CREDIT AGREEMENT

Exhibit 10.1

Execution Version

• • • • • • • • • • • • • • • • • • [ Published Deal CUSIP Number:                              ]

                                    [ Published Revolver CUSIP Number:                       ]

                                    [ Published Term CUSIP Number:                             ]

CREDIT AGREEMENT

Dated as of January 18, 2007

among

KYPHON INC.,

and

CERTAIN SUBSIDIARIES,

as Borrowers,

BANK OF AMERICA, N.A.,

as Administrative Agent, Swing Line Lender and L/C Issuer

and

The Other Lenders Party Hereto

BANC OF AMERICA SECURITIES LLC,

as

Sole Lead Arranger and Sole Book Manager

i

ii

iii

iv

v

CREDIT AGREEMENT

This CREDIT AGREEMENT (" Agreement ") is entered into as of January 18, 2007, among KYPHON INC., a Delaware corporation (the " Company "), certain Subsidiaries of the Company party hereto pursuant to Section 2.15 (each a " Designated Borrower ") and, together with the Company, the " Borrowers " and, each a " Borrower "), each lender from time to time party hereto (collectively, the " Lenders " and individually, a " Lender "), and BANK OF AMERICA, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer.

The Company intends, pursuant to a merger by its wholly-owned Subsidiary, Neptune Acquisition Sub, Inc., a Delaware corporation (" Neptune "), with St. Francis Medical Technologies, Inc., a Delaware corporation (" SFMT "), to acquire (the " SFMT Acquisition ") SFMT and each of its wholly-owned Subsidiaries, S.F.M.T. Europe B.V., private company with liability under Dutch law (" SFMT Europe "), and St. Francis Medical Technologies UK Limited, a limited liability company organized under the laws of the United Kingdom (" SFMT UK ") (each, an " Acquired Subsidiary ", and collectively, the " Acquired Subsidiaries ").

In order to finance a portion of the total consideration to be paid by the Company to effect the SFMT Acquisition and for other corporate purposes, the Company has requested that the Lenders provide a term loan facility and a revolving credit facility, and the Lenders are willing to do so on the terms and conditions set forth herein.

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

ARTICLE I.

DEFINITIONS AND ACCOUNTING TERMS

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

" Acquired Subsidiary " has the meaning specified in the second introductory paragraph hereto.

" Acquisition " means the acquisition of (i) a controlling equity or other ownership interest in another Person, whether by purchase of such equity or other ownership interest or upon the exercise of an option or warrant for, or conversion of securities into, such equity or other ownership interest, or (ii) assets of another Person which constitute all or substantially all of the assets of such Person or of a line or lines of business conducted by such Person.

" Acquisition Earnouts " means the aggregate amount of all earnout payments made in respect of Permitted Acquisitions other than the DOT Acquisition, the SFMT Acquisition and the Acquisition of InnoSpine.

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

1

" Administrative Agent’s Office " means, with respect to any currency, the Administrative Agent’s address and, as appropriate, account as set forth on Schedule 10.02 with respect to such currency, or such other address or account with respect to such currency as the Administrative Agent may from time to time notify to the Company and the Lenders.

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

" Affiliate " means, with respect to any Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is controlled by or is under common Control with the Person specified.

" Aggregate Commitments " means, as of the date of determination thereof, the sum of (a) the Aggregate Revolving Credit Commitments at such date plus (b) the Outstanding Amount with respect to the Term Loan at such date.

" Aggregate Revolving Credit Commitments " means, as at the date of determination thereof, the sum of all Revolving Credit Commitments of all Revolving Lenders at such date.

" Agreement " means this Credit Agreement.

" Alternative Currency " means each of Euro, Sterling, Yen, Swiss Francs and Canadian Dollars.

" Alternative Currency Equivalent " means, at any time, with respect to any amount denominated in US Dollars, the equivalent amount thereof in the applicable Alternative Currency as determined by the Administrative Agent or the L/C Issuer, as the case may be, at such time on the basis of the Spot Rate (determined in respect of the most recent Revaluation Date) for the purchase of such Alternative Currency with US Dollars.

" Alternative Currency Sublimit " means an amount equal to the lesser of the Aggregate Commitments and $100,000,000. The Alternative Currency Sublimit is part of, and not in addition to, the Aggregate Revolving Credit Commitments.

" Applicable Percentage " means with respect to any Lender at any time, the percentage (carried out to the ninth decimal place) of the Aggregate Commitments represented by such Lender’s Revolving Credit Commitment and by such Lender’s Outstanding Amount of the Term Loan, as applicable. If the Revolving Credit Commitment of each Revolving Lender and the obligation of the L/C Issuer to make L/C Credit Extensions have been terminated pursuant to Section 8.02 or if the Aggregate Revolving Credit Commitments have expired, then the Applicable Percentage of each Revolving Lender shall be determined based on the Outstanding Amount of the Revolving Loans of such Revolving Lender at such time. The initial Applicable Percentage of each Lender is set forth opposite the name of such Lender on Schedule 2.01 or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable.

" Applicable Rate " means,

2

• (a) with respect to the Revolving Loans, Commitment fee, Letter of Credit Fee and Swing Line Loan from time to time, the following percentages per annum, based upon the Consolidated Leverage Ratio as set forth below:

Applicable Rate

Pricing Level IV shall apply until the Company delivers a Compliance Certificate and the financial statements for the fiscal quarter ended March 31, 2007, in accordance with Sections 6.02(a) and 6.01(b) respectively. For purposes of the foregoing, (i) the Consolidated Leverage Ratio shall be determined as of the end of each fiscal quarter of the Company’s fiscal year based upon the Company’s consolidated financial statements delivered pursuant to Section 6.01(a) or (b)  and the Compliance Certificate for the respective fiscal quarter delivered pursuant to Section 6.02(a) and (ii) each change in the Applicable Rate resulting from a change in the Consolidated Leverage Ratio shall be effective during the period commencing on and including the date of delivery to the Administrative Agent of such consolidated financial statements and Compliance Certificate indicating such change and ending on the date immediately preceding the effective date of the next such change; provided that the Applicable Rate shall be deemed to be as provided in Pricing Level V of the table set forth above if the Company fails to deliver the consolidated financial statements required to be delivered by it pursuant to Section 6.01(a) or (b)  and the Compliance Certificate delivered in connection therewith, as of the first Business Day after the date on which such financial statements and Compliance Certificate were required to have been delivered until the Business Day after delivery thereof. In the event the Consolidated Leverage Ratio in any Compliance Certificate is later determined to have been inaccurate, the Applicable Rate shall be adjusted retroactively to the date of delivery of such inaccurate Compliance Certificate to the percentage corresponding to the correct Consolidated Leverage Ratio for that date, and such adjusted Applicable Rate shall be applicable for the same period as that period during which the Applicable Rate was incorrectly determined based on the original inaccurate Consolidated Leverage Ratio.

• (b) with respect to the Term Loan, a percentage per annum, based upon the Consolidated Leverage Ratio as set forth below:

3

Applicable Rate

Pricing Level II shall apply until the Company delivers a Compliance Certificate and the financial statements for the fiscal quarter ended March 31, 2007, in accordance with Sections 6.02(a) and 6.01(b) respectively. For purposes of the foregoing, (i) the Consolidated Leverage Ratio shall be determined as of the end of each fiscal quarter of the Company’s fiscal year based upon the Company’s consolidated financial statements delivered pursuant to Section 6.01(a) or (b)  and the Compliance Certificate for the respective fiscal quarter delivered pursuant to Section 6.02(a) and (ii) each change in the Applicable Rate resulting from a change in the Consolidated Leverage Ratio shall be effective during the period commencing on and including the date of delivery to the Administrative Agent of such consolidated financial statements and Compliance Certificate indicating such change and ending on the date immediately preceding the effective date of the next such change; provided that the Applicable Rate shall be deemed to be as provided in Pricing Level II of the table set forth above if the Company fails to deliver the consolidated financial statements required to be delivered by it pursuant to Section 6.01(a) or (b)  and the Compliance Certificate delivered in connection therewith, as of the first Business Day after the date on which such financial statements and Compliance Certificate were required to have been delivered until the Business Day after delivery thereof. In the event the Consolidated Leverage Ratio in any Compliance Certificate is later determined to have been inaccurate, the Applicable Rate shall be adjusted retroactively to the date of delivery of such inaccurate Compliance Certificate to the percentage corresponding to the correct Consolidated Leverage Ratio for that date, and such adjusted Applicable Rate shall be applicable for the same period as that period during which the Applicable Rate was incorrectly determined based on the original inaccurate Consolidated Leverage Ratio.

" Applicable Revolving Credit Percentage " means, with respect to any Revolving Lender at any time, the percentage (carried out to the ninth decimal place) of the Aggregate Revolving Credit Commitments represented by such Revolving Lender’s Revolving Credit Commitment at such time; provided , however , for the purposes of Section 2.13 , in the event that a Revolving Lender does not make a Revolving Loan to a Designated Borrower as permitted under Section 2.15 , then the Applicable Revolving Credit Percentage for such Revolving Lender with respect to such Revolving Loan it did not advance shall be zero, and for each other Revolving Lender with respect to such Revolving Loan shall be determined by subtracting from the Aggregate Revolving Credit Commitments such nonfunding Revolving Lender’s Revolving Commitment. If the commitment of each Revolving Lender to make Revolving Loans and the obligation of the L/C Issuer to make L/C Credit Extensions have been terminated pursuant to Section 8.02 or if the Aggregate Revolving Credit Commitments have expired, then the Applicable Revolving Credit Percentage of each Revolving Lender shall be determined based on the Applicable Revolving Credit Percentage of such Revolving Lender most recently in effect, giving effect to any subsequent assignments. The initial Applicable Revolving Credit Percentage

4

of each Revolving Lender is set forth opposite the name of such Revolving Lender on Schedule 2.01 or in the Assignment and Assumption pursuant to which such Revolving Lender becomes a party hereto, as applicable.

" Applicable Time " means, with respect to any borrowings and payments in any Alternative Currency, the local time in the place of settlement for such Alternative Currency as may be determined by the Administrative Agent or the L/C Issuer, as the case may be, to be necessary for timely settlement on the relevant date in accordance with normal banking procedures in the place of payment.

" Applicant Borrower " has the meaning specified in Section 2.15 .

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

" Arranger " means Banc of America Securities LLC, in its capacity as sole lead arranger and sole book manager.

" Assignee Group " means two or more Eligible Assignees that are Affiliates of one another or two or more Approved Funds managed by the same investment advisor.

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

" Assignment of Lease " means, collectively, the Collateral Assignment of Rights in Leases now or hereafter assigning to the Administrative Agent for the benefit of the Secured Parties all of the Company’s or any of its Subsidiaries’ interest as lessee in any real property.

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

" Audited Financial Statements " means the audited consolidated balance sheet of the Company and its Subsidiaries for the fiscal year ended December 31, 2005, and the related consolidated statements of income or operations, shareholders’ equity and cash flows for such fiscal year of the Company and its Subsidiaries, including the notes thereto.

" Availability Period " means the period from and including the Closing Date to the earliest of (a) the Revolving Credit Maturity Date, (b) the date of termination of the Aggregate Revolving Credit Commitments pursuant to Section 2.07 , and (c) the date of termination of the commitment of each Revolving Lender to make Revolving Loans and of the obligation of the L/C Issuer to make L/C Credit Extensions pursuant to Section 8.02 .

" Bank of America " means Bank of America, N.A. and its successors.

5

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

" Base Rate Loan " means a Loan that bears interest based on the Base Rate. All Base Rate Loans shall be denominated in US Dollars.

" Base Rate Revolving Loan " means a Revolving Loan that is a Base Rate Loan.

" Base Rate Segment " means a Segment that bears interest based on the Base Rate.

" Borrower " and " Borrowers " each has the meaning specified in the introductory paragraph hereto.

" Borrower Materials " has the meaning specified in Section 6.02 .

" Borrowing " means (a) a Revolving Borrowing, (b) the Term Loan Borrowing or (c) a Swing Line Borrowing, as the context may require.

