AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

 

 

 

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

THIS AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT is made on March 10, 2006, by and among Alpharma Inc. , a Delaware corporation (individually and, in its capacity as the representative of the other Borrowers pursuant to Section 4.4 , "Parent"), Alpharma Operating Corporation , a Delaware corporation, Alpharma U.S. Inc. , a Delaware corporation, Barre Parent Corporation , a Delaware corporation, Parmed Pharmaceuticals, Inc. , a Delaware corporation, Alpharma Euro Holdings Inc. , a Delaware corporation, Alpharma (Bermuda) Inc. , a Delaware corporation, Alpharma USHP Inc. , a Delaware corporation, Alpharma Animal Health Company , a Texas corporation, Mikjan Corporation , an Arkansas corporation, Alpharma Holdings Inc. , a Delaware corporation, Alpharma Pharmaceuticals Inc. , a Delaware corporation, Purepac Pharmaceutical Holdings, Inc. , a Delaware corporation, Alpharma Branded Products Division Inc. , a Delaware corporation, and Alpharma Investment Inc. , a Delaware corporation (collectively referred to herein as "Borrowers," and individually as a "Borrower"); the various financial institutions listed on the signature pages hereof (together with their respective successors and permitted assigns, the "Lenders"); and Bank of America, N.A. , a national bank, in its capacity as a Lender, Issuing Bank and collateral and administrative agent for the Lenders pursuant to Section 13 (together with its successors in such capacity, "Agent"). Capitalized terms used in this Agreement have the meanings assigned to them in Section 1 .

R e c i t a l s :

Borrowers, Agent and Lenders are parties to that certain Loan and Security Agreement dated October 26, 2005 (the "Original Loan Agreement"), pursuant to which Lenders made and may continue to make from time to time certain loans and other financial accommodations available to Borrowers.

On December 17, 2005, Parent sold certain stock and other assets to Actavis Group HF and certain of its affiliates ("Buyer") consisting of Parent ' s generics business (the "Permitted Portfolio Transaction") pursuant to a certain Stock and Asset Purchase Agreement between Parent, the other sellers named therein and Buyer dated October 17, 2005.

In connection with the Permitted Portfolio Transaction, Borrowers (i) repaid the outstanding Term Loan owing by Borrowers to Lenders under the Original Loan Agreement, (ii) reduced the outstanding principal balance of the Revolver Loans outstanding as of such date, (iii) repaid the Senior Notes and the Convertible Notes (as defined in the Original Loan Agreement) and (iv) reduced the Revolver Commitments under the Original Loan Agreement from $175,000,000 to $75,000,000.

On December 23, 2005, PNC Bank, National Association and DnB NOR Bank ASA became co-Lenders under the Original Loan Agreement pursuant to certain Assignments and Acceptances dated as of December 23, 2005.

As of December 27, 2005, Barre Parent Corporation ("Barre") became a co-Borrower under the Original Loan Agreement pursuant to a certain Joinder and Supplement to Loan Agreement dated as of December 27, 2005, between Barre and Agent.

Borrowers have requested that Agent and Lenders amend and restate the Original Loan Agreement to reflect, among other things, the foregoing transactions and to modify certain terms contained therein.

Agent and Lenders are willing to amend and restate the Original Loan Agreement, subject to the terms and conditions contained herein.

Each Borrower has requested that Lenders continue to make available a revolving credit and letter of credit facility to Borrowers, which shall be used by Borrowers to finance their mutual and collective enterprise of developing, manufacturing and marketing pharmaceutical products for humans and animals. In order to utilize the financial powers of each Borrower in the most efficient and economical manner, and in order to facilitate the financing of each Borrower ' s needs, Lenders will, at the request of any Borrower, make loans to all Borrowers under the revolving credit facility on a combined basis and in accordance with the provisions hereinafter set forth. Borrowers ' business is a mutual and collective enterprise, and Borrowers believe that the consolidation of all revolving credit loans under this Agreement will enhance the aggregate borrowing powers of each Borrower and ease the administration of their revolving credit loan relationship with Lenders, all to the mutual advantage of Borrowers. Lenders ' willingness to extend credit to Borrowers and to administer each Borrower ' s collateral security therefor, on a combined basis as more fully set forth in this Agreement, is done solely as an accommodation to Borrowers and at Borrowers ' request in furtherance of Borrowers ' mutual and collective enterprise.

Each Borrower has agreed to be jointly and severally liable for loans and all outstanding other obligations under this Agreement and to guarantee the obligations of each of the other Borrowers under this Agreement and each of the other Loan Documents.

NOW, THEREFORE, for Ten Dollars ($10.00) and other good and valuable consideration, the parties hereto, intending to be bound hereby, agree as follows:

1. DEFINITIONS; RULES OF CONSTRUCTION
2. 1. Definitions .

As used in this Agreement, the following terms shall have the following meanings ascribed to them (terms used in the singular to have the same meaning when used in the plural, and vice versa ):

Account - shall have the meaning given to the term "account" in the UCC and shall include any and all rights of a Borrower to payment for goods sold, leased, licensed, assigned or otherwise disposed of, or for services rendered that are not evidenced by an Instrument or Chattel Paper, whether or not they have been earned by performance.

Account Debtor - a Person who is or becomes obligated under or on account of an Account, Chattel Paper or General Intangible.

Accounts Formula Amount - on any date of determination thereof, an amount equal to the lesser of:

(i)          the Revolver Commitments on such date or

(ii)         85% of the net amount of Eligible Accounts on such date.

As used herein, the phrase "net amount of Eligible Accounts" shall mean (a) the face amount of such Accounts on any date less (without duplication) (b) any and all actual returns, rebates, discounts, credits, allowances, including, any and all direct and indirect customer rebates, floor stock adjustments, general sales allowances and other allowances, accrued free goods, and customer rebate accruals, or Taxes (including sales, excise or other taxes) at any time issued, owing, claimed by Account Debtors, granted, outstanding or payable in connection with, or any interest accrued on the amount of, such Accounts at such date, in each case, in accordance with GAAP and consistent with past practices of Borrowers; provided that in no event shall such reserve be greater than the amount of the Account for which a reserve has been established under GAAP.

Adjusted LIBOR Rate - for any Interest Period, with respect to LIBOR Loans, the rate of interest per annum determined pursuant to the following formula:

Where,

" Offshore Base Rate " means the rate per annum appearing on Telerate Page 3750 (or any successor page) as the London interbank offered rate for deposits in Dollars at approximately 11:00 a.m. (London time) 2 Business Days prior to the first day of such Interest Period for a term comparable to such Interest Period. If for any reason such rate is not available, the Offshore Base Rate shall be, for any Interest Period, the rate per annum appearing on Reuters Screen LIBO Page as the London interbank offered rate for deposits in Dollars at approximately 11:00 a.m. (London time) 2 Business Days prior to the first day of such Interest Period for a term comparable to such Interest Period; provided , however , if more than one rate is specified on Reuters Screen LIBO Page, the applicable rate shall be the arithmetic mean of all such rates. If for any reason none of the foregoing rates is available, the Offshore Base Rate shall be, for any Interest Period, the rate per annum determined by Agent as the rate of interest at which Dollar deposits in the approximate amount of the applicable LIBOR Loan would be offered by BofA ' s London Branch to major banks in the offshore Dollar market at their request at or about 11:00 a.m. (London time) 2 Business Days prior to the first day of such Interest Period for a term comparable to such Interest Period.

" Eurodollar Reserve Percentage " means for any day during any Interest Period, the reserve percentage (expressed as a decimal, rounded upward to the next 1/100th of 1%) in effect on such day applicable to member banks under regulations issued from time to time by the Board of Governors 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 Offshore Rate for each outstanding LIBOR Loan shall be adjusted automatically as of the effective date of any change in the Eurodollar Reserve Percentage.

Affiliate - with respect to any Person, any other Person (i) who directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, such Person; or (ii) who is an officer, director, partner or managing member of such Person. For purposes hereof, "control" means the possession, directly or indirectly, of the power to vote 10% or more of the voting interests of such Person or to direct or cause the direction of the management and policies of such Person, whether through the ownership of any Equity Interest, by contract or otherwise.

After-Acquired Real Estate - as such term is defined in Section 7.3 hereof.

Agent Advances - as defined in Section 2.1.6 .

Agent Indemnitees - Agent and all of it ' s present and future officers, directors, employees, agents and attorneys.

Agent Professionals - attorneys, accountants, appraisers, business valuation experts, environmental engineers or consultants, turnaround consultants and other professionals or experts retained by Agent.

Agreement - this Loan and Security Agreement and all Exhibits and Schedules thereto.

ALI - A.L. Industrier AS.

ANDA - an Abbreviated New Drug Application that is filed with the FDA.

Anti-Terrorism Laws - any laws relating to terrorism or money laundering, including Executive Order No. 13224 and the USA Patriot Act.

Applicable Advance Rate - 85%, subject to adjustment from time to time by Agent in its reasonable credit judgment.

Applicable Law - all laws, rules and regulations applicable to the Person, conduct, transaction, covenant or Loan Document in question, including all applicable common law and equitable principles; all provisions of all applicable state, federal and foreign constitutions, statutes, rules, regulations and orders of Governmental Authorities; and all applicable orders, judgments and decrees of all courts and arbitrators.

Applicable Margin - a percentage equal to 0.25% with respect to Revolver Loans that are Base Rate Loans, 1.75% with respect to Revolver Loans that are LIBOR Loans and 0.30% with respect to the Unused Line Fee, provided that the Applicable Margin shall be increased or decreased, on a quarterly basis (commencing with the first full Fiscal Quarter after the Closing Date), according to the performance of Borrowers as measured by the Average Availability for the immediately preceding Fiscal Quarter, as follows:

Any such increase or reduction in the Applicable Margin shall be calculated as of the last day of the immediately preceding Fiscal Quarter based upon the Average Availability for such Fiscal Quarter and subject to receipt of a month-end Borrowing Base Certificate for the last Fiscal Month of the immediately preceding Fiscal Quarter. Any such adjustment in the Applicable Margin shall be effective on the third Business Day after Agent ' s receipt of such Borrowing Base Certificate. Notwithstanding the foregoing, Agent and Lenders shall be entitled to accrue and receive (and Borrowers shall be obligated to pay) interest at the Default Rate to the extent authorized by Section 3.1.5.

Appraised Fair Market Value of Eligible Real Estate - on any date and with respect to any Eligible Real Estate, the fair market value of the applicable Eligible Real Estate as determined by reference to the most recent appraisal of the fair market value of such Real Estate received by Agent and acceptable to Agent and performed by an independent appraiser reasonably satisfactory to Agent.

Appraised Net Orderly Liquidation Value of Eligible Equipment - on any date with respect to any Eligible Equipment, the value of such Eligible Equipment expected to be realized at an orderly, negotiated sale of such Eligible Equipment that is held within a reasonable period of time, as such value is determined by reference to the most recent Net Orderly Liquidation Value Appraisal received by Agent and acceptable to Agent on or before such date.

Approved Credit Enhancement - in Agent ' s discretion and at its option, either (i) an irrevocable letter of credit that is in form and substance reasonably acceptable to Agent, issued or confirmed by a bank reasonably acceptable to Agent, and payable in Dollars at a place of payment within the United States that is acceptable to Agent (except for sight drafts that are advised by a United States bank acceptable to Agent), where the proceeds of such letter of credit have been assigned to Agent for the benefit of Secured Parties (with such assignment acknowledged by the issuing or confirming bank) or, if so requested by Agent, duly transferred to Agent for the benefit of Lenders (together with sufficient documentation to permit direct draws under any such letter of credit by Agent for the benefit of Lenders) or (ii) credit insurance that is issued by a credit insurance company acceptable to Agent and is in form and substance reasonably acceptable to Agent (which credit insurance shall be payable to Agent for the benefit of Secured Parties in Dollars).

Asset Disposition - a sale, lease, license or other transfer or disposition of Property of an Obligor, including a disposition of Property in connection with a sale-leaseback transaction.

Assignment and Acceptance - an assignment and acceptance entered into by a Lender and an Eligible Assignee and accepted by Agent, and, if applicable, Borrowers, in the form of Exhibit G .

Audit Spring Back Date - as defined in Section 3.2.4 hereof.

