Document:

Exhibit 10.1

 

LICENSE AGREEMENT

This License Agreement (the “Agreement”), effective as
of October 23, 2006 (the “Effective Date”), is entered into by and between
Vical, Inc., a Delaware corporation having offices at 863A Mitten Road,
Burlingame, California 94010 (“Valentis”) and Vical Incorporated, a Delaware
corporation having offices at 10309 Pacific Center Court (“Vical”).  All references to Valentis and Vical in this
Agreement shall include their Affiliates (as defined below).

BACKGROUND

A.            Valentis
is the owner or exclusive licensee of certain Patent Rights and Know-How (as
such terms are defined below), and Vical wishes to acquire a license under the
Patent Rights and Know-How; and

B.            Valentis
is willing to grant Vical such a license, on the terms and conditions set forth
below.

NOW, THEREFORE, in consideration of the promises and
the mutual covenants hereinafter recited, the parties agree as follows:

ARTICLE 1.

DEFINITIONS

In this Agreement, the following terms shall have the
meanings set forth in this Article.

1.1           “Affiliate”
means any company, corporation, division or other entity which is directly or
indirectly controlling, controlled by or under common control with a party
hereto.  For the purpose of this
Agreement, with respect to any company, corporation, division or other entity, “control”
shall mean the direct or indirect ownership of at least fifty percent (50%) of
the outstanding shares or other voting rights of the subject company,
corporation or other entity to elect directors.

1.2            “Confidential
Information” means (a) any proprietary or confidential information
or material in tangible form disclosed hereunder that is marked as “Confidential”
at the time it is delivered to the receiving party, or (b) proprietary or
confidential information disclosed orally hereunder which is identified as
confidential or proprietary when disclosed and such disclosure of confidential
information is confirmed in writing within thirty (30) days by the disclosing
party.

1.3           “Know-How”
means unpatented and/or unpatentable technical information, including ideas,
concepts, inventions, discoveries, data, designs, formulas, specifications,
procedures for experiments and tests and other protocols, results of
experimentation and testing, fermentation and purification techniques, and
assay protocols owned by Valentis as of the Effective Date and Vical after the
Effective Date which may be necessary for the practice of the Valentis Patent
Rights solely as contemplated hereunder. 
Know-How shall not include the Valentis Patent Rights.  All Know-How shall be Confidential
Information of Valentis.

 

1.4            “Vical Products”
means any product or material resulting from Vical’s use of the Licensed
Technology.

1.5           “Licensed Technology”
means the Patent Rights and the Know-How.

1.6           “Patent Rights”
means the patent applications and patents expressly listed in Exhibit A (“Patents”).

1.7            “Third Party”
means any person or entity other than Vical or Valentis.

ARTICLE 2.

LICENSE

2.1           Grant to Vical.  Subject to the terms and conditions of this
Agreement, Valentis hereby grants to Vical for the sum of one hundred eighty
five thousand dollars ($185,000.00) payable in good US funds upon the Effective
Date, a non-exclusive, worldwide, royalty-free, fully paid up license under the
Licensed Technology, without the right to grant sublicenses except to either
(i) a contract manufacturing organization (CMO) for the direct manufacture of
Vical Products or (ii) in connection with a written bona-fide research,
development and collaboration agreement with a Third Party, to:

(a)           make, have made, use
(by a contract manufacturing organization solely for the direct manufacturing
of Vical Products), export and import Vical Products;

2.2           No Implied Rights.  Only the licenses granted pursuant to the
express terms of this Agreement shall be of any legal force or effect.  No other license rights shall be granted or
created by implication, estoppel or otherwise. 
For the avoidance of doubt, by example only and without expanding or
narrowing the license grants of Sections 2.1, the grants of rights made
pursuant to Sections 2.1 do not include, and expressly exclude, any right or
license (a) to engage in any activities on behalf of or in collaboration with
any Third Party (other than, in the case of Vical, as applicable), or (b) to
release or waive any claim of infringement under any patent or patent
application owned or controlled by Valentis or its Affiliates, including,
without limitation, the Patent Rights.

2.3           Ownership; Enforcement;
No Challenge.

(a)           Valentis owns the Licensed
Technology, including all embodiments of the Patent Rights or the Know-How, and
may freely use and commercialize such Licensed Technology itself or with Third
Parties.  Valentis retains the right, at
its sole discretion, to enforce, maintain and otherwise protect the Licensed
Technology.  Vical shall give Valentis
notice of any infringement by a Third Party of any patent or patent application
owned or controlled by Valentis or misappropriation of the Know-How which comes
to Vical’s knowledge during the term of this Agreement.  Vical will cooperate on a commercially
reasonable basis with Valentis with respect to any actions Valentis may choose
to take pursuant to this Section 2.4, and Valentis will reimburse Vical for its
reasonable costs in this regard.

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(b)           Except as required
under applicable law, Vical shall not participate, directly or indirectly, in
any opposition or challenge to the validity or enforceability of any Patent in
any forum and Vical shall not assist any Third Party in any such participation.  Any breach by Vical of this Section 2.5(b)
shall constitute a material breach of this Agreement and any licenses or rights
granted hereunder may, at Valentis’ option, be terminable.

2.4           Reports, Records and
Audits.

(a)           Vical shall maintain
records fully and properly reflecting those activities to be reported to
Valentis pursuant to Section 2.6(a) (the “Records”) in sufficient detail and in
good scientific manner appropriate for patent, regulatory and manufacturing
purposes for at least three (3) years after the date of delivery of the report
containing such information.  Upon the
written request of Valentis and not more than once in each calendar year, Vical
shall permit an independent third party, selected by Valentis and reasonably
acceptable to Vical, at Valentis’ expense, to have access during normal
business hours to such of the Records of Vical as may be reasonably necessary
to verify compliance with the terms of this Agreement, as well as the accuracy
of the reports hereunder.  Vical shall certify
any statements by Vical personnel as to their accuracy and correctness.

ARTICLE 3.

IMPROVEMENTS

Valentis shall be free to research, develop and patent
any improvements to the Licensed Technology and, except as expressly set forth
herein, no rights shall be or are to be construed as granted under this
Agreement to Vical to any patents or patent applications arising from such
activities.

ARTICLE 4.

REPORTS AND RECORDS

4.1           Reports.  Vical shall make a written report to Valentis
within thirty (30) days after each anniversary of the Effective Date describing
Vical’ activities under the rights granted to Vical pursuant to Section
2.1.  Each such report shall also contain
a written certification that Vical is in material compliance with all relevant
terms and conditions of this Agreement. 
Valentis shall treat all such reports as Confidential Information of
Vical.

ARTICLE 5.

CONFIDENTIALITY

5.1           Confidential Information.  Except as expressly provided herein, the
parties agree that, for the term of this Agreement and for five (5) years
thereafter, the receiving party shall keep confidential and shall not publish
or otherwise disclose, and shall not use for any purpose except for the
purposes contemplated by this Agreement, any Confidential Information 

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furnished to such receiving party by a
disclosing party hereto, except to the extent that it can be established by the
receiving party by written proof that such Confidential Information:

(a)           was already known to
the receiving party, other than under an obligation of confidentiality to the
disclosing party, at the time of disclosure;

(b)           was generally
available to the public or otherwise part of the public domain at the time of
its disclosure to the receiving party;

(c)           became generally
available to the public or otherwise part of the public domain after its
disclosure other than through any act or omission of the receiving party in
breach of this Agreement; or

(d)           was subsequently
disclosed to the receiving party by a person or entity with no obligation to
the disclosing party with respect to such information.

5.2           Permitted Use and
Disclosures.  Each party
hereto may use or disclose information disclosed to it by the other party to
the extent such use or disclosure is reasonably necessary for the purposes
contemplated by this Agreement, and in such case pursuant to a confidentiality
agreement no less restrictive than the terms set forth in this Article 6, or in
complying with applicable law or government regulations; provided, however, that if a party is required to make any such
disclosure of the other party’s Confidential Information, other than pursuant
to such a confidentiality agreement, it will give reasonable advance notice to
such other party of such disclosure.

5.3           Confidential Terms.  Except as expressly provided herein, each
party agrees that the terms of this Agreement and the transaction and
relationship with Valentis constitute Confidential Information and are not to
be disclosed to any Third Party without the consent of the other party; provided that disclosures may be made as required by
securities or other applicable laws, or to a party’s accountants, attorneys and
other professional advisors provided,
however, that the party required to make any such disclosure will
give reasonable advance notice to such other party of such disclosure.

5.4           Existence of Agreement.  The parties hereby agree that the
consummation of this Agreement, but not any of the terms hereof, except as
otherwise permitted pursuant to Section 5.3, shall be deemed to be in the
public domain and may be announced or otherwise referred to by a party as
deemed appropriate.

ARTICLE 6.

REPRESENTATIONS AND WARRANTIES

6.1           Representations and
Warranties.

(a)           Valentis represents
and warrants that:  (i) it is the sole
and exclusive owner or exclusive licensee of all right, title and interest in
the Licensed Technology; (ii) it has the legal right, authority and power to
enter into this Agreement, and to grant the licenses granted herein; (iii) this
Agreement shall constitute a valid and binding obligation of 

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Valentis enforceable in accordance with its
terms; and (iv) the performance of its obligations under this Agreement by
Valentis shall not result in a breach of any agreement, contract or other
arrangement to which it is a party.

(b)           Vical represents and
warrants that: (i) it has the legal right, authority and power to enter into
this Agreement; (ii) this Agreement shall constitute a valid and binding
obligation of Vical enforceable in accordance with its terms; and (iii) the
performance of its obligations under this Agreement by Vical shall not result
in a breach of any agreement, contract or other arrangement to which it is a
party.

6.2           Disclaimer.  Nothing in this Agreement is or shall be
construed as:

(a)           A warranty or
representation by Valentis as to the validity or scope of any claim or patent
within the Patent Rights;

(b)           A warranty or
representation by Valentis that anything made, used, sold, or otherwise
disposed of under any license granted in this Agreement is or will be free from
infringement of any patent rights or other intellectual property right of any
Third Party;

(c)           An obligation to
bring or prosecute actions or suits against Third Parties for infringement of
any of the Patent Rights; or

(d)           Granting by
implication, estoppel, or otherwise any licenses or rights under patents or
other rights of Valentis or Third Parties, regardless of whether such patents
or other rights are dominant or subordinate to any patent within the Patent
Rights.

6.3           No Warranties.  EXCEPT FOR THE EXPRESS WARRANTIES SET FORTH
IN SECTION 6.1, NEITHER PARTY GRANTS ANY WARRANTY, EXPRESS OR IMPLIED, EITHER
IN FACT OR BY OPERATION OF LAW, BY STATUTE OR OTHERWISE, AND EACH PARTY
SPECIFICALLY DISCLAIMS ANY EXPRESS OR IMPLIED WARRANTY OF TITLE,
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR NON-INFRINGEMENT OF THE
INTELLECTUAL PROPERTY RIGHTS OF ANY THIRD PARTY.

ARTICLE 7.

PATENT PROVISIONS AND INDEMNITY

Valentis shall use commercially reasonable
efforts to give notice to Vical of Valentis’ intent to cease prosecution and/or
maintenance of Patent Rights and, in such case, may offer once to Vical to
permit Vical, and Vical shall promptly accept in writing in Vical’s sole
discretion, to continue prosecution or maintenance at its own expense.  If Vical elects to continue prosecution or
maintenance or file based on Company’s election not to file, Vical shall do so
at its sole expense.  Upon Vical’s
election to continue prosecution or maintenance of the Patent Rights, Valentis
shall cooperate execute such documents and perform such acts at Valentis’
expense as may be reasonably necessary for Vical to perform such prosecution or
maintenance or filing.

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Vical agrees to indemnify, defend and hold Valentis
and its directors, officers, shareholders, employees, contractors and agents
harmless from and against any and all liabilities, claims, demands, expenses
(including, without limitation, attorneys and professional fees and other costs
of litigation), losses or causes of action (each, whether by a Third Party,
Vical, a “Liability”) arising out of (i) the possession, manufacture, use, sale
or other disposition of Vical Products, whether based on breach of warranty,
negligence, product liability or otherwise; (ii) the use by Vical of the
Licensed Technology; (iii) any breach of a warranty, representation or covenant
granted to Valentis hereunder; or (iv) the exercise of any right granted to
Vical, pursuant to this Agreement.

ARTICLE 8.

TERM AND TERMINATION

8.1           Term.  The term of this Agreement will commence on
the Effective Date and remain in full force and effect until the expiration of
the last of the Patents, unless earlier terminated in accordance with this
Article 8.

8.2           Termination for Cause.

(a)           Either party may
terminate this Agreement in the event the other party has materially breached
or defaulted in the performance of any of its obligations hereunder, and such
default has continued for thirty (30) days after written notice thereof was
provided to the breaching party by the non-breaching party.  Any termination shall become effective at the
end of such thirty (30) day period unless the breaching party has cured any
such breach or default prior to the expiration of such period.

8.3           Effect of Termination.

(a)           Accrued Rights and Obligations.  Termination of this Agreement for any reason
shall not release any party hereto from any liability which, at the time of
such termination, has already accrued to the other party or which is
attributable to a period prior to such termination nor preclude either party
from pursuing any rights and remedies it may have hereunder or at law or in
equity with respect to any breach of this Agreement.  It is understood and agreed that monetary
damages may not be a sufficient remedy for any breach of this Agreement and
that the nonbreaching party may be entitled to injunctive relief as a remedy
for any such breach. Such remedy shall not be deemed to be the exclusive remedy
for any such breach of this Agreement, but shall be in addition to all other
remedies available at law or in equity.

(b)           Return of Confidential Information.  Upon any termination of this Agreement, Vical
and Valentis shall promptly return to the other party all Confidential
Information, including without limitation, any know-how received from the other
party (except Valentis may retain copies of any reports or records furnished
pursuant to Articles 2 and 4).

(c)           Licenses. 
Except as expressly provided in this Article 8, all licenses granted
hereunder shall terminate upon the termination of this Agreement.

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8.4           Survival.  Sections 2.6, 5, 6.3, 8.3 and 8.4, Articles
1, 5, 7, and 9 of this Agreement shall survive the expiration or termination of
this Agreement for any reason.

ARTICLE 9.

MISCELLANEOUS PROVISIONS

9.1           Governing Laws.  This Agreement and any dispute, including
without limitation any arbitration, arising from the performance or breach
hereof shall be governed by and construed and enforced in accordance with the
laws of the state of California, without reference to conflicts of laws
principles.

9.2           Assignment.  Neither party may transfer or assign this
Agreement, directly or indirectly, or any of its rights hereunder without the
prior written consent, which shall not be unreasonably withheld, of the other
party, other than (a) to one or more Affiliates, or (b) to a successor in
connection with the transfer or sale of all or substantially all of its
business relating to the subject matter of this Agreement.  Any attempted transfer or assignment in
violation of this Section 9.2 shall be void; provided, (a) this Agreement shall terminate immediately in
the event of a change of control or assignment by Vical to an entity or person
who is the subject matter of a letter sufficient to provide actual notice of
infringement under the applicable statues, any litigation (or re-examination,
interference, opposition or equivalent proceeding) relating to the subject
matter of this Agreement, and/or engaged in active licensing discussions with
Valentis with respect to the Licensed Technology, and (b) that in the event of
a permitted acquisition of all or substantially all of the a party’s assets
relating to the subject matter of this Agreement, the original party’s (or its
successor’s) obligations hereunder shall continue.  This Agreement shall be binding upon and
inure to the benefit of the parties and their permitted successors and assigns.

9.3           Waiver.  No waiver of any rights shall be effective
unless consented to in writing by the party to be charged and the waiver of any
breach or default shall not constitute a waiver of any other right hereunder or
any subsequent breach or default.

9.4           Severability.  In the event that any provisions of this
Agreement are determined to be invalid or unenforceable by a court of competent
jurisdiction, the remainder of the Agreement shall remain in full force and
effect without said provision.

9.5           Notices.  All notices, requests and other
communications hereunder shall be in writing and shall be delivered or sent in
each case to the respective address specified below, or such other address as
may be specified in writing to the other party hereto, and shall be effective
on receipt:

VALENTIS:

Valentis, Inc.

863A Mitten Road

Burlingame, California 94010

Attn:       Benjamin
F. McGraw, III, Pharm. D.

President and
Chief Executive Officer

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with a copy (which shall not constitute notice) to:

Liner Yankelevitz
Sunshine & Regenstreif LLP

199 Fremont St,
20th Floor

San Francisco, Ca
94105

Attn: Gregory Alan Rutchik, Esq.

VICAL INCORPORATED

10390 Pacific
Center Court

San Diego, CA  92121-4340

Attn:  Steven C. Petersen, Esq.

Executive
Director, Intellectual Property

9.6           Independent Contractors.  Both parties are independent contractors
under this Agreement.  Nothing contained
in this Agreement is intended nor is to be construed so as to constitute
Valentis or Vical as partners or joint venturers with respect to this
Agreement.  Except as expressly provided
herein, neither party shall have any express or implied right or authority to
assume or create any obligations on behalf of or in the name of the other party
or to bind the other party to any other contract, agreement, or undertaking
with any Third Party.

9.7           Compliance with Laws.  In exercising their rights under this
license, the parties shall comply in all material respects with the
requirements of any and all applicable laws, regulations, rules and orders of
any governmental body having jurisdiction over the exercise of rights under
this Agreement.  Vical shall, with
respect to the Patent Rights, abide by all applicable patent marking statutes
and, as advised by its own counsel, mark any Vical Products accordingly.

9.8           Bankruptcy.  All rights and licenses granted under or
pursuant to this Agreement by one party to the other are, for all purposes of
Section 365(n) of Title XI of the United States Code (“Title XI”),
licenses of rights to “intellectual property” as defined in Title XI.  During the term of this Agreement each party
shall create and maintain current copies to the extent practicable of all such
intellectual property.  If a bankruptcy
proceeding is commenced by or against one party under Title XI, the other party
shall be entitled to a copy of any and all such intellectual property and all
embodiments of such intellectual property, and the same, if not in the
possession of such other party, shall be promptly delivered to it (a) upon such
party’s written request following the commencement of such bankruptcy
proceeding, unless the party subject to such bankruptcy proceeding, or its
trustee or receiver, elects within thirty (30) days to continue to perform all
of its obligations under this Agreement, or (b) if not delivered as provided
under clause (a) above, upon such other party’s request following the rejection
of this Agreement by or on behalf of the party subject to such bankruptcy
proceeding.  If a party has taken
possession of all applicable embodiments of the intellectual property of the
other party pursuant to this Section 9.8 and the trustee in bankruptcy of the
other party does not reject this Agreement, the party in possession of such
intellectual property shall return such embodiments upon request.  If a party seeks or involuntarily is placed
under Title XI and the trustee rejects this Agreement as contemplated under 11
U.S.C. 365(n)(1), the other party hereby elects, pursuant to Section 

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365(n) of Title XI, to retain all rights
granted to it under this Agreement to the extent permitted by law.

9.9           Use of Names.  Neither party shall use the name or
trademarks of the other party, except to the extent that a party is permitted
to use the Confidential Information of the other party pursuant to Article 5,
without the prior written consent of such other party.

9.10         Further Actions.  Each party agrees to execute, acknowledge and
deliver such further instruments, and do such other acts, as may be necessary
and appropriate in order to carry out the purposes and intent of this
Agreement.

9.11         Limitation of Liability.  IN NO EVENT WILL EITHER PARTY BE LIABLE FOR
ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL OR INDIRECT DAMAGES ARISING IN ANY WAY
OUT OF THIS AGREEMENT, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY.  THIS LIMITATION WILL APPLY EVEN IF THE OTHER
PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE AND NOTWITHSTANDING
ANY FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED WARRANTY PROVIDED HEREIN.

9.12         Arbitration.

(a)           Solely with respect
to any dispute between the parties to this Agreement (other than any dispute
which arises out of or relates to infringement, validity and/or enforceability
of the Patent Rights) upon ten (10) days written notice, any party involved in the
dispute may initiate arbitration by giving notice to that effect to the other
party or parties involved in the dispute and by filing the notice with the
American Arbitration Association or its successor organization (“AAA”)
in accordance with its Commercial Arbitration Rules.  Such dispute shall then be settled by
arbitration in San Mateo County, in accordance with the Commercial Arbitration
Rules of the AAA or other rules agreed to by the parties involved in the dispute,
by a panel of one neutral arbitrator, who shall be selected by the parties
involved in the dispute using the procedures for arbitrator selection of the
AAA.

(b)           The parties
acknowledge that this Agreement evidences a transaction involving interstate
commerce. Insofar as it applies, the United States Arbitration Act shall govern
the interpretation of, enforcement of, and proceedings pursuant to the
arbitration clause in this Agreement. 
Except insofar as the United States Arbitration Act applies to such
matters, the agreement to arbitrate set forth in this Section 9.12 shall be
construed, and the legal relations among the parties shall be determined in
accordance with, the substantive laws of the State of California.

(c)           The arbitrator shall
render its decision and award, including a statement of reasons upon which such
award is based, within thirty (30) days after the arbitration hearing.  The decision shall be in writing and shall be
binding upon the parties involved in the dispute, final and non-appealable.
Judgment upon the award rendered by the panel may be entered in any court
having jurisdiction thereof in accordance with Section 9.13(a).

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(d)           Except as provided
under the United States Arbitration Act and with respect to the infringement,
validity and/or enforceability of the Patent Rights, no action at law or in
equity based upon any dispute that is subject to arbitration under this Section
9.12 shall be instituted.

(e)           All expenses of any
arbitration pursuant to this Section 9.12, including fees and expenses of the
parties’ attorneys, fees and expenses of the arbitrators, and fees and expenses
of any witness or the cost of any proof produced at the request of the
arbitrators, shall be paid by the non-prevailing party.

9.13         Venue; Jurisdiction.

(a)           Any action or
proceeding brought by either party seeking to enforce any provision of, or
based on any right arising out of, this Agreement may be brought against any of
the parties in the courts of the State of California, county of San Mateo.  Each party hereby irrevocably submits to the
jurisdiction of the state courts of the State of California and the country of
San Mateo and to the jurisdiction of any United States District Court in the
State of California, county of San Mateo, for the purpose of any suit, action,
or other proceeding arising out of or based upon this Agreement or the subject
matter hereof brought by any party or its successors or assigns.

(b)           Process in any
action or proceeding seeking to enforce any provision of, or based on any right
arising out of, this Agreement may be served on any party by registered mail at
the address to which notices are to be given pursuant to Section 9.5.  Nothing herein shall affect the right of a
party to serve process in any other manner permitted by applicable law.  Each party further agrees that final judgment
against it in any such action or proceeding arising out of or relating to this
Agreement shall be conclusive and may be enforced in any other jurisdiction
within or outside the United States of America by suit on the judgment, a certified
or exemplified copy of which shall be conclusive evidence of the fact and of
the amount of its liability.

(c)           Each party agrees
that it shall not, and that it shall instruct those in its control not to, take
any action to frustrate or prevent the enforcement of any writ, decree, final
judgment, award (arbitral or otherwise) or order entered against it with
respect to this Agreement or the Patent Rights and shall agree to be bound
thereby as if issued or executed by a competent judicial tribunal having personal
jurisdiction situated in its country of residence or domicile.

9.14         Entire Agreement;
Amendment.  This Agreement
constitutes the entire and exclusive Agreement between the parties with respect
to the subject matter hereof and supersedes and cancels all previous
discussions, agreements, commitments and writings in respect thereof.  No amendment or addition to this Agreement
shall be effective unless reduced to writing and executed by the authorized
representatives of the parties.

9.15         Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

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IN WITNESS WHEREOF, Valentis and Vical have executed
this Agreement in duplicate originals by duly authorized officers.

	
  VALENTIS , INC.

  	
  VICAL INCORPORATED 

  
	
   

  	
   

  
	
   

  	
   

  
	
  By: 

  	
  /s/ Benjamin F. McGraw, III

  	
   

  	
  By: 

  	
  /s/ Jill M. Church

  	
   

  
	
   

  	
  Name: 
  Benjamin F. McGraw, III

  	
   

  	
  Name: Jill M. Church

  
	
   

  	
  Title: 
  President and Chief Executive 

  Officer

  	
   

  	
  Title: Vice President and Chief Financial 

  Officer

  
						

 

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SCHEDULE 1.9

PATENT RIGHTS

	
  Family

  	
   

  	
  Title

  	
   

  	
  Number

  	
   

  	
  Filed/Priority Date

  
	
  1

  	
   

  	
  Methods for Purifying Nucleic Acids (Tangential Flow Ultrafiltration/Diafiltration [UF/DF] for plasmid
  purification)

  	
   

  	
  US6,011,148 WO98/05673
  EP0923592B1 AU717136B2 CA2261150C JP3492702B2

  	
   

  	
  filed 1996-08-01

  
	
  2

  	
   

  	
  Methods for Purifying Nucleic Acids (Purification protocol including static mixing for lysis, TMAE anion
  exchange chromatography and UF/DF for plasmid purification)

  	
   

  	
  WO00/05358 US09/121,798 (US
  Pub. No. 2002/0198372A1) EP1098966A1 AU48638/99A1 CA2338397AA JP2002-521029,A
  (unexamined publication no.)

  	
   

  	
  PCT filed 1999-07-07, claiming priority to
  1998-07-23

  
	
  3

  	
   

  	
  Process and Equipment for Plasmid Purification  (TMAE anion exchange and/or
  hydrophobic interaction chromatography (HIC) for plasmid purification)

  	
   

  	
  US7,026,468 US 11/327,987 (US
  Pub. No. 2006/0106208A1)

  	
   

  	
  filed 1997-07-03, claiming priority to 1996-07-19
  provisional.

  
	
  4

  	
   

  	
  Apparatus and Method for Preparative Scale
  Purification of Nucleic Acids  (flotation of alkaline precipitate for large scale plasmid
  purification)

  	
   

  	
  WO04/024283 US10/527,618 (US
  Pub. No. 2006-0166331A1) EP1554398A2 CA2498518AA AU3267175AA JP2005-538717,A
  (unexamined publication no.)

  	
   

  	
  filed 2003-09-12 as PCT app., claiming priority to
  2002-09-13 (US Provisional)Exhibit 10.1

 

 

AMENDED AND RESTATED

CREDIT AGREEMENT

DATED AS OF SEPTEMBER 29, 2006

AMONG

MEDICAL STAFFING NETWORK, INC.,

THE OTHER CREDIT PARTIES SIGNATORY HERETO

THE LENDERS REFERRED TO HEREIN,

GENERAL ELECTRIC CAPITAL CORPORATION,

AS ADMINISTRATIVE AGENT AND SOLE LEAD ARRANGER,

AND

LASALLE BANK NATIONAL ASSOCIATION,

AS SYNDICATION AGENT

 

TABLE
OF CONTENTS

 

	
  

  	
  Page

  
	
   

  	
   

  
	
  INTRODUCTORY STATEMENT

  	
  1

  
	
   

  	
   

  
	
  ARTICLE I. DEFINITIONS

  	
  2

  
	
  Section
  1.1.

  	
  Certain
  Defined Terms

  	
  2

  
	
  Section
  1.2. 

  	
  Accounting
  Terms and Determinations

  	
  37

  
	
  Section
  1.3. 

  	
  Other
  Definitional Provisions

  	
  37

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  II. THE FACILITIES

  	
  38

  
	
  Section
  2.1. 

  	
  The
  Facilities

  	
  38

  
	
  Section
  2.2. 

  	
  Notes

  	
  39

  
	
  Section
  2.3.

  	
  Method
  of Borrowing; Funding of Loans; Administrative Agent May Assume Funding;
  Failure to Fund

  	
  40

  
	
  Section
  2.4. 

  	
  Interest
  on Loans

  	
  41

  
	
  Section
  2.5. 

  	
  Letters
  of Credit

  	
  42

  
	
  Section
  2.6. 

  	
  Swingline
  Loans

  	
  50

  
	
  Section
  2.7. 

  	
  Certain
  Fees

  	
  52

  
	
  Section
  2.8. 

  	
  Mandatory
  Repayments and Prepayments

  	
  53

  
	
  Section
  2.9. 

  	
  Optional
  Prepayments

  	
  55

  
	
  Section
  2.10. 

  	
  Application
  of Payments

  	
  55

  
	
  Section
  2.11. 

  	
  Reduction
  of Commitments

  	
  56

  
	
  Section
  2.12. 

  	
  Loan
  Account and Accounting

  	
  57

  
	
  Section
  2.13.

  	
  Computation
  of Interest and Fees

  	
  57

  
	
  Section
  2.14. 

  	
  General
  Provisions Regarding Payments

  	
  58

  
	
  Section
  2.15. 

  	
  Maximum
  Interest

  	
  58

  
	
  Section
  2.16. 

  	
  Swap
  Related Reimbursement Obligations

  	
  59

  
	
   

  	
   

  	
   

  
	
  ARTICLE III. CONDITIONS

  	
  60

  
	
  Section
  3.1. 

  	
  Conditions to Closing

  	
  60

  
	
  Section
  3.2. 

  	
  Conditions to Each Extension of Credit

  	
  61

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV. REPRESENTATIONS AND
  WARRANTIES

  	
  62

  
	
  Section
  4.1.

  	
  Existence and Organizational Power; Compliance
  with Organizational Documents

  	
  62

  
	
  Section
  4.2. 

  	
  Governmental
  Approvals, Compliance with Laws and Compliance with Agreements with Third
  Parties

  	
  62

  
	
  Section
  4.3. 

  	
  Organizational and Governmental Approvals; No
  Contravention

  	
  63

  
	
  Section
  4.4. 

  	
  Binding Effect; Liens of Collateral Documents

  	
  63

  
	
  Section
  4.5. 

  	
  Financial Statements

  	
  63

  
	
  Section
  4.6. 

  	
  Material Adverse Effect

  	
  64

  
	
  Section
  4.7. 

  	
  Litigation

  	
  64

  
	
  Section
  4.8. 

  	
  Full Disclosure

  	
  65

  
	
  Section
  4.9.

  	
   No Adverse
  Fact

  	
  65

  

 

 

 

	
  Section 4.10. 

  	
  Ownership of Property, Liens

  	
  65

  
	
  Section
  4.11. 

  	
  Environmental Laws

  	
  65

  
	
  Section
  4.12. 

  	
  ERISA

  	
  65

  
	
  Section
  4.13. 

  	
  Subsidiaries; Capitalization

  	
  66

  
	
  Section
  4.14. 

  	
  Government Regulations

  	
  66

  
	
  Section
  4.15. 

  	
  Margin Regulations

  	
  66

  
	
  Section
  4.16. 

  	
  Taxes

  	
  67

  
	
  Section
  4.17. 

  	
  Intellectual Property

  	
  67

  
	
  Section
  4.18. 

  	
  Solvency

  	
  67

  
	
  Section
  4.19. 

  	
  Insurance

  	
  67

  
	
  Section
  4.20. 

  	
  Brokers

  	
  68

  
	
  Section
  4.21. 

  	
  HIPAA Compliance

  	
  68

  
	
  Section
  4.22. 

  	
  Third Party Reimbursement

  	
  68

  
	
  Section
  4.23. 

  	
  Tax Shelter Representation

  	
  69

  
	
   

  	
   

  	
   

  
	
  ARTICLE V. REPORTING COVENANTS

  	
  69

  
	
  Section
  5.1. 

  	
  Financial Statements and Reports

  	
  69

  
	
  Section
  5.2. 

  	
  Collateral Reports

  	
  72

  
	
  Section
  5.3. 

  	
  Accuracy of Financial Statements and Information

  	
  74

  
	
  Section
  5.4. 

  	
  Confidential Health Information

  	
  74

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI. AFFIRMATIVE
  COVENANTS

  	
  75

  
	
  Section
  6.1. 

  	
  Payment of Obligations

  	
  75

  
	
  Section
  6.2. 

  	
  Preservation of Existence and Franchises

  	
  75

  
	
  Section
  6.3. 

  	
  Insurance; Damage to or Destruction of Collateral

  	
  75

  
	
  Section
  6.4. 

  	
  Compliance with Law

  	
  77

  
	
  Section
  6.5. 

  	
  Payment of Taxes and Other Indebtedness

  	
  77

  
	
  Section
  6.6. 

  	
  Maintenance of Property

  	
  77

  
	
  Section
  6.7. 

  	
  Performance of Obligations

  	
  77

  
	
  Section
  6.8. 

  	
  Use of Proceeds

  	
  78

  
	
  Section
  6.9. 

  	
  Audits/Inspections

  	
  78

  
	
  Section
  6.10. 

  	
  Financial Covenants

  	
  78

  
	
  Section
  6.11. 

  	
  Collateral

  	
  78

  
	
  Section
  6.12. 

  	
  Additional Credit Parties

  	
  79

  
	
  Section
  6.13. 

  	
  [Reserved]

  	
  80

  
	
  Section
  6.14. 

  	
  Supplemental Disclosure

  	
  80

  
	
  Section
  6.15. 

  	
  Further Assurances

  	
  80

  
	
  Section
  6.16. 

  	
  Environmental Matters

  	
  80

  
	
  Section
  6.17. 

  	
  Landlord and Warehouseman Waivers

  	
  81

  
	
  Section
  6.18. 

  	
  Mortgages on Real Property; Title Insurance and
  Survey

  	
  81

  
	
  Section
  6.19. 

  	
  Compliance Program

  	
  82

  
	
  Section
  6.20. 

  	
  Cash Management Systems

  	
  82

  
	
  Section
  6.21. 

  	
  SEC Filings

  	
  84

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII. NEGATIVE COVENANTS

  	
  84

  
	
  Section
  7.1. 

  	
  Indebtedness

  	
  84

  
	
  Section
  7.2. 

  	
  Liens

  	
  85

  

 

 ii
 

 

 

	
  Section 7.3. 

  	
  Nature of Business

  	
  86

  
	
  Section
  7.4. 

  	
  Consolidation and Merger

  	
  86

  
	
  Section
  7.5. 

  	
  Sale or Lease of Assets

  	
  86

  
	
  Section
  7.6. 

  	
  Advances, Investments and Loans

  	
  87

  
	
  Section
  7.7. 

  	
  Restricted Payments

  	
  87

  
	
  Section
  7.8.

  	
  Transactions with Affiliates

  	
  87

  
	
  Section
  7.9. 

  	
  Fiscal Year; Organizational Documents

  	
  87

  
	
  Section
  7.10. 

  	
  Limitations

  	
  88

  
	
  Section
  7.11. 

  	
  Sale Leasebacks

  	
  88

  
	
  Section
  7.12. 

  	
  Negative Pledges

  	
  88

  
	
  Section
  7.13. 

  	
  Reserved

  	
  88

  
	
  Section
  7.14. 

  	
  Payments of Indebtedness, etc

  	
  88

  
	
  Section
  7.15.

  	
  Ownership of Subsidiaries; Limitations on
  Borrower

  	
  89

  
	
  Section
  7.16. 

  	
  Earn-Out Obligations

  	
  89

  
	
  Section
  7.17. 

  	
  Guaranteed Obligations

  	
  89

  
	
  Section
  7.18. 

  	
  ERISA

  	
  89

  
	
  Section
  7.19. 

  	
  Amendments or Waivers

  	
  89

  
	
  Section
  7.20. 

  	
  Limitations on Holdings

  	
  89

  
	
  Section
  7.21. 

  	
  Limitations on Parent

  	
  90

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII. EVENTS OF DEFAULT

  	
  90

  
	
  Section
  8.1. 

  	
  Events of Default

  	
  90

  
	
  Section
  8.2. 

  	
  Acceleration; Remedies

  	
  93

  
	
  Section
  8.3. 

  	
  Allocation of Payments After Event of Default

  	
  94

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX. EXPENSES AND
  INDEMNITIES

  	
  96

  
	
  Section
  9.1. 

  	
  Expenses

  	
  96

  
	
  Section
  9.2. 

  	
  Indemnity

  	
  96

  
	
  Section
  9.3. 

  	
  Taxes

  	
  97

  
	
  Section
  9.4. 

  	
  Capital Adequacy; Increased Costs; Illegality;
  Funding Losses

  	
  97

  
	
   

  	
   

  	
   

  
	
  ARTICLE X. THE ADMINISTRATIVE
  AGENT

  	
  99

  
	
  Section
  10.1. 

  	
  Appointment and Authorization

  	
  99

  
	
  Section
  10.2. 

  	
  Delegation of Duties

  	
  100

  
	
  Section
  10.3. 

  	
  Administrative Agent and Affiliates

  	
  100

  
	
  Section
  10.4. 

  	
  Action by Administrative Agent

  	
  100

  
	
  Section
  10.5. 

  	
  Consultation with Experts

  	
  100

  
	
  Section
  10.6. 

  	
  Liability of Administrative Agent

  	
  100

  
	
  Section
  10.7. 

  	
  Indemnification

  	
  101

  
	
  Section
  10.8. 

  	
  Credit Decision

  	
  101

  
	
  Section
  10.9. 

  	
  Successor Administrative Agent

  	
  101

  
	
  Section
  10.10. 

  	
  Reliance by Administrative Agent

  	
  102

  
	
  Section
  10.11. 

  	
  Notice of Default

  	
  102

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI. MISCELLANEOUS

  	
  103

  
	
  Section
  11.1. 

  	
  Survival

  	
  103

  
	
  Section
  11.2. 

  	
  No Waivers; Remedies Cumulative

  	
  103

  

 

 iii
 

 

 

	
  Section 11.3. 

  	
  Notices

  	
  103

  
	
  Section
  11.4. 

  	
  Severability

  	
  104

  
	
  Section
  11.5. 

  	
  Amendments and Waivers

  	
  105

  
	
  Section
  11.6. 

  	
  Successors and Assigns; Registration

  	
  106

  
	
  Section
  11.7. 

  	
  Setoff and Sharing of Payments

  	
  108

  
	
  Section
  11.8. 

  	
  Collateral

  	
  109

  
	
  Section
  11.9. 

  	
  Headings

  	
  109

  
	
  Section
  11.10. 

  	
  Governing Law; Submission To Jurisdiction

  	
  109

  
	
  Section
  11.11. 

  	
  Notice of Breach by Agents or Lender

  	
  110

  
	
  Section
  11.12. 

  	
  Waiver Of Jury Trial

  	
  110

  
	
  Section
  11.13. 

  	
  Counterparts; Entire Agreement

  	
  110

  
	
  Section
  11.14. 

  	
  Confidentiality; Press Release

  	
  111

  
	
  Section
  11.15. 

  	
  Reinstatement

  	
  112

  
	
  Section
  11.16. 

  	
  Advice of Counsel

  	
  112

  
	
  Section
  11.17. 

  	
  No Strict Construction

  	
  112

  
	
  Section
  11.18. 

  	
  Conflict of Terms

  	
  112

  
	
  Section
  11.19. 

  	
  My AccountSM

  	
  112

  
	
  Section
  11.20. 

  	
  Effect of Amendment and Restatement of the
  Original Credit Agreement

  	
  113

  
	
  Section
  11.21. 

  	
  Confirmation of Existing Obligations

  	
  113

  
	
  Section
  11.22. 

  	
  Confirmation/Ratification of the Loans

  	
  114

  

 

 iv
 

 

 

	
  EXHIBIT A  -

  	
  Revolving Note

  
	
  EXHIBIT B  -

  	
  Swingline Note

  
	
  EXHIBIT C-1  -

  	
  Notice of Borrowing

  
	
  EXHIBIT C-2  -

  	
  Notice of Swingline Borrowing

  
	
  EXHIBIT D  -

  	
  Application for Standby Letter of Credit

  
	
  EXHIBIT F  -

  	
  Application for Documentary Letter of Credit

  
	
  EXHIBIT G

  	
  Borrowing Base Certificate

  
	
  EXHIBIT H  -

  	
  Opinion of Counsel to the Credit Parties

  
	
  EXHIBIT I  -

  	
  Authorized Signatory Letter

  
	
  EXHIBIT J  -

  	
  Closing Checklist

  
	
  EXHIBIT K  -

  	
  Assignment Agreement

  
	
  EXHIBIT L  -

  	
  Business Associate Agreement

  

 

	
  EXHIBIT 5.1(a)

  	
  Compliance Certificate (Monthly)

  
	
  EXHIBIT 5.1(b)

  	
  Compliance Certificate (Quarterly)

  
	
  EXHIBIT 5.1(c)

  	
  Compliance Certificate (Annual)

  
	
  EXHIBIT 11.19

  	
  MyAccountSM

  

 

	
  DISCLOSURE SCHEDULE 4.5(a)

  	
  -

  	
  Financial Statements

  
	
  DISCLOSURE SCHEDULE 4.5(b)

  	
  -

  	
  Pro Forma Balance Sheet

  
	
  DISCLOSURE SCHEDULE 4.5(c)

  	
  -

  	
  Borrower’s Financial Projections

  
	
  DISCLOSURE SCHEDULE 4.5(d)

  	
  -

  	
  Fair Salable Balance Sheet

  
	
  DISCLOSURE SCHEDULE 4.7

  	
  -

  	
  Litigation

  
	
  DISCLOSURE SCHEDULE 4.13

  	
  -

  	
  Subsidiaries, Other Equity Investments

  
	
  DISCLOSURE SCHEDULE 4.16

  	
  -

  	
  Taxes

  
	
  DISCLOSURE SCHEDULE 4.19

  	
  -

  	
  Insurance Policies

  
	
  DISCLOSURE SCHEDULE 6.20

  	
  -

  	
  Bank Accounts

  
	
  DISCLOSURE SCHEDULE 7.1

  	
  -

  	
  Indebtedness

  
	
  DISCLOSURE SCHEDULE 7.6

  	
  -

  	
  Existing Investments

  

 

 v

AMENDED
AND RESTATED CREDIT AGREEMENT

THIS
AMENDED AND RESTATED CREDIT AGREEMENT (this “Agreement”),
dated as of September 29, 2006, among MEDICAL STAFFING NETWORK,
INC. (the “Borrower”). THE OTHER CREDIT PARTIES
SIGNATORY HERETO, THE LENDERS listed on the signature pages hereof,
and GENERAL ELECTRIC CAPITAL CORPORATION
(in its individual capacity, “GE Capital”), as Administrative Agent and
a Lender.

INTRODUCTORY
STATEMENT

A.            The Borrower and
other Credit Parties signatory thereto, GE Capital and Lenders signatory
thereto are parties to that certain Credit Agreement (as amended prior to the
date hereof, the “Original Credit Agreement”), dated as of December 22,
2003;

B.            The Borrower, the
other Credit Parties signatory hereto, GE Capital and Lenders desire to
continue the Original Credit Agreement but to make certain amendments and
modifications thereto, all as reflected in this Amended and Restated Credit
Agreement, which upon execution will supersede and replace the loans effective
as of the Closing Date (as hereinafter defined);

C.            The Borrower desires
that Lenders continue a credit facility to the Borrower to provide working
capital financing and funds for capital expenditures for the Borrower and to
provide funds for other general corporate purposes of the Borrower;

D.            The Borrower desires
to secure all of its Obligations (as hereinafter defined) under the Loan
Documents (as hereinafter defined) by granting to the Administrative Agent, for
the benefit of itself and Lenders, a security interest in and lien upon all of
its personal and Real Property including a pledge of the capital stock of all
of its subsidiaries;

E.             Medical Staffing
Holdings, LLC, a Delaware limited liability company (“Holdings”) that
owns all of the capital stock of the Borrower, is willing to guaranty all of
the Obligations of the Borrower to Lenders under the Loan Documents, to grant
to Administrative Agent, for the benefit of itself and Lenders, a security
interest in and lien upon all of its personal and Real Property to secure the
Obligations and to pledge to the Administrative Agent, for the benefit of
itself and Lenders, all of the capital stock of the Borrower to secure the
Obligations;

F.             Medical Staffing
Network Holdings, Inc., a Delaware corporation (“Parent”) that owns all
of the capital stock of Holdings, is willing to guaranty all of the Obligations
of the Borrower to Lenders under the Loan Documents, to grant to Administrative
Agent, for the benefit of itself and Lenders, a security interest in and lien
upon all of its personal and Real Property to secure the Obligations and to
pledge to the Administrative Agent, for the benefit of itself and Lenders, all
of the capital stock of Holdings to secure the Obligations; and

 

 

G.            Each
of the Borrower’s Subsidiaries is willing to guaranty all of the Obligations of
the Borrower to Lenders under the Loan Documents and to grant to Administrative
Agent, for the benefit of itself and Lenders, a security interest in and lien
upon all of its personal and Real Property to secure the Obligations.

In consideration of the above premises and for other good and valuable
consideration the receipt of which is hereby acknowledged, the parties hereto
agree as follows:

ARTICLE I.

DEFINITIONS

Section
1.1.  Certain Defined Terms.  The following terms used herein shall have
the following meanings:

“2006 Restructuring Charges” means fees and expenses incurred by the
Borrower in connection with its closure of approximately thirteen per diem
nurse staffing branch locations in the Fiscal Year 2006.

(b)           “Accounts” means all
“accounts,” as such term is defined in the Uniform Commercial Code as in effect
in the State of New York, now owned or hereafter acquired by a Credit Party,
including (a) all accounts receivable, other receivables, book debts and other
forms of obligations (other than forms of obligations evidenced by chattel
paper, or instruments), (including any such obligations that may be
characterized as an account or contract right under the Uniform Commercial Code
as in effect in the State of New York), (b) all of each Credit Party’s rights
in, to and under all purchase orders or receipts for goods or services, (c) all
of each Credit Party’s rights to any goods represented by any of the foregoing
(including unpaid sellers’ rights of rescission, replevin, reclamation and
stoppage in transit and rights to returned, reclaimed or repossessed goods),
(d) all rights to payment due to any Credit Party for property sold, leased,
licensed, assigned or otherwise disposed of, for a policy of insurance issued
or to be issued, for a secondary obligation incurred or to be incurred, for
energy provided or to be provided, for the use or hire of a vessel under a
charter or other contract, arising out of the use of a credit card or charge
card, or for services rendered or to be rendered by any Credit Party or in
connection with any other transaction (whether or not yet earned by performance
on the part of such Credit Party) all health care insurance receivables and (f)
all collateral security of any kind, given by any Account Debtor or any other
Person with respect to any of the foregoing.

