CREDIT AGREEMENT

CREDIT AGREEMENT

between

SUNTRUST BANK

and

NOVEN PHARMACEUTICALS, INC.

July 31, 2008

1

CREDIT AGREEMENT

Dated as of: July 31, 2008

This CREDIT AGREEMENT is made and entered into as of the date set forth above by and between NOVEN PHARMACEUTICALS, INC., a Delaware corporation authorized to transact business in Florida (“Borrower”), and SUNTRUST BANK, a state bank organized under the laws of Georgia (“Bank”). For good and valuable consideration, the receipt of which is hereby acknowledged, Borrower and Bank hereby agree as follows:

§1. TERMINOLOGY AND INTERPRETATION .

§1.1 Definitions of Capitalized Terms . When used herein, each capitalized term listed below shall have the meaning indicated below:

“Acquisition” shall mean the acquisition of (i) a controlling equity interest in another Person (including the purchase of an option, warrant or convertible or similar type security to acquire such a controlling interest at the time it becomes exercisable by the holder thereof), whether by purchase of such equity interest or upon exercise of an option or warrant for, or conversion of securities into, such equity interest, or (ii) assets of another Person which constitute all or substantially all of the assets of such Person.

“Advance” shall mean a cash loan made by Bank to Borrower pursuant to this Agreement.

“Affiliate” shall mean any Person (i) which, directly or indirectly through one or more intermediaries controls, is controlled by, or is under common control with, Borrower; or (ii) which beneficially owns or holds 20 percent or more of the aggregate voting rights for all classes of outstanding Voting Stock (or in the case of a Person which is not a corporation, 20 percent or more of the aggregate voting rights of such Person) of Borrower; or 20 percent or more of any class of the outstanding Voting Stock (or in the case of a Person which is not a corporation, 20 percent or more of the aggregate voting rights of such Person) of which is beneficially owned or held by Borrower (as used in the foregoing definition, the term “control” means, with respect to a Person, the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through ownership of Voting Stock, by contract or otherwise).

“Agreement” shall mean this Credit Agreement, as amended from time to time.

“Agreement Date” shall mean the date as of which this Agreement is dated.

“Agreement Termination Date” shall mean the date on which the Commitment Termination Date shall have occurred and Borrower shall have fully, finally and irrevocably paid and satisfied all Obligations.

“Applicable Law” shall mean (a) all applicable common law and principles of equity and (b) all applicable provisions of all (i) constitutions, statutes, rules, regulations and orders of Governmental Authorities, (ii) Governmental Approvals and (iii) orders, decisions, judgments and decrees of all courts and arbitrators.

“Authorized Representative” shall mean any of the President, Chief Executive Officer, Chief Financial Officer or Controller, Senior Director of Accounting and SEC Compliance of Borrower or, with respect to financial matters, the Chief Financial Officer or Controller, Senior Director of Accounting and SEC Compliance of Borrower, or any other Person expressly designated by the Board of Directors of Borrower (or the appropriate committee thereof) as an Authorized Representative, as set forth from time to time in a certificate in a form prescribed by Bank.

“Borrowing Account” shall mean a demand deposit account established by Borrower with Bank (or any substitute account established by Borrower with Bank).

“Borrowing Notice” shall mean a notice delivered by an Authorized Representative in connection with an Advance in a form prescribed by Bank.

“Business Day” shall mean a day (other than a Saturday) on which most banks are open for general commercial business in Miami, Florida (“day”, as used herein, means a calendar day).

“Capital Securities” shall mean, with respect to any Person, any shares of capital stock of such Person or any security convertible into, or any option, warrant or other right to acquire, any shares of capital stock of such Person.

“Change of Control” shall mean any “person” or “group” (each as used in §§13(d)(3) and 14(d)(2) of the Securities Exchange Act of 1934) other than the present controlling group (and/or any trusts or other entities owned or controlled by him or them) either (i) becomes the “beneficial owner” (as defined in Rule 13d-3 of the Securities Exchange Act of 1934), directly or indirectly, of Voting Stock of Borrower (or securities convertible into or exchangeable for such Voting Stock) representing more than 50 percent of the combined voting power of all Voting Stock of Borrower or (ii) otherwise attains the ability, through an express contractual arrangement, to elect a majority of the board of directors of Borrower.

