irrespective of any right of counterclaim or set-off, not later than 11:00 A.M. (New
York City time) on the day when due in Dollars to the Agent at the applicable Agent’s Account in
same day funds. The Agent will promptly thereafter cause to be distributed like funds relating to
the payment of principal or interest, fees or commissions ratably (other than amounts payable
pursuant to Section 2.04(b), 2.11, 2.14 or 9.04(c)) to the Lenders for the account of their
respective Applicable Lending Offices, and like funds relating to the payment of any other amount
payable to any Lender to such Lender for the account of its Applicable Lending Office, in each case
to be applied in accordance with the terms of this Agreement. Upon any Assuming Lender becoming a
Lender hereunder as a result of a Commitment Increase pursuant to Section 2.18 or an extension of
the Termination Date pursuant to Section 2.19, and upon the Agent’s receipt of such Lender’s
Assumption Agreement and recording of the information contained therein in the Register, from and
after the applicable Increase Date or Extension Date, as the case may be, the Agent shall make all
payments hereunder and under any Notes issued in connection therewith in respect of the interest
assumed thereby to the Assuming Lender. Upon its acceptance of an Assignment and Acceptance and
recording of the information contained therein in the Register pursuant to Section 9.07(c), from
and after the effective date specified in such Assignment and Acceptance, the Agent shall make all
payments hereunder and under the Notes in respect of the interest assigned thereby to the Lender
assignee thereunder, and the parties to such Assignment and Acceptance shall make all appropriate
adjustments in such payments for periods prior to such effective date directly between themselves.

          (b) The Borrower hereby authorizes each Lender, if and to the extent payment owed to such
Lender is not made when due hereunder or under the Note held by such Lender, to charge from time to
time against any or all of the Borrower’s accounts with such Lender any amount so due.

          (c) All computations of interest based on the Base Rate shall be made by the Agent on the
basis of a year of 365 or 366 days, as the case may be, and all computations of interest based on
the Eurodollar Rate or the Federal Funds Rate and of fees and Letter of Credit commissions shall be
made by the Agent on the basis of a year of 360 days, in each case for the actual number of days
(including the first day but excluding the last day) occurring in the period for which such
interest, fees or commissions are payable. Each determination by the Agent of an interest rate
hereunder shall be conclusive and binding for all purposes, absent manifest error.

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

          (e) Unless the Agent shall have received notice from the Borrower prior to the date on which
any payment is due to the Lenders hereunder that the Borrower will not make such payment in full,
the Agent may assume that the Borrower has made such payment in full to the Agent on such date and
the Agent may, in reliance upon such assumption, cause to be distributed to each Lender on such due
date an amount equal to the amount then due such Lender. If and to the extent the Borrower shall
not have so made such payment in full to the Agent, each Lender shall repay to the Agent forthwith
on demand such amount distributed to such Lender together with interest thereon, for each day from
the date

25

 

such amount is distributed to such Lender until the date such Lender repays such amount to
the Agent, at the Federal Funds Rate.

          SECTION 2.14. Taxes. (a) Any and all payments by the Borrower to or for the account
of any Lender or the Agent hereunder or under the Notes or any other documents to be delivered
hereunder shall be made, in accordance with Section 2.13 or the applicable provisions of such other
documents, free and clear of and without deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities with respect thereto,
excluding, in the case of each Lender and the Agent, taxes imposed on its overall net
income, and franchise taxes imposed on it in lieu of net income taxes, by the jurisdiction under
the laws of which such Lender or the Agent (as the case may be) is organized or any political
subdivision thereof and, in the case of each Lender, taxes imposed on its overall net income, and
franchise taxes imposed on it in lieu of net income taxes, by the jurisdiction of such Lender’s
Applicable Lending Office or any political subdivision thereof (all such non-excluded taxes,
levies, imposts, deductions, charges, withholdings and liabilities in respect of payments hereunder
or under the Notes being hereinafter referred to as “Taxes”). If the Borrower shall be
required by law to deduct any Taxes from or in respect of any sum payable hereunder or under any
Note or any other documents to be delivered hereunder to any Lender or the Agent, (i) the sum
payable shall be increased as may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section 2.14) such Lender or
the Agent (as the case may be) receives an amount equal to the sum it would have received had no
such deductions been made, (ii) the Borrower shall make such deductions and (iii) the Borrower
shall pay the full amount deducted to the relevant taxation authority or other authority in
accordance with applicable law.

          (b) In addition, the Borrower shall pay any present or future stamp or documentary taxes or
any other excise or property taxes, charges or similar levies that arise from any payment made
hereunder or under the Notes or any other documents to be delivered hereunder or from the
execution, delivery or registration of, performing under, or otherwise with respect to, this
Agreement or the Notes or any other documents to be delivered hereunder (hereinafter referred to as
“Other Taxes”).

          (c) The Borrower shall indemnify each Lender and the Agent for and hold it harmless against
the full amount of Taxes or Other Taxes (including, without limitation, taxes of any kind imposed
or asserted by any jurisdiction on amounts payable under this Section 2.14) imposed on or paid by
such Lender or the Agent (as the case may be) and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto. This indemnification shall be made within 30
days from the date such Lender or the Agent (as the case may be) makes written demand thereof.

          (d) Within 30 days after the date of any payment of Taxes, the Borrower shall furnish to the
Agent, at its address referred to in Section 9.02, the original or a certified copy of a receipt
evidencing such payment to the extent such a receipt is issued therefor, or other written proof of
payment thereof that is reasonably satisfactory to the Agent. In the case of any payment hereunder or
under the Notes or any other documents to be delivered hereunder by or on behalf of the Borrower
through an account or branch outside the United States or by or on behalf of the Borrower by a
payor that is not a United States person, if the Borrower determines that no Taxes are payable in
respect thereof, the Borrower shall furnish, or shall cause such payor to furnish, to the Agent, at
such address, an opinion of counsel acceptable to the Agent stating that such payment is exempt
from Taxes. For purposes of this subsection (d) and subsection (e), the terms “United
States” and “United States person” shall have the meanings specified in Section 7701 of
the Internal Revenue Code.

          (e) Each Lender organized under the laws of a jurisdiction outside the United States, on or
prior to the date of its execution and delivery of this Agreement in the case of each Initial
Lender and on the date of the Assumption Agreement or the Assignment and Acceptance pursuant to
which it

26

 

becomes a Lender in the case of each other Lender, and from time to time thereafter as
reasonably requested in writing by the Borrower (but only so long as such Lender remains lawfully
able to do so), shall provide each of the Agent and the Borrower with two original Internal Revenue
Service Forms W-8BEN or W-8ECI, as appropriate, or any successor or other form prescribed by the
Internal Revenue Service, certifying that such Lender is exempt from or entitled to a reduced rate
of United States withholding tax on payments pursuant to this Agreement or the Notes. If the form
provided by a Lender at the time such Lender first becomes a party to this Agreement indicates a
United States interest withholding tax rate in excess of zero, withholding tax at such rate shall
be considered excluded from Taxes unless and until such Lender provides the appropriate forms
certifying that a lesser rate applies, whereupon withholding tax at such lesser rate only shall be
considered excluded from Taxes for periods governed by such form; provided,
however, that, if at the date of the Assignment and Acceptance pursuant to which a Lender
assignee becomes a party to this Agreement, the Lender assignor was entitled to payments under
subsection (a) in respect of United States withholding tax with respect to interest paid at such
date, then, to such extent, the term Taxes shall include (in addition to withholding taxes that may
be imposed in the future or other amounts otherwise includable in Taxes) United States withholding
tax, if any, applicable with respect to the Lender assignee on such date. If any form or document
referred to in this subsection (e) requires the disclosure of information, other than information
necessary to compute the tax payable and information required on the date hereof by Internal
Revenue Service Form W-8BEN or W-8ECI, that the Lender reasonably considers to be confidential, the
Lender shall give notice thereof to the Borrower and shall not be obligated to include in such form
or document such confidential information.

          (f) For any period with respect to which a Lender has failed to provide the Borrower with the
appropriate form, certificate or other document described in Section 2.14(e) (other
than if such failure is due to a change in law, or in the interpretation or application
thereof, occurring subsequent to the date on which a form, certificate or other document originally
was required to be provided, or if such form, certificate or other document otherwise is not
required under subsection (e) above), such Lender shall not be entitled to indemnification under
Section 2.14(a) or (c) with respect to Taxes imposed by the United States by reason of such
failure; provided, however, that should a Lender become subject to Taxes because of
its failure to deliver a form, certificate or other document required hereunder, the Borrower shall
take such steps as the Lender shall reasonably request to assist the Lender to recover such Taxes.

          (g) If any Lender determines, in its sole discretion, that it has actually and finally
realized, by reason of a refund of any Taxes paid or reimbursed by the Borrower pursuant to
subjection (a) or (c) above in respect of payments under the Credit Agreement or the Notes, a
current monetary benefit that it would otherwise not have obtained, and that would result in the
total payments under this Section 2.14 exceeding the amount needed to make such Lender whole, such
Lender shall pay to the Borrower, with reasonable promptness following the date on which it
actually realizes such benefit, an
amount equal to the lesser of the amount of such benefit or the amount of such excess, in each
case net of all out-of-pocket expenses in securing such refund.

          SECTION 2.15. Sharing of Payments, Etc. If any Lender shall obtain any payment
(whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise) on
account of the Advances owing to it (other than (x) as payment of an Advance made by an Issuing
Bank pursuant to the first sentence of Section 2.03(c) or (y) pursuant to Section 2.11, 2.14 or
9.04(c)) in excess of its Ratable Share of payments on account of the Advances obtained by all the
Lenders, such Lender shall forthwith purchase from the other Lenders such participations in the
Advances owing to them as shall be necessary to cause such purchasing Lender to share the excess
payment ratably with each of them; provided, however, that if all or any portion of
such excess payment is thereafter recovered from such purchasing Lender, such purchase from each
Lender shall be rescinded and such Lender shall repay to the purchasing Lender the purchase price
to the extent of such recovery together with an amount equal to

27

 

such Lender’s ratable share
(according to the proportion of (i) the amount of such Lender’s required repayment to (ii) the
total amount so recovered from the purchasing Lender) of any interest or other amount paid or
payable by the purchasing Lender in respect of the total amount so recovered. The Borrower agrees
that any Lender so purchasing a participation from another Lender pursuant to this Section 2.15
may, to the fullest extent permitted by law, exercise all its rights of payment (including the
right of set-off) with respect to such participation as fully as if such Lender were the direct
creditor of the Borrower in the amount of such participation.

          SECTION 2.16. Evidence of Debt. (a) Each Lender shall maintain in accordance with
its usual practice an account or accounts evidencing the indebtedness of the Borrower to such
Lender resulting from each Advance owing to such Lender from time to time, including the amounts of
principal and interest payable and paid to such Lender from time to time hereunder in respect of
Advances. The Borrower agrees that upon notice by any Lender to the Borrower (with a copy of such
notice to the Agent) to the effect that a Note is required or appropriate in order for such Lender
to evidence (whether for purposes of pledge, enforcement or otherwise) the Advances owing to, or to
be made by, such Lender, the Borrower shall promptly execute and deliver to such Lender a Note
payable to the order of such Lender in a principal amount up to the Revolving Credit Commitment of
such Lender.

          (b) The Register maintained by the Agent pursuant to Section 9.07(d) shall include a control
account, and a subsidiary account for each Lender, in which accounts (taken together) shall be
recorded (i) the date and amount of each Borrowing made hereunder, the Type of Advances comprising
such Borrowing and, if appropriate, the Interest Period applicable thereto, (ii) the terms of each
Assumption Agreement and each Assignment and Acceptance delivered to and accepted by it, (iii) the
amount of any principal or interest due and payable or to become due and payable from the Borrower
to each Lender hereunder and (iv) the amount of any sum received by the Agent from the Borrower
hereunder and each Lender’s share thereof.

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

          SECTION 2.17. Use of Proceeds. The proceeds of the Advances shall be available (and
the Borrower agrees that it shall use such proceeds) solely for the purposes set forth in Section
5.01(j) hereof.

          SECTION 2.18. Increase in the Aggregate Commitments. (a) The Borrower may, at any
time but in any event not more than once in any calendar year prior to the final Termination Date,
by notice to the Agent, request that the aggregate amount of the Commitment be increased by an
amount of $10,000,000 or an integral multiple thereof (each a “Commitment Increase”) to be
effective as of a date that is at least 90 days prior to the scheduled final Termination Date then
in effect (the “Increase Date”) as specified in the related notice to the Agent;
provided, however that (i) in no event shall the aggregate amount of the
Commitments at any time exceed $700,000,000 and (ii) on the date of any request by the Borrower for
a Commitment Increase and on the related Increase Date the applicable conditions set forth in
Section 3.02 shall be satisfied.

28

 

          (b) The Agent shall promptly notify the Lenders of a request by the Borrower for a Commitment
Increase, which notice shall include (i) the proposed amount of such requested Commitment Increase,
(ii) the proposed Increase Date and (iii) the date by which Lenders wishing to participate in the
Commitment Increase must commit to an increase in the amount of their respective Commitments (the
“Commitment Date”). Each Lender that is willing to participate in such requested
Commitment Increase (each an “Increasing Lender”) shall, in its sole discretion, give
written notice to the Agent on or prior to the Commitment Date of the amount by which it is willing
to increase its Commitment. If the Lenders notify the Agent that they are willing to increase the
amount of their respective Commitments by an aggregate amount that exceeds the amount of the
requested Commitment Increase, the requested Commitment Increase shall be allocated among the
Lenders willing to participate therein in such amounts as are agreed between the Borrower and the
Agent.

          (c) Promptly following each Commitment Date, the Agent shall notify the Borrower as to the
amount, if any, by which the Lenders are willing to participate in the requested Commitment
Increase. If the aggregate amount by which the Lenders are willing to participate in any requested
Commitment Increase on any such Commitment Date is less than the requested Commitment Increase,
then the Borrower may extend offers to one or more Eligible Assignees to participate in any portion
of the requested Commitment Increase that has not been committed to by the Lenders as of the
applicable Commitment Date; provided, however, that the Commitment of each such
Eligible Assignee shall be in an amount of $5,000,000 or an integral multiple of $1,000,000 in
excess thereof.

          (d) On each Increase Date, each Eligible Assignee that accepts an offer to participate in a
requested Commitment Increase in accordance with Section 2.18(b) (each such Eligible Assignee and
each Eligible Assignee that agrees to an extension of the Termination Date in accordance with
Section 2.19(c), an “Assuming Lender”) shall become a Lender party to this Agreement as of
such Increase Date with a Commitment equal to the portion of the Commitment Increase it has
accepted, and the Commitment of each Increasing Lender for such requested Commitment Increase shall
be so increased by such amount (or by the amount allocated to such Lender pursuant to the last
sentence of Section 2.18(b)) as of such Increase Date; provided, however, that the
Agent shall have received on or before such Increase Date the following, each dated such date:

     (i) (A) certified copies of resolutions of the Board of Directors of the Borrower or
the Executive Committee of such Board approving the Commitment Increase and the
corresponding modifications to this Agreement and (B) an opinion of counsel for the Borrower
(which may be in-house counsel), in substantially the form of Exhibit E hereto;

     (ii) an assumption agreement from each Assuming Lender, if any, in form and substance
satisfactory to the Borrower and the Agent (each an “Assumption Agreement”), duly
executed by such Eligible Assignee, the Agent and the Borrower; and

     (iii) confirmation from each Increasing Lender of the increase in the amount of its
Commitment in a writing satisfactory to the Borrower and the Agent.

On each Increase Date, upon fulfillment of the conditions set forth in the immediately preceding
sentence of this Section 2.18(d), the Agent shall notify the Lenders (including, without
limitation, each Assuming Lender) and the Borrower, on or before 1:00 P.M. (New York City time), by
telecopier, of the occurrence of the Commitment Increase to be effected on such Increase Date and
shall record in the Register the relevant information with respect to each Increasing Lender and
each Assuming Lender on such date. Each Increasing Lender and each Assuming Lender shall, before
2:00 P.M. (New York City time) on the Increase Date, make available for the account of its
Applicable Lending Office to the Agent at the Agent’s Account, in same day funds, in the case of
such Assuming Lender, an amount equal to such

29

 

Assuming Lender’s ratable portion of the Borrowings
then outstanding (calculated based on its Revolving Credit Commitment as a percentage of the
aggregate Revolving Credit Commitments outstanding after giving effect to the relevant Commitment
Increase) and, in the case of such Increasing Lender, an amount equal to the excess of (i) such
Increasing Lender’s ratable portion of the Borrowings then outstanding (calculated based on its
Revolving Credit Commitment as a percentage of the aggregate Revolving Credit Commitments
outstanding after giving effect to the relevant Commitment Increase) over (ii) such Increasing
Lender’s ratable portion of the Borrowings then outstanding (calculated based on its Revolving
Credit Commitment (without giving effect to the relevant Commitment Increase) as a percentage of
the aggregate Revolving Credit Commitments (without giving effect to the relevant Commitment
Increase). After the Agent’s receipt of such funds from each such Increasing Lender and each such
Assuming Lender, the Agent will promptly thereafter cause to be distributed like funds to the other
Lenders for the account of their respective Applicable Lending Offices in an amount to each other
Lender such that the aggregate amount of the outstanding Advances owing to each Lender after giving
effect to such distribution equals such Lender’s ratable portion of the Borrowings then outstanding
(calculated based on its Revolving Credit Commitment as a percentage of the aggregate Revolving
Credit Commitments outstanding after giving effect to the relevant Commitment Increase).

          SECTION 2.19. Extension of Termination Date. (a) At least 45 days but not more than
60 days prior to the first and/or second anniversary of the Effective Date, the Borrower, by
written notice to the Agent, may request an extension of the Termination Date in effect at such
time by one year from its then scheduled expiration. The Agent shall promptly notify each Lender
of such request, and each Lender shall in turn, in its sole discretion, not later than 20 days
prior to the applicable anniversary date, notify the Borrower and the Agent in writing as to
whether such Lender will consent to such extension. If any Lender shall fail to notify the Agent
and the Borrower in writing of its consent to any such request for extension of the Termination
Date at least 20 days prior to the applicable anniversary date, such Lender shall be deemed to be a
Non-Consenting Lender with respect to such request. The Agent shall notify the Borrower not later
than 15 days prior to the applicable anniversary date of the decision of the Lenders regarding the
Borrower’s request for an extension of the Termination Date.

          (b) If all the Lenders consent in writing to any such request in accordance with subsection
(a) of this Section 2.19, the Termination Date in effect at such time shall, effective as at the
applicable anniversary date (the “Extension Date”), be extended for one year;
provided that on each Extension Date the applicable conditions set forth in Article III
shall be satisfied. If less than all of the Lenders consent in writing to any such request in
accordance with subsection (a) of this Section 2.19, the Termination Date in effect at such time
shall, effective as at the applicable Extension Date and subject to
subsection (d) of this Section 2.19, be extended as to those Lenders that so consented (each a
“Consenting Lender”) but shall not be extended as to any other Lender (each a
“Non-Consenting Lender”). To the extent that the Termination Date is not extended as to
any Lender pursuant to this Section 2.19 and the Commitment of such Lender is not assumed in
accordance with subsection (c) of this Section 2.19 on or prior to the applicable Extension Date,
the Commitment of such Non-Consenting Lender shall automatically terminate in whole on such
unextended Termination Date without any further notice or other action by the Borrower, such Lender
or any other Person; provided that such Non-Consenting Lender’s rights under Sections 2.11,
2.14 and 9.04, and its obligations under Section 9.04, shall survive the Termination Date for such
Lender as to matters occurring prior to such date. It is understood and agreed that no Lender
shall have any obligation whatsoever to agree to any request made by the Borrower for any requested
extension of the Termination Date.

          (c) If less than all of the Lenders consent to any such request pursuant to subsection (a) of
this Section 2.19, the Agent shall promptly so notify the Consenting Lenders, and each Consenting
Lender may, in its sole discretion, give written notice to the Agent not later than 10 days prior
to the Termination Date of the amount of the Non-Consenting Lenders’ Commitments for which it is
willing to

30

 

accept an assignment. If the Consenting Lenders notify the Agent that they are willing
to accept assignments of Commitments in an aggregate amount that exceeds the amount of the
Commitments of the Non-Consenting Lenders, such Commitments shall be allocated among the Consenting
Lenders willing to accept such assignments in such amounts as are agreed between the Borrower and
the Agent. If after giving effect to the assignments of Commitments described above there remains
any Commitments of Non-Consenting Lenders, the Borrower may arrange for one or more Consenting
Lenders or other Eligible Assignees as Assuming Lenders to assume, effective as of the Extension
Date, any Non-Consenting Lender’s Commitment and all of the obligations of such Non-Consenting
Lender under this Agreement thereafter arising, without recourse to or warranty by, or expense to,
such Non-Consenting Lender; provided, however, that the amount of the Commitment of
any such Assuming Lender as a result of such substitution shall in no event be less than $5,000,000
unless the amount of the Commitment of such Non-Consenting Lender is less than $5,000,000, in which
case such Assuming Lender shall assume all of such lesser amount; and provided
further that:

     (i) any such Consenting Lender or Assuming Lender shall have paid to such
Non-Consenting Lender (A) the aggregate principal amount of, and any interest accrued and
unpaid to the effective date of the assignment on, the outstanding Advances, if any, of such
Non-Consenting Lender plus (B) any accrued but unpaid facility fees owing to such
Non-Consenting Lender as of the effective date of such assignment;

     (ii) all additional costs reimbursements, expense reimbursements and indemnities
payable to such Non-Consenting Lender, and all other accrued and unpaid amounts owing to
such Non-Consenting Lender hereunder, as of the effective date of such assignment shall have
been paid to such Non-Consenting Lender; and

     (iii) with respect to any such Assuming Lender, the applicable processing and
recordation fee required under Section 9.07(a) for such assignment shall have been paid;

provided further that such Non-Consenting Lender’s rights under Sections 2.11, 2.14
and 9.04, and its obligations under Section 9.04, shall survive such substitution as to matters
occurring prior to the date of substitution. At least three Business Days prior to any Extension
Date, (A) each such Assuming Lender, if any, shall have delivered to the Borrower and the Agent an
Assumption Agreement, duly executed by such Assuming Lender, such Non-Consenting Lender, the
Borrower and the Agent, (B) any such Consenting Lender shall have delivered confirmation in writing
satisfactory to the Borrower and the Agent as to the increase in the amount of its Commitment and
(C) each Non-Consenting Lender being
replaced pursuant to this Section 2.19 shall have delivered to the Agent any Note or Notes held by
such Non-Consenting Lender. Upon the payment or prepayment of all amounts referred to in clauses
(i), (ii) and (iii) of this Section 2.19(c), each such Consenting Lender or Assuming Lender, as of
the Extension Date, will be substituted for such Non-Consenting Lender under this Agreement and
shall be a Lender for all purposes of this Agreement, without any further acknowledgment by or the
consent of the other Lenders, and the obligations of each such Non-Consenting Lender hereunder
shall, by the provisions hereof, be released and discharged.