Availability  - on any date, the amount that Borrowers are entitled to borrow as Revolver Loans on such date, such amount being the difference derived when the sum of the principal amount of Revolver Loans then outstanding (including any outstanding Swingline Loans) is subtracted from the Borrowing Base on such date. If the amount outstanding is equal to or greater than the Borrowing Base, Availability is zero.

Availability Reserve - on any date of determination thereof, an amount equal to the sum of the following (without duplication): (i) the Inventory Reserve; (ii) the Rent Reserve; (iii) the LC Reserve; (iv) the aggregate amount of reserves established by Agent from time to time in its reasonable credit judgment in respect of Banking Relationship Debt; (v) the Environmental Reserve; (vi) the aggregate amount of all liabilities and obligations that are secured by Liens upon any of the Collateral that are senior in priority to Agent ' s Liens if such Liens are not Permitted Liens (provided that the imposition of a reserve hereunder on account of such Liens shall not be deemed a waiver of the Event of Default that arises from the existence of such Liens) or are Permitted Liens for property taxes under Section 10.2.5(ii) ; and (vii) such additional reserves, in such amounts and with respect to such matters, as Agent in its reasonable credit judgment may elect to impose from time to time. If Agent shall elect to establish any reserve under clause (vii) above or to change any of the foregoing reserves to increase the amount of such reserves, then unless an Event of Default exists, Agent agrees to give Borrower Representative notice of such reserve but Agent ' s failure to give such notice shall not result in any liability to Agent hereunder but until such notice is given, such reserve shall not be effective. If an Event of Default exists, Agent shall not be required to give such notice as provided in the forgoing sentence but may do so at its election.

Average Availability - for any period, an amount equal to the sum of the actual amount of Availability on each calendar day during such period, as determined in good faith by Agent, divided by the number of calendar days in such period.

Average Revolver Loan Balance - for any period, the amount obtained by adding the unpaid balance of Revolver Loans (excluding Swingline Loans) and LC Obligations at the end of each calendar day for the period in question and by dividing such sum by the number of calendar days in such period.

Bank Products - any one or more of the following types of products, services or facilities extended to any Obligor by any Lender or any Affiliate of a Lender: (i) commercial credit cards; (ii) merchant card services; (iii) products or services under Cash Management Agreements; (iv) products under Hedging Agreements; and (v) interstate depository network services.

Banking Relationship Debt - Debt or other obligations of an Obligor to any Lender or any Affiliate of a Lender arising out of or relating to Bank Products.

Bankruptcy Code - title 11 of the United States Code.

Base Rate - the rate of interest announced or quoted by BofA from time to time as its prime rate. The prime rate announced by BofA is a reference rate and does not necessarily represent the lowest or best rate charged by BofA. BofA from time to time makes loans or other extensions of credit at, above or below its announced prime rate. If the prime rate is discontinued by BofA as a standard, a comparable reference rate designated by BofA as a substitute therefor shall be the Base Rate.

Base Rate Loan - a Loan, or portion thereof, during any period in which it bears interest at a rate based upon the Base Rate.

Blocked Person - (a) a Person that is listed in the annex to, or is otherwise subject to the provisions of, Executive Order No. 13224; (b) a Person owned or controlled by, or acting for or on behalf of, any Person that is listed in the annex to, or is otherwise subject to the provisions of, Executive Order No. 13224; (c) a Person or entity with which any bank or other financial institution is prohibited from dealing or otherwise engaging in any transaction by any Anti-Terrorism Law; (d) a Person or entity that commits, threatens or conspires to commit or supports "terrorism" as defined in Executive Order No. 13224; (e) a Person or entity that is named as a "specially designated national" on the most current list published by the U.S. Treasury Department Office of Foreign Asset Control (OFAC) at its official website or any replacement website or other replacement official publication of such list; (f) a Person or entity who is affiliated with a Person or entity listed above; or (g) an agency of the government of, an organization directly or indirectly controlled by, or a Person resident in, a country on any official list maintained by OFAC.

Board of Governors - the Board of Governors of the Federal Reserve System.

BofA - Bank of America, N.A., a national bank, and its successors and assigns.

BofA Indemnitees - BofA, Banc of America Securities LLC, and all of their respective present and future officers, directors, employees, agents and attorneys.

Borrower Representative - as defined in Section 4.4 .

Borrowing - a borrowing consisting of Loans of one Type made on the same day by Lenders (or by BofA in the case of a Borrowing funded by Swingline Loans) or a conversion of a Loan or Loans of one Type from Lenders on the same day.

Borrowing Base - on any date of determination thereof, an amount equal to the lesser of: (a) the aggregate amount of the Revolver Commitments on such date minus the LC Reserve on such date, or (b) an amount equal to (i) the sum of the Accounts Formula Amount plus the Inventory Formula Amount plus the Fixed Asset Sublimit on such date minus (ii) the Availability Reserve on such date; provided that at any time, the amounts set forth in clause (b) shall be determined by reference to the most recent Borrowing Base Certificate that has been delivered to Agent in accordance with, and subject to the terms of, Section 8.6 hereof and, subject to the adjustment of the Borrowing Base from time to time by Agent in accordance with the terms of this Agreement.

Borrowing Base Certificate - a certificate, in a form similar to Exhibit K , as adjusted from time to time in accordance with this Agreement, by which Borrowers shall certify to Agent and Lenders, the amount of the Borrowing Base as of the date of the certificate (which date shall be not more than 25 days earlier than the date of submission of such certificate to Agent) and the calculation of such amount.

Business Day - any day excluding Saturday, Sunday and any other day that is a legal holiday under the laws of the State of New York, the State of North Carolina or the State of Georgia or is a day on which banking institutions located in such state are closed; provided , however , that when used with reference to a LIBOR Loan (including the making, continuing, prepaying or repaying of any LIBOR Loan), the term "Business Day" shall also exclude any day on which banks are not open for dealings in Dollar deposits on the London interbank market.

Capital Adequacy Regulation - any guideline, request or directive of any central bank or other Governmental Authority, or any other law, rule or regulation, whether or not having the force of law, in each case regarding capital adequacy of any bank or of any corporation controlling a bank.

Capital Expenditures - expenditures made or liabilities incurred by a Borrower for the acquisition of any fixed assets or improvements, replacements, substitutions or additions thereto which have a useful life of more than one year, including Capitalized Lease Obligations, that are set forth in a consolidated statement of cash flow of Consolidated Group Members for such period prepared in accordance with GAAP.

Capitalized Lease Obligation - any Debt represented by obligations under a lease that is required to be capitalized for financial reporting purposes in accordance with GAAP.

Cash Collateral - cash, and any interest or other income earned thereon, that is deposited with Agent in accordance with this Agreement for the Pro Rata benefit of Lenders to Cash Collateralize any LC Obligations or other Obligations.

Cash Collateral Account - a demand deposit, money market or other account established by Agent at BofA or such other such financial institution as Agent may select in its discretion, which account shall be in Agent ' s name and subject to Agent ' s Liens.

Cash Collateralize - with respect to LC Obligations arising from Letters of Credit outstanding on any date or Obligations arising under Hedging Agreements on such date, the deposit with Agent of immediately available funds into the Cash Collateral Account in an amount equal to 103% of the sum of the aggregate Undrawn Amounts of such Letters of Credit and other LC Obligations, all Obligations existing under such Hedging Agreements, and all related fees and other amounts due in connection with such LC Obligations and Hedging Agreements.

Cash Equivalents - (i) marketable direct obligations issued or unconditionally guaranteed by the United States government and backed by the full faith and credit of the United States government having maturities of not more than 12 months from the date of acquisition; (ii) domestic certificates of deposit and time deposits having maturities of not more than 12 months from the date of acquisition, bankers ' acceptances having maturities of not more than 12 months from the date of acquisition and overnight bank deposits, in each case issued by any commercial bank organized under the laws of the United States, any state thereof or the District of Columbia, which at the time of acquisition are rated A-1 (or better) by S&P or P-1 (or better) by Moody ' s, and (unless issued by a Lender) not subject to offset rights in favor of such bank arising from any banking relationship with such bank; (iii) repurchase obligations with a term of not more than 30 days for underlying securities of the types described in clauses (i) and (ii) entered into with any financial institution meeting the qualifications specified in clause (ii) above or with any primary dealer; (iv) commercial paper having at the time of investment therein or a contractual commitment to invest therein a rating of A-1 or next highest (or better) by S&P or P-1 or next highest (or better) by Moody ' s, and having a maturity within 12 months after the date of acquisition thereof; and (v) shares of any money market fund that (a) has substantially all of its assets invested continuously in the types of investments referred to in clauses (i) - (iv), (b) has net assets not less than $500,000,000 and (c) has the highest or next highest rating obtainable from either Moody ' s or S&P.

Cash Management Agreements - any agreement entered into from time to time between any Borrower or any of its Subsidiaries, on the one hand, and any Lender or any of its Affiliates, on the other, in connection with cash management services for operating, collections, payroll and trust accounts of such Borrower or its Subsidiaries provided by such banking or financial institution, including automatic clearinghouse services, controlled disbursement services, electronic funds transfer services, information reporting services, lockbox services, stop payment services and wire transfer services.

CERCLA - the Comprehensive Environmental Response Compensation and Liability Act (42 U.S.C. Section9601 et seq .).

Change of Control - the occurrence of any of the following: (i) at any time after ALI and the EWS Parties cease to beneficially own (within the meaning of Rule 13d-3 promulgated under the Exchange Act) shares of common stock of Parent with a combined voting power sufficient to elect a majority of the board of directors of Parent, any Person (other than Parent or any of its Subsidiaries, ALI or the EWS Parties or any employee benefit plan of Parent or any of its Subsidiaries which acquires beneficial ownership of voting interests of Parent) shall acquire, or acquire the power to vote or direct the voting of, 30% or more, on a fully diluted basis, of the outstanding Equity Interests of Parent; (ii) a Consolidated Group Member is merged with or into another Person, other than a Consolidated Group Member except as permitted under Section 10.2.1 ; (iii) any Person or related group of Persons acquires by way of a purchase, merger, consolidation or other business combination a majority of the Equity Interests entitled to vote in the election of directors of Parent (other than ALI or an EWS Party); or (iv) a change in the majority of the board of directors of Parent unless approved by the then majority of the board of directors of Parent, provided, however , that for the purpose of clauses (i) and (iii) above, the terms "Person" shall not be deemed to include (x) ALI, (y) the stockholders of ALI in the case of a distribution of shares of capital stock of Parent beneficially owned by ALI to the stockholders of ALI, unless a Change of Control of ALI has occurred or occurs concurrently with such a distribution, or in a series of related transactions of which such distribution is a part (determined without regard to the exclusion for stockholders of ALI provided for in this clause (y) of this proviso), provided that the exclusion for stockholders of ALI provided for in this clause (y) shall not apply to any subsequent acquisition of shares of common stock of Parent by any such person (other than any of the persons described in clause (z) below) or (z) E.W. Sissener, his spouse, any heir or descendant of Mr. Sissener or the spouse of any such heir or descendant or the estate of Mr. Sissener (each, an "EWS Party") or any trust or other similar arrangement for the benefit of any EWS Party or any corporation or other person or entity controlled by one or more EWS Parties, or any group controlled by one or more EWS Parties. For purposes of the above sentence, (i) a "liquidation" or "dissolution" shall not be deemed to include any transfer of the Equity Interests in Parent solely to any of the Persons described in clauses (x), (y) and (z) of the proviso in such sentence and (ii) a "Change of Control of ALI" shall be determined in accordance with this definition of "Change of Control" (without regard to clauses (x) and (y) in the proviso of the preceding sentence), with each reference to Parent in such definition being deemed to refer to ALI.

Chattel Paper - shall have the meaning given to the term "chattel paper" in the UCC.