“Code” shall mean the Internal Revenue Code of 1986, as amended and in effect from time to time.

“Commitment Termination Date” shall mean the date that falls one year after the Agreement Date.

“Consequential Loss” shall mean, with respect to any prepayment of all or part of an Advance, any loss or expense actually incurred by Bank (by reason of liquidation or reemployment of deposits or other funds acquired by Bank to make, continue or maintain all or any part of the principal amount prepaid) as a result of such prepayment.

“Consistent Basis” shall mean, in reference to GAAP, that the accounting principles observed in such period are comparable in all material respects to those applied in the preparation of the audited financial statements of Borrower previously delivered to Bank.

“Contract” shall mean an indenture, agreement (other than this Agreement and any other Credit Document), other contractual restriction, lease, instrument (other than the Note), certificate of incorporation or charter, or bylaw.

“Copyright” shall mean any of the following: any copyright or general intangible of like nature (whether registered or unregistered), any registration or recording thereof, and any application in connection therewith, including any registration, recording and application in the United States Copyright Office or in any similar office or agency of the United States, any state or territory thereof, or any other country or any political subdivision thereof.

“Covered Assets” shall have the meaning given that term in the Negative Pledge Agreement.

“Credit Documents” shall mean this Agreement, the Note, the Negative Pledge Agreement, any other documents delivered by Borrower to Bank in connection with this Agreement, all as amended from time to time.

“Debt” shall mean any of the following: (i) indebtedness or liability for borrowed money, (ii) obligations evidenced by bonds, notes, or other similar instruments, (iii) obligations for the deferred purchase price of property or services (excluding trade obligations incurred in the ordinary course of Borrower’s business), (iv) obligations as lessee under capital leases, (v) current liabilities in respect of unfunded vested benefits under plans covered by the Employee Retirement Income Security Act of 1974, as amended, (vi) obligations under letters of credit or acceptance facilities, (vii) all guarantees, endorsements (other than for collection or deposit in the ordinary course of business) and other contingent obligations to purchase, to provide funds for payment, or otherwise to assure creditors against loss, and (viii) obligations secured by any mortgage, lien, pledge or security interest or other charge or encumbrance on property, whether or not the obligations have been assumed.

“Default” shall mean any condition or event which constitutes an Event of Default or which with the giving of notice or lapse of time or both would, unless cured or waived (or, in the case of a judgment, action or proceeding, dismissed), become an Event of Default.

“Default Rate” shall mean a floating per annum rate equal to 2.00 percent above the rate then applicable to Advances hereunder.

“Dollars” and “$” shall mean lawful money of the United States of America.

“Employee Benefit Plan” shall mean any employee benefit plan within the meaning of Section 3(3) of ERISA which (i) is maintained for employees of Borrower or any of its ERISA Affiliates or is assumed by Borrower or any of its ERISA Affiliates in connection with any Acquisition or (ii) has at any time been maintained for the employees of Borrower or any current or former ERISA Affiliate.

“Environmental Law” shall mean any federal, state or local statute, law, ordinance, code, rule, regulation, order, decree, permit or license regulating, relating to, or imposing liability or standards of conduct concerning, any environmental matters, conditions, protection or conservation, including without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended; the Superfund Amendments and Reauthorization Act of 1986, as amended; the Resource Conservation and Recovery Act, as amended; the Toxic Substances Control Act, as amended; the Clean Air Act, as amended; the Clean Water Act, as amended; together with all regulations promulgated thereunder, and any other “Superfund” or “Superlien” law.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as in effect from time to time.

“ERISA Affiliate”, shall mean, with respect to Borrower, any Person or trade or business which is a member of a group which is under common control with Borrower, and which, together with Borrower, is treated as a single employer within the meaning of Section 414(b) and (c) of the Code.