“Account Debtor” means any Person who may become obligated to a Credit
Party under, with respect to, or on account of an Account of such Credit Party
(including without limitation any guarantor of the payment or performance of an
Account).

“Accounts Receivable Advance Rate” means up to 85%, subject to
adjustment pursuant to Section 2.1(d).

 2
 

 

 

“Acquisition”
means the acquisition by any Person of (a) a majority of the Voting Stock of
another Person (b) all or substantially all of the assets of another Person or
(c) all or substantially all of a line of business of another Person, in each
case whether or not involving a merger or consolidation with such other Person.

“Adjusted Current Assets” means, at any date, the consolidated current
assets (excluding cash and cash equivalents) of the Credit Parties and their
Subsidiaries determined as of such date.

“Administrative Agent” means GE Capital in its capacity as
Administrative Agent for the Lenders hereunder and under the Loan Documents,
and its successors in such capacity.

“Advance” means either a LIBOR Loan Advance or a Base Rate Advance, as
applicable.

“Affiliate” means, with respect to any Person, (a) each Person that,
directly or indirectly, owns or controls, whether beneficially or as a trustee,
guardian or other fiduciary, five percent (5%) or more of the Stock of such
Person, (b) each Person that controls, is controlled by or is under common
control with such Person, (c) each of such Person’s officers, directors, joint
venturers and partners and (d) in the case of the Borrower, the immediate
family members, spouses and lineal descendants of individuals who are
Affiliates of the Borrower.  For the
purposes of this definition, “control” of a Person means the possession,
directly or indirectly, of the power to direct or cause the direction of its
management or policies, whether through the ownership of voting securities, by
contract or otherwise; provided, however, that the term “Affiliate”
when used with respect to any Credit Party shall specifically exclude each
Lending Party.

“Aggregate L/C Exposure” means, at any time, the sum, without
duplication, of (a) the aggregate amount that is (or may thereafter become)
available for drawing under all Letters of Credit outstanding at such time plus
(b) the aggregate unpaid principal amount of all Reimbursement Obligations
outstanding at such time.

“Agreement” means this Amended and Restated
Credit Agreement, including all schedules, exhibits and other attachments
hereto as the same may be amended, modified, supplemented or restated from time
to time.

“Applicable Law” means, anything in Section 11.10 to the contrary
notwithstanding, (i) all applicable common law and principles of equity and
(ii) all applicable provisions of all (A) constitutions, statutes, rules,
regulations and orders of Governmental Authorities, (B) Governmental
Approvals and (C) orders, decisions, judgments and decrees of all courts and
arbitrators.

“Applicable Margin” means: (i) 2.00% per annum for
LIBOR Loan Advances and 0.75% per annum for Base Rate Advances, (ii) 0.75% per
annum for Swingline Loans,

 3
 

 

 

(iii)
2.00% per annum for the Letter of Credit Fee Applicable Margin and (iv) 0.35%
for the Unused Line Fee Applicable Margin.

“Asset Disposition” means any disposition, whether by sale, lease,
transfer, loss, damage, destruction, casualty, condemnation or otherwise
(including any such transaction effected by way of merger or consolidation), of
any Stock or other property (whether real, personal or mixed) of any Credit
Party, but excluding (a) dispositions of inventory in the ordinary course of
business,  (b) dispositions of Temporary
Cash Investments and cash payments otherwise permitted under this Agreement and
(c) dispositions pursuant to the exercise of remedies against the Collateral by
the Administrative Agent.

“Assignment Agreement” has the meaning ascribed to it in Section 11.6(a).

“Authorized Signatory” means any Person or Persons designated as such
by the Borrower to the Administrative Agent in a writing in the form of Exhibit I.

“Availability Block” means an amount equal to $1,000,000.

 “Base Rate” means, for any day,
a floating rate equal to the greater of (a) the rate publicly quoted from time
to time by The Wall Street Journal as the “Prime Rate”
(or, if The Wall Street Journal ceases quoting a prime rate of
the type described, the highest per annum rate of interest published by the
Federal Reserve Board in Federal Reserve statistical release H.15 (519)
entitled “Selected Interest Rates” as the Bank prime loan rate or its
equivalent), and (b) the Federal Funds Rate plus 50 basis points per
annum.  Any change in the Base Rate due
to a change in the prime rate or the Federal Funds Rate shall be effective as
of the opening of business on the effective day of such change in the prime
rate or the Federal Funds Rate, respectively.

“Base Rate Advance” means a Revolving Credit Advance bearing interest
by reference to the Base Rate.

“Base Rate Borrowing” means a Borrowing that is constituted of Base
Rate Loans.

“Base Rate Loan” means that portion of a Loan, the interest on which
is, or is to be, as the context may require, computed on the basis of the Base
Rate.

“Benefit Arrangement” means, at any time, an employee benefit plan
within the meaning of Section 3(3) of ERISA that is not a Plan or a
Multiemployer Plan and which is maintained or otherwise contributed to by any
member of the Controlled Group.

“Blocked Account” has the meaning ascribed to it in Section 6.20.

“Borrower” means Medical Staffing Network, Inc.

 4
 

 

 

“Borrower Account” means the deposit account
specified on the signature pages hereof into which all Advances to the Borrower
shall be made available, or such other account as the Borrower shall from time
to time specify by written notice to the Administrative Agent.

“Borrower Bank of America Lockbox Account” means that certain lockbox
account number 3664920358 held in the name of the Borrower at Bank of America.

“Borrower Pledge Agreement” means the Borrower Pledge Agreement dated
December 22, 2003, between the Borrower and the Administrative Agent, as
amended, restated, replaced or otherwise modified from time to time.

“Borrower Security Agreement” means the Security Agreement dated
December 22, 2003, between the Borrower and the Administrative Agent, as
amended, restated, replaced or otherwise modified from time to time.

“Borrowing” means the aggregation of Advances to be made to the
Borrower by the Lenders pursuant to Article
II on the same day, all of which Advances are of the same Type
(subject to Article II) and,
except in the case of Base Rate Advances, have the same initial LIBOR
Period.  Borrowings are also classified
for purposes hereof by reference to the pricing of Advances comprising such
Borrowing (for example, a “LIBOR Borrowing” is a Borrowing comprised of LIBOR
Loan Advances).

“Borrowing Availability” means, as of any date of determination,
Revolving Credit Limit minus the sum of the aggregate Revolving Loans
and Swingline Loans then outstanding.

“Borrowing Base” means, on any date, a dollar amount equal to the
Account Receivable Advance Rate multiplied by the aggregate Collection Value of
Eligible Accounts.

“Borrowing Base Certificate” means a certificate, duly executed by the
chief financial officer, controller or treasurer of the Borrower, appropriately
completed and substantially in the form of Exhibit
G.

“Borrowing Base Party” means Borrower and its Subsidiaries.

“Budget” has the meaning ascribed to such term in Section 5.1(d).

“Business Associate Agreement” means, collectively, one or more
Business Associate Agreements in substantially the form attached hereto as Exhibit L, between Administrative Agent and
one or more Credit Parties, as amended, restated, supplemented or otherwise
modified from time to time.

“Business Day” means any day that is not a Saturday, a Sunday or a day
on which banks are required or permitted to be closed in the State of New York
and, in reference to LIBOR Loans, means any such day that is also a LIBOR
Business Day.

 5
 

 

 

“Capital Expenditures” means all expenditures
of the Credit Parties and their Subsidiaries which, in accordance with GAAP,
would be classified as capital expenditures, including, without limitation,
Capital Leases and capitalized software costs.

“Capital Lease” means, with respect to any Person, any lease of any
property (whether real, personal or mixed) by such Person as lessee which
would, in accordance with GAAP, be required to be accounted for as a capital
lease on the balance sheet of such Person.

“Capital Lease Obligation” means, with respect to any Capital Lease of
any Person, the amount of the obligation of the lessee thereunder that, in
accordance with GAAP, would appear on a balance sheet of such lessee in respect
of such Capital Lease.

“Cash Collateral Account” has the meaning ascribed to it in Section 2.5(k)(i).

“Cash Equivalents” means cash or cash equivalents acceptable to
Administrative Agent.

“Cash Management System” has the meaning ascribed to it in Section 6.20.

“Cash Taxes” means, as of any date for the twelve month period ending
on such date with respect to the Credit Parties and their Subsidiaries on a
consolidated basis, the aggregate of all taxes, as determined in accordance
with GAAP, to the extent the same are paid in cash during such period.

“CERCLA” means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980 (42 U.S.C. Sections 9601 et seq.), as amended
from time to time, and the regulations promulgated thereunder.

“CHAMPVA” means, collectively, the Civilian Health and Medical Program of
the Department of Veteran Affairs, a program of medical benefits covering
retirees and dependents of former members of the armed services administered by
the United States Department of Veteran Affairs, and all laws, rules,
regulations, manuals, orders, guidelines or requirements pertaining to such
program including, without limitation, (a) all federal statutes (whether set
forth in 38 U.S.C. §1713 or elsewhere) affecting such program or, to the extent
applicable to CHAMPVA and (b) all rules, regulations (including 38 C.F.R.
§17.54), manuals, orders and administrative, reimbursement and other guidelines
of all Governmental Authorities promulgated in connection with such program
(whether or not having the force of law), in each case as the same may be amended,
supplemented or otherwise modified from time to time.

“CHAMPVA Account” means an Account payable pursuant to CHAMPVA.

“Change of Control” means any event, transaction or occurrence as a
result of which (a) (i) any “person” or “group” (within the meaning of Section
13(d) or 14(d) of the Exchange Act) (other than the Sponsor, the management of
the Parent or any entity in which any member of the management of Parent owns a
controlling interest) has become, directly

 6
 

 

 

or indirectly, the “beneficial
owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that
a Person shall be deemed to have “beneficial ownership” of all shares that any
such Person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), by way of merger, consolidation
or otherwise, of 40% or more of the voting power of the Voting Stock of Parent
on a fully-diluted basis, after giving effect to the conversion and exercise of
all outstanding warrants, options and other securities of Parent convertible
into or exercisable for voting stock of Parent (whether or not such securities
are then currently convertible or exercisable), and (ii) such Person or group
is or becomes, directly or indirectly, the beneficial owner of a greater
percentage of the voting power of the Voting Stock of Parent calculated on such
fully-diluted basis than the aggregate percentage beneficially owned by the
Sponsor and the management of the Parent; or (b) during any period of two
consecutive calendar years, individuals who at the beginning of such period
constituted the board of directors of Parent together with any new members of
such board of directors whose elections by such board of directors or whose
nomination for election by the stockholders of Parent was approved by a vote of
a majority of the members of such board of directors then still in office who
either were directors at the beginning of such period or whose election or
nomination for election was previously so approved, cease for any reason to
constitute a majority of the directors of Parent then in office; or (c) Parent
shall fail to own and have the right to vote 100% of the outstanding Voting
Stock of Holdings, determined on a fully diluted basis after giving effect to
the conversion and exercise of all outstanding warrants, options and other
securities of Holdings, convertible into or exercisable for voting stock of
Holdings (whether or not such securities are then currently convertible or
exercisable); (d) Holdings shall fail to own and have the right to vote 100% of
the outstanding Voting Stock of the Borrower, determined on a fully diluted
basis after giving effect to the conversion and exercise of all outstanding
warrants, options and other securities of the Borrower, convertible into or
exercisable for voting stock of the Borrower (whether or not such securities
are then currently convertible or exercisable); or (e)  the occurrence of a “Change of Control” under
and as defined in any of the Employment Agreements as in effect on the Closing
Date.

“Charges” means any and all federal, state, county, city, municipal,
local, foreign or other governmental taxes (including taxes owed to the PBGC at
the time due and payable), levies, assessments, charges, liens, claims or
encumbrances upon or relating to (a) the Collateral, (b) the Obligations, (c)
the employees, payroll, income or gross receipts of any Credit Party, (d) any
Credit Party’s ownership or use of any properties or other assets, or (e) any
other aspect of any Credit Party’s business including, without limitation,
charges for necessary business permits and governmental authorizations.

“Class” defines an Extension of Credit by reference to the subfacility
under which it is made.

“Closing Checklist” means the Closing Checklist in the form of Exhibit J attached hereto.

“Closing Date” means September 29, 2006.

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“CMS” means the Centers for Medicare and
Medicaid Services, formerly known as the Health Care Financing Administration
or HCFA.

“Collateral” means the property covered by the Security Agreements and
the other Collateral Documents and any other property, real or personal,
tangible or intangible, now existing or hereafter acquired, that may at any
time be or become subject to a security interest or Lien in favor of
Administrative Agent, on behalf of itself and Lenders, to secure the
Obligations.

“Collateral Documents” means the Security Agreements, the Pledge
Agreements, the Guaranty Agreements, the Mortgages and all similar agreements
entered into guaranteeing payment of, or granting a Lien upon property as
security for, the Obligations.

“Collateral Reports” means the reports with respect to the Collateral
referred to in Section 5.2.

“Collection Account” means that certain account of Administrative
Agent, account number 50-271-079 in the name of Administrative Agent at
Deutsche Bank Trust Company Americas in New York, New York ABA No. 021-001-033,
or such other account as may be specified in writing by Administrative Agent as
the “Collection Account.”

“Collection Value” means, with respect to each Eligible Account, the
amount determined by the Agent in its reasonable credit judgment to be the
amount likely to be paid by the Account Debtor on such Account.

“Commitment” means (a) as to any Lender, such Lender’s Revolving Credit
Commitment (including without duplication the Swingline Lender’s Swingline
Commitment) as set forth on the signature pages hereto or in the most recent
Assignment Agreement executed by
such Lender and (b) as to all Lenders, the aggregate of all of Lenders’
Revolving Credit Commitments (including without duplication the Swingline
Lender’s Swingline Commitment), as such Commitments may be reduced, amortized
or adjusted from time to time in accordance with this Agreement.

“Commitment Termination Date” means the earliest of (a) September 29,
2009, (b) the date of termination of Lenders’ obligations to make Advances and
to incur L/C Obligations or the date of acceleration of the maturity date of
all or any portion of the Obligations pursuant to Section 8.2(b), and (c) the date of indefeasible payment in
full by the Borrower of the Loans and the cancellation and return of (or
issuance of a standby guarantee with respect to) all Letters of Credit or the
cash collateralization of all L/C Obligations pursuant to Section 2.5(k), and the permanent reduction
of all Commitments to Zero Dollars ($0).

“Compliance Certificate” means any of the compliance certificates
delivered pursuant to Sections 5.1(a)(ii),
(b)(iii) and/or (c)(iii).

 8
 

 

 

“Continuation” has the meaning ascribed to it
in Section 2.3(a).

“Control Letter” means a letter agreement between Administrative Agent
and (a) the issuer of uncertificated securities with respect to uncertificated
securities in the name of any Credit Party, (b) a securities intermediary with
respect to securities, whether certificated or uncertificated, securities
entitlements and other financial assets held in a securities account in the
name of any Credit Party, (c) a futures commission merchant or clearing house,
as applicable, with respect to commodity accounts and commodity contracts held
by any Credit Party, in each case whereby, among other things, the issuer,
securities intermediary or futures commission merchant disclaims any security
interest in the applicable financial assets, acknowledges the Lien of
Administrative Agent, on behalf of itself and Lenders, on such financial
assets, and agrees to follow the instructions or entitlement orders of
Administrative Agent without further consent by the affected Credit Party.

“Controlled Group” means, with respect to any Credit Party, any trade
or business (whether or not incorporated) that, together with such Credit
Party, is treated as a single employer within the meaning of Sections 414(b),
(c), (m) or (o) of the IRC or Section 4001 of ERISA.

“Conversion” has the meaning set forth in Section 2.3(a).

“Credit Parties” means the Borrower and each Guarantor.

“Current Assets” means, with respect to any Person, all current assets
of such Person as of any date of determination calculated in accordance with
GAAP, but excluding cash, cash equivalents and debts due from Affiliates.

“Current Liabilities” means, at any date, (a) the consolidated current
liabilities (excluding Indebtedness) of the Credit Parties plus (b) the current
liabilities of any Person (other than the Credit Parties) which are guaranteed
by the Credit Parties, all determined as of such date.

 “D&O Deductible” means the amount
of charges incurred by Borrower during or after the second Fiscal Quarter of
Fiscal Year 2004 for the deductible required for the D&O policy to defend
shareholder lawsuits, not to exceed $500,000.

“Days Sales Outstanding” means, with respect to the Credit Parties on
any date of determination, the amount obtained by dividing (i) the ending
accounts receivable balance of the Credit Parties on such date less
pass-through billings relating to subcontracting arrangements in which revenue
is recorded net of subcontracting costs but is recorded in accounts receivable
at its gross value in an amount not to exceed $15,000,000 by (ii) the revenues
of the Credit Parties for the three month period ending on such date and then
multiplying the result of such division by 91.5 days.

 9
 

 

 

“Default” means any condition or event which
constitutes an Event of Default or which with the giving of notice or lapse of
time or both would, unless cured or waived within any applicable grace or cure
period, become an Event of Default.

“Default Rate” means, subject to Section
2.15, the rate otherwise applicable to an Obligation plus
2.00% per annum, or if no such rate is provided, the Base Rate, plus the
Applicable Margin for Base Rate Advances, plus 2.00%.

“Disbursement Account” has the meaning ascribed to it in Section 6.20.

“Dollars” or “$” means lawful currency of the United States of America.

“Domestic Subsidiaries” means all direct and indirect Subsidiaries of a
Credit Party that are domiciled, incorporated or organized under the laws of
any state of the United States or the District of Columbia (or has any material
assets located in the United States).

“EBITDA” means, for any period, with respect to the Credit Parties and
their Subsidiaries on a consolidated basis, the sum of (a) Net Income for such
period (excluding the effect of any (i) intercompany items, (ii) all earnings
attributable to equity interests in Persons that are not Subsidiaries unless
actually received by such Person, (iii) all income arising from the
forgiveness, adjustment or negotiated settlement of any Indebtedness, (iv) any
extraordinary items of income and (v) any increase or decrease in income
arising from any change in such Person’s method of accounting, subject to
Section 1.2) plus (b) an amount which, in the determination of Net
Income for such period has been deducted for (i) Interest Expense for such
period, (ii) total Federal, state, foreign or other income taxes for such
period, (iii) depreciation and amortization expense for such period, and (iv)
non-cash goodwill impairment charges for such period up to an amount equal to
the Goodwill Addback Limit for such period, all as determined in accordance
with GAAP, minus (c) the amount of all earn-out payments made during
such period in connection with Permitted Acquisitions consummated subsequent to
the Closing Date; provided  that, for the calculation of EBITDA
made (i) for the subsequent four Fiscal Quarters after incurrence of Severance
Payments or the payment of D&O Deductible charges, EBITDA shall be the sum
of the amounts set forth above minus the amount of such Severance Payments or
such D&O Deductible payment, as applicable, (ii) for the third Fiscal
Quarter of Fiscal Year 2005, EBITDA shall be the sum of the amounts set forth
above plus the amount of applicable Project Ocean Acquisition Charges in an
amount not to exceed $512,493; and (iii) for the first Fiscal Quarter of Fiscal
Year 2006, EBITDA shall be the sum of the amounts set forth above plus the
amount of applicable 2006 Restructuring Charges in an aggregate amount not to
exceed the lesser of (A) $6,271,348 and (B) the sum of (x) the actual amount of
the portion of such fees and expenses incurred as of the date of determination plus
(y) the estimated amount of the portion of such fees and expenses not yet
incurred as of the date of determination.

“Eligible Accounts” means, at any date of determination thereof, the
aggregate amount of all Accounts at such date due to any Borrowing Base Party
except to the extent that (determined without duplication):

 10
 

 

 

(a)           such Account does not arise from the
sale of goods or the performance of services by such Credit Party in the
ordinary course of its business;

(b)           (i) such Borrowing Base Party’s right
to receive payment is not absolute or is contingent upon the fulfillment of any
condition whatsoever or (ii) as to which such Borrowing Base Party is not able
to bring suit or otherwise enforce its remedies against the Account Debtor
through judicial process or (iii) if the Account represents a progress billing
consisting of an invoice for goods sold or used or services rendered pursuant
to a contract under which the Account Debtor’s obligation to pay that invoice
is subject to such Borrowing Base Party’s completion of further performance
under such contract or is subject to the equitable lien of a surety bond
issuer;

(c)           any defense, counterclaim, setoff or
dispute exists as to such Account, provided that
this clause (c) shall not apply to adjustments in the ordinary course with
respect to Government Accounts;

(d)           in respect of which there is no right
to payment from any Third Party Payor, but only to the extent that there is no
such right of payment from a Third Party Payor;

(e)           such Account is not a true and
correct statement of bona fide indebtedness incurred in the amount of the
Account for merchandise sold to or services rendered and accepted by the
applicable Account Debtor;

(f)            an invoice, reasonably acceptable to
Administrative Agent in form and substance, has not been sent to the applicable
Account Debtor in respect of such Account;

(g)           such Account (i) is not owned by such
Borrowing Base Party or (ii) is subject to any right, claim, security interest
or other interest of any other Person, other than Liens in favor of
Administrative Agent, on behalf of itself and Lenders;

(h)           such Account arises from a sale to
any director, officer, other employee or Affiliate of any Borrowing Base Party,
or to any entity that has any common officer or director with any Borrowing
Base Party, except for up to $800,000, in the aggregate, for Accounts with
respect to McLaren Health Care Corporation and VITAS Healthcare Corporation;

(i)            except for Government Accounts, such
Account is the obligation of an Account Debtor that is the United States
government or a political subdivision thereof, or any state, county or
municipality or department, agency or instrumentality thereof unless
Administrative Agent, in its sole discretion, has agreed to the contrary in
writing and such Borrowing Base Party, if necessary or desirable, has complied
with respect to such obligation with the Federal Assignment of Claims Act of
1940, or any applicable state, county or municipal law restricting assignment
thereof;

(j)            such Account is the obligation of an
Account Debtor located in a foreign country other than Canada (excluding the
province of Newfoundland, the Northwest

 11
 

 

 

Territories and the
Territory of Nunavit) unless payment thereof is assured by a letter of credit
assigned and delivered to Administrative Agent, reasonably satisfactory to
Administrative Agent as to form, amount and issuer;

(k)           such 
Borrowing Base Party or any Subsidiary thereof is liable for goods sold
or services rendered by the applicable Account Debtor to such Borrowing Base
Party or any Subsidiary thereof but only to the extent of the potential offset;

(l)            such Account arises with respect to
goods that are delivered on a bill and hold, cash on delivery basis or placed
on consignment, guaranteed sale or other terms by reason of which the payment
by the Account Debtor is or may be conditional;

(m)          such Account is in default; provided
that, without limiting the generality of the foregoing, an Account shall be
deemed in default upon the occurrence of any of the following:

(i)            the Account is not paid within one
hundred twenty (120) days following its original invoice date;

(ii)           the Account Debtor obligated upon
such Account suspends business, makes a general assignment for the benefit of
creditors or fails to pay its debts generally as they come due; or

(iii)          a petition is filed by or against any
Account Debtor obligated upon such Account under any bankruptcy law or any
other federal, state or foreign (including any provincial) receivership,
insolvency relief or other law or laws for the relief of debtors;

(n)           such Account is the obligation of an
Account Debtor if fifty percent (50%) or more of the Dollar amount of all
Accounts owing by that Account Debtor are ineligible under the other criteria
set forth in this definition, except such Accounts as deemed allowable by the
Required Lenders from time to time;

(o)           such Account, as to which
Administrative Agent’s Lien attaches thereon on behalf of itself and Lenders,
is not a first priority perfected Lien;

(p)           any of the representations or
warranties in the Loan Documents with respect to such Account are untrue or
incomplete with respect to such Account;

(q)           such Account is evidenced by a
judgment, or by an Instrument or Chattel Paper the possession of which has not
been delivered to Administrative Agent;

(r)            such Account, together with all
other Accounts owing by such Account Debtor and its Affiliates as of any date
of determination exceed 5% of all Eligible Accounts other than Government
Accounts;

(s)           such Account is payable in any
currency other than Dollars; or

 12
 

 

 

(t)            such Account is otherwise
unacceptable to Administrative Agent in its reasonable credit judgment.

“Eligible Assets” means any assets or any business (or any substantial
part thereof) used or useful in the same or a similar line of business as the
Credit Parties and their Subsidiaries were engaged in on the Closing Date.

“Employment Agreements” means, collectively, the employee agreements,
dated as of August 20, 2001 as amended to the date hereof, among the Borrower,
Holdings and each of Robert J. Adamson, Patricia Donohoe, and Kevin S. Little.

“Environmental Laws” means all applicable federal, state, local and
foreign laws, statutes, ordinances, codes, rules, standards and regulations,
now or hereafter in effect, and any applicable judicial or administrative
interpretation thereof, including any applicable judicial or administrative
order, consent decree, order or judgment, imposing liability or standards of
conduct for or relating to the regulation and protection of human health,
safety, the environment and natural resources (including ambient air, surface
water, groundwater, wetlands, land surface or subsurface strata, wildlife,
aquatic species and vegetation).  Without
limiting the generality of the foregoing, Environmental Laws include CERCLA,
the Hazardous Materials Transportation Authorization Act of 1994 (49 U.S.C. §§
5101 et seq.), the Federal Insecticide, Fungicide, and Rodenticide Act
(7 U.S.C. §§ 136 et seq.), the Solid Waste Disposal Act (42 U.S.C.
§§ 6901 et seq.), the Toxic Substance Control Act (15 U.S.C. §§
2601 et seq.), the Clean Air Act (42 U.S.C. §§ 7401 et seq.), the
Federal Water Pollution Control Act (33 U.S.C. §§ 1251 et seq.), the
Occupational Safety and Health Act (29 U.S.C. §§ 651 et seq.), and
the Safe Drinking Water Act (42 U.S.C. §§ 300(f) et seq.), and
any rules and regulations promulgated thereunder, and all analogous state,
local and foreign counterparts or equivalents and any transfer of ownership
notification or approval statutes.

“Environmental Liabilities” means, with respect to any Person, all
liabilities, obligations, responsibilities, response, remedial and removal
costs, investigation and feasibility study costs, capital costs, operation and
maintenance costs, losses, damages, punitive damages, property damages, natural
resource damages, consequential damages, treble damages, costs and expenses
(including all reasonable fees, disbursements and expenses of counsel, experts
and consultants), fines, penalties, sanctions and interest incurred as a result
of or related to any claim, suit, action, investigation, proceeding or demand
by any Person, whether based in contract, tort, implied or express warranty,
strict liability, criminal or civil statute or common law, including any
arising under or related to any Environmental Laws or Environmental Permits or
in connection with any Release or threatened Release or the presence of a
Hazardous Material whether on, at, in, under, from or about or in the vicinity
of any real or personal property.

“Environmental Permits” means all permits, licenses, authorizations,
certificates, approvals or registrations required by any Governmental Authority
under any Environmental Laws.

 13
 

 

 

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

“ERISA Event” means, with respect to any Credit Party or any member of
a Controlled Group, (a) any event described in Section 4043(c) of ERISA with
respect to a Title IV Plan, (b) the withdrawal of any Credit Party or any
member of a Controlled Group from a Title IV 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, (c) the complete or partial withdrawal of any
Credit Party or any member of a Controlled Group from any Multi-employer Plan,
(d) the termination of, the filing of a notice of intent to terminate a Title
IV Plan or the treatment of a plan amendment as a termination under Section
4041 of ERISA, (e) the institution of proceedings to terminate a Title IV Plan
or Multi-employer Plan by the PBGC, (f) the failure by any Credit Party or any
member of a Controlled Group to make when due required contributions to a
Multi-employer Plan or Title IV Plan unless such failure is cured within thirty
(30) days, (g) any other event or condition that might reasonably be expected
to constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Title IV Plan or Multi-employer
Plan or for the imposition of liability under Section 4069 or 4212(c) of ERISA, (h) the termination
of a Multi-employer Plan under Section 4041A of
ERISA or the reorganization or insolvency of a Multi-employer Plan under
Section 4241 or 4245 of ERISA, (i)
the loss of a Qualified Plan’s qualification or tax exempt status, or (j) the
termination of a Plan described in Section 4064 of ERISA.

“Event of Default” has the meaning ascribed to it in Section 8.1.

“Exchange Act” means the Securities Exchange Act of 1934, as amended
from time to time, and any rules and regulations promulgated thereunder.

“Extension of Credit” means, as the context requires, (a) an Advance,
(b) the making of an Advance, (iii) the conversion of a Base Rate Loan to a
LIBOR Loan or the continuation of a LIBOR Loan as a LIBOR Loan for an
additional LIBOR Period, or (c) the issuance of any Letter of Credit or the
incurrence of any Reimbursement Obligation.

“Fair Salable Balance Sheet” means a balance sheet of Borrower prepared
in accordance with Section 4.5(d),
in form and substance satisfactory to the Administrative Agent.

“Federal Funds Rate” means, for any day, a floating rate equal to the
weighted average of the rates on overnight federal funds transactions among
members of the Federal Reserve System, as published for such day (or if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day
which is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three (3) federal funds
brokers of recognized standing selected by the Administrative Agent, which
determination shall be final, binding and conclusive (absent manifest error).

 14

 

“Fees” means any and all fees payable to Administrative Agent or any
Lender pursuant to this Agreement or any of the other Loan Documents or the GE
Capital Fee Letter.

“Fiscal Month” means any of the monthly accounting periods of Borrower.

“Fiscal Quarter” means any of the quarterly accounting periods of
Borrower, ending on or about March 31, June 30, September 30 and December 31 of
each year.

“Fiscal Year” means any of the annual accounting periods of the
Borrower ending on the Sunday closest to December 31 of each calendar year.

“Fixed Charge Coverage Ratio” means, as of any date of determination,
for the twelve month period ending on such date with respect to the Credit
Parties and their Subsidiaries on a consolidated basis, the ratio of (a) the
sum of (i) EBITDA for the applicable period minus (ii) cash Capital
Expenditures for the applicable period minus (iii) Cash Taxes for the
applicable period to (b) Fixed Charges for the applicable period.

“Fixed Charges” means, as of any date for the twelve month period
ending on such date with respect to the Credit Parties and their Subsidiaries
on a consolidated basis, the sum of (i) cash Interest Expense for the
applicable period plus (ii) Scheduled Funded Debt Payments for the applicable
period.

“Foreign Subsidiaries” means all Subsidiaries of a Credit Party that
are not Domestic Subsidiaries.

“Funded Indebtedness” means, without duplication, the sum of (a) all
Indebtedness (other than Swap Related Reimbursement Obligations) of the Credit
Parties and their Subsidiaries for borrowed money (it being understood that
with respect to Indebtedness incurred with an original issue discount, the
obligations shall consist of the then accreted value), (b) all obligations of a
Credit Party or any of its Subsidiaries evidenced by bonds, debentures, notes
or similar instruments, or upon which interest payments are customarily made
(not including trade debt incurred in the ordinary course of business and due
within six months of the incurrence thereof), (c) all obligations of a Credit
Party or any of its Subsidiaries under conditional sale or other title
retention agreements relating to property purchased by a Credit Party or any of
its Subsidiaries (other than customary reservations or retentions of title
under agreements with suppliers entered into in the ordinary course of
business), (d) all obligations of a Credit Party or any of its Subsidiaries
issued or assumed as the deferred purchase price of property or services
purchased by a Credit Party or any of its Subsidiaries (other than trade debt
incurred in the ordinary course of business and due within six months of the
incurrence thereof) which would appear as liabilities on a balance sheet of a
Credit Party or any of its Subsidiaries, prepared in accordance with GAAP, (e)
the principal portion of all obligations of the Credit Parties and their
Subsidiaries under (i) Capital Leases and (ii) Synthetic Leases, (f) commercial
letters of credit and the maximum amount of all performance and standby letters
of credit issued or bankers’ acceptance facilities created for the account of a
Credit Party or one of its Subsidiaries and, without duplication, all drafts

 15
 

 

 

drawn thereunder (to the extent
unreimbursed), (g) all preferred Stock issued by a Credit Party or any of its
Subsidiaries and which by the terms thereof could be (at the request of the
holders thereof or otherwise) subject to mandatory sinking fund payments,
redemption or other acceleration at any time on or prior to the Commitment
Termination Date, (h) all obligations of a Credit Party or any of its
Subsidiaries to repurchase any securities issued by a Credit Party or any of
its Subsidiaries at any time on or prior to the Commitment Termination Date,
which repurchase obligations are related to the issuance thereof, including, without
limitation, obligations commonly known as residual equity appreciation
potential shares, (i) the aggregate amount of uncollected accounts receivable
of a Credit Party or any of its Subsidiaries subject at such time to a sale of
receivables (or similar transaction) to the extent such transaction is effected
with recourse to a Credit Party or any of its Subsidiaries (whether or not such
transaction would be reflected on the balance sheet of a Credit Party or any of
its Subsidiaries in accordance with GAAP), (j) all Guaranteed Obligations of
the Credit Parties and their Subsidiaries with respect to Funded Indebtedness
of another Person, (k) all Funded Indebtedness of another entity secured by a
Lien on any property of a Credit Party or any of its Subsidiaries whether or
not such Funded Indebtedness has been assumed by a Credit Party or any of its
Subsidiaries and (l) all Funded Indebtedness of any partnership or
unincorporated joint venture to the extent a Credit Party or one of its
Subsidiaries is legally obligated or has a reasonable expectation of being
liable with respect thereto, net of any assets of such partnership or joint
venture.

“GAAP” has the meaning ascribed to it in Section 1.2.

“GE Capital” means General Electric Capital Corporation, a Delaware
corporation.

“GE Capital Fee Letter” means that certain letter, dated as of
September 29, 2006, between GE Capital and the Borrower with respect to certain
fees to be paid from time to time by the Borrower to GE Capital.

“Goodwill Addback Limit” means, for any period of determination, the
lesser amount of (i) $5,000,000 and (ii) the Goodwill Availability for such
period.

“Goodwill Availability” means, for any period of determination, (i) for
any amount less than $500,000, such amount and (ii) for amounts greater than
$500,000, the lesser of (A) such amount and (B) the Pro Forma Excess
Availability for such period.

“Government Accounts” means, collectively, any and all Accounts which
are (a) Medicare Accounts, (b) Medicaid Accounts, (c) TRICARE Accounts, (d)
CHAMPVA Accounts, (e) Accounts arising from services provided under agreements
with the United States Department of Health and Human Services or (f) any other
Account payable by a Governmental Authority acceptable to the Administrative
Agent in its reasonable discretion.

“Governmental Approval” means an authorization, consent, approval,
license or exemption of, registration or filing with, or report or notice to
any Governmental Authority.

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

“Guaranteed Obligations” means as to any Person, without duplication,
any obligation of such Person guaranteeing, providing comfort or otherwise
supporting any Indebtedness, lease, dividend, or other obligation (“primary
obligation”) of any other Person (the “primary obligor”) in any
manner, including any obligation or arrangement of such Person to (a) purchase
or repurchase any such primary obligation, (b) advance or supply funds (i) for
the purchase or payment of any such primary obligation or (ii) to maintain
working capital or equity capital of the primary obligor or otherwise to
maintain the net worth or solvency or any balance sheet condition of the
primary obligor, (c) purchase property, securities or services primarily for
the purpose of assuring the owner of any such primary obligation of the ability
of the primary obligor to make payment of such primary obligation, (d) protect
the beneficiary of such arrangement from loss (other than product warranties
given in the ordinary course of business) or (e) indemnify the owner of such
primary obligation against loss in respect thereof; provided that the
term Guaranteed Obligations shall not include endorsements for collection or
deposit in the ordinary course of business. 
The amount of any Guaranteed Obligations at any time shall be deemed to
be an amount equal to the lesser at such time of (x) the stated or determinable
amount of the primary obligation in respect of which such Guaranteed
Obligations are incurred and (y) the maximum amount for which such Person may
be liable pursuant to the terms of the instrument embodying such Guaranteed
Obligations, or, if not stated or determinable, the maximum reasonably
anticipated liability (assuming full performance) in respect thereof.

“Guarantors” means Parent, Holdings, each Subsidiary of the Borrower,
and each other Person, if any, that executes a Guaranty Agreement or other
similar agreement in favor of Administrative Agent, for itself and the ratable
benefit of Lenders, in connection with the transactions contemplated by this
Agreement and the other Loan Documents.

“Guaranty Agreements” means, collectively, the Parent Guaranty
Agreement, the Holdings Guaranty Agreement, the Subsidiary Guaranty and any
other guaranty now or hereafter executed by any Person in favor of
Administrative Agent and Lenders to guarantee the Obligations.

“Hazardous Material” means any substance, material or waste that is
regulated by, or forms the basis of liability now or hereafter under, any
Environmental Laws, including any material or substance that is (a) defined as
a “solid waste,” “hazardous waste,” “hazardous material,” “hazardous substance,”
“extremely hazardous waste,”  “restricted
hazardous waste,” “pollutant,” “contaminant,” “hazardous constituent,” “special
waste,” “toxic substance” or other similar term or phrase under any Environmental
Laws, or (b) petroleum or any fraction or by-product thereof, asbestos,
polychlorinated biphenyls (PCB’s), or any radioactive substance.

 17
 

 

 

“Healthcare Laws” means, collectively, any
and all federal, state or local laws, rules, regulations and administrative
manuals, orders, guidelines and requirements issued under or in connection with
Medicare, Medicaid CHAMPVA, TRICARE or any government payment program or any
law governing the licensure of or regulating healthcare providers,
professionals, facilities or payors or otherwise governing or regulating the
provision of, or payment for, Medical Services, or the sale of medical
supplies.  Without limiting the
generality of the foregoing, Healthcare Laws include, without limitation,
Section 1128B(b) of the Social Security Act, as amended, 42 U.S.C. Section
1320a-7(b) (Criminal
Penalties Involving Medicare or State Health Care Programs), commonly referred
to as the “Federal Anti-Kickback Statute,” and the Social Security Act, as
amended, and Section 1877, 42 U.S.C Section 1395nn (Prohibition Against Certain
Referrals), commonly referred to as “Stark Statute”.

“HIPAA” means the Health Insurance Portability and Accountability Act
of 1996, as amended from time to time, and any rules or regulations promulgated
from time to time thereunder.

“Holdings” has the meaning ascribed to it in Paragraph E of the
Introductory Statement.

“Holdings Guaranty Agreement” means the Holdings Guaranty Agreement
dated as of December 22, 2003, by Holdings in favor of Administrative Agent, on
behalf of itself and Lenders, as amended, restated, replaced or otherwise
modified from time to time.

“Holdings Pledge Agreement” means the Holdings Pledge Agreement dated
as of December 22, 2003, between Holdings and Administrative Agent.

“Holdings Security Agreement” means the Holdings Security Agreement
dated as of December 22, 2003, between Holdings and the Administrative Agent,
as amended, restated, replaced or otherwise modified from time to time.

“Indebtedness” of any Person means, without duplication, (a) all
obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, or upon
which interest payments are customarily made (not including trade debt incurred
in the ordinary course of business and due within six months of the incurrence
thereof), (c) all obligations of such Person under conditional sale or other
title retention agreements relating to property purchased by such Person to the
extent of the value of such property (other than customary reservations or
retentions of title under agreements with suppliers entered into in the
ordinary course of business), (d) all obligations of such Person issued or
assumed as the deferred purchase price of property or services purchased by
such Person (other than trade debt incurred in the ordinary course of business
and due within six months of the incurrence thereof) which would appear as
liabilities on a balance sheet of such Person, (e) all Indebtedness of others
secured by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien on, or payable out of the
proceeds of production from, property owned or acquired by such Person, whether
or not the obligations secured thereby have been assumed, (f) all

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Guaranty Obligations of such
Person, (g) the principal portion of all obligations of such Person under (i)
Capital Leases and (ii) Synthetic Leases, (h) all obligations of such Person in
respect of Swap Related Reimbursement Obligations, (i) commercial letters of
credit and the maximum amount of all performance and standby letters of credit
issued or bankers’ acceptances facilities created for the account of such
Person and, without duplication, all drafts drawn thereunder (to the extent
unreimbursed), (j) all preferred Capital Stock issued by such Person and which
by the terms thereof could be (at the request of the holders thereof or
otherwise) subject to mandatory sinking fund payments, redemption or other acceleration
by a fixed date, (k) all obligations of such Person to repurchase any
securities issued by such Person at any time on or prior to the Maturity Date,
which repurchase obligations are related to the issuance thereof, including,
without limitation, obligations commonly known as residual equity appreciation
potential shares, (l) the aggregate amount of uncollected accounts receivable
of such Person subject at such time to a sale of receivables (or similar
transaction) regardless of whether such transaction is effected without
recourse to such Person or in a manner that would not be reflected on the
balance sheet of such Person in accordance with GAAP and (m) the Indebtedness
of any partnership or unincorporated joint venture in which such Person is a general
partner or a joint venturer to the extent such Indebtedness is recourse to such
Person.

“Indemnitees” has the meaning ascribed to it in Section 9.2.

“Information” means written data, reports, statements (including, but
not limited to, financial statements delivered pursuant to or referred to in Sections 5.01 and 5.02), documents and other information,
whether, in the case of any such in writing, the same was prepared by any
Credit Party or any other Person on behalf of any Credit Party.

“Insurer” means a Person that insures a Patient against certain of the
costs incurred in the receipt by such Patient of Medical Services, or that has
an agreement with a Credit Party to
compensate such Credit Party for providing goods or services to a Patient.

“Interest Expense” means, for any period, with respect to the Credit
Parties and their Subsidiaries on a consolidated basis, all interest expense,
including the interest component under Capital Leases and the implied interest
component under Synthetic Leases, as determined in accordance with GAAP; it
being understood that Interest Expense shall include the amortized cost of any
Swap Related Reimbursement Obligation, to the extent permitted by GAAP.

“Interest Payment Date” means (a) as to any Base Rate Loan and Swingline
Loan, the first Business Day of each month to occur while such Loan is
outstanding, and (b) as to any LIBOR Loan, the last day of the applicable LIBOR
Period; provided that, in addition to the foregoing, each of (x) the
date upon which all of the Commitments have been terminated and the Loans have
been paid in full and (y) the Commitment Termination Date shall be deemed to be
an “Interest Payment Date” with respect to any interest (including
interest accruing at the Default Rate) that has then accrued under this
Agreement.

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“Investment” means (a) the acquisition
(whether for cash, property, services, assumption of Indebtedness, securities
or otherwise) of assets, shares of Stock, bonds, notes, debentures,
partnership, joint ventures or other ownership interests or other securities of
any Person or (b) any deposit with, or advance, loan or other extension of
credit to, such Person (other than deposits made in connection with the
purchase of equipment or other assets in the ordinary course of business) or (c)
any other capital contribution to or investment in such Person, including,
without limitation, any Guaranteed Obligation (including any support for a
Letter of Credit issued on behalf of such Person) incurred for the benefit of
such Person.

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

“IRS” means the Internal Revenue Service.

“L/C Exposure” means, with respect to any Lender at any time, its
Percentage of the Aggregate L/C Exposure at such time.

“L/C Issuer” means (a) GE Capital and (b) any other Lender designated
as an “L/C Issuer” for purposes hereof in a notice to the Administrative Agent
signed by the Borrower and such Lender, acting in each case in the capacity of
an L/C Issuer under the letter of credit facility described in Section 2.5, and their respective
successors.

“L/C Limit” means $5,000,000.

“L/C Obligations” means all outstanding obligations incurred by L/C
Issuer and Revolving Lenders, whether direct or indirect, contingent or
otherwise, due or not due, in connection with the issuance of Letters of Credit
by Administrative Agent or another L/C Issuer or the purchase of a
participation as set forth in Section 2.5
with respect to any Letter of Credit. 
The amount of such L/C Obligations shall equal the maximum amount that
may be payable at such time or at any time thereafter by Administrative Agent
or Revolving Lenders thereupon or pursuant thereto.

“L/C Payment Date” has the meaning ascribed to it in Section 2.5(f).

“Lenders” means GE Capital, the other Lenders named on the signature
pages of this Agreement, and, if any such Lender shall decide to assign all or
any portion of the Obligations, such term shall include any assignee of such
Lender.

“Lending Party” means the Administrative Agent, the Lenders and any L/C
Issuer.

“Letter of Credit Fee” has the meaning ascribed to it in Section 2.7(d).

“Letters of Credit” has the meaning ascribed to it in Section 2.5(a).

“LIBOR Borrowing” means a Borrowing that is constituted of LIBOR Loans.

 20
 

 

 

“LIBOR Business Day” means a Business Day on
which banks in the City of London, England are generally open for interbank or
foreign exchange transactions.

“LIBOR Loan” means a Loan or any portion thereof bearing interest by
reference to the LIBOR Rate.

“LIBOR Loan Advance” means a Revolving Credit Advance bearing interest
by reference to the LIBOR Rate.

“LIBOR Period” means, with respect to any LIBOR Loan, each period
commencing on a LIBOR Business Day and ending one (1), two (2) or three (3)
months thereafter, in each case as selected by the Borrower’s irrevocable
notice to Administrative Agent as set forth in Section 2.3; provided that the foregoing provision
relating to LIBOR Periods is subject to the following:

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

(b)           any LIBOR Period that would otherwise
extend beyond the Commitment Termination Date with respect to Revolving Loans
shall end two (2) LIBOR Business Days prior to such date;

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

(d)           the Borrower shall select LIBOR
Periods so as not to require a payment or prepayment of any LIBOR Loan during a
LIBOR Period for such Loan; and

(e)           the Borrower shall select LIBOR
Periods so that there shall be no more than five (5) separate LIBOR Loans in
existence at any one time.

“LIBOR Rate” means for each LIBOR Period, a rate of interest determined
by Administrative Agent equal to:

(a)          the offered rate for deposits in
Dollars for the applicable LIBOR Period that appears on Telerate Page 3750 (or
any successor or substitute page) as of 11:00 a.m. (London time) on the
second full LIBOR Business Day next preceding the first day of such LIBOR
Period (unless such date is not a Business Day, in which event the next
succeeding Business Day will be used); divided by

 21
 

 

 

(b)           a number equal to 1.0 minus
the aggregate (but without duplication) of the rates (expressed as a decimal
fraction) of reserve requirements in effect on the day that is two (2) LIBOR
Business Days prior to the beginning of such LIBOR Period (including basic,
supplemental, marginal and emergency reserves under any regulations of the
Federal Reserve Board or other Governmental Authority having jurisdiction with
respect thereto, as now and from time to time in effect) for Eurocurrency funding
(currently referred to as “Eurocurrency Liabilities” in Regulation D of the
Federal Reserve Board that are required to be maintained by a member bank of
the Federal Reserve System.