          (d) If (after giving effect to any assignments or assumptions pursuant to subsection (c) of
this Section 2.19) Lenders having Commitments equal to at least 50% of the Commitments in effect
immediately prior to the Extension Date consent in writing to a requested extension (whether by
execution or delivery of an Assumption Agreement or otherwise) not later than one Business Day
prior to such Extension Date, the Agent shall so notify the Borrower, and, subject to the
satisfaction of the applicable conditions in Article III, the Termination Date then in effect shall
be extended for the additional one-year period as described in subsection (a) of this Section 2.19,
and all references in this Agreement, and in the Notes, if any, to the “Termination Date”
shall, with respect to each Consenting

31

 

Lender and each Assuming Lender for such Extension Date,
refer to the Termination Date as so extended. Promptly following each Extension Date, the Agent
shall notify the Lenders (including, without limitation, each Assuming Lender) of the extension of
the scheduled Termination Date in effect immediately prior thereto and shall thereupon record in
the Register the relevant information with respect to each such Consenting Lender and each such
Assuming Lender.

ARTICLE III

CONDITIONS TO EFFECTIVENESS AND LENDING

          SECTION 3.01. Conditions Precedent to Effectiveness of Section 2.01. Section 2.01 of
this Agreement shall become effective on and as of the first date on or before March 31, 2008 (the
“Effective Date”) on which the following conditions precedent have been satisfied:

     (a) There shall have occurred no Material Adverse Change since September 30, 2007.

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

     (c) Nothing shall have come to the attention of the Lenders during the course of their
due diligence investigation to lead them to believe that the Information Memorandum was or
has become misleading, incorrect or incomplete in any material respect; without limiting the
generality of the foregoing, the Lenders shall have been given such access to the
management, records, books of account, contracts and properties of the Borrower and its
Subsidiaries as they shall have requested.

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

     (e) The Borrower shall have notified the Agent in writing as to the proposed Effective
Date.

     (f) The Borrower shall have paid all accrued fees and expenses of the Agent (including
the accrued fees and expenses of counsel to the Agent).

     (g) On the Effective Date, the following statements shall be true and the Agent shall
have received for the account of each Lender a certificate signed by a duly authorized
officer of the Borrower, dated the Effective Date, stating that:

     (i) The representations and warranties contained in Section 4.01 are correct on
and as of the Effective Date, and

32

 

     (ii) No event has occurred and is continuing that constitutes a Default.

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

     (i) The Notes to the order of the Lenders to the extent requested by any Lender
pursuant to Section 2.16.

     (ii) Certified copies of the resolutions of the Board of Directors of each Loan
Party approving this Agreement each other Loan Document to which it is or is to
become a party, and of all documents evidencing other necessary corporate action and
governmental approvals, if any, with respect to this Agreement and the Notes.

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

     (iv) A favorable opinion of Bracewell & Giuliani, LLP, counsel for the Loan
Parties, substantially in the form of Exhibit E hereto and as to such other matters
as any Lender through the Agent may reasonably request.

     (v) A favorable opinion of Shearman & Sterling LLP, counsel for the Agent, in
form and substance satisfactory to the Agent.

     (i) The commitments of the lenders shall have been terminated, and all of the
obligations shall have been repaid or prepaid under, the Multi-Year Credit Agreement dated
as of July 28, 2004 among the Borrower, the lenders parties thereto and Bank of America,
N.A., as administrative agent, and each of the Lenders that is a party to such credit
facility hereby waives, upon execution of this Agreement, any notice required by said Credit
Agreement relating to the termination of commitments or payments thereunder.

     (i) The Agent shall be satisfied that the Spin Transaction shall be consummated
substantially contemporaneously with the Effective Date.

          SECTION 3.02. Conditions Precedent to Each Borrowing, Issuance, Commitment
Increase and Extension Date. The obligation of each Lender to make an Advance (other than an
Advance made by any Issuing Bank or any Lender pursuant to Section 2.03(c)) on the occasion of each
Borrowing, the obligation of each Issuing Bank to issue a Letter of Credit, each Commitment
Increase and each extension of Commitments pursuant to Section 2.19 shall be subject to the
conditions precedent that the Effective Date shall have occurred and on the date of such Borrowing,
such issuance, the applicable Increase Date or the applicable Extension Date (as the case may be)
the following statements shall be true (and each of the giving of the applicable Notice of
Borrowing, Notice of Issuance, request for Commitment Increase, request for Commitment extension
and the acceptance by the Borrower of the proceeds of such Borrowing, such issuance, such increase
or such extension, shall constitute a representation and warranty by the Borrower that on the date
of such Borrowing, such issuance, request for Commitment Increase or request for Commitment
extension, that such statements are true):

     (a) the representations and warranties contained in Section 4.01 are correct on and as
of such date, before and after giving effect to such Borrowing, such issuance, such
Commitment

33

 

Increase or such Extension Date and to the application of the proceeds therefrom,
as though made on and as of such date, except for the purposes of this Section 3.02(a), (i)
to the extent that such representations and warranties specifically refer to an earlier
date, such representations and warranties shall be true and correct as of such earlier date,
(ii) the representations and warranties contained in subsections (i) and (ii) of Section
4.01(e) shall be deemed to refer to the most recent financial statements furnished pursuant
to subsections (i) and (ii), respectively, of Section 5.01(a), and (iii) the representations
and warranties set forth in subsection 4.01(e)(iii) and in subsection 4.01(f)(i) need to be
true and correct only as of the Effective Date, each Increase Date and each Extension Date,
and

     (b) no event has occurred and is continuing, or would result from such Borrowing, such
issuance, such Commitment Increase or such Extension Date or from the application of the
proceeds therefrom, that constitutes a Default.

          SECTION 3.03. Determinations Under Section 3.01. For purposes of determining
compliance with the conditions specified in Section 3.01, each Lender 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 the Lenders unless an
officer of the Agent responsible for the transactions contemplated by this Agreement shall have
received notice from such Lender prior to the date that the Borrower, by notice to the Lenders,
designates as the proposed Effective Date, specifying its objection thereto. The Agent shall
promptly notify the Lenders of the occurrence of the Effective Date.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

          SECTION 4.01. Representations and Warranties of the Borrower. The Borrower
represents and warrants as follows:

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

     (b) The execution, delivery and performance by each Loan Party of each Loan Document to
which it is party, have been duly authorized by all necessary corporate or other
organizational action, and do not (i) contravene the terms of any of such Person’s
Organization Documents; (ii) conflict with or result in any breach or contravention of, or
the creation of any Lien under, (A) any Contractual Obligation to which the Borrower is a
party, except to the extent that such breach, contravention or creation of any such Lien
could not reasonably be expected to have a Material Adverse Effect or (B) any order,
injunction, writ or decree of any Governmental Authority or any arbitral award to which the
Borrower or its property is subject; or (iii) violate any material Law. No Subsidiary of
the Borrower is in violation of any Law or in breach of any

34

 

Contractual Obligation, the
violation of which could be reasonably likely to have a Material Adverse Effect.

     (c) No approval, consent, exemption, authorization, or other action by, or notice to,
or filing with, any Governmental Authority or any other Person is necessary or required in
connection with the execution, delivery or performance by, or enforcement against, any Loan
Party of this Agreement or any other Loan Document to which it is a party.

     (d) This Agreement has been, and each other Loan Document to which each Loan Party is a
party, when delivered hereunder, will have been, duly executed and delivered by such Loan
Party. This Agreement constitutes, and each other Loan Document when so delivered will
constitute, a legal, valid and binding obligation of each Loan Party party thereto,
enforceable against such Loan Party in accordance with its terms, subject in the case of
enforceability to the effects of bankruptcy and general principles of equity.

     (e) (i) The Audited Financial Statements (A) were prepared in accordance with GAAP
consistently applied throughout the period covered thereby, except as otherwise expressly
noted therein; (B) fairly present the consolidated financial condition of the Borrower as of
the date thereof and its consolidated results of operations for the period covered thereby
in accordance with GAAP consistently applied throughout the period covered thereby, except
as otherwise expressly noted therein; and (C) show all material indebtedness and other
liabilities, direct or contingent, of the Borrower and its Subsidiaries as of the date
thereof to the extent required by GAAP, including liabilities for taxes, material
commitments and Indebtedness to the extent required by GAAP.

     (ii) The Unaudited Financial Statements (A) were prepared in accordance with GAAP
consistently applied throughout the period covered thereby, except as otherwise expressly
noted therein, (B) fairly present the consolidated financial condition of the Borrower as of
the date thereof and its consolidated results of operations for the period covered thereby,
except as expressly noted therein, and subject, in the case of clauses (A) and (B), to
year-end audit adjustments, and (C) show all material indebtedness and other liabilities,
direct or contingent, of
the Borrower and its consolidated Subsidiaries as of the date thereof to the extent
required by GAAP, including liabilities for taxes, material commitments and Indebtedness to
the extent required by GAAP.

     (iii) Since the date of the Audited Financial Statements, there has been no event or
circumstance, either individually or in the aggregate, that has had or could reasonably be
expected to have a Material Adverse Effect.

     (f) There are no actions, suits, proceedings, claims or disputes pending or, to the
knowledge of the Borrower after due and diligent investigation, threatened or contemplated,
at law, in equity, in arbitration or before any Governmental Authority, by or against the
Borrower or any of its Subsidiaries or against any of their properties or revenues that (i)
except the Disclosed Litigation, either individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect and there has been no material adverse
development in any Disclosed Litigation or (ii) purports to affect the legality, validity or
enforceability of this Agreement or any other Loan Document or the consummation of the
transactions contemplated hereby.

     (g) Neither the Borrower nor any Subsidiary is in default under or with respect to any
Indebtedness or Guarantee that could, either individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. No Default has occurred and is continuing or
would

35

 

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

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

     (i) The properties of the Borrower and its Subsidiaries are insured with insurance
companies or with a captive insurance company that is an Affiliate of the Borrower as to
which the Agent may request reasonable evidence of financial responsibility, in such
amounts, with such deductibles and covering such risks as are customarily carried by
companies with similar financial capacity and engaged in similar businesses and owning
similar properties in localities where the Borrower or the applicable Subsidiary operates.

     (j) The Borrower and its Subsidiaries have filed all tax returns and reports required
to be filed, and have paid all taxes, assessments, fees and other governmental charges
levied or imposed upon them or their properties, income or assets otherwise due and payable,
except those which are being contested in good faith by appropriate proceedings diligently
conducted and for which adequate reserves have been provided in accordance with GAAP and
except for those tax returns, reports, taxes, assessments, fees and other governmental
charges, which in the aggregate, could not reasonably be expected to have a Material Adverse
Effect. The Borrower is not aware of any proposed tax assessment against the Borrower or
any Subsidiary that would, if made, have a Material Adverse Effect.

     (k) (i) Except as could not reasonably be expected to have a Material Adverse Effect,
each Plan is in compliance in all material respects with the applicable provisions of ERISA,
the Internal Revenue Code and other Federal or state Laws. Except as could not reasonably
be expected to have a Material Adverse Effect, no application for a funding waiver or an
extension
of any amortization period pursuant to Section 412 of the Internal Revenue Code has
been made with respect to any Plan.

     (ii) There are no pending or, to the best knowledge of the Borrower, threatened claims,
actions or lawsuits, or action by any Governmental Authority, with respect to any Plan that
could be reasonably be expected to have a Material Adverse Effect. There has been no
prohibited transaction or violation of the fiduciary responsibility rules with respect to
any Plan that has resulted or could reasonably be expected to result in a Material Adverse
Effect.

     (iii) Except as could not be reasonably expected to have a Material Adverse Effect, (A)
no ERISA Event has occurred or is reasonably expected to occur; (B) no Pension Plan has any
Unfunded Pension Liability; (C) neither the Borrower nor any ERISA Affiliate has incurred,
or reasonably expects to incur, any liability (and no event has occurred which, with the
giving of notice under Section 4219 of ERISA, would result in such liability) under Sections
4201 or 4243 of ERISA with respect to a Multiemployer Plan; and (D) neither the Borrower nor
any ERISA Affiliate has engaged in a transaction that could be subject to Sections 4069 or
4212(c) of ERISA.

     (l) (i) The Borrower is not engaged and will not engage, principally or as one of its
important activities, in the business of purchasing or carrying margin stock (within the
meaning of Regulation U issued by the FRB), or extending credit for the purpose of
purchasing or carrying

36

 

margin stock and no proceeds of any Advances or drawings under any
Letter of Credit will be used to purchase or carry any margin stock in violation of
Regulation U or to extend credit to others for the purpose of purchasing or carrying any
margin stock in violation of Regulation U.

     (ii) Neither the Borrower nor any of its Subsidiaries is a “registered investment
company” or a company “controlled” by a “registered investment company” or a “principal
underwriter” of a “registered investment company” as such terms are defined in the
Investment Company Act of 1940.

Neither the making of the Advances, nor the issuance of the Letters of Credit or the
application of the proceeds or repayment thereof by the Borrower, nor the consummation of
other transactions contemplated hereunder, will violate any provision of the Investment
Company Act of 1940 or any rule, regulation or order of the SEC.

     (m) At the initial Borrowing and any Increase Date, the Borrower has disclosed to the
Agent and the Lenders all agreements, instruments and corporate or other restrictions to
which it or any of its Subsidiaries is subject, and all other matters known to it, that,
individually or in the aggregate, could reasonably be expected to result in a Material
Adverse Effect. No report, financial statement, certificate or other information furnished
(whether in writing or orally) by or on behalf of the Borrower to the Agent or any Lender in
connection with the transactions contemplated hereby and the negotiation of this Agreement
or delivered hereunder (as modified or supplemented by other information so furnished)
contains any material misstatement of fact or omits to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they were made,
not materially misleading; provided that, with respect to projected financial information,
the Borrower represents only that such information was prepared in good faith based upon
assumptions believed to be reasonable at the time.

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

ARTICLE V

COVENANTS OF THE BORROWER

          SECTION 5.01. Affirmative Covenants. So long as any Advance shall remain unpaid, any
Letter of Credit is outstanding or any Lender shall have any Commitment hereunder, the Borrower
will:

     (a) Financial Statements. Deliver to the Agent (for further distribution to
each Lender):

     (i) as soon as available, but in any event within 100 days after the end of each fiscal
year of the Borrower (or within five days of such other time required by the SEC), a
consolidated balance sheet of the Borrower as at the end of such fiscal year, and the
related consolidated statements of income or operations, shareholders’ equity and cash flows
for such fiscal year, setting forth in each case in comparative form the figures for the
previous fiscal year, all in reasonable detail and prepared in accordance with GAAP, and
audited and accompanied by a

37

 

report and opinion of PricewaterhouseCoopers LLP or another
independent certified public accountant of nationally recognized standing reasonably
acceptable to the Agent, which report and opinion shall be prepared in accordance with
generally accepted auditing standards; and

     (ii) as soon as available, but in any event within 55 days after the end of each of the
first three fiscal quarters of each fiscal year of the Borrower, beginning with the quarter
ending March 31, 2008, a consolidated balance sheet of the Borrower as at the end of such
fiscal quarter, and the related consolidated statements of income or operations,
shareholders’ equity and cash flows for such fiscal quarter and for the portion of the
Borrower’s fiscal year then ended, setting forth in each case in comparative form the
figures for the corresponding fiscal quarter of the previous fiscal year and the
corresponding portion of the previous fiscal year, all in reasonable detail and certified by
a Responsible Officer of the Borrower as fairly presenting the financial condition, results
of operations, shareholders’ equity and cash flows of the Borrower and its Subsidiaries in
accordance with GAAP, subject only to year-end audit adjustments and the absence of
footnotes.

As to any information contained in materials furnished pursuant to Section 5.01(b), the
Borrower shall not be separately required to furnish such information under subsection (i)
or (ii) above, but the foregoing shall not be in derogation of the obligation of the
Borrower to furnish the information and materials described in subsections (i) and (ii)
above at the times specified therein.

     (b) Certificates; Other Information. Deliver to the Agent (for further
distribution to each Lender):

     (i) concurrently with the delivery of the financial statements referred to in Sections
5.01(a), a duly completed Compliance Certificate signed by a Responsible Officer of the
Borrower;

     (ii) promptly after the same are available, copies of each annual report, proxy or
financial statement or other material report or communication sent generally to the
stockholders of the Borrower, and copies of all annual, regular, periodic and special
reports and registration
statements which the Borrower may file or be required to file with the SEC under
Section 13 or 15(d) of the Securities Exchange Act of 1934, and not otherwise required to be
delivered to the Agent pursuant hereto; and

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

Documents required to be delivered pursuant to Sections 5.01(a) (to the extent any such
documents are included in materials otherwise filed with the SEC) may be delivered
electronically and if so delivered, shall be deemed to have been delivered on the date (A)
on which the Borrower posts such documents, or provides a link thereto on the Borrower’s
website on the Internet at the website address listed on Schedule 9.02; or (B) on which such
documents are posted on the Borrower’s behalf on Intralinks or a substantially similar
electronic system (the “Platform”); provided that: (x) the Borrower shall
deliver paper copies of such documents to the Agent or any Lender that requests the Borrower
to deliver such paper copies until a written request to cease delivering paper copies is
given by the Agent or such Lender and (y) the Borrower shall notify (which may be by
facsimile or electronic mail) the Agent and each Lender of the posting of any such documents
and provide to the Agent by electronic mail electronic

38

 

versions (i.e., soft copies) of such
documents in accordance with Section 9.02(b). Notwithstanding anything contained herein, in
every instance the Borrower shall be required to provide paper copies of the Compliance
Certificates required by Section 5.01(b)(i) to the Agent. Except for such Compliance
Certificates, the Agent shall have no obligation to request the delivery or to maintain
copies of the documents referred to above, and in any event shall have no responsibility to
monitor compliance by the Borrower with any such request for delivery, and each Lender shall
be solely responsible for requesting delivery to it or maintaining its copies of such
documents.

The Borrower hereby acknowledges that (a) the Agent and/or the Joint Lead Arrangers will
make available to the Lenders materials and/or information provided by or on behalf of the
Borrower hereunder (collectively, “Borrower Materials”) by posting the Borrower
Materials on the Platform and (b) certain of the Lenders may be “public-side” Lenders (i.e.,
Lenders that do not wish to receive material non-public information with respect to the
Borrower or its securities) (each, a “Public Lender”). The Borrower hereby agrees
that (w) all Borrower Materials that are to be made available to Public Lenders shall be
clearly and conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word
“PUBLIC” shall appear prominently on the first page thereof; (x) by marking Borrower
Materials “PUBLIC,” the Borrower shall be deemed to have authorized the Agent, the Joint
Lead Arrangers and the Lenders to treat such Borrower Materials as either publicly available
information or not material information (although it may be sensitive and proprietary) with
respect to the Borrower or its securities for purposes of United States Federal and state
securities laws; (y) all Borrower Materials marked “PUBLIC” are permitted to be made
available through a portion of the Platform designated “Public Investor;” and (z) the Agent
and the Joint Lead Arrangers shall be entitled to treat any Borrower Materials that are not
marked “PUBLIC” as being suitable only for posting on a portion of the Platform not
designated “Public Investor.”

     (c) Notices. Promptly, after knowledge thereof, notify the Agent and each
Lender:

     (i) of the occurrence of any Default;

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

     (iii) of any announcement by Moody’s or S&P of any change in the Public Debt Rating.

     (d) Payment of Obligations. Pay and discharge, and cause each Subsidiary to
pay and discharge, as the same shall become due and payable, all its obligations and
liabilities, including (i) all tax liabilities, assessments and governmental charges or
levies upon it or its properties or assets, unless the same are being contested in good
faith by appropriate proceedings diligently conducted and adequate reserves in accordance
with GAAP are being maintained by the Borrower or such Subsidiary; (ii) all lawful claims
which, if unpaid, would by law become a Lien upon its property; and (iii) all Indebtedness,
as and when due and payable, but subject to any subordination provisions contained in any
instrument or agreement evidencing such Indebtedness, except, in each case, to the extent
that the failure to discharge such obligations and liabilities,

39

 

either individually or in
the aggregate, could not reasonably be expected to have a Material Adverse Effect.

     (e) Preservation of Existence, Etc. (i) Preserve, renew and maintain, and
cause each Subsidiary to preserve, renew and maintain, in full force and effect its legal
existence and good standing under the Laws of the jurisdiction of its organization except in
a transaction permitted by Section 5.02(d) and except to the extent that failure to do so
could not reasonably be expected to have a Material Adverse Effect; (ii) take, and cause
each Subsidiary to take, all reasonable action to maintain all rights, privileges, permits,
licenses and franchises necessary or desirable in the normal conduct of its business, except
to the extent that failure to do so could not reasonably be expected to have a Material
Adverse Effect; and (iii) preserve or renew, and cause each Subsidiary to preserve or renew,
all of its registered patents, trademarks, trade names and service marks, except in a
transaction permitted by Section 5.02(d) and except to the extent that the nonpreservation
or non-renewal of such patents, trademarks, trade names and service marks could reasonably
be expected to have a Material Adverse Effect.

     (f) Maintenance of Insurance. Maintain, and cause each Subsidiary to maintain,
with insurance companies or with a captive insurance company that is an Affiliate of the
Borrower as to which the Agent may request reasonable evidence of financial responsibility,
insurance with respect to its properties in such amounts with such deductibles and covering
such risks as are customarily carried by companies with similar financial capacity and
engaged in similar businesses and owning similar properties in localities where the Borrower
or applicable Subsidiaries operates.