“Event of Default” shall have the meaning given it in §7.1.

“Facility Limit” shall mean $15,000,000.00, subject to reduction pursuant to §2.7(b).

“Fiscal Year” shall mean the twelve-month fiscal period of Borrower commencing on January 1 ^st of each calendar year and ending on December 31 ^st of such calendar year.

“GAAP” shall mean accounting principles that are consistent with the principles promulgated or adopted by the Financial Accounting Standards Board and its predecessors, as in effect in the United States from time to time.

“Governmental Approval” shall mean an authorization, consent, approval, license or exemption of, registration or filing with, or report or notice to, any Governmental Authority, including, without limitation, any such approval required under ERISA or by the PBGC.

“Governmental Authority” shall mean any Federal, state, municipal, national or other governmental department, commission, board, bureau, court, agency or instrumentality or political subdivision thereof or any entity or officer exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to any government or any court, in each case whether associated with the United States of America, a state thereof, or a foreign entity or government.

“Hazardous Material” shall mean any pollutant, contaminant or hazardous, toxic or dangerous waste, substance or material (including without limitation petroleum products, asbestos-containing materials and lead) the generation, handling, storage, transportation, disposal, treatment, release, discharge or emission of which is subject to any Environmental Law.

“Information” shall mean written data, services, reports, statements (including, but not limited to, financial statements delivered pursuant to or referred to in §§6.1(a) and 6.1(b)), opinions of counsel, documents and other written information, whether, in the case of any such in writing, it was prepared by Borrower or any other Person on behalf of Borrower and delivered by Borrower to Bank.

“Intellectual Property” shall mean all licenses, Patents, Copyrights, Trademarks, trade names and customer lists in which Borrower has any interest and all technology, know-how and processes relating to any inventory of Borrower.

“Interest Period” shall mean the period beginning on the date the initial Advance is made and ending on the first Business Day of the following month and successive one-month periods each ending on the first Business Day of a month and each beginning when the previous one ends.

“LIBOR Rate” shall mean, with respect to any Interest Period, the per annum rate which is equal to the quotient of: (a) the per annum rate equal to the offered rate for Dollars for a one-month period, which rate appears on the page of Bloomberg Reporting Service, or such similar service as determined by Bank, that displays British Bankers’ Association interest settlement rates for deposits in Dollars as of 11:00 A.M. (London, England time) two Business Days prior to the first day of such Interest Period; provided that if no such offered rate appears on such page, the rate used for such Interest Period will be the per annum rate of interest determined by Bank to be the rate at which one-month Dollar deposits are offered to Bank in the London interbank market as of 11:00 A.M. (London, England time) on the day which is two Business Days prior to the first day of such Interest Period, divided by (b) a percentage equal to 100 percent minus the maximum reserve percentage (including any emergency, supplemental, special or other marginal reserves) (rounded upward to the next 1/100th of 1.00 percent, if not already a whole multiple of such fraction of a percent) in effect on any day on which Bank is subject to regulations issued by the Board of Governors of the Federal Reserve System with respect to eurocurrency funding (currently referred to as “eurocurrency liabilities” under Regulation D)(this percentage will be adjusted automatically on and as of the effective date of any change in any such reserve percentage).

“Lien” shall mean any lien, security interest or other charge or encumbrance, or any other type of preferential arrangement, upon or with respect to any properties or assets (other than licenses granted by Borrower in the ordinary course of its business).

“Material Adverse Effect” shall mean any material and adverse effect (whether occasioned by one or a number of concurrent events) upon (a) Borrower’s assets, business operations, properties or condition, financial or otherwise, or (b) the ability of Borrower to make payment as and when due of all or any part of the Obligations.

“Negative Pledge Agreement” shall mean the Negative Pledge Agreement, dated as of the date hereof, executed by Borrower and each Subsidiary in favor of Bank, as amended or restated from time to time.

“Note” shall mean the Revolving Promissory Note, of even date herewith, made by Borrower to Bank’s order in the principal amount of $15,000,000.00, and any modification, renewal or consolidation thereof or substitute therefor.