If such interest rates shall cease to be available from Telerate News Service,
the LIBOR Rate shall be determined from such financial reporting service or
other information as shall be determined by Administrative Agent.

“Lien” means any mortgage or deed of trust, pledge, hypothecation,
assignment, deposit arrangement, lien (statutory or other), charge, claim,
security interest, easement or encumbrance, or preference, priority or other
security agreement or preferential arrangement of any kind or nature whatsoever
(including any lease, conditional sale or title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing, and the filing of, or agreement to give, any financing statement
perfecting a security interest under the Code or comparable law of any
jurisdiction).

“Litigation” has the meaning ascribed to it in Section 4.7.

“Loan Account” has the meaning ascribed to it in Section 2.12.

“Loan Documents” means this Agreement, the Notes, the GE Capital Fee
Letter, the Collateral Documents, the Master Standby Agreement, the Master
Documentary Agreement, the Business Associate Agreement and all other
agreements, instruments, documents and certificates identified in the Closing
Checklist executed and delivered to, or in favor of, Administrative Agent or
any Lenders and including all other pledges, powers of attorney, consents,
assignments, contracts, notices, and all other written matter whether
heretofore, now or hereafter executed by or on behalf of any Credit Party, or
any employee of any Credit Party, and delivered to Administrative Agent or any
Lender in connection with this Agreement or the transactions contemplated
thereby.  Any reference in this Agreement
or any other Loan Document to a Loan Document shall include all appendices,
exhibits or schedules thereto, and all amendments, restatements, supplements or
other modifications thereto, and shall refer to this Agreement or such Loan
Document as the same may be in effect at any and all times such reference
becomes operative.

“Loans” means any one or more of the Revolving Loan or the Swingline
Loan, as the context may require.

“Lock Box” has the meaning ascribed to it in Section 6.20.

 22
 

 

 

“Margin Stock” has the meaning assigned
thereto in Regulation U of the Federal Reserve Board, as the same may be
amended, supplemented or modified from time to time.

“Master Documentary Agreement” means the Master Agreement for
Documentary Letters of Credit dated as of December 22, 2003, among the
Borrower, as Applicant, and GE Capital as issuer, as amended, restated,
replaced or otherwise modified from time to time.

“Master Standby Agreement” means the Master Agreement for Standby
Letters of Credit dated December 22, 2003, among the Borrower, as Applicant,
and GE Capital, as issuer, as amended, restated, replaced or otherwise modified
from time to time.

“Material Adverse Effect” means, with respect to any event, act,
condition or occurrence of whatever nature (including any adverse determination
in any litigation, arbitration, or governmental investigation or proceeding),
whether singly or in conjunction with any other event or events, act or acts,
condition or conditions, occurrence or occurrences, whether or not related, a
material adverse change in, or a material adverse effect upon, any of (a) the
financial condition, operations, business, properties or prospects of the
Credit Parties taken as a whole, (b) the rights and remedies of the
Administrative Agent or the Lenders under the Loan Documents, or the ability of
any Credit Party to perform its obligations under the Loan Documents to which
it is a party, as applicable, (c) the legality, validity or enforceability of
any Loan Document, or (d) the existence, perfection or priority of any security
interest granted in the Loan Documents or the value of the Collateral
(including its value to the Administrative Agent and the Lenders as security
for the Obligations).  If (x) a fact or
circumstance disclosed in the financial statements referred to in Section 4.5 or a Disclosure Statement, or
if an investigation, action, suit or proceeding disclosed in Disclosure Schedule 4.7, that, at the time
of such disclosure did not appear reasonably likely to have a Material Adverse
Effect, should in the future have, or appear reasonably likely to have, a
Material Adverse Effect, or (y) a development or change shall occur with
respect to any fact or circumstance disclosed in any financial statement,
Disclosure Schedule or previously described investigation, action, suit or
proceeding that should in the future have or appear reasonably likely to have a
Material Adverse Effect, then in each case ((x) and (y)) such Material Adverse
Effect shall be a change or event subject to Section
4.6 notwithstanding such prior disclosure.

“Maximum Commitment Amount” means, as of any date of determination, an
amount equal to the Revolving Credit Commitments of all Lenders as of that
date.

“Maximum Lawful Rate” has the meaning ascribed to it in Section 2.15(b).

“Medicaid” means, collectively, the healthcare assistance program
established by Title XIX of the Social Security Act (42 U.S.C. §§1396 et seq.)
and any statutes succeeding thereto, and all laws, rules, regulations, manuals,
orders, guidelines or requirements (whether or not having the force of law)
pertaining to such program, in each case as the same may be amended,
supplemented or otherwise modified from time to time.

 23
 

 

 

“Medicaid Account” means an Account payable
pursuant to a Medicaid Provider Agreement.

“Medicaid Certification” means certification of a facility by CMS or a
state agency or entity under contract with CMS that such healthcare facility
fully complies with all the conditions of Medicaid.

“Medicaid Provider Agreement” means an agreement entered into between a
state agency or other entity administering Medicaid in such state and a health
care facility or physician under which the health care facility or physician
agrees to provide services or merchandise for Medicaid patients.

“Medical Services” means medical and/or health care services provided
to a Patient, including, but not limited to, medical and/or health care services
provided to a Patient and performed by a Credit Party which are covered by a
policy of insurance issued by an Insurer, and includes, without limitation,
physician services, nurse and therapist services, dental services, hospital
services, skilled nursing facility services, comprehensive outpatient
rehabilitation services, home health care services, residential and out-patient
behavioral healthcare services, and medicine or health care equipment provided
by a Credit Party to a Patient for a necessary or specifically requested valid
and proper medical or health purpose.

“Medicare” means, collectively, the health insurance program for the
aged and disabled established by Title XVIII of the Social Security Act
(42 U.S.C. §§1395 et seq.) and any statutes succeeding thereto, and all laws,
rules, regulations, manuals, orders or guidelines (whether or not having the
force of law) pertaining to such program, in each case as the same may be
amended, supplemented or otherwise modified from time to time.

“Medicare Account” means an Account payable pursuant to a Medicare
Provider Agreement.

“Medicare Certification” means certification of a facility by CMS or a
state agency or entity under contract with CMS that such healthcare facility
fully complies with all conditions for such facility’s participation in
Medicare.

“Medicare Provider Agreement” means an agreement entered into between a
state agency or other entity administering Medicare in such state and a health
care facility or physician under which the health care facility or physician
agrees to provide services or merchandise for Medicare patients.

“Mortgaged Property” has the meaning set forth to it in Section 6.18.

“Mortgages” means each of the mortgages, deeds of trust, leasehold
mortgages, leasehold deeds of trust, collateral assignments of leases or other
Real Property security documents delivered by any Credit Party to
Administrative Agent on behalf of itself and Lenders with respect to the
Mortgaged Properties, all in form and substance reasonably satisfactory to
Administrative Agent.

 24
 

 

 

“MSN License Agreements” means, collectively
that certain License Agreement dated as of July 30, 2003 between Medical
Staffing Network Assets, LLC and Medical Staffing Network, Inc. and that
certain License Agreement dated as of August 18, 2003 between Medical Staffing
Network Assets, LLC and Medical Staffing Network of Illinois, LLC.

“MSN Management and Administrative Services Agreements” means,
collectively, that certain Management and Administrative Services Agreement
dated July 30, 2003 between Medical Staffing Network Assets, LLC and Medical
Staffing Network, Inc. and that certain Management and Administrative Services
Agreement dated August 18, 2003 between Medical Staffing Network, Inc. and
Medical Staffing Network of Illinois, LLC.

“Multi-employer Plan” means a “multi-employer plan” as defined in
Section 4001(a)(3) of ERISA,
and to which any Credit Party or any member of a Controlled Group is making, is
obligated to make or has made or been obligated to make, contributions on
behalf of participants who are or were employed by any of them.

“Net Cash Proceeds” means, with respect to any transaction, an amount
equal to the cash proceeds received by a Credit Party or any Subsidiary from or
in respect of such transaction (including any cash proceeds received as income
or other cash proceeds of any non-cash proceeds of such transaction), less
(x) any commissions and other reasonable and customary transaction costs, fees
and expenses properly attributable to such transaction and payable by the
Credit Party in connection therewith (in each case, paid to non-Affiliates) and
(y) in the case of an Asset Disposition, any amounts payable to holders of
senior Liens (to the extent such Liens are permitted by Section 7.2) and any taxes paid or payable
by such Person (as reasonably estimated by the chief financial officer of
Holdings giving effect to the overall tax position of such Person) in respect
of such Asset Disposition and (z) the amount of any reasonable reserve
established in accordance with GAAP against any liabilities retained by such
Person (other than taxes deducted pursuant to the foregoing clause (y))
associated with the asset disposed of in such Asset Disposition.

“Net Income” means, for any period, the net income as determined in
accordance with GAAP.

“Notes” means, collectively, the Revolving Notes and the Swingline
Notes.

“Notice of Borrowing” has the meaning ascribed to it in Section 2.3(a).

“Obligations” means all Loans, fees, indebtedness, liabilities,
obligations, covenants and duties of any Credit Party to any Lending Party of
every kind, nature and description, direct or indirect, absolute or contingent,
due or not due, in contract or tort, liquidated or unliquidated, arising under
this Agreement, or under the other Loan Documents, by operation of law or
otherwise in connection with the transactions contemplated hereby, now existing
or hereafter arising, and whether or not for the payment of money or the
performance or non-performance of any act, including, but not limited to, all
damages that any Credit Party may owe to the Administrative Agent and/or the
Lenders by

 25
 

 

 

reason of any breach by any
Credit Party of any representation, warranty, covenant, agreement or other
provision of this Agreement or any of the other Loan Documents and all
obligations of the Borrower under
any Swap Related Reimbursement Obligations. 
Without limiting the generality of the foregoing, this term includes all principal, interest
(including all interest that accrues after the commencement of any case or
proceeding by or against any Credit Party in bankruptcy, whether or not allowed
in such case or proceeding), Fees, Charges, expenses, attorneys’ fees and any
other sum payable by any Credit Party to a Lending Party under this Agreement
or any of the other Loan Documents.

“Officer’s Certificate” means a certificate executed on behalf of a
Person by one or more of its chairman of the board (if an officer), chief
executive officer, president, chief financial officer or treasurer.

“Operating Lease” means, as applied to any Person, any lease
(including, without limitation, leases which may be terminated by the lessee at
any time) of any property (whether real, personal or mixed) which is not a
Capital Lease other than any such lease in which that Person is the lessor.

“Organizational Documents” means, for any corporation, the certificate
or articles of incorporation, the bylaws, or other similar organizational
documents, any certificate of designation or instrument relating to the rights
of preferred shareholders of such corporation, any shareholder rights
agreement, and all applicable resolutions of the board of directors (or any
committee thereof) of such corporation adopting, supplementing or modifying any
of the foregoing and, for any entity other than a corporation, the equivalent
of the foregoing, including, without limitations, the partnership agreement,
and the operating agreement (or comparable agreement) of any partnership or
limited liability company, respectively.

“Outstanding Revolving Amount” means, with respect to any Lender at any
time, the sum of (a) the aggregate outstanding principal amount of its
Advances, plus (b) its Percentage of the aggregate outstanding
principal amount of the Swingline Loans (if any) plus (c) its L/C
Exposure, all determined at such time after giving effect to any prior
assignments by or to such Lender pursuant to Section
11.6.

“Parent” has the meaning ascribed to it in Paragraph F of the
Introductory Statement.

“Parent Guaranty Agreement” means the Parent Guaranty Agreement dated
as of December 22, 2003, by the Parent in favor of Administrative Agent, on
behalf of itself and Lenders, as amended, restated, replaced or otherwise
modified from time to time.

“Parent Pledge Agreement” means the Parent Pledge Agreement dated
December 22, 2003, between Parent and Administrative Agent, as amended,
restated, replaced or otherwise modified from time to time.

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“Parent Security Agreement” means the Parent
Security Agreement dated as of December 22, 2003, between Parent and the Administrative
Agent, as amended, restated, replaced or otherwise modified from time to time.

“Patient” means any Person receiving Medical Services from any Credit
Party and all Persons legally liable to pay such Credit Party for such Medical
Services other than Insurers or Governmental Authorities.

“Payment Account” means, with respect to each Lender, the account
specified on the signature pages hereof into which all payments by or on behalf
of the Borrower to such Lender under the Loan Documents shall be made, or such
other account as such Lender shall from time to time specify by notice to the
Borrower and Administrative Agent.

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

“Pension Plan” means a Plan described in Section 3(2) of ERISA.

“Percentage” means, with respect to any Lender at any time, the
percentage which the amount of its Commitment for a particular Class at such
time represents of the aggregate amount of all the Commitments for such Class
at such time.  At any time after the
Commitments for a Class shall have terminated, the term “Percentage” shall
refer to a Lender’s Percentage for that Class immediately before such
termination, adjusted to reflect any subsequent assignments pursuant to Section 11.6.

“Permitted Acquisition” means an Acquisition by a Credit Party (other
than the Parent) or any Subsidiary of a Credit Party for consideration no
greater than the fair market value (as conclusively determined in good faith by
the Board of Directors of the Borrower) of the Stock or property acquired;
provided that (a) the property acquired (or the property of the Person
acquired) in such Acquisition constitutes Eligible Assets (or goodwill
associated therewith), (b) the Administrative Agent shall have received all
items in respect of the Stock or property acquired in such Acquisition required
to be delivered by the terms of Section 6.11
and/or Section 6.12, (c) in the
case of an Acquisition of the Stock of another Person, the board of directors
(or other comparable governing body) of such other Person shall have duly
approved such Acquisition, (d) the Borrower shall have delivered to the
Administrative Agent, prior to the closing of such Acquisition, a certificate
of its chief financial officer demonstrating that, upon giving effect to such
Acquisition on a pro forma basis, the Credit Parties are in compliance with all
of the covenants set forth in Section 6.10,
(e) the representations and warranties made by the Credit Parties in any Loan
Document shall be true and correct in all material respects at and as if made
as of the date of such Acquisition (after giving effect thereto) except to the
extent such representations and warranties expressly relate to an earlier date,
(f) at the time of such Acquisition and after giving effect thereto, no Default
or Event of Default shall exist or be continuing, and (g) after giving effect
to such Acquisition, the aggregate consideration (including cash and non-cash
consideration and any assumption of liabilities) for all such Acquisitions
during the term of this Credit Agreement shall not exceed the sum of
$5,000,000.

 27
 

 

 

“Permitted Contest” means, with respect to
any Credit Party, a good faith contest by such Credit Party, by appropriate
proceedings, of the validity or amount of any Charges, claims, obligations or
liabilities of such Credit Party; provided, that (a) such contest is
maintained and prosecuted continuously and with diligence and operates to
suspend collection or enforcement of such Charges, (b) no Lien shall be imposed
to secure payment of such Charges, claims, obligations or liabilities (other
than payments to warehousemen and/or bailees) that is superior to any of the
Liens securing the Obligations, (c) none of the Collateral becomes subject to
forfeiture or loss as a result of such contest, (d) such Credit Party shall
promptly pay or discharge such contested Charges, claims, obligations,
liabilities and all additional charges, interest, penalties and expenses, if
any, and shall deliver to Administrative Agent evidence reasonably acceptable
to Administrative Agent of such compliance, payment or discharge, if such
contest is terminated or discontinued adversely to such Credit Party or the
conditions set forth above in clause (a), (b) and (c) of this definition are no
longer met, and (e) Administrative Agent has not advised Borrower in writing
that Administrative Agent reasonably believes that nonpayment or nondischarge
thereof could have, or result in, a Material Adverse Effect.

“Permitted Investments” means Investments which are (a) cash or Cash
Equivalents, (b) accounts receivable created, acquired or made in the ordinary
course of business of a Credit Party and payable or dischargeable in accordance
with customary trade terms or otherwise in the prudent judgment of a Credit
Party, (c) inventory, raw materials and general intangibles (to the extent such
general intangibles are not a Capital Expenditure) acquired in the ordinary
course of business, (d) Investments by one Credit Party in another Credit Party
other than the Parent, (e) Investments by the Credit Parties (other than the
Parent) in the Parent in an aggregate amount not to exceed $250,000 during the
term of this Credit Agreement, (f) Investments in Permitted Acquisitions, (g)
loans to directors, officers, employees or agents in the ordinary course of
business for reasonable  business
expenses or in connection with relocation, not to exceed $250,000 in the
aggregate at any one time, (h) Investments made as a result of the receipt of
non-cash consideration from an Asset Disposition permitted by this Credit
Agreement in an amount not to exceed $500,000 in the aggregate during the term
of this Credit Agreement, (i) Investments in Capital Expenditures and (j)
Investments existing as of the Closing Date and set forth on Disclosure Schedule 7.6.

“Permitted Liens” means (a) Liens securing Obligations, (b) Liens for
taxes not yet due or Liens for taxes being contested in good faith by
appropriate proceedings for which adequate reserves determined in accordance
with GAAP have been established (and as to which the property subject to any
such Lien is not yet subject to foreclosure, sale or loss on account thereof),
(c) Liens in respect of property imposed by law arising in the ordinary
course of business such as materialmen’s, mechanics’, warehousemen’s, carrier’s,
landlords’ and other nonconsensual statutory Liens which are not yet due and
payable, which have been in existence less than 90 days or which are being
contested in good faith by appropriate proceedings for which adequate reserves
determined in accordance with GAAP have been established (and as to which the
property subject to any such Lien is not yet subject to foreclosure, sale or
loss on account thereof), (d) pledges or deposits made in the ordinary course
of business to secure payment of worker’s compensation insurance, unemployment

 28
 

 

 

insurance, pensions or social
security programs (excluding Liens under ERISA), (e) Liens arising from good
faith deposits in connection with or to secure performance of tenders, bids,
leases, government contracts, performance and return-of-money bonds and other
similar obligations incurred in the ordinary course of business (other than
obligations in respect of the payment of borrowed money), (f) Liens arising
from good faith deposits in connection with or to secure performance of
statutory obligations and surety and appeal bonds, (g) easements,
rights-of-way, restrictions (including zoning restrictions), minor defects or
irregularities in title and other similar charges or encumbrances not, in any
material respect, impairing the use of the encumbered property for its intended
purposes, (h) judgment Liens that would not constitute an Event of Default, (i)
Liens on property of any Person securing purchase money Indebtedness of such
Person permitted under Section 7.1(d) and
provided that any such Lien attaches to such property concurrently or within 90
days after the acquisition thereof and provided further that the principal
amount of the Indebtedness secured shall not be less than 70% of the value of
the asset subject to such Lien, (j) Liens arising by virtue of any statutory or
common law provision relating to banker’s liens, rights of setoff or similar
rights as to deposit accounts or other funds maintained with a creditor
depository institution, (k) Liens on property of any Person securing purchase
money Indebtedness of such Person assumed in connection with a Permitted
Acquisition and permitted under Section
7.1(f) and (l) Liens on a time deposit account to secure the
outstanding letter of credit issued by Bank of America in an amount not to
exceed $52,500.

“Person” means any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization, association, corporation, limited
liability company, institution, public benefit corporation, other entity or
government (whether federal, state, county, city, municipal, local, foreign, or
otherwise, including any instrumentality, division, agency, body or department
thereof).

“Petty Cash Account” has the meaning ascribed to it in Section 6.20.

“Plan” means, at any time, an “employee benefit plan” as defined in
Section 3(3) of ERISA, that any Credit Party or any member of a Controlled
Group maintains, contributes to or has an obligation to contribute to or has
maintained, contributed to or had an obligation to contribute to at any time
within the past 7 years on behalf of participants who are or were employed by
any Credit Party or any member of a Controlled Group.

“Pledge Agreements” means, collectively, the Borrower Pledge Agreement,
the Subsidiary Pledge Agreement, the Holdings Pledge Agreement, the Parent
Pledge Agreement and any pledge agreements entered into after the Closing Date
by any Credit Party (as required by this Agreement or any other Loan Document).

“Private Accounts” means, collectively, any and all Accounts that are
not Government Accounts.

“Pro Forma” means the unaudited consolidated and consolidating balance
sheet of Borrowers and their Subsidiaries as of May 21, 2006 after giving pro
forma effect to the Related Transactions, in form and substance satisfactory to
the Administrative Agent.

 29
 

 

 

“Pro Forma Excess Availability” means for the
Borrower and it Subsidiaries on a consolidated basis, the sum of (a) Cash
Equivalents on hand plus (b) Borrowing Availability minus (c) the
aggregate amount of all then outstanding and unpaid trade payables and other
obligations of the Borrower and its Subsidiaries which are outstanding more
than sixty (60) days past due as of such time (other than trade payables or
other obligations being contested or disputed by the Borrower in good faith), minus
(d) without duplication, the amount of checks issued by the Borrower to pay
trade payables and other obligations which are more than sixty (60) days past
due as of such time (other than trade payables or other obligations being
contested or disputed by the Borrower in good faith) but not yet sent and the
book overdraft of the Borrower, all as determined on a pro forma basis before
and after giving effect to an applicable payment.

“Pro Rata Share” means with respect to all matters relating to any
Revolving Lender with respect to the Revolving Loan, the percentage obtained by
dividing (i) the Revolving Loan Commitment by (ii) the aggregate Revolving Loan
Commitments.

“Project Ocean Acquisition Charges” means fees and expenses incurred by
the Borrower in connection with its attempted stock acquisition and the
transactions in connection therewith collectively described by the Borrower as
the Project Ocean transaction.

“Projections” means Credit Parties’ forecasted consolidated and
consolidating:  (a) balance sheets; (b)
profit and loss statements; (c) cash flow statements; and (d) capitalization
statements, all prepared on a Subsidiary by Subsidiary or division-by-division
basis, if applicable, and otherwise consistent with the historical financial
statements of the Credit Parties, together with appropriate supporting details
and a statement of underlying assumptions, all in form and substance
satisfactory to the Administrative Agent.

“Qualified Assignee” means (a) any Lender, any Affiliate of any Lender
and, with respect to any Lender that is an investment fund that invests in
commercial loans, any other investment fund that invests in commercial loans
and that is managed or advised by the same investment advisor as such Lender or
by an Affiliate of such investment advisor, and (b) any commercial bank,
savings and loan association or savings bank or any other entity which is an “accredited
investor” (as defined in Regulation D under the Securities Act) that extends
credit or buys loans as one of its businesses, including insurance companies,
mutual funds, lease financing companies and commercial finance companies, and
that in each case, has a rating of BBB or higher from Standard & Poor’s Rating Group and a
rating of Baa2 or higher from Moody’s
Investors Service, Inc. at the date that it becomes a Lender and
that, through its applicable lending office, is capable of lending to the
Borrower without the imposition of any withholding or similar taxes; provided
that no Person determined by Administrative Agent to be acting in the capacity
of a vulture fund or distressed debt purchaser shall be a Qualified Assignee,
and no Person or Affiliate of such Person (other than a Person that is already
a Lender) holding Subordinated Debt or Stock issued by any Credit Party shall
be a Qualified Assignee.

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“Qualified
Plan” means a Pension Plan that is intended to be tax-qualified under
Section 401(a) of the IRC.

“Real Property” with respect to any Person, means all of such Person’s
right, title and interest in and to any owned or leased real property and any
buildings and Fixtures located thereon.

“Reimbursement Obligations” means, at any time, all obligations of the
Borrower to reimburse the L/C Issuers pursuant to Section 2.5 for amounts paid by the L/C Issuers in respect of
drawings under any Letters of Credit, including any portion of any such
obligation to which a Lender has become subrogated pursuant to Section 2.5.

“Related Person” has the meaning ascribed to it in Section 6.20.

“Related Transactions” means the initial borrowing under the Revolving
Loan on the Closing Date and the payment of all fees, costs and expenses
associated with all of the foregoing and the execution and delivery of all of
the Related Transactions Documents.

“Related Transaction Documents” means the Loan Documents and all other
agreements or instruments executed in connection with the Related Transactions.

“Relationship Bank” has the meaning ascribed to it in Section 6.20.

“Release” means any release, threatened release, spill, emission,
leaking, pumping, pouring, emitting, emptying, escape, injection, deposit,
disposal, discharge, dispersal, dumping, leaching or migration of Hazardous
Material in the indoor or outdoor environment, including the movement of
Hazardous Material through or in the air, soil, surface water, ground water or
property.

“Reportable Event” means a reportable event as defined in Section 4043
of ERISA other than a reportable event for which the requirement to provide
notice to the PBGC has been waived by regulation.

“Required Lenders” means Lenders having more than 50% of the sum of the
Revolving Credit Commitments of all Lenders (or if the Revolving Credit
Commitments shall have been terminated, the aggregate outstanding principal
amount of the Revolving Loan); provided if a
single Lender shall hold sufficient commitments and/or Loans to constitute the
Required Lenders, then the Required Lenders shall mean such Lender plus at
least one other Lender.

“Reserves” means reserves established by the Administrative Agent in
its reasonable credit judgment from time to time pursuant to Section 2.1(d) against the Revolving Credit
Limit, the Borrowing Base or any 
component thereof of the Borrower. 
Without limiting the generality of the foregoing, Reserves established
to ensure the payment of accrued Interest Expenses or any Indebtedness shall be
deemed to be a reasonable exercise of the Administrative Agent’s reasonable credit judgment.

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“Restricted
Payment” means (i) any dividend or other payment or distribution, direct or
indirect, on account of any shares of any class of Stock of any Person, now or
hereafter outstanding (including without limitation any payment in connection
with any dissolution, merger, consolidation or disposition involving any
Person), or to the holders, in their capacity as such, of any shares of any
class of Stock of any Person, now or hereafter outstanding (other than
dividends or distributions payable in Stock of the applicable Person), (ii) any
redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any shares of any class of Stock
of any Person, now or hereafter outstanding, (iii) any payment made to retire,
or to obtain the surrender of, any outstanding warrants, options or other
rights to acquire shares of any class of Stock of any Person, now or hereafter
outstanding and (iv) any payment of any management fee to any Person.

“Revolving Credit Advance” has the meaning ascribed to it in Section 2.1(a).

“Revolving Credit Commitment” means (a) with respect to any Lender
listed on the signature pages hereof, the amount (if any) set forth thereon
opposite the name of such Lender under the heading “Revolving Credit Commitment”,
(b) with respect to any assignee of a Revolving Credit Commitment, the amount
of the transferor Lender’s Revolving Credit Commitment assigned to such
assignee pursuant to Section 11.6,
and (c) as to all Lenders having a Revolving Credit Commitment, the aggregate
commitment of all Lenders to make Revolving Credit Advances, which aggregate
commitment shall be forty million dollars ($40,000,000) on the Closing Date, in
each case, as such amount may be reduced from time to time pursuant to Section 2.8 or changed as a result of an
assignment pursuant to Section 11.6.  The term “Revolving Credit Commitment” does
not include the Swingline Commitment.

“Revolving Credit Commitments” means the sum of the Revolving Credit
Commitments of all Lenders in effect at such time.

“Revolving Credit Limit” means as of any date of determination as to
Borrower, the lesser of (a) the Maximum Commitment Amount and (b) the Borrowing
Base, in each case, minus the Availability Block,  minus any Reserves established by
the Administrative Agent.

“Revolving Lenders” means, as of any date of determination, Lenders
having a Revolving Credit Commitment.

“Revolving Loan” means, at any time, the sum of (a) the aggregate
amount of Revolving Credit Advances outstanding to the Borrower plus (b)
the aggregate L/C Obligations incurred on behalf of the Borrower.  Unless the context otherwise requires,
references to the outstanding principal balance of the Revolving Loan shall
include the outstanding balance of L/C Obligations.

“Revolving Loan Collateral” means all Accounts, Cash Equivalents and
General Intangibles of each Credit Party.

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“Revolving
Note” has the meaning ascribed to it in Section
2.2(a).

“Scheduled Funded Debt Payments” means, for any period, the sum of all
scheduled payments of principal on Funded Indebtedness (including the implied
principal component of payments due on Capital Leases and Synthetic Leases, but
excluding any voluntary prepayments or mandatory prepayments required pursuant
to Sections 2.8 or 2.9), as determined in accordance with
GAAP.

“Securities Act” means the Securities Act of 1933, as amended from time
to time, and the rules and regulations promulgated thereunder.

“Security Agreements” means collectively, the Borrower Security
Agreement, the Parent Security Agreement, the Holdings Security Agreement, the
Subsidiary Security Agreement, and any other security agreements now or hereafter
executed by any Person in favor of Administrative Agent and Lenders to secure
the Obligations.

“Severance Payments” means the amount of payments paid by Borrower
during or after the second Fiscal Quarter of Fiscal Year 2004 for severance and
search firm costs, not to exceed $750,000.

“Single Employer Plan” means a Plan maintained by the Borrower or any
member of the Controlled Group for employees of the Borrower or any member of
the Controlled Group.

“Solvent” means, with respect to any Person on a particular date, that
on such date (a) the assets of such Person, at a fair valuation, exceed its
liabilities, including contingent liabilities, (b) the remaining capital of
such Person is not unreasonably small to conduct its business and (c) such
Person will not have incurred debts, and does not have the present intent to
incur debts, beyond its ability to pay such debts as they mature.  For purposes of this definition, “debt” means
any liability on a claim, and “claim” means any (i) right to payment, whether
or not such right is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured
or unsecured, or (ii) right to an equitable remedy for breach of performance if
such breach gives rise to a right to payment, whether or not such right to an
equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured,
disputed, undisputed, secured or unsecured. 
In computing the amount of contingent liabilities of any Person on any date,
such liabilities shall be computed at the amount that, in the judgment of the
Administrative Agent in light of all facts and circumstances existing at such
time, represents the amount of such liabilities that reasonably can be expected
to become actual or matured liabilities.

“Sponsor” means Warburg Pincus and its respective Subsidiaries.

“Stated Rate” has the meaning ascribed to it in Section 2.15(b).

“Stock” means all shares, options, warrants, general or limited
partnership interests, membership interests or other equivalents (regardless of
how designated) of or in a

 33
 

 

 

corporation, partnership, limited liability company or equivalent
entity whether voting or nonvoting, including common stock, preferred stock or
any other “equity security” (as such term is defined in Rule 3a11-1 of
the General Rules and Regulations promulgated by the Securities and Exchange
Commission under the Exchange Act).

“Subordinated Debt” means the Indebtedness of the Borrower or any of
its Subsidiaries incurred in connection with Permitted Acquisitions in an
aggregate amount not to exceed $2,500,000 at any one time outstanding which is
subordinated to the Obligations in a manner and form satisfactory to the
Administrative Agent and the Required Lenders in their sole discretion.

“Subsidiary” means, with respect to any Person, (a) any corporation of
which an aggregate of more than fifty percent (50%) of the outstanding Stock
having ordinary voting power to elect a majority of the board of directors of
such corporation (irrespective of whether, at the time, Stock of any other
class or classes of such corporation shall have or might have voting power by
reason of the happening of any contingency) is at the time, directly or
indirectly, owned legally or beneficially by such Person or one or more
Subsidiaries of such Person, or with respect to which any such Person has the
right to vote or designate the vote of fifty percent (50%) or more of such
Stock whether by proxy, agreement, operation of law or otherwise, and (b) any
partnership or limited liability company in which such Person and/or one or
more Subsidiaries of such Person shall have an interest (whether in the form of
voting or participation in profits or capital contribution) of more than fifty
percent (50%) or of which any such Person is a general partner or may exercise
the powers of a general partner.  Unless
the context otherwise requires, each reference to a Subsidiary shall be a
reference to a Subsidiary of the Borrower.

“Subsidiary Guaranty” means the Subsidiary Guaranty dated as of
December 22, 2003, executed by each Subsidiary of the Borrower in favor of
Administrative Agent, on behalf of the Agent and Lenders, as amended, restated,
replaced or otherwise modified from time to time.

“Subsidiary Pledge Agreement” means the Subsidiary Pledge Agreement
dated as of December 22, 2003, among Subsidiary Guarantors and Administrative
Agent, as amended, restated, replaced or otherwise modified from time to time.

“Subsidiary Security Agreement” means the Subsidiary Security Agreement
dated as of December 22, 2003, among Subsidiary Guarantors and Administrative
Agent, as amended, restated, replaced or otherwise modified from time to time.

“Swap Related L/C” means a letter of credit or other credit enhancement
provided by GE Capital to the extent supporting the payment obligations by
Borrower under an interest rate protection or hedging agreement or transaction
(including, but not limited to, interest rate swaps, caps, collars, floors and
similar transactions) designed to protect or manage exposure to the
fluctuations in the interest rates applicable to any of the Loans, and which
agreement or transaction Borrower entered into as the result of a specific
referral pursuant to which GE Capital, GE Corporate Financial Services, Inc. or
any other Affiliate of

 34
 

 

 

GE Capital had arranged for Borrower to enter into such agreement or
transaction.  The term includes a Swap
Related L/C as it may be increased from time to time fully to support Borrower’s
payment obligations under any and all such interest rate protection or hedging
agreements or transactions.

“Swap Related Reimbursement Obligation” has the meaning ascribed to it in Section
2.16.

“Swingline Advance” has the meaning ascribed to it in Section 2.1(b).

“Swingline Availability Period” means the period from and including the
Closing Date to but excluding the Swingline Maturity Date.

“Swingline Borrowing” means a borrowing of a Swingline Loan pursuant to
Section 2.6(a).

“Swingline Commitment” means the obligation of the Swingline Lender to
make Swingline Loans to the Borrower in an aggregate principal amount at any
one time outstanding not to exceed $3,000,000.

“Swingline Lender” means GE Capital, in its capacity as the Swingline
Lender under the swingline facility described in Section 2.6, and its successors in
such capacity.

“Swingline Loan” means a loan made by the Swingline Lender pursuant to Section 2.6(a).

“Swingline Maturity Date” means the day that is thirty (30) days before
the Commitment Termination Date.

“Swingline Note” has the meaning ascribed to it in Section 2.2(b).

“Synthetic Lease” means any synthetic lease, tax retention operating
lease, off-balance sheet loan or similar off-balance sheet financing product
where such transaction is considered borrowed money indebtedness for tax purposes
but is classified as an Operating Lease under GAAP.

“Target” means a Person, group of assets or business line that is the
subject of an Acquisition.

“Temporary Cash Investment” means any Investment in (a) direct
obligations of the United States or any agency thereof, or obligations fully
guaranteed by the United States or any agency thereof, (b) commercial paper
rated at least A-1 by Standard & Poor’s Rating Group and P-1 by
Moody’s Investors Service, Inc., (c) time deposits with, including certificates
of deposit issued by, any office located in the United States of any bank or
trust company which is organized under the laws of the United States or any
State thereof and has capital, surplus and undivided profits aggregating at
least $500,000,000 and which issues (or the parent of which issues)
certificates of deposit or commercial paper with a rating

 35
 

 

 

described in clause (b) above, (d) repurchase agreements with respect
to securities described in clause (a) above entered into with an office of a
bank or trust company meeting the criteria specified in clause (c) above, provided
in each case that such Investment matures within one (1) year from the date of
acquisition thereof by any Credit Party or (e) any money market or mutual fund
that invests only in the foregoing and the manager of which and the liquidity
of which is reasonably satisfactory to the Administrative Agent.

“Third Party Payor” means any governmental entity, insurance company,
health maintenance organization, professional provider organization or similar
entity that is obligated to make payments on any Account.

“Title IV Plan” means a Pension Plan (other than a Multi-employer
Plan), that is covered by Title IV of ERISA, and that any Credit Party or any
member of a Controlled Group maintains, contributes to or has an obligation to
contribute to on behalf of participants who are or were employed by any of
them.

“TRICARE” means, collectively, a program of medical benefits covering
former and active members of the uniformed services and certain of their
dependents, financed and administered by the United States Departments of
Defense, Health and Human Services and Transportation, which program was
formerly known as the Civilian Health and Medical Program of the Uniformed
Services (CHAMPUS), and all laws, rules, regulations, manuals, orders and
administrative, reimbursement and other guidelines of all Governmental
Authorities promulgated in connection with such program (whether or not having
the force of law), in each case as the same may be amended, supplemented or
otherwise modified from time to time.

“TRICARE Account” means an Account payable pursuant to TRICARE.

“Type” defines a Loan or Borrowing by reference to whether such Loan or
Borrowing is a LIBOR Loan or Borrowing or a Base Rate Loan or Borrowing.  Identification of a Borrowing or group of
Advances by Type indicates that such Borrowing or group of Advances is
comprised of Advances of the specified Type.

“Unfunded Pension Liability” means, at any time, the aggregate amount,
if any, of the sum of (a) the amount by which the present value of all accrued
benefits under each Title IV Plan exceeds the fair market value of all assets
of such Title IV Plan allocable to such benefits in accordance with Title IV of
ERISA, all determined as of the most recent valuation date for each such Title
IV Plan using the actuarial assumptions for funding purposes in effect under
such Title IV Plan, plus (b) for a period of five (5) years following a
transaction which might reasonably be expected to be covered by Section 4069 of
ERISA, the liabilities (whether or not accrued) that could be avoided by any
Credit Party or any member of a Controlled Group as a result of such
transaction.

“Unused Line Fee” has the meaning ascribed to it in Section 2.7(b).

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“Voting Stock”
of a corporation means all classes of the Stock of such corporation then
outstanding and normally entitled to vote in the election of directors.

“Warburg Pincus” means Warburg Pincus Private Equity VIII, L.P.

“Welfare Plan” means a Plan described in Section 3(i) of ERISA.

“Wholly Owned Subsidiary” means any Person 100% of whose Voting Stock
is at the time owned by the Borrower directly or indirectly through other
Persons 100% of whose Voting Stock is at the time owned, directly or
indirectly, by the Borrower.

Section
1.2.  Accounting Terms and
Determinations.  Unless
otherwise specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared in
accordance with generally accepted accounting principles as in effect from time
to time in the United States (“GAAP”), applied on a basis consistent
(except for changes concurred in by the Credit Parties’ independent public
accountants) with the most recent audited consolidated financial statements of
the Credit Parties delivered to the Lenders; provided that, if:  (a) the Borrower notifies the Lenders that
the Borrower wishes to amend any provision of any Loan Document to eliminate
the effect of any change in GAAP on the operation of such provision, or (b) the
Administrative Agent notifies the Borrower that the Required Lenders wish to
amend any provision of any Loan Document for such purpose, then compliance with
such provision shall be determined on the basis of GAAP in effect immediately
before the relevant change in GAAP became effective, until either such notice
is withdrawn or such provision is amended in a manner satisfactory to the
Borrower and the Required Lenders.

Section
1.3.  Other Definitional Provisions.  The terms “Accounts”, “Chattel Paper”, “Code”,
“Contracts”, “Deposit Accounts”, “Documents”, “Fixtures”, “Equipment”, “General
Intangibles”, “Goods”, “Intellectual Property”, “Instruments”, “Inventory”, “Investment
Property”, “Letter-of-Credit Rights”, “License” and “Software” have the
meanings assigned to such terms in Section 1 of
the Borrower Security Agreement, Subsidiary Security Agreement, Holdings
Security Agreement, or Parent Security Agreement as applicable.  References in this Agreement to “Articles”,
“Sections”, “Schedules” or “Exhibits” shall be to
Articles, Sections, Schedules or Exhibits of or to this Agreement unless
otherwise specifically provided.  Any of
the terms defined in Section 1.1
may, unless the context otherwise requires, be used in the singular or plural
depending on the reference.  “Include”, “includes”
and “including” shall be deemed to be followed by “without limitation” whether
or not they are in fact followed by such words or words of like import.  “Writing”, “written” and comparable terms
refer to printing, typing and other means of reproducing words on paper.  Except as otherwise expressly provided
herein, references to any agreement or contract are to such agreement or
contract as amended, restated, replaced, supplemented or otherwise modified
from time to time in accordance with the terms hereof and thereof.  References to any Person include the
successors and permitted assigns of such Person; provided that no Credit
Party may assign its rights or obligations under any Loan

 37
 

 

 

Document without the prior written consent of the Administrative Agent
and the Lenders.  References “from,” “through”
or “to” any date mean, unless otherwise specified, mean “from and including,” “through
and including”, and “to but excluding”, respectively.  References to any statute and related
regulation shall include any amendments, modifications and supplements of the
same and any successor statutes and regulations.

ARTICLE II.

THE FACILITIES

Section
2.1.  The Facilities.

(a)          Revolving
Loans. Upon the terms and subject to
the conditions set forth herein, from time to time during the period from the
Closing Date to the Commitment Termination Date, each Revolving Lender,
severally and not jointly, agrees to advance funds to the Borrower (each a “Revolving
Credit Advance”); provided that immediately after each such Advance
is made (and after giving effect to any substantially concurrent application of
the proceeds thereof to repay outstanding Advances, Reimbursement Obligations
or Swingline Loans):

(i)            such Revolving Lender’s Outstanding
Revolving Amount shall not exceed its Revolving Credit Commitment, and

(ii)           the aggregate Outstanding Revolving
Amount of all the Revolving Lenders shall not exceed the Revolving Credit Limit
then in effect.

Each Revolving Credit Advance shall be in a minimum amount of
$1,000,000 or integral multiples of $500,000 in excess thereof.  The several Revolving Lenders shall make each
Revolving Credit Advance under this subsection ratably in proportion to their
respective Revolving Credit Commitments. 
Within the limits specified in this subsection and subject to the
conditions set forth elsewhere in this Agreement, the Borrower may borrow
pursuant to this subsection, repay such Advances and reborrow pursuant to this
subsection. The Revolving Credit Commitment of each Revolving Lender shall
terminate at the opening of business on the Commitment Termination Date, and
there shall become due and the Borrower shall pay on the Commitment Termination
Date, the entire outstanding principal amount of each Revolving Loan and of
each L/C Obligation, together with accrued and unpaid interest thereon to but
excluding the Commitment Termination Date.

(b)          Swingline
Facility.                The Swingline
Lender agrees to advance funds to the Borrower (each a “Swingline Advance”),
and the Revolving Lenders agree to purchase participations therein from time to
time, all upon the terms and conditions specified in Section 2.6.

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(c)          Letter
of Credit Facility.      The Revolving
Lenders agree to incur, or purchase participations in, L/C Obligations incurred
by the L/C Issuer upon the terms and subject to the conditions specified in Section 2.5.

(d)          Reserves;
Borrowing Base Adjustment.          The
Administrative Agent shall have the right to establish, modify or eliminate
Reserves against the Revolving Credit Limit, the Borrowing Base or any
component thereof from time to time in its reasonable credit judgment; provided
that, so long as no Default or Event of Default shall have occurred and be
continuing both immediately before and after giving effect to any Reserve, the
Administrative Agent shall give 10 days prior written notice to Borrower of the
establishment, modification or elimination of such Reserve. In addition,
Administrative Agent reserves the right, at any time and from time to time
after the Closing Date, to adjust any of the criteria used to determine
eligibility of any component of the Borrowing Base, to establish new criteria,
to adjust Collection Values, and to adjust advance rates with respect to such
component, in its reasonable credit judgment, subject to the approval of the
Required Lenders in the case of adjustments or new criteria or changes in
advance rates or the elimination of Reserves which have the effect of making
more credit available to the Borrower.

Section
2.2.  Notes.

(a)          Revolving
Notes. The Revolving Loan of each
Revolving Lender shall be evidenced by a single revolving note, substantially
in the form of Exhibit A (each such note, a “Revolving
Note”), dated the Closing Date in an aggregate principal amount equal to
the amount of such Revolving Lender’s Revolving Credit Commitment, duly
executed and delivered and payable by the Borrower to such Revolving
Lender.  Each Revolving Lender shall
record the date and amount of each Revolving Credit Advance made by it, and the
date and amount of each payment of principal made by the Borrower with respect
thereto, and prior to any transfer of its Revolving Note shall endorse on Schedule
A thereto (or any continuation thereof) forming a part thereof appropriate
notations to evidence the foregoing information with respect to such Revolving
Loan then outstanding; provided that the failure of any Lender to make
any such recordation or endorsement shall not affect the obligations of the
Borrower hereunder or under any Revolving Note. 
Each Revolving Lender is hereby irrevocably authorized by the Borrower
to so endorse its Revolving Note and to attach to and make a part of its
Revolving Note a continuation of any such schedule as and when required.

(b)          Swingline
Notes.  The Swingline Loan shall be
evidenced by a swingline note substantially in the form of Exhibit B
(such note, the “Swingline Note”), dated the Closing Date in a principal
amount equal to the Swingline Commitment or the portion of such Swingline Loan
assigned to any Lender in accordance with Section 11.6,
duly executed and delivered by the Borrower and payable to the Swingline Lender
or other holder of such Swingline Loan.

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Section 2.3. 
Method of Borrowing; Funding of Loans; Administrative Agent May Assume
Funding; Failure to Fund.

(a)          Method
of Borrowing.  Whenever the Borrower
desires to receive an Advance, including the initial Advance, or to convert any
portion of the outstanding Base Rate Loans into one or more LIBOR Borrowings (a
“Conversion”), or to continue all or any portion of an outstanding LIBOR
Loan for another or additional LIBOR Period (a “Continuation”), it shall
give the Administrative Agent notice in writing (by telecopy or by telephone
confirmed immediately in writing) in the form of a duly completed Exhibit C-1 (a “Notice of Borrowing”) duly executed
by an Authorized Signatory, in the case of an Advance or Continuation of, or a
Conversion into, a LIBOR Borrowing, three (3) Business Days before the
requested date of such Advance, Conversion or Continuation, and in the case of
an Advance of a Base Rate Borrowing, not later than 11:00 a.m. (New York City
time) on the Business Day before the requested date of such Advance (which
shall be a Business Day).  Such Notice of
Borrowing shall specify (i) the requested date of the Advance, Conversion
or Continuation, which shall be a Business Day, (ii) in the case of a
Conversion or Continuation, which existing Borrowings include the Loans or
portions thereof to be affected by such Notice, (iii) the amount of the
Advances to be incurred, and/or the Borrowings to be created by such Conversion
or Continuation, (iv) the Class of the Loans comprising each requested
Borrowing, (v) in the case of a LIBOR Advance, Conversion or Continuation,
the duration of the LIBOR Period of the requested Borrowing and (vi) such other
information as the Administrative Agent shall request.  If a request for a Conversion or Continuation
is not timely made prior to the expiration of a LIBOR Period, or is not made in
accordance with this Section, the portions of the Loans proposed to be affected
thereby shall be converted into, or continued as, Base Rate Loans.  Any Notice of Borrowing received after 2:00
p.m. (New York City time) shall be deemed received on the following Business
Day.  Each Notice of Borrowing shall be
irrevocable upon receipt by the Administrative Agent.