" Business Day " means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the Laws of, or are in fact closed in, the state where the Administrative Agent’s Office with respect to Obligations denominated in US Dollars is located and:

• (a) if such day relates to any interest rate settings as to a Eurocurrency Rate Loan denominated in US Dollars, any fundings, disbursements, settlements and payments in US Dollars in respect of any such Eurocurrency Rate Loan, or any other dealings in US Dollars to be carried out pursuant to this Agreement in respect of any such Eurocurrency Rate Loan, means any such day on which dealings in deposits in US Dollars are conducted by and between banks in the London interbank eurodollar market;

  (b) if such day relates to any interest rate settings as to a Eurocurrency Rate Loan denominated in Euro, any fundings, disbursements, settlements and payments in Euro in respect of any such Eurocurrency Rate Loan, or any other dealings in Euro to be carried out pursuant to this Agreement in respect of any such Eurocurrency Rate Loan, means a TARGET Day;

  (c) if such day relates to any interest rate settings as to a Eurocurrency Rate Loan denominated in a currency other than US Dollars or Euro, means any such day on which dealings in deposits in the relevant currency are conducted by and between banks in the London or other applicable offshore interbank market for such currency; and

6

• (d) if such day relates to any fundings, disbursements, settlements and payments in a currency other than US Dollars or Euro in respect of a Eurocurrency Rate Loan denominated in a currency other than US Dollars or Euro, or any other dealings in any currency other than US Dollars or Euro to be carried out pursuant to this Agreement in respect of any such Eurocurrency Rate Loan (other than any interest rate settings), means any such day on which banks are open for foreign exchange business in the principal financial center of the country of such currency.

" Canadian Dollar " and " CAN$ " mean the lawful currency of Canada.

" Cash Collateralize " has the meaning specified in Section 2.04(g) .

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

" Change of Control " means an event or series of events by which:

• (a) any "person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding any employee benefit plan of such person or its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a person or group shall be deemed to have "beneficial ownership" of all securities that such person or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time (such right, an " option right ")), directly or indirectly, of 30% or more of the equity securities of the Company entitled to vote for members of the board of directors or equivalent governing body of the Company on a fully-diluted basis (and taking into account all such securities that such person or group has the right to acquire pursuant to any option right);

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

7

• (c) any Person or two or more Persons acting in concert shall have acquired by contract or otherwise the power to exercise, directly or indirectly, a controlling influence over the management or policies of the Company, or control over the equity securities of the Company entitled to vote for members of the board of directors or equivalent governing body of the Company on a fully-diluted basis (and taking into account all such securities that such Person or group has the right to acquire pursuant to any option right) representing 30% or more of the combined voting power of such securities.

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

" Code " means the Internal Revenue Code of 1986.

" Collateral " means, collectively, the assets and rights and interest in or to property of the Company or any of the other Loan Parties, whether real or personal, tangible or intangible, in which a Lien is granted or purported to be granted pursuant to the Security Instruments.

" Commitment " means, as to each Lender, the Term Loan Commitment or the Revolving Credit Commitment of such Lender, as applicable.

" Company " has the meaning specified in the introductory paragraph hereto.

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

" Consolidated Current Assets " means all assets of the Company and its Subsidiaries, determined on a consolidated basis, that would, in accordance with GAAP, be classified as current assets of a company conducting a business the same or similar to that of the Company and its Subsidiaries, after deducting adequate reserves in case a reserve is proper in accordance with GAAP.

" Consolidated Current Liabilities " means (a) all Indebtedness of the Company and its Subsidiaries that by its terms is payable on demand or matures within one year after the date of determination (excluding Indebtedness renewable or extendible, at the option of the Company or any of its Subsidiaries, to a date more than one year from such date or arising under a revolving credit or similar agreement that obligates the lender or lenders to extend credit during a period of more than one year from such date) and (b) all other items (including taxes accrued as estimated) that in accordance with GAAP would be classified as current liabilities of the Company and its Subsidiaries, determined on a consolidated basis.

" Consolidated EBITDA " means, for any period, for the Company and its Subsidiaries on a consolidated basis, an amount equal to Consolidated Net Income for such period plus (a) the following to the extent deducted in calculating such Consolidated Net Income: (i) Consolidated Interest Charges for such period, (ii) the provision for Federal, state, local and foreign income taxes payable by the Company and its Subsidiaries for such period, (iii) depreciation and

8

amortization expense for such period, (iv) non-cash stock based compensation expense for such period, (v) other extraordinary losses of the Company and its Subsidiaries reducing such Consolidated Net Income which do not represent a cash item in such period or any future period (including the amount of intellectual property research and development write-offs from the SFMT Acquisition and the DOT Acquisition), (vi) Transaction Costs not exceeding $20,000,000, and (vii) the cash charges related to the SFMT Acquisition (and not part of Transaction Costs) paid during such period so long as such cash charges are made within twelve (12) months of the consummation of the SFMT Acquisition (including the amount of severance payments made to departing SFMT employees and payout of accelerated option proceeds) and do not exceed $30,000,000 in the aggregate, and minus (b) the following to the extent included in calculating such Consolidated Net Income: (i) Federal, state, local and foreign income tax credits of the Company and its Subsidiaries for such period and (ii) all extraordinary non-cash gains and non-cash items increasing Consolidated Net Income for such period; provided , however , notwithstanding the foregoing, for purposes of determining the portion of Consolidated EBITDA attributable to SFMT and the Acquired Subsidiaries for the fiscal quarters ended June 30, 2006, September 30, 2006 and December 31, 2006, such amounts shall be as set forth on Schedule 1.01(d) .

" Consolidated Funded Indebtedness " means, as of any date of determination, for the Company and its Subsidiaries on a consolidated basis, the sum of (a) the outstanding principal amount of all obligations, whether current or long-term, for borrowed money (including Obligations hereunder) and all obligations evidenced by bonds, debentures, notes, loan agreements or other similar instruments, (b) all purchase money Indebtedness, (c) all direct obligations arising under letters of credit (including standby and commercial), bankers’ acceptances, bank guaranties, surety bonds and similar instruments, (d) all obligations in respect of the deferred purchase price of property or services (other than trade accounts payable in the ordinary course of business, other than the Total Earnout Amount and the Deferred Purchase Obligations related to the DOT Acquisition), (e) Attributable Indebtedness in respect of capital leases, (f) without duplication, all Guarantees with respect to outstanding Indebtedness of the types specified in clauses (a) through (e) above of Persons other than the Company or any Subsidiary, and (g) all Indebtedness of the types referred to in clauses (a) through (f) above of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which the Company or a Subsidiary is a general partner or joint venturer, unless such Indebtedness is expressly made non-recourse to the Company or such Subsidiary.

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

" Consolidated Interest Coverage Ratio " means, as of any date of determination, the ratio of (a) Consolidated EBITDA for the period of the four prior fiscal quarters ending on such date to (b) Consolidated Interest Charges for such period.

9

" Consolidated Leverage Ratio " means, as of any date of determination, the ratio of (a) Consolidated Funded Indebtedness as of such date to (b) Consolidated EBITDA for the period of the four fiscal quarters most recently ended.

" Consolidated Net Income " means, for any period, for the Company and its Subsidiaries on a consolidated basis, the net income of the Company and its Subsidiaries for that period.

" Consolidated Senior Secured Leverage Ratio " means, as of any date of determination, the ratio of (a) Consolidated Funded Indebtedness as of such date minus Subordinated Indebtedness minus Permitted Convertible Indebtedness as of such date minus senior unsecured Indebtedness as of such date to (b) Consolidated EBITDA for the period of the four fiscal quarters most recently ended.

" Consolidated Tangible Assets " means, as of any date of determination, Consolidated Total Assets on such date minus the book value of Intangible Assets of the Company and its Subsidiaries on such date.

" Consolidated Total Assets " means, as of any date of determination, the net book value of all assets of the Company and its Subsidiaries on such date determined on a consolidated basis in accordance with GAAP.

" Consolidated Working Capital" means, as of any date of determination, the Excess of Consolidated Current Assets over Consolidated Current Liabilities.

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

" Contingent Obligation GAAP Debt " means earnout and other contingent obligations incurred in connection with (w) Acquisitions permitted hereunder, (x) Acquisitions occurring prior to the Closing Date to the extent such obligation described in this clause (x) remains outstanding, (y) the SFMT Acquisition and (z) the DOT Acquisition, and are determined to be indebtedness in accordance with GAAP.

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

" Cost of Acquisition " means, with respect to any Acquisition, as at the date of entering into any agreement therefor, the sum of the following (without duplication): (i) the amount of any cash and fair market value of other property given as consideration, including without limitation cash and property to be given in satisfaction of Deferred Purchase Obligations, (ii) the amount (determined by using the face amount or the amount payable at maturity, whichever is greater) of any Indebtedness incurred, assumed or acquired by the Company or any Subsidiary in connection with such Acquisition, (iii) all amounts paid (including cash and the fair market value of other property given as consideration) in respect of covenants not to compete, and consulting agreements that should be recorded as acquisition costs on financial statements of the Company

10

and its Subsidiaries in accordance with GAAP, and (iv) out-of-pocket transaction costs for the services and expenses of attorneys, accountants and other consultants incurred in effecting such transaction, and other similar transaction costs so incurred and capitalized as acquisition costs in accordance with GAAP.

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

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

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

" Default Rate " means (a) when used with respect to Obligations other than Letter of Credit Fees, an interest rate equal to (i) the Base Rate plus (ii) the Applicable Rate, if any, applicable to Base Rate Loans plus (iii) 2% per annum; provided , however , that with respect to a Eurocurrency Rate Loan, the Default Rate shall be an interest rate equal to the interest rate (including any Applicable Rate and any Mandatory Cost) otherwise applicable to such Loan plus 2% per annum, and (b) when used with respect to Letter of Credit Fees, a rate equal to the Applicable Rate plus 2% per annum.

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

" Deferred Purchase Obligation " means, in connection with any Acquisition, the obligation to pay any portion of the purchase price after the closing date with respect to such Acquisition.

" Designated Borrower " has the meaning specified in the introductory paragraph hereto.

" Designated Borrower Notice " has the meaning specified in Section 2.15 .

" Designated Borrower Request and Assumption Agreement " has the meaning specified in Section 2.15 .

" Designated Borrower Sublimit " means an amount equal to the lesser of the Aggregate Revolving Credit Commitments and $100,000,000. The Designated Borrower Sublimit is part of, and not in addition to, the Aggregate Revolving Credit Commitments.

11

" Direct Foreign Subsidiary " means a Subsidiary other than a Domestic Subsidiary a majority of whose Voting Securities, or a majority of whose Subsidiary Securities, are owned by a Borrower or a Domestic Subsidiary.

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

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

" DOT Acquisition " means the acquisition of all of the spine-related product assets and associated intellectual property rights of Disc-O-Tech Medical Technologies, Ltd., a privately held Israeli company, and its U.S. subsidiary.

" Earnout Amount " shall have the meaning set forth in the Merger Agreement.

" Eligible Assignee " means any Person that meets the requirements to be an assignee under Section 10.06(b)(iii) , (v)  and (vi)  subject to such consents, if any, as may be required under Section 10.06(b)(iii) ).

" EMU " means the economic and monetary union in accordance with the Treaty of Rome 1957, as amended by the Single European Act 1986, the Maastricht Treaty of 1992 and the Amsterdam Treaty of 1998.

" EMU Legislation " means the legislative measures of the European Council for the introduction of, changeover to or operation of a single or unified European currency.

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

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

" Equity Interests " means, with respect to any Person, all of the shares of capital stock of (or other ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership

12

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

" ERISA " means the Employee Retirement Income Security Act of 1974, as amended, and any successor statute thereto, as interpreted by the rules and regulations thereunder, all as the same may be in effect from time to time. Reference to any sections of ERISA shall also be construed to refer to any successor sections.

" ERISA Affiliate " means any trade or business (whether or not incorporated) under common control with the Company within the meaning of Section 4001(a) of ERISA or which is treated as single employer with the Company under Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code).

" ERISA Event " means (a) a Reportable Event with respect to a Pension Plan; (b) a withdrawal by the Company or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by the Company or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is in reorganization; (d) the filing of a notice of intent to terminate, the treatment of a Plan amendment as a termination under Section 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension Plan or, to the knowledge of the Company, Multiemployer Plan; (e) an event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or, to the knowledge of the Company, Multiemployer Plan; or (f) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Company or any ERISA Affiliate.

" Euro " and " EUR " mean the lawful currency of the Participating Member States introduced in accordance with the EMU Legislation.

" Eurocurrency Base Rate " has the meaning specified in the definition of Eurocurrency Rate.

" Eurocurrency Rate " means for any Interest Period with respect to a Eurocurrency Rate Loan, a rate per annum determined by the Administrative Agent pursuant to the following formula:

13

Where,

" Eurocurrency Base Rate " means, for such Interest Period:

• (a) the rate per annum equal to the British Banker’s Association LIBOR Rate (" BBA LIBOR "), as published by Reuters (or other commercially available source providing quotations of BBA LIBOR as designated by the Administrative Agent from time to time) as approximately 8:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, for deposits in the relevant currency (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period.