“Novogyne Joint Venture” shall mean Vivelle Ventures, LLC, a Delaware limited liability company established pursuant to the Formation Agreement, dated as of May 1, 1998, by and between Borrower and Novartis Pharmaceuticals Corporation.

“Novogyne Joint Venture Agreement” shall mean the Operating Agreement of Vivelle Ventures, LLC, dated as of May 1, 1998, between Borrower and Novartis Pharmaceuticals Corporation.

“Obligations” shall mean all indebtedness, liabilities, obligations and duties of Borrower to Bank arising under or in connection with this Agreement, the Note or any other Credit Documents, direct or indirect, absolute or contingent, due or not due, in contract or tort, liquidated or unliquidated, arising by operation of law or otherwise, now existing or hereafter arising, and whether or not for the payment of money or the performance or non-performance of any act, including, but not limited to, all actual damages which Borrower may owe to Bank by reason of any breach by Borrower of any Representation and Warranty, covenant, agreement or other provision of this Agreement or any of the other Credit Documents.

“PBGC” shall mean the Pension Benefit Guaranty Corporation.

“Patent” shall mean any of the following: (a) patents and letters patent of the United States or any other country, and all registrations and recordings thereof and applications therefor, including registrations, recordings and applications in the United States Patent and Trademark Office or an any similar office or agency of the United States, any state or territory thereof, or any other country, and (b) all reissues, continuations or extensions of any of the foregoing.

“Pension Plan” shall mean any employee pension benefit plan within the meaning of Section 3(2) of ERISA, other than a Multiemployer Plan, which is subject to the provisions of Title IV or ERISA or Section 412 of the Code and which (i) is maintained for employees of Borrower or any of its ERISA Affiliates or is assumed by Borrower or any of its ERISA Affiliates in connection with any Acquisition or (ii) has at any time been maintained for the employees of Borrower or any current or former ERISA Affiliate.

“Person” shall mean an individual, corporation, partnership, limited liability company, trust or unincorporated organization or a government or any agency or political subdivision thereof.

“Prime Rate” shall mean Bank’s Prime Rate as quoted or otherwise established by Bank from time to time (or, if Bank ceases to quote or otherwise establish a Prime Rate, a comparable index selected by Bank) (the Prime Rate is purely a discretionary benchmark and is not necessarily the lowest or most favorable rate at which Bank extends credit to its customers).

“Rate Hedging Obligations” shall mean any and all obligations and liabilities of Borrower to Bank, whether absolute or contingent and however and whenever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor), under (i) any and all agreements, devices or arrangements designed to protect at least one of the parties thereto from the fluctuations of interest rates, exchange rates or forward rates applicable to such party’s assets, liabilities or exchange transactions, including but not limited to Dollar-denominated or cross-currency interest rate exchange agreements, forward currency exchange agreements, interest rate cap or collar protection agreements, forward rate currency or interest rate options, puts, warrants and those commonly known as interest rate “swap” agreements; and (ii) any and all cancellations, buybacks, reversals, terminations or assignments of any of the foregoing.

“Regulation D” shall mean Regulation D of the Board of Governors of the Federal Reserve System, as in effect from time to time, and any regulation successor thereto.

“Regulation U” shall mean Regulation U of the Board of Governors of the Federal Reserve System, as in effect from time to time, and any regulation successor thereto.

“Representation and Warranty” shall mean each representation and warranty made by Borrower pursuant to or under (a) §4 or any other provision of this Agreement or any other Credit Document, (b) any amendment of or waiver or consent under this Agreement, (c) any Schedule to this Agreement or any such amendment, waiver or consent, or (d) any statement contained in any certificate, financial statement, or other instrument or document delivered by or on behalf of Borrower pursuant to any Credit Document, whether or not (except as expressly provided to the contrary herein), in the case of any representation or warranty referred to in clause (a), (b), (c) or (d) of this definition, the information that is the subject matter thereof is within the knowledge of Borrower.