(b)          Funding
of Loans.  Promptly after receiving a
Notice of Borrowing, the Administrative Agent shall notify each Lender of the
contents of such Notice of Borrowing, of such Lender’s Percentage of the
Advances or Borrowings requested by such Notice of Borrowing and, in the case
of a LIBOR Borrowing, the applicable LIBOR Period.  In the case of an Advance, each Lender shall
make available to the Administrative Agent at the Administrative Agent’s Office
its Lender’s Percentage of such requested Advance, in lawful money of the
United States of America in immediately available funds, prior to 1:00 p.m. (New York City time) on the
specified date.  The Administrative Agent
shall, unless it shall have determined that one of the conditions set forth in Article III has not been satisfied, by 3:00 p.m. (or in the
case of a LIBOR Borrowing, 12 p.m.) (New York City time) on such day, credit
the amounts received by it in like funds to the Borrower Account, to repay
Swingline Loans, to repay Reimbursement Obligations, to pay expenses incurred
by the Administrative Agent for the Borrower’s account or in such other manner
as the Administrative Agent shall determine.

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(c)          Administrative
Agent May Assume Funding.  Unless the
Administrative Agent shall have received notice from a Lender prior to the date
of any particular Advance that such Lender will not make available to the
Administrative Agent such Lender’s Percentage of such Advance, the
Administrative Agent may assume that such Lender has made such amount available
to it on the date of such Advance in accordance with subsection (b) of
this Section 2.3, and may (but shall not be
obligated to), in reliance upon such assumption, make available a corresponding
amount for the account of the Borrower on such date.  If and to the extent that such Lender shall
not have so made such amount available to the Administrative Agent, such Lender
and the Borrower severally agree to repay to the Administrative Agent forthwith
on demand such corresponding amount together with interest thereon, for each
day from the day such amount is made available to the Borrower until the day
such amount is repaid to the Administrative Agent, at (i) in the case of the
Borrower, a rate per annum equal to the greater of (x) the Federal Funds Rate
and (y) the interest rate applicable thereto pursuant to Section 2.4,
and (ii) in the case of such Lender, a rate per annum equal to (x) for each day
from the day such amount is made available to the Borrower through the third
succeeding Business Day, the Federal Funds Rate for such day as determined by
the Administrative Agent and (y) for each day thereafter until the day such
amount is repaid to the Administrative Agent, the Base Rate for such day.  If such Lender shall repay such corresponding
amount to the Administrative Agent, the amount so repaid shall constitute such
Lender’s Loan included in such Borrowing for purposes of this Agreement.

(d)          Lender’s
Failure to Fund.  The failure of any
Lender to make an Advance on the date of any Borrowing shall not relieve any
other Lender of its obligation hereunder, if any, to make its Advance on that
date.  Neither the Administrative Agent nor
any Lender shall be responsible for the failure of any other Person to make any
Advance hereunder on the date required therefor.

Section
2.4.  Interest on Loans.

(a)          Interest.  Each Loan shall bear interest on the
outstanding principal amount thereof from the date of the applicable Advance
until repaid in full, whether before or after default, judgment or the
institution of proceedings under any bankruptcy, insolvency or other similar
law, as provided in this Section 2.4.  Unless the Default Rate has been imposed,
each Loan shall bear interest on the outstanding principal amount thereof until
due at a rate per annum equal to (i) to the extent and so long as it is a
Base Rate Loan, the Base Rate as in effect from time to time plus the
Applicable Margin, and (ii) to the extent and so long as it is a LIBOR
Loan, the LIBOR Rate plus the Applicable Margin.

(b)          Interest
Options.  Subject to the provisions
hereof, all or portions of the Loans, at the option of the Borrower, may be
made or Continued as, or Converted into, Base Rate Loans or one or more LIBOR
Loan, or any combination thereof; provided that LIBOR Loans may not be
Converted, but may be Continued, and such Continuation may occur on (and only
on) the last day of an applicable LIBOR Period; provided, further,
that Loans of any Class may only be part of a Borrowing consisting of Loans of
the same Class; and

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provided, further, that no
Advances shall be made as part of, and no Loans shall be Continued as, LIBOR
Loans, and all existing LIBOR Loans shall be Converted into Base Rate Loans on
the last day of the applicable LIBOR Period, so long as a Default shall have
occurred and be continuing.  Each LIBOR
Borrowing shall be in a minimum amount of $1,000,000 and in greater whole
multiples of $500,000.  There shall at no
time be in effect more than five (5) LIBOR Borrowings.

(c)          Post-Default
Interest.  During the period that any
Default or Event of Default shall have occurred and be continuing, at the
election of the Administrative Agent (or at the written request of Required
Lenders), all Loans and other outstanding Obligations shall bear interest at
the Default Rate.

(d)          Payments.  Interest due pursuant to this Agreement shall
be payable (i) in the case of any Loans, on the Interest Payment Date, and
(ii) in the case of any other Obligation, when any portion of such
Obligation shall be due (whether at maturity, by reason of prepayment or
acceleration or otherwise), but only to the extent then accrued on the amount
then so due.  Interest at the Default
Rate shall be payable on demand.

(e)          Determination.
Each determination by the Administrative Agent of the interest rate hereunder
shall be conclusive and binding for all purposes, absent clear and convincing
evidence to the contrary.

Section
2.5.  Letters of Credit.

(a)          Letters
of Credit.  Upon the terms and
subject to the conditions set forth herein, from time to time during the period
commencing on the Closing Date and ending on the date that is thirty (30) days
prior to the Commitment Termination Date, the Revolving Credit Commitment may,
in addition to Advances under the Revolving Loan, be utilized, upon the request
of Borrower, for (i) the issuance of standby letters of credit for the account
of Borrower by GE Capital or any other L/C Issuer approved by the Administrative
Agent, (ii) the issuance of commercial letters of credit for the account of
Borrower by any L/C Issuer other than GE Capital approved by Administrative
Agent or (iii) the issuance of standby letters of credit or commercial letters
of credit for the account of Borrower under risk participation agreements
entered into by GE Capital, as L/C Issuer, with other banks or financial
institutions (the letters of credit described in clauses (i), (ii) and (iii)
will be referred to hereinafter collectively as “Letters of Credit”
(this term does not include a Swap Related L/C)).  Immediately upon the issuance by a L/C Issuer
of a Letter of Credit, and without further action on the part of Administrative
Agent or any of the Lenders, each Revolving Lender shall be deemed to have
purchased from such L/C Issuer a participation in such Letter of Credit (or in
its obligation under a risk participation agreement with respect thereto) equal
to such Revolving Lender’s Percentage of the aggregate amount available to be drawn
under such Letter of Credit.  Immediately
after each such Letter of Credit is issued and participations therein are sold
to the Revolving Lenders as provided in this subsection:

(i)            the Aggregate L/C Exposure shall not
exceed the L/C Limit;

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(ii)           in
the case of each Revolving Lender, its Outstanding Revolving Amount shall not
exceed its Revolving Credit Commitment; and

(iii)          the aggregate Outstanding Revolving
Amount of all the Lenders shall not exceed the lesser of the Maximum Commitment
Amount or the Borrowing Base then in effect.

If required to obtain such issuance by an L/C Issuer that is not
Administrative Agent, an affiliate or a subsidiary thereof or a Lender,
Administrative Agent agrees to enter into risk participation agreements with
respect to the obligations of the Borrower under the Letter of Credit pursuant
to which Administrative Agent acquires the credit risk with respect to the
Borrower’s payment and performance of its obligations arising under and with
respect to such Letter of Credit to the L/C Issuer.  Upon any such issuance and/or entering in to
a risk participation agreement, without further action by any party hereto, (x)
each Revolving Lender shall be deemed to have purchased from Administrative
Agent and/or such L/C Issuer, and (y) such L/C Issuer and/or Administrative
Agent shall be deemed to have sold to each Revolving Lender, a participation in
the then existing or thereafter arising Reimbursement Obligations with respect
to such Letter of Credit, on the terms specified in this Agreement, in each
case equal to such Revolving Lender’s Percentage thereof.

(b)          Permitted
Terms.  Each Letter of Credit must
(i) support a transaction entered into in the ordinary course of business of
the Borrower and (ii) be in a form, for an amount and contain such terms and
conditions as are reasonably satisfactory to each of the L/C Issuer and the
Administrative Agent in its sole discretion. 
No Letter of Credit shall have an expiration date later than the close
of business on the earlier of:  (A) the
date that is one (1) year after such Letter of Credit is issued (or, in the
case of any renewal or extension thereof, one (1) year after the expiration of
such renewal or extension) and (B) the date that is thirty (30) Business Days
prior to the Commitment Termination Date. 
Notwithstanding the foregoing, a Letter of Credit may provide for
automatic extensions of its expiration date for one (1) or more successive one
year periods; provided that the L/C Issuer that issued such Letter of
Credit has the right to terminate such Letter of Credit on each such annual
expiration date and no renewal term may extend the term of the Letter of Credit
to a date that is later than thirty (30) Business Days prior to the Commitment
Termination Date.

(c)          Request
for Issuance of Letter of Credit. 
The Borrower shall give Administrative Agent at least three (3) Business
Days’ prior written notice requesting the issuance of any Letter of
Credit.  The notice shall be accompanied
by the form of the Letter of Credit (which shall be acceptable to the
Administrative Agent and the L/C Issuer) and a completed Application for
Standby Letter of Credit or Application for Agreement for Documentary Letter of
Credit, in the form of Exhibit D or E, respectively, and shall be subject to the terms and
conditions of the Master Standby Agreement or the Master Documentary Agreement
(as applicable).

(d)          Notice
of Proposed Extensions of Expiration Dates. 
The L/C Issuer or the Borrower shall give the Administrative Agent at
least three (3) Business Days’ notice

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before such L/C Issuer extends (or allows an automatic extension of)
the expiration date of any Letter of Credit issued by it (whether such
extension results from a request therefor by the Borrower or, in the case of an
evergreen Letter of Credit, from the absence of a request by the Borrower for
the termination thereof).  Such notice
shall (i) identify such Letter of Credit, (ii) specify the date on which such
extension is to be made (or the last day on which such L/C Issuer can give
notice to prevent such extension from occurring) and (iii) specify the date to
which such expiration date is to be so extended.  Upon receipt of such notice, the
Administrative Agent shall promptly notify each Revolving Lender of the
contents thereof.  No L/C Issuer shall
extend (or allow the extension of) the expiration date of any Letter of Credit
if (x) the extended expiration date would be after (A) the date that is one (1)
year after the date on which such Letter of Credit is to be extended or (B) the
date that is the thirty (30) Business Days before the Commitment Termination
Date or (y) such L/C Issuer shall have been notified by the Administrative
Agent or the Required Lenders expressly to the effect that any condition
specified in Section 3.2 is not satisfied at the
time such Letter of Credit is to be extended, provided that, in the case
of such notice from the Administrative Agent or Required Lenders, such L/C
Issuer receives such notice prior to the date notice of non-renewal is required
to be given by such L/C Issuer and such L/C Issuer has had a reasonable period
of time to act on such notice.

(e)          Notice
of Issuances.  Promptly upon issuing
any Letter of Credit, the relevant L/C Issuer will notify the Administrative
Agent of the date of such Letter of Credit, the amount thereof, the beneficiary
or beneficiaries thereof and the expiration date.  Upon receipt of such notice, the
Administrative Agent shall promptly notify each Revolving Lender of the
contents thereof and the amount of such Revolving Lender’s participation in the
relevant Letter of Credit.  Promptly upon
issuing any Letter of Credit, the relevant L/C Issuer will send a copy of such
Letter of Credit to the Administrative Agent.

(f)           Drawings.  Upon receiving a demand for payment under any
Letter of Credit from the beneficiary thereof, the relevant L/C Issuer shall
determine, in accordance with the terms of such Letter of Credit, whether such
demand for payment should be honored.  If
such L/C Issuer determines that any such demand for payment should be honored,
such L/C Issuer shall (i) promptly notify the Borrower and the Administrative
Agent as to the amount to be paid by such L/C Issuer as a result of such demand
and the date on which such amount is to be paid (an “L/C Payment Date”)
and (ii) on such L/C Payment Date make available to such beneficiary in
accordance with the terms of such Letter of Credit the amount of the drawing
under such Letter of Credit.

(g)          Reimbursement
and Other Payments by the Borrower. 
If any amount is drawn under any Letter of Credit:

(i)            the Borrower irrevocably and
unconditionally agrees to reimburse the relevant L/C Issuer for all amounts
paid by such L/C Issuer immediately upon such drawing, together with interest
on the amount drawn at the rate applicable to Base Rate Loans for each day from
and including the date such amount is drawn to but excluding the date such
reimbursement

 44
 

 

 

payment is due and payable.  Such
reimbursement payment shall be due and payable on the relevant L/C Payment Date
and Borrower hereby authorizes and directs Administrative Agent, at
Administrative Agent’s option, to debit Borrower’s account (by increasing the
outstanding principal balance of the Revolving Loan) in the amount of any
payment made by an L/C Issuer with respect to any Letter of Credit; and

(ii)           in addition, the Borrower agrees to
pay to the relevant L/C Issuer interest on any and all amounts not paid by the
Borrower when due hereunder with respect to a Letter of Credit, for each day
from and including the date when such amount becomes due to but excluding the
date such amount is paid in full, payable on demand, at a rate per annum equal
to the Default Rate.

Each payment to be made by the Borrower pursuant to this Section 2.5(g) shall be made
to the relevant L/C Issuer in federal or other funds immediately available to
it at its address specified in or pursuant to Section
11.3.

(h)          Payments
by Revolving Lenders with Respect to Letters of Credit.  In the event Administrative Agent elects not
to debit Borrower’s account for any Reimbursement Obligations and the Borrower
fails to reimburse the relevant L/C Issuer as and when required by Section 2.5(g) above for all or any portion of any amount
drawn under a Letter of Credit issued by it:

(i)            such L/C Issuer may notify the
Administrative Agent of such unpaid Reimbursement Obligation and request that
the Revolving Lenders reimburse such L/C Issuer for their respective
Percentages thereof.  Upon receiving any
such notice from an L/C Issuer, the Administrative Agent shall promptly notify
each Revolving Lender of such unpaid Reimbursement Obligation and such
Revolving Lender’s Percentage thereof. 
Upon receiving such notice from the Administrative Agent, each Revolving
Lender shall make available to such L/C Issuer, at its address specified in or
pursuant to Section 11.3, an
amount equal to such Revolving Lender’s Percentage of such unpaid Reimbursement
Obligation as set forth in such notice, in federal or other funds immediately
available to such L/C Issuer, by 3:00 p.m. (New York City time) (A) on the
day such Revolving Lender receives such notice if it is received at or before
12:00 Noon (New York City time) on such day or (B) on the first Business Day
following such Revolving Lender’s receipt of such notice if it is received
after 12:00 Noon (New York City time) on the date of receipt, in each case
together with interest on such amount for each day from and including the
relevant L/C Payment Date to but excluding the day such payment is due from
such Revolving Lender at the Federal Funds Rate for such day.  Upon payment in full thereof, such Revolving
Lender shall be subrogated to the rights of such L/C Issuer against the
Borrower to the extent of such Revolving Lender’s Percentage of such unpaid
Reimbursement Obligation (including interest

 45
 

 

 

accrued thereon).  Nothing in this Section 2.5(h) shall affect any rights any Revolving Lender
may have against any L/C Issuer for any action or omission for which such L/C
Issuer is not indemnified under Section 2.5(j);
and

(ii)           if any Revolving Lender fails to pay
any amount required to be paid by it pursuant to this Section 2.5(h) on the date on which such
payment is due, interest shall accrue on such Revolving Lender’s obligation to
make such payment, for each day from and including the date such payment became
due to but excluding the date such Revolving Lender makes such payment, at a
rate per annum equal to (x) for each day from the day such payment is due
through the third succeeding Business Day, inclusive, the Federal Funds Rate
for such day as determined by the relevant L/C Issuer and (y) for each day
thereafter, the Base Rate for such day. 
Any payment made by any Revolving Lender after 3:00 p.m. (New York
City time) on any Business Day shall be deemed for purposes of the preceding
sentence to have been made on the next succeeding Business Day.

If the Borrower shall reimburse any L/C Issuer for any drawing with
respect to which any Revolving Lender shall have made funds available to such
L/C Issuer in accordance with this Section 2.5(h),
such L/C Issuer shall promptly upon receipt of such reimbursement distribute to
such Revolving Lender its Percentage thereof, including interest, to the extent
received by such L/C Issuer.

(i)           Obligation
Absolute.  The obligation of the
Borrower to reimburse Administrative Agent and any applicable Revolving Lenders
for payments made with respect to any L/C Obligation shall be absolute,
unconditional and irrevocable, without necessity of presentment, demand,
protest or other formalities, and the obligation of each applicable Revolving
Lender to make payments to Administrative Agent with respect to Letters of
Credit shall be unconditional and irrevocable. 
Such obligations of the Borrower and Revolving Lenders shall be paid
strictly in accordance with the terms hereof under all circumstances including
the following:

(i)            any lack of validity or
enforceability of any Letter of Credit or this Agreement or the other Loan
Documents or any other agreement relating to the Letter of Credit;

(ii)           the existence of any claim, setoff,
defense or other right that any Credit Party or any of their respective
Affiliates or any Lender may at any time have against a beneficiary or any
transferee of any Letter of Credit (or any Persons or entities for whom any
such transferee may be acting), Administrative Agent, any Lender, or any other
Person, whether in connection with this Agreement, the Letter of Credit, the
transactions contemplated herein or therein or any unrelated transaction
(including any underlying transaction between the Credit Party or any of their
respective Affiliates and the beneficiary of the Letter of Credit);

 46

 

 

(iii)          any
draft, demand, certificate or any other document presented under any 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;

(iv)          payment
by Administrative Agent (except as otherwise expressly provided in paragraph
(k)(ii)(C) below) or any L/C Issuer under any Letter of Credit or L/C
Obligation against presentation of a demand, draft or certificate or other
document that does not comply with the terms of such Letter of Credit or L/C
Obligation;

(v)           any
other circumstance or event whatsoever that is similar to any of the foregoing;

(vi)          the
fact that a Default or an Event of Default has occurred
and is continuing;

(vii)         any
amendment or waiver of or any consent or departure from all or any of the
provisions of any Letter of Credit or any Loan Document; or

(viii)        any
other act or omission to act or delay of any kind of any L/C Issuer,
Administrative Agent, any Lender or any other Person or any other event or
circumstance whatsoever that might, but for the provisions of this subsection,
constitute a legal or equitable discharge of Borrower’s obligations hereunder.

(j)           Indemnification;
Nature of Revolving Lenders’ Duties.

(i)            In
addition to amounts payable as elsewhere provided in this Agreement, the
Borrower hereby agrees to pay and to protect, indemnify and save harmless
Administrative Agent and each Revolving Lender from and against any and all
claims, demands, liabilities, damages, losses, costs, charges and expenses
(including reasonable attorneys’ fees and allocated costs of internal counsel)
that Administrative Agent or any Revolving Lender may incur or be subject to as
a consequence, direct or indirect, of (A) the issuance of any Letter of Credit or
the incurrence of any L/C Obligation in respect thereof, or (B) the failure of
Administrative Agent or any Revolving Lender seeking indemnification or of any
L/C Issuer to honor a demand for payment under any Letter of Credit or of the
Administrative Agent to make any payment under any L/C Obligation as a result
of any act or omission, whether rightful or wrongful, of any present or future
de jure or de facto government or Governmental Authority, in each case other
than to the extent solely as a result of the gross negligence or willful
misconduct of Administrative Agent or such Revolving Lender (as finally
determined by a court of competent jurisdiction).

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(ii)           As
between Administrative Agent and any Lender, on the one hand, and the Borrower,
on the other hand, the Borrower assumes all risks of the acts and omissions of,
or misuse of any Letter of Credit by, beneficiaries of any Letter of
Credit.  In furtherance and not in
limitation of the foregoing, to the fullest extent permitted by law, neither
Administrative Agent nor any Lender shall be responsible for (A) the form,
validity, sufficiency, accuracy, genuineness or legal effect of any document
issued by any party in connection with the application for and issuance of any
Letter of Credit, even if it should in fact prove to be in any or all respects
invalid, insufficient, inaccurate, fraudulent or forged, (B) the validity or
sufficiency of any instrument transferring or assigning or purporting to
transfer or assign any Letter of Credit or the rights or benefits thereunder or
proceeds thereof, in whole or in part, that may prove to be invalid or
ineffective for any reason, (C) the failure of the beneficiary of any Letter of
Credit to comply fully with conditions required to demand payment under such
Letter of Credit; provided that in the case of any payment by L/C Issuer
under any Letter of Credit or L/C Obligation, L/C Issuer shall be liable only
to the extent such payment was made solely as a result of its gross negligence
or willful misconduct (as finally determined by a court of competent
jurisdiction) in determining that the demand for payment under such Letter of
Credit or L/C Obligation complies on its face with any applicable requirements
for a demand for payment under such Letter of Credit or any guaranty thereof,
(D) errors, omissions, interruptions or delays in transmission or delivery of
any messages by mail, cable, telegraph, telex or otherwise, whether or not they
may be in cipher, (E) errors in interpretation of technical terms, (F) any loss
or delay in the transmission or otherwise of any document required to make a
payment under any Letter of Credit or L/C Obligation, (G) the credit of the
proceeds of any drawing under any Letter of Credit or L/C Obligation and (H)
any consequences arising from causes beyond the control of Administrative Agent
or any Lender. None of the above shall affect, impair or prevent the vesting of
any of Administrative Agent’s or any Lender’s rights or powers hereunder or
under this Agreement.

(iii)          Nothing
contained herein shall be deemed to limit or expand any waivers, covenants or
indemnities made by the Borrower in favor of any L/C Issuer in any letter of
credit application, reimbursement agreement or similar document, instrument or
agreement between the Borrower and such L/C Issuer, including the Application
for Standby Letter of Credit, Master Standby Agreement, Application for
Documentary Letter of Credit or Master Agreement for Documentary Letter of
Credit.

(k)          Cash
Collateral.

(i)            If
the Borrower is required to provide cash collateral for any L/C Obligations
pursuant to this Agreement prior to the Commitment 

 48
 

 

 

Termination Date, the Borrower will pay to Administrative Agent for the
ratable benefit of itself and the Revolving Lenders cash in an amount equal to
one hundred ten percent (110%) of the maximum amount then available to be drawn
under each applicable Letter of Credit. 
Such cash shall be held by Administrative Agent in a cash collateral
account (the “Cash Collateral Account”) maintained at a bank or financial
institution acceptable to Administrative Agent in its sole discretion.  The Cash Collateral Account shall be in the
name of the Borrower and shall be pledged to, and subject to the control of,
Administrative Agent, for the benefit of Administrative Agent and the Revolving
Lenders, in a manner satisfactory to Administrative Agent.  The Borrower hereby pledges and grants to
Administrative Agent, on behalf of itself and the Revolving Lenders, a security
interest in all such funds and Cash Equivalents held in the Cash Collateral
Account from time to time and all proceeds thereof, as security for the payment
of all amounts due in respect of the L/C Obligations and other Obligations,
whether or not then due.  This Agreement,
including the provisions of this Section 2.5(k),
Obligations shall constitute a security agreement under applicable law.

(ii)           If
any L/C Obligations, whether or not then due and payable, shall for any reason
be outstanding on the Commitment Termination Date, the Borrower shall either
(A) provide cash collateral therefor in the manner described above, (B) cause
all such Letters of Credit and L/C Obligations, if any, to be canceled and
returned, or (C) deliver a stand-by letter (or letters) of credit in guaranty
of such L/C Obligations, which stand-by letter (or letters) of credit shall be
of like tenor and duration (plus thirty (30) additional days) as, and in an
amount equal to one hundred ten percent (110%) of the aggregate maximum amount
then available to be drawn under, the Letters of Credit to which such
outstanding L/C Obligations relate and shall be issued by a Person, and shall
be subject to such terms and conditions, as are satisfactory to Administrative
Agent in its sole discretion.

(iii)          From
time to time after funds are deposited in the Cash Collateral Account by the
Borrower, whether before or after the Commitment Termination Date,
Administrative Agent may apply such funds or Cash Equivalents then held in the
Cash Collateral Account to the payment of any amounts, and in such order as
Administrative Agent may elect, as shall be or shall become due and payable by
the Borrower to Administrative Agent and the Revolving Lenders with respect to
such L/C Obligations and, upon the satisfaction in full of all L/C Obligations,
to any other Obligations of the Borrower then due and payable.

(iv)          Neither
the Borrower nor any Person claiming on behalf of or through the Borrower shall
have any right to withdraw any of the funds or Cash Equivalents held in the
Cash Collateral Account, except that upon the termination of all L/C
Obligations and the payment of all amounts payable by

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the Borrower to Administrative Agent and Revolving Lenders in respect
thereof, any funds remaining in the Cash Collateral Account shall be applied to
other Obligations then due and owing and upon payment in full of such
Obligations, any remaining amount shall be paid to the Borrower or as otherwise
required by law.  Interest earned on
deposits in the Cash Collateral Account shall be for the account of
Administrative Agent.

(v)           Borrower
agrees to execute such Control Letters and such other documents and instruments
as the Administrative Agent shall require with respect to the security
interests created under this Section.

Section 2.6. 
Swingline Loans.

(a)          Swingline
Commitment.       Upon the terms and
subject to the conditions set forth herein, from time to time during the
Swingline Availability Period, the Swingline Lender agrees to advance funds to
the Borrower pursuant to this Section; provided that, immediately after
each such Advance is made (and after giving effect to any substantially
concurrent application of the proceeds thereof to repay outstanding Advances or
Reimbursement Obligations and to any Lender interest therein):

(i)            the
aggregate outstanding principal amount of the Swingline Loans shall not exceed
the Swingline Commitment;

(ii)           in
the case of each Revolving Lender, its Outstanding Revolving Amount shall not
exceed its Revolving Credit Commitment; and

(iii)          the
aggregate Outstanding Revolving Amount of all the Lenders shall not exceed the
Revolving Credit Limit then in effect.

Each Swingline Advance shall be
in a minimum amount of $500,000 or integral multiples of $500,000 in excess
thereof.  Subject to the foregoing
limits, the Borrower may borrow, repay and reborrow Swingline Advances at any
time during the Swingline Availability Period.

(b)          Notice
of Swingline Borrowing.         The
Borrower shall give the Swingline Lender notice (a “Notice of Swingline
Borrowing”), substantially in the form of Exhibit C-2
hereto, not later than 1:00 p.m. (New York City time) on the date of each
requested Swingline Advance, specifying:

(i)            the
date of such Advance, which shall be a Business Day; and

(ii)           the
amount of such Advance.

(c)          Funding
of Swingline Loans.  As promptly as
practicable following receipt of a Notice of Swingline Borrowing, the Swingline
Lender shall, unless the Swingline Lender determines that any applicable
condition specified in Article III has
not

 50
 

 

 

been satisfied, make available the amount of such Swingline Advance in
federal or other funds immediately available as provided in Section 2.3(b).

(d)          Interest.  The Swingline Loans shall bear interest on
the outstanding principal amount thereof, for each day from and including the
day such Swingline Advance is made to but excluding the date repaid, at a rate
per annum equal to the rate applicable to Base Rate Loans for such day.  Such interest shall be payable on the
Interest Payment Date.

(e)          Optional
Prepayment of Swingline Loans.  The
Borrower may prepay the Swingline Loans in whole at any time, or from time to
time in part, by giving notice of such prepayment to the Swingline Lender not
later than 12:00 Noon (New York City time) on the date of prepayment and paying
the principal amount to be prepaid, together with interest accrued thereon to
the date of prepayment, to the Swingline Lender in the manner provided in Section 2.14 not later than 3:00 p.m. (New York City time)
on the date of prepayment.

(f)           Mandatory
Prepayment of Swingline Loan.  The
Borrower shall prepay the Swingline Loans, together with interest accrued
thereon to the date of prepayment, upon the acceleration of the Obligations
pursuant to Article VIII.  On the date of each Revolving Credit Advance,
the Administrative Agent shall apply the proceeds thereof to prepay all
Swingline Loans then outstanding, together with interest accrued thereon to the
date of prepayment.

(g)          Maturity
of Swingline Loan.  The Swingline
Loans outstanding on the Swingline Maturity Date shall be due and payable on
such date, together with interest accrued thereon to such date.

(h)          Refunding
Unpaid Swingline Loans.  The
Swingline Lender, at any time and from time to time in its sole and absolute
discretion, but not less frequently than weekly, and immediately if (x) the
Swingline Loans are not paid in full on the Swingline Maturity Date or (y) the
Swingline Loans become immediately due and payable pursuant to Article VIII, shall on behalf of Borrower (and Borrower
hereby irrevocably authorizes the Swingline Lender to so act on its behalf) by
notice to the Revolving Lenders (including the Swingline Lender, in its
capacity as a Lender), require each Revolving Lender to pay to the Swingline
Lender an amount equal to such Revolving Lender’s Percentage of the aggregate
unpaid principal amount of the Swingline Loans then outstanding.  Such notice shall specify the date on which
such payments are to be made, which shall be the first Business Day after such
notice is given.  Not later than 12:00
Noon (New York City time) on the date so specified, each Revolving Lender shall
pay the amount so notified to it to the Swingline Lender at its address
specified in or pursuant to Section 11.3,
in federal or other funds immediately available in New York, New York.  The amount so paid by each Revolving Lender
shall constitute a Base Rate Advance to the Borrower and each Revolving Lender
hereby irrevocably agrees (absent gross negligence or willful misconduct of the
Swingline Lender as determined by a court of competent jurisdiction) to the
making of such Base Rate Advance notwithstanding (i) the amount of such
Advance may not comply with the

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minimum amount for borrowings of Revolving Loans otherwise required
hereunder, (ii) whether any conditions specified in Section 3.2
are then satisfied, (iii) whether a Default or an Event of Default then exists,
(iv) the failure of any such request or deemed request for Revolving Loans to
be made by the time otherwise required in Section 2.1,
(v) the date of such mandatory Advance or (vi) any reduction in the Revolving
Credit Commitments or termination of the Revolving Credit Commitments
immediately prior to such mandatory Advance contemporaneously therewith; provided
that, if the Revolving Lenders are prevented from making such Base Rate
Revolving Credit Advances to the Borrower by the provisions of the United
States Bankruptcy Code or otherwise, the amount so paid by each Revolving
Lender shall constitute a purchase by it of a participation in the unpaid
principal amount of the Swingline Loan and interest accruing thereon after the
date of such payment; provided that (x) all interest payable on the
Swingline Loans shall be for the account of the Swingline Lender until the date
as of which the respective participation is purchased and (y) at the time any
purchase of participations pursuant to this sentence is actually made, the
purchasing Lender shall be required to pay to the Swingline Lender, to the
extent not paid to the Swingline Lender by the Borrower in accordance with the
terms of subsection (d) hereof, interest on the principal amount of
participation purchased for each day from and including the day upon which such
borrowing would otherwise have occurred to, but excluding, the date of payment
for such participation.  Each Lender’s
obligation to make such payment or to purchase such participation under this
subsection shall be absolute and unconditional and shall not be affected by any
circumstance, including, without limitation, (1) any set-off,
counterclaim, recoupment, defense or other right which such Lender or any other
Person may have against the Swingline Lender or the Borrower, (2) the
occurrence or continuance of a Default or an Event of Default or the
termination of the Commitments, (3) any adverse change in the condition
(financial or otherwise) of the Borrower or any other Person, (4) any breach of
this Agreement by any party hereto or (5) any other circumstance, happening or
event whatsoever, whether or not similar to any of the foregoing.

(i)           Termination
of Swingline Commitment.  The
Borrower may, upon at least three (3) Business Days’ notice to the Swingline
Lender and the Administrative Agent, terminate the Swingline Commitment at any
time, if no Swingline Loans are outstanding at such time.  Unless previously terminated, the Swingline
Commitment shall terminate at the close of business on the Swingline Maturity
Date.

Section 2.7. 
Certain Fees.

(a)          Administrative
Agent Fees.  The Borrower shall pay
to GE Capital, individually, the Fees as and when required pursuant to the GE
Capital Fee Letter at the times specified for payment therein.

(b)          Unused
Line Fee.  As additional compensation
for the Revolving Lenders, the Borrower shall pay to Administrative Agent, for
the ratable benefit of such Revolving Lenders, in arrears, on the first
Business Day of each month prior to the Commitment Termination Date and on the
Commitment Termination Date, a fee (the “Unused Line Fee”) for the
Borrower’s non-use of available funds in an amount equal to (i)

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the Applicable Margin (calculated on the basis of a 360 day year for
the number of actual days elapsed) multiplied by (ii) the difference
between (x) the Maximum Commitment Amount (as it may be reduced from time to
time) minus (y) the average for the period of the daily closing balances
of the aggregate Revolving Loans and the Swingline Loans outstanding during the
period for which such Fee is due.

(c)          Reserved.

(d)          Letter
of Credit Fee.  (i) The Borrower
agrees to pay to the Administrative Agent for the ratable benefit of Revolving
Lenders, with respect to the L/C Obligations incurred hereunder, (A) for the
benefit of the Administrative Agent and the L/C Issuer, all costs and expenses
incurred by the Administrative Agent and the L/C Issuer on account of such L/C
Obligations, (B) for the ratable benefit of the Revolving Lenders, for each day
during any month in which any L/C Obligation shall remain outstanding, a fee
(the “Letter of Credit Fee”) in an amount equal to (x) the Applicable
Margin (calculated on the basis of a 360 day year for actual days elapsed) multiplied
by (y) the maximum amount available for drawing (whether or not such day is a
Business Day and whether or not the conditions for drawing thereunder have been
satisfied) under all Letters of Credit at the close of business on such day.  The Letter of Credit Fee shall be paid to
Administrative Agent for the ratable benefit of the Revolving Lenders quarterly
in arrears, on the first Business Day of each Fiscal Quarter prior to the
Commitment Termination Date and on the Commitment Termination Date.  In addition, the Borrower shall pay to any
L/C Issuer, on demand, such fees (including all per annum fees), charges and
expenses of such L/C Issuer in respect of the issuance, negotiation,
acceptance, amendment, transfer and payment of any Letter of Credit or otherwise
payable pursuant to the application and related documentation under which any
Letter of Credit is issued.  During any
period during which the Default Rate shall have been imposed pursuant Section 2.4(c), or, in the absence of such imposition,
during any period during which the Required Lenders could have imposed the
Default Rate pursuant to such Section and instead elect to impose the
provisions of this paragraph, the Letter of Credit Fee otherwise in effect
pursuant to the preceding paragraph shall be increased by two percent (2%) per
annum.

Section 2.8. 
Mandatory Repayments and Prepayments.

(a)          Prepayment
of Excess Outstanding Revolving Amount; Maturity of Obligations.  (i)  If
at any time the aggregate Outstanding Revolving Amount of all Lenders exceeds
the Revolving Credit Limit then in effect, the Borrower shall immediately
prepay Loans and Swingline Loans (or if no such Loans and Swingline Loans are
outstanding, deposit cash in a collateral account in accordance with Section 2.5(k)) in an aggregate principal amount sufficient
to eliminate such excess; provided that if any such excess results from
the establishment or modification of a Reserve or an adjustment to the
Borrowing Base or Collection Values pursuant to Section
2.1(d), such prepayments will be due within 30 days after such
establishment, modification or adjustment; provided further that, during
such 30 day period, Borrower shall be able to request Revolving Credit Advances
in an amount

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not to exceed the amount of any such Reserve or the amount attributable
to any such Borrowing Base or Collection Value adjustment, as applicable.

(b)          Asset
Dispositions.             Immediately
upon any Credit Party’s receipt of Net Cash Proceeds of any Asset Disposition
(other than any Asset Dispositions permitted by Section 7.5 or
any sale of Stock of any Subsidiary of any Credit Party), the Borrower shall
prepay an aggregate principal amount of Loans (and to the extent that any Net
Cash Proceeds in excess of the outstanding principal amount of Loans, cash
collateralize L/C Obligations in accordance with Section
2.5(k)) equal to (i)
one hundred percent (100%) of all such Net Cash Proceeds. 
Notwithstanding the foregoing, with respect to Net Cash Proceeds
resulting from the sale of fixed assets, if Borrower delivers to the
Administrative Agent a certificate, signed by Borrower’s chief financial
officer, that it intends to reinvest all or any portion of such Net Cash
Proceeds in productive replacement assets of a kind then used or usable in the
business of a Credit Party within 180 days of receipt thereof, the Borrower may
reinvest such Net Cash Proceeds in the manner set forth in such certificate; provided
that (i) the aggregate amount of such Net Cash Proceeds shall not exceed
$1,000,000 during the term of the Credit Agreement, and (ii) any amounts not so
used within the period set forth in such certificate shall, on the first
Business Day immediately following such period, be applied as provided in the
last  sentence of this subsection.  Any prepayment under this Section 2.8(b) shall be applied in accordance with Section 2.10(d).

(c)          Stock
Issuances.  Subject to the following
sentence, if any Credit Party issues Stock, immediately upon receipt of the Net
Cash Proceeds thereof (other than (i) proceeds from the issuance of Stock to
members of the management of the Borrower
pursuant to employee option or stock plans, (ii) proceeds of the
issuance of Stock to any Credit Party and (iii) issuance of common Stock of
Parent pursuant to a follow-on public offering on terms and conditions
reasonably satisfactory to the Required Lenders), the Borrower shall prepay an
aggregate principal amount of Loans (and to the extent of any Net Cash Proceeds
in excess of the outstanding principal amount of Loans, cash collateralize L/C
Obligations in accordance with Section 2.5(k))
in an amount equal to one-hundred percent (100%) of such Net Cash Proceeds; provided
that any such Net Cash Proceeds received from the sale of common stock of
Holdings in a follow-on public offering which are not applied within 135 days
from receipt thereof must be used to prepay the Loans as set forth in this Section 2.8(c).  Prior
to any prepayment pursuant to this Section 2.8(c),
Borrower must demonstrate to the reasonable satisfaction of the Administrative
Agent that immediately before and after giving effect to such prepayment, no
Default has occurred and is continuing and the Pro Forma Excess Availability is
not less than $5,000,000. 
Notwithstanding anything to the contrary contained herein, the failure
of the Borrower to make the payments set forth in this Section
2.8(c) shall be an Event of Default as set forth in Section 8.1(a)(i). 
Any prepayment under this Section 2.8(c)
shall be applied in accordance with Section 2.10(d).

(d)          Issuance
of Indebtedness.  Subject to the
following sentence, if any Credit Party incurs any Indebtedness, immediately
upon the receipt of the Net Cash Proceeds thereof, the Borrower shall prepay an
aggregate principal amount of Loans (and to

 54
 

 

 

the extent of any Net Cash Proceeds in excess of the outstanding
principal amount of Loans, cash collateralize L/C Obligations in accordance
with Section 2.5(k)) in an amount equal to
one hundred percent (100%) of all such Net Cash Proceeds.  Prior to any prepayment pursuant to this Section 2.8(d), Borrower must demonstrate to the reasonable
satisfaction of the Administrative Agent that immediately before and after
giving effect to such prepayment, no Default has occurred and is continuing and
the Pro Forma Excess Availability is not less than $5,000,000.  Notwithstanding anything to the contrary
contained herein, the failure of the Borrower to make the payments set forth in
this Section 2.8(d) shall be an Event of
Default as set forth in Section 8.1(a)(i).
Any prepayment under this Section 2.8(d)
shall be applied in accordance with Section 2.10(d).

Section 2.9. 
Optional Prepayments. 
Subject to the following sentence, the Borrower may prepay the Loans in
whole or in part upon at least three (3) Business Days’ (or, in the case of
Base Rate Revolving Loans, one (1) Business Day’s) prior irrevocable written
notice to the Lenders, subject to the payment of any prepayment charges
incurred pursuant to Section 9.4(d),
provided that in the case of repayments of Revolving Loans or Swingline
Loans pursuant to the cash sweep mechanism specified in Section 6.20,
such notice shall be waived.  The
aggregate principal amount of Loans designated for prepayment in any notice of
optional prepayment given pursuant to this section shall become due and payable
on the date fixed for prepayment as specified in such notice.

Section 2.10. 
Application of Payments.  (a)  So
long as no Event of Default has occurred and is continuing, (i) payments
consisting of proceeds of Accounts received in the ordinary course of business
shall be applied, first, to the Swingline Loan and, second, to the Revolving
Loan; (ii) payments matching specific scheduled payments then due shall be
applied to those scheduled payments; (iii) voluntary prepayments shall be
applied in accordance with the provisions of Section
2.10(c); and (iv) mandatory prepayments shall be applied as set
forth in Section 2.10(d). All payments and
prepayments applied to a particular loan shall be applied ratably to the
portion thereof held by each Lender as determined by its Pro Rata Share.  As to any other payment, and as to all
payments made following the Commitment Termination Date, Borrower hereby
irrevocably waives the right to direct the application of any and all payments
received from or on behalf of Borrower, and Borrower hereby irrevocably agrees
that Administrative Agent shall have the continuing exclusive right to apply
any and all such payments against the Obligations as Administrative Agent may
deem advisable notwithstanding any previous entry by Administrative Agent in the
Loan Account or any other books and records. 
In the absence of a specific determination by Administrative Agent with
respect thereto, payments shall be applied to amounts then due and payable in
the following order: (1) to Fees and Administrative Agent’s expenses
reimbursable hereunder; (2) to interest on the Swingline Loan; (3) to principal
payments on the Swingline Loan; (4) to interest on the other Loans and unpaid
Swap Related Reimbursement Obligations, ratably in proportion to the interest
accrued as to each Loan and unpaid Swap Related Reimbursement Obligation, as
applicable; (5) to principal payments on the other Loans and unpaid Swap
Related Reimbursement Obligations and to provide cash collateral for L/C
Obligations in the manner described in Section 2.5(k),
ratably to the aggregate, combined principal balance of the other Loans, unpaid
Swap Related

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Reimbursement Obligations and outstanding L/C Obligations; and (6) to
all other Obligations.

(b)          Administrative
Agent is authorized to, and at its sole election may, charge to the Revolving
Loan balance on behalf of Borrower and cause to be paid all Fees, expenses,
Charges, costs (including insurance premiums in accordance with Section 6.3(a)) and interest and principal, other than
principal of the Revolving Loan, owing by Borrower under this Agreement or any
of the other Loan Documents if and to the extent Borrower fails to pay promptly
any such amounts as and when due, even if the amount of such charges would
exceed the Revolving Credit Limit at such time. 
At Administrative Agent’s option and to the extent permitted by law, any
charges so made shall constitute part of the Revolving Loan hereunder.

(c)          Prepayments
pursuant to Section 2.9 will be applied to the
Revolving Loans.

(d)          Prepayments
described in Section 2.8(b) shall be applied first
to repay Revolving Loans to the extent of the value (if any) of any Account
Receivable related assets included in such sale (either directly or as an asset
of a subsidiary whose Stock was the subject of such sale), and second,
any amounts remaining shall be applied to repay Revolving Loans.  Prepayments described in Sections
2.8(c) and 2.8(d) shall be
applied to prepay Revolving Loans.  When
amounts are required to be applied against Revolving Loans pursuant to Section 2.8, such amounts shall be applied first to
outstanding Revolving Credit Advances until paid in full, second to cash
collateralize all outstanding L/C Obligations until paid in full and third
to repay any outstanding Swingline Loan. 
Subject to Section 2.10(e),
considering each Loan being prepaid separately, any such prepayment shall be
applied first to Base Rate Loans of the Class required to be prepaid before
application to LIBOR Loans of the Class required to be prepaid, in each case in
a manner which minimizes any resulting LIBOR breakage fee.

(e)          Each
payment or prepayment of less than all the outstanding aggregate principal
amount of the Loans of any Class shall be applied pro rata to the Loans of that
Class of all Lenders according to the respective outstanding principal amounts
of Loans of that Class held by each such Lender.

Section 2.11. 
Reduction of Commitments.  (a) The Revolving Credit Commitment shall
permanently reduce (i) to the extent directed by the Borrower pursuant to Section 2.11(b), and (ii) to Zero Dollars ($0) on the
Commitment Termination Date.

(b)          The
Borrower shall have the right at any time to terminate in whole the Revolving
Credit Commitments and this Agreement, or from time to time, irrevocably to
reduce in part the amount of the Revolving Credit Commitments upon at least
thirty (30) days’ prior written notice to the Administrative Agent; provided
that Borrower must demonstrate to the reasonable satisfaction of the
Administrative Agent that immediately before and after giving effect to a
reduction of the Revolving Credit Commitments under this Section
2.11(b), no Default has occurred and is continuing and the Pro Forma
Excess

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Availability is not less than $5,000,000.  Such notice shall be irrevocable on the part
of the Borrower and shall specify the effective date of such reduction or
termination, whether a termination or reduction is being made, and, in the case
of any reduction, the amount thereof shall be in an amount of $5,000,000 or an
integral multiple $1,000,000 in excess thereof. 
Upon any such reduction, the Borrower shall simultaneously prepay any
outstanding Revolving Loans (without premium except for the payment of any
charges incurred pursuant to Section 9.4(d)) to the extent necessary so that the aggregate outstanding
principal amount of the Revolving Loans does not exceed the amount of the
Revolving Credit Commitment after giving effect to any partial reduction
thereof.  The aforesaid prior notice
requirement shall not apply to the Administrative Agent’s exercise of remedies
under Section 8.2.  The amount of the Revolving Credit Commitment
may not be reinstated if it is reduced or if this Agreement is terminated by
the Borrower.