  (b) If such rate referenced in the preceding clause (a) is not available at such time for any reason, then the "Eurocurrency Base Rate" for such Interest Period shall be the rate per annum determined by the Administrative Agent to be the rate at which deposits in the relevant currency for delivery on the first day of such Interest Period in Same Day Funds in the approximate amount of the Eurocurrency Rate Loan being made, continued or converted by Bank of America and with a term equivalent to such Interest Period would be offered by Bank of America’s London Branch (or other Bank of America branch or Affiliate) to major banks in the London or other offshore interbank market for such currency at their request at approximately 8:00 a.m. (London time) two Business Days prior to the commencement of such Interest Period.

" Eurocurrency Reserve Percentage " means, for any day during any Interest Period, the reserve percentage (expressed as a decimal, carried out to five decimal places) in effect on such day, whether or not applicable to any Lender, under regulations issued from time to time by the FRB for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirement) with respect to Eurocurrency funding (currently referred to as "Eurocurrency liabilities"). The Eurocurrency Rate for each outstanding Eurocurrency Rate Loan shall be adjusted automatically as of the effective date of any change in the Eurocurrency Reserve Percentage.

" Eurocurrency Rate Loan " means a Loan that bears interest at a rate based on the Eurocurrency Rate. Eurocurrency Rate Loans may be denominated in US Dollars or, as to Revolving Loans only, in an Alternative Currency. All Revolving Loans denominated in an Alternative Currency must be Eurocurrency Rate Loans.

" Eurocurrency Rate Segment " means a Segment that bears interest at a rate based on the Eurocurrency Rate.

" Event of Default " has the meaning specified in Section 8.01 .

" Excess Cash Flow " means, with respect to the Company and its Subsidiaries on a consolidated basis for any fiscal year, the following:

• (a) Consolidated EBITDA for such period (but adjusted to include the effect of cash losses or gains added or deducted pursuant to the definition of Consolidated EBITDA),

14

minus

• (b) the sum of (i) the change in Consolidated Working Capital as at the end of such fiscal year compared to Consolidated Working Capital as at the end of the immediately preceding fiscal year; plus (ii) capital expenditures to the extent permitted by Section 7.11 paid in cash during such period; plus (iii) Consolidated Interest Charges paid in cash for such period; plus (iv) taxes paid in cash for such period and added in the calculation of Consolidated EBITDA pursuant to the definition thereof; plus (v) the aggregate amount of all scheduled payments of Consolidated Funded Indebtedness made during such period; plus (vi) the aggregate amount of any optional prepayments of the Term Loan and of Revolving Loans made by the Company pursuant to Section 2.06 hereof during such period; plus (vii) the aggregate amount of any mandatory prepayments of the Term Loan and of Revolving Loans made by the Company pursuant to Section 2.06A hereof during such period; plus (viii) Transaction Costs up to $20,000,000, plus (ix)   the cash charges related to the SFMT Acquisition (and not part of Transaction Costs) paid during such period so long as such cash charges are made within twelve (12) months of the consummation of the SFMT Acquisition (including the amount of severance payments made to departing SFMT employees and payout of accelerated option proceeds) and do not exceed $30,000,000 in the aggregate; plus (x) Permitted Earnout Distributions paid in cash.

" Excluded Taxes " means, with respect to the Administrative Agent, any Lender, the L/C Issuer or any other recipient of any payment to be made by or on account of any obligation of any Borrower hereunder, (a) taxes imposed on or measured by its overall net income (however denominated), and franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction (or any political subdivision thereof) under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable Lending Office is located, (b) any branch profits taxes imposed by the United States or any similar tax imposed by any other jurisdiction in which such Borrower is located and (c) in the case of a Foreign Lender (other than an assignee pursuant to a request by the Company under Section 10.13 ), any withholding tax that is imposed on amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party hereto (or designates a new Lending Office) or is attributable to such Foreign Lender’s failure or inability (other than as a result of a Change in Law) to comply with Section 3.01(e) , except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new Lending Office (or assignment), to receive additional amounts from the applicable Borrower with respect to such withholding tax pursuant to Section 3.01(a) .

" Existing Credit Agreement " means that certain Credit Agreement dated as of October 20, 2006, by and among the Company, the Designated Borrowers, Bank of America, as administrative agent, and the lenders party thereto (as from time to time amended, restated, supplemented or otherwise modified prior to the date hereof),

" Existing Letter of Credit " means that certain Standby Letter of Credit No. 3083707 issued by Bank of America, N.A. on August 14, 2006 for the benefit of Credit Suisse with an expiry date of August 15, 2007.

15

" Extraordinary Receipts " means cash payments received by the Company or its Subsidiaries in respect of any property or casualty insurance claim or any condemnation proceeding.

" Facility " means the Term Loan Facility or the Revolving Credit Facility, as the context may require.

" Facility Termination Date " means the date as of which all of the following shall have occurred: (a) the Borrowers shall have permanently terminated the credit facilities under the Loan Documents by final payment in full of all Outstanding Amounts, together with all accrued and unpaid interest and fees thereon, other than (i) the undrawn portion of Letters of Credit and (ii) all letter of credit fees relating thereto accruing after such date (which fees shall be payable solely for the account of the L/C Issuer and shall be computed (based on interest rates and the Applicable Rate then in effect) on such undrawn amounts to the respective expiry dates of the Letters of Credit), in each case as have been fully Cash Collateralized or as to which other arrangements with respect thereto satisfactory to the Administrative Agent and the L/C Issuer shall have been made; (b) all Commitments shall have terminated or expired; (c) the obligations and liabilities of the Borrowers and each other Loan Party under all Related Credit Arrangements shall have been fully, finally and irrevocably paid and satisfied in full and the Related Credit Arrangements shall have expired or been terminated, or other arrangements satisfactory to the applicable Related Credit Arrangement Providers shall have been made with respect thereto; and (d) the Borrowers and each other Loan Party shall have fully, finally and irrevocably paid and satisfied in full all of their respective obligations and liabilities arising under the Loan Documents, including with respect to the Borrowers and the Obligations (except for future obligations consisting of continuing indemnities and other contingent Obligations of any Borrower or any Loan Party that may be owing to any of its Related Parties or any Lender pursuant to the Loan Documents and expressly survive termination of the Credit Agreement or any other Loan Document).

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

" Fee Letter " means the letter agreement, dated August 31, 2006, among the Company, the Administrative Agent and the Arranger.

" First Earnout Amount " shall have the meaning set forth in the Merger Agreement.

" Foreign Lender " means, with respect to any Borrower, any Lender that is organized under the laws of a jurisdiction other than that in which such Borrower is resident for tax purposes. For purposes of this definition, the United States, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.

16

" Foreign Obligor " means a Loan Party that is a Foreign Subsidiary.

" Foreign Subsidiary " means any Subsidiary that is organized under the laws of a jurisdiction other than the United States, a State thereof or the District of Columbia.

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

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

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

" Governmental Authority " means the government of the United States or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).

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

17

not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith. The term "Guarantee" as a verb has a corresponding meaning.

" Guarantors " means, (i) with respect to the Obligations of the Company hereunder, collectively, each Domestic Subsidiary of the Company (other than InnoSpine, unless it becomes a Guarantor pursuant to Section 6.14 ), and (ii) with respect to the Obligations of each Designated Borrower hereunder, the Company.

" Guaranty " means that certain Guaranty Agreement executed by the Guarantors in favor of the Administrative Agent and the Lenders, substantially in the form of Exhibit F , as supplemented from time to time by execution and delivery of Guaranty Joinder Agreements pursuant to Section 6.12 .

" Guaranty Joinder Agreement " means each Guaranty Joinder Agreement, substantially in the form thereof attached to the Guaranty, executed and delivered by a Domestic Subsidiary to the Administrative Agent pursuant to Section 6.13 .

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

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

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

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

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

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

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

  (f) capital leases;

18

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

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

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

" Indemnified Taxes " means Taxes other than Excluded Taxes.

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

" Information " has the meaning specified in Section 10.07 .

" InnoSpine " means InnoSpine, Inc., a Delaware corporation.

" Intangible Assets " means assets that are considered to be intangible assets under GAAP, including customer lists, goodwill, computer software, copyrights, trade names, trademarks, patents, franchises, licenses, unamortized deferred charges, unamortized debt discount and capitalized research and development costs.

" Interest Payment Date " means, (a) as to any Loan or Segment other than a Base Rate Loan or Base Rate Segment, the last day of each Interest Period applicable to such Loan and the Revolving Credit Maturity Date or the Term Loan Maturity Date, as applicable; provided , however , that if any Interest Period for a Eurocurrency Rate Loan exceeds three months, the respective dates that fall every three months after the beginning of such Interest Period shall also be Interest Payment Dates; and (b) as to any Base Rate Loan or any Base Rate Segment (including a Swing Line Loan), the last Business Day of each March, June, September and December and the Revolving Credit Maturity Date or the Term Loan Maturity Date, as applicable.

" Interest Period " means, as to each Eurocurrency Rate Loan and each Eurocurrency Rate Segment, the period commencing on the date such Eurocurrency Rate Loan or such Eurocurrency Rate Segment is disbursed or converted to or continued as a Eurocurrency Rate Loan or a Eurocurrency Rate Segment and ending on the date one, two, three or six months thereafter, as selected by the Company in its Revolving Loan Notice or Term Loan Interest Rate Selection Notice; provided that:

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

19

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

  (iii) no Interest Period shall extend beyond the Revolving Credit Maturity Date or the Term Loan Maturity Date, as applicable.

" Internal Control Event " means a material weakness in, or fraud that involves management or other employees who have a significant role in, the Company’s internal controls over financial reporting, in each case as described in the Securities Laws.

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

" IP Rights " has the meaning specified in Section 5.18 .

" IP Security Agreement " means that certain Intellectual Property Security Agreement dated as of the Closing Date made by the Company and each of its Domestic Subsidiaries in favor of the Administrative Agent for the benefit of the Secured Parties, substantially in the form of Exhibit G attached hereto, as supplemented from time to by the execution and delivery of IP Security Joinder Agreements pursuant to Section 6.13 or otherwise.

" IP Security Joinder Agreement " means each Intellectual Property Security Joinder Agreement, substantially in the form thereof attached to the Security Agreement, executed and delivered by the Company and each of its Domestic Subsidiaries, as applicable, to the Administrative Agent pursuant to Section 6.13 or otherwise.

" IRS " means the United States Internal Revenue Service.

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

20

" Issuer Documents " means with respect to any Letter of Credit, the Letter of Credit Application, and any other document, agreement and instrument entered into by the L/C Issuer and the Company (or any Subsidiary) or in favor the L/C Issuer and relating to such Letter of Credit.

" KYPH Swiss Shares " means the 34.9% ownership interest in Kyphon SARL to be transferred by the Company and held by InnoSpine.

" Laws " means, collectively, all international, foreign, Federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.

" L/C Advance " means, with respect to each Revolving Lender, such Revolving Lender’s funding of its participation in any L/C Borrowing in accordance with its Applicable Revolving Credit Percentage. All L/C Advances shall be denominated in US Dollars.

" L/C Borrowing " means an extension of credit resulting from a drawing under any Letter of Credit which has not been reimbursed on the date when made or refinanced as a Revolving Borrowing. All L/C Borrowings shall be denominated in US Dollars.

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

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

" L/C Obligations " means, as at any date of determination, the aggregate amount available to be drawn under all outstanding Letters of Credit plus the aggregate of all Unreimbursed Amounts, including all L/C Borrowings. For purposes of computing the amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.09 . For all purposes of this Agreement, if on any date of determination a Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP, such Letter of Credit shall be deemed to be "outstanding" in the amount so remaining available to be drawn.

" Leased Real Estate Support Documents " means, with respect to any real property which is leased or sub-leased to the Company or any of its Subsidiaries, such landlord and mortgagee waivers and nondisturbance agreements, third party consents, mortgagee title insurance policies (in amounts and with endorsements reasonably acceptable to the Administrative Agent), surveys, environmental assessment reports, flood hazard certifications, evidence of flood insurance, if required, and other mortgage-related documents as the Administrative Agent may reasonably request.

21

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

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

" Letter of Credit " means any letter of credit issued hereunder and shall include the Existing Letter of Credit. Letters of Credit may only be issued in US Dollars and may only be issued as standby letters of credit.

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

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

" Letter of Credit Fee " has the meaning specified in Section 2.04(i) .