Claims - all liabilities, losses, damages, actions, judgments, suits and related charges, expenses and disbursements of any kind or nature (including reasonable attorneys ' fees and expenses for one counsel (and local counsels if determined by Agent) for Agent, and one counsel for all other Indemnitees) which may at any time (including at any time following Full Payment of the Obligations, termination of the Commitments, resignation or replacement of Agent or replacement of any Lender) be imposed on, incurred by, or asserted against any Indemnitee in any way relating to or arising out of (i) the enforcement under any of the Loan Documents or consummation of any of the transactions described herein, (ii) any action taken or omitted to be taken by any Indemnitee under or in connection with any of the Loan Documents or Applicable Law, (iii) the existence, perfection or realization upon Agent ' s Liens upon any Collateral, (iv) the exercise by Agent or any Lender of any of its rights or remedies under any of the Loan Documents or Applicable Law, or (v) the failure of any Obligor to observe, perform or discharge any of such Obligor ' s covenants or duties under any of the Loan Documents or the inaccuracy or incompleteness of any representation or warranty of any Borrower in any of the Loan Documents, in each case including any costs or expenses incurred by any Indemnitee in connection with any investigation, litigation, arbitration or other judicial or non-judicial proceeding (including any Insolvency Proceeding or appellate proceedings) whether or not such Indemnitee is a party thereto; provided , however that notwithstanding anything to the contrary contained in this Agreement, no party shall have any obligation under this Agreement to indemnify an Indemnitee with respect to any Claim to the extent that it is determined in a final, non-appealable judgment by a court of competent jurisdiction that such Claim resulted from the gross negligence or willful misconduct of such Indemnitee (or its officers, directors, employees, agents or attorneys).

Closing Date - the date on which all of the conditions precedent in Section 11 are satisfied or waived and the initial Loans are made under this Agreement.

Collateral - all of the Property and interests in Property described in Section 7 ; all Property described in any of the Security Documents as security for the payment or performance of any of the Obligations; and all other Property and interests in Property that now or hereafter secure (or are intended to secure) the payment and performance of any of the Obligations.

Commercial Tort Claim - shall have the meaning given to the term "commercial tort claim" in the UCC.

Commitment - at any date for any Lender, the amount of such Lender ' s Revolver Commitment on such date, and " Commitments " means the aggregate amount of all Revolver Commitments on such date.

Commitment Termination Date - the date that is the soonest to occur of (i) the last day of the Term; (ii) the date on which either Borrowers or Agent terminate the Revolver Commitments pursuant to Section 6.2 ; or (iii) the date on which the Revolver Commitments are automatically terminated pursuant to Section 12.2 .

Compliance Certificate - a Compliance Certificate to be provided by Borrowers to Agent in accordance with, and in the form annexed as Exhibit E to, this Agreement and the supporting schedules to be annexed thereto.

Consolidated - the consolidation in accordance with GAAP of the accounts or other items as to which such term applies.

Consolidated Group - Parent and each of its Domestic Subsidiaries.

Consolidated Group Member - a Person that is in the Consolidated Group.

Consolidated Net Income - for any period, the net income of the Consolidated Group for such period, determined on a Consolidated basis and in accordance with GAAP but excluding for each such period (without duplication):

(a)         any gain or loss arising from the sale of capital assets;

(b)         any gain arising from any write-up of assets during such period and any loss arising from any write down of assets during such period;

(c)         net income of any Consolidated Group Member accrued prior to the date it became a Consolidated Group Member;

(d)         net income of any other Person, substantially all the assets of which have been acquired in any manner by a Consolidated Group Member, realized by such Person and accrued prior to the date of such acquisition;

(e)         net income of any entity (other than a Consolidated Group Member) in which a Consolidated Group Member has an ownership interest (unless such net income has actually been received by a Consolidated Group Member in the form of cash Distributions but excluding such cash Distributions that have been used to repay, defease or redeem the Senior Notes or the Convertible Notes);

(f)          the net income of any Consolidated Group Member to the extent that such Consolidated Group Member is prohibited from making any payment of Distributions to any Consolidated Group Member;

(g)         the net income of any Person (other than a Consolidated Group Member) into which a Consolidated Group Member shall have merged or consolidated with, accrued prior to the date of such transaction; and

(h)         the net income of any Person in which a Person other than such Person or any of its Subsidiaries owns or otherwise holds an Equity Interest, except to the extent such income (or loss) shall have been received in the form of distributions actually paid to such Person or any of its Subsidiaries by such other Person during such period.

Contingent Obligation - with respect to any Person, any obligation of such Person arising from any guaranty or other assurance of payment or performance of any Debt, lease, dividend or other obligation ("primary obligations") of any other Person (the "primary obligor") in any manner, whether directly or indirectly, including (i) the direct or indirect guaranty, endorsement (other than for collection or deposit in the Ordinary Course of Business), co-making, discounting with recourse or sale with recourse by such Person of the obligation of a primary obligor, (ii) the obligation to make take-or-pay or similar payments, if required, regardless of nonperformance by any other party or parties to an agreement (excluding standard minimum purchase requirements under supply agreements with Borrowers ' vendors in the Ordinary Course of Business), (iii) any obligation of such Person, whether or not contingent, (A) to purchase any such primary obligation or any Property constituting direct or indirect security therefor, (B) to advance or supply funds (1) for the purchase or payment of any such primary obligations or (2) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (C) to purchase Property or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (D) otherwise to assure or hold harmless the holder of such primary obligation against loss in respect thereof; provided , however that the term "Contingent Obligations" shall not include contingent obligations incurred in the Ordinary Course of Business or any indemnities given under or liabilities retained in connection with any Permitted Asset Disposition, Permitted Acquisition or Permitted Investment. The amount of any Contingent Obligation shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation with respect to which such Contingent Obligation is made (or, if less, the maximum amount of such primary obligation for which such Person may be liable pursuant to the terms of the instrument evidencing such Contingent Obligation) or, if not stated or determinable, the maximum reasonably anticipated liability with respect thereto, as determined by such Person in good faith.

Controlled Disbursement Account - a demand deposit account maintained by Borrowers at BofA and to which proceeds of Loans may be wired from time to time.

Covenant Spring-Back Date - as such term is defined in Section 10.3.1 .

CWA - the Clean Water Act (33 U.S.C. SectionSection 1251 et seq .).

Debt - as applied to a Person means, without duplication: (i) all items which in accordance with GAAP would be included in determining total liabilities as shown on the liability side of a balance sheet of such Person as of the date as of which Debt is to be determined, including Capitalized Lease Obligations; (ii) all Contingent Obligations of such Person; (iii) all reimbursement obligations in connection with letters of credit or letter of credit guaranties issued for the account of such Person; and (iv) in the case of a Borrower (without duplication), the Obligations; provided that the amount of any contingent liability under any indemnity obligation existing under any document or agreement evidencing such Debt shall, to the extent such contingent liability is unrelated to the underlying financial obligations of such Person in respect of such Debt, be excluded from the definition of "Debt" until such time as when such contingent liability matures or is or should be reported as "debt" for the purposes of GAAP. The Debt of a Person shall include any recourse Debt of any partnership or joint venture in which such Person is a general partner or joint venturer to the extent such Person is liable therefor.

Default - an event or condition the occurrence of which would, with the lapse of time or the giving of notice, or both, become an Event of Default.

Default Rate - on any date, a rate per annum that is equal to (i) in the case of each Revolver Loan outstanding on such date, 2% in excess of the rate otherwise applicable to such Loans on such date, and (ii) in the case of any of the other Obligations outstanding on such date, 2.50% in excess of the Base Rate in effect on such date.

Deposit Account - shall have the meaning given to the term "deposit account" in the UCC.

Deposit Account Control Agreements - the Deposit Account Control Agreements to be executed by each depository institution of a Borrower in favor of Agent as security for the Obligations, in accordance with Section 8.5 .

Distribution - in respect of any entity, (i) any payment of any dividends or other distributions on Equity Interests of the entity (except distributions in such Equity Interests) and (ii) any purchase, redemption or other acquisition or retirement for value of any Equity Interests of the entity unless made contemporaneously from the net proceeds of the sale of Equity Interests.

Document - shall have the meaning given to the term "document" in the UCC.

Dollars and the sign $ - lawful money of the United States of America.

Domestic Subsidiary - a Subsidiary of a Borrower (other than a Subsidiary that is a Borrower) that is incorporated under the laws of a state of the United States or the District of Columbia.

Dominion Account - a special account of Agent established by Borrowers at BofA and over which Agent shall have exclusive access and control for withdrawal purposes.

Dominion Spring-Back Date - as such term is defined in Section 8.2.5(ii) .

EBITDA - on any date of determination thereof, with respect to the Consolidated Group (A) Consolidated Net Income plus to the extent included (i) non-cash expenses including non-cash restructuring charges and impairment charges; (ii) any non-cash gain arising from extraordinary or non-recurring items; (iii) impairment or amortization of goodwill and other intangibles; (iv) costs and expenses incurred in connection with the entering into by the Obligors of the Loan Documents, any defeasance, redemption, refinancing or escrow of the Senior Notes and the Convertible Notes occurring after the Closing Date, acquisitions or dispositions permitted hereunder (including any Permitted Portfolio Transaction); (v) all non-cash expenses taken in connection with employee stock options and other employee equity awards following adoption of Financial Accounting Standard 123R; (vi) provision for taxes based upon income; (vii) interest expense; and (viii) depreciation and amortization expenses, all as determined in accordance with GAAP on a Consolidated basis.

Electronic Chattel Paper - shall have the meaning given to the term "electronic chattel paper" in the UCC.

Eligible Account - an Account that arises in the Ordinary Course of Business of a Borrower from the sale of goods, is payable in Dollars, is subject to Agent ' s duly perfected Lien, and is deemed by Agent, in its reasonable credit judgment, to be an Eligible Account. Without limiting the generality of the foregoing, no Account shall be an Eligible Account if (i) it arises out of a sale made by a Borrower to an Affiliate of a Borrower, a Person controlled by an Affiliate of a Borrower or a Blocked Person; (ii) it is unpaid for more than 60 days after the original due date shown on the invoice; (iii) it is due or unpaid more than 150   days after the original invoice date; (iv) 50% or more of the Accounts from the Account Debtor are not deemed Eligible Accounts hereunder; (v) the total unpaid Accounts of the Account Debtor exceed 15%   of the aggregate amount of all Eligible Accounts or exceed a higher credit limit established by Agent for such Account Debtor, in each case, to the extent of such excess; (vi) any covenant, representation or warranty contained in this Agreement with respect to such Account has been breached in any material respect; (vii) the Account Debtor is also such Borrower ' s creditor or supplier, or has disputed liability with respect to such Account or has made any claim with respect to any other Account due from such Account Debtor to such Borrower, or the Account otherwise is or may become subject to any right of setoff, counterclaim, recoupment, reserve, defense or chargeback, provided that, the Accounts of such Account Debtor shall be ineligible only to the extent of such dispute or right of offset, counterclaim, recoupment, reserve, defense or chargeback; (viii) an Insolvency Proceeding has been commenced by or against the Account Debtor or the Account Debtor has failed, suspended or ceased doing business or the Account Debtor is unable in general to pay its debts as they become due; (ix) it arises from a sale to an Account Debtor that is organized under the laws of any jurisdiction outside of the United States except to the extent that the sale is supported or secured by an Approved Credit Enhancement; (x) it arises from a sale to the Account Debtor on a bill-and-hold, guaranteed sale, sale-or-return, sale-on-approval, or consignment basis (unless each of the Permitted Consignment Sale Conditions have been satisfied) or any other repurchase or return basis; (xi) the Account Debtor is the United States of America or any department, agency or instrumentality thereof, unless the applicable Borrower is not prohibited from assigning the Account and does assign its right to payment of such Account to Agent, in a manner satisfactory to Agent, so as to comply with the Assignment of Claims Act of 1940 (31 U.S.C. Section3727 and 41 U.S.C. Section15), or is a state, county or municipality, or a political subdivision or agency thereof and Applicable Law disallows or restricts an assignment of Accounts on which it is the Account Debtor; (xii) the Account Debtor is located in New Jersey, Minnesota, Indiana or any other jurisdiction which imposes conditions on the right of, or restricts the ability of, a creditor to collect accounts receivable unless the applicable Borrower has either qualified to transact business in such jurisdiction as a foreign entity or filed a Notice of Business Activities Report or other required report with the appropriate officials in those jurisdictions for the then current year; (xiii) the Account is subject to a Lien other than a Permitted Lien; (xiv) the goods giving rise to such Account have not been delivered to and accepted by the Account Debtor or the Account otherwise does not represent a final sale; (xv) the Account is evidenced by Chattel Paper or an Instrument of any kind, or has been reduced to judgment; (xvi) the Account represents a progress billing or a retainage or arises from a sale on a cash-on-delivery basis; (xvii) such Borrower has made any agreement with the Account Debtor for any deduction therefrom, except for discounts or allowances which are made in the Ordinary Course of Business and which discounts or allowances are reserved for by Borrowers in accordance with GAAP; (xviii) such Borrower has made an agreement with the Account Debtor to extend the time of payment thereof; (xix) the Account represents, in whole or in part, a billing for interest, fees or late charges, provided that such Account shall be ineligible only to the extent of the amount of such billing; (xx) the Account Debtor has made a partial payment with respect to such Account; (xxi) it arises from the sale of Inventory that is not Eligible Inventory pursuant to clause (ii) of the definition of "Eligible Inventory"; or (xxii) it arises from a retail sale of Inventory to a Person who is purchasing the same primarily for personal, family or household purposes.