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

     (h) Books and Records. Maintain, and cause each Subsidiary to maintain, proper
books of record and account, in which entries in conformity with GAAP consistently applied
shall be made of all financial transactions and matters involving the assets and business of
the Borrower or such Subsidiary, as the case may be.

     (i) Inspection Rights. Permit, and cause each Subsidiary to permit,
representatives and independent contractors of the Agent and each Lender to visit and
inspect any of its properties, to examine its corporate, financial and operating records,
and make copies thereof or abstracts therefrom, and to discuss its affairs, finances and
accounts with its directors, officers, and independent public accountants, all at the
expense of the Borrower and at such reasonable times during normal business hours (but not
more frequently than two such inspections within a twelve month period) and upon reasonable
advance notice to the Borrower; provided, however, that when an Event of
Default exists the Agent or any Lender (or any of their respective representatives or
independent contractors) may do any of the foregoing at the expense of the Borrower at any
time during normal business hours and without advance notice.

     (j) Use of Proceeds. Use the proceeds of the Advances and Letters of Credit
(i) to consummate the Spin Transaction, (ii) to provide for working capital to the Borrower
and its Subsidiaries, (iii) to pay fees and expenses related to this Agreement, (iv) for
other general

40

 

corporate purposes not in contravention of any Law or of any Loan Document and
(v) to finance acquisitions in accordance with the terms of this Agreement.

     (k) Covenant to Guarantee Obligations. Upon the formation or acquisition of
any new direct or indirect Material Subsidiary organized under the laws of the United States
or a political subdivision thereof by the Borrower, then at the Borrower’s expense:

     (A) within 10 days after such formation or acquisition, cause each such
Subsidiary, and cause each direct and indirect parent (other than the Borrower) of
such Subsidiary (if it has not already done so), to duly execute and deliver to the
Agent a guaranty or guaranty supplement, in form and substance satisfactory to the
Agent, guaranteeing the Guaranteed Obligations, and

     (B) upon the request of the Agent in its sole discretion, deliver to the Agent
within 20 days after such request, a signed copy of a favorable opinion of counsel
for the Loan Parties acceptable to the Agent (addressed to the Agent and the
Lenders) as to (1) the matters contained in clause (A) above, (2) such guaranties
and guaranty supplements, being legal, valid and binding obligations of each Loan
Party party thereto enforceable in accordance with their terms and (3) such other
matters as the Agent may reasonably request.

          SECTION 5.02. Negative Covenants. So long as any Advance shall remain unpaid, any
Letter of Credit is outstanding or any Lender shall have any Commitment hereunder, the Borrower
will not:

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

     (i) Liens pursuant to any Loan Document;

     (ii) Liens existing on the date hereof (A) that do not exceed $1,000,000 or (B)
are listed on Schedule 5.02(a) and any renewals or extensions thereof;
provided that the property covered thereby is not increased and any renewal
or extension of the obligations secured or benefited thereby is permitted by Section
5.02(c)(ii);

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

     (iv) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other
like Liens arising in the ordinary course of business which are not overdue for a
period of more than 60 days or which are being contested in good faith and by
appropriate proceedings in the circumstances, if adequate reserves with respect
thereto are maintained on the books of the applicable Person to the extent required
in accordance with GAAP;

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

41

 

carriers under insurance or self-insurance arrangements in the ordinary course of
business;

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

     (vii) easements, rights-of-way, restrictions and other similar encumbrances
affecting real property existing or incurred in the ordinary course of business
which, in the aggregate, are not substantial in amount, and which do not in any case
materially detract from the value of the property of the Borrower and its
Subsidiaries taken as a whole or materially interfere with the ordinary conduct of
the business of the applicable Person;

     (viii) Liens securing Indebtedness permitted under Section 5.02(c)(iv);
provided that (A) such Liens do not at any time encumber any property other than the
property financed by such Indebtedness and (B) the Indebtedness secured thereby does
not exceed the cost or fair market value, whichever is lower, of the property being
acquired on the date of acquisition;

     (ix) Liens securing Indebtedness permitted under Section 5.02(c)(x);

     (x) statutory rights of set-off arising in the ordinary course of business;

     (xi) Liens existing on property at the time of acquisition thereof by the
Borrower or any Subsidiary and not created in contemplation thereof;

     (xii) Liens existing on property of a Subsidiary at the time such Subsidiary is
merged or consolidated with or into, or acquired by, the Borrower or any Subsidiary
or becomes a Subsidiary and not created in contemplation thereof;

     (xiii) Liens in favor of banks which arise under Article 4 of the Uniform
Commercial Code on items in collection and documents relating thereto and the
proceeds thereof; and

     (xv) Other Liens securing liabilities or assignments of rights to receive
income in an aggregate amount not to exceed $75,000,000 at any time outstanding.

     (b) Acquisitions. Enter into any agreement, contract, binding commitment or
other arrangement providing for the acquisition (in one or a series of transactions) of all
of the capital stock or equity interests or all or substantially all of the assets of any
Person, or permit any Subsidiary to do so, unless (i) immediately before and after giving
effect thereto, no Default shall have occurred and be continuing or would result therefrom
and (ii) if the aggregate amount invested (including assumed debt) is greater than
$250,000,000, pro forma consolidated historical financial statements of the Borrower and its
Subsidiaries as of the end of the most recent fiscal quarter for the four fiscal quarters
most recently ended giving effect to the acquisition of the company or business pursuant to
this Section 5.02(b) are delivered to the Agent not less than five Business Days prior to
the consummation of any such acquisition or series of acquisitions, together with a
Compliance Certificate of a Responsible Officer of the Borrower delivered to the

42

 

Lenders demonstrating pro forma compliance with Section 5.03 after giving effect to such acquisition
or series of acquisitions.

     (c) Indebtedness. Create, incur, assume or suffer to exist, or permit any
Subsidiary to create, incur, assume or suffer to exist, any Indebtedness, except:

     (i) Indebtedness under the Loan Documents;

     (ii) Indebtedness outstanding on the date hereof that (A) is less than
$2,000,000 individually or $15,000,000 in the aggregate or (B) is listed on Schedule
5.02(c) and any refinancings, refundings, renewals or extensions thereof; provided
that the amount of such Indebtedness is not increased at the time of such
refinancing, refunding, renewal or extension except by an amount equal to a
reasonable premium or other reasonable amount paid, and fees and expenses reasonably
incurred, in connection with such refinancing and by an amount equal to any existing
commitments unutilized thereunder;

     (iii) obligations (contingent or otherwise) of the Borrower existing or arising
under any Swap Contract; provided that such obligations are (or were) entered into
in the ordinary course of business, and not for purposes of speculation;

     (iv) Indebtedness in respect of capital leases and purchase money obligations
for fixed or capital assets; provided that the only property subject to such capital
leases and purchase money obligations is the property so acquired;

     (v) Indebtedness that may be deemed to exist pursuant to surety bonds, appeal
bonds, supersedeas bonds or similar obligations incurred in the ordinary course of
business;

     (vi) so long as no Default has occurred and is continuing or would result
therefrom at the time of incurrence, unsecured Indebtedness of the Borrower or any
Guarantor; provided that such Indebtedness is not senior in right of payment
to the payment of the Indebtedness arising under this Agreement and the Loan
Documents;

     (vii) Indebtedness of a Subsidiary of the Borrower to the Borrower or any of
the Borrower’s other Subsidiaries or Indebtedness of the Borrower to any Subsidiary
of the Borrower in connection with loans or advances; provided that each
item of intercompany debt shall be unsecured and such Indebtedness shall only be
permitted under this clause (vii) to the extent it will be eliminated for purposes
of the Consolidated financial statements of the Borrower in accordance with GAAP;

     (viii) Indebtedness arising as a result of the endorsement in the ordinary
course of business of negotiable instruments in the course of collection;

     (ix) Indebtedness incurred in connection with the acquisition of all or a
portion of Hill-Rom Company, Inc.’s interest in the real and personal property
described in the Farm Agreement; and

     (x) other Indebtedness (exclusive of Indebtedness permitted under subsections
(i) through (ix) above) in an aggregate principal amount not to exceed $100,000,000
at any time outstanding; provided that the aggregate principal amount of

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Indebtedness of Subsidiaries of the Borrower that may be Guaranteed by the
Borrower’s Subsidiaries shall not exceed $10,000,000 at any time.

     (d) Fundamental Changes. Merge, dissolve, liquidate, consolidate with or into
another Person, or Dispose of (whether in one transaction or in a series of transactions)
all or substantially all of its assets (whether now owned or hereafter acquired) to or in
favor of any Person (any such event being a “Fundamental Change”), or permit any
Subsidiary to do so, except that, so long as no Default exists or would result therefrom:

     (i) any Subsidiary may merge or consolidate with or into (A) the Borrower,
provided that the Borrower shall be the continuing or surviving Person, or (B) any
one or more other Subsidiaries, provided that when any wholly-owned
Subsidiary is merging with another Subsidiary, the wholly-owned Subsidiary shall be
the continuing or surviving Person;

     (ii) any Subsidiary may Dispose of all or substantially all of its assets (upon
voluntary liquidation or otherwise) to the Borrower or to another Subsidiary;
provided that if the transferor in such a transaction is a wholly-owned
Subsidiary, then the transferee must either be the Borrower or a wholly-owned
Subsidiary;

     (iii) the Borrower or any Subsidiary may merge with any Person in a transaction
that would be an acquisition that is permitted under this Agreement;
provided that (A) if the Borrower is a party to such merger, it shall be the
continuing or surviving Person, or (B) if any Subsidiary is a party to such merger,
such Subsidiary shall be the continuing or surviving Person; and

     (iv) any Subsidiary that is not a Guarantor may dispose of all or substantially
all of its assets.

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

     (i) each Subsidiary may make Restricted Payments to the Borrower and to other
Subsidiaries (and, in the case of a Restricted Payment by a non-wholly-owned
Subsidiary, such Restricted Payment may be made to each other owner of capital stock
or other equity interests of such Subsidiary on a pro rata basis based on their
relative ownership interests);

     (ii) the Borrower and each Subsidiary may declare and make dividend payments or
other distributions payable solely in the common stock or other common equity
interests of such Person;

     (iii) the Borrower and each Subsidiary may purchase, redeem or otherwise
acquire shares of its common stock or other common equity interests or warrants or
options to acquire any such shares with the proceeds received from the substantially
concurrent issue of new shares of its common stock or other common equity interests;
and

     (iv) the Borrower may declare and pay cash dividends to its stockholders and
purchase, redeem or otherwise acquire shares of its capital stock or warrants,
rights or

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options to acquire any such shares for cash; provided that immediately
after giving effect to such proposed action, no Event of Default would exist.

     (f) Change in Nature of Business. Enter, or permit any Subsidiary to enter,
into any business, if after giving effect thereto, the business of the Borrower and its
Subsidiaries, taken as a whole, would be substantially different from the business in which
the Borrower and its Subsidiaries, taken as a whole, is presently engaged.

     (g) Transactions with Affiliates. Enter, or permit any Subsidiary to enter,
into any transaction of any kind with any Affiliate of the Borrower, whether or not in the
ordinary course of business, other than on fair and reasonable terms substantially as
favorable to the Borrower or such Subsidiary as would be obtainable by the Borrower or such
Subsidiary at the time in a comparable arm’s length transaction with a Person other than an
Affiliate; provided that this Section 5.02(g) shall not prohibit the Spin
Transaction or any transaction permitted by Section 5.02(c)(vii); provided,
further, that this Section 5.02(g) shall not apply to reasonable compensation
(including amounts paid pursuant to Plans) and indemnification paid or made available to an
officer, director or employee of the Borrower or any of its Subsidiaries for services
rendered in that Person’s capacity as an officer, director or employee or the making of any
Restricted Payment otherwise permitted by this Agreement, in each case to the extent any
such payments are made in accordance with applicable Law. For purposes of this Section
5.02(g), Affiliate shall not include the Borrower or any wholly-owned Subsidiary of the
Borrower or, following the distribution of all of the shares of common stock of the Borrower
to the shareholders of Hillenbrand Industries, Inc., any of Hillenbrand Industries, Inc. or
any of its Subsidiaries.

     (h) Burdensome Agreements. Enter, or permit any Subsidiary to enter, into any
Contractual Obligation (other than this Agreement and any other Loan Document) that (i)
limits the ability (A) of any Subsidiary to make Restricted Payments to the Borrower or to
otherwise transfer property to the Borrower; provided, however, that this clause (A) shall
not prohibit (x) customary provisions restricting subletting or assignment of any leases of
the Borrower or any Subsidiary or provisions in agreements restricting the assignment of
such agreement or any rights thereunder or (y) any temporary encumbrance or restrictions
with respect to a Subsidiary under an agreement that has been entered into for the
disposition of all or substantially all of the equity
interests or assets of such Subsidiary, provided that such disposition is otherwise
permitted under this Agreement, (B) of any Subsidiary to Guarantee the Indebtedness of the
Borrower or (C) of the Borrower or any Subsidiary to create, incur, assume or suffer to
exist Liens on property of such Person; provided, however, that this clause
(C) shall not prohibit any negative pledge (x) granted in connection with the property or
interest described in the Farm Agreement, the Airport Access and Use Agreement or the Joint
Ownership Agreements or (y) incurred or provided in favor of any holder of Indebtedness
permitted under Section 5.02(c)(iv) solely to the extent any such negative pledge relates to
the property financed by or the subject of such Indebtedness and shall not prohibit the
grant of Liens otherwise permitted under Section 5.02(a); or (ii) requires the grant of a
Lien to secure an obligation of such Person if a Lien is granted to secure another
obligation of such Person; provided that this subsection (ii) shall not prohibit the
grant of Liens otherwise permitted under Section 5.02(a).

     (i) Use of Proceeds. Use the proceeds of any Advances or Letters of Credit,
whether directly or indirectly, and whether immediately, incidentally or ultimately, to
purchase or carry margin stock (within the meaning of Regulation U of the FRB) or to extend
credit to others for the purpose of purchasing or carrying margin stock or to refund
indebtedness originally incurred for such purpose, in each case, in violation of Regulation
U.

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          SECTION 5.03. Financial Covenants. So long as any Advance shall remain unpaid, any
Letter of Credit is outstanding or any Lender shall have any Commitment hereunder, the Borrower
will:

     (a) Debt to EBITDA Ratio. Maintain a ratio of Consolidated Indebtedness to
Consolidated EBITDA for the period of four fiscal quarters most recently ended of the
Borrower and its Subsidiaries of not greater than 3.5:1.0.

     For purposes of calculations under this Section 5.03(a), Consolidated Indebtedness
shall not include 75% of the principal amount of any mandatorily convertible unsecured bonds,
debentures, preferred stock or similar instruments in a principal amount not to exceed $500,000,000
in the aggregate during the term of this Agreement which are payable in no more than three years
(whether by redemption, call option or otherwise) solely in common stock or other common equity
interests.

     (b) Interest Coverage Ratio. Maintain a ratio of Consolidated EBITDA for the
period of four fiscal quarters most recently ended of the Borrower and its Subsidiaries to
interest payable on, and amortization of debt discount in respect of, all Indebtedness
during such period by the Borrower and its Subsidiaries of not less than 3.5:1.0.

ARTICLE VI

EVENTS OF DEFAULT

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

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

     (b) Any representation or warranty made by the Borrower herein or by the Borrower (or
any of its officers) in connection with this Agreement shall prove to have been incorrect in
any material respect when made; or

     (c) (i) The Borrower shall fail to perform or observe any term, covenant or agreement
contained in Section 5.01(c), (e) or (i), 5.02 or 5.03, or (ii) the Borrower shall fail to
perform or observe any other term, covenant or agreement contained in this Agreement on its
part to be performed or observed if such failure shall remain unremedied for 30 days after
written notice thereof shall have been given to the Borrower by the Agent or any Lender; or

     (d) The Borrower or any of its Subsidiaries shall fail to pay any principal of or
premium or interest on (i) any Indebtedness (other than Indebtedness with respect to Swap
Contracts) that is outstanding in a principal amount of at least $75,000,000 in the
aggregate (but excluding Indebtedness outstanding hereunder) or (ii) any Indebtedness with
respect to Swap Contracts with a Swap Termination Value of at least $75,000,000 in the
aggregate, of the Borrower or such Subsidiary (as the case may be), when the same becomes
due and payable (whether by scheduled maturity, required prepayment, acceleration, demand or
otherwise), and such failure shall continue after the applicable grace period, if any,
specified in the agreement or instrument relating to such Indebtedness; or any other event
shall occur or condition shall exist under any agreement or instrument relating to any such
Indebtedness and shall continue after the

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applicable grace period, if any, specified in such
agreement or instrument, if the effect of such event or condition is to accelerate, or to
permit the acceleration of, the maturity of such Indebtedness; or any such Indebtedness
shall be declared to be due and payable, or required to be prepaid or redeemed (other than
by a regularly scheduled required prepayment or redemption), purchased or defeased, or an
offer to prepay, redeem, purchase or defease such Indebtedness shall be required to be made,
in each case prior to the stated maturity thereof; or

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

     (f) Judgments or orders for the payment of money in excess of $75,000,000 in the
aggregate shall be rendered against the Borrower or any of its Subsidiaries and remain
undischarged and either (i) enforcement proceedings shall have been commenced by any
creditor upon such judgment or order or (ii) there shall be any period of 30 consecutive
days during which a stay of enforcement of such judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect; provided, however, that any
such judgment or order shall not be an Event of Default under this Section 6.01(f) if and
for so long as (i) the amount of such judgment or order is covered by a valid and binding
policy of insurance between the defendant and the insurer covering payment thereof and (ii)
such insurer, which shall be rated at least “A” by A.M. Best
Company, has been notified of, and has not disputed the claim made for payment of, the
amount of such judgment or order; or

     (g) a Change of Control shall occur; or

     (i) An ERISA Event occurs with respect to a Pension Plan or Multiemployer Plan which
has resulted or could reasonably be expected to result in liability of the Borrower under
Title IV of ERISA to the Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount
in excess of $75,000,000, or (ii) the Borrower or any ERISA Affiliate fails to pay when due,
after the expiration of any applicable grace period, any installment payment with respect to
its withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan in an
aggregate amount in excess of $75,000,000;

     (j) any provision of Article VII shall for any reason cease to be valid and binding on
or enforceable against any of the Guarantors, or any of the Guarantors shall so state in
writing;

then, and in any such event, the Agent (i) shall at the request, or may with the consent, of the
Required Lenders, by notice to the Borrower, declare the obligation of each Lender to make Advances
(other than Advances to be made by an Issuing Bank or a Lender pursuant to Section 2.03(c)) and of
the Issuing Banks to issue Letters of Credit to be terminated, whereupon the same shall forthwith
terminate, and

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(ii) shall at the request, or may with the consent, of the Required Lenders, by
notice to the Borrower, declare the Advances, all interest thereon and all other amounts payable
under this Agreement to be forthwith due and payable, whereupon the Advances, all such interest and
all such amounts shall become and be forthwith due and payable, without presentment, demand,
protest or further notice of any kind, all of which are hereby expressly waived by the Borrower;
provided, however, that in the event of an actual or deemed entry of an order for
relief with respect to the Borrower under the Federal Bankruptcy Code, (A) the obligation of each
Lender to make Advances (other than Advances to be made by an Issuing Bank or a Lender pursuant to
Section 2.03(c)) and of the Issuing Banks to issue Letters of Credit shall automatically be
terminated and (B) the Advances, all such interest and all such amounts shall automatically become
and be due and payable, without presentment, demand, protest or any notice of any kind, all of
which are hereby expressly waived by the Borrower.

          SECTION 6.02. Actions in Respect of the Letters of Credit upon Default. If any Event
of Default shall have occurred and be continuing, the Agent may with the consent, or shall at the
request, of the Required Lenders, irrespective of whether it is taking any of the actions described
in Section 6.01 or otherwise, make demand upon the Borrower to, and forthwith upon such demand the
Borrower will, (a) pay to the Agent on behalf of the Lenders in same day funds at the Agent’s
office designated in such demand, for deposit in the L/C Cash Deposit Account, an amount equal to
the aggregate Available Amount of all Letters of Credit then outstanding or (b) make such other
arrangements in respect of the outstanding Letters of Credit as shall be acceptable to the Required
Lenders and not more disadvantageous to the Borrower than clause (a); provided,
however, that in the event of an actual or deemed entry of an order for relief with respect
to the Borrower under the Federal Bankruptcy Code, an amount equal to the aggregate Available
Amount of all outstanding Letters of Credit shall be immediately due and payable to the Agent for
the account of the Lenders without notice to or demand upon the Borrower, which are expressly
waived by the Borrower, to be held in the L/C Cash Deposit Account. If at any time an Event of
Default is continuing the Agent determines that any funds held in the L/C Cash Deposit Account are
subject to any right or claim of any Person other than the Agent and the Lenders or that the total
amount of such funds is less than the aggregate Available Amount of all Letters of Credit, the
Borrower will, forthwith upon demand by the Agent, pay to the Agent, as additional funds to be
deposited and held in the L/C Cash Deposit Account, an amount equal to the excess of (a) such
aggregate
Available Amount over (b) the total amount of funds, if any, then held in the L/C Cash Deposit
Account that the Agent determines to be free and clear of any such right and claim. Upon the
drawing of any Letter of Credit, to the extent funds are on deposit in the L/C Cash Deposit
Account, such funds shall be applied to reimburse the Issuing Banks to the extent permitted by
applicable law. After all such Letters of Credit shall have expired or been fully drawn upon and
all other obligations of the Borrower hereunder and under the Notes shall have been paid in full,
the balance, if any, in such L/C Cash Deposit Account shall be returned to the Borrower.

ARTICLE VII

GUARANTY

          SECTION 7.01. Unconditional Guaranty; Limitation of Liability. (a) Each Guarantor,
jointly and severally, hereby absolutely, unconditionally and irrevocably guarantees the punctual
payment when due, whether at scheduled maturity or on any date of a required prepayment or by
acceleration, demand or otherwise, of all obligations of the Borrower now or hereafter existing
under or in respect of this Agreement and the other Loan Documents (including, without limitation,
any extensions, modifications, substitutions, amendments or renewals of any or all of the foregoing
obligations), whether direct or indirect, absolute or contingent, and whether for principal,
interest, premiums, fees, indemnities, contract causes of action, costs, expenses or otherwise
(such obligations being the “Guaranteed Obligations”), and agrees to pay any and all
expenses (including, without limitation, reasonable fees and

48

 

expenses of counsel) incurred by the
Agent or any Lender in enforcing any rights under this Agreement. Without limiting the generality
of the foregoing, each Guarantor’s liability shall extend to all amounts that constitute part of
the Guaranteed Obligations and would be owed by the Borrower to the Agent or any Lender under or in
respect of this Agreement and the other Loan Documents but for the fact that they are unenforceable
or not allowable due to the existence of a bankruptcy, reorganization or similar proceeding
involving the Borrower.