" Letter of Credit Sublimit " means an amount equal to $50,000,000. The Letter of Credit Sublimit is part of, and not in addition to, the Aggregate Revolving Credit Commitments.

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

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

" Loan Documents " means this Agreement, each Designated Borrower Request and Assumption Agreement, each Note, each Issuer Document, the Fee Letter, each Revolving Loan Notice, each Term Loan Interest Rate Selection Notice, the Guaranty (including each Guaranty Joinder Agreement) and the Security Instruments.

" Loan Parties " means, collectively, the Company, each Guarantor and each Designated Borrower.

" Mandatory Cost " means, with respect to any period, the percentage rate per annum determined in accordance with Schedule 1.01(a) .

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

22

" Material Real Property Interest " means all owned or leased real property other than office space or warehouse space having less than 3,000 square feet.

" Merger Agreement " means that certain Agreement and Plan of Merger dated as of December 4, 2006, by and among Kyphon Inc., Neptune Acquisition Sub, Inc., and St. Francis Medical Technologies, Inc., and, with respect to Article VII only, Philip M. Young as Stockholders’ Representative, without alteration, amendment, change, supplement or waiver of any material condition therein (in each case, in a manner materially adverse to the interests of the Lenders), without the prior written consent of the Lenders, which shall not be unreasonably withheld.

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

" Mortgage " means, individually or collectively as the context may indicate, those mortgages, deeds of trust, deeds to secure debt and comparable real estate Lien documents delivered on or after the Closing Date to the Administrative Agent with respect to any Mortgaged Property, substantially in the form attached hereto as Exhibit H .

" Mortgaged Property " means collectively, (i) as at the Closing Date, the owned or leased properties of the Loan Parties more particularly described in Schedule 1.01(b) , and (ii) thereafter such other properties as are required by the terms hereof to be added to the Mortgaged Property.

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

" Neptune " has the meaning specified in the second introductory paragraph hereto.

" Net Cash Proceeds " means the aggregate proceeds in cash or cash equivalents received by the Company or any of its Subsidiaries (including cash received by way of deferred payment pursuant to a note receivable or otherwise, but only when and as so received) in respect of (i) the Disposition of any property or assets, (ii) the issuance of any additional Equity Interests of the Company or any Subsidiary, (iii) the issuance or incurrence of any Consolidated Funded Indebtedness (including, without limitation, any cash received upon the sale or other disposition of any noncash consideration received in connection with (i), (ii) or (iii) above), net of the direct costs relating to (i), (ii) or (iii) above (including taxes, legal, accounting and investment banking and other customary fees and expenses, and sales commissions) and net of the direct costs relating to (ii) and (iii) above incurred prior to or within seven (7) days of the issuance of such Indebtedness or Equity Interests and paid or payable as a result of any call spread or simultaneous purchase and sale of call options for the same number of shares issued with respect to such Indebtedness or issuance of Equity Interests in an aggregate amount up to fifteen percent (15%) of the gross proceeds received by the Company and its Subsidiaries from such Indebtedness or issuance of Equity Interests, or (iv) Extraordinary Receipts.

23

" Note " means a promissory note made by a Borrower in favor of a Lender evidencing Loans made by such Lender (in its capacity as a Revolving Lender or a Term Loan Lender) to such Borrower, substantially in the form of Exhibit C .

" Obligations " means all advances to, and debts, liabilities, obligations, covenants and duties of, any Loan Party arising under any Loan Document or otherwise with respect to any Loan, Letter of Credit or Related Credit Arrangement, whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against any Loan Party or any Affiliate thereof of any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding.

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

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

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

" Overnight Rate " means, for any day, (a) with respect to any amount denominated in US Dollars, the greater of (i) the Federal Funds Rate and (ii) an overnight rate determined by the Administrative Agent, the L/C Issuer, or the Swing Line Lender, as the case may be, in accordance with banking industry rules on interbank compensation, and (b) with respect to any

24

amount denominated in an Alternative Currency, the rate of interest per annum at which overnight deposits in the applicable Alternative Currency, in an amount approximately equal to the amount with respect to which such rate is being determined, would be offered for such day by a branch or Affiliate of Bank of America in the applicable offshore interbank market for such currency to major banks in such interbank market.

" Owned Real Estate Support Documents " means, with respect to any real property which is owned by the Company or any of its Subsidiaries in fee simple, such mortgagee title insurance policies (in amounts and with endorsements reasonably acceptable to the Administrative Agent), surveys, environmental assessment reports, flood hazard certifications, evidence of flood insurance, if required, and other mortgage-related documents as the Administrative Agent may reasonably request.

" Parent Stock " has the meaning specified in each Stockholder Support Agreement.

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

" Participating Member State " means each state so described in any EMU Legislation.

" PBGC " means the Pension Benefit Guaranty Corporation.

" PCAOB " means the Public Company Accounting Oversight Board.

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

" Permitted Acquisition " means any Acquisition or any series of related Acquisitions made after the date hereof by any Loan Party of a Person or any division, line of business or other business unit of such Person (such Person or such division, line of business or other business unit of such Person referred to herein as the " Target "), in each case that is a type of business (or assets used in a type of business) permitted to be engaged in by the Loan Parties pursuant to this Agreement, so long as (a) no Default or Event of Default shall then exist or would exist after giving effect thereto, (b) to the extent required under this Agreement, the Administrative Agent, on behalf the Lenders, shall have received (or shall receive in connection with the closing of such Acquisition), a first priority perfected security interest in all domestic property with such exceptions as are consistent with Permitted Liens or otherwise reasonably approved by the Administrative Agent (including, without limitation, Equity Interests) acquired with respect to the Target and the Target and its Domestic Subsidiaries, if a Person, shall have executed a Guaranty Joinder Agreement, Mortgage, Security Joinder Agreement, IP Security Joinder Agreement, Pledge Joinder Agreement and other documents, as may be required by Section 6.13 hereof, (c) such Acquisition is not a "hostile" Acquisition and, if required by applicable law, has been approved by the board of directors and/or shareholders (or comparable persons or groups) of the applicable Loan Party and the Target, (d) the Costs of Acquisition (excluding the Equity Interest of the applicable Loan Party and any transaction fee for service

25

providers) paid for the Target acquired in such Acquisition or series of related Acquisitions are paid 100% in Equity Interests or, if paid in cash, shall not exceed (A) if the Consolidated Senior Secured Leverage Ratio after giving effect to such Acquisition and any related transactions is equal to or greater than 2.50 to 1.00, $40,000,000 for any individual Acquisition (or series of related Acquisitions) or, together with all Acquisition Earnouts, $100,000,000 (of which only $25,000,000 in the aggregate may be Acquisition or portions of Acquisitions involving assets situated outside the United States of America or the Equity Interests of any Person organized outside the United States of America) in the aggregate during the term of this Agreement or (B) if the Consolidated Senior Secured Leverage Ratio after giving effect to such Acquisition and any related transactions is less than 2.50 to 1.00, $75,000,000 for any individual Acquisition (or series of related Acquisitions) or, together with all Acquisition Earnouts, $150,000,000 (of which only $25,000,000 in the aggregate may be Acquisition or portions of Acquisitions involving assets situated outside the United States of America or the Equity Interests of any Person organized outside the United States of America) in the aggregate during the term of this Agreement, (e) to the extent the Costs of Acquisition of any Permitted Acquisition is in excess of $15,000,000, the Target shall have earnings before interest, taxes, depreciation and amortization in an amount greater than $0, determined on a pro forma basis for the period of twelve months most recently ended, (f) after giving effect to such Acquisition, there shall be at least $25,000,000 of borrowing availability under the Revolving Credit Facility, (g) the Administrative Agent shall have received a certificate from a Responsible Officer of the Company certifying that, in the reasonable judgment of the Loan Parties, the Loan Parties have conducted such financial, legal, environmental and consulting due diligence with respect to the Target as a substantially similarly situated prudent purchaser acquiring substantially similar property and/or assets would customarily conduct, and (h) to the extent the Costs of Acquisition of any Permitted Acquisition is in excess of $15,000,000 or the Company requests a Revolving Borrowing to fund such Permitted Acquisition, the Company shall use its best efforts to provide not less than fifteen (15) days and in any event not less than ten (10) days prior to the consummation of such Permitted Acquisition (i) a reasonably detailed description of the material terms of such Permitted Acquisition (including, without limitation, the purchase price and method and structure of payment) and of each Target, (ii) to the extent available, financial statements of the Target for the previous two years and year-to-date financial statements of the Target, and (ii) a certificate, in form and substance reasonably satisfactory to the Administrative Agent, executed by a Responsible Officer of the Company (A) setting forth the best good faith estimate of the Costs of Acquisition to be paid for each Target, (B) certifying that such Permitted Acquisition complies with the requirements of this Agreement, and (C) certifying and demonstrating that after giving effect to such Permitted Acquisition and any borrowings in connection therewith on a pro forma basis, the Company and its Subsidiaries will be in compliance with the financial covenants set forth in Section 7.10 .

" Permitted Convertible Indebtedness " means Indebtedness of the Company in the form of unsecured convertible notes with respect to which (a) no portion of the principal of such Indebtedness shall have a stated maturity date prior to the date that is five years after the Closing Date; and (b) such Indebtedness (i) in the Company’s good faith business judgment, has no more restrictive terms in the aggregate than the terms under this Agreement, and (ii) has no provisions limiting amendments to, or consents, waivers or other modifications with respect to, this Agreement or any other Loan Document.

26

" Permitted Earnout Distributions " means, collectively, all cash payments of an Earnout Amount, and all payments of an Earnout Amount in Parent Stock, to the extent either or both are permitted under Section 7.14 .

" Permitted Lien " means any Lien permitted by Section 7.01 .

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

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

" Platform " has the meaning specified in Section 6.02 .

" Pledge Agreement " means that certain Pledge Agreement dated as of the Closing Date made by the Company and each Subsidiary in favor of the Administrative Agent for the benefit of the Secured Parties, substantially in the form of Exhibit I attached hereto, as supplemented from time to by the execution and delivery of Pledge Joinder Agreements pursuant to Section 6.13 or otherwise.

" Pledge Agreement Supplement " means, with respect to the Pledge Agreement, the Pledge Agreement Supplement in the form affixed as an Exhibit to the Pledge Agreement.

" Pledge Joinder Agreement " means each Pledge Joinder Agreement, substantially in the form thereof attached to the Pledge Agreement, executed and delivered by the Company or a Subsidiary, as applicable, to the Administrative Agent pursuant to Section 6.13 hereof or otherwise.

" Pro Rata Term Share " means, with respect to each Term Loan Lender, the percentage (carried out to the ninth decimal place) of the principal amount of the Term Loan funded by such Term Loan Lender, after giving effect to any subsequent assignments made pursuant to the terms hereof. The initial Pro Rata Term Share of each Term Loan Lender is set forth opposite the name of such Term Loan Lender on Schedule 2.01 or in the Assignment and Assumption pursuant to which such Term Loan Lender becomes a party hereto, as applicable.

" Rating Agency " means any of S&P and Moody’s.

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

" Registered Public Accounting Firm " has the meaning specified in the Securities Laws and shall be independent of the Company as prescribed by the Securities Laws.

" Related Credit Arrangement Provider " means any Person that, at the time it enters into a Swap Contract or Treasury Management Arrangement, as the case may be is (a) a Lender or (b) an Affiliate of a Lender that has executed and delivered a letter of undertaking in the form of Exhibit J hereto to the Administrative Agent.

27

" Related Credit Arrangements " means, collectively, Related Swap Contracts and Related Treasury Management Arrangements.

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

" Related Swap Contract " means a Swap Contract which is permitted under Articles VI and VII of this Agreement and which is entered into or maintained by or for the benefit of any Loan Party with a Related Credit Arrangement Provider.

" Related Treasury Management Arrangement " means a Treasury Management Arrangement which is permitted under Articles VI and VII of this Agreement and which is entered into or maintained by or for the benefit of any Loan Party with a Related Credit Arrangement Provider.

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

" Request for Credit Extension " means (a) with respect to a Borrowing, conversion or continuation of Revolving Loans, a Revolving Loan Notice, (b) with respect to a conversion or continuation of Segments, a Term Loan Interest Rate Selection Notice, (c) with respect to an L/C Credit Extension, a Letter of Credit Application, and (d) with respect to a Swing Line Loan, a Swing Line Loan Notice.