(c)          In
the event the Borrower exercises its rights under Section
2.11(b) to reduce the Revolving Credit Commitment, the Borrower
agrees that any such prepayment or reduction shall be accompanied by (i) in the
case of a prepayment in full and termination of this Agreement, the payment by
the Borrower to the Administrative Agent for the ratable account of the Lenders
of all accrued and unpaid interest and all fees and other remaining Obligations
hereunder, and (ii) the payment of any prepayment charges incurred pursuant to Section 9.4(d).

Section 2.12. 
Loan Account and Accounting.  The Administrative Agent shall maintain a
loan account (the “Loan Account”) on its books to record all Loans, all
payments made by the Borrower, and all other debits and credits as provided in
this Agreement with respect to the Loans or any other Obligations.  All entries in the Loan Account shall be made
in accordance with the Administrative Agent’s customary accounting practices as
in effect from time to time.  The balance
in the Loan Account, as recorded on the Administrative Agent’s most recent
printout or other written statement, shall, absent clear and convincing
evidence to the contrary, be presumptive evidence of the amounts due and owing
to each Lender and the Administrative Agent by the Borrower; provided
that any failure to so record or any error in so recording shall not limit or
otherwise affect the Borrower’s duty to pay the Obligations.  The Administrative Agent shall render to the
Borrower a monthly accounting of transactions with respect to the Loans setting
forth the balance of the Loan Account.  Unless
the Borrower notifies the Administrative Agent in writing of any objection to
any such accounting (specifically describing the basis for such objection),
within thirty (30) days after the date thereof, each and every such accounting
shall (absent clear and convincing error) be deemed final, binding and
conclusive upon the Credit Parties in all respects as to all matters reflected
therein.  Only those items expressly
objected to in such notice shall be deemed to be disputed by the Borrower.

Section 2.13. 
Computation of Interest and Fees.  Unused Line Fees pursuant to Section 2.7(b), Letter of Credit Fees pursuant to Section 2.7(d) and all interest hereunder and under the
Notes shall be calculated for any period on the basis of a 360-day year
for the actual number of days elapsed during such period, including the first
day but excluding the last day of such period.

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Section 2.14. 
General Provisions Regarding Payments.  All payments (including prepayments) to be
made by the Credit Parties under any Loan Document, including payments of
principal of and interest on the Notes, fees, expenses and indemnities, shall
be made without set-off or counterclaim and in immediately available
funds to each Lender’s Payment Account before 2:00 p.m. (New York City time) on
the date when due.  If any payment
hereunder becomes due and payable on a day other than a Business Day, such payment
shall be extended to the next succeeding Business Day and, with respect to
payments of principal, interest thereon, shall be payable at the then
applicable rate during such extension. 
For purposes of computing interest and Fees and determining Borrowing
Availability as of any date, all payments shall be deemed received on the same
Business Day  on which immediately
available funds therefor are received in the Collection Account prior to 2:00
p.m. (New York City time).  Payments
received after 2:00 p.m. (New York City time) on any Business Day or on a day
that is not a Business Day shall be deemed to have been received on the
following Business Day.

Section 2.15. 
Maximum Interest. 
(a)  In no event shall the
interest charged with respect to the Loans, the Notes or any other Obligations
of any Credit Party under the Loan Documents exceed the maximum amount
permitted under the laws of the jurisdiction whose law is specified as the
governing law of this document pursuant to Section 11.10
or of any other applicable jurisdiction. 
For the purposes of making any such determination hereunder, the Loans
hereunder shall be deemed a single loan in the amount of the Commitments.

(b)          Notwithstanding
anything to the contrary herein or elsewhere, if at any time the rate of
interest payable for the account of any Lender hereunder or any other Loan
Document (the “Stated Rate”) would exceed the highest rate of interest
permitted under any applicable law to be charged by such Lender (the “Maximum
Lawful Rate”), then for so long as the Maximum Lawful Rate would be so
exceeded, the rate of interest payable for the account of such Lender shall be
equal to the Maximum Lawful Rate; provided that if at any time
thereafter the Stated Rate is less than the Maximum Lawful Rate, the Borrower
shall, to the extent permitted by law, continue to pay interest for the account
of such Lender at the Maximum Lawful Rate until such time as the total interest
received by such Lender is equal to the total interest which such Lender would
have received had the Stated Rate been (but for the operation of this
provision) the interest rate payable. 
Thereafter, the interest rate payable for the account of such Lender
shall be the Stated Rate unless and until the Stated Rate again would exceed
the Maximum Lawful Rate, in which event this provision shall again apply.

(c)          In
no event shall the total interest received by any Lender exceed the amount
which such Lender could lawfully have received had the interest been calculated
for the full term hereof at the Maximum Lawful Rate with respect to such
Lender.

(d)          In
computing interest payable with reference to the Maximum Lawful Rate applicable
to any Lender, such interest shall be calculated at a daily rate equal to the

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Maximum Lawful Rate divided by the number of days in the year in which
such calculation is made.

(e)          If
any Lender has received interest hereunder in excess of the Maximum Lawful Rate
with respect to such Lender, such excess amount shall be applied to the
reduction of the outstanding principal balance of its Loans or to other amounts
(other than interest) payable hereunder, and if no such principal or other
amounts are then outstanding, such excess or part thereof remaining shall be
paid to the Borrower.

Section 2.16. 
Swap Related Reimbursement Obligations.

(a)          Borrower
agrees to reimburse GE Capital in immediately available funds in the amount of
any payment made by GE Capital under a Swap Related L/C (such reimbursement
obligation, whether contingent upon payment by GE Capital under the Swap
Related L/C or otherwise, being herein called a “Swap Related Reimbursement Obligation”).  No Swap Related
Reimbursement Obligation for any Swap Related L/C may exceed the amount of the
payment obligations owed by Borrower under the interest rate protection or
hedging agreement or transaction supported by the Swap Related L/C.

(b)          A
Swap Related Reimbursement Obligation shall be due and payable by Borrower
within one (1) Business Day after the date on which the related payment is made
by GE Capital under the Swap Related L/C.

(c)          Any
Swap Related Reimbursement Obligation shall, during the period in which it is
unpaid, bear interest at the rate per annum equal to the LIBOR Rate plus one
percent (1%), as if the unpaid amount of the Swap Related Reimbursement
Obligation were a LIBOR Loan, and not at any otherwise applicable Default
Rate.  Such interest shall be payable
upon demand.  The following additional
provisions apply to the calculation and charging of interest on Swap Related
Reimbursement Obligations by reference to the LIBOR Rate:

(i)            The
LIBOR Rate shall be determined for each successive one-month LIBOR Period
during which the Swap Related Reimbursement Obligation is unpaid,
notwithstanding the occurrence of any Event of Default and even if the LIBOR Period
were to extend beyond the Commitment Termination Date.

(ii)           If
a Swap Related Reimbursement Obligation is paid during a monthly period for
which the LIBOR Rate is determined, interest shall be pro-rated and charged for
the portion of the monthly period during which the Swap Related Reimbursement
Obligation was unpaid.  Section 9.4(d) shall not apply to any payment of a Swap
Related Reimbursement Obligation during the monthly period.

(iii)          Notwithstanding
the last paragraph of the definition of “LIBOR Rate”, if the LIBOR Rate is no
longer available from Telerate News

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Service, the LIBOR Rate with respect to Swap Related Reimbursement
Obligations shall be determined by GE Capital from such financial reporting
service or other information available to GE Capital as in GE Capital’s
reasonable discretion indicates GE Capital’s cost of funds.

(d)          Except
as provided in the foregoing provisions of this Section 2.16
and in Article IX, Borrower shall not be
obligated to pay to GE Capital or any of its Affiliates any Letter of Credit
Fee, or any other fees, charges or expenses, in respect of a Swap Related L/C
or arranging for any interest rate protection or hedging agreement or
transaction supported by the Swap Related L/C. 
GE Capital and its Affiliates shall look to the beneficiary of a Swap
Related L/C for payment of any such letter of credit fees or other fees,
charges or expenses and such beneficiary may factor such fees, charges, or
expenses into the pricing of any interest rate protection or hedging arrangement
or transaction supported by the Swap Related L/C.

(e)          If
any Swap Related L/C is revocable prior to its scheduled expiry date, GE
Capital agrees not to revoke the Swap Related L/C unless the Commitment
Termination Date or an Event of Default has occurred.

(f)           GE
Capital or any of its Affiliates shall be permitted to (i) provide confidential
or other information furnished to it by any of the Credit Parties (including,
without limitation, copies of any documents and information in or referred to
in the Closing Checklist, financial statements and Compliance Certificates) to
a beneficiary or potential beneficiary of a Swap Related L/C and (ii) receive
confidential or other information from the beneficiary or potential beneficiary
relating to any agreement or transaction supported or to be supported by the
Swap Related L/C.  However, no
confidential information shall be provided to any Person under this paragraph
unless the Person has agreed to comply with the covenant substantially as
contained in Section 11.14 of this Agreement.

ARTICLE III.

CONDITIONS

Section 3.1. 
Conditions to Closing. 
The obligation of each Lender to make any Extension of Credit on the
Closing Date or for the Administrative Agent or any Lender to take, fulfill or
perform any other action hereunder, shall be subject to satisfaction of all of
the following conditions in a manner satisfactory to Administrative Agent:

(a)          This
Agreement or counterparts hereof, the Notes and the Borrower Security Agreement
shall have been duly executed by the Borrower, and delivered to the
Administrative Agent and Lenders; and Administrative Agent shall have received
such documents, instruments, agreements and legal opinions as Administrative
Agent shall reasonably request in connection with the transactions contemplated
by this Agreement and the other Related Transaction Documents, including an
opinion of counsel to the Credit Parties substantially in the form of Exhibit H and the other documents, instruments

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agreements and opinions listed in the Closing Checklist attached hereto
as Exhibit J, each in form and substance
reasonably satisfactory to the Administrative Agent;

(b)          Administrative
Agent shall have received (i) evidence satisfactory to it in its sole
discretion that the Credit Parties have obtained all required consents and
approvals of all Persons including all requisite Governmental Authorities, to
the execution, delivery and performance of this Agreement and the other Loan
Documents and the consummation of the Related Transactions or (ii) an Officer’s
Certificate in form and substance satisfactory to Administrative Agent
affirming that no such consents or approvals are required;

(c)          Administrative
Agent and the Lenders shall have received the Fees required to be paid by the
Borrower on the Closing Date in the respective amounts specified in Section 2.7 and shall have reimbursed the Administrative
Agent for all fees, costs and expenses of closing presented as of the Closing
Date;

(d)          The
organizational and capital structure of each Credit Party and the terms and
conditions of all Indebtedness of each Credit Party shall be acceptable to
Administrative Agent in its sole discretion and Administrative Agent shall have
received all agreements, documents and Organizational Documents related thereto
which shall be reasonably satisfactory to Administrative Agent;

(e)          Administrative
Agent shall have completed its business and legal due diligence, with results
satisfactory to Administrative Agent in its sole discretion;

(f)           Administrative
Agent shall have received fully executed copies of each of the other Related
Transactions Documents, each of which shall be in form and substance
satisfactory to Administrative Agent and its counsel in their sole discretion.
The Related Transactions shall have been consummated in accordance with the
terms of the Related Transactions Documents;

(g)          The
Eligible Accounts supporting the initial Revolving Credit Advances and the
initial L/C Obligations incurred and the amount of the Reserves to be
established on the Closing Date shall be sufficient in value, as determined by
Administrative Agent, to provide the Borrower with Borrowing Availability,
after giving effect to the initial Revolving Credit Advances made to the
Borrower, the incurrence of any initial L/C Obligations and the consummation of
the Related Transactions (on a pro forma basis, with trade payables being paid
currently, and expenses and liabilities being paid in the ordinary course of
business and without acceleration of sales) of at least $5,000,000; and

(h)          Administrative
Agent shall be satisfied in its sole discretion that no breach by the Credit
Parties exists under the Original Credit Agreement.

Section 3.2. 
Conditions to Each Extension of Credit.  The obligation of any Lender to make any
Extension of Credit (including on the Closing Date), is subject to the
satisfaction of the following additional conditions:

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(a)          receipt
by the Administrative Agent of a Notice of Borrowing in accordance with Section 2.3, accompanied by a Borrowing Base
Certificate as of the last day of the month preceding the date of such proposed
Borrowing;

(b)          immediately
before and after giving effect to such Extension of Credit, no Default or Event
of Default shall have occurred and be continuing; and

(c)          the
representations and warranties of the Credit Parties contained in the Loan
Documents shall be true and correct in all material respects on and as of the
date of and after giving effect to such Extension of Credit, except for such
changes therein as are expressly permitted by the terms of this Agreement and
except to the extent that such representations and warranties are expressly
stated to be made as of an earlier date, in which case they shall be true as of
such earlier date.

Each Extension of Credit
hereunder shall be deemed to be a representation and warranty by the Borrower
on the date of such Extension of Credit as to the facts specified in clauses
(b) and (c) of this Section.

ARTICLE IV.

REPRESENTATIONS AND WARRANTIES

To induce each
Lending Party to enter into the Loan Documents and to make Extensions of
Credit, the Credit Parties, jointly and severally, make the following
representations and warranties to each Lending Party, each and all of which
shall survive the execution and delivery of this Agreement:

Section 4.1. 
Existence and Organizational Power; Compliance with Organizational
Documents.  Each Credit
Party (a) is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, (b) is duly qualified to conduct
its business and is in good standing in each other jurisdiction where its
ownership or lease of property or the conduct of its business requires such
qualification, except where the failure to be so qualified could not result in
a Material Adverse Effect, (c) has the requisite power and authority and the
legal right to own, pledge, mortgage or otherwise encumber and operate its
properties, (d) has all organizational powers necessary for the conduct of its
business as now conducted or hereafter proposed to be conducted, and (e) is in
material compliance with all provisions of its Organizational Documents.

Section 4.2. 
Governmental Approvals, Compliance with Laws and Compliance with
Agreements with Third Parties.  Each
Credit Party possesses in full force and effect all Governmental Approvals
necessary for the conduct of its business and is in compliance with all
provisions of all Applicable Law, except where the failure to possess such
Governmental Approval or of such Governmental Approval to be in full force and
effect or the failure to comply with Applicable Law could not reasonably be
expected to have a Material Adverse Effect. 
No Credit Party is in breach of or default under or with respect to any
contract, agreement, lease or other instrument to which it is a party or by which
any of its

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property is bound or affected, which breach or default could reasonably
be expected to have a Material Adverse Effect.

Section 4.3. 
Organizational and Governmental Approvals; No Contravention.  The execution, delivery and performance by each
Credit Party of the Loan Documents and Related Transaction Documents to which
it is a party, and the consummation of the transactions contemplated to occur
thereunder, (a) are within its organizational powers, have been duly authorized
by all necessary organizational action, (b) require no Governmental Approval
(other than the filing of UCC-1 financing statements, and such other
filings as have been made and are in full force and effect), (c) do not
contravene, or constitute a default under (i) any provision of Applicable Law
the violation of which could reasonably be expected to have a Material Adverse
Effect, (ii) the Organizational Documents of such Credit Party or (iii) any
agreement, judgment, injunction, order, decree or other instrument binding upon
any Credit Party and (d) do not result in the creation or imposition of any
Lien (other than the Liens created by the Loan Documents) on any asset of any
such Credit Party.

Section 4.4. 
Binding Effect; Liens of Collateral Documents.  (a) 
Each Loan Document and each Related Transaction Document to which any
Credit Party, is a party constitutes a valid and binding agreement of such
Credit Party in each case enforceable in accordance with its terms, subject to
(i) the effect of any applicable bankruptcy, fraudulent transfer, moratorium,
insolvency, reorganization or other similar laws affecting the rights of
creditors generally and (ii) the effect of general principles of equity
whether applied by a court of equity or law.

(b)          The
Collateral Documents create valid security interests in the Collateral
purported to be covered thereby, which security interests are perfected
security interests, prior to all other Liens other than Permitted Prior Liens.

Section 4.5. 
Financial Statements. 
(a)  The financial information set
forth in the financial statements listed on, and attached to, Disclosure Schedule 4.5(a) present fairly, in all material
respects, in accordance with GAAP, the consolidated and consolidating financial
position of the Credit Parties as at their respective dates and the
consolidated and consolidating income, shareholders’ equity and cash flows of
the Credit Parties for the respective periods to which such statements relate
(except in the case of unaudited interim financial statements for the absence
of footnotes and normally recurring year-end adjustments).  Any information other than financial
information presented in such statements is true, correct and complete in all
material respects.  Except as disclosed
or reflected in such financial statements or in Disclosure
Schedule 4.5(a), no Credit Party has any liabilities,
contingent or otherwise, nor any unrealized or anticipated losses, that, singly
or in the aggregate, have had or could reasonably be expected to have a
Material Adverse Effect.

(b)          The
Pro Forma delivered on the date hereof and attached hereto as Disclosure Schedule 4.5(b) was prepared by the Borrower
giving pro forma effect to the Related Transactions, was based on the unaudited
consolidated and consolidating balance

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sheets of the Borrower and its Subsidiaries dated May 21, 2006, and was
prepared in accordance with GAAP, with only such adjustments thereto as would
be required in accordance with GAAP.

(c)          The
Projections delivered on the date hereof and attached hereto as Disclosure Schedule 4.5(c) have been prepared by the
Borrower in light of the past operations of its businesses, but including
future payments of known contingent liabilities reflected on the Fair Salable
Balance Sheet, and reflect projections on a year-by-year basis through the year
ending on December 31, 2009.  The
Projections are based upon estimates and assumptions stated therein, all of
which the Borrower believes to be reasonable and fair in light of current
conditions and current facts known to the Borrower and, as of the Closing Date,
reflect the Borrower’s good faith and reasonable estimates of the future
financial performance of the Borrower and its Subsidiaries and of the other
information projected therein for the period set forth therein.

(d)          The
Fair Salable Balance Sheet delivered on the date hereof and attached hereto as Disclosure Schedule 4.5(d) was prepared by the Borrower on
the same basis as the Pro Forma, except that the Borrower’s consolidated assets
are set forth therein at their fair salable values on a going concern basis and
the liabilities set forth therein include all consolidated contingent
liabilities of the Borrower stated at the reasonably estimated present values
thereof.

Section 4.6. 
Material Adverse Effect.  Since May 21, 2006, no act, event, condition
or occurrence has occurred or failed to occur, that has had or reasonably could
be expected to have, a Material Adverse Effect (an “Adverse Change”).  In determining whether an Adverse Change has
occurred, it is understood that such an Adverse Change may have occurred at any
particular time notwithstanding the fact that at such time no Default shall
have occurred and be continuing.  If (x)
a fact or circumstance disclosed in the financial statements referred to in Section 4.5 or a Disclosure Statement, or if an
investigation, action, suit or proceeding disclosed in Disclosure
Schedule 4.7, that, at the time of such disclosure did not appear
reasonably likely to have a Material Adverse Effect, should in the future have,
or appear reasonably likely to have, a Material Adverse Effect, or (y) a
development or change shall occur with respect to any fact or circumstance
disclosed in any financial statement, Disclosure Schedule or previously
described investigation, action, suit or proceeding that should in the future
have or appear reasonably likely to have a Materially Adverse Effect, then in
each case ((x) and (y)) such Materially Adverse Effect shall be a change or
event subject to Section 4.6 notwithstanding such
prior disclosure.

Section 4.7. 
Litigation. 
Except as disclosed on Disclosure Schedule 4.7,
there is no action, suit, investigation or proceeding (collectively, “Litigation”)
pending or, to the knowledge of any Credit Party, threatened against or
affecting any Credit Party or its property before any court or arbitrator or
any Governmental Authority which, if adversely determined, could reasonably be
expected to have a Material Adverse Effect. 
There is no Litigation pending or, to the best knowledge of any Credit
Party, threatened against or affecting, any party to this Agreement or any of
the Related Transaction Documents before

 64
 

 

 

any court or arbitrator or any Governmental Authority which questions
or challenges the validity of this Agreement or any of the other Related
Transaction Documents or any transaction contemplated herein or therein.

Section 4.8. 
Full Disclosure.  None
of the Information (financial or otherwise) furnished by or on behalf of any
Credit Party to the Administrative Agent or any other Lending Party hereunder
or in connection with the Loan Documents or the Related Transaction Documents
or any of the transactions contemplated here by or thereby contains any untrue
statement of a material fact or omits to state a material fact necessary to
make the statements contained herein or therein not misleading in the light of
the circumstances under which such statements were made.

Section 4.9. 
No Adverse Fact. 
No fact or circumstance is known to any Credit Party that, either alone
or in conjunction with all other such facts and circumstances, has had or
reasonably could be expected in the future to have a Material Adverse Effect,
that has not been set forth or referred to in the financial statements referred
to in Section 4.5 or in a writing
specifically captioned “Disclosure Statement” and delivered to the
Administrative Agent prior to the Agreement Date.

Section 4.10. 
Ownership of Property, Liens.  Each Credit Party is the lawful owner of, has
good and marketable title to and is in lawful possession of, or has valid
leasehold interests in, all properties and other assets (real or personal,
tangible, intangible or mixed) purported to be owned, leased, subleased or used
as the case may be, by such Credit Party on the most recent balance sheet
referred to in Section 4.5 or, if more recent,
delivered pursuant to Section 5.1,
and none of such Credit Party’s properties or assets is subject to any Liens,
except Liens permitted pursuant to Section 7.2.

Section 4.11. 
Environmental Laws. Each Credit Party and its
respective operations are (a) in material compliance with the requirements
of all Environmental Laws and (b) not the subject of any investigation by
any Governmental Authority evaluating whether any remedial action is needed to
respond to a Release of any Hazardous Material into the environment or the work
place or the use of any such substance in any of its products or manufacturing
operations, which noncompliance or remedial action could reasonably be expected
to have a Material Adverse Effect.

Section 4.12. 
ERISA.  Each member
of the Controlled Group has fulfilled its obligations under the minimum funding
standards of ERISA and the IRC with respect to each Plan and is in compliance
in all material respects with the presently applicable provisions of ERISA and
the IRC with respect to each Plan.  No
member of the Controlled Group has (a) sought a waiver of the minimum funding
standard under Section 412 of the IRC in respect of any Plan, (b) failed to
make any contribution or payment to any Plan or Multiemployer Plan or in respect
of any Benefit Arrangement, or made any amendment to any Plan or Benefit
Arrangement, which has resulted or could reasonably be expected to result in
the imposition of a Lien or the posting of a bond or other security under ERISA
or

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the IRC or (c) incurred any liability under Title IV of ERISA other
than a liability to the PBGC for premiums under Section 4007 of ERISA.

Section 4.13. 
Subsidiaries; Capitalization.  The
Credit Parties have no Subsidiaries on the Closing Date other than as set forth
on Disclosure Schedule 4.13.  Disclosure
Schedule 4.13 sets forth the correct legal name and
jurisdiction of organization of each of the Credit Parties.  The authorized Stock of each of the Credit
Parties are as set forth on Disclosure
Schedule 4.13.  All issued
and outstanding Stock of each of the Credit Parties is duly authorized and
validly issued, fully paid, nonassessable, free and clear of all Liens other
than those in favor of Administrative Agent for the benefit of the Lending
Parties, and such Stock was issued in compliance with all Applicable Laws.  The identity of the holders of the Stock of
each of the Credit Parties (other than Parent) and the percentage of their
fully diluted ownership of the Stock of each of the Credit Parties is set forth
on Disclosure Schedule 4.13.  No Stock of any Credit Party, other than that
described above, is issued and outstanding. 
Except as provided in Disclosure Schedule 4.13,
there are no preemptive or other outstanding rights, options, warrants,
conversion rights or similar agreements or understandings for the purchase or
acquisition from any Credit Party of any Stock of any such entity.  All outstanding Indebtedness and Guaranteed
Obligations of each Credit Party as of the Closing Date (except for the
Obligations) is described in Disclosure Schedule 4.13. Holdings has no assets (except Stock of its Subsidiaries)
and no Indebtedness or Guaranteed Indebtedness (except the Obligations).  Holdings has no liabilities and engages in no
activities except those liabilities that are incurred in the ordinary course of
business.  Parent has no assets (except
Stock of its Subsidiaries) and no Indebtedness or Guaranteed Indebtedness
(except the Obligations).  Parent has no
liabilities and engages in no activities except those liabilities that are
incurred in the ordinary course of business.

Section 4.14. 
Government Regulations.  No Credit Party is an “investment company” or
an “affiliated person” of, or “promoter” or “principal underwriter” for, an “investment
company,” as such terms are defined in the Investment Company Act of 1940.  No Credit Party is subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act, or
any other federal or state statute that restricts or limits its ability to
incur Indebtedness or to perform its obligations hereunder.

Section 4.15. 
Margin Regulations. 
No Credit Party is engaged, nor will it engage, principally or as one of
its activities, in the business of extending credit for the purpose of “purchasing”
or “carrying” any “margin stock” as such terms are defined in Regulation U of
the Federal Reserve Board as now and from time to time hereafter in effect
(such securities being referred to herein as “Margin Stock”).  No Credit Party owns any Margin Stock and
none of the proceeds from the Loans have been or will be used, directly or
indirectly, for the purpose of purchasing or carrying any Margin Stock, for the
purpose of reducing or retiring any indebtedness which was originally incurred
to purchase or carry any Margin Stock or for any other purpose which might
cause any of the loans under this Agreement to be considered a “purpose credit”
within the meaning of Regulations T, U or X of the Board of Governors of the
Federal Reserve Board.  No Credit Party
will take or permit

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to be taken any action that might cause any Loan Document to violate
any regulation of the Federal Reserve Board.

Section 4.16. 
Taxes.  All tax
returns, reports and statements, including information returns, required by any
Governmental Authority to be filed by any Credit Party have been filed with the
appropriate Governmental Authority and all Charges have been paid prior to the
date on which any fine, penalty, interest or late charge may be added thereto
for nonpayment thereof (or any such fine, penalty, interest, late charge or
loss has been paid), excluding Charges or other amounts which are the subject
of a Permitted Contest.  Proper and
accurate amounts have been withheld by each Credit Party from its respective
employees for all periods in compliance with Applicable Laws and such
withholdings have been timely paid to the respective Governmental
Authorities.  Disclosure
Schedule 4.16 sets forth as of the Closing Date those taxable years
for which any Credit Party’s tax returns are currently being audited by the IRS
or any other applicable Governmental Authority, and any assessments or
threatened assessments in connection with such audit, or otherwise currently
outstanding.  Except as described in Disclosure Schedule 4.16, no Credit Party has executed or
filed with the IRS or any other Governmental Authority any agreement or other
document extending, or having the effect of extending, the period for
assessment or collection of any Charges. 
None of the Credit Parties and their respective predecessors are liable
for any Charges (a) under any agreement (including any tax sharing agreements)
or (b) to each Credit Party’s knowledge, as a transferee.  As of the Closing Date, no Credit Party has
agreed or been requested to make any adjustment under IRC Section 481(a), by
reason of a change in accounting method or otherwise, that could reasonably be
expected to have a Material Adverse Effect.

Section 4.17. 
Intellectual Property. 
Each Credit Party owns or has rights to use all Intellectual Property
material to the conduct of its business as now or heretofore conducted by it or
proposed to be conducted by it, without, to each Credit Party’s knowledge,
actual or claimed infringement upon the rights of third parties.

Section 4.18. 
Solvency.  Both
before and after giving effect to (a) the Extensions of Credit to be made or
extended on the Closing Date or such other date as Extensions of Credit
requested hereunder are made or extended, the issuance of the guaranties of the
Obligations and the pledge of assets as security therefor by all of the Credit
Parties, (b) the disbursement of the proceeds of such Extensions of Credit
pursuant to the instructions of the Credit Parties, (c) the consummation of the
transactions contemplated in the Related Transactions Documents, and (d) the
payment and accrual of all transaction costs in connection with the foregoing,
each Credit Party is Solvent.

Section 4.19. 
Insurance.  Disclosure Schedule 4.19 lists all insurance policies of any
nature maintained, as of the date such Disclosure schedule was delivered
pursuant to Section 6.3, for current
occurrences by each Credit Party, as well as a summary of the terms of each
such policy.

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Section 4.20. 
Brokers.  No
broker or finder acting on behalf of any Credit Party brought about the
obtaining, making or closing of the Loans, and no Credit Party has any
obligation to any Person in respect of any finder’s or brokerage fees in
connection therewith.

Section 4.21. 
HIPAA Compliance.  (a) To the extent that and
for so long as (i) a Credit Party is a “covered entity” as defined in 45 C.F.R.
§ 160.103, (ii) a Credit Party and/or its business and operations are subject
to or covered by the HIPAA Administrative Requirements codified at 45 C.F.R.
Parts 160 & 162 (the “Transactions Rule”) and/or the HIPAA Security
and Privacy Requirements codified at 45 C.F.R. Parts 160 & 164 (the “Privacy
and Security Rules”), and/or (iii) a Credit Party sponsors any “group
health plans” as defined in 45 C.F.R. § 160.103, each such Credit Party
has:  (x) completed, or will complete on
or before any applicable compliance date, thorough and detailed surveys,
audits, inventories, reviews, analyses and/or assessments, including risk
assessments, (collectively “Assessments”) of all areas of its business
and operations subject to HIPAA and/or that could be adversely affected by the
failure of such Credit Party to be HIPAA Compliant (as defined below) to the
extent these Assessments are appropriate or required for such Credit Party to
be HIPAA Compliant; (y) developed, or will develop on or before any applicable
compliance date, a detailed plan and time line for becoming HIPAA Compliant (a “HIPAA
Compliance Plan”); and (z) implemented, or will implement on or before any
applicable compliance date, those provisions of its HIPAA Compliance Plan
necessary to ensure that such Credit Party is HIPAA Compliant.  For purposes of this Agreement, “HIPAA
Compliant” shall mean that an applicable Credit Party (1) is, or on or before
any applicable compliance date will be, in full compliance with any and all of
the applicable requirements of HIPAA, including all requirements of the
Transactions Rule and the Privacy and Security Rules and (2) is not subject to,
and could not reasonably be expected to become subject to, any civil or criminal
penalty or any investigation, claim or process that could reasonably be
expected to have a Material Adverse Effect.

(b)          Each
Credit Party represents that it, collectively with certain other affiliates of
such Credit Party has elected to be treated as a single covered entity in
accordance with the Privacy and Security Rules (45 C.F.R. § 164.504(d)) (the “Affiliated
Entity”).  As such, each Credit Party
represents and warrants that it has the legal right, power and authority to
execute the Business Associate Agreement on behalf of the Affiliated Entity, in
accordance with the Privacy and Security Rules, and that the provisions of the
Business Associate Agreement shall be binding upon each Credit Party and all of
such Credit Party’s affiliates that are participating in the Affiliated Entity,
in accordance with the Privacy and Security Rules, as if each and every such
affiliate were a party to such Business Associate Agreement directly.

Section 4.22. 
Third Party
Reimbursement.  If any
Credit Party is or has been audited by Medicare, Medicaid, TRICARE, CHAMPVA or
similar governmental payors, none of such audits provides for adjustments in
reimbursable costs or asserts claims for reimbursement or repayment by such
Credit Party of costs and/or payments theretofore

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made by such governmental payor that, if adversely determined, could
reasonably be expected to have or result in a Material Adverse Effect.

Section 4.23. 
Tax Shelter
Representation.  The
Borrower does not intend to treat the Loans, the Letters of Credit and/or
related transactions as being a “reportable transaction” (within the meaning of
Treasury Regulation Section 1.6011-4). 
In the event the Borrower determines to take any action inconsistent
with such intention, it will promptly notify the Administrative Agent
thereof.  If the Borrower so notifies the
Administrative Agent, the Borrower acknowledges that one or more of the Lenders
may treat its Loans and/or its interest in Swingline Loans and/or Letters of Credit
as part of a transaction that is subject to Treasury Regulation Section
301.6112-1, and such Lender or Lenders, as applicable, will maintain the lists
and other records required by such Treasury Regulation.

ARTICLE V.

REPORTING COVENANTS

So long as any
Lending Party has any Commitment hereunder or any Extension of Credit or other
Obligation remains outstanding, each Credit Party shall comply with each of the
provisions in this Article V:

Section 5.1. 
Financial Statements and Reports.  The Credit Party shall deliver the following
to each Lending Party at its address specified pursuant to Section 11.3:

(a)          Monthly
Financials.  As soon as available,
but in any event within 30 days after the end of each fiscal month:

(i)                                     consolidated
and consolidating balance sheets of the Credit Parties as of the close of such
fiscal month, and related consolidated and consolidating statements of income
and cash flows for such fiscal month and for that portion of the Fiscal Year
ending as of the close of such fiscal month, in each case setting forth in
comparative form the figures for the corresponding period in the prior year and
the figures contained in the Projections and Budget for
such Fiscal Year; and

(ii)                                  a
Compliance Certificate in the form of Exhibit 5.1(a).

(b)          Quarterly
Financials.  As soon as available,
but in any event within 45 days after the end of each Fiscal Quarter:

(i)                                     consolidated
and consolidating balance sheets of the Credit Parties as of the close of such
Fiscal Quarter and the related consolidated and consolidating statements of
income and cash flow for such Fiscal Quarter and for that portion of the Fiscal
Year ending as of the close of such Fiscal Quarter, in each case

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setting forth in comparative form the figures for the
corresponding period in the prior year and the figures contained in the
Projections and Budget for such Fiscal Year;

(ii)                                  a
management discussion and analysis that includes a comparison of performance
for such Fiscal Quarter to the corresponding period in the prior year; and

(iii)                               a
Compliance Certificate in the form of Exhibit 5.1(b).

(c)          Annual
Financials.  As soon as available,
but in any event within 90 days after the end of each Fiscal Year:

(i)                                     audited
consolidated balance sheets and related audited consolidated statements of
income, retained earnings and cash flows for the Credit Parties, setting forth
in comparative form in each case the figures for the previous Fiscal Year, and
reported on without a “going concern” or other qualification or exception by an
independent certified public accounting firm of national standing reasonably
acceptable to Administrative Agent;

(ii)                                  a
management discussion and analysis that includes a comparison of performance
for such Fiscal Year to the prior year;

(iii)                               a
Compliance Certificate in the Form of Exhibit 5.1(c);

(iv)                              a
report in form and substance reasonably satisfactory to Administrative Agent
and subject only to standard qualifications required by nationally recognized
accounting firms, signed by the accounting firm auditing the financial
statements, (A) showing the calculations used to determine compliance with each
of the financial covenants set forth herein, (B) stating that, in connection
with their audit examination, nothing has come to their attention to cause them
to believe that a Default has occurred (or specifying those Defaults that they
became aware of), it being understood that such audit examination extended only
to accounting matters and that no special investigation was made with respect
to the existence of Defaults, and (C) consistent with past practices; and

(v)                                 the
annual letters collected by such accountants in connection with their audit
examination detailing contingent liabilities and material litigation matters.

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(d)          Annual
Budgets.  As soon as available
following the end of each Fiscal Year, but in any event not later than 30 days
after the end of such Fiscal Year, an annual operating plan for the Credit
Parties (the “Budget”), on a consolidated and consolidating basis,
approved by the Board of Directors of the Borrower, for the following Fiscal
Year, which (i) includes a statement of all of the material assumptions on
which such plan is based, (ii) includes monthly balance sheets, income
statements and statements of cash flows for the following year and (iii)
integrates sales, gross profits, operating expenses, operating profit, cash
flow projections and Borrowing Availability projections, all prepared on the
same basis and in similar detail as that on which operating results are
reported (and in the case of cash flow projections, representing management’s
good faith estimates of future financial performance based on historical
performance), and including plans for personnel, Capital Expenditures and
facilities.

(e)          Management
Letters.  Within five Business Days
after receipt thereof by any Credit Party, copies of all management letters,
exception reports or similar letters or reports received by such Person from
its independent certified public accountants.

(f)           Defaults
and other Material Events. As soon as
practicable, and in any event within five (5) Business Days after any executive
or financial officer of any Credit Party obtains knowledge of the existence of
any event that could reasonably be expected to have a Material Adverse Effect
or of any Default, telephonic or telecopied notice specifying the nature of
such event or Default, including the anticipated effect thereof, which notice,
if given telephonically, shall be promptly confirmed in writing on the next Business
Day.

(g)          Litigation.              As soon as practicable, and in any
event within five (5) Business Days after any executive or financial officer of
any Credit Party obtains knowledge of any Litigation commenced or threatened
against any Credit Party that (i) seeks damages in excess of $1,000,000, (ii) seeks injunctive
relief and, if such relief were granted, such injunction could reasonably be
expected to have a Material Adverse Effect, (iii) is asserted or instituted
against any Plan, its fiduciaries or its assets or against any Credit Party or
any member of a Controlled Group in connection with any Plan, (iv) alleges
criminal misconduct by any Credit Party, (v) alleges material violations of any
Healthcare Laws, (vi) alleges the violation of any law regarding, or seeks
remedies in connection with, any Environmental Liabilities, or (vii) if
adversely determined against any Credit Party, could reasonably be expected to
have a Material Adverse Effect.

(h)          Other
Securities Reports.  Promptly upon
their becoming available, copies of (i) all financial statements, reports,
notices and proxy statements sent by any Credit Party to its security holders,
(ii) all regular and periodic reports and all registration statements and
prospectuses, if any, filed by any Credit Party with any securities exchange or
with the Securities and Exchange Commission or any governmental or private
regulatory authority and (iii) all press releases and other statements made
available by any Credit Party to the public concerning material changes or
developments in the business of any such Credit Party.

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(i)           Supplemental
Disclosures. Supplemental disclosures, if any, required by Section 6.7.

(j)           Damage
to Collateral.  Disclosure of any
loss, damage, or destruction to the Collateral in the amount of $500,000 or
more individually or in the aggregate, whether or not covered by insurance.

(k)          Defaults
under Material Agreements.              Immediately
upon receipt, copies of any notice to any Credit Party of claimed default by
any third party to any Credit Party with respect to or by any Credit Party of
any lease or agreement to which any Credit Party is a party that involves
payments in excess of $250,000 individually or in the aggregate per annum or
involves property of any Credit Party 
having a value in excess of $250,000 individually or in the aggregate.

(l)           Other
Documents.  Promptly upon request,
such other financial and other information respecting any Credit Party’s
business or financial condition as Administrative Agent or any Lender shall
from time to time reasonably request.

Section
5.2.  Collateral Reports.  Each Credit Party shall deliver to
Administrative Agent or to Administrative Agent and Lenders, as required, the
various Collateral Reports (including Borrowing Base Certificates in the form
of Exhibit G) at the times and in the
manner set forth below:

(a)          To
Administrative Agent, upon its request, and in any event no less frequently
than 12:00 p.m. (New York City time) on the date that is fifteen (15)
Business Days after the end of each fiscal month (together with a copy of all
or any part of the following reports requested by any Lender in writing after
the Closing Date), each of the following reports, each of which shall be
prepared by the Borrower as of the last day of the immediately preceding fiscal
month:

(i)            a Borrowing Base Certificate
accompanied by such supporting detail and documentation as shall be requested
by Administrative Agent in its reasonable discretion; and

(ii)           a monthly trial balance showing
Accounts outstanding aged from invoice date as follows:  one (1) to thirty (30) days; thirty-one (31)
to sixty (60) days; sixty-one (61) to ninety (90) days; ninety-one (91) days to
one hundred twenty days (120) and one hundred twenty-one days (121) or more,
accompanied by such supporting detail and documentation as shall be requested
by Administrative Agent in its reasonable discretion;

(b)          To
Administrative Agent, on a monthly basis or at such more frequent intervals as
Administrative Agent may reasonably request from time to time (together with a
copy of all or any part of such delivery requested by any Lender in writing
after the Closing Date), Collateral reports including all additions and
reductions (cash and non-cash) with respect to Accounts in each case
accompanied by such supporting detail and documentation 

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as shall be requested by Administrative Agent in its reasonable
discretion each of which shall be prepared as of the last day of the
immediately preceding month or the date that is two (2) days prior to the date
of any such request;

(c)          To
Administrative Agent, at the time of delivery of each of the monthly financial
statements delivered pursuant to Section 5.1(a):

(i)            a reconciliation of the Accounts
trial balance to the most recent Borrowing Base Certificate, general ledger and
monthly financial statements delivered pursuant to Section 5.1(a), in each case accompanied by such supporting
detail and documentation as shall be requested by Administrative Agent in its
reasonable discretion;

(ii)           an aging of accounts payable and a
reconciliation of such accounts payable aging to the general ledger and monthly
financial statements delivered pursuant to Section
5.1(a), in each case accompanied by such supporting detail and
documentation as shall be requested by Administrative Agent in its reasonable
discretion; and

(iii)          a reconciliation of the outstanding
Loans as set forth in the monthly Loan Account statement provided by
Administrative Agent to the general ledger and monthly financial statements
delivered pursuant to Section 5.1(a),
in each case accompanied by such supporting detail and documentation as shall
be requested by Administrative Agent in its reasonable discretion.

(d)          To
Administrative Agent, at the time of delivery of each of the annual financial
statements delivered pursuant to Section 5.1(d),
(i) a listing of government contracts of the Borrower subject to the Federal
Assignment of Claims Act of 1940; and (ii) a list of any applications for the
registration of any patent, trademark or copyright filed by any Credit Party
with the United States Patent and Trademark Office, the United States Copyright
Office or any similar office or agency in the prior Fiscal Quarter;

(e)          To
the Administrative Agent, such appraisals of the Borrower’s assets as
Administrative Agent may request at any time after the occurrence and during
the continuance of a Default, such appraisals to be conducted by an appraiser,
and in form and substance reasonably satisfactory to Administrative Agent;

(f)           To
Administrative Agent, within five (5) Business Days after receipt thereof,
copies of (i) any and all default notices received under or with respect to any
leased location or public warehouse where any Collateral is located, and (ii)
such other notices or documents with respect to any owned or leased Real Property
of any Credit Party as Administrative Agent may reasonably request;

(g)          To
Administrative Agent, within five (5) Business Days after receipt thereof,
copies of any material amendments to any Real Property leases of any Credit
Party; and

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(h)          Such
other reports, statements and reconciliations with respect to the Borrowing
Base, Collateral or Obligations of any or all Credit Parties as Administrative
Agent shall from time to time request in its reasonable discretion.

Section
5.3.  Accuracy of
Financial Statements and Information

(a)          Future
Financial Statements.  All financial
statements delivered pursuant to Section 5.1(a),
(b), or (c), shall (i) in the case of the financial information
set forth therein, present fairly, in all material respects, in accordance with
GAAP the consolidated and consolidating financial position of the Credit
Parties, as at their respective dates and the consolidated and consolidating
income, shareholders’ equity, and consolidated cash flows of the Credit Parties
for the respective periods to which such statements relate (subject, in the
case of the financial statements delivered pursuant to Section 5.1(a) and (b), to the absence of
footnotes and normally recurring year-end adjustments) and (ii) in the
case of any other information presented, be true, correct and complete in all
material respects, and the furnishing of the same to the Lending Parties shall
constitute a representation and warranty by the Credit Parties made on the date
the same are furnished to the Lending Parties to that effect.

(b)          Future
Information.  All Information
furnished to any Lending Party by or on behalf of any Credit Party on and after
the Closing Date in connection with or pursuant to this Agreement or any other
Loan Document or in connection with or pursuant to any amendment or
modification of, or waiver under, this Agreement or any other Loan Document,
shall, at the time the same is so furnished, but in the case of Information
dated as of a prior date, as of such date, (i) in the case of any such information
prepared in the ordinary course of business, be complete and correct in all
material respects in the light of the purpose prepared, and, in the case of any
such Information required by the terms of this Agreement or the preparation of
which was requested by any Lending Party, be complete and correct in all
material respects to the extent necessary to give true and accurate knowledge
of the subject matter thereof, and (ii) not contain any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements contained therein, in light of the circumstances in which they are
made, not misleading, and the furnishing of the same to any Lending Party shall
constitute a representation and warranty by the Credit Parties made on the date
the same are so furnished to the effect specified in clauses (i) and (ii).

Section
5.4.  Confidential Health Information.              Notwithstanding anything in this Agreement to the
contrary, Credit Parties agree that they will not distribute or share
confidential health information with any Lender if the sharing or distribution
of such information to Lender would be a violation of HIPAA and Credit Parties
further agree to identify any such health information and protect Lenders from
the receipt thereof; provided that any Lender shall have the right to
receive confidential health information if such Lender executes a Business
Associate Agreement.

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ARTICLE VI.

AFFIRMATIVE COVENANTS

So long as any Lending Party has any Commitment hereunder or any Extension
of Credit or other Obligation remains outstanding, Borrower shall, and shall
cause each Credit Party to, comply with each of the covenants in this Article VI:

Section
6.1.  Payment of Obligations.  Each Credit Party (a) shall pay and
discharge, at or before maturity, all of its respective obligations and
liabilities, including Charges, the non-payment or discharge of which could
reasonably be expected to have a Material Adverse Effect except where the same
is the subject of a Permitted Contest, (b) shall maintain, in accordance with
GAAP, appropriate reserves for the accrual of any of the same and (c) shall not
breach in any respect, or permit to exist any default under, the terms of any
lease, commitment, contract, instrument or obligation to which it is a party,
or by which its properties or assets are bound, the breach of or default under
which could reasonably be expected to have a Material Adverse Effect, subject
to Permitted Contests.

Section
6.2.  Preservation of Existence and
Franchises.  Each of the
Credit Parties will, and will cause each of its Subsidiaries to, do all things
necessary to preserve and keep in full force and effect its existence, rights,
franchises and authority except as permitted by Section 7.4
or except (with respect to rights, franchises and authority only) where the
failure to do so would not have or be reasonably expected to have a Material
Adverse Effect.