          (b) Each Guarantor, and by its acceptance of this Guaranty, the Agent and each other Lender,
hereby confirms that it is the intention of all such Persons that this Guaranty and the obligations
of each Guarantor hereunder not constitute a fraudulent transfer or conveyance for purposes of
Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any
similar foreign, federal or state law to the extent applicable to this Guaranty and the obligations
of each Guarantor hereunder. To effectuate the foregoing intention, the Agent, the other Lender
Parties and the Guarantors hereby irrevocably agree that the obligations of each Guarantor under
this Guaranty at any time shall be limited to the maximum amount as will result in the obligations
of such Guarantor under this Guaranty not constituting a fraudulent transfer or conveyance.

          (c) Each Guarantor hereby unconditionally and irrevocably agrees that in the event any payment
shall be required to be made to any Lender under this Guaranty or any other guaranty, such
Guarantor will contribute, to the maximum extent permitted by law, such amounts to each other
Guarantor and each other guarantor so as to maximize the aggregate amount paid to the Lenders under
or in respect of the Loan Documents.

          SECTION 7.02. Guaranty Absolute. Each Guarantor guarantees that the Guaranteed
Obligations will be paid strictly in accordance with the terms of the Loan Documents, regardless of
any law, regulation or order now or hereafter in effect in any jurisdiction affecting any of such
terms or the rights of the Agent or any Lender with respect thereto. The obligations of each
Guarantor under or in respect of this Guaranty are independent of the Guaranteed Obligations or any
other obligations of any other Loan Party under or in respect of the Loan Documents, and a separate
action or actions may be brought and prosecuted against each Guarantor to enforce this
Guaranty, irrespective of whether any action is brought against the Borrower or any other Loan
Party or whether the Borrower or any other Loan Party is joined in any such action or actions. The
liability of each Guarantor under this Guaranty shall be irrevocable, absolute and unconditional
irrespective of, and each Guarantor hereby irrevocably waives any defenses (other than payment in
full of the Guaranteed Obligations) it may now have or hereafter acquire in any way relating to,
any or all of the following:

     (a) any lack of validity or enforceability of any Loan Document or any agreement or
instrument relating thereto;

     (b) any change in the time, manner or place of payment of, or in any other term of, all
or any of the Guaranteed Obligations or any other obligations of any other Loan Party under
or in respect of the Loan Documents, or any other amendment or waiver of or any consent to
departure from any Loan Document, including, without limitation, any increase in the
Guaranteed Obligations resulting from the extension of additional credit to the Borrower or
any of its Subsidiaries or otherwise;

     (c) any taking, exchange, release or non-perfection of any collateral, or any taking,
release or amendment or waiver of, or consent to departure from, any other guaranty, for all
or any of the Guaranteed Obligations;

49

 

     (d) any manner of application of any collateral, or proceeds thereof, to all or any of
the Guaranteed Obligations, or any manner of sale or other disposition of any collateral for
all or any of the Guaranteed Obligations or any other obligations of any Loan Party under
the Loan Documents or any other assets of any Loan Party or any of its Subsidiaries;

     (e) any change, restructuring or termination of the corporate structure or existence of
any Loan Party or any of its Subsidiaries;

     (f) any failure of the Agent or any Lender to disclose to any Loan Party any
information relating to the business, condition (financial or otherwise), operations,
performance, properties or prospects of any other Loan Party now or hereafter known to the
Agent or such Lender (each Guarantor waiving any duty on the part of the Agent and the
Lenders to disclose such information);

     (g) the failure of any other Person to execute or deliver this Agreement, any Guaranty
Supplement or any other guaranty or agreement or the release or reduction of liability of
any Guarantor or other guarantor or surety with respect to the Guaranteed Obligations; or

     (h) any other circumstance (including, without limitation, any statute of limitations)
or any existence of or reliance on any representation by the Agent or any Lender that might
otherwise constitute a defense available to, or a discharge of, any Loan Party or any other
guarantor or surety.

This Guaranty shall continue to be effective or be reinstated, as the case may be, if at any time
any payment of any of the Guaranteed Obligations is rescinded or must otherwise be returned by the
Agent or any Lender or any other Person upon the insolvency, bankruptcy or reorganization of the
Borrower or any other Loan Party or otherwise, all as though such payment had not been made.

          SECTION 7.03. Waivers and Acknowledgments. (a) Each Guarantor hereby
unconditionally and irrevocably waives promptness, diligence, notice of acceptance, presentment,
demand for performance, notice of nonperformance, default,
acceleration, protest or dishonor and any other notice with respect to any of the Guaranteed
Obligations and this Guaranty and any requirement that the Agent or any Lender protect, secure,
perfect or insure any Lien or any property subject thereto or exhaust any right or take any action
against the Borrower or any other Person or any collateral.

     (b) Each Guarantor hereby unconditionally and irrevocably waives any right to revoke
this Guaranty and acknowledges that this Guaranty is continuing in nature and applies to all
Guaranteed Obligations, whether existing now or in the future.

     (c) Each Guarantor hereby unconditionally and irrevocably waives (i) any defense
arising by reason of any claim or defense based upon an election of remedies by the Agent or
any Lender that in any manner impairs, reduces, releases or otherwise adversely affects the
subrogation, reimbursement, exoneration, contribution or indemnification rights of the
Borrower or other rights of the Borrower to proceed against any of the other Loan Parties,
any other guarantor or any other Person or any collateral and (ii) any defense based on any
right of set-off or counterclaim against or in respect of the obligations of such Guarantor
hereunder.

     (d) Each Guarantor hereby unconditionally and irrevocably waives any duty on the part
of the Agent or any Lender to disclose to such Guarantor any matter, fact or thing relating
to the business, condition (financial or otherwise), operations, performance, properties or

50

 

prospects of the Borrower or any of its Subsidiaries now or hereafter known by the Agent or
such Lender.

     (e) Each Guarantor acknowledges that it will receive substantial direct and indirect
benefits from the financing arrangements contemplated by this Agreement and the other Loan
Documents and that the waivers set forth in Section 7.02 and this Section 7.03 are knowingly
made in contemplation of such benefits.

          SECTION 7.04. Subrogation. Each Guarantor hereby unconditionally and irrevocably
agrees not to exercise any rights that it may now have or hereafter acquire against the Borrower,
any other Loan Party or any other insider guarantor that arise from the existence, payment,
performance or enforcement of such Guarantor’s obligations under or in respect of this Guaranty,
including, without limitation, any right of subrogation, reimbursement, exoneration, contribution
or indemnification and any right to participate in any claim or remedy of the Agent or any Lender
against the Borrower, any other Loan Party or any other insider guarantor or any collateral,
whether or not such claim, remedy or right arises in equity or under contract, statute or common
law, including, without limitation, the right to take or receive from the Borrower, any other Loan
Party or any other insider guarantor, directly or indirectly, in cash or other property or by
set-off or in any other manner, payment or security on account of such claim, remedy or right,
unless and until all of the Guaranteed Obligations and all other amounts payable under this
Guaranty shall have been paid in full in cash, all Letters of Credit shall have expired or been
terminated and the Commitments shall have expired or been terminated. If any amount shall be paid
to any Guarantor in violation of the immediately preceding sentence at any time prior to the latest
of (a) the payment in full in cash of the Guaranteed Obligations and all other amounts payable
under this Guaranty, (b) the final Termination Date and (c) the latest date of expiration or
termination of all Letters of Credit, such amount shall be received and held in trust for the
benefit of the Agent and the Lenders, shall be segregated from other property and funds of such
Guarantor and shall forthwith be paid or delivered to the Agent in the same form as so received
(with any necessary endorsement or assignment) to be credited and applied to the Guaranteed
Obligations and all other amounts payable under this Guaranty, whether matured or unmatured, in
accordance with the terms of this Agreement and the other Loan Documents, or to be held as
collateral for any Guaranteed
Obligations or other amounts payable under this Guaranty thereafter arising. If (i) any
Guarantor shall make payment to the Agent or any Lender of all or any part of the Guaranteed
Obligations, (ii) all of the Guaranteed Obligations and all other amounts payable under this
Guaranty shall have been paid in full in cash, (iii) the final Termination Date shall have occurred
and (iv) all Letters of Credit shall have expired or been terminated, the Agent and the Lenders
will, at such Guarantor’s request and expense, execute and deliver to such Guarantor appropriate
documents, without recourse and without representation or warranty, necessary to evidence the
transfer by subrogation to such Guarantor of an interest in the Guaranteed Obligations resulting
from such payment made by such Guarantor pursuant to this Guaranty.

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          SECTION 7.05. Guaranty Supplements. Upon the execution and delivery by any Person
of a guaranty supplement in substantially the form of Exhibit F hereto (each, a “Guaranty
Supplement”), (a) such Person shall be referred to as an “Additional Guarantor” and
shall become and be a Guarantor hereunder, and each reference in this Guaranty to a “Guarantor”
shall also mean and be a reference to such Additional Guarantor, and each reference in any other
Loan Document to a “Guarantor” shall also mean and be a reference to such Additional Guarantor,
and (b) each reference herein to “this Guaranty,” “hereunder,” “hereof” or words of like import
referring to this Guaranty, and each reference in any other Loan Document to the “Guaranty,”
“thereunder,” “thereof” or words of like import referring to this Guaranty, shall mean and be a
reference to this Guaranty as supplemented by such Guaranty Supplement.

          SECTION 7.06. Subordination. Each Guarantor hereby subordinates any and all debts,
liabilities and other obligations owed to such Guarantor by each other Loan Party (the
“Subordinated Obligations”) to the Guaranteed Obligations to the extent and in the manner
hereinafter set forth in this Section 7.06:

     (a) Prohibited Payments, Etc. Except during the continuance of an Event of
Default (including the commencement and continuation of any proceeding under any Bankruptcy
Law relating to the Borrower), each Guarantor may receive payments from the Borrower on
account of the Subordinated Obligations. After the occurrence and during the continuance of
any Event of Default (including the commencement and continuation of any proceeding under
any Bankruptcy Law relating to the Borrower), however, unless the Required Lenders otherwise
agree, no Guarantor shall demand, accept or take any action to collect any payment on
account of the Subordinated Obligations.

     (b) Prior Payment of Guaranteed Obligations. In any proceeding under any
Bankruptcy Law relating to any other Loan Party, each Guarantor agrees that the Agent and
the Lenders shall be entitled to receive payment in full in cash of all Guaranteed
Obligations (including all interest and expenses accruing after the commencement of a
proceeding under any Bankruptcy Law, whether or not constituting an allowed claim in such
proceeding (“Post Petition Interest”)) before such Guarantor receives payment of any
Subordinated Obligations.

     (c) Turn-Over. After the occurrence and during the continuance of any Event of
Default (including the commencement and continuation of any proceeding under any Bankruptcy
Law relating to the Borrower), each Guarantor shall, if the Agent so requests, collect,
enforce and receive payments on account of the Subordinated Obligations as trustee for the
Agent and the Lenders and deliver such payments to the Agent on account of the Guaranteed
Obligations (including all Post Petition Interest), together with any necessary endorsements
or other instruments of transfer, but without reducing or affecting in any manner the
liability of such Guarantor under the other provisions of this Guaranty.

     (d) Agent Authorization. After the occurrence and during the continuance of
any Event of Default (including the commencement and continuation of any proceeding under
any Bankruptcy Law relating to the Borrower), the Agent is authorized and empowered (but
without any obligation to so do), in its discretion, (i) in the name of each Guarantor, to
collect and enforce, and to submit claims in respect of, Subordinated Obligations and to
apply any amounts received thereon to the Guaranteed Obligations (including any and all Post
Petition Interest), and (ii) to require each Guarantor (A) to collect and enforce, and to
submit claims in respect of, Subordinated Obligations and (B) to pay any amounts received on
such obligations to the Agent for application to the Guaranteed Obligations (including any
and all Post Petition Interest).

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          SECTION 7.07. Continuing Guaranty; Assignments. This Guaranty is a continuing
guaranty and shall (a) remain in full force and effect until the latest of (i) the payment in full
in cash of the Guaranteed Obligations and all other amounts payable under this Guaranty, (ii) the
final Termination Date and (iii) the latest date of expiration or termination of all Letters of
Credit, (b) be binding upon each Guarantor, its successors and assigns and (c) inure to the benefit
of and be enforceable by the Agent and the Lenders and their successors, transferees and assigns.
Without limiting the generality of clause (c) of the immediately preceding sentence, the Agent or
any Lender may assign or otherwise transfer all or any portion of its rights and obligations under
this Agreement (including, without limitation, all or any portion of its Commitments, the Advances
owing to it and the Note or Notes held by it) to any other Person, and such other Person shall
thereupon become vested with all the benefits in respect thereof granted to the Agent or such
Lender herein or otherwise, in each case as and to the extent provided in Section 9.07.

ARTICLE VIII

THE AGENT

          SECTION 8.01. Authorization and Authority. Each Lender hereby irrevocably appoints
Citibank, N.A. to act on its behalf as the Agent hereunder and under the other Loan Documents and
authorizes the Agent to take such actions on its behalf and to exercise such powers as are
delegated to the Agent by the terms hereof or thereof, together with such actions and powers as are
reasonably incidental thereto. The provisions of this Article are solely for the benefit of the
Agent and the Lenders, and neither the Borrower nor any other Loan Party shall have rights as a
third party beneficiary of any of such provisions.

          SECTION 8.02. Agent Individually. (a) The Person serving as the Agent hereunder
shall have the same rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Agent and the term “Lender” or “Lenders” shall, unless
otherwise expressly indicated or unless the context otherwise requires, include the Person serving
as the Agent hereunder in its individual capacity. Such Person and its Affiliates may accept
deposits from, lend money to, act as the financial advisor or in any other advisory capacity for
and generally engage in any kind of business with the Borrower or any Subsidiary or other Affiliate
thereof as if such Person were not the Agent hereunder and without any duty to account therefor to
the Lenders.

          (b) Each Lender understands that the Person serving as Agent, acting in its individual
capacity, and its Affiliates (collectively, the “Agent’s Group”) are engaged in a wide
range of financial services and businesses (including investment management, financing, securities
trading, corporate and investment banking and research) (such services and businesses are
collectively referred to in this Section 8.02 as “Activities”) and may engage in the
Activities with or on behalf of one or more of the Loan Parties or their respective Affiliates.
Furthermore, the Agent’s Group may, in undertaking the
Activities, engage in trading in financial products or undertake other investment businesses
for its own account or on behalf of others (including the Loan Parties and their Affiliates and
including holding, for its own account or on behalf of others, equity, debt and similar positions
in the Borrower, another Loan Party or their respective Affiliates), including trading in or
holding long, short or derivative positions in securities, loans or other financial products of one
or more of the Loan Parties or their Affiliates. Each Lender understands and agrees that in
engaging in the Activities, the Agent’s Group may receive or otherwise obtain information
concerning the Loan Parties or their Affiliates (including information concerning the ability of
the Loan Parties to perform their respective obligations hereunder and under the other Loan
Documents) which information may not be available to any of the Lenders that are not members of the
Agent’s Group. None of the Agent nor any member of the Agent’s Group shall have any duty to
disclose to any Lender or use on behalf of the Lenders, and shall not be liable for the failure to
so disclose or use, any information whatsoever about or derived from the Activities or otherwise
(including

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any information concerning the business, prospects, operations, property, financial and
other condition or creditworthiness of any Loan Party or any Affiliate thereof) or to account for
any revenue or profits obtained in connection with the Activities, except that the Agent shall
deliver or otherwise make available to each Lender such documents as are expressly required by any
Loan Document to be transmitted by the Agent to the Lenders.

          (c) Each Lender further understands that there may be situations where members of the Agent’s
Group or their respective customers (including the Loan Parties and their Affiliates) either now
have or may in the future have interests or take actions that may conflict with the interests of
any one or more of the Lenders (including the interests of the Lenders hereunder and under the
other Loan Documents). Each Lender agrees that no member of the Agent’s Group is or shall be
required to restrict its activities as a result of the Person serving as Agent being a member of
the Agent’s Group, and that each member of the Agent’s Group may undertake any Activities without
further consultation with or notification to any Lender. None of (i) this Agreement nor any other
Loan Document, (ii) the receipt by the Agent’s Group of information (including Information)
concerning the Loan Parties or their Affiliates (including information concerning the ability of
the Loan Parties to perform their respective obligations hereunder and under the other Loan
Documents) nor (iii) any other matter shall give rise to any fiduciary, equitable or contractual
duties (including without limitation any duty of trust or confidence) owing by the Agent or any
member of the Agent’s Group to any Lender including any such duty that would prevent or restrict
the Agent’s Group from acting on behalf of customers (including the Loan Parties or their
Affiliates) or for its own account.

          SECTION 8.03. Duties of Agent; Exculpatory Provisions. (a) The Agent’s duties
hereunder and under the other Loan Documents are solely ministerial and administrative in nature
and the Agent shall not have any duties or obligations except those expressly set forth herein and
in the other Loan Documents. Without limiting the generality of the foregoing, the Agent shall not
have any duty to take any discretionary action or exercise any discretionary powers, but shall be
required to act or refrain from acting (and shall be fully protected in so acting or refraining
from acting) upon the written direction of the Required Lenders (or such other number or percentage
of the Lenders as shall be expressly provided for herein or in the other Loan Documents),
provided that the Agent shall not be required to take any action that, in its opinion or
the opinion of its counsel, may expose the Agent or any of its Affiliates to liability or that is
contrary to any Loan Document or applicable law.

          (b) The Agent shall not be liable for any action taken or not taken by it (i) with the consent
or at the request of the Required Lenders (or such other number or percentage of the Lenders as
shall be necessary, or as the Agent shall believe in good faith shall be necessary, under the
circumstances as provided in Sections 9.01 or 6.01) or (ii) in the absence of its own gross
negligence or willful misconduct. The Agent shall be deemed not to have knowledge of any Default
or the event or events that
give or may give rise to any Default unless and until the Borrower or any Lender shall have
given notice to the Agent describing such Default and such event or events.

          (c) Neither the Agent nor any member of the Agent’s Group shall be responsible for or have any
duty to ascertain or inquire into (i) any statement, warranty, representation or other information
made or supplied in or in connection with this Agreement, any other Loan Document or the
Information Memorandum, (ii) the contents of any certificate, report or other document delivered
hereunder or thereunder or in connection herewith or therewith or the adequacy, accuracy and/or
completeness of the information contained therein, (iii) the performance or observance of any of
the covenants, agreements or other terms or conditions set forth herein or therein or the
occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this
Agreement, any other Loan Document or any other agreement, instrument or document or the perfection
or priority of any Lien or security interest created or purported to be created hereby or (v) the
satisfaction of any condition set forth

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in Article III or elsewhere herein, other than (but subject
to the foregoing clause (ii)) to confirm receipt of items expressly required to be delivered to the
Agent.

          (d) Nothing in this Agreement or any other Loan Document shall require the Agent or any of its
Related Parties to carry out any “know your customer” or other checks in relation to any person on
behalf of any Lender and each Lender confirms to the Agent that it is solely responsible for any
such checks it is required to carry out and that it may not rely on any statement in relation to
such checks made by the Agent or any of its Related Parties.

          SECTION 8.04. Reliance by Agent. The Agent shall be entitled to rely upon, and shall
not incur any liability for relying upon, any notice, request, certificate, consent, statement,
instrument, document or other writing (including any electronic message, Internet or intranet
website posting or other distribution) believed by it to be genuine and to have been signed, sent
or otherwise authenticated by the proper Person. The Agent also may rely upon any statement made
to it orally or by telephone and believed by it to have been made by the proper Person, and shall
not incur any liability for relying thereon. In determining compliance with any condition
hereunder to the making of an Advance, or the issuance of a Letter of Credit, that by its terms
must be fulfilled to the satisfaction of a Lender, the Agent may presume that such condition is
satisfactory to such Lender unless an officer of the Agent responsible for the transactions
contemplated hereby shall have received notice to the contrary from such Lender prior to the making
of such Advance or the issuance of such Letter of Credit, and in the case of a Borrowing, such
Lender shall not have made available to the Agent such Lender’s ratable portion of such Borrowing.
The Agent may consult with legal counsel (who may be counsel for the Borrower or any other Loan
Party), independent accountants and other experts selected by it, and shall not be liable for any
action taken or not taken by it in accordance with the advice of any such counsel, accountants or
experts.

          SECTION 8.05. Delegation of Duties. The Agent may perform any and all of its duties
and exercise its rights and powers hereunder or under any other Loan Document by or through any one
or more sub-agents appointed by the Agent. The Agent and any such sub-agent may perform any and
all of its duties and exercise its rights and powers by or through their respective Related
Parties. Each such sub-agent and the Related Parties of the Agent and each such sub-agent shall be
entitled to the benefits of all provisions of this Article VIII and Section 9.04 (as though such
sub-agents were the “Agent” under the Loan Documents) as if set forth in full herein with respect
thereto.