" Required Lenders " means, as of any date of determination, Lenders having more than 50% of the Aggregate Commitments or, if the commitment of each Revolving Lender to make Loans and the obligation of the L/C Issuer to make L/C Credit Extensions have been terminated pursuant to Section 8.02 , Lenders holding in the aggregate more than 50% of the Total Outstandings (with the aggregate amount of each Lender’s risk participation and funded participation in L/C Obligations and Swing Line Loans being deemed "held" by such Lender for purposes of this definition); provided that the Commitment of, and the portion of the Total Outstandings held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required Lenders.

" Required Revolving Lenders " means, as of any date of determination, Revolving Lenders having more than 50% of the Aggregate Revolving Credit Commitments or, if the commitment of each Revolving Lender to make Revolving Loans and the obligation of the L/C Issuer to make L/C Credit Extensions have been terminated pursuant to Section 8.02 , Revolving Lenders holding in the aggregate more than 50% of the Total Revolving Credit Outstandings (with the aggregate amount of each Revolving Lender’s risk participation and funded participation in L/C Obligations and Swing Line Loans being deemed "held" by such Revolving Lender for purposes of this definition); provided that the Revolving Credit Commitment of, and the portion of the Outstanding Amount (including risk participations in Letters of Credit) under the Revolving Credit Facility held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required Revolving Lenders.

28

" Required Term Loan Lenders " means, as of any date of determination, Term Loan Lenders having more than 50% of the Outstanding Amount of the Term Loan.

" Responsible Officer " means any one of the President and Chief Executive Officer; Vice President, Chief Operating Officer; and Vice President, Legal Affairs & General Counsel together with any one of the Vice President, Chief Financial Officer; Corporate Controller; and Director, Treasury & Tax, all of the Company. Any document delivered hereunder that is signed by a Responsible Officer of the Company shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of any Loan Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Loan Party.

" Restricted Payment " means any dividend or other distribution (whether in cash, securities or other property) with respect to any capital stock or other Equity Interest of the Company or any Subsidiary, any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such capital stock or other Equity Interest, or on account of any return of capital to the Company’s stockholders, partners or members (or the equivalent Person thereof), or the issuance of any Equity Interest in any Subsidiary to any Person other than the Company or a Subsidiary of the Company.

" Revaluation Date " means with respect to any Revolving Loan, each of the following: (i) each date of a Borrowing of a Eurocurrency Rate Loan denominated in an Alternative Currency, (ii) each date of a continuation of a Eurocurrency Rate Loan denominated in an Alternative Currency pursuant to Section 2.02 , and (iii) such additional dates as the Administrative Agent shall determine or the Required Revolving Lenders shall require.

" Revolving Borrowing " means a borrowing consisting of simultaneous Revolving Loans of the same Type, in the same currency and, in the case of Eurocurrency Rate Loans, having the same Interest Period made by each of the Lenders pursuant to Section 2.01 .

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

" Revolving Credit Facility " means the facility described in Article II providing for Revolving Loans, Swing Line Loans and Letters of Credit to or for the benefit the Company and any other Borrower by the Revolving Lenders, Swing Line Lender or L/C Issuer, as the case may be, in the maximum aggregate principal US Dollar Equivalent amount at any time outstanding of $200,000,000, as adjusted from time to time pursuant to the terms of this Agreement.

" Revolving Credit Maturity Date " means (a) October 20, 2011 or (b) such earlier date upon which the Aggregate Revolving Credit Commitments shall be terminated in accordance

29

with the terms hereof and upon which the Outstanding Amount of Revolving Loans, Swing Line Loans and L/C Obligations, including all accrued and unpaid interest, are due and payable or are otherwise paid in full in accordance with the terms hereof; provided , however , that if such date is not a Business Day, the Revolving Credit Maturity Date shall be the next preceding Business Day.

" Revolving Lender " means each Lender that has a Revolving Credit Commitment or, following termination of the Revolving Credit Commitments, has Revolving Loans outstanding.

" Revolving Loan " has the meaning specified in Section 2.01 .

" Revolving Loan Notice " means a notice of (a) a Revolving Borrowing, (b) a conversion of Revolving Loans from one Type to the other, or (c) a continuation of Eurocurrency Rate Loans, pursuant to Section 2.03(a) , which, if in writing, shall be substantially in the form of Exhibit A-1 .

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

" Same Day Funds " means (a) with respect to disbursements and payments in US Dollars, immediately available funds, and (b) with respect to disbursements and payments in an Alternative Currency, same day or other funds as may be determined by the Administrative Agent or the L/C Issuer, as the case may be, to be customary in the place of disbursement or payment for the settlement of international banking transactions in the relevant Alternative Currency.

" Sarbanes-Oxley " means the Sarbanes-Oxley Act of 2002.

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

" Second Earnout Amount " shall have the meaning set forth in the Merger Agreement.

" Secured Parties " means, collectively, with respect to the Security Instruments, the Administrative Agent, the Lenders, and each Person who is party to a Related Credit Arrangement.

" Security Agreement " means that certain Security Agreement dated as of the Closing Date made by the Company and each of its Domestic Subsidiaries in favor of the Administrative Agent for the benefit of the Secured Parties, substantially in the form of Exhibit K attached hereto, as supplemented from time to by the execution and delivery of Security Joinder Agreements pursuant to Section 6.13 or otherwise.

" Security Instruments " means, collectively or individually as the context may indicate, the Security Agreement (and any Security Joinder Agreement), the IP Security Agreement (and any IP Security Joinder Agreement), the Mortgages, the Assignments of Lease, the Pledge Agreement (including each Pledge Joinder Agreement and Pledge Agreement Supplement) and all other agreements (including control agreements), instruments and other documents, whether

30

now existing or hereafter in effect, pursuant to which the Company, any Domestic Subsidiary or any other Person shall grant or convey to the Administrative Agent or the Lenders a Lien in, or any other Person shall acknowledge any such Lien in, property as security for all or any portion of the Obligations and any obligation or liability arising under any Related Credit Arrangement.

" Security Joinder Agreement " means each Security Joinder Agreement, substantially in the form thereof attached to the Security Agreement, executed and delivered by the Company and each of its Subsidiaries, as applicable, to the Administrative Agent pursuant to Section 6.13 or otherwise.

" Securities Laws " means the Securities Act of 1933, the Securities Exchange Act of 1934, Sarbanes-Oxley and the applicable accounting and auditing principles, rules, standards and practices promulgated, approved or incorporated by the SEC or the PCAOB.

" Segment " means a portion of the Term Loan (or all of the Term Loan), in each case with respect to which a particular interest rate is (or is proposed to be) applicable.

" Senior Credit Facilities " means, collectively, the Term Loan Facility and the Revolving Credit Facility.

" SFMT " has the meaning specified in the second introductory paragraph hereto.

" SFMT Acquisition " has the meaning specified in the second introductory paragraph hereto.

" SFMT Europe " has the meaning specified in the second introductory paragraph hereto.

" SFMT Initial Acquisition Price " means an amount not in excess of $525,000,000 in initial cash payments payable at the closing of the Transaction.

" SFMT UK " has the meaning specified in the second introductory paragraph hereto.

" Solvent " means, when used with respect to any Person, that at the time of determination:

• (a) the fair value of its assets (at fair valuation) is in excess of the total amount of its liabilities, including contingent obligations; and

  (b) the present fair saleable value of the assets of such Person will, as of such date, be greater than the amount that will be required to pay the probable liability of such Person on its debts as such debts become absolute and matured; and

  (c) it is then able and expects to be able to pay its debts as they mature; and

  (d) it has capital sufficient to carry on its business as conducted and as proposed to be conducted.

  The amount of contingent liabilities at any time shall be computed as the amount that can reasonably be expected to become an actual or matured liability.

31

" Specified Credit Agreement Representations " means the representations and warranties set forth in Sections 5.01 , 5.02 , 5.03 , 5.04 , 5.07 , 5.14 and 5.20 of this Agreement.

" Specified Transaction Document Representations " means the representations and warranties made by SFMT, SFMT Europe and SFMT UK to the Company and Neptune in the Merger Agreement, in each case without giving effect to any consent or waiver by any party to the Merger Agreement to any exception thereto or deviation therefrom.

" Spot Rate " for a currency means the rate determined by the Administrative Agent to be the rate quoted by the Person acting in such capacity as the spot rate for the purchase by such Person of such currency with another currency through its principal foreign exchange trading office at approximately 8:00 a.m. on the date two Business Days prior to the date as of which the foreign exchange computation is made; provided that the Administrative Agent may obtain such spot rate from another financial institution designated by the Administrative Agent if the Person acting in such capacity does not have as of the date of determination a spot buying rate for any such currency.

" Sterling " and " £ " mean the lawful currency of the United Kingdom.

" Stockholder " has the meaning set forth in the Stockholder Support Agreements.

" Stockholder Support Agreement " means any of the Stockholder Support Agreements set forth on Schedule 1.01(c) , in the form delivered to and approved by the Administrative Agent on December 4, 2006, without alteration, amendment, change, supplement or waiver of any material condition therein (in each case, in a manner materially adverse to the interests of the Lenders), without the prior written consent of the Lenders, which shall not be unreasonably withheld

" Subordinated Indebtedness " means subordinated financing (other than any Subordinated Indebtedness constituting Permitted Convertible Indebtedness) provided to the Company or a Subsidiary by any Person for any purpose so long as (a) there is no scheduled payment of principal, or optional or mandatory payments of principal, at any time any Obligation hereunder shall remain unpaid or unsatisfied, (b) the term thereof is longer than the term of this Agreement, and (c) such financing (i) is made on an unsecured basis, (ii) in the Company’s good faith business judgment, has no more restrictive terms in the aggregate than the terms under this Agreement, (iii) has no provisions limiting amendments to, or consents, waivers or other modifications with respect to, this Agreement or any other Loan Document, and (iv) is expressly subordinate to rights of enforcement and collection of the Lenders under this Agreement and any other Loan Document.

" Subsidiary " as determined in accordance with GAAP. Unless otherwise specified, all references herein to a "Subsidiary" or to "Subsidiaries" shall refer to a Subsidiary or Subsidiaries of the Company.

" Subsidiary Securities " means the Equity Interests issued by or equity participations in any Subsidiary, whether or not constituting a "security" under Article 8 of the Uniform Commercial Code as in effect in any jurisdiction.

32

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

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

" Swing Line " means the revolving credit facility made available by the Swing Line Lender pursuant to Section 2.05 .

" Swing Line Borrowing " means a borrowing of a Swing Line Loan pursuant to Section 2.05 .

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

" Swing Line Loan " has the meaning specified in Section 2.05(a) . Swing Line Loans may only be in US Dollars.

" Swing Line Loan Notice " means a notice of a Swing Line Borrowing pursuant to Section 2.05(b) , which, if in writing, shall be substantially in the form of Exhibit B .

" Swing Line Sublimit " means an amount equal to the lesser of the Aggregate Commitments and $25,000,000. The Swing Line Sublimit is part of, and not in addition to, the Aggregate Commitments.

" Swiss Franc " and " F " mean the lawful currency of Switzerland.

33

" TARGET Day " means any day on which the Trans-European Automated Real-time Gross Settlement Express Transfer (TARGET) payment system (or, if such payment system ceases to be operative, such other payment system (if any) determined by the Administrative Agent to be a suitable replacement) is open for the settlement of payments in Euro.

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

" Term Loan " means, individually or in the aggregate as the context may indicate, the loans made by the Term Loan Lenders pursuant to the Term Loan Facility in accordance with Section 2.02 . The Term Loan shall be in US Dollars.

" Term Loan Borrowing " means the borrowing by the Company on the Closing Date consisting of simultaneous Term Loans of the same Type and, as to Eurocurrency Rate Loans, having the same Interest Period made by each of the Term Loan Lenders pursuant to Section 2.02 .

" Term Loan Commitment " means, as to each Term Loan Lender, its obligation to fund on the Closing Date its portion of the Term Loan Borrowing pursuant to Section 2.02 in a principal amount not to exceed the amount set forth opposite such Term Loan Lender’s name on Schedule 2.01 , and at all times after such funding on the Closing Date there shall no longer be any Term Loan Commitment in effect for any Term Loan Lender.

" Term Loan Facility " means the facility described in Section 2.01 providing for a Term Loan to the Company by the Term Loan Lenders in the initial principal amount of $425,000,000.

" Term Loan Interest Rate Selection Notice " means a notice of (a) the election of a subsequent Interest Period for any Eurocurrency Segment, (b) the conversion of any Eurocurrency Segment to a Base Rate Segment or (c) the conversion of any Base Rate Segment to a Eurocurrency Rate Segment, pursuant to Section 2.03 , which, if in writing, shall be substantially in the form of Exhibit A-2 .

" Term Loan Lender " means each Lender that has a Term Loan Commitment or a Term Loan outstanding.