Section 6.3. 
Insurance; Damage to or Destruction of Collateral.   (a) 
The Credit Parties shall, at their sole cost and expense, (i) maintain
the policies of insurance described on Disclosure
Schedule 4.19 as in effect on the Closing Date or otherwise in
form and amounts and with insurers reasonably acceptable to Administrative
Agent and (ii) deliver to Administrative Agent at the time financial statements
and reports are required to be delivered by Section
5.1(c) hereof, an updated Disclosure Schedule 4.19,
which shall be attached to this Agreement and made a part hereof in replacement
of the previously delivered Disclosure Schedule 4.19
showing the form and amounts of such policies as of such delivery date and the
changes from the previous such disclosure schedule.  Such policies of insurance (or the loss
payable and additional insured endorsements delivered to Administrative Agent)
shall contain provisions pursuant to which the insurer agrees to provide thirty
(30) days prior written notice to Administrative Agent in the event of any
non-renewal, cancellation or amendment of any such insurance policy.  If any Credit Party at any time or times
hereafter shall fail to obtain or maintain any of the policies of insurance
required above, or to pay all premiums relating thereto, Administrative Agent
may at any time or times thereafter obtain and maintain such policies of
insurance and pay such premiums and take any other action with respect thereto
that Administrative Agent deems advisable; provided that Administrative
Agent shall have no obligation to obtain insurance for any Credit Party or pay
any premiums therefor, but to the extent it does obtain such insurance or pay
such premiums, Administrative Agent shall not be deemed to have waived any
Default arising from any Credit Party’s failure to maintain such insurance or
pay any

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premiums therefor.  All sums so
disbursed by Administrative Agent hereunder, including reasonable attorneys’
fees, court costs and other charges related thereto, shall be payable on demand
by the Borrower to Administrative Agent and shall constitute additional
Obligations hereunder secured by the Collateral.

(b)          Administrative
Agent reserves the right at any time upon any change in any Credit Party’s risk
profile (including any change in the product mix maintained by any Credit Party
or any laws affecting the potential liability of such Credit Party) to require
additional forms and limits of insurance to, in Administrative Agent’s
reasonable opinion, adequately protect both Administrative Agent’s and Lender’s
interests in all or any portion of the Collateral and to ensure that each
Credit Party is protected by insurance in amounts and with coverage customary
for its industry.  If requested by
Administrative Agent, each Credit Party shall deliver to Administrative Agent
from time to time a report of a reputable insurance broker, satisfactory to
Administrative Agent, with respect to its insurance policies.

(c)          Each
Credit Party shall deliver to Administrative Agent, in form and substance
satisfactory to Administrative Agent, endorsements to (i) all “All Risk” and
business interruption insurance naming Administrative Agent, on behalf of the
Agent and Lenders, as loss payee, and (ii) all general liability and other
liability policies naming Administrative Agent, on behalf of itself and
Lenders, as additional insured.  Each Credit
Party irrevocably makes, constitutes and appoints Administrative Agent (and all
officers, employees or agents designated by Administrative Agent), as such
Credit Party’s true and lawful agent and attorney-in-fact for the purpose of
making, settling and adjusting claims under such “All Risk” policies of
insurance, endorsing the name of such Credit Party on any check or other item
of payment for the proceeds of such “All Risk” policies of insurance and for
making all determinations and decisions with respect to such “All Risk”
policies of insurance; provided that 
Administrative Agent shall have no duty to exercise any rights or powers
granted to it pursuant to the foregoing power-of-attorney.  After deducting from such proceeds the
expenses, if any, incurred by Administrative Agent in the collection or
handling thereof, Administrative Agent shall apply such proceeds in excess of
$250,000 to the reduction of the Obligations in accordance with Section 2.8(b); provided however, that, absent a Default or
Event of Default, the applicable Credit Party may use such proceeds in an
amount not to exceed $1,000,000, to replace, repair, restore or rebuild the
Collateral within 270 days of such casualty with materials and workmanship of
substantially the same quality as existed before the loss, damage or destruction;
provided that if such Credit Party shall not have completed or entered
into binding agreements to complete such replacement, restoration, repair or
rebuilding within 180 days of such casualty, Administrative Agent shall apply
such insurance proceeds to the Obligations in accordance with Section 2.8(b).  All
insurance proceeds that are to be made available to any Credit Party to
replace, repair, restore or rebuild the Collateral shall be applied by
Administrative Agent to reduce the outstanding principal balance of the
Revolving Loan (which application shall not result in a permanent reduction of
the Revolving Credit Commitment) and upon such application, Administrative
Agent shall establish a Reserve against the Borrowing Base in an amount equal to
the amount of such proceeds so applied. 
Thereafter, such funds shall be made available to that Credit Party to
provide funds to replace, repair, restore or rebuild the

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Collateral as follows: (x) the Borrower shall request a Revolving
Credit Advance be made to such Credit Party in the amount requested to be
released; (y) so long as the conditions set forth in Section 3.2 have
been met, Revolving Lenders shall make such Revolving Credit Advance and (z) in
the case of insurance proceeds applied against the Revolving Loan, the Reserve
established with respect to such insurance proceeds shall be reduced by the
amount of such Revolving Credit Advance. 
To the extent not used to replace, repair, restore or rebuild the Collateral,
such insurance proceeds shall be applied in accordance with Section 2.8(b).

Section
6.4.  Compliance with Law.  Each of the Credit Parties
will, and will cause each of its Subsidiaries to, comply with all laws, rules,
regulations and orders, and all applicable restrictions imposed by all
Governmental Authorities, applicable to it and its property (including, without
limitation, Environmental Laws) if noncompliance with any such law, rule,
regulation, order or restriction would have or be reasonably expected to have a
Material Adverse Effect.

Section
6.5.  Payment of Taxes and Other
Indebtedness.  Each of
the Credit Parties will, and will cause its Subsidiaries to, pay, settle or
discharge (a) all taxes, assessments and governmental charges or levies imposed
upon it, or upon its income or profits, or upon any of its properties, before
they shall become delinquent, (b) all lawful claims (including claims for
labor, materials and supplies) which, if unpaid, might give rise to a Lien upon
any of its properties, and (c) except as prohibited hereunder, all of its other
Indebtedness as it shall become due; provided, however, that a Credit Party or
any of its Subsidiaries shall not be required to pay any such tax, assessment,
charge, levy, claim or Indebtedness which is being contested in good faith by
appropriate proceedings and as to which adequate reserves therefor have been
established in accordance with GAAP, unless the failure to make any such
payment (i) could give rise to an immediate right to foreclose on a Lien
securing such amounts or (ii) would have or be reasonably expected to have a
Material Adverse Effect.

Section
6.6.  Maintenance of Property.  Each of the Credit Parties
will, and will cause its Subsidiaries to, maintain and preserve its properties
and equipment in good repair, working order and condition, normal wear and tear
excepted, and will make, or cause to be made, in such properties and equipment
from time to time all repairs, renewals, replacements, extensions, additions,
betterments and improvements thereto as may be needed or proper, to the extent
and in the manner customary for companies in similar businesses.

Section
6.7.  Performance of Obligations.  Each of the Credit Parties
will, and will cause its Subsidiaries to, perform in all respects all of its
obligations under the terms of all agreements, indentures, mortgages, security
agreements or other debt instruments to which it is a party or by which it is
bound unless the failure to do so would not have or be reasonably expected to
have a Material Adverse Effect.

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Section 6.8. 
Use of Proceeds.  The
Borrower will use the proceeds of the Loans solely for working capital and
general corporate purposes including, without limitation, Capital Expenditures
and Permitted Acquisitions.

Section
6.9.  Audits/Inspections.  Upon reasonable notice and during normal
business hours the Credit Parties will, and will cause their Subsidiaries to,
permit, subject to the provisions of Section 11.14,
representatives appointed by the Administrative Agent, including, without
limitation, independent accountants, agents, attorneys and appraisers to visit
and inspect each Credit Party’s property, including its books and records, its
accounts receivable and inventory, its facilities and its other business
assets, and to make photocopies or photographs thereof and to write down and
record any information such representative obtains and shall permit the
Administrative Agent or its representatives to investigate and verify the
accuracy of information provided to the Lenders and to discuss all such matters
with the officers, employees and representatives of the Credit Parties and
their Subsidiaries.  The Credit Parties
agree that the Administrative Agent and its representatives may conduct one
annual field audit and, to the extent necessary, one annual desk audit of the
Collateral at the expense of the Borrower (the Borrower being entitled to have
a representative present at discussions with its independent accountants), provided
that upon a Default or Event of Default, the Administrative Agent and its representatives
may conduct audits at the expense of the Borrower and such audits do not count
towards the limitation of one field audit and one desk audit per year at
Borrower’s expense set forth in this Section 6.9.

Section
6.10.  Financial Covenants.  The Borrower’s fiscal year
ends on the Sunday closest to December 31 of each calendar year.  Each reference to the end of the Fiscal
Quarter or Fiscal Month in this Section 6.10
shall be deemed to refer to the last day of the Fiscal Quarter or Fiscal Month
of the Borrower, as applicable.

(a)          Fixed
Charge Coverage Ratio.  The Fixed
Charge Coverage Ratio, as of the end of each Fiscal Quarter of the Borrower,
shall be greater than or equal to 1.25 to 1.00.

(b)          Days
Sales Outstanding.  As of the end of
each Fiscal Month from the Closing Date, Days Sales Outstanding shall not be
greater than 65 days for any Fiscal Month.

Section
6.11.  Collateral.  If, subsequent to the Closing Date, a Credit
Party shall (a) acquire or lease any real property or (b) acquire any intellectual
property, securities, instruments, chattel paper or other personal property
required to be delivered to the Administrative Agent as Collateral hereunder or
under any of the Collateral Documents, the Borrower shall promptly (and in any
event within ten (10) Business Days) after any senior executive officer of the
Borrower acquires knowledge of same notify the Administrative Agent of same; provided
that with respect to leased real property, Credit Parties shall within five (5)
Business Days after the end of each Fiscal Quarter deliver to Administrative
Agent a schedule of the leased real property showing leased real property
acquired and closed during such Fiscal Quarter. 
Each Credit Party shall take such action as requested by the
Administrative Agent and at its own expense, to ensure that the Administrative
Agent has a 

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first priority perfected Lien in all owned real property (and in such
leased real property as reasonably requested by the Administrative Agent or the
Required Lenders) and all personal property of the Credit Parties (whether now
owned or hereafter acquired), subject only to Permitted Liens; provided,
however, that nothing in this Section 6.11
shall require any Credit Party to take any action which would require the
creation of any Lien that would result in a breach of any agreement creating or
evidencing such Collateral so long as such agreement was not entered into with
the intent of avoiding the requirements of this Section 6.11.  Each Credit Party shall adhere to the
covenants regarding the location of personal property as set forth in the
Security Agreement.

Section
6.12.  Additional Credit Parties.  At the time any Person becomes a Subsidiary
of a Credit Party, the Borrower shall so notify the Administrative Agent and
promptly thereafter (but in any event within 45 days after the date thereof)
shall (a) cause such Person (if it is a Domestic Subsidiary) to execute a
Joinder Agreement in form reasonably acceptable to Administrative Agent, (b)(i)
cause all of the Stock of such Person (if such Person is a Domestic Subsidiary)
or 65% of the Stock of such Person (if such Person is a Foreign Subsidiary
owned by a Credit Party) to be delivered to the Administrative Agent (together
with undated stock powers signed in blank) and pledged to the Administrative
Agent pursuant to an appropriate pledge agreement in substantially the form of
the Pledge Agreement and otherwise in a form acceptable to the Administrative
Agent, (ii) if such Person is a Domestic Subsidiary, pledge all of its assets
to the Administrative Agent pursuant to a security agreement in substantially
the form of the Security Agreement and otherwise in a form acceptable to the
Administrative Agent, (iii) if such Person is a Domestic Subsidiary and has any
Subsidiaries, (A) deliver all of the Stock of such Domestic Subsidiaries and
65% of the Stock of such direct Foreign Subsidiaries (together with undated
stock powers signed in blank) to the Administrative Agent and (B) execute a
pledge agreement in substantially the form of the Pledge Agreement and
otherwise in a form acceptable to the Administrative Agent, (iv) if such Person
is a Domestic Subsidiary and owns or leases any real property in the United
States of America, execute any and all necessary mortgages, deeds of trust, deeds
to secure debt, collateral assignments of leaseholds or other appropriate real
estate collateral documentation in a form acceptable to the Administrative
Agent and (v) deliver such other documentation as the Administrative Agent may
reasonably request in connection with the foregoing, including, without
limitation, appropriate UCC-1 financing statements, real estate title insurance
policies, environmental reports and landlord waivers, and (c) cause such Person
to deliver certified resolutions and other organizational and authorizing
documents of such Person and favorable opinions of counsel to such Person
(which shall cover, among other things, the legality, validity, binding effect
and enforceability of the documentation referred to above); it being understood
that all of the documentation, agreements, instruments, certificates and
opinions to be delivered pursuant to (a), (b) and (c) above shall be in form,
content and scope reasonably satisfactory to the Administrative Agent.  Notwithstanding anything in this Section 6.12 to the contrary, no Credit Party shall be
required to (x) take any action which would violate any Requirement of Law or
(y) grant a Lien on any asset that is subject to a Permitted Lien if the
granting of such Lien would violate the agreement creating or evidencing such
Permitted Lien, so long as such agreement was not entered into with the intent
of avoiding the requirements of this Section 6.12.

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Section 6.13. 
[Reserved].

Section
6.14.  Supplemental Disclosure.  From time to time as may be reasonably
requested by Administrative Agent (which request will not be made more
frequently than once each year absent the occurrence and continuance of a
Default or an Event of Default), the Credit Parties shall supplement each
Disclosure Schedule hereto, or any representation herein or in any Loan
Document, with respect to any matter hereafter arising that, if existing or
occurring as of the date of this Agreement, would have been required to be set
forth or described in such Disclosure Schedule or as an exception to such
representation or that is necessary to correct any information in such
Disclosure Schedule or representation which has been rendered inaccurate
thereby (and, in the case of any supplements to any Disclosure Schedule, such
Disclosure Schedule shall be appropriately marked to show the changes made
therein); provided that (a) no such supplement to any such Disclosure
Schedule or representation shall amend, supplement or otherwise modify any
Disclosure Schedule or representation, or be deemed a waiver of any Default
resulting from the matters disclosed therein, except as consented to by
Administrative Agent and Required Lenders in writing, and (b) no supplement
shall be required or permitted as to representations and warranties that relate
solely to the Closing Date.

Section
6.15.  Further Assurances.  Each Credit Party shall, at its own cost and
expense, cause to be promptly and duly taken, executed, acknowledged and
delivered all such further acts, documents and assurances (a) as may from time
to time be necessary or as the Administrative Agent may from time to time
reasonably request to carry out the intent and purposes of the Loan Documents
and the transactions contemplated thereby, including all such actions to
establish, preserve, protect and perfect the estate, right, title and interest
of the Administrative Agent to the Collateral (including Collateral acquired
after the date hereof), including first priority Liens thereon, subject only to
Liens permitted by Section 7.2,
and (b) as the Administrative Agent may from time to time reasonably request,
to establish, preserve, protect and perfect first priority Liens in favor of
the Administrative Agent on any and all assets of the Credit Parties and the
proceeds thereof, now owned or hereafter acquired, that do not constitute
Collateral on the date hereof.  The
Borrower shall promptly give notice to the Administrative Agent of the
acquisition after the Closing Date by any Credit Party of any Real Property
(including leaseholds in respect of Real Property) or any trademark, copyright
or patent.

Section
6.16.  Environmental Matters.  Each Credit Party shall and shall cause each
Person within its control to (a) conduct its operations and keep and maintain
its Real Property in compliance with all Environmental Laws and Environmental
Permits other than noncompliance that, individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect, (b) implement any
and all investigative, remedial, removal and response actions that are
appropriate or necessary to maintain the value and marketability of the Real
Property or to otherwise comply with Environmental Laws and Environmental
Permits pertaining to the presence, generation, treatment, storage, use,
disposal, transportation or Release of any Hazardous Material on, at, in,
under, above, to, from or about any of the Real Property of any Credit Party,
and (c) promptly forward to 

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Administrative Agent a copy of any order, notice, request for
information or any communication or report received by such Credit Party in
connection with any such violation or Release or any other matter relating to
any Environmental Laws or Environmental Permits that could reasonably be
expected to result in Environmental Liabilities in excess of $250,000, in each
case whether or not any Governmental Authority has taken or threatened any
action in connection with any violation, Release or other matter.  If Administrative Agent at any time has a
reasonable basis to believe that there may be a violation of any Environmental
Laws or Environmental Permits by any Credit Party or any Environmental
Liability arising thereunder, or a Release of Hazardous Materials on, at, in,
under, above, to, from or about any of the Real Property of any Credit Party, that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect, then each Credit Party shall, upon Administrative
Agent’s written request (i) cause the performance of such environmental audits
including subsurface sampling of soil and groundwater, and preparation of such
environmental reports, at the Borrower’s expense, as Administrative Agent may
from time to time reasonably request, which shall be conducted by reputable
environmental consulting firms reasonably acceptable to Administrative Agent
and shall be in form and substance reasonably acceptable to Administrative
Agent, and (ii) permit Administrative Agent or its representatives to have
access to all Real Property for the purpose of conducting such environmental audits
and testing as Administrative Agent deems appropriate, including subsurface
sampling of soil and groundwater; provided that the Borrower shall reimburse
Administrative Agent for the costs of such audits and tests and the same will
constitute a part of the Obligations secured hereunder.

Section
6.17.  Landlord and Warehouseman Waivers.  The Credit Parties shall deliver to the
Administrative Agent waivers of contractual and statutory landlord’s, mortgagee’s
or warehouseman’s Liens in form and substance reasonably satisfactory to the
Administrative Agent under each lease, mortgage, warehouse agreement or similar
agreement to which any Credit Party is a party.

Section 6.18. 
Mortgages on Real Property; Title Insurance and Survey.  Within thirty (30) days after the acquisition
of any owned Real Property having a fair market value in excess of $250,000 by
any Credit Party, such Credit Party will furnish the Administrative Agent with
a Mortgage covering each parcel of Real Property acquired by such Credit Party
(the “Mortgaged Property”), together with an ALTA extended coverage
lender’s policy of title insurance in a policy amount equal to one hundred
percent (100%) of the greater of (x) the purchase price of such acquired
property (including any liabilities assumed in connection with the acquisition)
or (y) the fair market value of such property, insuring such Mortgage as a
valid, enforceable first Lien on the Credit Party’s interest in the Mortgaged
Property covered thereby, subject only to Permitted Liens and to such other
exceptions as are reasonably satisfactory to the Administrative Agent, together
with an ALTA survey with respect to each parcel of the Mortgaged Property
acquired, in form and substance reasonably satisfactory to the Administrative
Agent, and legible copies of all documents affecting title, which shall show
all recording information.  The policy,
including each of the exceptions to coverage contained therein, shall be
subject to the approval of the Administrative Agent, and shall be issued by a
title company acceptable to the 

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Administrative Agent.  Attached
to the policy shall be any and all endorsements reasonably required by the
Administrative Agent, including (a) a comprehensive endorsement (ALTA 100 or
equivalent) covering restrictions and other matters, (b) a broad form zoning
endorsement, which specifically ensures that applicable parking requirements,
if any, have been satisfied, (c) an endorsement ensuring that the lien of each
Mortgage is valid against any applicable usury laws or other laws prohibiting
the charging of interest on interest in the state(s) where such Mortgaged
Property is located, (d) an endorsement ensuring that the Mortgaged Property
has access to a dedicated public street, (e) a revolving credit endorsement,
(f) a contiguity endorsement, (g) a survey and “same as” endorsement and (h) an
endorsement deleting the so-called “doing business” exclusion.

Section 6.19. 
Compliance Program.  To the extent required by
law, each Credit Party will maintain, and be operated in accordance with, a
compliance program which meets the compliance guidance issued by the Department
of Health and Human Services Office of Inspector General for clinical
laboratories, including without limitation (a) the implementation of internal
audits and monitoring on a regular and systematic basis to monitor compliance
with the requirements of the compliance program and
applicable law, and (b) audits and monitoring of billing, claims, and coding
processes by independent third party auditors acceptable to the Administrative
Agent and the Required Lenders and on such time frames as required by law.

Section
6.20.  Cash Management Systems.  The Credit Parties will
establish and maintain the cash management systems described below (the “Cash
Management Systems”):

(a)          Each Credit Party shall (i) establish
lock boxes (“Lock Boxes”) and/or at Administrative Agent’s reasonable
discretion, lockbox or blocked accounts at one or more of the banks set forth
in Disclosure Schedule 6.20 (“Blocked Accounts”), and shall request in writing
and otherwise take such reasonable steps to ensure that all Account Debtors
forward payment directly to such Lock Boxes, and (ii) deposit or cause to be
deposited promptly, and in any event no later than the first Business Day after
the date of receipt thereof at Borrower’s offices in Boca Raton, FL or North
Aurora, IL, all cash, checks, drafts or other similar items of payment relating
to or constituting payments made in respect of any and all Collateral (whether
or not otherwise delivered to a Lock Box) into one or more Blocked Accounts in
such Credit Party’s name, but under the sole dominion and control of
Administrative Agent, and at a bank identified in Disclosure Schedule 6.20
(each, a “Relationship Bank”).  Each
Credit Party and each Related Person thereof acknowledges and agrees that all
cash, checks or other items of payment constituting proceeds of Collateral are
part of the Collateral.  All proceeds of
the sale or other disposition of any Collateral, shall be deposited directly into
the applicable Blocked Accounts, subject to the provisions of Section 2.8.

(b)          The Borrower may maintain, in its
name, accounts (each a “Disbursement Account” and collectively, the “Disbursement
Accounts”) at a bank reasonably acceptable to Administrative Agent into which
Administrative Agent shall, from 

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time to time, deposit proceeds of Revolving Credit
Advances and Swingline Advances made to the Borrower pursuant to Section 2.1
for use by the Borrower solely in accordance with the provisions of Section
6.8.

(c)          The Borrower may maintain, in its
name, an account (“Petty Cash Account”) at a bank reasonably acceptable to
Administrative Agent which account shall have funds on deposit not to exceed
$25,000 at any time and shall be used by the Borrower solely in accordance with
the provisions of Section 6.8.

(d)          On or before the Closing Date, each
bank where a Disbursement Account or the Petty Cash Account is maintained and
all Relationship Banks, shall have entered into tri-party blocked account
agreements with Administrative Agent, for the benefit of the Lending Parties,
and the Credit Parties, as applicable, in form and substance reasonably
acceptable to Administrative Agent, which shall become operative on or prior to
the Closing Date.  Each such blocked
account agreement shall provide, among other things, that (i) the bank
acknowledges that all items of payment deposited in such account and proceeds
thereof deposited in the applicable Blocked Account are subject to a security
interest of the Administrative Agent, on behalf of the Lending Parties, (ii)
that the parties to such blocked account agreement agree that the bank shall
comply with the instruction originated by Administrative Agent directing
disposition of the funds in the deposit account without further consent of the
applicable Credit Party, (iii) the bank executing such agreement has no rights
of setoff or recoupment or any other claim against such account, as the case
may be, other than for payment of its service fees and other charges directly
related to the administration of such account and for returned checks or other
items of payment, and (iv) from and after the Closing Date (A) with respect to
banks at which a Blocked Account is maintained, such bank agrees to forward
immediately all amounts in each Blocked Account to the Collection Account and
to commence the process of daily sweeps from such Blocked Account into the
Collection Account and (B) with respect to banks at which a Disbursement
Account or the Petty Cash Account is maintained, from and after the receipt of
a notice (an “Activation Notice”) from Administrative Agent (which Activation
Notice may be given by Administrative Agent at any time at which (1) a Default
or Event of Default has occurred and is continuing after its applicable cure
period, (2) Administrative Agent reasonably believes based upon information
available to it that a Default or an Event of Default is likely to occur; (3)
Administrative Agent reasonably believes that an event or circumstance that is
likely to have a Material Adverse Effect has occurred, or (4) Administrative
Agent reasonably has grounds to question the integrity of the Borrower’s Cash
Management Systems or any Credit Party’s compliance with the provisions of this
Section 6.20 or any other provisions of the Loan Documents to the extent
related to such Cash Management Systems), such bank agrees to forward
immediately all amounts in such Disbursement Account or Petty Cash Account to
the Collection Account and to commence the process of daily sweeps from such
Disbursement Account or Petty Cash Account into the Collection Account.  No Credit Party shall accumulate or maintain
cash in Disbursement Accounts or payroll accounts as of any date of
determination in excess of (x) the aggregate amount of checks outstanding
against such accounts as of that date plus (y) all amounts necessary to meet
minimum balance requirements.

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(e)          So long as no Default has occurred and
is continuing, the Borrower may amend Disclosure Schedule 6.20 to add or
replace a Relationship Bank, Lock Box or Blocked Account or to replace any
Disbursement Account or the Petty Cash Account; provided that (i)
Administrative Agent shall have consented, such consent not to be unreasonably
withheld conditioned or delayed, in writing in advance to the opening of such
account or Lock Box with the relevant bank and (ii) prior to the time of the
opening of such account or Lock Box, the applicable Credit Party, and such bank
shall have executed and delivered to Administrative Agent a tri-party blocked account
agreement, in form and substance reasonably satisfactory to Administrative
Agent.

(f)           The Lock Boxes, Blocked Accounts,
Disbursement Accounts and the Petty Cash Account shall be cash collateral
accounts, with all cash, checks and other similar items of payment in such
accounts securing payment of the Loans and all other Obligations, and in which
each Credit Party thereof shall have granted a Lien to Agent, on behalf of the
Lending Parties, pursuant to the Security Agreement.

(g)          All amounts deposited in the Collection Account shall be deemed
received by Administrative Agent in accordance with Section 2.14 and shall be
applied (and allocated) by Administrative Agent in accordance with Section
2.10.  In no event shall any amount be so
applied unless and until such amount shall have been credited in immediately
available funds to the Collection Account. 
Each Credit Party shall and shall cause its Affiliates, officers,
employees, agents, directors or other Persons acting for or in concert with
such Credit Party (each a “Related Person”) to hold in trust for Administrative
Agent, for the benefit of the Lending Parties, all checks, cash and other items
of payment received by such Credit Party or any such Related Person.

Section
6.21.  SEC Filings.  The Credit Parties will file all documents and
accompanying certifications required by the Securities and Exchange Commission
within the time required to file such documents (the “SEC Documents”).  Any material restatement of the SEC Documents
shall be an Event of Default.

ARTICLE VII.

NEGATIVE COVENANTS

So long as any Lender has any Commitment hereunder or any Extension of
Credit or other Obligation remains outstanding, Borrower shall, and shall cause
each Credit Party to, comply with each of the covenants in this Article VII:

Section
7.1.  Indebtedness.  No Credit Party will, nor
will it permit any of its Subsidiaries to, contract, create, incur, assume or
permit to exist any Indebtedness, except:

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

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(b)          Indebtedness
existing as of the Closing Date as set forth on Disclosure
Schedule 7.1 (including renewal, refinancing or extension of such
Indebtedness provided that any such renewal, refinancing or extension does not
increase the principal amount of such Indebtedness outstanding as of the date
of such renewal, refinancing or extension, decrease the weighted average life
of such Indebtedness, increase the interest rate beyond reasonable market rates
in effect at the time of such renewal, refinancing or extension and is not upon
terms otherwise less favorable to such Person than the Indebtedness being
renewed, refinanced or extended);

(c)           (i)
Indebtedness owing from one Credit Party (other than the Parent) to another
Credit Party and (ii) Indebtedness owing from the Parent to the other Credit
Parties in an amount not to exceed $250,000 in the aggregate during the term of
this Agreement;

(d)          purchase
money Indebtedness (including Capital Leases but excluding Synthetic Leases)
incurred by the Borrower or any of its Subsidiaries to finance the purchase of
fixed assets; provided that (i) the aggregate total of all such Indebtedness
for all such Persons (together with the aggregate amount of all Indebtedness
outstanding under subsection (f) below) shall not exceed an aggregate principal
amount of $3,000,000 at any one time outstanding; (ii) such Indebtedness when
incurred shall not exceed the purchase price of the asset(s) financed; and
(iii) no such Indebtedness shall be refinanced for a principal amount in excess
of the principal balance outstanding thereon at the time of such refinancing;

(e)          hedging
obligations under swaps, caps and collar arrangements arranged by GE Capital
entered into for the sole purpose of hedging in the normal course of business
and consistent with industry practices and not for speculative purposes;

(f)           Indebtedness
(including Subordinated Debt but excluding Synthetic Leases) assumed in
connection with a Permitted Acquisition (including renewals, refinancing or
extensions of such Indebtedness in a principal amount not in excess of that
outstanding as of the date of such renewal, refinancing or extension) so long
as (i) such Indebtedness is not incurred in anticipation of or in connection
with such Permitted Acquisition and the aggregate total of all such
Indebtedness, together with the aggregate amount of any Indebtedness
outstanding under subsection (d) above, shall not exceed an aggregate principal
amount of $3,000,000 at any one time outstanding;

(g)          Indebtedness
in respect of performance, surety or appeal bonds in the ordinary course of
business; and

(h)          other
unsecured Indebtedness of the Borrower and its Subsidiaries in an aggregate
principal amount (whether fixed or contingent or drawn) not to exceed at any
time $500,000.

Section
7.2. Liens. No Credit Party will, nor will it permit its
Subsidiaries to, contract, create, incur, assume or permit to exist any Lien
with respect to any of its property

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or assets of any kind
(whether real or personal, tangible or intangible), whether now owned or after
acquired, except for Permitted Liens.

Section
7.3. Nature of Business. No Credit Party will, nor will it
permit its Subsidiaries to, alter the character of its business from that, or
substantially similar to that, conducted as of the Closing Date or engage in
any business other than the business conducted as of the Closing Date with
reasonable extensions and expansions of such business. Notwithstanding the
foregoing, the Parent will not engage in any operations whatsoever other than
(a) owning all of the Stock of the Borrower and obligations related thereto and
otherwise permitted hereunder and (b) guaranteeing the Obligations pursuant to
the terms of this Agreement and the other Loan Documents and performing its
obligations hereunder and thereunder.

Section
7.4. Consolidation and Merger. No Credit Party will, nor will
it permit its Subsidiaries to, enter into any transaction of merger or
consolidation or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution); provided that notwithstanding the foregoing
provisions of this Section 7.4, if
(a) the Administrative Agent is given prior written notice of such action, and
the Credit Parties execute and deliver such documents, instruments,
certificates and opinions as the Administrative Agent may reasonably request,
including, without limitation, those necessary in order to maintain the
perfection and priority of the Liens on the assets of the Credit Parties and
(b) after giving effect thereto no Default or Event of Default exists, any
Subsidiary of the Borrower may be merged or consolidated with or into the
Borrower or another Subsidiary of the Borrower; provided that if the
transaction is between the Borrower and one of its Subsidiaries, the Borrower
must be the continuing or surviving entity.

Section
7.5. Sale or Lease of Assets. No Credit Party will, nor will
it permit any of its Subsidiaries to, convey, sell, lease, transfer or
otherwise dispose of, in one transaction or a series of transactions, all or
any part of its business or assets whether now owned or hereafter acquired,
including, without limitation, inventory, receivables, leasehold interests,
equipment and securities other than (a) any inventory or other assets sold,
leased, licensed or disposed of (including through commercial accommodations
and going out of business sales) in the ordinary course of business, (b)
obsolete, idle or worn-out assets no longer used or useful in its business, (c)
subject to Section 6.11 and the location of
Collateral provisions set forth in the Loan Documents, the sale, lease or
transfer or other disposal by a Credit Party of any or all of its assets to
another Credit Party so long as (i) the Credit Parties shall cause to be
executed and delivered such documents, instruments and certificates as the
Administrative Agent may request in order to maintain the perfection and
priority of the Administrative Agent’s liens on the assets of the Credit
Parties as required by Section 6.11
and 6.12 and (ii) after giving effect to
such transaction, no Default or Event of Default exists, (d) the issuance of
Stock by Parent pursuant to a follow-on public offering, (e) the transfer of
assets which constitute a Permitted Investment and (f) other sales of assets,
in addition to those permitted by the other subsections of this Section 7.5, provided that (i) the sale is for fair market
value, (ii) the sale is for cash consideration, (iii) at the time of the sale
(and after giving effect thereto) no Default or Event of Default exists, (iv)
as a result of such sale, no

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Material Adverse Effect would occur or be reasonably expected to occur,
(v) the proceeds from such sale are, within 180 days from the date of such
sale, applied as a mandatory prepayment in accordance with Section
2.8(b) or reinvested by the Credit Parties in Eligible Assets and
(vi) such sales do not exceed, in the aggregate, $1,000,000 during the term of
this Agreement.

Section
7.6. Advances, Investments and Loans. No Credit Party will,
nor will it permit any of its Subsidiaries to, make any Investments except for
Permitted Investments.

Section
7.7. Restricted Payments. No Credit Party will, nor will it
permit any of its Subsidiaries to, directly or indirectly, declare or pay any
Restricted Payment except (a) to make dividends or other distributions payable
to any Credit Party (other than the Parent) (directly or indirectly through
Subsidiaries), (b) to purchase shares of (or options to purchase shares of)
equity securities from employees of any Credit Party upon their death,
termination or retirement in an amount not to exceed $500,000 during the term
of this Agreement, (c) the Borrower may make distributions directly or
indirectly to Parent to permit Parent to pay operating expenses; provided that
such distributions do not exceed $500,000 in the aggregate during any Fiscal
Year, (d) to purchase shares of (or options to purchase shares of) equity
securities from certain employees pursuant to the terms of the Employment
Agreements as in effect as of the Closing Date and (e) payments made by Credit
Parties to Credit Parties pursuant to the MSN Management and Administrative
Services Agreements and the MSN License Agreements provided that
Borrower shall demonstrate to the reasonable satisfaction of the Administrative
Agent that immediately before and after giving effect to any such payment, no
Default shall have occurred and is continuing and the Pro Forma Excess
Availability is not less than $5,000,000.

Section
7.8. Transactions with Affiliates. Except for (a) loans or
advances to employees and officers of a Credit Party or any of its Subsidiaries
(to the extent permitted by Section 7.6),
(b) fees, compensation or employee benefit arrangements paid to and indemnity
provided on behalf of directors, officers or employees of the Borrower and its
Subsidiaries in the ordinary course of business, (c) any employment agreement
(including customary benefits thereunder) that is entered into in the ordinary
course of business, (d) any dividend or other payment that is permitted by Section 7.7 and (e) any transactions between or among a
Credit Party and any of its Subsidiaries (to the extent otherwise permitted by
this Agreement), no Credit Party will, nor will it permit its Subsidiaries to,
enter into any transaction or series of transactions, whether or not in the ordinary
course of business, with any officer, director, shareholder, Subsidiary or
Affiliate other than on terms and conditions substantially as favorable as
would be obtainable in a comparable arm’s-length transaction with a Person
other than an officer, director, shareholder, Subsidiary or Affiliate.

Section
7.9. Fiscal Year; Organizational Documents. No Credit Party
will, nor will it permit any of its Subsidiaries to, (a) change its fiscal year
or (b) change its articles or certificate of incorporation (or other similar
organizational document) or its bylaws (or

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other similar document) if such change would affect the Lenders in a
materially adverse manner.

Section
7.10. Limitations. No Credit Party will, nor will it permit
any of its Subsidiaries to, directly or indirectly, create or otherwise cause,
incur, assume, suffer or permit to exist or become effective any consensual
encumbrance or restriction of any kind on the ability of any such Person to (a)
pay dividends or make any other distribution on any of such Person’s Stock, (b)
pay any Indebtedness owed to the Borrower or any other Credit Party, (c) make
loans or advances to any Credit Party or (d) transfer any of its property to
any Credit Party, except for encumbrances or restrictions existing under or by
reason of (i) customary non-assignment or net worth provisions in any lease
governing a leasehold interest or customary provisions in documents evidencing
the transactions permitted by Section 7.1(d) and
(f), provided that any such encumbrance
or restriction relates only to the property which is the subject of such lease,
(ii) any agreement or other instrument of a Person existing at the time it
becomes a Subsidiary of a Credit Party; provided that such encumbrance or
restriction is not applicable to any other Person, or any property of any other
Person, other than such Person becoming a Subsidiary of a Credit Party and was
not entered into in contemplation of such Person becoming a Subsidiary of such
Credit Party, (iii) this Agreement and the other Loan Documents, (iv)
Applicable Law and (v) any agreement of the Borrower evidencing any unsecured
Indebtedness of the Borrower permitted under Section
7.1(i); provided that any such encumbrance or restriction is not
applicable to any Person other than the Borrower and does not prohibit or
otherwise restrict the rights and remedies of the Administrative Agent and the
Lenders in any manner whatsoever.

Section
7.11. Sale Leasebacks. No Credit Party will, nor will it
permit any of its Subsidiaries to, directly or indirectly become or remain
liable as lessee or as guarantor or other surety with respect to any lease of
any property (whether real or personal or mixed), whether now owned or
hereafter acquired, (a) which such Credit Party or Subsidiary has sold or transferred
or is to sell or transfer to any other Person other than a Credit Party or (b)
which such Credit Party or Subsidiary intends to use for substantially the same
purpose as any other property which has been sold or is to be sold or
transferred by a Credit Party or Subsidiary to any Person in connection with
such lease.

Section
7.12. Negative Pledges. None of the Credit Parties will, nor
will it permit any of its Subsidiaries to, enter into, assume or become subject
to any agreement prohibiting or otherwise restricting the creation or
assumption of any Lien upon its properties or assets, whether now owned or
hereafter acquired, or requiring the grant of any security for such obligation
if security is given for some other obligation; provided, however, the Indebtedness
incurred or assumed, as applicable, pursuant to Sections
7.1(d) and (f) may
restrict the creation of any additional Liens on the assets securing such
Indebtedness.

Section
7.13. Reserved.

Section
7.14. Payments of Indebtedness, etc. No Credit Party will,
nor will it permit any of its Subsidiaries to, (a) after the issuance thereof,
amend or modify (or permit

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the amendment or modification of) any of the terms of any Indebtedness
if such amendment or modification would add or change any terms in a manner
materially adverse to the issuer of such Indebtedness, or shorten the final
maturity or average life to maturity or require any payment to be made sooner
than originally scheduled or increase the interest rate applicable thereto or
change any subordination provision thereof, (b) make or offer to make any
principal or interest payments with respect to Subordinated Debt, (c) redeem or
offer to redeem any of Subordinated Debt or (d) deposit any funds intended to
discharge Subordinated Debt. Notwithstanding any terms to the contrary
contained herein, Subordinated Debt may not be amended or modified in any
manner that would adversely affect the Lenders without the prior written
consent of the Required Lenders.

Section
7.15. Ownership of Subsidiaries; Limitations on Borrower. Notwithstanding
any other provisions of this Agreement to the contrary, no Credit Party will,
nor will it permit any of its Subsidiaries to, (a) permit any Person (other
than the Borrower or any Wholly-Owned Subsidiary of the Borrower) to own any
Stock of any Subsidiary of the Borrower, (b) permit any Subsidiary of the
Borrower to issue Stock (except to the Borrower or to a Wholly-Owned Subsidiary
of the Borrower), (c) permit, create, incur, assume or suffer to exist any Lien
thereon, (d) notwithstanding anything to the contrary contained in clause (b)
above, permit any Subsidiary of the Borrower to issue any shares of preferred
Stock, and (e) permit the sale of any Stock of any of its Subsidiaries.

Section
7.16. Earn-Out Obligations. The Credit Parties will not
permit projected earn-out obligations in excess of $2,000,000 in the aggregate
at any one time in connection with Permitted Acquisitions.

Section
7.17. Guaranteed Obligations. No Credit Party shall create,
incur, assume or permit to exist any Guaranteed Obligations except (a) by
endorsement of instruments or items of payment for deposit to the general
account of any Credit Party, and (b) for Guaranteed Obligations incurred for
the benefit of any other Credit Party if the primary obligation is expressly
permitted by this Agreement.

Section
7.18. ERISA. No Credit Party shall, or shall cause or permit
any member of a Controlled Group to, cause or permit to occur an event that
could result in the imposition of a Lien under Section 412 of the IRC or
Section 302 or 4068 of ERISA or cause or permit to occur an ERISA Event to the
extent such ERISA Event could reasonably be expected to have a Material Adverse
Effect.

Section 7.19. Amendments or Waivers.
Without the prior written consent of the Administrative Agent and the Required
Lenders, no Credit Party will agree to (a) any amendment to or waiver of or in
respect of any Loan Documents, (b) any other material amendment to or waiver of
any material contract constituting a part of the Collateral which could
reasonably be expected to have a Material Adverse Effect on the Credit Parties,
or (c) any amendment or waiver of any document governing any Subordinated Debt.

Section
7.20. Limitations on Holdings. Holdings shall not, directly
or indirectly, (i) enter into or permit to exist any transaction or agreement
(including any

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agreement for the incurrence or assumption of Indebtedness, other than
the Holdings Guaranty, any purchase, sale, lease or exchange of any property or
the rendering of any service), between itself and any other Person, (ii) engage
in any business or conduct any activity (including the making of any Investment
or payment) or transfer any of its assets, other than Investments in the
Borrower and the performance of ministerial activities and payment of taxes and
administrative fees necessary for the compliance with the next succeeding
sentence or (iii) consolidate or merge with or into any other Person. Holdings
shall further preserve, renew and keep in full force and effect its corporate
existence and any rights, privileges and franchises necessary or desirable in
the conduct of its business, and shall comply in all material respects with all
material applicable laws, ordinances, rules, regulations and requirements of
Governmental Authorities. Holdings shall have no direct Subsidiaries other than
the Borrower.

Section
7.21. Limitations on Parent. Parent shall not, directly or
indirectly, (i) enter into or permit to exist any transaction or agreement
(including any agreement for the incurrence or assumption of Indebtedness,
other than the Parent Guaranty, any purchase, sale, lease or exchange of any
property or the rendering of any service), between itself and any other Person,
provided that Parent may enter into transactions with Persons necessary
to complete a follow-on public offering or offering made pursuant to a shelf
registration, (ii) engage in any business or conduct any activity (including
the making of any Investment or payment) or transfer any of its assets, other
than Investments in Holdings and the Borrower and the performance of
ministerial activities and payment of taxes and administrative fees necessary
for the compliance with the next succeeding sentence or (iii) consolidate or
merge with or into any other Person. Parent shall further preserve, renew and
keep in full force and effect its corporate existence and any rights,
privileges and franchises necessary or desirable in the conduct of its
business, and shall comply in all material respects with all material applicable
laws, ordinances, rules, regulations and requirements of Governmental
Authorities. Parent shall have no direct Subsidiaries other than Holdings.

ARTICLE VIII.

EVENTS OF DEFAULT

Section
8.1. Events of Default. An Event of Default shall exist upon
the occurrence of any of the following specified events (each an “Event of
Default”):

(a)          Payment.
Any Credit Party shall:

(i)            default in the payment when due of
any principal of any of the Loans or of any reimbursement obligation arising
from drawings under Letters of Credit; or

(ii)           default, and such default shall
continue for three or more Business Days, in the payment when due of any
interest on the Loans, or of any fees or other amounts owing hereunder, under
any of the other Loan Documents or in connection herewith.

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(b)          Representations.
Any representation, warranty or statement made or deemed to be made by any
Credit Party herein, in any of the other Loan Documents, or in any statement or
certificate delivered or required to be delivered pursuant hereto or thereto
shall prove untrue in any material respect on the date as of which it was made
or deemed to have been made.

(c)          Covenants.
Any Credit Party shall:

(i)            default in the due performance or
observance of any term, covenant or agreement contained in Sections
6.1, 6.2, 6.3, 6.4, 6.6 through 6.21, Article VII;
or

(ii)           default in the due performance or
observance by it of any term, covenant or agreement contained in Section 5 and Section 6.5, and
such default shall continue unremedied for a period of 30 days; or

(iii)          default in the due performance or
observance by it of any term, covenant or agreement (other than those referred
to in subsections (a), (b) or (c)(i) or (ii) of this Section 8.1)
contained in this Credit Agreement and such default shall continue unremedied
for a period of at least 10 days after the earlier of an executive officer of a
Credit Party becoming aware of such default or notice thereof given by the
Administrative Agent.

(d)          Other
Loan Documents. (i) Any Credit Party shall default in the due performance
or observance of any term, covenant or agreement in any of the other Loan
Documents and such default shall continue unremedied for a period of at least
10 days after the earlier of an executive officer of a Credit Party becoming
aware of such default or notice thereof given by the Administrative Agent, (ii)
except pursuant to the terms thereof, any Loan Document shall fail to be in
full force and effect or any Credit Party shall so assert or (iii) except
pursuant to the terms thereof, any Loan Document shall fail to give the
Administrative Agent and/or the Lenders the security interests, liens, rights,
powers and privileges purported to be created thereby.

(e)          Bankruptcy,
etc. The occurrence of any of the following with respect to any Credit
Party or any of their Subsidiaries: (i) a court or governmental agency having
jurisdiction in the premises shall enter a decree or order for relief in
respect of any Credit Party or any of their Subsidiaries in an involuntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or appoint a receiver, liquidator, assignee, custodian,
trustee, sequestrator or similar official of any Credit Party or any of their
Subsidiaries or for any substantial part of its property or ordering the
winding up or liquidation of its affairs; or (ii) an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect is commenced against any Credit Party or any of their Subsidiaries and
such petition remains unstayed and in effect for a period of 60 consecutive
days; or (iii) any Credit Party or any of their Subsidiaries shall commence a
voluntary case under any applicable bankruptcy, insolvency or other similar law
now or hereafter in effect, or consent to the entry of an order for relief in
an involuntary case under any such law, or consent to the appointment or taking
possession by a receiver,

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liquidator, assignee, custodian, trustee, sequestrator or similar
official of such Person or any substantial part of its property or make any
general assignment for the benefit of creditors; or (iv) any Credit Party or
any of their Subsidiaries shall admit in writing its inability to pay its debts
generally as they become due or any action shall be taken by such Person in
furtherance of any of the aforesaid purposes.

(f)           Defaults
under Other Agreements. With respect to any Indebtedness (other than
Indebtedness outstanding under this Credit Agreement) of a Credit Party or any
of their Subsidiaries in an aggregate principal amount in excess of $1,000,000,
(i) a Credit Party or one of its Subsidiaries shall (A) default in any payment
(beyond the applicable grace period with respect thereto, if any) with respect
to any such Indebtedness, or (B) default (after giving effect to any applicable
grace period) in the observance or performance relating to such Indebtedness or
contained in any instrument or agreement evidencing, securing or relating
thereto, or any other event or condition shall occur or condition exist, the
effect of which default or other event or condition is to cause, or permit, the
holder or holders of such Indebtedness (or trustee or agent on behalf of such
holders) to cause (determined without regard to whether any notice or lapse of time
is required) any such Indebtedness to become due prior to its stated maturity;
(ii) any such Indebtedness shall be declared due and payable, or required to be
prepaid other than by a regularly scheduled required prepayment prior to the
stated maturity thereof; or (iii) any such Indebtedness shall mature and remain
unpaid.