          SECTION 8.06. Resignation of Agent. (a) The Agent may at any time give notice of its
resignation to the Lenders and the Borrower. Upon receipt of any such notice of resignation, the
Required Lenders shall have the right, in consultation with
the Borrower, to appoint a successor, which shall be a bank with an office in New York, New
York, or an Affiliate of any such bank with an office in New York, New York. If no such successor
shall have been so appointed by the Required Lenders and shall have accepted such appointment
within 30 days after the retiring Agent gives notice of its resignation (such 30-day period, the
“Lender Appointment Period”), then the retiring Agent may on behalf of the Lenders, appoint
a successor Agent meeting the qualifications set forth above. In addition and without any
obligation on the part of the retiring Agent to appoint, on behalf of the Lenders, a successor
Agent, the retiring Agent may at any time upon or after the end of the Lender Appointment Period
notify the Borrower and the Lenders that no qualifying Person has accepted appointment as successor
Agent and the effective date of such retiring Agent’s resignation which effective date shall be no
earlier than three business days after the date of such notice. Upon the resignation effective
date established in such notice and regardless of whether a successor Agent has been appointed and
accepted such appointment, the retiring Agent’s resignation shall nonetheless become effective and
(i) the retiring Agent shall be discharged from its duties and obligations as Agent hereunder and
under the other Loan Documents and (ii) all payments, communications and determinations provided to
be made by, to or through the Agent shall instead be made by or to each Lender directly, until such
time as the Required

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Lenders appoint a successor Agent as provided for above in this paragraph.
Upon the acceptance of a successor’s appointment as Agent hereunder, such successor shall succeed
to and become vested with all of the rights, powers, privileges and duties as Agent of the retiring
(or retired) Agent, and the retiring Agent shall be discharged from all of its duties and
obligations as Agent hereunder or under the other Loan Documents (if not already discharged
therefrom as provided above in this paragraph). The fees payable by the Borrower to a successor
Agent shall be the same as those payable to its predecessor unless otherwise agreed between the
Borrower and such successor. After the retiring Agent’s resignation hereunder and under the other
Loan Documents, the provisions of this Article and Section 9.04 shall continue in effect for the
benefit of such retiring Agent, its sub-agents and their respective Related Parties in respect of
any actions taken or omitted to be taken by any of them while the retiring Agent was acting as
Agent.

          (b) Any resignation pursuant to this Section by a Person acting as Agent shall, unless such
Person shall notify the Borrower and the Lenders otherwise, also act to relieve such Person and its
Affiliates of any obligation to advance or issue new, or extend existing, Letters of Credit where
such advance, issuance or extension is to occur on or after the effective date of such resignation.
Upon the acceptance of a successor’s appointment as Agent hereunder, (i) such successor shall
succeed to and become vested with all of the rights, powers, privileges and duties of the retiring
Issuing Bank, (ii) the retiring Issuing Bank shall be discharged from all of their respective
duties and obligations hereunder or under the other Loan Documents and (iii) the successor Issuing
Bank shall issue letters of credit in substitution for the Letters of Credit, if any, outstanding
at the time of such succession or make other arrangement satisfactory to the retiring Issuing Bank
to effectively assume the obligations of the retiring Issuing Bank with respect to such Letters of
Credit.

          SECTION 8.07. Non-Reliance on Agent and Other Lenders. (a) Each Lender confirms to
the Agent, each other Lender and each of their respective Related Parties that it (i) possesses
(individually or through its Related Parties) such knowledge and experience in financial and
business matters that it is capable, without reliance on the Agent, any other Lender or any of
their respective Related Parties, of evaluating the merits and risks (including tax, legal,
regulatory, credit, accounting and other financial matters) of (x) entering into this Agreement,
(y) making Advances and other extensions of credit hereunder and under the other Loan Documents and
(z) in taking or not taking actions hereunder and thereunder, (ii) is financially able to bear such
risks and (iii) has determined that entering into this Agreement and making Advances and other
extensions of credit hereunder and under the other Loan Documents is suitable and appropriate for
it.

          (b) Each Lender acknowledges that (i) it is solely responsible for making its own independent
appraisal and investigation of all risks arising under or in connection with this Agreement and the
other Loan Documents, (ii) that it has, independently and without reliance upon the Agent, any
other Lender or any of their respective Related Parties, made its own appraisal and investigation
of all risks associated with, and its own credit analysis and decision to enter into, this
Agreement based on such documents and information, as it has deemed appropriate and (iii) it will,
independently and without reliance upon the Agent, any other Lender or any of their respective
Related Parties, continue to be solely responsible for making its own appraisal and investigation
of all risks arising under or in connection with, and its own credit analysis and decision to take
or not take action under, this Agreement and the other Loan Documents based on such documents and
information as it shall from time to time deem appropriate, which may include, in each case:

     (i) the financial condition, status and capitalization of the Borrower and each other
Loan Party;

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     (ii) the legality, validity, effectiveness, adequacy or enforceability of this
Agreement and each other Loan Document and any other agreement, arrangement or document
entered into, made or executed in anticipation of, under or in connection with any Loan
Document;

     (iii) determining compliance or non-compliance with any condition hereunder to the
making of an Advance, or the issuance of a Letter of Credit and the form and substance of
all evidence delivered in connection with establishing the satisfaction of each such
condition;

     (iv) the adequacy, accuracy and/or completeness of the Information Memorandum and any
other information delivered by the Agent, any other Lender or by any of their respective
Related Parties under or in connection with this Agreement or any other Loan Document, the
transactions contemplated hereby and thereby or any other agreement, arrangement or document
entered into, made or executed in anticipation of, under or in connection with any Loan
Document.

          SECTION 8.08. No Other Duties, etc. Anything herein to the contrary notwithstanding,
none of the Persons acting as Bookrunners, Arrangers or Syndication Agent listed on the cover page
hereof shall have any powers, duties or responsibilities under this Agreement or any of the other
Loan Documents, except in its capacity, as applicable, as the Agent or as a Lender hereunder.

ARTICLE IX

MISCELLANEOUS

          SECTION 9.01. Amendments, Etc. No amendment or waiver of any provision of this
Agreement or the Notes, nor consent to any departure by any Loan Party therefrom, shall in any
event be effective unless the same shall be in writing and signed by the Required Lenders, and then
such waiver or consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no amendment, waiver or consent
shall, unless in writing and signed by all the Lenders, do any of the following: (a) waive any of
the conditions specified in Section 3.01, (b) increase the Commitments of the Lenders other than in
accordance with Section 2.18, (c) reduce the principal of, or interest on, the Advances or any fees
or other amounts payable hereunder, (d) postpone any date fixed for any payment of principal of, or
interest on, the Advances or any fees or other amounts payable hereunder other than in accordance
with Section 2.19, (e) change the percentage of the Commitments or of the aggregate unpaid
principal amount of the
Advances, or the number of Lenders, that shall be required for the Lenders or any of them to
take any action hereunder, (f) release any Guarantor from any of its obligations under Article VII
or (g) amend this Section 9.01; and provided further that (x) no amendment, waiver
or consent shall, unless in writing and signed by the Agent in addition to the Lenders required
above to take such action, affect the rights or duties of the Agent under this Agreement or any
other Loan Document and (y) no amendment, waiver or consent shall, unless in writing and signed by
the Issuing Banks in addition to the Lenders required above to take such action, adversely affect
the rights or obligations of the Issuing Banks in their capacities as such under this Agreement.

          SECTION 9.02. Notices, Etc. (a) All notices and other communications provided for
hereunder shall be either (x) in writing (including telecopier communication) and mailed,
telecopied or delivered or (y) as and to the extent set forth in Section 9.02(b) and in the proviso
to this Section 9.02(a), if to the Borrower or any other Loan Party, at the Borrower’s address at
1069 State Route 46 East, Batesville, Indiana 47006; Attention: Corporate Treasurer; Telephone:
(812) 934-7777; Facsimile: (812) 934-1963; if to any Initial Lender, at its Domestic Lending
Office specified opposite its name on Schedule I hereto; if to any other Lender, at its Domestic
Lending Office specified in the Assumption Agreement or the Assignment and Acceptance pursuant to
which it became a Lender; and if to the Agent,

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at its address at Two Penns Way, New Castle, 19720,
Attention: Bank Loan Syndications Department; or, as to the Borrower or the Agent, at such other
address as shall be designated by such party in a written notice to the other parties and, as to
each other party, at such other address as shall be designated by such party in a written notice to
the Borrower and the Agent, provided that materials required to be delivered pursuant to
Sections 5.01(a) or 5.01(b)(ii) shall be delivered to the Agent as specified in Section 9.02(b) or
as otherwise specified to the Borrower by the Agent. All such notices and communications shall,
when mailed, telecopied or e-mailed, be effective when deposited in the mails, telecopied or
confirmed by e-mail, respectively, except that notices and communications to the Agent pursuant to
Article II, III or VIII shall not be effective until received by the Agent. Delivery by telecopier
of an executed counterpart of any amendment or waiver of any provision of this Agreement or the
Notes or of any Exhibit hereto to be executed and delivered hereunder shall be effective as
delivery of a manually executed counterpart thereof.

          (b) So long as Citibank or any of its Affiliates is the Agent, materials required to be
delivered pursuant to Sections 5.01(a) or 5.01(b)(ii) shall be delivered to the Agent in an
electronic medium in a format acceptable to the Agent and the Lenders by e-mail at
oploanswebadmin@citigroup.com. The Borrower agrees that the Agent may make such materials, as well
as any other written information, documents, instruments and other material relating to the
Borrower, any of its Subsidiaries or any other materials or matters relating to this Agreement, the
Notes or any of the transactions contemplated hereby (collectively, the “Communications”)
available to the Lenders by posting such notices on the Platform. The Borrower acknowledges that
(i) the distribution of material through an electronic medium is not necessarily secure and that
there are confidentiality and other risks associated with such distribution, (ii) the Platform is
provided “as is” and “as available” and (iii) neither the Agent nor any of its Affiliates warrants
the accuracy, adequacy or completeness of the Communications or the Platform and each expressly
disclaims liability for errors or omissions in the Communications or the Platform. No warranty of
any kind, express, implied or statutory, including, without limitation, any warranty of
merchantability, fitness for a particular purpose, non-infringement of third party rights or
freedom from viruses or other code defects, is made by the Agent or any of its Affiliates in
connection with the Platform.

          SECTION 9.03. No Waiver; Remedies. No failure on the part of any Lender or the Agent
to exercise, and no delay in exercising, any right hereunder or under any Note shall operate as a
waiver thereof; nor shall any single or partial
exercise of any such right preclude any other or further exercise thereof or the exercise of
any other right. The remedies herein provided are cumulative and not exclusive of any remedies
provided by law.

          SECTION 9.04. Costs and Expenses. (a) The Borrower agrees to pay on demand all
reasonable costs and expenses of the Agent in connection with the preparation, execution, delivery,
administration, modification and amendment of this Agreement, the Notes and the other documents to
be delivered hereunder, including, without limitation, (A) all due diligence, syndication
(including printing, distribution and bank meetings), transportation, computer, duplication,
appraisal, consultant, and, subject to Section 5.01(i), audit expenses, (B) the reasonable fees and
expenses of counsel for the Agent with respect thereto and with respect to advising the Agent as to
its rights and responsibilities under this Agreement and (C) all reasonable out-of-pocket expenses
incurred by any Issuing Bank in connection with the issuance, amendment, renewal or extension of
any Letter of Credit or any demand for payment thereunder. The Borrower further agrees to pay on
demand all costs and expenses of the Agent and the Lenders, if any (including, without limitation,
reasonable counsel fees and expenses), in connection with the enforcement (whether through
negotiations, legal proceedings or otherwise) of this Agreement, the Notes and the other documents
to be delivered hereunder, including, without limitation, reasonable fees and expenses of counsel
for the Agent and each Lender in connection with the enforcement of rights under this Section
9.04(a).

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          (b) The Borrower agrees to indemnify and hold harmless the Agent and each Lender and each of
their Affiliates and their officers, directors, employees, agents and advisors (each, an
“Indemnified Party”) from and against any and all claims, damages, losses, liabilities and
expenses (including, without limitation, reasonable fees and expenses of counsel) incurred by or
asserted or awarded against any Indemnified Party, in each case arising out of or in connection
with or by reason of (including, without limitation, in connection with any investigation,
litigation or proceeding or preparation of a defense in connection therewith) (i) the Notes, this
Agreement, any of the transactions contemplated herein or the actual or proposed use of the
proceeds of the Advances or Letters of Credit or (ii) the actual or alleged presence of Hazardous
Materials on any property of the Borrower or any of its Subsidiaries or any Environmental Action
relating in any way to the Borrower or any of its Subsidiaries, except to the extent such claim,
damage, loss, liability or expense is found in a final, non-appealable judgment by a court of
competent jurisdiction to have resulted from such Indemnified Party’s gross negligence or willful
misconduct. In the case of an investigation, litigation or other proceeding to which the indemnity
in this Section 9.04(b) applies, such indemnity shall be effective whether or not such
investigation, litigation or proceeding is brought by the Borrower, its directors, equityholders or
creditors or an Indemnified Party or any other Person, whether or not any Indemnified Party is
otherwise a party thereto and whether or not the transactions contemplated hereby are consummated.
The Borrower also agrees not to assert any claim for special, indirect, consequential or punitive
damages against the Agent, any Lender, any of their Affiliates, or any of their respective
directors, officers, employees, attorneys and agents, on any theory of liability, arising out of or
otherwise relating to the Notes, this Agreement, any of the transactions contemplated herein or the
actual or proposed use of the proceeds of the Advances.

          (c) If any payment of principal of, or Conversion of, any Eurodollar Rate Advance is made by
the Borrower to or for the account of a Lender (i) other than on the last day of the Interest
Period for such Advance, as a result of a payment or Conversion pursuant to Section 2.08, 2.10 or
2.12, acceleration of the maturity of the Notes pursuant to Section 6.01 or for any other reason,
or by an Eligible Assignee to a Lender other than on the last day of the Interest Period for such
Advance upon an assignment of rights and obligations under this Agreement pursuant to Section 9.07
as a result of a demand by the Borrower pursuant to Section 9.07(a) or (ii) as a result of a
payment or Conversion pursuant to Section 2.08, 2.10 or 2.12, the Borrower shall, upon demand by
such Lender (with a copy of such demand to the Agent), pay to the Agent for the account of such
Lender any amounts required to compensate such Lender for any additional losses, costs or expenses
that it may reasonably incur as a
result of such payment or Conversion, including, without limitation, any loss (including loss
of anticipated profits), cost or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by any Lender to fund or maintain such Advance.

          (d) Without prejudice to the survival of any other agreement of the Borrower hereunder, the
agreements and obligations of the Borrower contained in Sections 2.11, 2.14 and 9.04 shall survive
the payment in full of principal, interest and all other amounts payable hereunder and under the
Notes.

          (e) Each Lender severally agrees to indemnify the Agent and each Issuing Bank (in each case,
to the extent not promptly reimbursed by the Borrower) from and against such Lender’s Ratable Share
of any and all losses, claims, damages, liabilities, obligations, penalties, actions, judgments,
suits, costs, disbursements and expenses, joint or several, of any kind or nature (including the
fees, charges and disbursements of any advisor or counsel for such Person that may be imposed on,
incurred by, or asserted against the Agent or any Issuing Bank, as the case may be, in any way
relating to or arising out of the Loan Documents or any action taken or omitted by the Agent or any
Issuing Bank under the Loan Documents; provided, however, that no Lender shall be
liable for any portion of such losses, claims, damages, liabilities, obligations, penalties,
actions, judgments, suits, costs, disbursements or expenses resulting from the Agent’s or such
Issuing Bank’s gross negligence or willful misconduct as found in a

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final, non-appealable judgment
by a court of competent jurisdiction. Without limitation of the foregoing, each Lender agrees to
reimburse the Agent and each Issuing Bank for its Ratable Share of any costs and expenses
(including, without limitation, fees and expenses of counsel) payable by the Borrower under Section
9.04(a), to the extent that the Agent or such Issuing Bank is not promptly reimbursed for such
costs and expenses by the Borrower.

          SECTION 9.05. Right of Set-off. Upon either (x) the occurrence and during the
continuance of any Event of Default under Section 6.01(a) or 6.01(e) or (y) (i) the occurrence and
during the continuance of any other Event of Default and (ii) the making of the request or the
granting of the consent specified by Section 6.01 to authorize the Agent to declare the Advances
due and payable pursuant to the provisions of Section 6.01, each Lender and each of its Affiliates
is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to
set off and apply any and all deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by such Lender or such Affiliate to or
for the credit or the account of the Borrower or any Loan Party against any and all of the
obligations of the Borrower or any Loan Party now or hereafter existing under this Agreement and
the Note held by such Lender, whether or not such Lender shall have made any demand under this
Agreement or such Note and although such obligations may be unmatured. Each Lender agrees promptly
to notify the Borrower or such Loan Party and the Agent after any such set-off and application,
provided that the failure to give such notice shall not affect the validity of such set-off
and application. The rights of each Lender and its Affiliates under this Section are in addition
to other rights and remedies (including, without limitation, other rights of set-off) that such
Lender and its Affiliates may have.

          SECTION 9.06. Binding Effect. This Agreement shall become effective (other than
Section 2.01, which shall only become effective upon satisfaction of the conditions precedent set
forth in Section 3.01) when it shall have been executed by the Borrower and the Agent and when the
Agent shall have been notified by each Initial Lender that such Initial Lender has executed it and
thereafter shall be binding upon and inure to the benefit of the Borrower, the Agent and each
Lender and their respective successors and assigns, except that neither the Borrower nor any other
Loan Party shall have the right to assign its rights hereunder or any interest herein without the
prior written consent of the Lenders.

          SECTION 9.07. Assignments and Participations. (a) Each Lender may with the consent
of each Issuing Bank (which consent shall not be unreasonably withheld or delayed) and, if demanded
by the Borrower (so long as no Default shall have occurred and be continuing and following a demand
by such Lender pursuant to Section 2.11 or 2.14) upon at least five Business Days’ notice to such
Lender and the Agent, will assign to one or more Persons all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a portion of its Revolving
Credit Commitment, its Unissued Letter of Credit Commitment, the Advances owing to it, its
participations in Letters of Credit and the Note or Notes held by it); provided,
however, that (i) each such assignment shall be of a constant, and not a varying,
percentage of all rights and obligations under this Agreement, (ii) except in the case of an
assignment to a Person that, immediately prior to such assignment, was a Lender or an assignment of
all of a Lender’s rights and obligations under this Agreement, the amount of (x) the Revolving
Credit Commitment of the assigning Lender being assigned pursuant to each such assignment
(determined as of the date of the Assignment and Acceptance with respect to such assignment) shall
in no event be less than $5,000,000 or an integral multiple of $1,000,000 in excess thereof and (y)
the Unissued Letter of Credit Commitment of the assigning Lender being assigned pursuant to each
such assignment (determined as of the date of the Assignment and Acceptance with respect to such
assignment) shall in no event be less than $5,000,000 or an integral multiple of $1,000,000 in
excess thereof, in each case, unless the Borrower and the Agent otherwise agree (iii) each such
assignment shall be to an Eligible Assignee, (iv) each such assignment made as a result of a demand
by the Borrower pursuant to this Section 9.07(a) shall be arranged by the Borrower after
consultation with the Agent and shall be either an assignment of all of the

60

 

rights and obligations
of the assigning Lender under this Agreement or an assignment of a portion of such rights and
obligations made concurrently with another such assignment or other such assignments that together
cover all of the rights and obligations of the assigning Lender under this Agreement, (v) no Lender
shall be obligated to make any such assignment as a result of a demand by the Borrower pursuant to
this Section 9.07(a) unless and until such Lender shall have received one or more payments from
either the Borrower or one or more Eligible Assignees in an aggregate amount at least equal to the
aggregate outstanding principal amount of the Advances owing to such Lender, together with accrued
interest thereon to the date of payment of such principal amount and all other amounts payable to
such Lender under this Agreement, and (vi) the parties to each such assignment shall execute and
deliver to the Agent, for its acceptance and recording in the Register, an Assignment and
Acceptance, together with any Note subject to such assignment and a processing and recordation fee
of $3,500 payable by the parties to each such assignment, provided, however, that
(A) in the case of each assignment made as a result of a demand by the Borrower, such recordation
fee shall be payable by the Borrower except that no such recordation fee shall be payable in the
case of an assignment made at the request of the Borrower to an Eligible Assignee that is an
existing Lender and (B) no consent shall be required for an assignment to an Affiliate of the
assignor Lender. Upon such execution, delivery, acceptance and recording, from and after the
effective date specified in each Assignment and Acceptance, (x) the assignee thereunder shall be a
party hereto and, to the extent that rights and obligations hereunder have been assigned to it
pursuant to such Assignment and Acceptance, have the rights and obligations of a Lender hereunder
and (y) the Lender assignor thereunder shall, to the extent that rights and obligations hereunder
have been assigned by it pursuant to such Assignment and Acceptance, relinquish its rights (other
than its rights under Sections 2.11, 2.14 and 9.04 to the extent any claim thereunder relates to an
event arising prior to such assignment) and be released from its obligations (other than its
obligations under Section 8.05 to the extent any claim thereunder relates to an event arising prior
to such assignment) under this Agreement (and, in the case of an Assignment and Acceptance covering
all or the remaining portion of an assigning Lender’s rights and obligations under this Agreement,
such Lender shall cease to be a party hereto).

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

61

 

          (c) Upon its receipt of an Assignment and Acceptance executed by an assigning Lender and an
assignee representing that it is an Eligible Assignee, together with any Note or Notes subject to
such assignment, the Agent shall, if such Assignment and Acceptance has been completed and is in
substantially the form of Exhibit C hereto, (i) accept such Assignment and Acceptance, (ii) record
the information contained therein in the Register and (iii) give prompt notice thereof to the
Borrower.

          (d) The Agent shall maintain at its address referred to in Section 9.02 a copy of each
Assumption Agreement and each Assignment and Acceptance delivered to and accepted by it and a
register for the recordation of the names and addresses of the Lenders and the Commitment of, and
principal amount of the Advances owing to, each Lender from time to time (the “Register”).
The entries in the Register shall be conclusive and binding for all purposes, absent manifest
error, and the Borrower and the Guarantors, the Agent and the Lenders may treat each Person whose
name is recorded in the Register as a Lender hereunder for all purposes of this Agreement. The
Register shall be available for inspection by the Borrower or any Lender at any reasonable time and
from time to time upon reasonable prior notice.

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

          (f) Any Lender may, in connection with any assignment or participation or proposed assignment
or participation pursuant to this Section 9.07, disclose to the assignee or participant or proposed
assignee or participant, any information relating to the Borrower furnished to such Lender by or on
behalf of the Borrower; provided that, prior to any such disclosure, the assignee or
participant or proposed assignee or participant shall agree to preserve the confidentiality of any
Information relating to the Borrower or any of its Subsidiaries received by it from such Lender.

          (g) Notwithstanding any other provision set forth in this Agreement, any Lender may at any
time create a security interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including, without limitation, any pledge or assignment to secure
obligations to a Federal Reserve Bank in accordance with Regulation A of the Board of Governors of
the Federal Reserve System, 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 party hereto.