Eligible Assignee - a Person that is a Lender, a U.S. based Affiliate of a Lender or an Approved Fund (as defined below); a commercial bank, finance company, or other financial institution, in each case that is organized under the laws of the United States or any state, has total assets in excess of $5 billion, extends asset-based lending facilities of the type contemplated herein in the Ordinary Course of Business and whose becoming an assignee would not constitute a prohibited transaction under Section 4975 of ERISA or any other Applicable Law, is acceptable to Agent and, unless an Event of Default exists, Borrowers (such approval by Borrowers, when required, not to be unreasonably withheld or delayed) and, at any time that an Event of Default exists, any other Person (other than a competitor of Borrowers) acceptable to Agent in its discretion. The term "Approved Fund" means with respect to any Lender, any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in bank loans and similar extensions of credit in the Ordinary Course of Business of such Person and that is administered or managed by (i) such Lender, (ii) an Affiliate of such Lender or (iii) an entity or an Affiliate of an entity that administers or manages a Lender.

Eligible Equipment - new Equipment located in the United States which (i) is owned by a Borrower and has been delivered to and accepted by a Borrower and installed at premises owned or leased by a Borrower; (ii) is subject to Agent ' s duly perfected security interest and no other Lien that is not a Permitted Lien; (iii) does not and will not, after delivery to and installation at a Borrower ' s premises (other than premises owned by any Consolidated Group Member), constitute a fixture under Applicable Law unless each landlord and mortgagee in respect of such premises have executed in favor of Agent a Lien Waiver; and (iv) does not and will not, after delivery to and installation at a Borrower ' s premises, constitute an accession to other Equipment that is subject to any Lien (whether or not a Permitted Lien) in favor of any Person other than Agent unless the holder of any such Lien agrees to disclaim any interest in the Eligible Equipment.

Eligible Inventory - Inventory which is owned by a Borrower (other than packaging or shipping materials, labels, samples, display items, bags and manufacturing supplies) and which Agent, in its reasonable credit judgment, deems to be Eligible Inventory. Without limiting the generality of the foregoing, no Inventory shall be Eligible Inventory unless: (i) it is raw materials or finished goods; (ii) it is owned by a Borrower and it is not held by such Borrower on consignment from or subject to any guaranteed sale, sale-or-return, sale-on-approval or repurchase agreement with any supplier; (iii) it is not damaged, not defective, not obsolete, not otherwise unfit for sale and is in good and saleable condition and is not goods returned to such Borrower by or repossessed from an Account Debtor; (v) it is and continues to be FDA-approved and meets all other material standards imposed by any Governmental Authority; (vi) it conforms in all material respects to the warranties and representations set forth in this Agreement and is fully insured in the manner required by this Agreement; (vii) it is at all times subject to Agent ' s duly perfected, first priority security interest and no other Lien except a Permitted Lien; (viii) it is in such Borrower ' s possession and control at a location in compliance with this Agreement, is not in transit or outside the United States (except for Permitted Canadian Inventory) and is not consigned to any Person unless each of the Permitted Consignment Sale Conditions have been satisfied; (ix) it is not the subject of a negotiable warehouse receipt or other negotiable Document; (x) it has not been sold or leased and such Borrower has not received any deposit or downpayment in respect thereof in anticipation of a sale; (xi) no more than 50% of such Inventory consists of a single product; (xii) the age for a human health generic or an animal health generic is no more than 360 days and 180 days, respectively, prior to its expiration date; and (xiii) it appears in the details of a current perpetual inventory report.

Eligible Real Estate - the Real Estate listed on Exhibit J and other Real Estate in the United States that is owned by a Borrower in fee simple title or which is subject to a ground lease reasonably acceptable to Agent, which satisfies each of the following conditions as determined by Agent:

(i)          Agent has a perfected first-priority Lien in such Real Estate for the benefit of the Secured Parties (subject only to Permitted Liens) and the applicable Borrower has executed and delivered to Agent such Mortgages and other documents as Agent may request;

(ii)         such Real Estate has been appraised by a third party appraiser reasonably acceptable to Agent and the results of such appraisal are satisfactory in all respects to Agent;

(iii)        Agent has received an environmental site assessment of such Real Estate acceptable to Agent in all respects;

(iv)        such Real Estate is improved by fully constructed buildings occupied by Borrowers and utilized as Borrowers ' corporate offices or for their manufacturing, development and distribution of pharmaceutical products; and

(v)         the applicable Borrower has delivered to Agent title insurance, surveys, flood insurance certifications and other real estate items, as required by, and satisfactory to, Agent, including, but not limited to, those items required by FIRREA.

Enforcement Action - action taken or to be taken by Agent, during any period that an Event of Default exists, to enforce collection of the Obligations or to realize upon the Collateral (whether by judicial action, under power of sale, by self-help repossession, by notification to Account Debtors, or by exercise of rights of setoff or recoupment).

Environmental Agreement - the Agreement Regarding Environmental Matters executed by Borrowers in favor of Agent on or about the Original Closing Date, which Agreement sets forth the understanding and agreements of Indemnitees, Agent and Lenders with respect to environmental matters and by which each Borrower shall, among other things, indemnify Agent and Lenders from liability for such Borrower ' s failure to comply with any Environmental Laws.

Environmental Laws - all federal, state, local and foreign laws, rules, regulations, codes, ordinances, orders and consent decrees (together with all programs, permits and guidance documents promulgated by regulatory agencies, to the extent having the force of law), now or hereafter in effect, that relate to public health (but excluding occupational safety and health, to the extent regulated by OSHA) or the protection or pollution of the environment, whether new or hereafter in effect, including CERCLA, RCRA and CWA.

Environmental Reserve - a reserve to be included in the Availability Reserve in an amount equal to the costs and expenses of remediation with respect to any of the Real Estate, as determined by Agent in its reasonable credit judgment. Agent may release all or any portion of such Environmental Reserve upon receipt by Agent of written evidence, satisfactory to Agent in all respects, that such remediation has been completed and that the Real Estate is in compliance with all Environmental Laws.

Equipment - shall have the meaning given to the term "equipment" in the UCC and shall include all of each Borrower ' s machinery, apparatus, equipment, fittings, furniture, fixtures and other tangible personal Property (other than Inventory) of every kind and description, whether now owned or hereafter acquired by such Borrower and wherever located, and all parts, accessories and special tools therefor, all accessions thereto, and all substitutions and replacements thereof, excluding motor vehicles.

Equity Interest - the interest of (i) a shareholder in a corporation, (ii) a partner (whether general or limited) in a partnership (whether general, limited or limited liability), (iii) a member in a limited liability company, or (iv) any other Person having any other form of equity security or ownership interest.

ERISA - the Employee Retirement Income Security Act of 1974.

Euro Debt - any Debt incurred or issued by any Foreign Subsidiary of Parent, which indebtedness could include, without limitation, a European high yield offering, an asset based credit facility and/or a bridge facility.

Event of Default - as defined in Section 12 .

EWS Party - has the meaning ascribed to such term in the definition of "Change of Control."

Excess Borrowing Base Amount - the amount by which the Borrowing Base on any date of determination exceeds the Pro Forma Borrowing Base.

Excess FAS Amount - on any date of determination, the difference between (i) the Fixed Asset Sublimit on the Closing Date, as reduced after the Closing Date by the quarterly amortization amounts referenced in the definition of Fixed Asset Sublimit and (ii) on any date of determination after the Closing Date in connection with a prepayment under Section 5.3.1 , an amount equal to the sum of (I) 85% of the Appraised Net Orderly Liquidation Value of Eligible Equipment and (II) 65% of the Appraised Fair Market Value of Eligible Real Estate.

Exchange Act - the Securities Exchange Act of 1934, as amended from time to time, and the regulations promulgated and the rulings issued thereunder.

Executive Order No. 13224 - Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001.

Extraordinary Expenses - all costs, expenses, fees (including fees incurred to Agent Professionals) or advances that Agent (or any Lender) may suffer or incur in connection with the Obligations or the Loan Documents during any period that an Event of Default exists, or during the pendency of an Insolvency Proceeding of an Obligor, on account of or in connection with (i) the audit, inspection, repossession, storage, repair, appraisal, insuring, completion of the manufacture of, preparing for sale, advertising for sale, selling, collecting or otherwise preserving or realizing upon any Collateral; (ii) any action, suit, litigation, arbitration, contest or other judicial or non-judicial proceeding (whether instituted by or against Agent, any Lender, any Obligor, any representative of creditors of any Obligor or any other Person) in any way arising out of or relating to any of the Collateral (or the validity, perfection, priority or avoidability of Agent ' s Liens with respect to any of the Collateral), any of the Loan Documents or the validity, allowance or amount of any of the Obligations, including any lender liability or other Claims asserted against Agent or any Lender; (iii) the exercise, protection or enforcement of any rights or remedies of Agent in, or the monitoring of, any Insolvency Proceeding; (iv) the settlement or satisfaction of any Liens upon any Collateral (whether or not such Liens are Permitted Liens); (v) the collection or enforcement of any of the Obligations, whether by Enforcement Action or otherwise; (vi) the negotiation, documentation, and closing of any amendment, waiver, restructuring or forbearance agreement with respect to the Loan Documents or Obligations; (vi) amounts advanced by Agent pursuant to Sections 8.1.3 or 15.10 ; or (viii) the enforcement of any of the provisions of any of the Loan Documents; provided , however , that such expenses shall include the reasonable legal fees and expenses of only one counsel to Agent (and any necessary local counsel as determined by Agent) and in addition, Lenders who are not the Agent shall be entitled to reimbursement for no more than one counsel representing all such Lenders (absent a conflict of interest in which case Lenders may engage and be reimbursed for additional counsel). Extraordinary Expenses shall not include the allocation of any overhead expenses consisting of rent, utilities and employee salaries of any Secured Party. Such costs, expenses and advances may include transfer fees, taxes, storage fees, insurance costs, permit fees, utility reservation and standby fees, legal fees, appraisal fees, brokers ' fees and commissions, auctioneers ' fees and commissions, accountants ' fees, environmental study fees, wages and salaries paid to employees of any Borrower or independent contractors in liquidating any Collateral, travel expenses, all other fees and expenses payable or reimbursable by Borrowers or any other Obligor under any of the Loan Documents, and all other reasonable fees and expenses associated with the enforcement of rights or remedies under any of the Loan Documents, but excluding compensation paid to employees (including inside legal counsel who are employees) of Agent or any Lender and in each case, subject to the limitations set forth above.

FDA - the United States Food and Drug Administration, and any Governmental Authority succeeding to any of its principal functions.

Federal Funds Rate - for any period, a fluctuating interest rate per annum equal for each date during such period to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by Agent from 3 federal funds brokers of recognized standing selected by Agent.

Fee Letter - the fee letter agreement dated on or before the Original Closing Date among Agent, Banc of America Securities LLC and Borrowers.

FEIN - with respect to any Person, the Federal Employer Identification Number of such Person.

Financed Capital Expenditures - (i) Capital Expenditures funded with the proceeds of Debt permitted under Section 10.2.3 , including Permitted Purchase Money Debt (excluding Loans) and those represented by Capitalized Lease Obligations, (ii) Capital Expenditures funded with the proceeds of any equity securities issued or capital contributions received, or Debt borrowed (other than Borrowings under this Agreement) by any Consolidated Group Member, (iii) Capital Expenditures that satisfy the requirements of a Permitted Acquisition or Permitted Investment, (iv) any expenditures which are contractually required to be, and are, reimbursed to a Consolidated Group Member in cash by a third party (including landlords) during such period of calculation, (v) Capital Expenditures made with the cash proceeds of any insurance, condemnation or eminent domain event, or (vi) Capital Expenditures made with the cash proceeds from any Permitted Asset Disposition (other than proceeds of any Inventory, Accounts, Eligible Equipment and Eligible Real Estate).