(g)          Judgments.
One or more judgments, orders, or decrees shall be entered against any Credit
Party or any of its Subsidiaries involving a liability of $1,000,000 or more,
in the aggregate, (to the extent not paid or covered by insurance provided by a
carrier who has acknowledged coverage) and such judgments, orders or decrees
(i) are the subject of any enforcement proceeding commenced by any creditor or
(ii) shall continue unsatisfied, undischarged and unstayed for a period ending
on the first to occur of (A) the last day on which such judgment, order or
decree becomes final and unappealable or (B) 60 days.

(h)          ERISA.
The occurrence of any of the following events or conditions if such event or
condition could involve possible taxes, penalties and other liabilities in an
aggregate amount in excess of $1,000,000: (A) any “accumulated funding
deficiency,” as such term is defined in Section 302 of ERISA and Section 412 of
the Code, whether or not waived, shall exist with respect to any Plan, or any
lien shall arise on the assets of any Credit Party or any of their Subsidiaries
or any ERISA Affiliate in favor of the PBGC or a Plan; (B) a Termination Event
shall occur with respect to a Single Employer Plan, which is, in the reasonable
opinion of the Administrative Agent, likely to result in the termination of
such Plan for purposes of Title IV of ERISA; (C) a Termination Event shall
occur with respect to a Multiemployer Plan or Multiple Employer Plan, which is,
in the reasonable opinion of the Administrative Agent, likely to result in (i)
the termination of such Plan for purposes of Title IV of ERISA, or (ii) any
Credit Party or any of their Subsidiaries or any ERISA Affiliate incurring any
liability in connection with a withdrawal from, reorganization of (within the
meaning of Section 4241 of ERISA), or insolvency (within the meaning of Section
4245 of ERISA) of such Plan; or (D) any prohibited transaction (within the
meaning of Section 406

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of ERISA or Section 4975 of the Code) or breach of fiduciary
responsibility shall occur which may subject any Credit Party or any of their
Subsidiaries or any ERISA Affiliate to any liability under Sections 406, 409,
502(i), or 502(l) of ERISA or Section 4975 of the Code, or under any agreement
or other instrument pursuant to which any Credit Party or any of their
Subsidiaries or any ERISA Affiliate has agreed or is required to indemnify any
Person against any such liability.

(i)           Guaranties.
The guaranty given by the Credit Parties hereunder or by any Additional Credit
Party hereafter or any provision thereof shall, except pursuant to the terms
thereof, cease to be in full force and effect, or any guarantor thereunder or
any Person acting by or on behalf of such guarantor shall deny or disaffirm
such Guarantor’s obligations under such guaranty.

(j)           Ownership.
There shall occur a Change of Control.

Section
8.2. Acceleration; Remedies. Upon the occurrence of an Event
of Default, and at any time thereafter unless and until such Event of Default
has been waived in writing by the Required Lenders (and/or the Lenders or the
Required Lenders as may be required pursuant to Section 11.5),
the Administrative Agent shall, upon the request and direction of the Required
Lenders (and/or the Lenders or the Required Lenders as may be required pursuant
to Section 11.5), by written notice to the
Borrower, take any of the following actions:

(a)          Termination
of Commitments. Declare the Commitments terminated whereupon the
Commitments shall be immediately terminated.

(b)          Acceleration
of Loans. Declare the unpaid principal of and any accrued interest in
respect of all Loans, any reimbursement obligations arising from drawings under
Letters of Credit and any and all other indebtedness or obligations of any and
every kind owing by a Credit Party to any of the Lenders hereunder to be due
whereupon the same shall be immediately due and payable without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by the
Credit Parties.

(c)          Cash
Collateral. Direct the Borrower to pay (and the Borrower agrees that upon
receipt of such notice, or upon the occurrence of an Event of Default under Section 8.1(e), it will immediately pay) to the
Administrative Agent additional cash, to be held by the Administrative Agent,
for the benefit of the Lenders, in a cash collateral account as additional
security for the L/C Obligations in respect of subsequent drawings under all
then outstanding Letters of Credit in an amount equal to the maximum aggregate
amount which may be drawn under all Letters of Credits then outstanding.

(d)          Enforcement
of Rights. Enforce any and all rights and interests created and existing
under the Loan Documents, including, without limitation, all rights and remedies
existing under the Collateral Documents, all rights and remedies against a
Guarantor and all rights of set-off.

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Notwithstanding
the foregoing, if an Event of Default specified in Section 8.1(e) shall occur, then the Commitments shall
automatically terminate and all Loans, all reimbursement obligations under
Letters of Credit, all accrued interest in respect thereof, all accrued and
unpaid fees and other indebtedness or obligations owing to the Lenders
hereunder shall immediately become due and payable without the giving of any
notice or other action by the Administrative Agent or the Lenders, which notice
or other action is expressly waived by the Credit Parties.

Notwithstanding the fact that enforcement powers reside primarily with
the Administrative Agent, each Lender has, to the extent permitted by law, a
separate right of payment and shall be considered a separate “creditor” holding
a separate “claim” within the meaning of Section 101(5) of the Bankruptcy Code
or any other insolvency statute.

Section
8.3. Allocation of Payments After Event of Default. Notwithstanding
any other provisions of this Credit Agreement, after the occurrence and during
the continuance of an Event of Default, all amounts collected or received by
the Administrative Agent or any Lender on account of amounts outstanding under
any of the Loan Documents or in respect of the Collateral shall be paid over or
delivered as follows:

FIRST, to the payment of all reasonable out-of-pocket costs and
expenses (including without limitation reasonable attorneys’ fees) of the
Administrative Agent or any of the Lenders in connection with enforcing the
rights of the Lenders and/or the Administrative Agent under the Loan Documents
and any protective advances made by the Administrative Agent with respect to
the Collateral under or pursuant to the terms of the Collateral Documents;

SECOND, to payment of any fees owed to the Administrative Agent or the
L/C Issuer;

THIRD, to the extent of any amounts received as proceeds of the
Revolving Loan Collateral:

A.            to the payment of any and all costs, liabilities and/or
expenses incurred by the Administrative Agent in connection with the collection
or administration of the Revolving Loan or the Revolving Loan Collateral;

B.            to the payment of all amounts due to any L/C Issuer in
respect of Letters of Credit hereunder;

C.            to the payment of all accrued interest (including on Swap
Related Reimbursement Obligations and interest accrued following the filing of
a petition under any bankruptcy law or any other federal, state or foreign
(including any provincial) receivership, insolvency relief or other law or laws
for the relief of debtors), fees, costs, liabilities and/or expenses payable to
the Revolving Lenders and GE Capital hereunder in their capacity as such;

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D.            to the payment of the outstanding
principal amount of the Revolving Credit Advances, and Swap Related
Reimbursement Obligations and to the payment or cash collateralization of the
outstanding L/C Obligations, pro rata, as
set forth below; and

E.             to the payment of any amounts
described in clause FOURTH below, in the order and manner set forth therein;

FOURTH, to the
extent of any amounts received as proceeds of a sale of Stock:

A.            proceeds in the amount attributable
to the Accounts shall be applied as set forth in clause “THIRD” above; and

B.            any remaining proceeds shall be
applied as set forth in clause “FIFTH” below;

FIFTH, to all
other obligations which shall have become due and payable under the Loan
Documents and not repaid pursuant to clauses “FIRST” through “FOURTH” above;
and

SIXTH, to the
payment of the surplus, if any, to whoever may be lawfully entitled to receive
such surplus.

In carrying
out the foregoing, (a) amounts received shall be applied in the numerical order
provided until exhausted prior to application to the next succeeding category;
(b) each of the Lenders and GE Capital shall receive an amount equal to its pro
rata share (based on the proportion that the then outstanding Loans, L/C
Obligations and obligations under Swap Related Reimbursement Obligations held
by such Lender or GE Capital bears to the aggregate then outstanding Loans, L/C
Obligations and obligations under Swap Related Reimbursement Obligations held
by all Lenders or GE Capital) of amounts available to be applied pursuant to
clauses “THIRD,” “FOURTH,” or “FIFTH” above; and (c) to the extent that any
amounts available for distribution pursuant to clause “THIRD,” “FOURTH” or “FIFTH”
above are attributable to the issued but undrawn amount of outstanding Letters
of Credit, such amounts shall be held by the Administrative Agent in a cash
collateral account and applied (x) first, to reimburse the L/C Issuer from time
to time for any drawings under such Letters of Credit and (y) then, following
the expiration of all Letters of Credit, to all other obligations of the types
described in clauses “THIRD”, “FOURTH,”  “FIFTH,”
or “SIXTH” above in the manner provided in this Section 8.3.  If any
Lending Party shall receive any proceeds in contradiction of this Section 8.3, such Lending Party shall
forward such proceeds to Administrative Agent for distribution pursuant to this
Section 8.3.

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ARTICLE IX.

EXPENSES AND INDEMNITIES

Section 9.1. 
Expenses. 
Whether or not the transactions contemplated hereby are consummated, the
Credit Parties, jointly and severally, agree (a) to pay on demand all fees,
costs and expenses (including reasonable attorneys’ fees and expenses and the
allocated cost of internal legal staff) incurred by Administrative Agent and
any appraisers, auditors and consultants retained by the Administrative Agent
in connection with (i) the examination, review, due diligence investigation,
documentation, negotiation, closing and syndication of the transactions
contemplated herein and in the Related Transactions Documents and in connection
with the continued administration of the Loan Documents including any
amendments, modifications, consents and waivers, (ii) creating, perfecting and
maintaining Liens pursuant to the Loan Documents, including filing and
recording fees and expenses, the costs of any bonds required to be posted in
respect of future filing and recording fees and expenses, and title
investigations and (iii) any matters contemplated by or arising out of the Loan
Documents, including the Administrative Agent’s customary field and desk audit
charges and the reasonable fees, expenses and disbursements of the
Administrative Agent or any accountants or other experts retained by the
Administrative Agent (including any affiliate of Administrative Agent as shall
be engaged for such purpose) in connection with accounting and collateral
audits or reviews of the Credit Parties and their affairs, (b) to promptly pay
reasonable documentation charges assessed the Administrative Agent for
amendments, waivers, consents and any of the documentation prepared by the
Administrative Agent’s internal legal staff, and (c) to promptly pay all fees,
costs and expenses (including attorneys’ fees and expenses and the allocated
cost of internal legal staff) incurred by the Administrative Agent and Lenders
in connection with any action to enforce any Loan Document or to collect any
payments due from Borrower or any other Credit Party.  All fees, costs and expenses for which any
Credit Party is responsible under this Section 9.1
shall be deemed part of the Obligations when incurred, and shall payable on
demand in accordance with Section 2.14.

Section 9.2. 
Indemnity. 
Whether or not the transactions contemplated hereby are consummated, the
Credit Parties, jointly and severally, agree to indemnify, pay and hold
harmless each Lending Party and any subsequent holder of any of the Notes or
any other Obligation, and each of such Person’s officers, directors, employees,
attorneys, agents and Affiliates (collectively, the “Indemnitees”) from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, claims, costs, expenses and disbursements of any
kind or nature whatsoever (including the fees and disbursements of counsel for
such Indemnitee and the allocated cost of internal legal staff) in connection
with any claim, investigative, administrative or judicial proceeding, whether
or not such Indemnitee shall be designated a party thereto and including any
such proceeding initiated by or on behalf of any Credit Party, and the expenses
of investigation by experts, engineers, environmental consultants and similar
technical personnel and any commission, fee or compensation claimed by any
broker (other than any broker retained by any Lending Party) asserting any
right to payment for the transactions contemplated hereby, which may be

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imposed on, incurred by or asserted against such Indemnitee as a result
of or in connection with the transactions contemplated hereby or by the Loan
Documents or the other Related Transactions Documents (including, without
limitation, (i)(A) as a direct or indirect result of the presence on or under,
or Release from, any Real Property now or previously owned, leased or operated
by any Credit Party of any Hazardous Materials or any Hazardous Materials
contamination, (B) arising out of or relating to the offsite disposal of any
Hazardous Materials generated or present on any such Real Property or (C)
arising out of or resulting from the environmental condition of any such Real
Property or the applicability of any governmental requirements relating to
Hazardous Materials, whether or not occasioned wholly or in part by any
condition, accident or event caused by any act or omission of any Credit Party,
and (ii) proposed and actual Extensions of Credit under this Agreement) and the
use or intended use of any Extension of Credit or the proceeds thereof, except
that the Credit Parties shall have no obligation hereunder to an Indemnitee
with respect to any liability resulting solely from the gross negligence or
willful misconduct of such Indemnitee as finally determined by a court of
competent jurisdiction.  To the extent
that the undertaking set forth in the immediately preceding sentence may be
unenforceable, each Credit Party shall contribute the maximum portion which it
is permitted to pay and satisfy under Applicable Law to the payment and
satisfaction of all such indemnified liabilities incurred by the Indemnitees or
any of them.  Without limiting the
generality of any provision of this Section, to the fullest extent permitted by
law, each Credit Party hereby waives all rights for contribution or any other
rights of recovery with respect to liabilities, losses, damages, costs and
expenses arising under or relating to Environmental Laws that it might have by
statute or otherwise against any Indemnitee, except to the extent that such
items are finally determined by a court of competent jurisdiction to have
resulted solely from the gross negligence or willful misconduct of such
Indemnitee.

Section 9.3. 
Taxes.  The
Credit Parties jointly and severally agree to pay each Lending Party, promptly
following demand therefor, all Charges (excluding income taxes or other similar
taxes imposed on any Lender or any holder of a Note), including any interest or
penalties thereon, at any time payable or ruled to be payable in respect of the
existence, execution or delivery of this Agreement, the Related Transactions
Documents or the making of any Extension of Credit, and to indemnify and hold
each Lending Party, and each and every holder of the Notes or any other
Obligation harmless against liability in connection with any such Charges.

Section 9.4. 
Capital Adequacy; Increased Costs; Illegality; Funding
Losses.

(a)          If
any Lender shall have determined that the introduction of or any change in
after the date hereof of any law, treaty, governmental (or quasi-governmental)
rule, regulation, guideline or order regarding capital adequacy, reserve
requirements or similar requirements or compliance by any Lender with any
request or directive regarding capital adequacy, reserve requirements or
similar requirements (whether or not having the force of law) from any central
bank or other Governmental Authority increases or would have the effect of
increasing the amount of capital, reserves or other funds required to be
maintained by such Lender and thereby reducing the rate of return on such
Lender’s capital

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as a consequence of its obligations hereunder, then the Borrower shall
from time to time upon demand by such Lender (with a copy of such demand to the
Administrative Agent) promptly pay to the Administrative Agent, for the account
of such Lender, additional amounts sufficient to compensate such Lender for
such reduction.  A certificate as to the
amount of such reduction that, at a minimum, shows the basis of the computation
thereof submitted by such Lender to the Borrower and to the Administrative
Agent shall be conclusive and binding on the Borrower for all purposes, absent
manifest error.

(b)          If,
as a result of either (i) the introduction of or any change in any law or
regulation (or any change in the interpretation thereof) or (ii) the
compliance with any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law), there shall be
any increase in the cost to any Lender of agreeing to make or making, funding
or maintaining any Loan, then the Borrower shall from time to time, upon demand
by such Lender (with a copy of such demand to the Administrative Agent),
promptly pay to the Administrative Agent for the account of such Lender
additional amounts sufficient to compensate such Lender for such increased
cost.  A certificate as to the amount of
such increased cost, submitted to the Borrower and to the Administrative Agent
by such Lender, shall be conclusive and binding on the Borrower for all
purposes, absent manifest error.

(c)          Notwithstanding
anything to the contrary contained herein, if the introduction of or any change
in any law or regulation (or any change in the interpretation thereof) shall
make it unlawful, or any central bank or other Governmental Authority shall
assert that it is unlawful, for any Lender to agree to make or to make or to
continue to fund or maintain any Loan based on LIBOR, then, unless that Lender
is able to make or to continue to fund or to maintain such LIBOR Loan at
another branch or office of that Lender without, in that Lender’s opinion,
adversely affecting it or its Loans or the income obtained therefrom, on notice
thereof and demand therefor by such Lender to the Borrower through the
Administrative Agent, (i) the obligation of such Lender to agree to make
or to make or to continue to fund or maintain LIBOR Loans shall terminate and
(ii) the Borrower shall forthwith prepay in full all outstanding LIBOR
Loans owing to such Lender, together with interest accrued thereon, unless the
Borrower, within five (5) Business Days after the delivery of such notice and
demand, converts all such Loans into Base Rate Loans.

(d)          To
induce Lenders to permit LIBOR Loans on the terms provided herein, if (i) any
LIBOR Loan is repaid in whole or in part prior to the last day of any
applicable LIBOR Period (whether that repayment is made pursuant to any
provision of this Agreement or any other Loan Document or is the result of
acceleration, by operation of law or otherwise), (ii) the Borrower shall
default in payment when due of the principal amount of or interest on any LIBOR
Loan, (iii) the Borrower shall default in making any borrowing of, Conversion
into or Continuation of any LIBOR Loan after the Borrower has given notice
requesting the same in accordance herewith, or (iv) the Borrower shall fail to
make any prepayment of a LIBOR Loan after the Borrower has given a notice
thereof in accordance herewith, then the Borrower shall indemnify and hold
harmless each Lender from and against all losses, costs and expenses resulting
from or arising from any of the foregoing.

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Such indemnification shall include any loss (but excluding loss of
margin) or expense arising from the reemployment of funds obtained by it or
from fees payable to terminate deposits from which such funds were
obtained.  For the purpose of calculating
amounts payable to a Lender under this subsection, each Lender shall be deemed
to have actually funded its relevant LIBOR Loan through the purchase of a
deposit bearing interest at the LIBOR Rate in an amount equal to the amount of
such LIBOR Loan and having a maturity comparable to the relevant LIBOR Period; provided,
that each Lender may fund each of its LIBOR Loans in any manner it sees fit,
and the foregoing assumption shall be utilized only for the calculation of
amounts payable under this subsection. 
As promptly as practicable under the circumstances, each Lender shall provide
the Borrower with its written calculation of all amounts payable pursuant to
this Section 9.4(d), and such calculation
shall be conclusive and binding on the Borrower for all purposes, absent
manifest error.  The Borrower shall pay
to Lenders all amounts required to be paid by it hereunder promptly upon demand
therefor.

ARTICLE X.

THE ADMINISTRATIVE AGENT

Section 10.1. 
Appointment and Authorization.  L/C Issuer and each Lender hereby irrevocably
designates and appoints GE Capital as the Administrative Agent of L/C Issuer
and Lenders under this Agreement, and L/C Issuer and each such Lender
irrevocably authorizes as the Administrative Agent for L/C Issuer and Lenders,
to take such action on its behalf under the provisions of this Agreement and
the other Loan Documents and to exercise such powers and perform such duties as
are expressly delegated to the Administrative Agent by the terms of this
Agreement and the other Loan Documents, together with such other powers as are
reasonably incidental thereto. 
Notwithstanding any provision to the contrary elsewhere in this
Agreement, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with L/C Issuer or any Lender, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement, the other Loan Documents or otherwise exist against the
Administrative Agent.  In performing its
functions and duties under this Agreement, Administrative Agent shall act solely
as agent of Lenders and the L/C Issuer and does not assume and shall not be
deemed to have assumed any obligation toward or relationship of agency or trust
with or for the Borrower or any other Credit Party.  The Administrative Agent, as collateral agent
hereunder and under the Collateral Documents, is hereby authorized to act on
behalf of the Lenders, in its own capacity and through other agents and
sub-agents appointed by it, under the Collateral Documents, provided that,
unless otherwise expressly provided in this Agreement, the Administrative Agent
shall not agree to the release of any Collateral, or any property encumbered by
any mortgage, pledge or security interests. 
In connection with its role as secured party with respect to the
Collateral hereunder, the Administrative Agent shall act as collateral agent,
for itself and for the ratable benefit of the Lenders and such role as
collateral agent shall be disclosed on all appropriate accounts, certificates,
filings, mortgages, and other collateral documentation.

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Section 10.2. 
Delegation of Duties.  The
Administrative Agent may execute any of its duties under this Agreement and the
other Loan Documents by or through agents or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters pertaining to such
duties.  The Administrative Agent shall
not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.  Without limiting the foregoing, the
Administrative Agent may appoint one of its affiliates as its agent to perform
the functions of the Administrative Agent hereunder relating to the advancing
of funds to the Borrower and distribution of funds to L/C Issuer and the
Lenders and to perform such other related functions of the Administrative Agent
hereunder as are reasonably incidental to such functions.

Section 10.3. 
Administrative Agent and Affiliates.  Administrative Agent shall have the same
rights and powers under the Loan Documents as any other Lender and may exercise
or refrain from exercising the same as though it were not an Administrative
Agent, and the terms “Lender” and “Lenders” shall include the Administrative
Agent in its individual capacity.  The
Administrative Agent and its Affiliates may lend money to and generally engage
in any kind of business with any Credit Party or Affiliate thereof as if it
were not an Administrative Agent hereunder.

Section 10.4. 
Action by Administrative Agent.  The duties of Administrative Agent shall be
mechanical and administrative in nature. 
Administrative Agent shall not have by reason of this Agreement a
fiduciary relationship to any Lending Party or any other Person.  The obligations of the Administrative Agent
hereunder are only those expressly set forth herein and under the other Loan
Documents.  Without limiting the
generality of the foregoing, the Administrative Agent shall not be required to
take any action with respect to any Default, except as expressly provided in Article VIII.

Section 10.5. 
Consultation with Experts.  The Administrative Agent may consult with
legal counsel (who may be counsel for the Borrower), accountants and other
experts selected by it and shall not be liable for (a) any action taken or
omitted to be taken by it in good faith in accordance with the advice of such
counsel, accountants or experts, or (b) any negligence or misconduct of any of
its legal counsel, accountants or other experts, provided that
Administrative Agent has exercised due care in the selection of such Persons.

Section 10.6. 
Liability of Administrative Agent.  Neither the Administrative Agent nor any of
its directors, officers, agents, representatives, employees or Affiliates shall
be liable for any action taken or not taken by it in connection with the Loan
Documents (a) with the consent or at the request or direction of the Lenders or
the Required Lenders, as applicable, or (b) in the absence of its own gross
negligence or willful misconduct. 
Neither the Administrative Agent nor any of its directors, officers,
agents, representatives, employees or Affiliates shall be responsible for or
have any duty to ascertain, inquire into or verify (i) any statement, warranty
or representation made under or in connection with any Loan Document or any
Extension of Credit hereunder, (ii) the performance or observance of any of the
covenants or agreements of any Credit Party, (iii) the satisfaction of any
condition specified in Article III,
except to confirm receipt of items required to be delivered to the

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Administrative Agent, (iv) the validity, effectiveness, sufficiency or
genuineness of any Loan Document or any other instrument or writing furnished
in connection therewith, or (v) the value, validity, effectiveness,
genuineness, enforceability or sufficiency of any of the Loan Documents or for
any failure of the Borrower or any other Credit Party to perform its
obligations under this Agreement or any other Loan Document.  The Administrative Agent shall not incur any
liability by acting in reliance upon any notice, consent, certificate, statement,
other writing (which may be a bank wire, telex, facsimile transmission or
similar writing) or conversation believed by it to be genuine or to be signed
by the proper party or parties.

Section 10.7. 
Indemnification. 
The L/C Issuer and each Lender shall, ratably in accordance with its
Revolving Credit Commitment (whether or not such Commitment has been
terminated), indemnify the Administrative Agent (to the extent not reimbursed
by the Credit Parties) against any cost, expense (including counsel fees and
disbursements), claim, demand, action, loss or liability (except such as result
from the Administrative Agent’s gross negligence or willful misconduct) that
the Administrative Agent may suffer or incur in connection with the Loan
Documents or any action taken or omitted by the Administrative Agent under this
Agreement or any other Loan Document. 
The agreements in this Section 10.7
shall survive the termination of this Agreement and payment of the Notes and
all other amounts payable hereunder.

Section 10.8. 
Credit Decision. 
L/C Issuer and each Lender acknowledges that neither the Administrative
Agent nor any of its officers, directors, employees, agents, attorneys-in-fact
or Affiliates has made any representation or warranty to it and that no act by
the Administrative Agent hereinafter taken, including any review of the affairs
of the Borrower or any other Credit Party, shall be deemed to constitute any
representation or warranty by the Administrative Agent to L/C Issuer or any
Lender.  L/C Issuer and each Lender
acknowledges that it has, independently and without reliance upon the
Administrative Agent, L/C Issuer or any other Lender, and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement and to make the Extensions
of Credit hereunder.  L/C Issuer and each
Lender also acknowledges that it will, independently and without reliance upon
the Administrative Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in connection with its taking or not taking any action under
the Loan Documents.  Except for notices,
reports and other documents expressly required to be furnished to the Lenders
by the Administrative Agent hereunder, the Administrative Agent shall not have
any duty or responsibility to provide L/C Issuer or any Lender with any credit
or other information concerning the business, operations, property, condition
(financial or otherwise), prospects or creditworthiness of the Borrower or any
other Credit Party which may come into the possession of the Administrative
Agent or any of its officers, directors, employees, agents, attorneys-in-fact
or affiliates.

Section 10.9. 
Successor Administrative Agent.  The Administrative Agent may resign at any
time by giving thirty (30) days’ prior written notice thereof to the Lenders

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and the Borrower.  Upon any such
resignation, the Required Lenders shall have the right to appoint a successor
Administrative Agent which, absent the occurrence and continuance of a Default,
must be acceptable to the Borrower (such acceptance not to be unreasonably
withheld or delayed).  If no successor
Administrative Agent shall have been so appointed by the Required Lenders, and
shall have accepted such appointment, within thirty (30) days after the
retiring Administrative Agent gives notice of resignation, then the retiring
Administrative Agent may, on behalf of the Lenders, appoint a successor Administrative
Agent, which shall be an institution organized or licensed under the laws of
the United States of America or of any State thereof.  Upon the acceptance of its appointment as
Administrative Agent hereunder by a successor Administrative Agent, such successor
Administrative Agent shall thereupon succeed to and become vested with all the
rights and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder.  After any retiring
Administrative Agent’s resignation hereunder as Administrative Agent, the
provisions of this Article shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Administrative Agent.

Section 10.10.  Reliance by Administrative Agent.  The Administrative Agent shall be entitled to
rely, and shall be fully protected in relying, upon any Note, writing,
resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, telex or teletype message, statement, order or other
document or conversation believed by it in good faith to be genuine and correct
and to have been signed, sent or made by the proper Person or Persons and upon
advice and statements of legal counsel (including, without limitation, counsel
to the Borrower), independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent may deem and treat the payee of
any Note as the owner thereof for all purposes unless (a) a written notice of
assignment, negotiation or transfer thereof shall have been filed with the
Administrative Agent and (b) the Administrative Agent shall have received the
written agreement of such assignee to be bound hereby as fully and to the same
extent as if such assignee were an original Lender party hereto, in each case
in form satisfactory to the Administrative Agent.  The Administrative Agent shall be fully
justified in failing or refusing to take any action under this Agreement unless
it shall first receive such advice or concurrence of the Lenders or the
Required Lenders, as it deems appropriate or it shall first be indemnified to
its satisfaction by the L/C Issuer and Lenders against any and all liability
and expense which may be incurred by it by reason of taking or continuing to take
any such action.  The Administrative
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under any of the Loan Documents in accordance with a request of the
Lenders or the Required Lenders, as may be required under this Agreement, and
such request and any action taken or failure to act pursuant thereto shall be
binding upon all the Lenders and all future holders of the Notes.

Section 10.11. 
Notice of Default. 
The Administrative Agent shall not be deemed to have knowledge or notice
of the occurrence of any Default or Event of Default hereunder unless the
Administrative Agent has received notice from a Lender or the Borrower
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a “notice of default”.  In the event that the Administrative Agent

 102
 

 

 

receives such a notice, the Administrative Agent shall give prompt
notice thereof to the L/C Issuer and the Lenders.  The Administrative Agent shall take such
action with respect to such Default or Event of Default as shall be reasonably
directed by the Lenders or the Required Lenders, as appropriate; provided,
that unless and until the Administrative Agent shall have received such
directions, the Administrative Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default
or Event of Default as it shall deem advisable in the best interests of the L/C
Issuer and Lenders except to the extent that this Agreement expressly requires
that such action be taken, or not taken, only with the consent or upon the
authorization of the Lenders or the Required Lenders, or all of the Lenders, as
the case may be.

ARTICLE XI.

MISCELLANEOUS

Section 11.1. 
Survival.  All
agreements, representations and warranties made herein shall survive the
execution and delivery of this Agreement and the other Loan Documents.  The provisions of Article IX and
the indemnities contained in this Agreement and the other Loan Documents shall
survive the termination of this Agreement.

Section 11.2. 
No Waivers; Remedies Cumulative.  No failure or delay by the Administrative
Agent, the L/C Issuer or any Lender in exercising any right, power or privilege
under any Loan Document shall operate as a waiver thereof nor shall any single
or partial exercise thereof preclude any other or further exercise thereof or
the exercise of any other right, power or privilege.  The rights and remedies herein and therein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law, by other agreement or otherwise.

Section 11.3. 
Notices.  All
notices, requests and other communications to any party hereunder shall be in
writing (including prepaid overnight courier, facsimile transmission or similar
writing) and shall be given to such party at its address or facsimile number
set forth in this Section or on the signature pages hereof (or, in the case of
any such Lender who becomes a Lender after the date hereof, in a notice
delivered to the Borrower and the Administrative Agent by the assignee Lender
forthwith upon such assignment) or at such other address or facsimile number as
such party may hereafter specify in writing for the purpose by notice to the
Administrative Agent and the Borrower. 
Each such notice, request or other communication shall be effective (a)
if given by facsimile, when transmitted to the facsimile number specified in
this Section and confirmation of receipt is received by the sender, (b) if
given by mail, upon the earlier of actual receipt and five (5) Business Days
after deposit in the United States Mail, registered or certified mail, return
receipt requested, properly addressed and with proper postage prepaid, (c) one
(1) Business Day after deposit with a reputable overnight courier properly
addressed and with all charges prepaid or (d) when received, if by any other
means.

Notices shall be addressed as follows:

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  If to the Borrower:

  	
  Medical Staffing Network, Inc.

  
	
   

  	
  901 Yamato Road,
  Suite 110

  
	
   

  	
  Boca Raton,
  Florida 33431

  
	
   

  	
  Attention: Kevin
  Little

  
	
   

  	
  Facsimile No:
  (561) 322-1201

  
	
   

  	
  Telephone No.
  (561) 322-1301

  
	
   

  	
   

  
	
  With a copy to:

  	
   

  
	
   

  	
  Akerman
  Senterfitt

  
	
   

  	
  222 Lakeview
  Avenue, 4th Floor

  
	
   

  	
  West Palm Beach,
  FL 33401-6183

  
	
   

  	
  Attention: Kim
  Hines, Esq.

  
	
   

  	
  Facsimile No.:
  (561) 659-6313

  
	
   

  	
  Telephone No.:
  (561) 671-3610

  
	
   

  	
   

  
	
  If to
  Administrative Agent, L/C Issuer or GE Capital:

  	
   

  
	
   

  	
  General Electric
  Capital Corporation

  
	
   

  	
  2 Bethesda Metro
  Center

  
	
   

  	
  Suite 600

  
	
   

  	
  Bethesda,
  Maryland 20814

  
	
   

  	
  Attention:
  Medical Staffing Network 

  
	
   

  	
   

  	
   Account Manager

  
	
   

  	
  Facsimile No:
  (866) 296-5577

  
	
   

  	
  Telephone No.:
  (301) 664-9800

  
	
   

  	
   

  
	
  With a copy to:

  	
   

  
	
   

  	
  General Electric
  Capital Corporation

  
	
   

  	
  2 Bethesda Metro
  Center

  
	
   

  	
  Suite 600

  
	
   

  	
  Bethesda,
  Maryland 20814

  
	
   

  	
  Attention: Legal
  Department

  
	
   

  	
  Facsimile No:
  (301) 664-9866

  
	
   

  	
  Telephone No.:
  (301) 664-9804

  

 

If to a Lender:  To the address set forth on the signature
page hereto or in the applicable Assignment Agreement.

Section 11.4. 
Severability. 
In case any provision of or obligation under this Agreement or any other
Loan Document shall be invalid, illegal or unenforceable in any applicable
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

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Section 11.5. 
Amendments and Waivers.  Any provision of this Agreement or any other
Loan Document may be amended or waived only if such amendment or waiver is in
writing and is signed by: (x) in the case of this Agreement, the Borrower and
the Required Lenders or (y) in the case of any other Loan Document, the
Borrower and the Administrative Agent (with the consent of the Required
Lenders); provided, that no such amendment or
waiver shall, unless signed by:

(a)          all
the Lenders:

(i)                                     increase
the aggregate Revolving Credit Commitments,

(ii)                                  change
the percentage of the Commitments or of the aggregate unpaid principal amount
of the Loans and Reimbursement Obligations which shall be required for the
Lenders or any of them to take any action under this Section or any other
provision of this Agreement,

(iii)                               release
all or substantially all of the Collateral, or release all or substantially all
of the Guarantors, or

(iv)                              amend
this Section 11.5 or the definition of “Required
Lenders”,

(b)          all
the Lenders affected thereby:

(i)                                     increase
or decrease any Commitment of any Lender (except for a ratable decrease in the
Commitments of all Lenders) or subject any Lender to any additional obligation,

(ii)                                  reduce
the principal of or rate of interest on any Obligation or the amount of any
Fees payable hereunder,

(iii)                               postpone
the date fixed for any (A) payment of (1) principal of any Loan or
Reimbursement Obligation pursuant to Section 2.8 or
otherwise waive, excuse or reduce the amount of any scheduled payment, (2) interest on any Loan or Reimbursement Obligation or
(3) any fees hereunder, or (B) termination of any Commitment,

(iv)                              amend,
modify or waive the order of payment provisions set forth in Section 8.3 or the
payment allocation provisions of Section 2.8, or

(v)                                 change
any provision of any Loan Document in a manner that by its terms adversely
affects the rights of the holders of the

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Loans or Commitments of any one Class
disproportionately than any other Class.

provided
that, if the rights or duties of the Administrative Agent, the Swingline Lender
or the L/C Issuer are affected by any amendment, modification or waiver, by the
Administrative Agent, Swingline Lender or L/C Issuer, as applicable and provided further that, no amendment, modification,
termination or waiver affecting the rights or duties of Administrative Agent or
L/C Issuer, or of GE Capital in respect of any Swap Related Reimbursement
Obligations, under this Agreement or any other Loan Document, including any
release of any Guaranty or Collateral requiring a writing signed by all
Lenders, shall be effective unless in writing and signed by Agent or L/C Issuer
or GE Capital, as the case may be, in addition to Lenders required hereinabove
to take such action.

Section 11.6. 
Successors and Assigns; Registration.  (a) 
The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns
(including any transferee of any Note or other Obligation), except that the
Borrower may not assign or otherwise transfer any of its rights under this
Agreement without the prior written consent of all Lenders.  Notwithstanding the foregoing, in the absence
of an Event of Default, each Lender covenants for the benefit of the Borrower
that it will not assign Loans, Obligations or the Commitments (or any
combination thereof) except with the prior written consent of the Borrower and
the Administrative Agent (which consent shall not be unreasonably withheld or
delayed), provided, that each Lender retains the unrestricted right to
transfer, sell or assign any or all of its interest and obligations in the
Loans and the Commitments without respect to this sentence in the following
cases: (i) to any Lender or any Affiliate of any Lender; (ii) to any Person to
the extent required to comply with any order, directive or request from any
Governmental Authority; (iii) to any Person in connection with the sale by any
Lender of all or any substantial portion of such Lender’s corporate finance or
healthcare capital portfolio; or (iv) to a Qualified Assignee.  Any assignment made pursuant to this Section  11.6 shall be
made pursuant to an Assignment Agreement substantially in the form of Exhibit K (each such agreement referred to herein as an “Assignment
Agreement”).

(b)          Any
assignment shall be for an equal percentage of such assignor Lender’s Loans and
its Commitment, and any such assignee Lender shall, upon its registration in
the Note Register referred to below, become a “Lender” for all purposes hereunder.  If such assignment is a partial assignment,
such assignment shall be in an amount at least equal to $5,000,000 for
Revolving Loans and, after giving effect to any such partial assignment, a
Lender assigning Revolving Loans shall have retained Revolving Loan Commitments
in an amount at least equal to $5,000,000. 
The Administrative Agent shall receive a fee of $5,000 in connection
with any such assignment (including, without limitation, an assignment to an existing
Lender).  Upon any such assignment, the
assignor Lender shall be released from its Commitments to the extent assigned
to and assumed by the assignee Lender.

 106

 

 

(c)          Upon
any assignment of any Note(s), the assigning Lender shall surrender its Note(s)
to the Borrower for exchange or registration of transfer, and the Borrower will
promptly execute and deliver in exchange therefor a new Note or Note(s) of the
same tenor and registered in the name of the assignor Lender (if less than all
of such Lender’s Notes are assigned) and the name of the assignee Lender.

(d)          Each
Lender may sell participations in all or any part of the Loans, its Notes, its
Commitments or its L/C Exposure.  Any
participation by a Lender shall be made with the understanding that all amounts
payable by the Borrower hereunder shall be determined as if that Lender had not
sold such participation, and that the holder of any such participation shall
not be entitled to require such Lender to take or omit to take any action
hereunder.  Neither the Borrower nor any
other Credit Party shall have any obligation or duty to any participant.  Neither the Administrative Agent, L/C Issuer
nor any Lender (other than the Lender selling a participation) shall have any
duty to any participant and may continue to deal solely with the Lender selling
a participation as if no such sale had occurred.  No Lender shall, as between the Borrower and
that Lender, or Administrative Agent and/or L/C Issuer and that Lender, be
relieved of any of its obligations hereunder as a result of any participation
in all or any part of the Loans, its Note, its Commitments or other
Obligations.

(e)          The
Administrative Agent shall maintain a register (the “Note Register”) of
the Lenders and all assignee Lenders that are the holders of all the Notes and
other Obligations issued pursuant to this Agreement.  Upon five (5) Business Days’ prior written
notice to the Administrative Agent will allow any Lender to inspect and copy
such list at the Administrative Agent’s principal place of business during
normal business hours.  Prior to the due
presentment for registration of transfer of any Note or other Obligation, the
Administrative Agent may deem and treat the Person in whose name a Note or
Other Obligation is registered as the absolute owner of such Note or Obligation
for the purpose of receiving payment of principal of and premium and interest
on such Note or Obligation and for all other purposes whatsoever, and the
Administrative Agent shall not be affected by notice to the contrary.

(f)           Each
Lender (including any assignee Lender at the time of such assignment)
represents that it (i) is acquiring its Note(s) or Obligations solely for
investment purposes and not with a view toward, or for sale in connection with,
any distribution thereof, (ii) has received and reviewed such information as it
deems necessary to evaluate the merits and risks of its investment in such
Note(s) or Obligations, (iii) is an “accredited investor” within the meaning of
Rule 501(a) under the Securities Act and (iv) has such knowledge and experience
in financial and business matters as to be capable of evaluating the merits and
risks of its investment in the Note(s) or Obligations, including a complete
loss of its investment.

(g)          Each
Lender understands that the Notes or Obligations are being offered only in a
transaction not involving any public offering within the meaning of the
Securities Act, and that, if in the future such Lender decides to resell,
pledge or otherwise

 107
 

 

 

transfer the Notes or Obligations, the Notes or Obligations may be
resold, pledged or transferred only (i) to a Person who such Lender reasonably
believes is a qualified institutional buyer that purchases for its own account
or for the account of a qualified institutional buyer to whom notice is given
that such resale, pledge or transfer is being made in reliance on Rule 144A
under the Securities Act or (ii) 
pursuant to an exemption from registration under the Securities Act.

(h)          Each
Lender understands that the Notes will, unless otherwise agreed by the Borrower
and the holder thereof, bear a legend to the following effect:

THIS
SECURITY IS NOT BEING REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”).  THE HOLDER HEREOF, BY PURCHASING THIS
SECURITY, AGREES FOR THE BENEFIT OF THE ISSUER THAT THIS SECURITY MAY BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1) TO THE BORROWER, (2) TO A
PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER THAT IS AWARE
THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE
144A OR (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT.

(i)           If
any Note becomes mutilated and is surrendered by the Lender with respect
thereto to the Borrower, or if any Lender claims that any of its Notes have
been lost, destroyed or wrongfully taken, the Borrower shall execute and
deliver to such Lender a replacement Note(s), upon the affidavit of such Lender
attesting to such loss, destruction or wrongful taking with respect to such
Note(s) and such lost, destroyed, mutilated, surrendered or wrongfully taken
Note(s) shall be deemed to be canceled for all purposes hereof.  Such affidavit shall be accepted as
satisfactory evidence of the loss, wrongful taking or destruction thereof and
no indemnity shall be required as a condition of the execution and delivery of
a replacement Note.  Any costs and
expenses of the Borrower in replacing any Note shall be for the account of such
Lender.

(j)           Nothing
contained in this Section 11.6
shall require the consent of any party for GE Capital to assign any of its
rights in respect of any Swap Related Reimbursement Obligation.

Section 11.7. 
Setoff and Sharing of Payments.  Upon
the occurrence and during the continuance of any Event of Default, 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 any time owing by such Lender (or any of its
Affiliates) to or for the credit or the account of any Credit Party against any
and all of the

 108
 

 

 

Obligations held by such Lender, irrespective of whether such Lender
shall have made any demand under this Agreement or any Note or such Obligations
and although such Obligations may be unmatured. 
Each Lender agrees promptly to notify the Borrower and Administrative
Agent after any such set-off and application made by such Lender; provided,
that the failure to give such notice shall not affect the validity of such
set-off and application.  The rights of
each Lender under this Section are in addition to other rights and remedies
(including, without limitation, other rights of set-off) that such Lender may
have.  If any Lender (a “Benefited
Lender”) shall at any time receive any payment of all or part of the Loans
or other Obligations or other amounts owing to it hereunder, or interest
thereon, or receive any Collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, or otherwise), in a greater proportion than any such
payment to or Collateral received by any other Lender, if any, in respect of
such other Lender’s Loans, Obligations or other amounts owing to it hereunder,
or interest thereon, such Benefited Lender shall purchase for cash from the
other Lender(s) a participating interest in such portion of each such other
Lender’s Loans and other Obligations owing to it, or shall provide such other
Lender(s) with the benefits of any such Collateral, or the proceeds thereof, as
shall be necessary to cause such Benefited Lender to share the excess payment
or benefits of such Collateral or proceeds ratably with each of the Lenders; provided,
that if all or any such purchase shall be rescinded, and the purchase price and
benefits are thereafter recovered from such Benefited Lender, such purchase
shall be rescinded, and the purchase price and benefits returned, to the extent
of such recovery, but without interest. 
Each Credit Party agrees that any Lender so purchasing a participation
from any other Lender pursuant to this Section 11.7
may, to the fullest extent permitted by law, and notwithstanding the provisions
of Section 11.6(d), exercise all of its
rights of payment (including the right of set-off) with respect to such
participation as fully as if such purchasing Lender were the direct creditor of
such Credit Party in the amount of such participation.

Section 11.8. 
Collateral. 
Each of the Lenders represents to the Administrative Agent and each of
the other Lenders that it in good faith is not relying upon any Margin Stock as
collateral in the extension or maintenance of the credit provided for in this
Agreement.

Section 11.9. 
Headings. 
Headings and captions used in the Loan Documents (including all exhibits
and schedules thereto) are included herein and therein for convenience of
reference only and shall not constitute a part of this Agreement for any other
purpose or be given any substantive effect.

Section 11.10. 
Governing Law; Submission To Jurisdiction.  THIS AGREEMENT AND EACH NOTE SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF
NEW YORK.  EACH OF THE BORROWER AND THE
OTHER CREDIT PARTIES PARTY HERETO HEREBY SUBMITS TO THE NONEXCLUSIVE
JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN NEW YORK CITY FOR PURPOSES
OF ALL LEGAL PROCEEDINGS ARISING OUT

 109
 

 

 

OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.  EACH
OF THE BORROWER AND THE OTHER CREDIT PARTIES PARTY HERETO IRREVOCABLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN
SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM. 
EACH OF THE PARTIES HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN
THE MANNER PROVIDED FOR NOTICES IN SECTION 11.3.  NOTHING IN THIS AGREEMENT WILL AFFECT THE
RIGHT OF ANY PARTY TO THIS AGREEMENT TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW.

Section 11.11. 
Notice of Breach by Agents or Lender. 
The Credit Parties party hereto agree to give the
Administrative Agent and the Lenders notice of any action or inaction by the
Administrative Agent or any Lender or any agent or attorney of the
Administrative Agent or any Lender in connection with this Agreement or any
other Loan Document or the Obligations of the Credit Parties under this
Agreement or any other Loan Document that may be actionable against the
Administrative Agent or any Lender or any agent or attorney of the
Administrative Agent or any Lender or a defense to payment of any Obligations
of the Credit Parties under this Agreement or any other Loan Document for any
reason, including commission of a tort or violation of any contractual duty or
duty implied by law.  The Credit Parties
party hereto agree, to the fullest extent that they may lawfully do so, that
unless such notice is given promptly (and in any event within ten (10) Business
Days after any Credit Party has knowledge, or with the exercise of reasonable
diligence could have had knowledge, of any such action or inaction), no Credit
Party shall assert, and each Credit Party shall be deemed to have waived, any
claim or defense arising therefrom to the extent that the Administrative Agent
or any Lender could have mitigated such claim or defense after receipt of such
notice.