          SECTION 9.08. Confidentiality. Each of the Agent, the Lenders and the Issuing Bank
agrees to maintain the confidentiality of the Information (as defined below), except that
Information may be disclosed (a) to its Affiliates and to its and its Affiliates’ respective
managers, administrators, trustees,

62

 

partners, directors, officers, employees, agents, advisors and
other representatives (it being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by any regulatory authority purporting to have
jurisdiction over it or its Affiliates (including any self-regulatory authority, such as the
National Association of Insurance Commissioners), (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (d) to any other party hereto, (e) in
connection with the exercise of any remedies hereunder or under any Note or any action or
proceeding relating to this Agreement or any Note or the enforcement of rights hereunder or
thereunder, (f) subject to an agreement containing provisions substantially the same as those of
this Section, to (i) any assignee of or participant in, or any prospective assignee of or
participant in, any of its rights or obligations under this Agreement (subject to the conditions
set forth in Section 9.07(f)) or (ii) any actual or prospective party (or its managers,
administrators, trustees, partners, directors, officers, employees, agents, advisors and other
representatives) to any swap, derivative or other transaction under which payments are to be made
by reference to the Borrower and its obligations, this Agreement or payments hereunder, (iii) any
rating agency, or (iv) the CUSIP Service Bureau or any similar organization, (g) with the consent
of the Borrower or (h) to the extent such Information (x) becomes publicly available other than as
a result of a breach of this Section or (y) becomes available to the Agent, any Lender, the Issuing
Bank or any of their respective Affiliates on a nonconfidential basis from a source other than the
Borrower.

          For purposes of this Section, “Information” means all information received from the
Borrower or any of its Subsidiaries relating to the Borrower or any of its Subsidiaries or any of
their respective businesses, other than any such information that is available to the Agent, any
Lender or the Issuing Bank on a nonconfidential basis prior to disclosure by the Borrower or any of
its Subsidiaries, provided that, in the case of information received from the Borrower or
any of its Subsidiaries after the date hereof, such information is clearly identified at the time
of delivery as confidential. Any Person required to maintain the confidentiality of Information as
provided in this Section shall be considered to have complied with its obligation to do so if such
Person has exercised the same degree of care to maintain the confidentiality of such Information as
such Person would accord to its own confidential information.

          SECTION 9.10. Governing Law. This Agreement and the Notes shall be governed by, and
construed in accordance with, the laws of the State of New York.

          SECTION 9.11. Execution in Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts, each of which when
so executed shall be deemed to be an original and all of which taken together shall constitute one
and the same agreement. Delivery of an executed counterpart of a signature page to this Agreement
by telecopier shall be effective as delivery of a manually executed counterpart of this Agreement.

          SECTION 9.13. Jurisdiction, Etc. (a) Each of the parties hereto hereby irrevocably
and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of any
New York State court or federal court of the United States of America sitting in New York City, and
any appellate court from any thereof, in any action or proceeding arising out of or relating to
this Agreement or the Notes, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such
action or proceeding may be heard and determined in any such New York State court or, to the extent
permitted by law, in such federal court. The Borrower hereby further irrevocably consents to the
service of process in any action or proceeding in such courts by the mailing thereof by any parties
hereto by registered or certified mail, postage prepaid, to the Borrower at its address specified
pursuant to Section 9.02. Each of the parties hereto agrees that a final judgment in any such
action or proceeding shall be conclusive and may be

63

 

enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement shall affect any right
that any party may otherwise have to bring any action or proceeding relating to this Agreement or
the Notes in the courts of any jurisdiction.

          (b) Each of the parties hereto irrevocably and unconditionally waives, to the fullest extent
it may legally and effectively do so, any objection that it may now or hereafter have to the laying
of venue of any suit, action or proceeding arising out of or relating to this Agreement or the
Notes in any New York State or federal court. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.

          SECTION 9.15. No Liability of the Issuing Banks. The Borrower assumes all risks of
the acts or omissions of any beneficiary or transferee of any Letter of Credit with respect to its
use of such Letter of Credit. Neither an Issuing Bank nor any of its officers or directors shall
be liable or responsible for: (a) the use that may be made of any Letter of Credit or any acts or
omissions of any beneficiary or transferee in connection therewith; (b) the validity, sufficiency
or genuineness of documents, or of any endorsement thereon, even if such documents should prove to
be in any or all respects invalid, insufficient, fraudulent or forged; (c) payment by such Issuing
Bank against presentation of documents that do not comply with the terms of a Letter of Credit,
including failure of any documents to bear any reference or adequate reference to the Letter of
Credit; or (d) any other circumstances whatsoever in making or failing to make payment under any
Letter of Credit, except that the Borrower shall have a claim against such Issuing Bank, and such
Issuing Bank shall be liable to the Borrower, to the extent of any direct, but not consequential,
damages suffered by the Borrower that the Borrower proves were caused by such Issuing Bank’s
willful misconduct or gross negligence when determining whether drafts and other documents
presented under a Letter of Credit comply with the terms thereof. In furtherance and not in
limitation of the foregoing, such Issuing Bank may accept documents that appear on their face to be
in order, without responsibility for further investigation, regardless of any notice or information
to the contrary; provided that nothing herein shall be
deemed to excuse such Issuing Bank if it acts with gross negligence or willful misconduct in
accepting such documents.

          SECTION 9.16. Patriot Act Notice. Each Lender and the Agent (for itself and not on
behalf of any Lender) hereby notifies the Borrower that pursuant to the requirements of the Patriot
Act, it is required to obtain, verify and record information that identifies the Borrower, which
information includes the name and address of the Borrower and other information that will allow
such Lender or the Agent, as applicable, to identify the Borrower in accordance with the Patriot
Act. The Borrower shall provide such information and take such actions as are reasonably requested
by the Agent or any Lenders in order to assist the Agent and the Lenders in maintaining compliance
with the Patriot Act.

          SECTION 9.17. Power of Attorney. Each Subsidiary of the Borrower may from time to
time authorize and appoint the Borrower as its attorney-in-fact to execute and deliver (a) any
amendment, waiver or consent in accordance with Section 9.01 on behalf of and in the name of such
Subsidiary and (b) any notice or other communication hereunder, on behalf of and in the name of
such Subsidiary. Such authorization shall become effective as of the date on which such Subsidiary
delivers to the Agent a power of attorney enforceable under applicable law and any additional
information to the Agent as necessary to make such power of attorney the legal, valid and binding
obligation of such Subsidiary.

          SECTION 9.18. No Fiduciary Duty. Each of the Agent, each Lender and their Affiliates
(collectively, solely for purposes of this paragraph, the “Lenders”), may have economic interests
that conflict with those of the Borrower. The Borrower agrees that nothing in the Loan Documents
or otherwise will be deemed to create an advisory, fiduciary or agency relationship or fiduciary or
other implied duty between the Lenders and the Borrower, its stockholders or its Affiliates. The
Borrower

64

 

acknowledges and agrees that (i) the transactions contemplated by the Loan Documents are
arm’s-length commercial transactions between the Lenders, on the one hand, and the Borrower, on the
other, (ii) in connection therewith and with the process leading to such transaction each of the
Lenders is acting solely as a principal and not the agent or fiduciary of the Borrower, its
management, stockholders, creditors or any other Person, (iii) no Lender has assumed an advisory or
fiduciary responsibility in favor of the Borrower with respect to the transactions contemplated
hereby or the process leading hereto (irrespective of whether any Lender or any of its Affiliates
has advised or is currently advising the Borrower on other matters) or any other obligation to the
Borrower except the obligations expressly set forth in the Loan Documents and (iv) the Borrower has
consulted its own legal and financial advisors to the extent it deemed appropriate. The Borrower
further acknowledges and agrees that it is responsible for making its own independent judgment with
respect to such transactions and the process leading thereto. The Borrower agrees that it will not
claim that any Lender has rendered advisory services of any nature or respect, or owes a fiduciary
or similar duty to the Borrower, in connection with such transaction or the process leading thereto

65

 

          SECTION 9.19. Waiver of Jury Trial. Each of the Borrower, the Guarantors, the Agent
and the Lenders hereby irrevocably waives all right to trial by jury in any action, proceeding or
counterclaim (whether based on contract, tort or otherwise) arising out of or relating to this
Agreement or the Notes or the actions of the Agent or any Lender in the negotiation,
administration, performance or enforcement thereof.

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

	 	 	 	 	 
	 	HILLENBRAND INDUSTRIES, INC., as Borrower

 	 
	 	By  	
 	 
	 	 	Title: 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	HILL-ROM, INC., as Guarantor

 	 
	 	By  	
 	 
	 	 	Title: 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	CITIBANK, N.A., as Agent

 	 
	 	By  	
 	 
	 	 	Title: 	 
	 	 	 	 
	 

Initial Lenders

	 	 	 	 	 
	 	CITIBANK, N.A.

 	 
	 	By  	
 	 
	 	 	Title: 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	BANK OF AMERICA, N.A.

 	 
	 	By  	
 	 
	 	 	Title: 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	JPMORGAN CHASE BANK, N.A.

 	 
	 	By  	
 	 
	 	 	Title: 	 
	 	 	 	 

66

 

	 	 	 	 	 

	 	 	 	 	 
	 	THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.

 	 
	 	By  	
 	 
	 	 	Title: 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	FIFTH THIRD BANK

 	 
	 	By  	
 	 
	 	 	Title: 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	KEYBANK NATIONAL ASSOCIATION

 	 
	 	By  	
 	 
	 	 	Title: 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	PNC BANK, NATIONAL ASSOCIATION

 	 
	 	By  	
 	 
	 	 	Title: 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	NATIONAL CITY BANK

 	 
	 	By  	
 	 
	 	 	Title: 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	RBS CITIZENS, N.A.

 	 
	 	By  	
 	 
	 	 	Title: 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	THE NORTHERN TRUST COMPANY

 	 
	 	By  	
 	 
	 	 	Title: 	 
	 	 	 	 

67

 

	 	 	 	 	 

	 	 	 	 	 
	 	U.S. BANK NATIONAL ASSOCIATION

 	 
	 	By  	
 	 
	 	 	Title: 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	WILLIAM STREET LLC

 	 
	 	By  	
 	 
	 	 	Title: 	 
	 	 	 	 

68

 

	 	 	 	 	 

SCHEDULE I

HILLENBRAND INDUSTRIES, INC.

FIVE YEAR CREDIT AGREEMENT

APPLICABLE LENDING OFFICES

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Name of Initial	 	Revolving Credit	 	Letter of Credit	 	 	 	Eurodollar Lending
	Lender	 	Commitment	 	Commitment	 	Domestic Lending Office	 	Office
	Bank of America,
N.A.

	 	$	62,500,000	 	 	$	15,000,000	 	 	101 N. Tryon Street,
4th Floor
Charlotte, NC 28255
Attn: Manpreet Kaur
T: 415-436-4777
ext. 8544
F: 214-290-9446
	 	101 N. Tryon Street,
4th Floor
Charlotte, NC 28255
Attn: Manpreet Kaur
T: 415-436-4777
ext. 8544
F: 214-290-9446
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	The Bank of
Tokyo-Mitsubishi
UFJ, Ltd.

	 	$	50,000,000	 	 	 	 	 	 	1251 Avenue of the
Americas
New York, NY 10020
Attn: Mr. Rolando Uy
T: 201-413-8570
F: 201-521-2304/2305
	 	1251 Avenue of the
Americas
New York, NY 10020
Attn: Mr. Rolando Uy
T: 201-413-8570
F: 201-521-2304/2305
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Citibank, N.A.

	 	$	62,500,000	 	 	$	15,000,000	 	 	2 Penn’s Way
Suite 110
New Castle, DE 19720
Attn: Michael Gordon
T: 302-894-6047
F: 212-994-0847
	 	2 Penn’s Way Suite 110
New Castle, DE 19720
Attn: Michael Gordon
T: 302-894-6047
F: 212-994-0847
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Fifth Third Bank

	 	$	50,000,000	 	 	 	 	 	 	38 Fountain Square Plaza

Cincinnati, OH 45263

Attn: Joyce Elam

T: 513-358-7336

F: 513-358-3479
	 	38 Fountain Square

Plaza

Cincinnati, OH 45263

Attn: Joyce Elam

T: 513-358-7336

F: 513-358-3479
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	JPMorgan Chase
Bank, N.A.

	 	$	50,000,000	 	 	$	10,000,000	 	 	21 South Clark St.
Chicago, IL 60603
Attn: Cecily A. Roland
T: 312-732-2016
F: 312-385-7098
	 	21 South Clark St.
Chicago, IL 60603
Attn: Cecily A. Roland
T: 312-732-2016
F: 312-385-7098
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	KeyBank National 

Association

	 	$	50,000,000	 	 	 	 	 	 	127 Public Square

Cleveland, OH 44114

Attn: Kathy Gosnell

T: 216-689-4790

F: 216-370-5996
	 	127 Public Square

Cleveland, OH 44114

Attn: Kathy Gosnell

T: 216-689-4790

F: 216-370-5996
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	National City Bank

	 	$	25,000,000	 	 	 	 	 	 	6750 Miller Rd

Brecksville OH 4414

Attn: Milan Vrzic

T: 440-546-7365

F: 440-546-7342
	 	6750 Miller Rd

Brecksville OH 4414

Attn: Milan Vrzic

T: 440-546-7365

F: 440-546-7342
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	The Northern Trust

	 	$	25,000,000	 	 	 	 	 	 	50 S. LaSalle Street
Chicago, IL 60675
	 	50 S. LaSalle Street
Chicago, IL 60675

 

 

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Name of Initial	 	Revolving Credit	 	Letter of Credit	 	 	 	Eurodollar Lending
	Lender	 	Commitment	 	Commitment	 	Domestic Lending Office	 	Office
	Company

	 	 	 	 	 	 	 	 	 	Attn: Ms. Sharon Jackson
T: 312-630-1609
F: 312-630-1566
	 	Attn: Ms. Sharon
Jackson
T: 312-630-1609
F: 312-630-1566
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	PNC Bank, National 

Association

	 	$	50,000,000	 	 	$	10,000,000	 	 	201 East Fifth Street

Cincinnati, OH 45202

Attn: Marc Accamando

T: 412-768-6214

F: 412-768-4586
	 	201 East Fifth Street

Cincinnati, OH 45202

Attn: Marc Accamando

T: 412-768-6214

F: 412-768-4586
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	RBS Citizens, N.A.

	 	$	25,000,000	 	 	 	 	 	 	27777 Franklin Road

MH 1970

Southfield, MI 48034

Attn: Peggy Secatore

T: 781-655-4404

F: 781-655-4050
	 	27777 Franklin Road

MH 1970

Southfield, MI 48034

Attn: Peggy Secatore

T: 781-655-4404

F: 781-655-4050
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	U.S. Bank National
Association

	 	$	25,000,000	 	 	 	 	 	 	One U.S. Bank Plaza
SL-MO-T12M
St. Louis, MO 63101
Attn: Barbara Campbell
T: 920-237-7370
F: 920-237-7993
	 	One U.S. Bank Plaza
SL-MO-T12M
St. Louis, MO 63101
Attn: Barbara Campbell
T: 920-237-7370
F: 920-237-7993
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	William Street LLC

	 	$	25,000,000	 	 	 	 	 	 	1 New York Plaza,

40th Floor

New York, NY 10004

Attn: Pedro Ramirez

T: 917-343-8319

F: 212-428-1243
	 	1 New York Plaza,

40th Floor

New York, NY 10004

Attn: Pedro Ramirez

T: 917-343-8319

F: 212-428-1243
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Total:

	 	$	500,000,000	 	 	$	50,000,000	 	 	 	 	 

2

 

SCHEDULE II

GUARANTORS

Hill-Rom, Inc.

 

 

SCHEDULE 2.01(b)

EXISTING LETTERS OF CREDIT

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Letter of Credit No.	 	Issuer	 	Beneficiary	 	Dollar Amount	 	Issue Date	 	Expiration Date
	3052431

	 	Bank of America,
N.A.
	 	The Travelers

Indemnity Company
	 	$	3,026,000.00	 	 	11/26/2002
	 	12/01/2008

(includes an

automatic renewal

provision)
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	3064397

	 	Bank of America,
N.A.
	 	St. Paul Fire and
Marine Insurance
Company
	 	$	500,000.00	 	 	7/19/2004
	 	7/15/2008 (includes

an automatic

renewal provision)
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	3052430

	 	Bank of America,
N.A.
	 	United States
Fidelity and
Guaranty Company
	 	$	10,275,000.00	 	 	11/26/2002
	 	12/01/08 (includes

an automatic

renewal provision)

 

 

SCHEDULE 3.01(b)

DISCLOSED LITIGATION

	1.	 	Funeral Consumers Alliance, Inc. vs. Service Corporation International, et al. filed on May
2, 2005 in the United States District Court for the Northern District of California (the
“FCA Matter”), and purported copycat class action lawsuits filed after the FCA Matter
on behalf of consumers based on essentially the same factual allegations alleged in the FCA
Matter. The FCA Matter has been transferred to the United States District Court for the
Southern District of Texas.

	2.	 	Pioneer Valley Casket Co., Inc., et al. vs. Service Corporation International, et al. filed
July 8, 2005 in the United States District Court for the Northern District of California.
This matter has been transferred to the United States District Court for the Southern District
of Texas

	3.	 	Civil Investigative Demands by the Attorney General of Maryland and certain other state
attorneys general with respect to purported anticompetitive practices in the death care
industry.

	4.	 	Potential claims from class members who opted out of the court approved agreement in
connection with the Spartanburg Regional Healthcare Systems purported antitrust class action
lawsuit.

	5.	 	Investigations of the Healthcare Research & Development Institute, LLC, a health care trade
organization of which Hill-Rom was a corporate member, by the offices of the Connecticut and
Illinois Attorneys General.

	6.	 	Administrative Investigative Demand subpoena by the United States Attorney’s Office for the
Eastern District of Tennessee pursuant to a Health and Human Services’ Office of Inspector
General investigation. The investigation focuses on “claims for payment for certain durable
medical equipment, including specialized support beds.”

 

 

SCHEDULE 5.02(a)

EXISTING LIENS

None

 

 

SCHEDULE 5.02(c)

EXISTING INDEBTEDNESS

	 	 	 	 	 
	 	 	As of 12/31/07
	 	 	(in millions)
	Unsecured 4.50% debentures due on June 15, 2009
	 	$	250.9	 
	Unsecured 8.50% debentures due on December 1, 2011
	 	$	50.9	 
	Unsecured 7.00% debentures due on February 15, 2024
	 	$	19.9	 
	Unsecured 6.75% debentures due on December 15, 2027
	 	$	29.8	 
	Trade finance credit lines totaling $16.0 million
	 	$	10.8	 
	Outstanding, undrawn letters of credit under an
uncommitted credit line of $20.0 million
	 	$	17.6	 
	Outstanding, undrawn letters of credit under an
uncommitted credit line of $4.0 million
	 	$	2.4	 

Contingent obligation to reassume deferred compensation obligations owed to Designated Individuals
(as defined in Schedule 2.03(e) of the Distribution Agreement) assumed by Batesville Holdings, Inc.
pursuant to the Spin Transaction.

Purchase price adjustments that may be due to BHI and/or certain of its subsidiaries for
asset acquisitions in connection with consummation of the Spin Transaction.

 

 

EXHIBIT A — FORM OF

REVOLVING CREDIT

PROMISSORY NOTE

	 	 	 
	U.S.$                                        
	 	Dated:                                 , 200___

          FOR VALUE RECEIVED, the undersigned, HILLENBRAND INDUSTRIES, INC., an Indiana corporation (the
“Borrower”), HEREBY PROMISES TO PAY to the order of                                                              (the
“Lender”) for the account of its Applicable Lending Office on the Termination Date
applicable to the Lender (each as defined in the Credit Agreement referred to below) the principal
sum of U.S.$[amount of the Lender’s Commitment in figures] or, if less, the aggregate principal
amount of the Advances made by the Lender to the Borrower pursuant to the Credit Agreement dated as
of March 28, 2008 among the Borrower, the Lender and certain other lenders parties thereto, and
Citibank, N.A. as Agent for the Lender and such other lenders (as amended or modified from time to
time, the “Credit Agreement”; the terms defined therein being used herein as therein
defined) outstanding on such Termination Date.

          The Borrower promises to pay interest on the unpaid principal amount of each Advance from the
date of such Advance until such principal amount is paid in full, at such interest rates, and
payable at such times, as are specified in the Credit Agreement.

          Both principal and interest in respect of each Advance in Dollars are payable in lawful money
of the United States of America to the Agent at its account maintained at 388 Greenwich Street, New
York, New York 10013, in same day funds. Each Advance owing to the Lender by the Borrower pursuant
to the Credit Agreement, and all payments made on account of principal thereof, shall be recorded
by the Lender and, prior to any transfer hereof, endorsed on the grid attached hereto which is part
of this Promissory Note.

          This Promissory Note is one of the Notes referred to in, and is entitled to the benefits of,
the Credit Agreement. The Credit Agreement, among other things, (i) provides for the making of
Advances by the Lender to the Borrower from time to time in an aggregate amount not to exceed at
any time outstanding the U.S. dollar amount first above mentioned, the indebtedness of the Borrower
resulting from each such Advance being evidenced by this Promissory Note and (ii) contains
provisions for acceleration of the maturity hereof upon the happening of certain stated events and
also for prepayments on account of principal hereof prior to the maturity hereof upon the terms and
conditions therein specified.

	 	 	 	 	 
	 	HILLENBRAND INDUSTRIES, INC.