FIRREA - Financial Institutions Reform, Recovery, and Enforcement Act of 1989.

Fiscal Month - each calendar month in Borrowers ' Fiscal Year.

Fiscal Quarter - the period commencing January 1 in any Fiscal Year and ending on the next succeeding March 31, the period commencing April 1 in any Fiscal Year and ending on the next succeeding June 30, the period commencing July 1 in any Fiscal Year and ending on the next succeeding September 30 or the period commencing October 1 in any Fiscal Year and ending on the next succeeding December 31, as the context may require, or, if any such Subsidiary was not in existence on the first day of any such period, the period commencing on the date on which such Subsidiary is incorporated, organized, formed or otherwise created and ending on the last day of such period.

Fiscal Year - the fiscal year of Borrowers and their Subsidiaries for accounting and tax purposes, which ends on December 31 of each year.

Fixed Asset Sublimit - on any date of determination thereof, an amount equal to the lesser of (i) the sum of (x) 80% of the Appraised Net Orderly Liquidation Value of Eligible Equipment and (y) 75% of the Appraised Fair Market Value of Eligible Real Estate or (ii) $11,000,000. The Fixed Asset Sublimit shall be reduced on a quarterly basis in accordance with the following schedule:

The remainder of the Fixed Asset Sublimit shall be reduced to zero on the Commitment Termination Date.

Fixed Charge Coverage Ratio - for any period, the ratio of (a) EBITDA for such period minus Capital Expenditures (excluding Financed Capital Expenditures) for such period, to (b) the sum of all Fixed Charges for such period, all calculated for the Consolidated Group on a Consolidated basis.

Fixed Charges - for any fiscal period, the sum of (i) interest expense of the Consolidated Group (other than interest payable-in-kind to the extent not paid in cash) for such period less interest income of the Consolidated Group for such period plus (ii) scheduled principal payments on Funded Debt of the Consolidated Group (including scheduled principal payments of Capitalized Lease Obligations but excluding the scheduled reductions of the Fixed Asset Sublimit, and any repurchase, redemption or defeasance of the Convertible Notes or the Senior Notes during such period plus (iii) Distributions made by Parent or Distributions made by any other Borrower to a Person that is not a Borrower during such period plus (iv) cash incomes taxes (net of cash refunds received) paid during such period.

FLSA - the Fair Labor Standards Act of 1938.

Food and Drug Laws - all federal, state or local statues, rules, regulations, ordinances and codes, together with all administrative orders, directed duties, licenses, authorization and permits of, and agreements with, any United States and foreign Governmental Authority, in each case relating to manufacture, sale, testing, handling, management, marketing and disposal or pharmaceutical, medical device, biological and drug products, including but not limited to those relating to good manufacturing practices, good clinical practices, labeling, record keeping and obligations for products for which (a) monograph conditions must be met, or (b) a 510K or similar application must be filed, or (c) approval of the FDA and/or similar foreign Governmental Authority is required, before they may be marketed or sold.

Foreign Lender - any Lender that is organized under the laws of a jurisdiction other than the laws of the United States, any state thereof or the District of Columbia.

Foreign Subsidiary - a Subsidiary that is not a Domestic Subsidiary.

Full Payment - with respect to any of the Obligations, the full and final payment in full, in cash and in Dollars, of such Obligations (other than contingent indemnification obligations for which no claim has been made or asserted), including all interests, fees and other charges payable in connection therewith under any of the Loan Documents, whether such interests, fees or other charges accrue or are incurred prior to or during the pendency of an Insolvency Proceeding and whether or not any of the same are allowed or recoverable in any bankruptcy case pursuant to Section 506 of the Bankruptcy Code or otherwise; with respect to any LC Obligations represented by undrawn Letters of Credit and Banking Relationship Debt (including Debt arising under Hedging Agreements), the depositing of cash with Agent, as security for the payment of such Obligations, not to exceed 103% of the aggregate undrawn amount of such Letters of Credit and 100% of Agent ' s good faith estimate of the amount of Banking Relationship Debt due and to become due after termination of such Bank Products; and with respect to any Obligations that are contingent in nature (other than Obligations consisting of LC Obligations or Banking Relationship Debt), such as a right of Agent or a Lender to indemnification by any Obligor, the depositing of cash with Agent in an amount equal to 100% of such Obligations or, if such Obligations are unliquidated in amount and represent a claim which has been overtly asserted (or is reasonably probable of assertion) against Agent or a Lender and for which an indemnity has been provided by Borrowers in any of the Loan Documents, in an amount that is equal to such claim or Agent ' s good faith estimate of such claim. None of the Loans shall be deemed to have been paid in full until all Commitments related to such Loans have expired or been terminated.

Funded Debt - with respect to the Consolidated Group, the sum, without duplication, of (i) the aggregate amount of Debt of the Consolidated Group consisting of (a) the borrowing of money or the obtaining of credit (other than accrued expenses and accounts payables incurred in the Ordinary Course of Business including the Obligations on any date of determination (but excluding repayment and reborrowing of Revolver Loans), and any other notes or bonds, (b) the deferred purchase price of assets (other than trade payables incurred in the Ordinary Course of Business), or (c) Capitalized Lease Obligations, plus (ii) Debt of the type referred to in clause (i) of another Person guaranteed by a Consolidated Group Member, in each case as determined on a Consolidated basis.

GAAP - generally accepted accounting principles in the United States of America in effect from time to time.

General Intangibles - shall have the meaning given to the term "general intangibles" in the UCC and shall include each Borrower ' s choses in action, causes of action, company or other business records, inventions, blueprints, designs, patents, patent applications, trademarks, trademark applications, trade names, trade secrets, service marks, goodwill, brand names, copyrights, registrations, licenses, franchises, customer lists, permits, tax refund claims, computer programs, operational manuals, internet addresses and domain names, insurance refunds and premium rebates, all rights to indemnification and all other intangible property of such Borrower of every kind and nature (other than Accounts).

Goods - shall have the meaning given to the term "goods" in the UCC.

Governmental Approvals - all authorizations, consents, approvals, licenses and exemptions of, registrations and filings with, and reports to, all Governmental Authorities.

Governmental Authority - any federal, state, municipal, national, foreign or other governmental department, commission, board, bureau, court, agency or instrumentality or political subdivision thereof or any entity exercising executive, legislative, judicial, regulatory or administrative functions of any government or any court, in each case whether associated with a state of the United States, the District of Columbia or a foreign entity or government.

Guarantors - each Person after the Closing Date who guarantees payment or performance of the whole or any part of the Obligations.

Guaranty - each guaranty agreement now or hereafter executed by a Guarantor in favor of Agent with respect to any of the Obligations.

Hedging Agreement - any interest rate protection agreement, interest rate swap, cap, collar agreements, foreign currency exchange agreement, forward, future or option contract, currency swap agreement, commodity price protection agreement or other interest or currency exchange rate or commodity price hedging arrangement or other similar agreements.

Impermissible Qualification - any qualification or exception to the opinion or certification of any independent public accountant as to any financial statement of Parent and its Subsidiaries which (i) is of a "going concern" or similar nature, or (ii) relates to the limited scope of examination of matters relevant to such financial statements.

Indemnitees - the Agent Indemnitees, the Lender Indemnitees, the Issuing Bank Indemnities and the BofA Indemnitees.

Insolvency Proceeding - any action, case or proceeding commenced by or against a Person under any state, federal or foreign bankruptcy, insolvency, receivership or similar law for (i) the entry of an order for relief under any chapter of the Bankruptcy Code or other bankruptcy insolvency, receivership or similar law (whether state, federal or foreign), (ii) the appointment of a receiver (or administrative receiver), trustee, liquidator, administrator or conservator for such Person or any substantial part of its Property, (iii) a general assignment or trust mortgage for the benefit of creditors of such Person, or (iv) except to the extent otherwise expressly permitted herein, the liquidation, dissolution or winding up of the affairs of such Person.

Instrument - shall have the meaning given to the term "instrument" in the UCC.

Intellectual Property - all intellectual and intangible Property and other similar Property of a Person of every kind and description, including inventions, designs, patents, patent applications, copyrights, trademarks, service marks, trade names, mask works, trade secrets, confidential or proprietary information, know-how, software and databases and all embodiments or fixations thereof and related documentation, registrations and all licenses, or other rights to use any of the foregoing.

Intellectual Property Claim - the assertion by any Person of a claim (whether asserted in writing, by action, suit or proceeding or otherwise) that any Borrower ' s ownership, use, marketing, sale or distribution of any Inventory, Equipment, Intellectual Property or other Property is violative of any ownership of or right to use any Intellectual Property of such Person.

Interest Period - shall have the meaning ascribed to it in Section 3.1.3 .

Inventory - shall have the meaning given to the term "inventory" in the UCC and shall include all goods intended for sale or lease by a Borrower, or for display or demonstration; all work in process, all raw materials and other materials and supplies of every nature and description used or which might be used in connection with the manufacture, printing, packing, shipping, advertising, selling, leasing or furnishing of such goods or otherwise used or consumed in a Borrower ' s business (but excluding Equipment).

Inventory Formula Amount - on any date of determination thereof, an amount equal to the lesser of (A) the Revolver Commitments or (B) the sum of (i) the lesser of (x) 65% of the Value of Eligible Inventory consisting of finished goods on such date or (y) 85% of the product obtained by multiplying the Value of Eligible Inventory on such date consisting of finished goods by the Net Orderly Liquidation Value Percentage; plus (ii) the lesser of (x) 65% of the Value of Eligible Inventory consisting of raw materials on such date or (y) 85% of the product obtained by multiplying the Value of Eligible Inventory on such date consisting of raw materials by the Net Orderly Liquidation Value Percentage.

Inventory Reserve - such reserves as may be established from time to time by Agent in its reasonable credit judgment to reflect changes in the salability of any Eligible Inventory in the Ordinary Course of Business or such other factors as could be reasonably expected to negatively impact the Value of any Eligible Inventory. Without limiting the generality of the foregoing, such reserves may include reserves based on obsolescence, theft or other shrinkage, markdowns, and vendor chargebacks; provided that any reserve for returns and rebates shall be determined consistent with Borrowers ' past practice and in accordance with GAAP and shall otherwise be acceptable to Agent in its reasonable credit judgment.

Investment Property - shall have the meaning given to the term "investment property" in the UCC and shall include all securities (whether certificated or uncertificated), security entitlements, securities accounts, commodity contracts and commodity accounts.

Issuing Bank - BofA or an Affiliate of BofA.

Issuing Bank Indemnitees - Issuing Bank and all of its present and future officers, directors, employees, agents and attorneys.

LC Application - an application by any or all Borrowers to Issuing Bank, pursuant to a form approved by Issuing Bank, for the issuance of a Letter of Credit, that is submitted to Issuing Bank at least 3 Business Days prior to the requested issuance of such Letter of Credit.

LC Conditions - the following conditions, the satisfaction of each of which is required before Issuing Bank shall be obligated issue a Letter of Credit: (i) each of the conditions set forth in Section 11.1 and Section 11.2 in connection with the issuance of Letters of Credit on the Closing Date and each of the conditions set forth in Section 11.2 for Letters of Credit issued thereafter has been and continues to be satisfied, including the absence of any Default or Event of Default; (ii) after giving effect to the issuance of the requested Letter of Credit and all other unissued Letters of Credit for which an LC Application has been signed by a Borrower and approved by Agent and Issuing Bank, the LC Obligations would not exceed $25,000,000 and no Out-of-Formula Condition would exist, and, if no Revolver Loans are outstanding, the LC Obligations do not, and would not upon the issuance of the requested Letter of Credit, exceed the Borrowing Base; (iii) such Letter of Credit has an expiration date that is no more than 365 days from the date of issuance in the case of standby Letters of Credit and no more than 120 days from the date of issuance in the case of documentary Letters of Credit and, in either event, such expiration date is at least 30 days prior to the last Business Day of the Term unless otherwise agreed by Agent in its discretion; (iv) the currency in which payment is to be made under the Letter of Credit is Dollars; and (v) the form of the proposed Letter of Credit is satisfactory to Agent and Issuing Bank in their discretion, provides for sight drafts only and does not contain any language that automatically increases the amount available to be drawn under the Letter of Credit.

LC Documents - any and all agreements, instruments and documents (including an LC Application) required by Issuing Bank to be executed by Borrowers or any other Person and delivered to Issuing Bank for the issuance, amendment or renewal of a Letter of Credit.