“Solvent” shall mean, when used with respect to any Person, that at the time of determination: (a) the book value of its assets is in excess of the total amount of its liabilities, including contingent Obligations; (b) it is then able and expects to be able to pay its debts as they mature; and (c) it has capital sufficient to carry on its business as conducted and as proposed to be conducted.

“Subsidiary” shall mean any corporation or other entity in which 50 percent or more of its outstanding Voting Stock or 50 percent or more of all equity interests is owned directly or indirectly by Borrower and/or by one or more of Borrower’s Subsidiaries.

“Tax” shall mean any federal, state or foreign tax, assessment or other governmental charge or levy (including any withholding tax) upon a Person or upon its assets, revenues, income or profits other than income and franchise taxes imposed upon Bank by the federal government or the State of Florida (or any political subdivision thereof).

“Termination Event” shall mean: (i) a “Reportable Event” described in Section 4043 of ERISA and the regulations issued thereunder (unless the notice requirement has been waived by applicable regulation); or (ii) the withdrawal of Borrower or any ERISA Affiliate from a Pension Plan during a plan year in which it was a “substantial employer” as defined in Section 4001(a)(2) of ERISA or was deemed such under Section 4068(f) of ERISA; or (iii) the termination of a Pension Plan, the filing of a notice of intent to terminate a Pension Plan or the treatment of a Pension Plan amendment as a termination under Section 4041 of ERISA; or (iv) the institution of proceedings to terminate a Pension Plan by the PBGC; or (v) any other event or condition which would constitute grounds under Section 4042(a) of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan; or (vi) the partial or complete withdrawal of Borrower or any ERISA Affiliate from a Multiemployer Plan; or (vii) the imposition of a Lien pursuant to Section 412 of the Code or Section 302 of ERISA; or (viii) any event or condition which results in the reorganization or insolvency of a Multiemployer Plan under Section 4241 or Section 4245 of ERISA, respectively; or (ix) any event or condition which results in the termination of a Multiemployer Plan under Section 4041A of ERISA or the institution by the PBGC of proceedings to terminate a Multiemployer Plan under Section 4042 of ERISA.

“Trademark” shall mean any of the following: (a) trademarks, trade names, corporate names, business names, trade styles, service marks, logos, other source or business identifiers, prints and labels on which any of the foregoing have appeared or appear, designs and general intangibles of like nature (whether registered or unregistered), now owned or existing or hereafter adopted or acquired, all registrations and recordings thereof, and all applications in connection therewith, including registrations, recordings and applications in the United States Patent and Trademark Office or in any similar office or agency of the United States, any state or territory thereof, or any other country or any political subdivision thereof; and (b) all reissues, extensions or renewals thereof.

“Voting Stock” shall mean, with respect to any Person, Capital Securities of such Person entitling the holder thereof to vote in the election of directors of such Person.

§1.2 Other Definitional and Interpretive Provisions .

(a) When used in this Agreement, “herein”, “hereof” and “hereunder” and words of similar import shall refer to this Agreement as a whole and not to any particular section or subsection of this Agreement, and “Section” (and/or “§”) or “subsection” and “Schedule” and “Exhibit” shall refer to sections and subsections of, and Schedules and Exhibits to, this Agreement unless otherwise specified.

(b) Whenever the context so requires, when used in this Agreement the neuter gender shall include the masculine or feminine, and the singular number shall include the plural, and vice versa.

(c) In this Agreement, in the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including” and the words “to” and “until” each means “to but excluding.”

(d) The words “includes” and “including” when used herein are not limiting.

(e) When used herein, unless specifically provided herein otherwise, the phrase “acceptable to Bank” or “satisfactory to Bank”‘ shall mean “acceptable and satisfactory to Bank in its sole and absolute discretion.”

(f) Each term defined in Article 1 or Article 9 of the Florida Uniform Commercial Code shall have the meaning given to it therein unless otherwise defined herein, except to the extent that the Uniform Commercial Code of another jurisdiction is controlling, in which case such term shall have the meaning given to it in the Uniform Commercial Code of the applicable jurisdiction.