 	 
	 	By  	
 	 
	 	 	Title: 	 
	 	 	 	 

 

 

	 	 	 	 	 

ADVANCES AND PAYMENTS OF PRINCIPAL

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Amount of	 	 	 	 	 	 	 
	 	 	 	 	Amount of	 	 	Principal Paid	 	 	Unpaid Principal	 	 	Notation	 
	Date	 	 	 	Advance	 	 	or Prepaid	 	 	Balance	 	 	Made By	 

2

 

EXHIBIT B — FORM OF NOTICE OF

BORROWING

Citibank, N.A., as Agent

   for the Lenders parties

   to the Credit Agreement

   referred to below

   Two Penns Way

   New Castle, Delaware 19720

[Date]

          Attention: Bank Loan Syndications Department

Ladies and Gentlemen:

          The undersigned, Hillenbrand Industries, Inc., refers to the Credit Agreement, dated as of
March 28, 2008 (as amended or modified from time to time, the “Credit Agreement”, the terms
defined therein being used herein as therein defined), among the undersigned, certain Lenders
parties thereto and Citibank, N.A., as Agent for said Lenders, and hereby gives you notice,
irrevocably, pursuant to Section 2.02 of the Credit Agreement that the undersigned hereby requests
a Borrowing under the Credit Agreement, and in that connection sets forth below the information
relating to such Borrowing (the “Proposed Borrowing”) as required by Section 2.02(a) of the
Credit Agreement:

     (i) The Business Day of the Proposed Borrowing is                                         , 200___.

     (ii) The Type of Advances comprising the Proposed Borrowing is [Base Rate Advances]
[Eurodollar Rate Advances].

     (iii) The aggregate amount of the Proposed Borrowing is $                                        .

     [(iv) The initial Interest Period for each Eurodollar Rate Advance made as part of the
Proposed Borrowing is                      month[s].]

          The undersigned hereby certifies that the following statements are true on the date hereof,
and will be true on the date of the Proposed Borrowing:

     (A) the representations and warranties contained in Section 4.01 of the Credit
Agreement (except the representations set forth in subsection (e)(iii) thereof and in
subsection (f) thereof (other than clause (ii) thereof)) are correct, before and after
giving effect to the Proposed Borrowing and to the application of the proceeds therefrom, as
though made on and as of such date, except (x) to the extent that such representations and
warranties specifically refer to an earlier date, such representations and warranties shall
be true and correct as of such earlier date and (y) the representations and warranties
contained in subsections (i) and (ii) of Section 4.01(e) shall be deemed to refer to the
most recent financial statements furnished pursuant to subsections (i) and (ii),
respectively, of Section 5.01(a); and

 

 

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

	 	 	 	 	 
	 	Very truly yours,

HILLENBRAND INDUSTRIES, INC.

 	 
	 	By  	
 	 
	 	 	Title: 	 
	 	 	 	 

2

 

	 	 	 	 	 

EXHIBIT C — FORM OF

ASSIGNMENT AND ACCEPTANCE

          Reference is made to the Credit Agreement dated as of March 28, 2008 (as amended or modified
from time to time, the “Credit Agreement”) among Hillenbrand Industries, Inc., an Indiana
corporation (the “Company”), the Lenders (as defined in the Credit Agreement) and Citibank,
N.A., as agent for the Lenders (the “Agent”). Terms defined in the Credit Agreement are
used herein with the same meaning.

          The “Assignor” and the “Assignee” referred to on Schedule I hereto agree as follows:

          1. The Assignor hereby sells and assigns to the Assignee, and the Assignee hereby purchases
and assumes from the Assignor, an interest in and to the Assignor’s rights and obligations under
the [Credit Agreement as of the date hereof] [the Letter of Credit Facility] equal to the
percentage interest specified on Schedule 1 hereto of [all outstanding rights and obligations under
the Credit Agreement together with participations in Letters of Credit held by the Assignor on the
date hereof] [such Assignor’s Unissued Letter of Credit Commitment]. After giving effect to such
sale and assignment, the Assignee’s [Revolving Credit Commitment and the amount of the Advances
owing to the Assignee] [Letter of Credit Commitment] will be as set forth on Schedule 1 hereto.

          2. The Assignor (i) 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; (ii) makes no representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the Credit Agreement or the
execution, legality, validity, enforceability, genuineness, sufficiency or value of, or the
perfection or priority of any lien or security interest created or purported to be created under or
in connection with, the Credit Agreement or any other instrument or document furnished pursuant
thereto; (iii) makes no representation or warranty and assumes no responsibility with respect to
the financial condition of the Borrower or any other Loan Party or the performance or observance by
the Borrower or any other Loan Party of any of its obligations under the Credit Agreement or any
other instrument or document furnished pursuant thereto; and (iv) attaches the Note[, if any,] held
by the Assignor [and requests that the Agent exchange such Note for a new Note payable to the order
of [the Assignee in an amount equal to the Revolving Credit Commitment assumed by the Assignee
pursuant hereto or new Notes payable to the order of the Assignee in an amount equal to the
Revolving Credit Commitment assumed by the Assignee pursuant hereto and] the Assignor in an amount
equal to the Revolving Credit Commitment retained by the Assignor under the Credit Agreement[,
respectively,] as specified on Schedule 1 hereto].

          3. The Assignee (i) confirms that it has received a copy of the Credit Agreement, together
with copies of the financial statements referred to in Section 4.01 thereof and such other
documents and information as it has deemed appropriate to make its own credit analysis and decision
to enter into this Assignment and Acceptance; (ii) agrees that it will, independently and without
reliance upon the Agent, the Assignor or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Credit Agreement; (iii) confirms that it is an Eligible
Assignee; (iv) appoints and authorizes the Agent to take such action as agent on its behalf and to
exercise such powers and discretion under the Credit Agreement as are delegated to the Agent by the
terms thereof, together with such powers and discretion as are reasonably incidental thereto; (v)
agrees that it will perform in accordance with their terms all of the obligations that by the terms
of the Credit Agreement are required to be performed by it as a Lender; and (vi) attaches any U.S.
Internal Revenue Service forms required under Section 2.14 of the Credit Agreement.

 

 

          4. Following the execution of this Assignment and Acceptance, it will be delivered to the
Agent for acceptance and recording by the Agent. The effective date for this Assignment and
Acceptance (the “Effective Date”) shall be the date of acceptance hereof by the Agent,
unless otherwise specified on Schedule 1 hereto.

          5. Upon such acceptance and recording by the Agent, as of the Effective Date, (i) the Assignee
shall be a party to the Credit Agreement and, to the extent provided in this Assignment and
Acceptance, have the rights and obligations of a Lender thereunder and (ii) the Assignor shall, to
the extent provided in this Assignment and Acceptance, relinquish its rights and be released from
its obligations under the Credit Agreement.

          6. Upon such acceptance and recording by the Agent, from and after the Effective Date, the
Agent shall make all payments under the Credit Agreement and the Notes in respect of the interest
assigned hereby (including, without limitation, all payments of principal, interest and facility
fees with respect thereto) to the Assignee. The Assignor and Assignee shall make all appropriate
adjustments in payments under the Credit Agreement and the Notes for periods prior to the Effective
Date directly between themselves.

          7. This Assignment and Acceptance shall be governed by, and construed in accordance with, the
laws of the State of New York.

          8. This Assignment and Acceptance may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which taken together shall constitute one and the same agreement.
Delivery of an executed counterpart of Schedule 1 to this Assignment and Acceptance by telecopier
shall be effective as delivery of a manually executed counterpart of this Assignment and
Acceptance.

          IN WITNESS WHEREOF, the Assignor and the Assignee have caused Schedule 1 to this Assignment
and Acceptance to be executed by their officers thereunto duly authorized as of the date specified
thereon.

2

 

Schedule 1

to

Assignment and Acceptance

	 	 	 	 	 
	Percentage interest assigned:
	 	 	                    	%
	[Assignee’s Revolving Credit Commitment:
	 	$	                    	 
	Aggregate outstanding principal amount of Advances assigned:
	 	$	                    	 
	Principal amount of Note payable to Assignee:
	 	$	                    	 
	Principal amount of Note payable to Assignor:
	 	$	                    ]	 
	[Assignee’s Letter of Credit Commitment:
	 	$	                    ]	 

Effective Date*:                                         , 200___

	 	 	 	 	 
	 	[NAME OF ASSIGNOR], as Assignor

 	 
	 	By  	
 	 
	 	 	Title: 	 
	 
	 	Dated:                      , 200___ 	 
	 

	 	 	 	 	 
	 	[NAME OF ASSIGNEE], as Assignee

 	 
	 	By  	
 	 
	 	 	Title: 	 
	 
	 	Dated:                      , 200___ 	 
	 

	 	 	 	 	 
	 	Domestic Lending Office:

              [Address]

 	 

	 	 	 	 	 
	 	Eurodollar Lending Office:

              [Address]

 	 
	 	 	 
	 	 	 
	 	 	 
	 

 

			
	*	 	This date should be no earlier than five Business Days
after the delivery of this Assignment and Acceptance to the Agent.

3

 

	 	 	 	 	 
	Accepted [and Approved]** this

                     day of                                         , 200___

CITIBANK, N.A., as Agent

 	 	 
	By  	 	
 	 	 
	 	 	Title: 	 
	 

	 	 	 	 	 
	[Approved this                      day

of                                         ,
200___

HILLENBRAND INDUSTRIES, INC.

 	 	 
	By  	 	
 	]*
 	 
	 	 	Title: 	 
	 

	 	 	 	 	 
	[Approved this                      day

of                                         , 200___

[ISSUING BANK]

 	 	 
	By  	 	
 	]***	 
	 	 	Title: 	 
	 

 

			
	**	 	Required if the Assignee is an Eligible Assignee solely
by reason of clause (iii) of the definition of “Eligible Assignee”.
	 
	*	 	Required if the Assignee is an Eligible Assignee solely
by reason of clause (iii) of the definition of “Eligible Assignee”.
	 
	***	 	Required unless the Assignee is an Affiliate of the
Assignor.

4

 

EXHIBIT D — FORM OF

COMPLIANCE CERTIFICATE

Financial Statement Date:                     ,

	 	 	To: Citibank, N.A., as Administrative Agent

Ladies and Gentlemen:

     Reference is made to that certain Credit Agreement, dated as of March 28, 2008 (as amended,
restated, extended, supplemented or otherwise modified in writing from time to time, the
“Agreement;” the terms defined therein being used herein as therein defined), among
Hillenbrand Industries, Inc., an Indiana corporation (the “Borrower”), the Lenders from
time to time party thereto, Citibank, N.A., as Agent, and certain other Persons party thereto.

     The undersigned Responsible Officer hereby certifies as of the date hereof that he/she is the
                     of the Borrower, and that, as such, he/she is authorized to execute and deliver this
Certificate to the Agent on the behalf of the Borrower, and that:

[Use following paragraph 1 for fiscal year-end financial statements]

     1. Attached hereto as Schedule 1 are the year-end audited financial statements
required by Section 5.01(a)(i) of the Agreement for the fiscal year of the Borrower ended
as of the above date, together with the report and opinion of an independent certified public
accountant required by such section.

[Use following paragraph 1 for fiscal quarter-end financial statements]

     1. Attached hereto as Schedule 1 are the unaudited financial statements required by
Section 5.01(a)(ii) of the Agreement for the fiscal quarter of the Borrower ended as of the
above date. Such financial statements fairly present the financial condition, results of
operations and cash flows of the Borrower and its Subsidiaries in accordance with GAAP as at such
date and for such period, subject only to normal year-end audit adjustments and the absence of
footnotes.

[select one:]

     2. [To the best knowledge of the undersigned during such fiscal period, the Borrower performed
and observed each covenant and condition of the Loan Documents applicable to it.]

—or—

     [The following covenants or conditions have not been performed or observed and the following
is a list of each such Default and its nature and status:]

     3. The representations and warranties of the Borrower contained in Section 4.01 of the
Agreement are true and correct on and as of the date hereof, except (i) to the extent that such
representations and warranties specifically refer to an earlier date, in which case they are true
and correct as of such earlier date, and except that for purposes of this Compliance Certificate,
(ii) the representations and warranties contained in subsections (i) and (ii) of Section
4.01(e) shall be deemed to refer to the most recent financial statements furnished pursuant to
subsections (i) and (ii), respectively, of Section 5.01(a)

D-1

Form of Compliance Certificate

 

 

of the Agreement, including the statements in connection with which this Compliance
Certificate is delivered and (iii) the representations and warranties contained in subsection
4.01(e)(iii) and in subsection 4.01(f)(i) shall be true and correct only as of the date
of the Effective Date, each Increase Date and each Extension Date.

     4. The financial covenant analyses and information set forth on Schedule 2 attached
hereto are true and correct in all material respects on and as of the date of this Certificate.

     IN WITNESS WHEREOF, the undersigned has executed this Certificate as of                                         ,
                    .

	 	 	 	 	 
	 	HILLENBRAND INDUSTRIES, INC.

 	 
	 	By  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

D-2

Form of Compliance Certificate

 

 

For the Quarter/Year ended                                         (“Statement Date”)

SCHEDULE 2

to the Compliance Certificate

($ in 000’s)

	 	 	 	 	 	 	 
	I.	 	Consolidated Indebtedness.	 	 
	 
	 	 	 	 	 	 
	 

	 	A.
	 	For the Borrower and its Subsidiaries, calculated on a
consolidated basis, all Indebtedness at Statement Date
calculated before giving consideration to the second
paragraph of Section 5.03(a).
	 	$                    
	 
	 	 	 	 	 	 
	 

	 	B.
	 	For the Borrower and its Subsidiaries calculated on a
consolidated basis, 25% of the principal amount of any
mandatorily convertible unsecured bonds, debentures,
preferred stock or similar instruments in a principal
amount not to exceed $500,000,000 in the aggregate
during the term of the Agreement which are payable in no
more than three years (whether by redemption, call option
or otherwise) solely in common stock or other common
equity interests of the Borrower or its Subsidiaries
(the “Convertibles”)
	 	$                    
	 
	 	 	 	 	 	 
	 

	 	C.
	 	Actual Consolidated Indebtedness at Statement Date (Lines 1A. +
1.B.):
	 	$                    
	 
	 	 	 	 	 	 
	II.	 	Consolidated EBITDA.	 	 
	 
	 	 	 	 	 	 
	 

	 	A.
	 	Net income (or loss)
	 	$                    
	 
	 	 	 	 	 	 
	 

	 	B.
	 	Interest expense.
	 	$                    
	 
	 	 	 	 	 	 
	 

	 	C.
	 	Income tax expense
	 	$                    
	 
	 	 	 	 	 	 
	 

	 	D.
	 	Depreciation expense
	 	$                    
	 
	 	 	 	 	 	 
	 

	 	E.
	 	Amortization expense
	 	$                    
	 
	 	 	 	 	 	 
	 

	 	F.
	 	Actual Consolidated EBITDA for the period of
four fiscal quarters ended at Statement Date
(Lines II.A. + II.B. + II.C. + II.D. + II.E):
	 	$                    
	 
	 	 	 	 	 	 
	III.	 	Actual Consolidated Indebtedness to Consolidated EBITDA
Ratio at Statement Date (Line I.C.  ̧ Line II.F.):	 	                    to1
	 
	 	 	 	 	 	 
	 	 	Maximum permitted by Section 5.03(a):	 	3.50 to 1
	 
	 	 	 	 	 	 
	IV.	 	Consolidated interest payable on, and amortization of debt discount
in respect of, all Indebtedness during the period of	 	 

 

 

	 	 	 	 	 	 	 
	 

	 	four fiscal quarters ended at Statement Date
	 	$                    
	 
	 	 	 	 	 	 
	V.	 	Actual Consolidated EBITDA to Consolidated Interest
Ratio at Statement Date (Line II.F.  ̧ Line IV):	 	                    to1
	 
	 	 	 	 	 	 
	 	 	Maximum permitted by
Section 5.03(b):	 	3.50 to 1

D-2

Form of Compliance Certificate

 

 

EXHIBIT E — FORM OF

OPINION OF COUNSEL

FOR THE BORROWER

March 28, 2008

To each of the Lenders and the

Agents party to the Credit Agreement

described herein

Ladies and Gentlemen:

     We have acted as counsel to Hillenbrand Industries, Inc., an Indiana corporation (the
“Borrower”) and Hill-Rom, Inc., an Indiana corporation (the “Guarantor”) in
connection with the Credit Agreement dated as of March 28, 2008 (the “Credit Agreement”)
among the Borrower, the financial institutions party thereto as lenders (the “Lenders”),
and Citibank, N.A., as administrative agent for such Lenders (in such capacity, the
“Administrative Agent”). The Administrative Agent and the syndication agent referred to in
the Credit Agreement are herein collectively referred to as the “Agents” and the Borrower
and the Guarantor are each individually referred to as an “Opinion Party” and collectively
as the “Opinion Parties”). This opinion letter is delivered to you pursuant to Section
3.01(h)(iv) of the Credit Agreement.

     In connection with this opinion, we have examined originals or counterparts of the following
documents (collectively, the “Opinion Documents”):

	 	(i)	 	a counterpart of the Credit Agreement executed by each Opinion Party, and
	 
	 	(ii)	 	the Notes executed by the Borrower on the date hereof.

     We have also examined originals or counterparts of such records and documents as we have
deemed necessary and relevant for purposes of this opinion. In addition, we have examined the
originals, or copies certified to our satisfaction, of such other corporate records of the Opinion
Parties, certificates of public officials and of an officer of the Borrower (including the
certificate dated the date hereof and attached hereto as Exhibit A), and agreements,
instruments and other documents, as we have deemed necessary as a basis for the opinions expressed
below. In addition, we have relied on the opinion letter with respect to the Opinion Parties
issued by Patrick DeMaynadier on even date herewith and certificates or comparable documents of an
officer of the Borrower as to certain matters of fact relating to this opinion. We have also made
such investigations of law as we have deemed necessary and relevant as a basis for this opinion.

     In making our examinations, we have assumed: (i) the genuineness of all signatures on all
documents furnished to us (including, without limitation, those of each Opinion Party); (ii) the

 

 

authenticity of all documents and records submitted to us as originals; (iii) the conformity
to original documents of documents and records submitted to us as copies; (iv) the truthfulness of
all statements of fact made in documents and records submitted to us; and (v) the accuracy of all
written statements made to us as to issues of fact.

     Capitalized terms used herein and not otherwise defined herein have the meanings assigned to
such terms in the Credit Agreement. For purposes of this opinion letter:

     “Applicable Law” means those laws, rules and regulations of the State of New
York and the United States of America which in our experience are normally applicable to the
transactions of the type provided for in the Opinion Documents, except that the term
“Applicable Law” does not include, and we express no opinion with regard to (i) any law,
rule or regulation relating to (A) any federal or state securities, commodities, insurance,
or investment company laws and regulations; (B) any federal or state labor, pension, or
other employee benefit laws and regulations; (C) any federal or state antitrust, trade or
unfair competition laws and regulations; (D) any federal or state laws and regulations
relating to the environment, safety, health, or other similar matters; (E) any laws, rules,
and regulations of any county, municipality, subdivision or similar local authority of any
jurisdiction or any agency or instrumentality thereof; (F) any federal or state tax laws or
regulations; or (G) any federal or state laws or regulations relating to copyrights,
patents, trademarks, or other intellectual property.

     “Government Approvals” means any order, consent, approval, license, permit,
authorization of, or filing, recording, registration or qualification with, or exemption by,
or notice to any governmental body or authority of the State of New York or of the United
States of America, pursuant to any Applicable Law.

     Based upon the foregoing and subject to the limitations, qualifications and assumptions set
forth in this opinion, and having due regard for such legal considerations as we deem relevant in
respect of Applicable Law, we are of the opinion that:

     1. No Governmental Approval is necessary or required in connection with the execution,
delivery or performance by, or enforcement against (i) each Opinion Party of the Credit Agreement
and (ii) the Borrower of the Notes.

     2. (a) The Credit Agreement is, and after giving effect to the initial Borrowing, the Notes
will be, legal, valid and binding obligations of the Borrower, enforceable against the Borrower in
accordance with their respective terms.

          (b) The obligations of the Guarantor set forth in the Credit Agreement are legal, valid and
binding obligations of the Guarantor, enforceable against the Guarantor in accordance with its
terms.

     3. The execution, delivery and performance by each Opinion Party of the Credit Agreement and
of the Notes by the Borrower, and the consummation of the transactions contemplated by the Opinion
Documents, does not and will not violate any Applicable Law.

 

 

     The foregoing opinions are, with your concurrence, predicated on and qualified in their
entirety by the following:

     (a) The foregoing opinions are based on and are limited to Applicable Law. We render no
opinion with respect to the law of any other jurisdiction, and we have assumed the validity,
binding effect and enforceability of the Opinion Documents under the law of each such other
jurisdiction relevant thereto.

     (b) Our opinions are (i) subject to the effect of applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance, preference, liquidation, conservatorship or
other similar law affecting creditor’s rights generally, and such duties and standards as are or
may be imposed on creditors (including, without limitation, good faith, materiality, reasonableness
and fair dealing) under any applicable law or judicial decision, and (ii) subject to general
principles of equity and public policy, and we express no opinion as to the availability of
specific performance, injunctive relief or any other equitable remedy.

     (c) We express no opinion as to the legality, validity, binding effect or enforceability of
any provision in the Opinion Documents (i) purporting to restrict access to courts or to legal or
equitable remedies; (ii) purporting to establish evidentiary standards; (iii) purporting to grant a
right of set-off of moneys, securities and other properties of any Person other than the Person
granting such right; (iv) providing for rights of contribution; (v) purporting to irrevocably
appoint any Person as attorney-in-fact; (vi) purporting to indemnify, defend or hold harmless any
Person (A) in conflict with principles of public policy, or (B) to the extent precluded by federal
or state securities laws, (vii) purporting to indemnify or exculpate any Person from the
consequences of its own negligence or strict liability or for illegality or violation of laws;
(viii) purporting to affect any right to trial by jury, venue or jurisdiction; or (ix) pertaining
to subrogation rights, delay or omission of enforcement of rights or remedies, severability or
marshaling of assets.

     (d) We express no opinion as to any provision of the Opinion Documents insofar as it provides
that any Person purchasing a participation from a Lender pursuant thereto may exercise set-off or
similar rights with respect to such participation.