LC Facility - the subfacility for Letters of Credit established as part of the Revolver Commitments pursuant to Section 2.3 .

LC Obligations - on any date, an amount (in Dollars) equal to the sum of (without duplication) (i) all amounts then due and payable by any Obligor on such date by reason of any payment that is made by Issuing Bank under a Letter of Credit and that has not been repaid to Issuing Bank, plus (ii) the aggregate Undrawn Amount of all Letters of Credit which are then outstanding or for which an LC Application has been delivered to and accepted by Issuing Bank, plus (iii) all fees and other amounts due and payable in respect of Letters of Credit outstanding on such date.

LC Request - a Letter of Credit Request from Borrowers to Issuing Bank in the form of Exhibit I annexed hereto.

LC Reserve - at any date, the aggregate of all LC Obligations on such date, other than (i) LC Obligations that Borrowers shall Cash Collateralize on or prior to such date and (ii) during any period that no Default or Event of Default exists, the portion of LC Obligations described in clause (iii) of the definition thereof.

Lender Indemnitees - Lenders and all of their respective present and future officers, directors, employees, agents and attorneys.

Lenders - shall have the meaning given to it in the preamble to this Agreement and shall include BofA (whether in its capacity as a provider of Loans under Section 2 or as the provider of Swingline Loans under Section 4.1.3 ) and any other Person who may from time to time become a "Lender" under this Agreement, including each assignee that becomes a party to this Agreement pursuant to Section 14.3 .

Letter of Credit - any standby or documentary letter of credit issued by Issuing Bank for the account of any Borrower.

Letter-of-Credit Right - shall have the meaning given to the term "letter-of-credit-right" in the UCC.

LIBOR Lending Office - with respect to a Lender, the office designated as a LIBOR Lending Office for such Lender on the signature page hereof (or on any Assignment and Acceptance, in the case of an assignee) or such other office of such Lender or any of its Affiliates that is hereafter designated by written notice to Agent.

LIBOR Loan - a Loan, or portion thereof, during any period in which it bears interest at a rate based upon the applicable Adjusted LIBOR Rate.

License Agreement - any agreement between a Borrower and a Licensor pursuant to which such Borrower is authorized to use any Intellectual Property in connection with the manufacturing, marketing, sale or other distribution of any Inventory of such Borrower.

Licensor - any Person from whom a Borrower obtains the right to use (whether on an exclusive or non-exclusive basis) any Intellectual Property in connection with such Borrower ' s manufacture, marketing, sale or other distribution of any Inventory.

Lien - means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, collateral assignment, charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.

Lien Waiver - an agreement duly executed in favor of Agent, in form and content reasonably acceptable to Agent, by which (i) for locations leased by an Obligor, an owner or mortgagee of premises upon which the Property of an Obligor is located agrees to waive or subordinate any Lien it may have with respect to such Property in favor of Agent ' s Lien therein and to permit Agent to enter upon such premises and remove such Property or to use such premises to store or dispose of such Property, or (ii) for locations at which any Obligor places Inventory with a warehouseman or a processor, such warehouseman or processor agrees to waive or subordinate any Lien it may have with respect to such Property in favor of Agent ' s Lien therein and to permit Agent to enter upon such premises and remove such Property or to use such premises to store or dispose of such Property, or, in either case, otherwise reasonably acceptable to Agent.

Loan - a Revolver Loan (and, without duplication, each Base Rate Loan and LIBOR Loan comprising such Loan).

Loan Account - the loan account established by each Lender on its books pursuant to Section 5.8.

Loan Documents - this Agreement, the Other Agreements and the Security Documents.

Loan Year - a period commencing each calendar year on the same month and day as the date of this Agreement and ending on the same month and day in the immediately succeeding calendar year, with the first such period ( i.e. the first Loan Year) to commence on the date of this Agreement.

Margin Stock - shall have the meaning ascribed to it in Regulation U and of the Board of Governors.

Material Adverse Effect - the effect of any event, condition or circumstance, which (i) has a material adverse effect upon the business, operations, Properties, or financial condition of Parent and its Subsidiaries, taken as a whole or the ability of the Consolidated Group to repay the Obligations; (ii) has or could be reasonably expected to have any material adverse effect whatsoever upon the validity or enforceability of this Agreement or any of the other Loan Documents; or (iii) has a material adverse effect upon the value of the whole or any substantial part of the Collateral, the Liens of Agent with respect to such Collateral or the priority of any such Liens; or (iv) has a material adverse effect on the ability of Agent or any Lender to enforce or collect the Obligations or realize upon any material portion of the Collateral in accordance with the Loan Documents and Applicable Law.

Material Contract - an agreement to which an Obligor is a party (other than the Loan Documents) for which breach, termination, cancellation, nonperformance or failure to renew could reasonably be expected to have a Material Adverse Effect.

Maximum Rate - the maximum non-usurious rate of interest permitted by Applicable Law that at any time, or from time to time, may be contracted for, taken, reserved, charged or received on the Debt in question or, to the extent that at any time Applicable Law may thereafter permit a higher maximum non-usurious rate of interest, then such higher rate. Notwithstanding any other provision hereof, the Maximum Rate shall be calculated on a daily basis (computed on the actual number of days elapsed over a year of 365 or 366 days, as the case may be).

Money Borrowed - as applied to any Obligor, without duplication, (i) Debt arising from the lending of money by any other Person to such Obligor; (ii) Debt, whether or not in any such case arising from the lending of money by another Person to such Obligor, (A) which is represented by notes payable or drafts accepted that evidence extensions of credit, (B) which constitutes obligations evidenced by bonds, debentures, notes or similar instruments, or (C) upon which interest charges are customarily paid (other than accounts payable) or that was issued or assumed as full or partial payment for Property; (iii) Debt that constitutes a Capitalized Lease Obligation; (iv) reimbursement obligations with respect to letters of credit or guaranties of letters of credit; and (v) Debt of such Obligor under any guaranty of obligations that would constitute Debt for Money Borrowed under clauses (i) through (iii) hereof, if owed directly by such Obligor.

Moody's - Moody's Investors Services, Inc.

Mortgages - the mortgages, deeds of trust and/or deeds to secure debt executed by a Borrower on or before the Original Closing Date in favor of Agent and pursuant to which such Borrower granted and conveyed to Agent, for the benefit of Secured Parties, Liens upon the Real Estate of such Borrower listed on Exhibit J attached hereto as security for the payment of the Obligations.

Multiemployer Plan - has the meaning set forth in Section 4001(a)(3) of ERISA.

Negative Pledge Agreement - each Negative Pledge Agreement executed by the applicable Borrower on or before the Original Closing Date, pursuant to which such Borrower agreed that it shall not consensually pledge, assign, transfer, encumber or grant any Lien in favor of any other Person in any of the Specified Real Estate of such Borrower that has not been pledged to Agent or permit any Lien to exist thereon (other than a Permitted Lien) until the Full Payment of the Obligations.

Net Disposition Proceeds - proceeds (including cash receivable (when received) by way of deferred payment) received by an Obligor in cash from an Asset Disposition under clause (ii), (ix) or (x) of the definition of Permitted Asset Disposition, net of: (i) the reasonable fees and out-of-pocket costs and expenses actually incurred in connection with such Asset Disposition (including legal fees, accountants, appraisals, brokerage, title fees and expenses and sales commissions); (ii) amounts applied to repayment of Debt (other than the Obligations) secured by a Permitted Lien on such Collateral disposed of that is senior in priority to Agent's Liens; (iii) recording, transfer, sales or similar taxes; and (iv) reserves for escrows and indemnities, until such reserves are no longer required and such reserves or escrows are released to a Borrower.

Net Orderly Liquidation Value Appraisal - an appraisal of the orderly liquidation value of Inventory or Equipment (as applicable) of Borrowers performed by an appraiser reasonably satisfactory to Agent, which appraisal shall deduct as a factor in the determination of orderly liquidation value, all costs and expenses projected to be incurred in the conduct of any liquidation of all or any portion of the Inventory or Equipment (as applicable).

Net Orderly Liquidation Value Percentage - at any date and with respect to any Inventory, the percentage of the value of such Inventory expected to be realized at an orderly, negotiated sale of such Inventory that is held within a reasonable period of time, as such percentage is determined by Agent from the most recent Net Orderly Liquidation Value Appraisal received by Agent and acceptable by Agent on or before such date.

Notes - each Revolver Note, the Swingline Note and any other promissory note executed by Borrowers at Agent's request to evidence any of the Obligations.

Notice of Borrowing - as defined in Section 4.1.1(i) .

Notice of Conversion/Continuation - as defined in Section 3.1.2(ii).

Obligations - in each case, whether now in existence or hereafter arising, (i) the principal of, and interest and premium, if any, on the Loans, (ii) all LC Obligations and all other obligations of any Obligor to Agent or Issuing Bank arising in connection with the issuance of any Letter of Credit, (iii) all liabilities and obligations of Borrowers under any indemnity for Claims, (iv) all Extraordinary Expenses, (v) all other Debts, covenants, duties and obligations (including Contingent Obligations) now or at any time or times hereafter owing by any Obligor to Agent or any Lender under or pursuant to this Agreement or any of the other Loan Documents, in each case, whether evidenced by any note or other writing, whether arising from any extension of credit, opening of a letter of credit, acceptance, loan, guaranty, indemnification or otherwise and whether direct or indirect, absolute or contingent, due or to become due, primary or secondary, or joint or several, including all interest, charges, expenses, fees or other sums chargeable to any or all Obligors under any of the Loan Documents, and (vi) any Banking Relationship Debt.

Obligor - each Borrower and each Guarantor.

Ordinary Course of Business - with respect to any transaction involving any Person, the ordinary course of such Person's business and undertaken by such Person in good faith and not for the purpose of evading any covenant or restriction in any Loan Document.

Organic Documents - with respect to any Person, its charter, certificate or articles of incorporation, bylaws, articles of organization, limited liability agreement, operating agreement, members agreement, shareholders agreement, partnership agreement, certificate of partnership, certificate of formation, voting trust, or similar agreement or instrument governing the formation or operation of such Person.

Original Closing Date - October 26, 2005.

OSHA - the Occupational Safety and Hazard Act of 1970.

Other Agreements - the Notes, the Fee Letter, the LC Documents, each Lien Waiver, and any and all other agreements, instruments and documents (other than this Agreement and the Security Documents), heretofore, now or hereafter executed by any Borrower, any other Obligor or any other Person and delivered to Agent or any Lender, in each case in respect of the transactions contemplated by this Agreement or other Loan Documents.

Out-of-Formula Condition - as defined in Section 2.1.2 .

Out-of-Formula Loan - a Revolver Loan made or existing when an Out-of-Formula Condition exists or the amount of any Revolver Loan which, when funded, results in an Out-of-Formula Condition.

Participant - as defined in Section 14.2.1 .

Participating Lender - as defined in Section 2.3.2(i) .

Patent Security Agreement - each Patent Security Agreement executed by Borrowers in favor of Agent on or before the Original Closing Date and by which Borrowers granted to Agent, for the benefit of Secured Parties, as security for the Obligations, a security interest in all of Borrowers' right, title and interest in and to the patents and patent applications listed therein.

Payment Account - an account maintained by Agent to which all monies from time to time deposited to a Dominion Account shall be transferred and all other payments shall be sent in immediately available federal funds.

Payment Intangible - shall have the meaning given to the term "payment intangible" in the UCC.

Payment Item - each check, draft, or other item of payment payable to a Borrower, including those evidencing or constituting proceeds of any of the Collateral.

Pending Revolver Loans - at any date, the aggregate principal amount of all Revolver Loans which have been requested in any Notice of Borrowing received by Agent but which have not theretofore been advanced by Agent or Lenders.