§1.3 Accounting Terms and Matters . Unless the context otherwise requires, all accounting terms herein (including capitalized terms) that are not specifically defined herein shall be interpreted and determined under GAAP applied on a Consistent Basis. Unless otherwise specified herein, all accounting determinations hereunder and all computations utilized by Borrower in complying with the covenants contained herein shall be made, and all financial statements requested to be delivered hereunder shall be prepared, in accordance with GAAP applied on a Consistent Basis, except, in the case of such financial statements, for departures from GAAP that may from time to time be approved in writing by the independent certified public accountants who are at the time, in accordance with §7, reporting on the financial statements of Borrower.

§1.4 Representations and Warranties . All Representations and Warranties shall be made at and as of the Agreement Date, at and as of the time of each Advance, and, in addition, in the case of any particular Representation and Warranty, at such other time or times as such Representation and Warranty is made or deemed made in accordance with the provisions of this Agreement or the document pursuant to, under, or in connection with which such Representation and Warranty is made or deemed made, except to the extent that any such Representation or Warranty expressly states that it relates to a different specified date.

§1.5 Captions. Section and subsection captions in this Agreement are included for convenience of reference only and shall not constitute a part of this Agreement for any other purpose.

§1.6 Neutral Interpretation . This Agreement and each other Credit Document has been thoroughly reviewed by counsel for Borrower and the Subsidiaries. No provision of this Agreement or other Credit Document shall be construed less favorably to Bank because it was drafted by Bank’s counsel.

§1.7 Severability, Conflicts, Etc . Any provision of any Credit Document which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or affecting the validity or enforceability of such provision in any other jurisdiction. It is the intention of the parties to this Agreement that if any provision of any Credit Document is capable of two constructions, one of which would render the provision void and the other of which would render the provision valid, the provision shall have the meaning which renders it valid.

§2. GENERAL TERMS .

§2.1 Commitment . Bank agrees, upon and subject to the terms and conditions hereinafter set forth, to make Advances to Borrower from time to time during the period from the Agreement Date to (but excluding) the Commitment Termination Date.

§2.2 Limit . At no time shall the aggregate principal amount of Advances outstanding exceed the Facility Limit.

§2.3 Use of Advances . Each Advance shall be used for Borrower’s general corporate purposes (including working capital and capital expenditures).

§2.4 Making of Advances . Each Advance shall be made on the basis of written notice from Borrower to Bank specifying for such Advance the date thereof, the amount thereof, and any other information required under §2. Bank reserves the right to require any such notice to be made at least two Business Days before the date of the Advance requested by it. Each such notice shall be given by means of a writing reasonably satisfactory to Bank. Each notice requesting an Advance shall be irrevocable and binding on Borrower; and Borrower shall indemnify Bank against any loss or expense incurred by Bank as a result of any failure to fulfill on or before the date specified for such Advance the applicable conditions set forth in §3, including without limitation any loss or expense actually incurred by Bank by reason of the liquidation or reemployment of deposits or other funds acquired or held by Bank to fund the Advance when such Advance, as a result of such failure, is not made on such date. Bank shall make each Advance available to Borrower on the date specified by Borrower in accordance with this §2.4, upon fulfillment of the applicable conditions set forth in §3, by crediting the Borrowing Account, except that Bank may, in its discretion, apply all or any part of any Advance to repay any Obligations.

§2.5 Interest Rates and Payment . (a) Interest shall accrue on the outstanding principal amount of Advances, during each Interest Period, at a per annum rate equal to 1.25 percent above the LIBOR Rate for that Interest Period. Borrower shall pay such accrued interest to Bank in arrears on the first Business Day of each calendar month and at maturity. Bank is hereby irrevocably authorized to debit any account of Borrower with Bank to make any interest payment on its due date. Nothing herein to the contrary withstanding, interest shall accrue on any overdue principal of Advances, fees or other Obligations at a floating per annum rate equal to the Default Rate and be payable on demand.