" Term Loan Maturity Date " means the earliest of (a) January 17, 2014; (b) the date that is one month prior to the stated maturity date of any portion of any Permitted Convertible Indebtedness then outstanding; or (c) such earlier date upon which the Outstanding Amounts under the Term Loan, including all accrued and unpaid interest, are due and payable or are otherwise paid in full in accordance with the terms hereof; provided , however , that if such date is not a Business Day, the Term Loan Maturity Date shall be the next preceding Business Day.

" Threshold Amount " means $15,000,000.

" Total Earnout Amount " shall have the meaning set forth in the Merger Agreement.

34

" Total Outstandings " means at any date of determination thereof, the aggregate Outstanding Amount of (a) the Term Loan, (b) the Revolving Loans, (c) the L/C Obligations and (d) the Swing Line Loans.

" Total Revolving Credit Outstandings " means, at any date of determination thereof, the Outstanding Amount of Revolving Loans, L/C Obligations and Swing Line Loans.

" Transaction " means the SFMT Acquisition pursuant to the terms of the Transaction Documents, for an aggregate consideration not to exceed the SFMT Initial Acquisition Price plus the Total Earnout Amount, and the entering into the Senior Credit Facilities and financing thereunder of a portion of the SFMT Initial Acquisition Price with the Term Loan and Revolving Loans on the Closing Date.

" Transaction Costs " means non-recurring out-of-pocket costs, fees and expenses, paid by any of the Loan Parties in connection with the closing of the transactions evidenced by any of the Transaction Documents and the Loan Documents, including, fees due under the Fee Letter, attorneys’ fees, accountants’ fees and investment banking fees.

" Transaction Documents " means, collectively, the Merger Agreement, the Stockholder Support Agreements, the Disclosure Letter, the Loan Documents and all other agreements, instruments and documents relating to the SFMT Acquisition.

" Treasury Management Arrangement " means any agreement to provide cash management services, including treasury, depository, overdraft, credit or debit card, electronic funds transfer and other cash management arrangements.

" Type " means, with respect to a Revolving Loan, Term Loan or Segment, its character as a Base Rate Loan or a Eurocurrency Rate Loan.

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

" United States " and " U.S. " mean the United States of America.

" Unreimbursed Amount " has the meaning specified in Section 2.04(c)(i) .

" US Dollar " and " US$ " mean lawful money of the United States.

" US Dollar Equivalent " means, at any time, (a) with respect to any amount denominated in US Dollars, such amount, and (b) with respect to any amount denominated in any Alternative Currency, the equivalent amount thereof in US Dollars as determined by the Administrative Agent or the L/C Issuer, as the case may be, at such time on the basis of the Spot Rate (determined in respect of the most recent Revaluation Date) for the purchase of US Dollars with such Alternative Currency.

35

" Voting Securities " means Equity Interests issued by any other Person, the holders of which are ordinarily, in the absence of contingencies, entitled to vote for the election of directors (or persons performing similar functions) of such Person, even if the right so to vote has been suspended by the happening of such a contingency.

" Yen " and " ¥ " mean the lawful currency of Japan.

1.02 Other Interpretive Provisions. With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document:

• (a) The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words " include ," " includes " and " including " shall be deemed to be followed by the phrase "without limitation." The word " will " shall be construed to have the same meaning and effect as the word " shall ." Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument or other document (including any Organization Document) shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein or in any other Loan Document), (ii) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (iii) the words " herein ," " hereof " and " hereunder ," and words of similar import when used in any Loan Document, shall be construed to refer to such Loan Document in its entirety and not to any particular provision thereof, (iv) all references in a Loan Document to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, the Loan Document in which such references appear, (v) any reference to any law shall include all statutory and regulatory provisions consolidating, amending, replacing or interpreting such law and any reference to any law or regulation shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time, and (vi) the words " asset " and " property " shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

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

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

1.03 Accounting Terms. (a)  Generally . All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP applied on a consistent basis, as in effect from time to time, applied in a manner consistent with that used in preparing the Audited Financial Statements, except as otherwise specifically prescribed herein.

36

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

(c) Consolidation of Variable Interest Entities . All references herein to consolidated financial statements of the Borrower and its Subsidiaries or to the determination of any amount for the Borrower and its Subsidiaries on a consolidated basis or any similar reference shall, in each case, be deemed to include each variable interest entity that the Borrower is required to consolidate pursuant to FASB Interpretation No. 46 – Consolidation of Variable Interest Entities: an interpretation of ARB No. 51 (January 2003) as if such variable interest entity were a Subsidiary as defined herein.

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

1.05 Exchange Rates; Currency Equivalents. (a) The Administrative Agent or the L/C Issuer, as applicable, shall determine the Spot Rates as of each Revaluation Date to be used for calculating US Dollar Equivalent amounts of Credit Extensions and Outstanding Amounts denominated in Alternative Currencies. Such Spot Rates shall become effective as of such Revaluation Date and shall be the Spot Rates employed in converting any amounts between the applicable currencies until the next Revaluation Date to occur. Except for purposes of financial statements delivered by Loan Parties hereunder or calculating financial covenants hereunder or except as otherwise provided herein, the applicable amount of any currency (other than US Dollars) for purposes of the Loan Documents shall be such US Dollar Equivalent amount as so determined by the Administrative Agent or the L/C Issuer, as applicable.

(b) Wherever in this Agreement in connection with a Revolving Borrowing, conversion, continuation or prepayment of a Eurocurrency Rate Loan such as a required minimum or multiple amount, is expressed in US Dollars, but such Revolving Borrowing, Eurocurrency Rate Loan or Letter of Credit is denominated in an Alternative Currency, such amount shall be the relevant Alternative Currency Equivalent of such US Dollar amount (rounded to the nearest unit of such Alternative Currency, with 0.5 of a unit being rounded upward), as determined by the Administrative Agent.

37

1.06 Accounting for Acquisitions . With respect to any Acquisition consummated on or after the Closing Date, the following shall apply:

(a) For each period of four fiscal quarters ending next following the date of any Acquisition, Consolidated EBITDA shall include the results of operations of the Person or assets so acquired on a historical pro forma basis to the extent information in sufficient detail concerning such historical results of such Person or assets is reasonably available, and which amounts shall include only adjustments reasonably satisfactory to the Administrative Agent and shall not include any increases to Consolidated EBITDA relative to synergies resulting from such Acquisition other than those permitted pursuant to Regulation S-X of the SEC; and

(b) For each period of four fiscal quarters ending next following the date of each Acquisition, Consolidated Interest Charges shall include the results of operations of the Person or assets so acquired determined on a historical pro forma basis to the extent information in sufficient detail concerning such historical results of such Person or assets is reasonably available; provided , that, Consolidated Interest Charges shall be adjusted on a historical pro forma basis to (i) eliminate interest expense accrued during such period on any Indebtedness repaid in connection with such Acquisition and (ii) include interest expense on any Indebtedness (including Indebtedness hereunder) incurred, acquired or assumed in connection with such Acquisition (" Incremental Debt ") calculated (x) as if all such Incremental Debt had been incurred as of the first day of such four fiscal quarter period and (y) at the following interest rates: (I) for all periods subsequent to the date of the Acquisition and for Incremental Debt assumed or acquired in the Acquisition and in effect prior to the date of Acquisition, at the actual rates of interest applicable thereto, and (II) for all periods prior to the actual incurrence of such Incremental Debt, equal to the average daily rate of interest actually applicable to such Incremental Debt hereunder or under other financing documents applicable thereto, as the case may be.

1.07 Change of Currency. (a) Each obligation of the Borrowers to make a payment denominated in the national currency unit of any member state of the European Union that adopts the Euro as its lawful currency after the date hereof shall be redenominated into Euro at the time of such adoption (in accordance with the EMU Legislation). If, in relation to the currency of any such member state, the basis of accrual of interest expressed in this Agreement in respect of that currency shall be inconsistent with any convention or practice in the London interbank market for the basis of accrual of interest in respect of the Euro, such expressed basis shall be replaced by such convention or practice with effect from the date on which such member state adopts the Euro as its lawful currency; provided that if any Revolving Borrowing in the currency of such member state is outstanding immediately prior to such date, such replacement shall take effect, with respect to such Revolving Borrowing, at the end of the then current Interest Period.

(b) Each provision of this Agreement shall be subject to such reasonable changes of construction as the Administrative Agent may from time to time specify to be appropriate to reflect the adoption of the Euro by any member state of the European Union and any relevant market conventions or practices relating to the Euro.

38

(c) Each provision of this Agreement also shall be subject to such reasonable changes of construction as the Administrative Agent may from time to time specify to be appropriate to reflect a change in currency of any other country and any relevant market conventions or practices relating to the change in currency.

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

1.09 Letter of Credit Amounts. Unless otherwise specified herein, the amount of a Letter of Credit at any time shall be deemed to be the US Dollar Equivalent of the stated amount of such Letter of Credit in effect at such time; provided, however, that with respect to any Letter of Credit that, by its terms or the terms of any Issuer Document related thereto, provides for one or more automatic increases in the stated amount thereof, the amount of such Letter of Credit shall be deemed to be the US Dollar Equivalent of the maximum stated amount of such Letter of Credit after giving effect to all such increases, whether or not such maximum stated amount is in effect at such time.

ARTICLE II.

THE COMMITMENTS AND CREDIT EXTENSIONS

2.01 Revolving Loans. Subject to the terms and conditions set forth herein, each Revolving Lender severally agrees to make loans (each such loan, a " Revolving Loan ") to the Borrowers in US Dollars or in one or more Alternative Currencies from time to time, on any Business Day during the Availability Period, in an aggregate amount not to exceed at any time outstanding the amount of such Revolving Lender’s Revolving Credit Commitment; provided , however , that after giving effect to any Revolving Borrowing, (i) the Total Outstandings shall not exceed the Aggregate Commitments, (ii) the Total Revolving Credit Outstandings shall not exceed the Aggregate Revolving Credit Commitments, (iii) the aggregate Outstanding Amount of the Revolving Loans of any Lender, plus such Lender’s Applicable Revolving Credit Percentage of the Outstanding Amount of all L/C Obligations, plus such Lender’s Applicable Revolving Credit Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed such Lender’s Revolving Credit Commitment, (iv) the aggregate Outstanding Amount of all Revolving Loans made to the Designated Borrowers shall not exceed the Designated Borrower Sublimit; and (v) the aggregate Outstanding Amount of all Revolving Loans denominated in Alternative Currencies shall not exceed the Alternative Currency Sublimit. Within the limits of each Revolving Lender’s Revolving Credit Commitment, and subject to the other terms and conditions hereof, the Borrowers may borrow under this Section 2.01 , prepay under Section 2.06 , and reborrow under this Section 2.01 . Revolving Loans may be Base Rate Loans or Eurocurrency Rate Loans, as further provided herein.

2.02 Term Loan. (a) Subject to the terms and conditions of this Agreement, each Term Loan Lender severally agrees to make an advance in US Dollars of its Pro Rata Term Share of the Term Loan to the Borrower on the Closing Date. The principal amount of each Segment of the Term Loan outstanding hereunder from time to time shall bear interest and the principal amount of the Term Loan shall be repayable, each as herein provided. No amount of the Term Loan repaid or prepaid by the Borrower may be reborrowed hereunder, and no subsequent advances of Term Loan amounts shall be made by any Term Loan Lender after the initial advance on the Closing Date.

39

(b) Not later than 1:00 P.M. on the Closing Date, each Term Loan Lender shall, pursuant to the terms and subject to the conditions of this Agreement, make the amount of its Pro Rata Term Share of the Term Loan available by wire transfer to the Administrative Agent. Such wire transfer shall be directed to the Administrative Agent at the Administrative Agent’s Office and shall be in the form of immediately available, freely transferable US Dollars. The amount so received by the Administrative Agent shall, subject to the terms and conditions of this Agreement, be made available to the Borrower by delivery of the proceeds thereof as shall be directed by a Responsible Officer and reasonably acceptable to the Administrative Agent. The initial Borrowing of the Term Loan shall be a single Base Rate Segment, subject to conversion after the Closing Date in accordance with a Term Loan Interest Rate Selection Notice.