Permitted Acquisition - the acquisition by a Borrower of all or a portion of the capital stock or assets of a Person organized under the laws of the United States of America or any state thereof so long as each of the following conditions is satisfied:

1. 1. 1. 1. 1. such acquired Person is engaged primarily in one or more businesses in which Borrowers are engaged or businesses reasonably related or incidental thereto;
            2. the Pro Forma Fixed Charge Coverage Ratio for the immediately preceding twelve Fiscal Months (if a Restrictive Trigger Event has occurred, based upon the monthly financial statements required pursuant to Section 10.1.3(ii) , and if a Restrictive Trigger Event has not occurred, then based upon the financial statements required pursuant to Section 10.1.3(iii) ) is at least 1.0 to 1.0 and Availability at the time of and after giving effect thereto is at least $15,000,000;
            3. with respect to any Person that is or becomes a Subsidiary, such Person (i) if requested by Agent, executes and delivers to Agent, for the benefit of Lenders, a joinder agreement to this Agreement and such other documents (including, if requested by Agent, an amendment to any Hedging Agreement to add such Subsidiary thereto) as may be determined by Agent to add such Subsidiary as an additional "Borrower" hereunder, and/or a new pledge agreement or such amendments to the relevant Security Documents as Agent shall deem necessary or reasonably advisable to grant to Agent, for the benefit of Secured Parties, a Lien on the capital stock of such Subsidiary (and if such Person has any direct Foreign Subsidiaries, a Lien on at least 65% of the capital stock of each direct Foreign Subsidiary), (ii) delivers to Agent the certificates representing such capital stock, together with undated stock powers executed and delivered in blank by a duly authorized officer of the Borrowers or such Subsidiary, as the case may be, (iii) if requested by Agent, in lieu of being joined as a Borrower, causes such new Subsidiary to become a party to a subsidiary guarantee, if applicable, or such comparable documentation which is in form and substance reasonably satisfactory to Agent, and (iv)  takes all actions deemed necessary or advisable by Agent to cause the Lien created by this Agreement to be duly perfected against such Person in accordance with all Applicable Law (subject to Section 7.6 hereof) including the filing of financing statements in such jurisdictions as may be requested by Agent, subject to and in accordance with the Loan Documents; provided , however , that if such Subsidiary constitutes an Excluded Subsidiary, then Agent and Lenders will not require that such Subsidiary be joined to this Agreement as a Borrower or a Guarantor but may require that 100% of the capital stock of such Subsidiary be pledged to Agent, for the benefit of Lenders, as security for the Obligations and that all of the other provisions of this definition (other than the joinder provisions of this clause (iii)) be satisfied ;
            4. the applicable Borrower has made available to Agent, not later than 10 Business Days (or such later date to which Agent may agree) prior to the proposed date of such acquisition, copies of lien search results and copies of the acquisition documents (including a copy of the purchase and sale agreement with all schedules and exhibits thereto) and other due diligence information as reasonably requested by Agent;
            5. Borrowers shall have executed and deliver such amendments or supplements to this Agreement or the other Security Documents or such other documents as Agent may deem necessary or advisable to grant Agent a first priority Lien on all of the acquired assets to the extent required by the terms hereof and thereof;
            6. Agent shall have received a certificate of the Borrower Representative executed on its behalf by a Senior Officer, certifying that both before and after giving pro forma effect to such acquisition, the Consolidated Group, taken as a whole is Solvent; and
            7. no Default or Event of Default has occurred and is continuing or would result therefrom.

In connection with any merger (or other distribution of the assets) of a Subsidiary that is not a Borrower with and into (or to) a Borrower, or any acquisition, whether by purchase of stock, merger, or purchase of assets and whether in a single transaction or series of related transactions, by a Borrower, Agent shall have the right to determine in its reasonable credit judgment which Inventory or Accounts so acquired shall be included in the Borrowing Base (subject to the provisions of the definitions "Borrowing Base," "Eligible Inventory" and "Eligible Accounts" and any other provisions of this Agreement and the other Loan Documents applicable to the computation and reporting of the Borrowing Base). In connection with such determination, Agent may obtain, at Borrowers' expense, such appraisals, commercial finance exams and other assessments of such Accounts and Inventory as it may reasonably deem desirable and all such appraisals, exams and other assessments shall be paid for by Borrowers and shall not be limited by or included in the number of appraisals and field exams reimbursable under Section 3.2.4 .

Permitted Asset Disposition - an Asset Disposition that consists of (i)  the sale of Inventory in the Ordinary Course of Business; (ii) for so long as no Default or Event of Default exists, dispositions of Property (other than Accounts, Inventory, Eligible Equipment or Eligible Real Estate) which, in the aggregate as to all Borrowers during any consecutive 12-month period, has a fair market value or book value, whichever is more, of $5,000,000 or less, provided that all Net Disposition Proceeds thereof are remitted to Agent for application to the Obligations, (iii) replacements of Equipment that is substantially worn, damaged or obsolete with Equipment of like kind, function and value, provided that the replacement Equipment shall be acquired prior to or concurrently with any disposition of the Equipment that is to be replaced, the replacement Equipment shall be free and clear of Liens other than Permitted Liens that are not Purchase Money Liens and Borrowers shall have given Agent at least 10 days prior written notice of such disposition, (iv) the licensing of Intellectual Property in the Ordinary Course of Business; (v) sales, transfers, licenses, leases or other dispositions of assets made by a Consolidated Group Member to another Consolidated Group Member (other than an Excluded Subsidiary or a Restrictive Subsidiary); (vi) transfers or forgiveness of Accounts in the Ordinary Course of Business and in connection with the collection or compromise thereof; (vii) the abandonment, failure to maintain or renew or cancellation of Intellectual Property of any Consolidated Group Member that is not material to such Consolidated Group Member's business in such Consolidated Group Member's reasonable business judgment; (viii) any sublease, sale or other disposition of any Specified Real Estate (ix) for so long as no Default or Event of Default exists, any sale or other disposition of the Piscataway New Jersey site; (x) for so long as no Default or Event of Default exists, any sale of the stock of ParMed Pharmaceuticals, Inc. by Alpharma U.S. Inc. (xi) condemnations by Governmental Authorities of Real Estate (other than Eligible Real Estate); and (xii) for so long as no Default or Event of Default exists, mergers and consolidations permitted under Section 10.2.11 .

Permitted Canadian Inventory - Inventory of a Borrower that would otherwise constitute Eligible Inventory but for the fact that it is located in Canada and in which Agent has a first-priority, perfected Lien.

Permitted Consignment Sale Conditions - each of the following conditions, the satisfaction of each of which shall be determined by Agent in its reasonable credit judgment (i) the consignee shall have executed a consignment agreement, in form and scope acceptable to Agent, granting a Borrower and its assigns a purchase money lien and security interest in all consigned Inventory that is consigned by such Borrower to such consignee, together with the cash and non-cash proceeds thereof; (ii) consignee and such Borrower shall have executed UCC financing statements, in form acceptable to Agent, based upon the requirements of the filing jurisdiction, naming such consignee as debtor and such Borrower as secured party (and, if requested by Agent, naming Agent as assignee), covering the consigned Inventory and the cash and non-cash proceeds thereof; such financing statement shall have been filed of record in all appropriate filing locations for the perfection of a first priority security interest in such consigned Inventory and the cash and non-cash proceeds thereof; and, after filing of such financing statements, such Borrower shall have conducted searches of all filings made against such consignee in such filing offices and taken such other action as Agent may reasonably request, including notification pursuant to the UCC to each holder of a conflicting Lien in such consigned Inventory, which shall confirm that the security interest in the consigned Inventory in favor of such Borrower that such Borrower has assigned to Agent, together with the cash and non-cash proceeds thereof, is and shall be a first priority Lien; (iii) if requested by Agent, after determination by Agent that such agreement is necessary for the protection of its assigned Lien in such consigned Inventory, based upon Applicable Law of the state in which the consigned Inventory is located, such Borrower shall obtain an agreement from the landlord of the premises where the consigned Inventory is to be located, in form and substance reasonably acceptable to Agent, waiving in favor of such Borrower and its assigns such landlord's Liens in such consigned Inventory; (v) if requested by Agent, Lender shall have received the originals of the consignment agreement, the filed UCC financing statements, the UCC searches, the landlord's agreement and the insurance agreement referred to in clauses (i) through (iv) above, and such other instruments, documents, certificates, opinions or assurances, and such Borrower shall have taken such other action as Agent may have reasonably requested in connection with the consignee; and (vi) consignee shall maintain the consigned Inventory at a location in the United States.

Permitted Contingent Obligations - Contingent Obligations arising from endorsements of items of payment for collection or deposit in the Ordinary Course of Business; Contingent Obligations of any Consolidated Group Member existing as of the Closing Date, including extensions and renewals thereof that do not increase the amount of such Contingent Obligations as of the date of such extension or renewal; Contingent Obligations arising under indemnity agreements to title insurers to cause such title insurers to issue to Agent title insurance policies; Contingent Obligations with respect to customary indemnification obligations in favor of purchasers in connection with dispositions of Equipment permitted under Section 8.4.2; Contingent Obligations consisting of reimbursement obligations from time to time owing by any Borrower to Issuing Bank with respect to Letters of Credit (but in no event to include reimbursement obligations at any time owing by a Borrower to any other Person that may issue letters of credit for the account of Borrowers); unsecured guaranties made by a Consolidated Group Member for Debt or other obligations of another Consolidated Group Member that is expressly permitted to be incurred hereunder or not prohibited; other unsecured Contingent Obligations not to exceed $25,000,000 in the aggregate at any time; the Permitted Euro Debt Guaranty; and unsecured guaranties made by a Consolidated Group Member for Debt of another Consolidated Group Member that is expressly permitted to be incurred hereunder.

Permitted Euro Debt Guaranty - the unsecured guaranty by Parent of the Euro Debt, not to exceed $100,000,000.

Permitted Investment - investments in, or loans or investments to, (a) any Foreign Subsidiary of a Borrower or (b) joint ventures with other Persons organized under the laws of the United States of America or any state thereof, so long as each of the following conditions is satisfied as determined by Agent:

                                                                                 i.             such Person is engaged primarily in one or more businesses in which Borrowers are engaged or reasonably related or incidental thereto;

                                                                               ii.             Availability at the time of and after giving effect thereto is at least $15,000,000;

                                                                              iii.             with respect to any Person that is or becomes a Domestic Subsidiary, such Person (i) if requested by Agent, executes and delivers to Agent, for the benefit of Lenders, a joinder agreement to this Agreement and such other documents (including, if requested by Agent, an amendment to any Hedging Agreement to add such Domestic Subsidiary thereto) as may be determined by Agent to add such Domestic Subsidiary as an additional "Borrower" hereunder, and/or a new pledge agreement or such amendments to the relevant Security Documents as Agent shall deem necessary or advisable to grant to Agent, for the benefit of Secured Parties, a Lien on the capital stock of such Domestic Subsidiary (and if such Person has any direct Foreign Subsidiaries, a Lien on at least 65% of the capital stock of such Foreign Subsidiary), (ii) delivers to Agent the certificates representing such capital stock, together with undated stock powers executed and delivered in blank by a duly authorized officer of the Borrowers or such Subsidiary, as the case may be, and (iii) if requested by Agent, cause such new Domestic Subsidiary (a) to become a party to a subsidiary guarantee, if applicable, or such comparable documentation which is in form and substance reasonably satisfactory to Agent, and (b) to take all actions necessary or advisable to cause the Lien created by this Agreement to be duly perfected against such Person in accordance with all Applicable Law (subject to Section 7.6 hereof), including the filing of financing statements in such jurisdictions as may be requested by Agent subject to and in accordance with the Loan Documents; provided , however , that if such Subsidiary constitutes an Excluded Subsidiary, then Agent and Lenders will not require that such Subsidiary be joined to this Agreement as a Borrower or a Guarantor but may require that 100% of the capital stock of such Subsidiary be pledged to Agent, for the benefit of Lenders, as security for the Obligations and that all of the other provisions of this definition (other than the joinder provisions of this clause (iii)) be satisfied;

                                                                             iv.             the applicable Borrower has made available to Agent, not later than 10 Business Days prior to the proposed date of such investment, copies of the applicable investment documents, Organic Documents and other due diligence information as requested by Agent;

                                                                               v.             Agent shall have received a certificate of the Borrower Representative executed on its behalf by a Senior Officer, certifying that both before and after giving pro forma effect to such investment, the Consolidated Group is Solvent; and

                                                                             vi.             No Default or Event of Default shall exist or result therefrom.

Permitted Lien - a Lien of a kind specified in Section 10.2.5 .

Permitted Payment Conditions - each of the following conditions, the satisfaction of each shall be required before any Borrower shall be permitted to repurchase, redeem or prepay any Funded Debt under Section 10.2.6(ii) :

                                                                                 i.             Availability at the time of and after giving effect thereto is at least $15,000,000;

                                                                               ii.             the applicable Borrower has given Agent at least 10 Business Days' prior notice of such payment (or such later date as is acceptable to Agent); and

                                                                              iii.             no Default or Event of Default shall exist or result therefrom.