     (e) We have assumed, as to each Person (other than the Opinion Parties) shown as being a party
to any of the Loan Documents, (i) that such Person is duly organized, validly existing and in good
standing under the laws of the jurisdiction in which it is organized, (ii) that such Loan Documents
have been duly authorized, executed and delivered by such Person, (iii) that such Person has the
requisite power and authority to execute, deliver and perform its obligations under the Loan
Documents to which it is a party and will perform such obligations in compliance with all laws and
regulations applicable to it, (iv) that there are no suits, actions or proceedings pending against
such Person or judicial or administrative orders, judgments, or decrees binding on such Person that
affect the legality, validity, binding effect or enforceability of the Loan Documents to which it
is a party, (v) that no consent, license, approval or authorization of, or filing or registration
with, any governmental authority is required for the valid execution, delivery and performance of
the Loan Documents to which such Person is a party, and (vi) that the execution, delivery and
performance of such Loan Documents by such Person does not violate (1) any provision of any law or
regulation, (2) any order, judgment, writ,

 

 

injunction, award or decree of any court, arbitrator, or governmental authority, (3) the charter of
bylaws of such Person, or (4) any indenture, lease or other agreement to which such Person is a
party or by which such Person or any of its assets is bound. Furthermore, we have assumed as to
each Person party to the Loan Documents (other than the Opinion Parties) that such Loan Documents
constitute the legal, valid and binding obligation of such Person enforceable against such Person
in accordance with their terms, subject to the type of qualifications regarding enforceability as
are set forth in this opinion. We have also assumed that each Lender will make each extension of
credit under the Loan Documents for its own account in the ordinary course of its commercial
lending business and not with a view to, or for sale in connection with, any distribution of its
Note or extensions of credit and that no Lender is participating in any such distribution other
than assignments and participations made in accordance with the terms of the Loan Documents and not
in violation of any securities laws.

     (f) We express no opinion as to the effect on the opinions herein stated of (i) the compliance
or non-compliance of any party (other than the Opinion Parties to the extent expressly set forth in
our opinions above) to the Loan Documents with any state, federal or other laws or regulations
applicable to it, and (ii) the legal or regulatory status or the nature of the business of any such
party (other than the Opinion Parties to the extent expressly set forth in our opinions above).

     (g) We express no opinion as to the effect of the law of any jurisdiction other than the State
of New York wherein any Lender or Agent may be located or wherein enforcement of the Loan Documents
may be sought which limits the interest, fees or other charges legally chargeable or collectible.

     (h) We have assumed that the factual matters included in the representations and warranties
made by the Opinion Parties in the Opinion Documents are true and accurate as of the date hereof.

     (i) Requirements in the Opinion Documents specifying that provisions thereof may only be
waived in writing may not be legal, valid, binding and enforceable to the extent that an oral
agreement or an implied agreement by trade practice or course of conduct has been created modifying
any provision of such documents.

     (j) We express no opinion as to any provision in the Opinion Documents (i) with respect to
consent to jurisdiction, (ii) with respect to a waiver of inconvenient forum with respect to
proceedings in any court, (iii) purporting to waive rights to notice, or (iv) providing that
remedies are cumulative or that decisions by a party are conclusive.

     (k) This opinion is given only as of the date hereof, and we have no obligation to report to
you or any other Person any fact or circumstance that may hereafter come to our attention or any
change in law.

     This opinion (i) is delivered in connection with the Opinion Documents only to counsel for the
Administrative Agent, you and your assignees permitted under the Credit Agreement, solely in your
capacities identified as addressees of this opinion, and only in connection with the transactions
described above, (ii) does not extend to counsel for the Administrative Agent, you or

 

 

your assignees when acting in any other capacity or to any other Person without our prior express
written consent, and (iii) may not be quoted, circulated, or published, in whole or in part, or
furnished to any other Person (other than to independent auditors and attorneys, participants or
transferees, regulators or government agencies, or pursuant to a court order, subpoena or other
legal process) without our prior express written consent. This opinion is strictly limited to the
matters stated herein, and no other or more extensive opinion is intended, implied or to be
inferred beyond the matters expressly stated herein.

	 	 	 	 	 
	 	Very truly yours,

 	 
	 	
 	 
	 	Bracewell & Giuliani LLP 	 
	 	 	 

 

 

	 	 	 	 	 

Exhibit A

Certificate from the Borrower’s Vice President and Treasurer

(See Attached)

 

 

OFFICERS’ CERTIFICATE

     This certificate is delivered in connection with the opinion of Bracewell & Giuliani LLP dated
as of March 28, 2008 and issued in connection with the Credit Agreement (the “Credit
Agreement”) dated as of the same date between Hillenbrand Industries, Inc., an Indiana
corporation (the “Borrower”), the financial institutions party thereto as lenders (the
“Lenders”), and Citibank, N.A., as administrative agent for such Lenders. Capitalized
terms used in this Certificate and not otherwise defined herein have the meanings assigned to such
terms in the Credit Agreement.

     The undersigned hereby certifies, solely in his capacity as an officer of the Borrower, and
not in his personal capacity, that he is the duly elected and acting Vice President and Treasurer
of the Borrower and that there are no indentures, loan or credit agreements, leases, guarantees,
mortgages, security agreements, bonds, notes, orders, writs, judgments, awards, injunctions,
decrees or any other agreements or instruments that affect or purport to affect the Borrower’s
right to borrow money or the Borrower’s obligations under the Credit Agreement or the Notes.

Dated as of March 28, 2008.

	 	 	 	 	 
	 	Hillenbrand Industries, Inc.

 	 
	 	By:  	
 	 
	 	 	Mark R. Lanning 	 
	 	 	Vice President and Treasurer 	 

 

 

	 	 	 	 	 

[On Company Letterhead]

March 28, 2008

To each of the Lenders and the

Agents party to the Credit Agreement

described herein

	 	Re: 	 	The Credit Agreement dated as of March 28, 2008 (the “Credit
Agreement”) among Hillenbrand Industries, Inc., an Indiana corporation (the
“Company”), each lender from time to time party thereto, Citibank, N.A., as
Administrative Agent, and certain other Persons party thereto.

Ladies and Gentlemen:

     I am Senior Vice President, General Counsel and Secretary of the Company and have represented
the Company and Hill-Rom, Inc. (the “Guarantor”) in connection with the Credit Agreement.
Capitalized terms used herein and defined in the Credit Agreement but not defined herein are used
herein as therein defined. The Administrative Agent and the syndication agent referred to in the
Credit Agreement are herein collectively referred to as the “Agents” and the Company and
the Guarantor are each individually referred to as an “Opinion Party” and collectively as
the “Opinion Parties”).

     In connection with the rendering of this opinion, I have reviewed (i) the Credit Agreement
executed by the Opinion Parties and the Notes executed by the Company on the date hereof
(collectively, the “Opinion Documents”); (ii) Organization Documents and resolutions of the
Opinion Parties; and (iii) such other matters of fact and law which I deemed necessary in order to
render this opinion.

     I have also discussed the matters addressed in this opinion with officers of one or more
Opinion Parties to the extent I deemed appropriate to enable me to render this opinion.

     In connection with this opinion, I have assumed (i) the genuineness of all signatures (other
than the signatures of the Opinion Parties); (ii) the authenticity of all documents submitted to me
as originals; and (iii) the conformity to original documents of all documents submitted to me as
photostatic or certified copies and the authenticity of the originals of such copies.

     Based upon the foregoing, and subject to the qualifications and exceptions hereinafter set
forth, I am of the opinion that:

     1. Each Opinion Party is a corporation duly organized and validly existing under the laws of
the jurisdiction of its organization.

     2. The execution, delivery and performance by each Opinion Party of the Opinion Documents to
which it is a party, and the consummation of the transactions contemplated

 

 

thereby, are within such Opinion Party’s corporate powers, have been duly authorized by all
necessary corporate action, and do not contravene the Organization Documents of such Opinion Party.
The Opinion Documents have been duly executed and delivered by an authorized officer of each
Opinion Party that is a party thereto.

     3. To the best of my knowledge, there are no pending or overtly threatened actions or
proceedings against the Company or any of its Subsidiaries before any court, governmental agency or
arbitrator that purport to affect the legality, validity, binding effect or enforceability of any
Opinion Document or the consummation of the transactions contemplated thereby or, except as
described in Schedule 3.01(b) to the Credit Agreement, that are likely to have a materially adverse
effect upon the financial condition or operations of the Company or any of its Subsidiaries.

     The opinions set forth above are expressly subject to the following limitations and
assumptions, in addition to those above:

	 	a)	 	In the foregoing opinions, the phrase “to my knowledge” refers to my
conscious awareness of information.
	 
	 	b)	 	I am licensed to practice law in the State of Texas and do not hold
myself out as an expert on the law of any state other than the State of Texas.
Consequently, the foregoing opinions are limited in all respects to the federal
laws of the United States of America, the laws of the State of Texas and as to the
Company’s power and authority to act, the Business Corporation Law of the State of
Indiana (without consideration of judicial or administrative interpretations or
announcements). I express no opinion as to the laws of any other state or
jurisdiction, or as to the other laws of the State of Indiana, other than as set
forth in the immediately preceding sentence.
	 
	 	c)	 	I have, with respect to factual matters, to the extent I have deemed
appropriate, assumed that the statements, recitals, representations and warranties
contained in the Loan Documents are accurate and complete.
	 
	 	d)	 	This opinion is rendered as of the date of this letter, and I undertake
no obligation, and hereby disclaim any obligation, to update or supplement such
opinions to reflect any fact or circumstance that may hereafter come to my
attention or any changes in law that may hereafter occur or become effective.

     This opinion (i) is delivered in connection with the Opinion Documents only to counsel for the
Administrative Agent, you and your assignees permitted under the Credit Agreement, solely in your
capacities identified as addressees of this opinion, and only in connection with the transactions
described above, (ii) does not extend to counsel for the Administrative Agent, you or your
assignees when acting in any other capacity or to any other Person without my prior express written
consent, and (iii) may not be quoted, circulated, or published, in whole or in part, or furnished
to any other Person (other than to independent auditors and attorneys, participants or transferees,
regulators or government agencies, or pursuant to a court order, subpoena or other legal process)
without my prior express written consent. This opinion is strictly limited to the

 

 

matters stated herein, and no other or more extensive opinion is intended, implied or to be
inferred beyond the matters expressly stated herein.

	 	 	 	 	 
	 	Yours truly,

 	 
	 	
 	 
	 	Patrick D. de Maynadier 	 
	 	Senior Vice President, General Counsel and

Secretary of Hillenbrand Industries, Inc. 	 

 

 

	 	 	 	 	 

EXHIBIT F — FORM OF

GUARANTY SUPPLEMENT

                     ____, 20____

Citibank, N.A., as Agent

   for the Lenders parties

   to the Credit Agreement

   referred to below

   Two Penns Way

   New Castle, Delaware 19720

          Attention: Bank Loan Syndications Department

Credit Agreement dated as of March 28, 2008 among

Hillenbrand Industries, Inc., an Indiana corporation (the “Borrower”), the Lenders

party to the Credit Agreement, and Citibank, N.A., as Agent

Ladies and Gentlemen:

          Reference is made to the above-captioned Credit Agreement and to the Guaranty referred to
therein. The capitalized terms defined in the Credit Agreement and not otherwise defined herein
are used herein as therein defined.

          Section 1. Guaranty; Limitation of Liability. (a) The undersigned hereby absolutely,
unconditionally and irrevocably guarantees the punctual payment when due, whether at scheduled
maturity or on any date of a required prepayment or by acceleration, demand or otherwise, of all
obligations of the Borrower now or hereafter existing under or in respect of the Loan Documents
(including, without limitation, any extensions, modifications, substitutions, amendments or
renewals of any or all of the foregoing obligations), whether direct or indirect, absolute or
contingent, and whether for principal, interest, premium, fees, indemnities, contract causes of
action, costs, expenses or otherwise (such obligations being the “Guaranteed Obligations”),
and agrees to pay any and all expenses (including, without limitation, reasonable fees and expenses
of counsel) incurred by the Agent or any Lender in enforcing any rights under this Guaranty
Supplement, the Guaranty or any other Loan Document. Without limiting the generality of the
foregoing, the undersigned’s liability shall extend to all amounts that constitute part of the
Guaranteed Obligations and would be owed by the Borrower to the Agent or any Lender under or in
respect of the Loan Documents but for the fact that they are unenforceable or not allowable due to
the existence of a bankruptcy, reorganization or similar proceeding involving the Borrower.

          (b) The undersigned, and by its acceptance of this Guaranty Supplement, the Agent and each
Lender, hereby confirms that it is the intention of all such Persons that this Guaranty Supplement,
the Guaranty and the obligations of the undersigned hereunder and thereunder not constitute a
fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance
Act, the Uniform Fraudulent Transfer Act or any similar foreign, federal or state law to the extent
applicable to this Guaranty Supplement, the Guaranty and the obligations of the undersigned
hereunder and thereunder. To effectuate the foregoing intention, the Agent, the Lenders and
the

 

 

undersigned hereby irrevocably agree that the obligations of the undersigned under this
Guaranty Supplement and the Guaranty at any time shall be limited to the maximum amount as will
result in the obligations of the undersigned under this Guaranty Supplement and the Guaranty not
constituting a fraudulent transfer or conveyance.

          (c) The undersigned hereby unconditionally and irrevocably agrees that in the event any
payment shall be required to be made to the Agent or any Lender under this Guaranty Supplement, the
Guaranty or any other guaranty, the undersigned will contribute, to the maximum extent permitted by
applicable law, such amounts to each other Guarantor and each other guarantor so as to maximize the
aggregate amount paid to the Agent and the Lenders under or in respect of the Loan Documents.

          Section 2. Obligations Under the Guaranty. The undersigned hereby agrees, as of the
date first above written, to be bound as a Guarantor by all of the terms and conditions of the
Guaranty to the same extent as each of the other Guarantors thereunder. The undersigned further
agrees, as of the date first above written, that each reference in the Guaranty to an “Additional
Guarantor” or a “Guarantor” shall also mean and be a reference to the undersigned, and each
reference in any other Loan Document to a “Guarantor” or a “Loan Party” shall also mean and be a
reference to the undersigned.

          Section 3. Representations and Warranties. The undersigned hereby makes each
representation and warranty set forth in Article IV of the Credit Agreement to the same extent as
each other Guarantor.

          Section 4. Delivery by Telecopier. Delivery of an executed counterpart of a signature
page to this Guaranty Supplement by telecopier or other electronic communication shall be effective
as delivery of an original executed counterpart of this Guaranty Supplement.

          Section 5. Governing Law; Jurisdiction; Waiver of Jury Trial, Etc. (a) This Guaranty
Supplement shall be governed by, and construed in accordance with, the laws of the State of New
York.

          (b) The undersigned hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or any federal court of the
United States of America sitting in New York City, and any appellate court from any thereof, in any
action or proceeding arising out of or relating to this Guaranty Supplement, the Guaranty or any of
the other Loan Documents to which it is or is to be a party, or for recognition or enforcement of
any judgment, and the undersigned hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in any such New York State
court or, to the extent permitted by law, in such federal court. The undersigned agrees that a
final judgment in any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this
Guaranty Supplement or the Guaranty or any other Loan Document shall affect any right that any
party may otherwise have to bring any action or proceeding relating to this Guaranty Supplement,
the Guaranty or any of the other Loan Documents to which it is or is to be a party in the courts of
any other jurisdiction.

          (c) The undersigned irrevocably and unconditionally waives, to the fullest extent it may
legally and effectively do so, any objection that it may now or hereafter have to the laying of
venue of any suit, action or proceeding arising out of or relating to this Guaranty Supplement, the
Guaranty or any of the other Loan Documents to which it is or is to be a party in any New York
State or federal court. The undersigned hereby irrevocably waives, to the fullest extent permitted
by law, the defense of an inconvenient forum to the maintenance of such suit, action or proceeding
in any such court.

 

 

          (d) THE UNDERSIGNED HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO ANY OF THE LOAN DOCUMENTS, THE ADVANCES OR THE ACTIONS OF THE AGENT OR ANY LENDER IN
THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.

	 	 	 	 	 
	 	Very truly yours,

[NAME OF ADDITIONAL GUARANTOR]

 	 
	 	By  	
 	 
	 	 	Title: 	 
	 	 	 	 

 

 

	 	 	 	 	 

EXECUTION COPY

U.S. $500,000,000

CREDIT AGREEMENT

Dated as of March 28, 2008

Among

HILLENBRAND INDUSTRIES, INC.

as Borrower

and

THE INITIAL LENDERS NAMED HEREIN

as Initial Lenders

and

CITIBANK, N.A.

as Administrative Agent

and

BANK OF AMERICA, N.A.

as Syndication Agent

and

CITIGROUP GLOBAL MARKETS INC.

and

BANC OF AMERICA SECURITIES LLC

as Joint Lead Arrangers and Joint Bookrunners

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	ARTICLE I
	 	 	 	 
	SECTION 1.01. Certain Defined Terms
	 	 	1	 
	SECTION 1.02. Computation of Time Periods
	 	 	16	 
	SECTION 1.03. Accounting Terms
	 	 	16	 
	 
	 	 	 	 
	ARTICLE II
	 	 	 	 
	SECTION 2.01. The Advances and Letters of Credit
	 	 	16	 
	SECTION 2.02. Making the Advances
	 	 	17	 
	SECTION 2.03. Issuance of and Drawings and Reimbursement Under Letters of
Credit
	 	 	18	 
	SECTION 2.04. Fees
	 	 	19	 
	SECTION 2.05. Termination or Reduction of the Commitments
	 	 	20	 
	SECTION 2.06. Repayment of Advances and Letter of Credit Drawings
	 	 	20	 
	SECTION 2.07. Interest on Advances
	 	 	21	 
	SECTION 2.08. Interest Rate Determination
	 	 	22	 
	SECTION 2.09. Optional Conversion of Advances
	 	 	23	 
	SECTION 2.10. Prepayments of Advances
	 	 	23	 
	SECTION 2.11. Increased Costs
	 	 	23	 
	SECTION 2.12. Illegality
	 	 	24	 
	SECTION 2.13. Payments and Computations
	 	 	25	 
	SECTION 2.14. Taxes
	 	 	26	 
	SECTION 2.15. Sharing of Payments, Etc.
	 	 	27	 
	SECTION 2.16. Evidence of Debt
	 	 	28	 
	SECTION 2.17. Use of Proceeds
	 	 	28	 
	SECTION 2.18. Increase in the Aggregate Commitments
	 	 	28	 

 

 

	 	 	 	 	 
	SECTION 2.19. Extension of Termination Date
	 	 	30	 
	 
	 	 	 	 
	ARTICLE III
	 	 	 	 
	SECTION 3.01. Conditions Precedent to Effectiveness of Section 2.01
	 	 	32	 
	SECTION 3.03. Conditions Precedent to Each Borrowing, Issuance,
Commitment Increase and Extension Date
	 	 	33	 
	SECTION 3.03. Determinations Under Section 3.01
	 	 	34	 
	 
	 	 	 	 
	ARTICLE IV
	 	 	 	 
	SECTION 4.01. Representations and Warranties of the Company
	 	 	34	 
	 
	 	 	 	 
	ARTICLE V
	 	 	 	 
	SECTION 5.01. Affirmative Covenants
	 	 	37	 
	SECTION 5.02. Negative Covenants
	 	 	41	 
	SECTION 5.03. Financial Covenants
	 	 	46	 
	 
	 	 	 	 
	ARTICLE VI
	 	 	 	 
	SECTION 6.01. Events of Default
	 	 	46	 
	SECTION 6.02. Actions in Respect of the Letters of Credit upon Default
	 	 	48	 
	 
	 	 	 	 
	ARTICLE VII
	 	 	 	 
	SECTION 7.01. Unconditional Guaranty; Limitation of Liability
	 	 	48	 
	SECTION 7.02. Guaranty Absolute
	 	 	49	 
	SECTION 7.03. Waivers and Acknowledgments
	 	 	50	 
	SECTION 7.04. Subrogation
	 	 	51	 
	SECTION 7.05. Guaranty Supplements
	 	 	52	 
	SECTION 7.06. Subordination
	 	 	52	 
	SECTION 7.07. Continuing Guaranty; Assignments
	 	 	53	 
	 
	 	 	 	 
	ARTICLE VIII
	 	 	 	 

ii

 

	 	 	 	 	 
	SECTION 8.01. Authorization and Authority
	 	 	53	 
	SECTION 8.02. Agent Individually
	 	 	53	 
	SECTION 8.03. Duties of Agent; Exculpatory Provisions
	 	 	54	 
	SECTION 8.04. Reliance by Agent
	 	 	55	 
	SECTION 8.05. Delegation of Duties
	 	 	55	 
	SECTION 8.06. Resignation of Agent
	 	 	55	 
	SECTION 8.07. Non-Reliance on Agent and Other Lenders
	 	 	56	 
	SECTION 8.08. No Other Duties, etc.
	 	 	57	 
	 
	 	 	 	 
	ARTICLE IX
	 	 	 	 
	SECTION 9.01. Amendments, Etc.
	 	 	57	 
	SECTION 9.02. Notices, Etc.
	 	 	57	 
	SECTION 9.03. No Waiver; Remedies
	 	 	58	 
	SECTION 9.04. Costs and Expenses
	 	 	58	 
	SECTION 9.05. Right of Set-off
	 	 	60	 
	SECTION 9.06. Binding Effect
	 	 	60	 
	SECTION 9.07. Assignments and Participations
	 	 	60	 
	SECTION 9.08. Confidentiality
	 	 	62	 
	SECTION 9.10. Governing Law
	 	 	63	 
	SECTION 9.11. Execution in Counterparts
	 	 	63	 
	SECTION 9.13. Jurisdiction, Etc.
	 	 	63	 
	SECTION 9.15. No Liability of the Issuing Banks
	 	 	64	 
	SECTION 9.16. Patriot Act Notice
	 	 	64	 
	SECTION 9.17. Power of Attorney
	 	 	64	 
	SECTION 9.18. No Fiduciary
	 	 	64	 

iii

 

	 	 	 	 	 
	SECTION 9.19. Waiver of Jury Trial
	 	 	66	 

Schedules

Schedule I — List of Applicable Lending Offices

Schedule II — Guarantors

Schedule 2.01(b) — Existing Letters of Credit

Schedule 3.01(b) — Disclosed Litigation

Schedule 5.02(a) — Existing Liens

Schedule 5.02(c) — Existing Indebtedness

Schedule 9.02 — Borrower’s Address

Exhibits

	 	 	 	 	 
	Exhibit A
	 	—	 	Form of Note
	Exhibit B
	 	—	 	Form of Notice of Borrowing
	Exhibit C
	 	—	 	Form of Assignment and Acceptance
	Exhibit D
	 	—	 	Form of Compliance Certificate
	Exhibit E
	 	—	 	Form of Opinion of Counsel for the Borrower
	Exhibit F
	 	—	 	Form of Guaranty Supplement

iv

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