2.03 Borrowings, Conversions and Continuations.

(a) Each Revolving Borrowing, each conversion of Revolving Loans or Segments of the Term Loan from one Type to the other, and each continuation of Eurocurrency Rate Loans shall be made upon the Company’s irrevocable notice to the Administrative Agent, which may be given by telephone. Each such notice must be received by the Administrative Agent not later than 8:00 a.m. (i) three Business Days prior to the requested date of any Borrowing of, conversion to or continuation of Eurocurrency Rate Loans or Eurocurrency Rate Segments denominated in US Dollars or of any conversion of Eurocurrency Rate Loans denominated in US Dollars to Base Rate Revolving Loans or any conversion of Eurocurrency Rate Segments to Base Rate Segments, (ii) four Business Days prior to the requested date of any Revolving Borrowing or continuation of Eurocurrency Rate Loans denominated in Alternative Currencies (other than Yen), (iii) five Business Days prior to the requested date of any Revolving Borrowing or continuation of Eurocurrency Rate Loans denominated in Yen, and (iv) on the requested date of any Borrowing of Base Rate Revolving Loans. Each telephonic notice by the Company pursuant to this Section 2.03(a) must be confirmed promptly by delivery to the Administrative Agent of a written Revolving Loan Notice or Term Loan Interest Rate Selection Notice, as applicable, appropriately completed and signed by a Responsible Officer of the Company. Each Borrowing of, conversion to or continuation of Eurocurrency Rate Loans and Eurocurrency Rate Segments shall be in a principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof. Except as provided in Sections 2.03(c) and 2.04(c) , each Revolving Borrowing of or conversion to Base Rate Revolving Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof. Each Revolving Loan Notice (whether telephonic or written) shall specify (i) whether the Company is requesting a Revolving Borrowing, a conversion of Revolving Loans from one Type to the other, or a continuation of Eurocurrency Rate Loans, (ii) the requested date of the Borrowing, conversion or continuation, as the case may be (which shall be a Business Day), (iii) the principal amount of Revolving Loans to be borrowed, converted or continued, (iv) the Type of Revolving Loans to be borrowed or to which existing Revolving Loans are to be converted, (v) if applicable, the duration of the Interest Period with respect thereto, (vi) the currency of the Revolving Loans to be borrowed, (vii) if applicable, the Designated Borrower, and (viii) shall be substantially in the form of Exhibit A-1 attached hereto. If the Company fails to specify a currency in a Revolving Loan Notice requesting a Borrowing, then the Revolving Loans so requested shall be made in US Dollars. Each Term Loan Interest

40

Rate Selection Notice (whether telephonic or written) shall specify (i) whether the Company is requesting a conversion of Segments from one Type to the other, or a continuation of Eurocurrency Rate Segment, (ii) the requested date of the conversion or continuation, as the case may be (which shall be a Business Day), (iii) the principal amount of Segments to be converted or continued, (iv) the Type of Segment to which existing Segments are to be converted, (v) if applicable, the duration of the Interest Period with respect thereto, and (vi) shall be substantially in the form of Exhibit A-2 attached hereto. If the Company fails to specify a Type of Loan in a Loan Notice with respect to a Revolving Loan or a Type of Segment in a Loan Notice with respect to a Segment, or if the Company fails to give a timely notice requesting a conversion or continuation, then the applicable Revolving Loans and Segments shall be made as, or converted to, Base Rate Loans or Base Rate Segments, respectively; provided , however , that in the case of a failure to timely request a continuation of Revolving Loans denominated in an Alternative Currency, such Loans shall be continued as Eurocurrency Rate Loans in their original currency with an Interest Period of one month. Any automatic conversion to Base Rate Loans or Base Rate Segments shall be effective as of the last day of the Interest Period then in effect with respect to the applicable Eurocurrency Rate Loans or Eurocurrency Rate Segments, respectively. If the Company requests a Borrowing of, conversion to, or continuation of Eurocurrency Rate Loans or Eurocurrency Rate Segments, respectively, in any such Revolving Loan Notice or Term Loan Interest Rate Selection Notice, but fails to specify an Interest Period, it will be deemed to have specified an Interest Period of one month. No Revolving Loan may be converted into or continued as a Revolving Loan denominated in a different currency, but instead must be prepaid in the original currency of such Revolving Loan and reborrowed in the other currency. No Segment may be in a currency other than US Dollars.

(b) Following receipt of a Revolving Loan Notice, the Administrative Agent shall promptly notify each Revolving Lender of the amount (and currency) of its Applicable Revolving Credit Percentage of the applicable Revolving Loans, and if no timely notice of a conversion or continuation is provided by the Company, the Administrative Agent shall notify each Revolving Lender of the details of any automatic conversion to Base Rate Loans or continuation of Revolving Loans denominated in a currency other than US Dollars, in each case as described in the preceding subsection. In the case of a Revolving Borrowing, each Revolving Lender (unless provided otherwise in Section 2.15 ) shall make the amount of its Revolving Loan available to the Administrative Agent in Same Day Funds at the Administrative Agent’s Office for the applicable currency not later than 10:00 a.m., in the case of any Revolving Loan denominated in US Dollars, and not later than the Applicable Time specified by the Administrative Agent in the case of any Revolving Loan in an Alternative Currency, in each case on the Business Day specified in the applicable Revolving Loan Notice. Upon satisfaction of the applicable conditions set forth in Section 4.02 (and, if such Revolving Borrowing is the initial Credit Extension, Section 4.01 ), the Administrative Agent shall make all funds so received available to the Company or the other applicable Borrower in like funds as received by the Administrative Agent either by (i) crediting the account of such Borrower on the books of Bank of America with the amount of such funds or (ii) wire transfer of such funds, in each case in accordance with instructions provided to (and reasonably acceptable to) the Administrative Agent by the Company; provided , however , that if, on the date the Revolving Loan Notice with respect to such Revolving Borrowing denominated in US Dollars is given by the Company, there are L/C Borrowings outstanding, then the proceeds of such Revolving Borrowing, first , shall be applied to the payment in full of any such L/C Borrowings, and, second , shall be made available to the applicable Borrower as provided above.

41

(c) Following receipt of a Term Loan Interest Rate Selection Notice with respect to a Segment of the Term Loan, the Administrative Agent shall promptly notify each Term Loan Lender of the amount of its Pro Rate Term Share of the applicable Segment, and if no timely notice of a conversion or continuation is provided by the Company, the Administrative Agent shall notify each Term Loan Lender of the details of any automatic conversion to Base Rate Segments described in subsection (a).

(d) Except as otherwise provided herein, a Eurocurrency Rate Loan and a Eurocurrency Rate Segment may be continued or converted only on the last day of an Interest Period for such Eurocurrency Rate Loan. During the existence of a Default, no Segments may be converted to or continued as Eurocurrency Rate Segments without the consent of the Required Term Loan Lenders. During the existence of a Default, no Revolving Loans may be requested as, converted to or continued as Eurocurrency Rate Loans (whether in US Dollars or any Alternative Currency) without the consent of the Required Revolving Lenders, and the Required Revolving Lenders may demand that any or all of the then outstanding Eurocurrency Rate Loans denominated in an Alternative Currency be prepaid, or redenominated into US Dollars in the amount of the US Dollar Equivalent thereof, on the last day of the then current Interest Period with respect thereto.

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

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

2.04 Letters of Credit.

(a) The Letter of Credit Commitment .

• (i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in reliance upon the agreements of the Revolving Lenders set forth in this Section 2.04 , (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit denominated in US Dollars for the account of the Company or its Subsidiaries, and to amend or extend Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to honor drawings under the Letters of Credit; and (B) the Revolving Lenders severally agree to participate in Letters of Credit issued for the account of the Company or its Subsidiaries and any drawings thereunder; provided that after giving effect to any L/C

42

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

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

  • • (A) subject to Section 2.04(b)(iii) , the expiry date of such requested Letter of Credit would occur more than twelve months after the date of issuance or last extension, unless the Required Revolving Lenders have approved such expiry date; or

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

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

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

43

• • • (B) the issuance of such Letter of Credit would violate one or more policies of the L/C Issuer applicable to letters of credit generally;

      (C) except as otherwise agreed by the Administrative Agent and the L/C Issuer, such Letter of Credit is in an initial stated amount less than $500,000;

      (D) except as otherwise agreed by the Administrative Agent and the L/C Issuer, such Letter of Credit is to be denominated in a currency other than US Dollars; or

      (E) a default of any Revolving Lender’s obligations to fund under Section 2.04(c) exists or any Revolving Lender is at such time a Defaulting Lender hereunder, unless the L/C Issuer has entered into satisfactory arrangements with the Company or such Lender to eliminate the L/C Issuer’s risk with respect to such Revolving Lender.

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

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

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

(b) Procedures for Issuance and Amendment of Letters of Credit; Auto-Extension Letters of Credit .

• (i) Each Letter of Credit shall be issued or amended, as the case may be, upon the request of the Company delivered to the L/C Issuer (with a copy to the Administrative Agent) in the form of a Letter of Credit Application, appropriately completed and signed by a Responsible Officer of the Company. Such Letter of Credit Application must be received by the L/C Issuer and the Administrative Agent not later than 8:00 a.m. at least two Business Days (or such later date and time as the Administrative Agent and the L/C Issuer may agree in a particular instance in their sole discretion) prior to the proposed issuance date or date of amendment, as the case may be. In the case of a request for an initial issuance of a Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to the L/C Issuer: (A) the proposed issuance date of the requested Letter of Credit (which shall be a Business Day); (B) the amount thereof;

44

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

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

  (iii) If the Company so requests in any applicable Letter of Credit Application, the L/C Issuer may, in its sole and absolute discretion, agree to issue a Letter of Credit that has automatic extension provisions (each, an " Auto-Extension Letter of Credit "); provided that any such Auto-Extension Letter of Credit must permit the L/C Issuer to prevent any such extension at least once in each twelve-month period (commencing with the date of issuance of such Letter of Credit) by giving prior notice to the beneficiary thereof not later than a day (the " Non-Extension Notice Date ") in each such twelve-month period to be agreed upon at the time such Letter of Credit is issued. Unless otherwise directed by the L/C Issuer, the Company shall not be required to make a specific request to the L/C Issuer for any such extension. Once an Auto-Extension Letter of Credit has been issued, the Revolving Lenders shall be deemed to have authorized (but may not require) the L/C Issuer to permit the extension of such Letter of Credit at any time to an expiry date not later than the Letter of Credit Expiration Date; provided , however , that the L/C Issuer shall not permit any such extension if (A) the L/C Issuer has determined that it would not be permitted, or would have no obligation, at such time to issue such Letter of Credit in its revised form (as extended) under the terms hereof (by

45

• reason of the provisions of clause (ii) or (iii) of Section 2.04(a) or otherwise), or (B) it has received notice (which may be by telephone or in writing) on or before the day that is five Business Days before the Non-Extension Notice Date (1) from the Administrative Agent that the Required Revolving Lenders have elected not to permit such extension or (2) from the Administrative Agent, any Revolving Lender or the Company that one or more of the applicable conditions specified in Section 4.02 is not then satisfied, and in each such case directing the L/C Issuer not to permit such extension.

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

(c) Drawings and Reimbursements; Funding of Participations .

• (i) Upon receipt from the beneficiary of any Letter of Credit of any notice of a drawing under such Letter of Credit, the L/C Issuer shall notify the Company and the Administrative Agent thereof. Not later than 8:00 a.m. on the date of any payment by the L/C Issuer under a Letter of Credit (each such date, an " Honor Date "), the Company shall reimburse the L/C Issuer through the Administrative Agent in an amount equal to the amount of such drawing. If the Company fails to so reimburse the L/C Issuer by such time, the Administrative Agent shall promptly notify each Revolving Lender of the Honor Date, the amount of the unreimbursed drawing (the " Unreimbursed Amount "), and the amount of such Revolving Lender’s Applicable Revolving Credit Percentage thereof. In such event, the Company shall be deemed to have requested a Revolving Borrowing of Base Rate Loans to be disbursed on the Honor Date in an amount equal to the Unreimbursed Amount, without regard to the minimum and multiples specified in Section 2.03 for the principal amount of Base Rate Loans, but subject to the amount of the unutilized portion of the Aggregate Revolving Credit Commitments and the conditions set forth in Section 4.02 (other than the delivery of a Revolving Loan Notice). Any notice given by the L/C Issuer or the Administrative Agent pursuant to this Section 2.04(c)(i) may be given by telephone if immediately confirmed in writing; provided that the lack of such an immediate confirmation shall not affect the conclusiveness or binding effect of such notice.

  (ii) Each Revolving Lender shall upon any notice pursuant to Section 2.04(c)(i) make funds available to the Administrative Agent for the account of the L/C Issuer at the Administrative Agent’s Office for US Dollar-denominated payments in an amount equal to its Applicable Revolving Credit Percentage of the Unreimbursed Amount not later than 10:00 a.m. on the Business Day specified in such notice by the Administrative Agent, whereupon, subject to the provisions of Section 2.04(c)(iii) , each Revolving Lender that so makes funds available shall be deemed to have made a Base Rate Revolving Loan to the Company in such amount. The Administrative Agent shall remit the funds so received to the L/C Issuer.