Section 11.12. 
Waiver Of Jury Trial.  EACH OF THE
CREDIT PARTIES PARTY HERETO, ADMINISTRATIVE AGENT, L/C ISSUER AND LENDERS
HEREBY IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THE LOAN DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED THEREBY AND TO THE FULLEST EXTENT PERMITTED BY LAW WAIVES ANY
RIGHTS THAT IT MAY HAVE TO CLAIM OR RECEIVE CONSEQUENTIAL OR SPECIAL DAMAGES IN
CONNECTION WITH ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THE LOAN
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY.

Section 11.13. 
Counterparts; Entire Agreement.  This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.  This Agreement shall become effective upon
the execution of a counterpart hereof by each of the parties

 110
 

 

 

hereto.  This Agreement and the
other Loan Documents (including any fee letters between Administrative and one
or more of the Credit Parties including the GE Capital Fee Letter) constitute
the entire agreement and understanding among the parties hereto and supersede
any and all prior agreements and understandings, oral or written, relating to
the subject matter hereof.

Section 11.14. 
Confidentiality; Press Release.  (a) Any confidential information from time to
time delivered to Administrative Agent and/or the Lenders by the Borrower or
any other Credit Party which is not in the public domain shall be held by  such Agent or such Lender as confidential; provided,
that the Administrative Agent and each Lender may make disclosure of such
information (i) to its independent accountants and legal counsel (which Persons
shall be likewise bound by the provisions of this Section
11.14), (ii) pursuant to statutory and regulatory requirements,
(iii) pursuant to any mandatory court order or subpoena or in connection with
any legal process, (iv) pursuant to any written agreement hereafter made
between the Administrative Agent, any Lender and the Borrower or any other
Credit Party to which such information relates, which agreement permits such
disclosure, (v) as necessary in connection with the exercise of any remedy by
Administrative Agent or any Lender under the Loan Documents, (vi) consisting of
general portfolio information that does not identify any Credit Party, (vii)
which was heretofore been publicly disclosed or is otherwise available to such
Agent and/or Lender on a non-confidential basis from a source that is not, to
its knowledge, subject to a confidentiality agreement with any Credit Party,
(viii) in connection with any litigation to which Administrative Agent or any
Lender or its Affiliates is a party, or (ix) subject to an agreement containing
provisions substantially the same as those set forth in this Section 11.14, to any assignee of or participant in, or
prospective assignee of or participant in, any of the Obligations.  Notwithstanding anything to the contrary set
forth herein or in any other agreement to which the parties hereto are parties
or by which they are bound, the obligations of confidentiality contained herein
and therein, as they relate to the transactions contemplated by the Credit
Agreement and the other Loan Documents (the “Transaction”), shall not
apply to the federal tax structure or federal tax treatment of the Transaction,
and each party hereto (and any employee, representative, agent of any party
hereto) may disclose to any and all persons, without limitation of any kind,
the federal tax structure and federal tax treatment of the Transaction.  The preceding sentence is intended to cause
the Transaction to be treated as not having been offered under conditions of
confidentiality for purposes of Section 1.6011-4(b)(3) (or any successor
provision) of the Treasury Regulations promulgated under Section 6011 of the
Internal Revenue Code of 1986, as amended, and shall be construed in a manner
consistent with such purpose.  In
addition, each party hereto acknowledges that it has no proprietary or
exclusive rights to the federal tax structure of the Transaction or any federal
tax matter or federal tax idea related to the Transaction.

(b)          No
Credit Party or Affiliate thereof will in the future issue any press releases
or other public disclosure using the name of GE Capital or its Affiliates or
any other Lender or its Affiliates or referring to this Agreement or the other
Loan Documents without at least two (2) Business Days’ prior notice to GE
Capital and without the prior written consent of GE Capital unless (and only to
the extent that) such Credit Party or Affiliate is

 111
 

 

 

required to do so under law and then, in any event, such Credit Party
or Affiliate will consult with GE Capital before issuing such press release or
other public disclosure.  Each Credit
Party consents to the publication by Administrative Agent or any Lender of a tombstone
or similar advertising material relating to the financing transactions
contemplated by this Agreement. Administrative Agent reserves the right to
provide to industry trade organizations information necessary and customary for
inclusion in league table measurements.

Section 11.15. 
Reinstatement. 
This Agreement shall remain in full force and effect and continue to be
effective should any petition be filed by or against any Credit Party for
liquidation or reorganization, should any Credit Party become insolvent or make
an assignment for the benefit of any creditor or creditors or should a receiver
or trustee be appointed for all or any significant part of any Credit Party’s
assets or properties, and shall continue to be effective or to be reinstated,
as the case may be, if at any time payment and performance of the Obligations,
or any part thereof, is, pursuant to applicable law, rescinded or reduced in
amount, or must otherwise be restored or returned by any obligee of the
Obligations, whether as a “voidable preference,” “fraudulent conveyance,” or
otherwise, all as though such payment or performance had not been made.  In the event that any payment, or any part
thereof, is rescinded, reduced, restored or returned, the Obligations shall be
reinstated and deemed reduced only by such amount paid and not so rescinded,
reduced, restored or returned.

Section 11.16. 
Advice of Counsel. 
Each of the parties represents to each other party hereto that it has
discussed this Agreement and the other Loan Documents and, specifically, the
provisions of Sections 9.2, 11.10 and 11.12,
with its counsel.

Section 11.17. 
No Strict Construction.  The parties hereto have participated jointly
in the negotiation and drafting of this Agreement and the other Loan
Documents.  In the event any ambiguity or
question of intent or interpretation arises, this Agreement and the other Loan
Documents shall be construed as if drafted jointly by the parties hereto and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any provisions of this Agreement.

Section 11.18. 
Conflict of Terms. 
Except as otherwise provided in this Agreement or any of the other Loan
Documents by specific reference to the applicable provisions of this Agreement,
if any provision contained in this Agreement conflicts with any provision in
any of the other Loan Documents, the provision contained in this Agreement
shall govern and control.

Section 11.19. 
My AccountSM.  In consideration of being given access to and
the right to use the MyAccount website and service of Administrative Agent,
Borrower hereby agrees to the terms and conditions set forth on Exhibit 11.19 below, as such may be amended by
Administrative Agent from time to time by posting revised terms and conditions
on the MyAccount website.

 112
 

 

 

Section 11.20. 
Effect of Amendment and Restatement of the Original Credit Agreement.

(a)          Until
this Agreement becomes effective in accordance with the conditions set forth in
Section 3.1, the Original Credit
Agreement shall remain in full force and effect and shall not be affected
hereby.  Upon the effectiveness of this
Agreement, after the Closing Date all “Obligations” of the Borrower and the
other Credit Parties under the Original Credit Agreement shall become “Obligations”
of the Borrower and the other Credit Parties hereunder, secured by the
Collateral Documents, and the provisions of the Original Credit Agreement shall
be superseded by the provisions hereof; provided, that (i) the Original Credit
Agreement shall continue to apply to all events, circumstances and periods
arising or existing prior to the Closing Date of this Agreement and (ii) the
effectiveness of this Agreement shall not be deemed to be a waiver of or
consent to any default or other violation of the terms of the Original Credit
Agreement or other Loan Documents occurring or existing prior to such Closing
Date.

(b)          Upon
the effectiveness of this Agreement, on the Closing Date hereof, the Original
Credit Agreement shall be superseded by this Agreement, which has been executed
in renewal, amendment, restatement and modification, but not in novation or
extinguishment of, the obligations under the Original Credit Agreement.  The parties hereto acknowledge and agree that
(i) this Agreement and the other Loan Documents, whether executed and delivered
in connection herewith or otherwise, do not constitute a novation, payment and
reborrowing, or termination of the “Obligations” (as defined in the Original
Credit Agreement) under the Original Credit Agreement as in effect prior to the
Closing Date hereof and remain outstanding herunder as described in this Section 11.20; (ii) such “Obligations” are in all respects
continuing (as amended and restated hereby); (iii) the Liens and security
interests as granted under the Collateral Documents securing payment of such “Obligations”
are in all respects continuing and in full force and effect; (iv) references in
the Loan Documents to the “Credit Agreement” shall be deemed to be references
to this Agreement, and to the extent necessary to effect the foregoing, each
such Loan Document is hereby deemed amended accordingly, (v) all of the terms
and provisions of the Original Credit Agreement shall continue to apply for the
period prior to the Closing Date hereof, including any determinations of
payment dates, interest rates, Events of Default or any amount that may be
payable to the Agent or the Lenders (or their assignees or replacements
hereunder), (vi) the obligations under the Original Credit Agreement shall
continue to be paid or prepaid on or prior to the Closing Date, and shall from
and after the Closing Date continue to be owing and be subject to the terms of
this Agreement, (vii) all references in the Loan Documents to the “Lenders” or
a “Lender” or to the “Agent” shall mean such terms as defined in this Agreement..

Section 11.21. 
Confirmation of Existing Obligations.  Each Credit Party hereby reaffirms and admits
the validity and enforceability of (i) all of its “Obligations” under the
Original Credit Agreement which shall become obligations hereunder as described
in Section 11.20 above and (ii) the Loan
Documents and all of its respective Obligations thereunder and agrees and
admits that, as of the date hereof, it has no defenses to, or offsets

 113
 

 

 

or counterclaims against, any of its Obligations to the Lenders
hereunder or the secured parties hereunder or under the Original Credit
Agreement or Loan Documents of any kind whatsoever.

Section
11.22.  Confirmation/Ratification of the Loans.  The Borrower hereby agrees that, as of the
Closing Date, it is fully and truly indebted to the Lenders for the full amount
of the Revolving Loans and Swingline Loans stated herein. The Borrower and the
other parties signatory hereto hereby acknowledge that the “Term Loans” made
pursuant to and as set forth in the Original Credit Agreement as of the Closing
Date are re-characterized as Revolving Loans having the terms and conditions of
Revolving Loans as set forth in this Agreement. 
Furthermore, without limiting any of the other provisions of this
Agreement, the Borrower and each Lender agrees that (i) the loans made to the
Borrower by the Revolving Lenders and Swingline Lenders shall be subject to and
shall benefit from all of the provisions of this Agreement and the other Loan
Documents applicable to the Revolving Loans and Swingline Loans hereunder and
thereunder, (ii) the Revolving Lenders and Swingline Lenders are “Lenders”
hereunder and under the other Loan Documents and (iii) the unpaid principal of
and interest on Revolving Loans and Swingline Loans are “Obligations” hereunder
and under the other Loan Documents.

[Remainder of page intentionally left blank]

 114

 

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

	
   

  	
  MEDICAL STAFFING NETWORK, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kevin S. Little

  	
   

  
	
   

  	
  Name:

  	
  Kevin S. Little

  
	
   

  	
  Title:

  	
  President and Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
  Borrower Account
  Information:

  
	
   

  	
   

  
	
   

  	
  Bank’s Name and
  Address:

  
	
   

  	
  Bank of America

  
	
   

  	
  Jacksonville, FL

  
	
   

  	
   

  
	
   

  	
  CREDIT PARTIES:

  
	
   

  	
   

  
	
   

  	
  MEDICAL
  STAFFING NETWORK

  HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kevin S. Little

  	
   

  
	
   

  	
  Name:

  	
  Kevin S. Little

  
	
   

  	
  Title:

  	
  President and Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
  MEDICAL
  STAFFING HOLDINGS, LLC

  
	
   

  	
  By:

  	
  Medical Staffing Network Holdings, Inc., as its sole
  Member

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kevin S.
  Little

  	
   

  
	
   

  	
  Name:

  	
  Kevin S. Little

  
	
   

  	
  Title:

  	
  President and Chief Financial

  Officer

  
									

 

 [Signature Page to Amended and Restated Credit Agreement]
 

 

 

	
  

  	
  MSN-ILLINOIS
  HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kevin S. Little

  	
   

  
	
   

  	
  Name:

  	
  Kevin S. Little

  
	
   

  	
  Title:

  	
  Director

  
	
   

  	
   

  
	
   

  	
  MEDICAL
  STAFFING NETWORK OF

  ILLINOIS, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kevin S. Little

  	
   

  
	
   

  	
  Name:

  	
  Kevin S. Little

  
	
   

  	
  Title:

  	
  Manager

  
	
   

  	
   

  
	
   

  	
  MEDICAL
  STAFFING NETWORK ASSETS,

  LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kevin S. Little

  	
   

  
	
   

  	
  Name:

  	
  Kevin S. Little

  
	
   

  	
  Title:

  	
  Manager

  
	
   

  	
   

  
								

 

 [Signature Page to Amended and Restated Credit Agreement]
 

 

 

	
   

  	
  AGENT AND LENDERS:

  
	
   

  	
   

  
	
   

  	
  GENERAL ELECTRIC CAPITAL

  CORPORATION, as Lender and as

  Administrative Agent

  
	
   

  	
   

  
	
  Revolving Credit

  	
  By:

  	
  /s/ Jason Dufour

  	
   

  
	
  Commitment: $29,000,000

  	
   

  
	
   

  	
  Its Duly Authorized Signatory:

  
	
   

  	
   

  
	
   

  	
  Payment Account Information:

  
	
   

  	
  Deutsche Bank/Banker’s Trust

  
	
   

  	
  New York, NY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LASALLE BANK NATIONAL

  ASSOCIATION, as Lender

  
	
   

  	
   

  
	
  Revolving Loan

  	
  By:

  	
  /s/ Whitney M. Black

  	
   

  
	
  Commitment: $11,000,000

  	
  Name:

  	
  Whitney M. Black

  	
   

  
	
   

  	
  Title:

  	
  Assistant Vice President

  	
   

  
	
   

  	
   

  
	
   

  	
  Payment Account Information:

  
	
   

  	
  Chase Bank

  
	
   

  	
  New York, New York

  
							

 

 [Signature Page to Amended and Restated Credit Agreement]

 

EXHIBIT 11.19

My
AccountSM

The MyAccount
service is an electronic service provided by Administrative Agent and its
Affiliates, which (a) provides Borrower with electronic access via the World
Wide Web to information regarding its loan account(s) under the Agreement
through the use of web browsers and (b) allows Borrower to electronically
submit Borrowing Base certificates to Administrative Agent in connection with
requests for Revolving Credit Advances. 
By accessing and/or using the MyAccount service, Borrower agrees to
accept and abide by the following terms and conditions as well as the Privacy
Policy posted on the MyAccount site (the “Privacy Policy”) for each use
and access of this service.

(a)           Changes
to Terms and Conditions:  Administrative
Agent reserves the right, at its sole discretion, to change, modify, add or
remove any portion of these Terms and Conditions, including the Privacy Policy,
in whole or in part, at any time. 
Notification of changes in these Terms and Conditions and/or the Privacy
Policy will be posted on the MyAccount site. 
Changes in these Terms and Conditions will be effective when notice of
such changes has been posted. Borrower’s continued use of the MyAccount site
after such changes are posted will constitute its agreement to such changed
Terms and Conditions and/or the Privacy Policy.

(b)           Changes
to Service and Terminate Access: 
Administrative Agent may change, modify, remove, suspend, terminate or
discontinue any aspect of the MyAccount site or service at any time without notice
or liability.  Administrative Agent, in
its sole discretion, may also impose limits or restrictions on certain
services, features or content, terminate Borrower’s access to parts or all of
the MyAccount site or service and terminate all rights and licenses contained
in these Terms and Conditions without notice or liability.

(c)           Passwords:  Administrative Agent will issue to Borrower a
user name, password or other access codes or security items (collectively, “Passwords”).  Borrower will be solely responsible for the
use and proper protection of the Passwords. 
Borrower agrees to take all reasonable precautions to protect the
security and integrity of the Passwords and to prevent their unauthorized use.
The MyAccount service is a private computer system. Access to the MyAccount
service is restricted to those who have Passwords.  Borrower’s Passwords should never be shared
with anyone and Borrower may not allow anyone other than an authorized officer
of Borrower to use them.  Borrower will
be solely responsible for all actions taken that use its Passwords, including
all transmissions by Borrower of electronic records and electronic signatures,
other than actions involving the unauthorized use of such Passwords by
Administrative Agent and/or its Affiliates. 
“Electronic records” refer to a record or information created,
generated, sent, communicated, received or stored electronically, such as
Borrower’s financial data and Borrowing Base certificates in connection with
requests for Revolving Credit Loans. Borrower will immediately

 

 

notify Administrative Agent in writing if Borrower becomes aware of any
unauthorized access or use of its Passwords and/or the MyAccount service, or if
Borrower’s Passwords are lost or stolen. 
Such notice shall not release Borrower from its responsibility for such
loss, theft, unauthorized access or use of its Passwords and/or the MyAccount
service, or any other losses that may be incurred by Administrative Agent.  Administrative Agent shall be entitled to
assess Borrower’s Passwords and, if Administrative Agent determines that
Borrower is using Passwords that Administrative Agent considers insecure,
Administrative Agent may at its discretion require Borrower to change the
Passwords and/or terminate Borrower’s account.

Borrower shall be prohibited from using any services
or facilities provided in connection with the MyAccount site to compromise its
security or tamper with system resources and/or accounts. The use or
distribution of tools designed for compromising security (e.g., password
guessing programs, cracking tools or network probing tools) is strictly
prohibited. If Borrower becomes involved in any violation of system security,
Administrative Agent reserves the right to release Borrower’s details to system
administrators at other websites in order to assist them in resolving security
incidents. Administrative Agent reserves the right to investigate suspected
violations of these Terms and Conditions.

Administrative Agent reserves the right to fully
cooperate with any law enforcement authorities, or comply with any court order
or subpoena requesting or directing Administrative Agent to disclose any
information concerning a user or registered user of the MyAccount site. BY
ACCEPTING THESE TERMS AND CONDITIONS BORROWER WAIVES AND HOLDS HARMLESS
ADMINISTRATIVE AGENT FROM ANY CLAIMS RESULTING FROM ANY ACTION TAKEN BY
ADMINISTRATIVE AGENT DURING OR AS A RESULT OF ITS INVESTIGATIONS AND/OR FROM
ANY ACTIONS TAKEN AS A CONSEQUENCE OF INVESTIGATIONS BY EITHER ADMINISTRATIVE
AGENT OR LAW ENFORCEMENT AUTHORITIES.

(d)           Consent
to Electronic Transaction:  At the
MyAccount site, Borrower may transmit and receive electronic records relating
to its financial condition, the loans or the Collateral and allow
Administrative Agent to compute the Borrowing Base, availability within the
Borrowing Base and other related calculations using electronic records and
other information provided by Borrower in lieu of submitting such information
in writing and signed by an authorized officer of Borrower.  Borrower’s affirmative actions in using the
MyAccount site, such as clicking “I Accept”, “Submit”, “Yes”, “Go” and the like
and uploading of data to Administrative Agent, signify that Borrower agrees to,
adopts and executes the action or electronic record with the intention to be
legally bound, and the words “execution”, “signed”, “signature”, and words of
like import in any Borrowing Base Certificate given to Administrative Agent in
connection with a request for a Revolving Credit Advance shall be deemed to be
satisfied by such affirmative actions. 
Such affirmative actions will have the same legal force, effect,
validity and enforceability as if an authorized

 

 

officer of Borrower affixed a written signature to the electronic
record, and such electronic signature and electronic record shall be deemed to
satisfy the writing and delivery requirements of any applicable law, to the
extent and as provided for in any applicable law, including the Federal
Electronic Signatures in Global and National Commerce Act, the Maryland Uniform
Electronic Transactions Act, or any other similar state laws based on the
Uniform Electronic Transactions Act. Borrower agrees to transmit and receive
electronic records through the MyAccount service via the Internet using its
Passwords.  Administrative Agent’s
electronic or other properly stored copy of such electronic signatures and
electronic records shall be deemed to be the true, complete, valid, authentic
and enforceable copy of them. Borrower will not transmit to Administrative
Agent via the MyAccount site any message or other electronic record other than
those expressly authorized by the MyAccount service. Borrower acknowledges
that, regardless of whether it is using a web browser with security features,
Administrative Agent is unable to ensure that data contained in any related
Internet transmission between Administrative Agent and Borrower will not be
intercepted by third parties. Borrower agrees that Administrative Agent will
not be liable should any such interception occur prior to receipt by
Administrative Agent of any such data transmitted by Borrower or after
transmission by Administrative Agent of any such data to Borrower.

(e)           Representations
and Warranties:  In consideration of
Borrower’s use of and access to the MyAccount service, Borrower agrees that
each transmission of electronic signatures and electronic records using its
Passwords via the MyAccount site shall be (i) deemed to be a representation and
warranty by Borrower that all such electronic records are true, correct and accurate
when the record is sent and that the conditions in Section 3.2 of the Agreement
have been satisfied and (ii) a restatement by Borrower and each Guarantor (if
any) of each of the representations and warranties made by such Person in any
Loan Document and a reaffirmation by Borrower and each Guarantor (if any) of
the granting and continuance of Administrative Agent’s Liens pursuant to the
Loan Documents.

(f)            Duty
to Verify Transmissions:  Borrower shall
independently verify all information and calculations computed by use of the
MyAccount service and immediately inform Administrative Agent of any
error.  No such error shall impair the
validity of the Obligations, all of which shall be payable in full in
accordance with the Loan Documents and Borrower hereby agrees that any such
loans made in excess of availability within the Borrowing Base or otherwise
made in error shall be immediately due and payable.

(g)           Security Procedures:  The MyAccount service uses encryption to
preserve the security and integrity of Borrower’s transmissions.  The parties agree that Borrower’s Passwords
affixed to or contained in an electronic record or electronic signature,
together with the encrypted transmissions employed by the MyAccount service for
detecting changes or errors in electronic records and electronic signatures,
shall be sufficient security procedures to verify the origin of any such
transmission or the

 

 

identity or authority of the Person transmitting it. Each electronic
signature and electronic record transmitted to Administrative Agent via the
MyAccount service using Borrower’s Passwords shall be the act of and
attributable to Borrower.

(h)           User
Conduct:  Borrower agrees: (i) not to use
the MyAccount service in any manner that could damage, disable, overburden or impair
the MyAccount service; (ii) not to share Borrower’s Passwords with any other
user or provide access to the MyAccount service or site to any other Person
authorized to act on Borrower’s behalf. Any employee of Borrower, or authorized
third party (e.g., accounting company) who requires such access, and is
approved by Borrower’s User Administrator, should apply for their own
Passwords; (iii) not to upload, post, or otherwise transmit through or on the
MyAccount site any viruses or other harmful, disruptive or destructive files;
(iv) not to knowingly post on the MyAccount service or site information which
is untrue, incomplete or inaccurate; (v) not to transmit through or on the
MyAccount site “spam”, chain letters, junk mail or any other type of unsolicited
mass email to Persons who have not agreed to be part of such mailings; (vi) not
to post or otherwise disseminate on or through the MyAccount site harassing,
defamatory, libelous, tortious, offensive, threatening, obscene or otherwise
unlawful communications or materials of any kind, or materials which infringe
or violate any third party’s copyright, trademark, trade secrets, privacy or
other proprietary or property right or that could constitute a criminal
offense, give rise to civil liability or otherwise violate any applicable law;
(vii) not to use any robot, spider or other automatic device, or manual process
to monitor, extract, collect, harvest or copy the web pages or any data or data
fields contained at the MyAccount site including, but not limited to,
personally identifiable information of any other user of the MyAccount site, or
the names of customers of Administrative Agent or its Affiliates; (viii) not to
modify, assign, sublicense, sell or prepare derivative works of any materials
on the MyAccount site nor to reproduce or publicly display, perform, distribute
or otherwise use such materials except as expressly allowed herein; (ix) to
retain, on all copies of any materials downloaded, all copyright, trademark,
and other proprietary notices contained in the materials; (x) not to interfere
with the security of, or otherwise abuse, the MyAccount service, or any
services, system resources,  accounts,
servers or networks connected to or accessible through the MyAccount site or
affiliated or linked sites; (xi) not to disrupt or interfere with any other
Person’s use and enjoyment of the MyAccount service or affiliated or linked
sites; (xii) not to use or attempt to use another’s account, service or system
without authorization from Administrative Agent to create or use a false
identity on the MyAccount service; (xiii) not to attempt to obtain unauthorized
access to the MyAccount service or portions of the MyAccount service which are
restricted from general access; and (xiv) to comply with all applicable laws
that relate to its use or activities on the MyAccount service.

(i)            System Requirements: The system
requirements for use of the MyAccount service are Netscape Navigator 4.7 or
higher or Internet Explorer 5.5 or higher, and Internet access which allow Borrower
to send and receive secure data transmissions. 
Borrower acknowledges that it has the appropriate computer equipment and
Internet

 

 

access to use the MyAccount service and understands that its use of the
Internet may incur certain operational costs such as monthly fees for a service
provider.  Borrower agrees to notify
Administrative Agent prior to modifying or replacing any of its software or
hardware or report format which may affect the accuracy of the data required to
be submitted under this Agreement through the continued use of the MyAccount
service.  Borrower agrees to notify
Administrative Agent at 1-301-961-1640 in the event that it no longer desires
to use the MyAccount service offered by Administrative Agent.  Borrower will allow a reasonable amount of
time to make appropriate changes to ensure proper delivery to Borrower through
other means.  

(j)            Disclaimer
of Warranties:  Administrative Agent
shall not be responsible for the accuracy, completeness or use of any
information received by Borrower through the MyAccount service. THE MyAccount
SITE, INCLUDING ALL SOFTWARE, FUNCTIONS AND CONTENT, ARE PROVIDED ON AN “AS IS”
OR “AS AVAILABLE” BASIS. NONE OF ADMINISTRATIVE AGENT NOR ANY OF ITS AFFILIATES
OR SUPPLIERS MAKES ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED,
STATUTORY OR ARISING FROM COURSE OF CONDUCT, INCLUDING WITHOUT LIMITATION ANY
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, TITLE OR
NON-INFRINGEMENT.  ADMINISTRATIVE AGENT,
ITS AFFILIATES AND SUPPLIERS MAKE NO REPRESENTATION OR WARRANTY THAT ANY
CONTENT, SOFTWARE OR FUNCTIONS ACCESSED THROUGH THE MyAccount SERVICE WILL BE
UNINTERRUPTED OR ERROR FREE, THAT DEFECTS WILL BE CORRECTED, OR THAT THE
MyAccount SERVICE OR THE SERVER THAT MAKES IT AVAILABLE IS FREE OF VIRUSES OR
OTHER HARMFUL COMPONENTS.  ADMINISTRATIVE
AGENT RESERVES THE RIGHT, IN ITS SOLE DISCRETION, TO MAKE ANY CHANGES TO THE
MyAccount SITE, THE MATERIALS AND THE PRODUCTS, PROGRAMS, SERVICES OR PRICES
(IF ANY) DESCRIBED IN THE SITE AT ANY TIME WITHOUT NOTICE.

(k)           Limitation of Damages:  ADMINISTRATIVE AGENT, ITS AFFILIATES AND
SUPPLIERS SHALL NOT BE RESPONSIBLE TO BORROWER OR ANY THIRD PARTY FOR ANY
TRANSMISSIONS NOT ACTUALLY RECEIVED OR FOR MALFUNCTIONS IN COMMUNICATIONS FACILITIES
WHICH MAY AFFECT THE ACCURACY OR TIMELINESS OF THE ELECTRONIC RECORDS SENT OR
RECEIVED, OR FOR ANY LOSSES, ERRORS OR DELAYS ARISING OUT OF BORROWER’S USE OF
ANY ACCESS SERVICE PROVIDER OR CAUSED BY ANY BROWSER SOFTWARE.  IN NO EVENT SHALL ADMINISTRATIVE AGENT OR ITS
AFFILIATES OR SUPPLIERS BE LIABLE FOR DIRECT, INDIRECT, INCIDENTAL, SPECIAL OR
CONSEQUENTIAL DAMAGES (INCLUDING BUSINESS INTERRUPTION, LOSS OF INFORMATION OR
PROGRAMS OR OTHER DATA ON BORROWER’S INFORMATION HANDLING SYSTEM) (EVEN IF
EXPRESSLY ADVISED OF

 

 

THE POSSIBILITY OF SUCH DAMAGES) RELATED TO BORROWER’S USE OR ACCESS
TO, OR BORROWER’S INABILITY TO USE OR ACCESS, THE MyAccount SITE, ITS CONTENT
OR FUNCTIONS OR ANY LINKED WEBSITE. IN NO EVENT SHALL THE AGGREGATE LIABILITY
OF ADMINISTRATIVE AGENT, ITS AFFILIATES AND SUPPLIERS ARISING FROM BORROWER’S
USE OR ACCESS TO, OR BORROWER’S INABILITY TO USE OR ACCESS, THE MyAccount SITE,
ITS CONTENT OR FUNCTIONS EXCEED ONE HUNDRED DOLLARS ($100), REGARDLESS OF THE
CAUSE OF ACTION, WHETHER IN CONTRACT, TORT OR OTHERWISE. THE LIMITATION OF
DAMAGES SET FORTH ABOVE IS A FUNDAMENTAL ELEMENT OF THE BASIS OF THE BARGAIN
BETWEEN ADMINISTRATIVE AGENT AND BORROWER. THIS SERVICE WOULD NOT BE PROVIDED
WITHOUT SUCH LIMITATION.

The limitations of
liability and disclaimers herein contained apply regardless of the form of
action, whether in contract, warranty, strict liability, negligence or other
tort and shall survive the termination of Borrower’s use or access to the
MyAccount service, a fundamental breach or breaches, or the failure of the
essential purpose of contract or the failure of an exclusive remedy.

(l)            Indemnity:  Borrower hereby indemnifies and agrees to
defend (with counsel acceptable to Administrative Agent) and hold harmless
Administrative Agent, its partners, officers, agents and employees
(collectively, “Indemnitees”) from and against any liability, loss, cost,
expense (including reasonable attorneys’ fees and expenses for both in-house
and outside counsel), claim, damage, suit, action or proceeding ever suffered
or incurred by Administrative Agent or in which Administrative Agent may ever
be or become involved (whether as a party, witness or otherwise), in accordance
with Section 9.2 of the Agreement, in connection with any claim of any nature
arising out of its use of the MyAccount service.  Borrower also agrees to indemnify the
Indemnitees from any breach of these Terms and Conditions by Borrower,
including use of any MyAccount site or service (other than as expressly
authorized in these Terms and Conditions), or any allegation that information
or materials that Borrower provides to Administrative Agent infringes the
intellectual property, confidentiality, or other rights of any third party.
Borrower agrees that the Indemnitees will have no liability in connection with
any such breach or unauthorized use, and Borrower agrees to indemnify any and
all resulting loss, damages, judgments, awards, costs, expenses, and attorneys’
fees of the Indemnitees in connection therewith. Borrower will also indemnify
and hold the Indemnitees harmless from any claims brought by third parties
arising out of Borrower’s use of the information accessed from the MyAccount
site.

(m)          Waiver and Release:  Borrower releases, discharges and holds
harmless Administrative Agent and its Affiliates and their respective
directors, officers, employees and agents from any and all liability, claims or
causes of action (known or unknown) arising out of its or their negligence in
connection with the MyAccount

 

 

service including, without limitation, liabilities arising out of
information posted on the MyAccount site or otherwise provided by
Administrative Agent.  Borrower
acknowledges that it has carefully read this waiver and release paragraph and
fully understands that it is a release of liability. Borrower is waiving any
right that it may have to bring a legal action to assert a claim against
Administrative Agent or the other parties set out above for its or their
negligence.

(n)           No
Confidential, Fiduciary or Contractually Implied Relationship with
Administrative Agent:  Borrower
acknowledges that by using the MyAccount service, no confidential, fiduciary,
contractually implied or other relationship is created between Borrower and
Administrative Agent other than the express contractual relationship provided
in these Terms and Conditions and any other written agreement between Borrower
and Administrative Agent (including, without limitation, the Loan Documents).

(o)           License
to Administrative Agent to Use Information: 
Administrative Agent does not claim ownership of the materials Borrower
may provide to Administrative Agent (including documents, feedback and
suggestions), or upload, input or submit to the MyAccount service. However, by
uploading files, inputting information or otherwise communicating on, to or through
the MyAccount service, Borrower hereby grants to Administrative Agent a
perpetual, worldwide, irrevocable, non-exclusive, royalty-free, transferable
(with right to grant sublicenses through multiple sublicenses) license to use,
copy, adapt, distribute, display, reproduce, transmit, modify and edit such
materials, in all media now known or hereafter developed, in each case in
accordance with the terms of Section 11.14 of the Agreement and the MyAccount
Privacy Policy.

(p)           Agreement
to Privacy Policy:  Information will be
collected, processed, used, communicated, and disclosed by Administrative Agent
and its Affiliates for the purposes of monitoring Borrower’s accounts and
business, servicing Borrower’s account, enforcing Administrative Agent’s
rights, providing and offering products and services and to facilitate
transactions Borrower enters into with Administrative Agent and its Affiliates.
Borrower can find further information on the collection, use, communication and
disclosure of its information in the MyAccount Privacy Policy. The Privacy
Policy is incorporated by reference into these Terms and Conditions. Such
information that Borrower provides via the MyAccount site, together with
information regarding the manner in which Borrower uses the site, will be used,
processed, communicated and disclosed as permitted by these Terms and
Conditions, the Privacy Policy reproduced on the MyAccount site, other
agreements between the parties related to such information, and as otherwise
required by law.  In the event of any
conflict between these Terms and Conditions and the Privacy Policy or any other
terms on the site, these Terms and Conditions shall control.

(q)           Links to and From Other Sites:  As a convenience to Borrower, the MyAccount
site may contain links to websites operated by other entities. If Borrower

 

 

follows those links, Borrower will leave the MyAccount site. If
Borrower decides to visit any linked website, Borrower does so at its own risk
and it is Borrower’s responsibility to take all protective measures to guard
against viruses or other destructive elements. Administrative Agent makes no
warranty or representation regarding, and does not endorse, approve of, sponsor
or recommend any linked websites or the information appearing thereon or any of
the products or services described thereon. Links do not imply that
Administrative Agent sponsors, endorses, is affiliated or associated with, or
is legally authorized to use any trademark, trade name, logo or copyrighted
material displayed in or accessible through the links, or that any linked site
is authorized to use any trademark, trade name, logo or copyrighted material of
General Electric Company, Administrative Agent, or any of their Affiliates or
Subsidiaries. Any such site may contain material, data or information provided,
posted or offered by third parties, including but not limited to advertisements
and postings in online community discussions. Borrower agrees that neither
Administrative Agent nor its Affiliates, business partners or service providers
shall have any liability whatsoever to Borrower for any such third party
material, data or information.

All links to the
MyAccount site must be approved in writing by Administrative Agent except that
Administrative Agent consents to links in which: (i) the link is a text-only
link containing only the name “gehealthcarefinance.com” or the URL “http://www.gehealthcarefinance.com”;
(ii) the link “points” only to “http://www.gehealthcarefinance.com” and not to
deeper pages; (iii) the link, when activated by a user, displays this page
full-screen in a fully operable and navigable browser window and not within a “frame”
on the linked website; (iv) the appearance, position, and other aspects of the
link may neither create the false appearance that an entity or its activities
or products are associated with or sponsored by Administrative Agent nor be
such as to damage or dilute the goodwill associated with the name and
trademarks of Administrative Agent. Administrative Agent reserves the right to
revoke this consent to link at any time in its sole discretion.

(r)            Telephone
and Communication Charges and Equipment: 
Borrower shall be solely responsible for any and all telephone and other
communications and equipment charges relating to its use of the MyAccount
service.  All transmissions by Borrower
via the MyAccount service shall be at the sole risk of Borrower and
Administrative Agent shall not be responsible for any communications line
failure, equipment or systems failure or other occurrence beyond Administrative
Agent’s reasonable control.

(s)           Limited License:  Subject to the terms and conditions set forth
herein, Administrative Agent hereby grants to Borrower a non-exclusive,
non-transferable, revocable, limited right to access, use and display the
MyAccount service, and the visible text, graphics and images thereon and to
view and download such text, graphics and images only in connection with the
uploading of data and submission of Borrowing Base Certificates in connection
with requests for Revolving Credit Advances by Borrower in the United
States.  Borrower may not modify, assign,

 

 

sublicense, sell or prepare derivative works from such text, graphic or
images or reproduce or publicly display, perform, distribute or otherwise use
them for any public or commercial use. 
Borrower may not print or copy the HTML or other computer programs that
are viewable at the MyAccount site. 
Borrower shall not upload or transmit to Administrative Agent’s computer
systems any computer virus, worm, time bomb or other harmful programming
routine.  Except as expressly provided in
these Terms and Conditions, Administrative Agent does not grant to Borrower any
express or implied right or license of any intellectual property including
patent, trademark, copyright, trade secret or confidential information of
Administrative Agent or any of its Affiliates.

(t)            Software:  Any software as well any files, images
generated by such software, code and data accompanying such software (the “Software”)
used or accessible through the MyAccount service are the copyrighted works of
Administrative Agent and/or its Affiliates and suppliers.  Administrative Agent retains full and
complete title to any and all intellectual property rights it may own or
license in the Software. Administrative Agent hereby grants to Borrower a
non-exclusive, non-transferable (without the right to grant sublicenses),
revocable, limited license to use the Software for the sole purposes as
provided in these Terms and Conditions. 
Borrower may not reproduce, sell, distribute, copy, assign, sublicense,
disassemble, decompile, modify or reverse engineer any of the Software or
permit any other Person to do so.

(u)           Copyright:  The MyAccount site, including without
limitation its content and materials, Software, functions, organization, design
compilation, magnetic translation, digital conversion, content, HTML code,
graphics and other files and other matters related to this site, as well as
their overall coordination, selection and arrangement (“Materials”) are
protected by United States copyright laws, international conventions and other
copyright laws. All rights are reserved. All Materials contained on the
MyAccount site are protected by copyright, and are either owned, controlled or
licensed by Administrative Agent. 
Borrower agrees to comply with all applicable copyright laws in its use
of the MyAccount site and to prevent any unauthorized copying of the Materials.
Borrower shall abide by this and any and all additional copyright notices,
information or restrictions contained in any of these Materials. Borrower may
print the materials without the express written consent of Administrative
Agent, provided that Borrower maintains all copyright and other notices
contained in such materials, but Borrower may not otherwise prepare derivative
works based upon such content, nor may such content be modified, copied,
distributed, framed, reproduced, republished, downloaded, displayed, posted,
transmitted, or sold in any form or by any means, in whole or in part, without
prior written permission of the copyright owner. No such activity may be
competitive with or derogatory to Administrative Agent and no such express or
implied right is granted. Borrower shall not distribute any of the content of
any of the MyAccount site to any other Person unless that Person accepts all
obligations under these Terms and Conditions. Any copyright owner consent may
be revoked at any time, and such consent does not include consent to republish
MyAccount site information on any

 

 

other Internet, Intranet or Extranet site or to incorporate the
information in any other database or compilation, unless expressly given in
writing. Any other use of the content of the MyAccount site is strictly
prohibited.

(v)           Trademarks:  MyAccount and other MyAccount graphics, logos
and service marks are trademarks of the General Electric Company.  Such may not be copied, imitated or used, in
whole or part, without the prior written consent of the General Electric
Company.  All other trademarks, service
marks, logos, certification marks, collective marks or trade dress, including
MyAccount (collectively “Trademarks”) appearing in the MyAccount site are the
property of Administrative Agent or its Affiliates, business providers or
service providers. No such Trademarks may be copied, imitated, or used, in
whole or in part, without prior written permission of the owner of the relevant
Trademark. All page headers, custom graphics, button icons, and scripts are
Trademarks owned by Administrative Agent or its Affiliates, business partners
or service providers which may not be copied, imitated, or used, in whole or in
part, without the relevant owner’s prior written permission. No rights to use
any Trademarks are granted under these Terms and Conditions. Certain company
names and products mentioned on the MyAccount site may be claimed as Trademarks
by their respective owners, who may not be affiliated with Administrative Agent
its Affiliates, business partners or service providers.

(w)          Reservation
of Rights:  Administrative Agent and its
Affiliates’ products, services, methods and processes may be covered by one or
more patents or other statutory intellectual property rights, and are subject
to trade secret and other proprietary rights. Administrative Agent and its
Affiliates reserve all such rights.

(x)            For
U.S. Users Only:  Access to the MyAccount
service is open only to United States corporations, partnerships, limited
liability companies and business trusts only which are borrowers of certain of
Administrative Agent’s businesses.  The
MyAccount site is controlled, operated and administrated from Administrative
Agent’s offices within the United States. 
Administrative Agent makes no representation that any materials
contained on the MyAccount site or features provided on or through the site or
otherwise by Administrative Agent are appropriate or permitted in all
locations, or for use by all borrowers. Those who access the MyAccount site
from other jurisdictions are responsible for their compliance with local laws.

(y)           Language:  Borrower and Administrative Agent acknowledge
that each has requested that these Terms and Conditions, all ancillary
documents and the MyAccount site be drawn up in the English language only.

(z)            General:  These Terms and Conditions constitute the
entire agreement between Administrative Agent and Borrower with respect to
Borrower’s use of the MyAccount site and service, and supersede all prior or
contemporaneous agreements, with respect to the subject matter hereof. No
modification of these Terms and 

 

 

Conditions shall be effective unless signed by an officer of
Administrative Agent or posted by Administrative Agent on the MyAccount site.
These Terms and Conditions are not intended to alter the terms or conditions of
any other agreement Borrower may have with Administrative Agent to the extent
that those agreements govern issues other than Borrower’s use of the MyAccount
site and service.  Administrative Agent
may assign its rights and obligations under these Terms and Conditions but
Borrower may not.  Any cause of action Borrower
may have with respect to Borrower’s use of the MyAccount service or which is
the subject of these Terms and Conditions must be commenced within one (1) year
after the claim or cause of action arises. Any waiver of any rights of either
party must be in writing, signed by the waiving party, and any such waiver
shall not operate as a waiver of any future breach of these Terms and
Conditions. The language in these Terms and Conditions shall be interpreted as
to its fair meaning and not strictly for or against either party. If for any
reason a court of competent jurisdiction finds any provision of these Terms and
Conditions or portion thereof to be unenforceable, that provision shall be
enforced to the maximum extent permissible so as to effect the intent of these
Terms and Conditions, and the remainder of these Terms and Conditions shall
continue in full force and effect.

(aa)         Governing
Law:  These Terms and Conditions shall be
governed by and construed in accordance with the substantive law of the State
of New York, without regard to conflict of laws provisions. You agree that the
exclusive jurisdiction and venue for any action arising out of or relating to
the MyAccount site or the Materials, Borrower’s use of the MyAccount site, or
these Terms and Conditions shall be in the state or federal courts in New York
City, New York, and you agree to be subject to jurisdiction in such courts for
purposes of such actions. You waive all rights to a jury trial.

(bb)         Acceptance:  You may accept the Terms and Conditions by clicking
on the “Accept” button on the Legal Notice page. Your action in clicking on
that button signifies that you agree to be bound by these Terms and Conditions.
Such acceptance and agreement shall be deemed to be as effective as if
execution of the Terms and Conditions were by a written signature performed
manually by you, and these Terms and Conditions shall be deemed to satisfy any
writing requirements of any applicable law. Our electronic or other properly
stored copy of these Terms and Conditions shall be deemed to be the true,
complete, valid, authentic and enforceable copy of these Terms and Conditions
and you agree not to contest the admissibility or enforceability of these Terms
and Conditions in a court for any proceedings arising out of these Terms and
Conditions or use of the MyAccount site.

 

 

September 29, 2006

Medical Staffing Network, Inc.

901 Yamato Road, Suite 110

Boca Raton, Florida 33431

Attn: Kevin Little

RE:          Daily Cash Management Sweeps under the
Credit Agreement

Ladies and Gentlemen:

Reference is made
to that certain Amended and Restated Credit Agreement, dated as of September
29, 2006 (as amended, restated, replaced or otherwise modified from time to
time, the “Credit Agreement”), among Medical
Staffing Network, Inc (“Borrower”) the
other Credit Parties signatory thereto, the Lenders from time to time signatory
thereto and General Electric Capital Corporation as a Lender and Administrative
Agent for the Lenders (“GE Capital”).  Capitalized terms used herein and not
otherwise defined have the meaning given such terms in the Credit Agreement.

This letter confirms that
GE Capital, as Administrative Agent, the Lenders signatory hereto and the
Borrower have agreed that, subject to the terms and conditions of this letter
and notwithstanding anything to the contrary in Section 6.20 to the
Credit Agreement or in the blocked account agreements entered into with respect
to any Blocked Accounts, GE Capital as Administrative Agent, on each Business
Day after the Collection Account has received the daily sweep of amounts from
the Blocked Accounts as described in Section 6.20 (“Sweep
Amounts”), (i) shall apply such Sweep Amounts to payments of
Interest or other Obligations due and payable by Borrower or any other Credit
Party on such Business Day and (ii), so long as no Event of Default then
exists, shall return the balance of all such Sweep Amounts to a Disbursement
Account designated by the Borrower. 
After the occurrence and during the continuation of an Event of Default,
Administrative Agent shall not return any Sweep Amounts, but instead shall
apply Sweep Amounts to the payment of Loans and other Obligations as described
in Section 8.2  and may take any
other action under or in respect of the Loan Documents in the exercise of any
remedy, power or privilege contained therein or available to it at law, equity
or otherwise, or waive or refrain from exercising any such remedies, powers or
privileges.  Except as expressly modified
hereby, each of the Loan Documents including without limitation the Credit Agreement,
any blocked account agreements, and any other tri-party account agreements
entered into in connection with Section 6.20 remain in full force and
effect in accordance with their original terms.

 

 

Please
acknowledge that the Credit Parties are in agreement with the terms and
conditions of this letter by signing the enclosed copy of it in the space
provided below and returning the same to the undersigned officer of the Agent.

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  GENERAL
  ELECTRIC CAPITAL CORPORATION,

  as Lender and as Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jason Dufour

  	
   

  
	
   

  	
   

  	
  Its Duly
  Authorized Signatory:

  
	
   

  	
   

  
	
  ACKNOWLEDGED AND
  AGREED:

  	
   

  
	
   

  	
   

  
	
  LASALLE
  BANK NATIONAL ASSOCIATION,

  	
   

  
	
  as Lender

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By: 

  	
  /s/ Whitney M.
  Black

  	
   

  	
   

  
	
  Name: 

  	
  Whitney M. Black

  	
   

  	
   

  
	
  Title: 

  	
  Assistant Vice
  President

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