(b) If Bank determines that for any period of time it is impossible or unfeasible for it to obtain funds in the London interbank market and so notifies Borrower, the outstanding principal amount of Advances shall, prior to their maturity, bear interest during that period at a floating per annum rate equal to .50 percent below the Prime Rate.

§2.6 Mandatory Repayment of Advances .

(a)  At Maturity . All Advances then outstanding shall mature and become immediately due and payable in full on the Commitment Termination Date.

(b)  Prior to Maturity . If at any time the limitation set forth in §2.2 is exceeded, Borrower shall, within two Business Days after Bank’s written demand, prepay the Advances in the amount of the excess. Nothing in this §2.6(b) shall be construed to restrict Bank’s right to accelerate the Obligations or pursue its other remedies under §7 based on the limitation in §2.2 being exceeded.

§2.7 Optional Prepayments of Advances . (a) Borrower may, at any time and from time to time, upon one Business Day’s advance notice, prepay the Advances in whole or in part without premium or penalty, except that any prepayment of an Advance shall be in a principal amount of a whole multiple of $100,000, and except that no prepayment shall be made on other than the last day of an Interest Period unless the payment is accompanied by the applicable Consequential Loss (as computed by Bank) (as of the date hereof, Bank computes the LIBOR Rate in such a manner that a prepayment would not result in any Consequential Loss; Bank shall advise Borrower if and when this ceases to be the case). Amounts to be prepaid shall irrevocably be due and payable on the date specified in the applicable notice of prepayment, together with interest thereon. Amounts prepaid in respect of Advances may be reborrowed, subject to the terms and conditions hereof. Borrower shall also have the right, upon one Business Day’s advance notice, to prepay the Advances in full and terminate this Agreement, provided that (i) such prepayment shall be subject to the provisions hereinabove set forth with respect to prepayment, (ii) Borrower must fully prepay all Advances together with all other outstanding Obligations, and (iii) Borrower shall remit a pro rata payment of the commitment fee specified in §2.8 (b), calculated to the date of receipt by Bank of the full payment of the Advances and other Obligations, and (iv) the written notice from Borrower must specify that Borrower desires to terminate this Agreement and prepay in full the Advances.

(b) In addition, Borrower may from time to time, upon three Business Days prior written notice to Bank, permanently reduce the Facility Limit to an amount not less than the aggregate principal amount of Advances outstanding at such time. Any such reduction shall be in an amount not less than $100,000 or a higher integral multiple of $100,000.

§2.8 Facility and Commitment Fees . (a) Borrower shall pay to Bank a non-refundable facility fee in the amount of $15,000 on the Agreement Date.

(b) Within 5 Business Days of being invoiced therefor, Borrower shall pay to Bank, with respect to each quarter of each Fiscal Year, a commitment fee equal to 0.25 percent multiplied by the average daily amount by which the Facility Limit exceeds the outstanding principal amount of Advances during that quarter.

§2.9 Payments and Computations . (a) Borrower shall make each payment hereunder by 11:00 a.m. (Miami, Florida time) on the day when due, in lawful money of the United States of America and immediately available funds without setoff or deduction of any kind, to Bank at its address referred to in §8.9 (or another address of which Bank gives Borrower notice pursuant to §8.9). Until notice to the contrary from Bank, interest payments shall be automatically debited from a demand account which Borrower shall maintain with Bank and in which Borrower shall maintain sufficient balances to cover such payments.

(b) All computations of interest, commissions and fees hereunder shall be made by Bank on the basis of a year of 360 days and the actual number of days (including the first day but excluding the last day) elapsed in the period for which such interest, commission or fee is payable. Payments received hereunder shall be applied first against interest and any lawful charges accrued but unpaid and the remainder, if any, against outstanding principal. If any interest payment required to be made hereunder is not made within 10 days after its due date, Borrower shall pay Bank on demand a late charge equal to 5.00 percent of the amount of the payment. Each late charge is intended to compensate Bank for administrative and other costs associated with not receiving a payment when due and is neither a penalty nor interest. Each late charge may be assessed without notice, shall be immediately due and payable and shall be in addition to all other rights and remedies available to Bank.