  (iii) With respect to any Unreimbursed Amount that is not fully refinanced by a Revolving Borrowing of Base Rate Loans because the conditions set forth in Section

46

• 4.02 cannot be satisfied or for any other reason, the Company shall be deemed to have incurred from the L/C Issuer an L/C Borrowing in the amount of the Unreimbursed Amount that is not so refinanced, which L/C Borrowing shall be due and payable on demand (together with interest) and shall bear interest at the Default Rate. In such event, each Revolving Lender’s payment to the Administrative Agent for the account of the L/C Issuer pursuant to Section 2.04(c)(ii) shall be deemed payment in respect of its participation in such L/C Borrowing and shall constitute an L/C Advance from such Revolving Lender in satisfaction of its participation obligation under this Section 2.04 .

  (iv) Until each Revolving Lender funds its Revolving Loan or L/C Advance pursuant to this Section 2.04(c) to reimburse the L/C Issuer for any amount drawn under any Letter of Credit, interest in respect of such Lender’s Applicable Revolving Credit Percentage of such amount shall be solely for the account of the L/C Issuer.

  (v) Each Revolving Lender’s obligation to make Revolving Loans or L/C Advances to reimburse the L/C Issuer for amounts drawn under Letters of Credit, as contemplated by this Section 2.04(c) , shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any setoff, counterclaim, recoupment, defense or other right which such Revolving Lender may have against the L/C Issuer, the Company, any Subsidiary or any other Person for any reason whatsoever; (B) the occurrence or continuance of a Default, or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing; provided , however , that each Revolving Lender’s obligation to make Revolving Loans pursuant to this Section 2.04(c) is subject to the conditions set forth in Section 4.02 (other than delivery by the Company of a Revolving Loan Notice). No such making of an L/C Advance shall relieve or otherwise impair the obligation of the Company to reimburse the L/C Issuer for the amount of any payment made by the L/C Issuer under any Letter of Credit, together with interest as provided herein.

  (vi) If any Revolving Lender fails to make available to the Administrative Agent for the account of the L/C Issuer any amount required to be paid by such Revolving Lender pursuant to the foregoing provisions of this Section 2.04(c) by the time specified in Section 2.04(c)(ii) , the L/C Issuer shall be entitled to recover from such Revolving Lender (acting through the Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to the L/C Issuer at a rate per annum equal to the applicable Overnight Rate from time to time in effect, plus any administrative, processing or similar fees customarily charged by the L/C Issuer in connection with the foregoing. If such Revolving Lender pays such amount (with interest and fees as aforesaid), the amount so paid shall constitute such Revolving Lender’s Revolving Loan included in the relevant Revolving Borrowing or L/C Advance in respect of the relevant L/C Borrowing, as the case may be. A certificate of the L/C Issuer submitted to any Lender (through the Administrative Agent) with respect to any amounts owing under this clause (vi) shall be conclusive absent manifest error.

47

(d) Repayment of Participations .

• (i) At any time after the L/C Issuer has made a payment under any Letter of Credit and has received from any Revolving Lender such Revolving Lender’s L/C Advance in respect of such payment in accordance with Section 2.04(c) , if the Administrative Agent receives for the account of the L/C Issuer any payment in respect of the related Unreimbursed Amount or interest thereon (whether directly from the Company or otherwise, including proceeds of Cash Collateral applied thereto by the Administrative Agent), the Administrative Agent will distribute to such Revolving Lender its Applicable Revolving Credit Percentage thereof and in the same funds as those received by the Administrative Agent.

  (ii) If any payment received by the Administrative Agent for the account of the L/C Issuer pursuant to Section 2.04(c)(i) is required to be returned under any of the circumstances described in Section 10.05 (including pursuant to any settlement entered into by the L/C Issuer in its discretion), each Revolving Lender shall pay to the Administrative Agent for the account of the L/C Issuer its Applicable Revolving Credit Percentage thereof on demand of the Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned by such Revolving Lender, at a rate per annum equal to the applicable Overnight Rate from time to time in effect. The obligations of the Revolving Lenders under this clause shall survive the payment in full of the Obligations and the termination of this Agreement.

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

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

  (ii) the existence of any claim, counterclaim, setoff, defense or other right that the Company or any Subsidiary may have at any time against any beneficiary or any transferee of such Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting), the L/C Issuer or any other Person, whether in connection with this Agreement, the transactions contemplated hereby or by such Letter of Credit or any agreement or instrument relating thereto, or any unrelated transaction;

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

  (iv) any payment by the L/C Issuer under such Letter of Credit against presentation of a draft or certificate that does not strictly comply with the terms of such Letter of Credit; or any payment made by the L/C Issuer under such Letter of Credit to

48

• any Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver or other representative of or successor to any beneficiary or any transferee of such Letter of Credit, including any arising in connection with any proceeding under any Debtor Relief Law; or

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

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

(f) Role of L/C Issuer . Each Revolving Lender and the Company agree that, in paying any drawing under a Letter of Credit, the L/C Issuer shall not have any responsibility to obtain any document (other than any sight draft, certificates and documents expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any such document. None of the L/C Issuer, the Administrative Agent, any of their respective Related Parties nor any correspondent, participant or assignee of the L/C Issuer shall be liable to any Revolving Lender for (i) any action taken or omitted in connection herewith at the request or with the approval of the Revolving Lenders or the Required Revolving Lenders, as applicable; (ii) any action taken or omitted in the absence of gross negligence or willful misconduct; or (iii) the due execution, effectiveness, validity or enforceability of any document or instrument related to any Letter of Credit or Issuer Document. The Company hereby assumes all risks of the acts or omissions of any beneficiary or transferee with respect to its use of any Letter of Credit; provided , however , that this assumption is not intended to, and shall not, preclude the Company’s pursuing such rights and remedies as it may have against the beneficiary or transferee at law or under any other agreement. None of the L/C Issuer, the Administrative Agent, any of their respective Related Parties nor any correspondent, participant or assignee of the L/C Issuer shall be liable or responsible for any of the matters described in clauses (i) through (v) of Section 2.04(e) ; provided , however , that anything in such clauses to the contrary notwithstanding, the Company may have a claim against the L/C Issuer, and the L/C Issuer may be liable to the Company, to the extent, but only to the extent, of any direct, as opposed to consequential or exemplary, damages suffered by the Company which the Company proves were caused by the L/C Issuer’s willful misconduct or gross negligence or the L/C Issuer’s willful failure to pay under any Letter of Credit after the presentation to it by the beneficiary of a sight draft and certificate(s) strictly complying with the terms and conditions of a Letter of Credit. In furtherance and not in limitation of the foregoing, the L/C Issuer may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary, and the L/C Issuer shall not be responsible for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason.

49

(g) Cash Collateral . (i) Upon the request of the Administrative Agent, (A) if the L/C Issuer has honored any full or partial drawing request under any Letter of Credit and such drawing has resulted in an L/C Borrowing, or (B) if, as of the Letter of Credit Expiration Date, any L/C Obligation for any reason remains outstanding, the Company shall, in each case, immediately Cash Collateralize the then Outstanding Amount of all L/C Obligations.

• (ii) The Administrative Agent may, at any time and from time to time after the initial deposit of Cash Collateral, request that additional Cash Collateral be provided in order to protect against the results of exchange rate fluctuations.

  (iii) Sections 2.05 and 8.02(c) set forth certain additional requirements to deliver Cash Collateral hereunder. For purposes of this Section 2.04 , Section 2.06 and Section 8.02(c) , " Cash Collateralize " means to pledge and deposit with or deliver to the Administrative Agent, for the benefit of the L/C Issuer and the Revolving Lenders, as collateral for the L/C Obligations, cash or deposit account balances pursuant to documentation in form and substance satisfactory to the Administrative Agent and the L/C Issuer (which documents are hereby consented to by the Lenders). Derivatives of such term have corresponding meanings. The Company hereby grants to the Administrative Agent, for the benefit of the L/C Issuer and the Revolving Lenders, a security interest in all such cash, deposit accounts and all balances therein and all proceeds of the foregoing. Cash Collateral shall be maintained in blocked, non-interest bearing deposit accounts at Bank of America.

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

(i) Letter of Credit Fees . The Company shall pay to the Administrative Agent for the account of each Revolving Lender in accordance with its Applicable Revolving Credit Percentage, in US Dollars, a Letter of Credit fee (the " Letter of Credit Fee ") for each Letter of Credit equal to the Applicable Rate times the US Dollar Equivalent of the daily amount available to be drawn under such Letter of Credit. For purposes of computing the daily amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.09 . Letter of Credit Fees shall be (i) due and payable on the first Business Day after the end of each March, June, September and December, commencing with the first such date to occur after the issuance of such Letter of Credit, on the Letter of Credit Expiration Date and thereafter on demand and (ii) computed on a quarterly basis in arrears. If there is any change in the Applicable Rate during any quarter, the daily amount available to be drawn under each Letter of Credit shall be computed and multiplied by the Applicable Rate separately for each period during such quarter that such Applicable Rate was in effect. Notwithstanding anything to the contrary contained herein while any Event of Default exists, all Letter of Credit Fees shall accrue at the Default Rate, unless waived by the Required Revolving Lenders.

(j) Fronting Fee and Documentary and Processing Charges Payable to L/C Issuer . The Company shall pay directly to the L/C Issuer for its own account a fronting fee with respect to each Letter of Credit, of 0.125% per annum, computed on the daily amount available to be

50

drawn under such Letter of Credit on a quarterly basis in arrears. Such fronting fee shall be due and payable on the tenth Business Day after the end of each March, June, September and December in respect of the most recently-ended quarterly period (or portion thereof, in the case of the first payment), commencing with the first such date to occur after the issuance of such Letter of Credit, on the Letter of Credit Expiration Date and thereafter on demand. For purposes of computing the daily amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.09 . In addition, the Company shall pay directly to the L/C Issuer for its own account the customary issuance, presentation, amendment and other processing fees, and other standard costs and charges, of the L/C Issuer relating to letters of credit as from time to time in effect. Such customary fees and standard costs and charges are due and payable on demand and are nonrefundable.

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

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

2.05 Swing Line Loans.

(a) The Swing Line . Subject to the terms and conditions set forth herein, the Swing Line Lender agrees, in reliance upon the agreements of the other Lenders set forth in this Section 2.05 , to make loans in US Dollars (each such loan, a " Swing Line Loan ") to the Company from time to time on any Business Day during the Availability Period in an aggregate amount not to exceed at any time outstanding the amount of the Swing Line Sublimit, notwithstanding the fact that such Swing Line Loans, when aggregated with the Applicable Revolving Credit Percentage of the Outstanding Amount of Revolving Loans and L/C Obligations of the Lender acting as Swing Line Lender, may exceed the amount of such Lender’s Revolving Credit Commitment; provided , however , that after giving effect to any Swing Line Loan, (i) the Total Outstandings shall not exceed the Aggregate Commitments, (ii) the Total Revolving Credit Outstandings shall not exceed the Aggregate Revolving Credit Commitments, and (iii) the aggregate Outstanding Amount of the Revolving Loans of any Revolving Lender, plus such Revolving Lender’s Applicable Revolving Credit Percentage of the Outstanding Amount of all L/C Obligations, plus such Revolving Lender’s Applicable Revolving Credit Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed such Lender’s Commitment, and provided , further , that the Company shall not use the proceeds of any Swing Line Loan to refinance any outstanding Swing Line Loan. Within the foregoing limits, and subject to the other terms and conditions hereof, the Company may borrow under this Section 2.05 , prepay under Section 2.06 , and reborrow under this Section 2.05 . Each Swing Line Loan shall be a Base Rate Loan. Immediately upon the making of a Swing Line Loan, each Revolving Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Swing Line Lender a risk participation in such Swing Line Loan in an amount equal to the product of such Revolving Lender’s Applicable Revolving Credit Percentage times the amount of such Swing Line Loan.

51

(b) Borrowing Procedures . Each Swing Line Borrowing shall be made upon the Company’s irrevocable notice to the Swing Line Lender and the Administrative Agent, which may be given by telephone. Each such notice must be received by the Swing Line Lender and the Administrative Agent not later than 10:00 a.m. on the requested borrowing date, and shall specify (i) the amount to be borrowed, which shall be a minimum of $500,000, and (ii) the requested borrowing d