(c) Whenever any payment to be made under this Agreement or any other Credit Document shall be stated to be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day, and such extension of time shall in such case be reflected in the computation of interest, commissions or fees, as the case may be.

(d) Borrower irrevocably authorizes Bank — if and to the extent any payment is not made to Bank when due hereunder or under any other agreement relating to any Advance and any applicable grace period has expired — to charge from time to time against a demand account in Borrower’s name (which Borrower hereby agrees to maintain with Bank) any amount so due even if doing so creates an overdraft. Any overdraft so created shall (to the extent permitted by Applicable Law) bear interest until paid in full at the Default Rate and shall be due and payable, together with any accrued interest, immediately after being created.

§2.10. Evidence of Indebtedness; Impaired Note . The Advances and Borrower’s obligations to repay them, with interest in accordance with the terms of this Agreement, shall be evidenced by this Agreement, the records of Bank, and the Note. The records of Bank shall be prima facie evidence of the Advances and the other indebtedness of Borrower under this Agreement, of accrued interest thereon, of accrued fees, and of all payments made in respect of any thereof. Upon Borrower’s receipt from Bank of (a) reasonably satisfactory evidence of the loss, theft, destruction or mutilation of the Note (an “Impaired Note”) and (b) (i) in the case of mutilation, such Impaired Note for cancellation or (ii) in all other cases, indemnity reasonably satisfactory to Borrower and reimbursement of Borrower’s reasonable out-of-pocket expenses incidental thereto, Borrower shall make and deliver to Bank a new replacement Note of like tenor, date and principal amount in lieu of the Impaired Note.

§3. CONDITIONS OF LENDING .

§3.1 Conditions Precedent to Initial Advance . The obligation of Bank to make the initial Advance hereunder after the date hereof is subject to the condition precedent that Bank shall have received, on or before the day such Advance is made, the following, all in form and substance satisfactory to Bank:

(a) The Note, duly executed by Borrower.

(b) The Negative Pledge Agreement, duly executed by Borrower and each Subsidiary:

(i) certified copies of Requests for Information or Copies, or equivalent reports acceptable to Bank, listing all effective financing statements which name Borrower (under its present name and any previous names) as debtor and which are filed in one or more of jurisdictions reasonably specified by Bank, together with copies of such other financing statements (none of which may cover the any Covered Assets);

(ii) judgment, tax lien and litigation searches in all relevant jurisdictions showing that there are no outstanding judgments or tax liens or pending lawsuits against Borrower or any property of Borrower except as disclosed herein;

(c) A certified copy of the resolution of the board of directors of Borrower approving and authorizing each Credit Document to which it is a party and of all documents evidencing other necessary corporate action and Governmental Approvals, if any, with respect to each such Credit Document.

(d) A certificate of the Secretary or an Assistant Secretary of Borrower certifying the name and true signatures of its officers authorized to sign each Credit Document to which it is a party and the other documents to be delivered by it hereunder.

(e) Certificates of good standing issued by the Delaware and Florida Secretaries of State with respect to Borrower; a copy of Borrower’s articles of incorporation certified by each such Secretary of State; and a copy of Borrower’s bylaws certified as true and complete by an Authorized Representative.

(f) A favorable opinion of Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A., counsel for Borrower, covering such matters as Bank may request.

(g) Either evidence that Florida documentary stamp tax in the amount of $2,450 has been paid with respect to the Note or whatever certificates and affidavits Bank requires to establish that no such tax is or will be owing in connection with the Note or other Credit Documents.

(h) Such other approvals, appraisals, opinions, consents and documents as Bank may reasonably request.

§3.2 Conditions to Each Advance . The obligation of Bank to make each Advance to be made by it, including the initial Advance, is subject to the fulfillment of each of the following conditions to Bank’s satisfaction:

(a) each of the Representations and Warranties shall, in the determination of Bank in its reasonable discretion, be true and correct in all material respects at and as of the time of such Advance, with and without giving effect to such Advance and to the application of the proceeds thereof, except those expressly stated to be made as of a particular date which shall be true and correct in all