Permitted Purchase Money Debt - Purchase Money Debt of Borrowers and their Subsidiaries (or of any target to the extent constituting a Permitted Acquisition) that is incurred after the date of this Agreement and that is unsecured or is secured only by a Purchase Money Lien, provided that the aggregate amount of Purchase Money Debt outstanding at any time does not exceed $25,000,000 and the incurrence of such Purchase Money Debt does not violate any limitation in the Loan Documents regarding Capital Expenditures. For the purposes of this definition, the principal amount of any Purchase Money Debt consisting of capitalized leases shall be computed as a Capitalized Lease Obligation.

Permitted Subsidiary - a Person that becomes a Domestic Subsidiary of a Borrower after the Closing Date, subject to the satisfaction of each of the following conditions:

1. 1. No Default or Event of Default exists at the time of the creation or formation of such Subsidiary;
   2. Borrowers give Agent not less than 10 Business Days prior written notice of the formation of such Subsidiary (or such later date as is acceptable to Agent);
   3. such Subsidiary is engaged primarily in one or more businesses in which Borrowers are engaged or businesses reasonably related or incidental thereto; and
   4. with respect to any such Subsidiary, such Person (i) if requested by Agent, executes and delivers to Agent, for the benefit of Lenders, a joinder agreement to this Agreement and such other documents (including, if requested by Agent, an amendment to any Hedging Agreement to add such Subsidiary thereto) as may be determined by Agent to add such Subsidiary as an additional "Borrower" hereunder, and/or a new pledge agreement or such amendments to the relevant Security Documents as Agent shall deem necessary or reasonably advisable to grant to Agent, for the benefit of Secured Parties, a Lien on the capital stock of such Subsidiary (and if such Person has any direct Foreign Subsidiaries, a Lien on at least 65% of the capital stock of each direct Foreign Subsidiary), (ii) delivers to Agent the certificates representing such capital stock, together with undated stock powers executed and delivered in blank by a duly authorized officer of the Borrowers or such Subsidiary, as the case may be, (iii) if requested by Agent, in lieu of being joined as a Borrower, causes such new Subsidiary to become a party to a subsidiary guarantee, if applicable, or such comparable documentation which is in form and substance reasonably satisfactory to Agent, and (iv)  takes all actions deemed necessary or advisable by Agent to cause the Lien created by this Agreement to be duly perfected against such Person in accordance with all Applicable Law (subject to Section 7.6 hereof), including the filing of financing statements in such jurisdictions as may be requested by Agent subject to and in accordance with the Loan Documents; provided , however , that if such Subsidiary constitutes an Excluded Subsidiary, then Agent and Lenders will not require that such Subsidiary be joined to this Agreement as a Borrower or a Guarantor but may require that 100% of the capital stock of such Subsidiary be pledged to Agent, for the benefit of Lenders, as security for the Obligations and that all of the other provisions of this definition (other than the joinder provisions of this clause (iv)) be satisfied.

Agent shall have the right to determine in its reasonable credit judgment which Inventory or Accounts of such Subsidiary shall be included in the Borrowing Base (subject to the provisions of the definitions "Borrowing Base," "Eligible Inventory" and "Eligible Accounts" and any other provisions of this Agreement and the other Loan Documents applicable to the computation and reporting of the Borrowing Base). In connection with such determination, Agent may obtain, at Borrowers' expense, such appraisals, commercial finance exams and other assessments of such Accounts and Inventory as it may reasonably deem desirable and all such appraisals, exams and other assessments shall be paid for by Borrowers and shall not be limited by or included in the number of appraisals and field exams reimbursable under Section 3.2.4 .

Person - an individual, partnership, corporation, limited liability company, limited liability partnership, joint stock company, land trust, business trust, or unincorporated organization, or a Governmental Authority.

Plan - an employee pension benefit plan that is covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Internal Revenue Code and that is either (i) maintained by a Borrower for employees or (ii) maintained pursuant to a collective bargaining agreement or any other arrangement under which more than one employer makes contributions and to which a Borrower is then making or accruing an obligation to make contributions or has within the preceding 5 years made or accrued such contributions.

Pledge Agreements - the Pledge Agreements executed by each Borrower on or before the Original Closing Date, pursuant to which each Borrower pledged to Agent, for the benefit of the Secured Parties, 100% of the Equity Interests of each of its Domestic Subsidiaries and 65% of the Equity Interests of each of its direct Foreign Subsidiaries, as security for the Obligations.

Pro Forma Fixed Charge Coverage Ratio - for any period, the ratio of (a) EBITDA for such period minus Capital Expenditures (excluding Financed Capital Expenditures) for such period, to (b) the sum of all Fixed Charges for such period, all calculated for the Consolidated Group on a Consolidated basis, provided , that for purposes of computing this ratio for Permitted Acquisitions only (and without duplication in each case):

                                                                                 i.             the last 12 months of EBITDA of the acquired target shall be added to the EBITDA of the Consolidated Group (as adjusted to give effect to any cost savings reasonably acceptable to Agent and certified by Borrowers in good faith arising from the synergies of the combination of the target's and the Consolidated Group's workforce, administration and business operations);

                                                                               ii.             the last 12 months of Capital Expenditures of the acquired target shall be added to the Capital Expenditures of the Consolidated Group;

                                                                              iii.             there shall be added to cash interest expense of the Consolidated Group the last 12 months of cash interest expense on Debt acquired in connection with such acquisition, plus, on a proforma basis, 12 months of cash interest expense on the incremental Loans undertaken by the Borrowers on the closing date of the acquisition; and

                                                                             iv.             there shall be added to scheduled and actual principal payments of the Consolidated Group the last 12 months of scheduled principal payments on Debt acquired in connection with such acquisition.

Pro Rata - with respect to any Lender on any date, a percentage (expressed as a decimal, rounded to the ninth decimal place) derived by dividing the amount of the total Commitments of such Lender on such date by the aggregate amount of the Commitments of all Lenders on such date (regardless of whether or not any of such Commitments have been terminated on or before such date).

Projections - (i) prior to the Original Closing Date and thereafter until Agent receives new projections pursuant to Section 10.1.5 , the projections of Borrowers' consolidated balance sheets, income statements and cash flow statements and projected Availability, prepared on a quarterly basis for the Fiscal Year ending December 31, 2006, and on an annual basis for the Fiscal Years ending 2007, 2008, 2009 and 2010; and (ii) thereafter, the projections most recently received by Agent and Lenders pursuant to and as required by Section 10.1.5 .

Properly Contested - in the case of any Debt of an Obligor (including any Taxes) that is not paid as and when due or payable by reason of such Obligor's bona fide dispute concerning its liability to pay same or concerning the amount thereof, (i) such Debt is being properly contested in good faith by appropriate proceedings promptly instituted and diligently conducted; (ii) such Obligor has established appropriate reserves as shall be required in conformity with GAAP; (iii) the non-payment of such Debt will not have a Material Adverse Effect; (iv) no Lien in excess of $500,000 is imposed upon any of such Obligor's assets with respect to such Debt unless such Lien is at all times junior and subordinate in priority to the Liens in favor of Agent (except only with respect to property taxes that have priority as a matter of Applicable Law) and enforcement of such Lien is stayed during the period prior to the final resolution or disposition of such dispute; and (v) if such contest is abandoned, settled or determined adversely (in whole or in part) to such Obligor, such Obligor forthwith pays such Debt.

Property - any interest in any kind of property or asset, whether real, personal or mixed and whether tangible or intangible.

Purchase Money Debt - means and includes (i) Debt (other than the Obligations but including capitalized leases) for the payment of all or any part of the purchase price of any fixed or capital assets consisting of Equipment, Real Estate or Software, (ii) any Debt (other than the Obligations) incurred or assumed at the time of or within 90 days prior to or after the acquisition or completion of construction of any fixed or capital assets consisting of Equipment, Real Estate or Software for the purpose of financing all or any part of the purchase price or construction or improvement thereof, including deferred purchase price and industrial revenue bonds or similar municipal or governmental bonds, and (iii) any renewals, extensions or refinancings (but not any increases in the principal amounts) thereof outstanding at the time.

Purchase Money Lien - a Lien upon fixed or capital assets consisting of Equipment, Real Estate or Software which secures Purchase Money Debt, but only if such Lien shall at all times be confined solely to such asset acquired through the incurrence of the Purchase Money Debt secured by such Lien.

RCRA - the Resource Conservation and Recovery Act (42 U.S.C. SectionSection 6991-6991i).

Real Estate - all right, title and interest of a Borrower (whether as owner, lessor or lessee) at any time or times held by such Borrower in real Property or any buildings, structures, parking areas or other improvements thereon (excluding the Specified Real Estate).

Refinancing Conditions - the following conditions, each of which must be satisfied before Refinancing Debt shall be permitted under Section 10.2.3 : (i) the Refinancing Debt is in an aggregate principal amount that does not exceed the aggregate principal amount of the Debt being extended, renewed or refinanced, plus the amount of fees and expenses payable in connection with such refinancing and any premiums penalties, accrued interest and accreted amounts payable with respect to such Refinancing Debt, (ii) the Refinancing Debt has a later or equal final maturity and a longer or equal weighted average life than the Debt being extended, renewed or refinanced, (iii) the Refinancing Debt does not bear a rate of interest that exceeds, as of the date of such extension, renewal or refinancing, a market rate (as determined in good faith by a Senior Officer) for Debt of such type issued by an entity similar to the Borrower that is liable on the Debt being extended, renewed or refinanced, (iv) if the Debt being extended, renewed or refinanced is subordinate to the Obligations, the Refinancing Debt is subordinated to the same extent, (v) the financial and other material covenants contained in any instrument or agreement relating to the Refinancing Debt are no less favorable when taken as a whole in any material respect to Borrowers than those relating to the Debt being extended, renewed or refinanced, (vi) at the time of and after giving effect to such extension, renewal or refinancing, no Default or Event of Default shall exist, and (vii) no additional Lien is granted to secure the repayment of the Refinancing Debt.

Refinancing Debt - Debt that is permitted by Section 10.2.3 and that is the subject or the result of an extension, renewal or refinancing.

Regulation D - Regulation D of the Board of Governors.

Register - the register maintained by Agent in accordance with Section 5.8.2 .

Reimbursement Date - as defined in Section 2.3.1(iii) .

Rent Reserve - on any date, the aggregate of (i) all past due rent, fees or other charges owing on such date by any Obligor to any landlord of any premises where any of the Collateral is located or to any processor, repairman, mechanic or other Person who is in possession of any Collateral or has asserted any Lien or claim thereto, and (ii) a reserve equal to 3 months rent or other charges with respect to any Collateral in the possession of, or at a location owned by, a Person other than a Borrower if such Person has not duly executed and delivered to Agent a Lien Waiver reasonably satisfactory to Agent.

Report - as defined in Section 13.1.5 .

Reportable Event - any of the events set forth in Section 4043(c) of ERISA.

Reporting Spring-Back Date - as such term is defined in Section 10.1.3(ii) .

Required Lenders - at any date of determination thereof, Lenders having Commitments representing greater than 50% of the aggregate Commitments at such time; provided , however , that if any Lender shall be in breach of any of its obligations hereunder to Borrowers or Agent, including any breach resulting from its failure to honor its Commitment in accordance with the terms of this Agreement, then, for so long as such breach continues, the term "Required Lenders" shall mean Lenders (excluding each Lender that is in breach of its obligations under this Agreement) having Commitments representing greater than 50% of the aggregate Commitments (excluding the Commitments of each Lender that is in breach of its obligations under this Agreement) at such time; provided further , however , that if all of the Commitments have been terminated, the term "Required Lenders" shall mean Lenders (excluding each Lender that is in breach of its obligations under this Agreement) holding Loans (including Swingline Loans) representing greater than 50% of the aggregate principal amount of Loans (including Swingline Loans) outstanding at such time.

Restricted Investment - any acquisition of Property comprising a division or business unit or all or a substantial part of the business of any Person by a Consolidated Group Member, or the purchase or acquisition by any Consolidated Group Member of Equity Interests in or Debt of any Person, or a loan, advance, capital contribution or subscription, except for the following: (a) acquisitions of the following: (i) fixed assets to be used in the Ordinary Course of Business of such Consolidated Group Member so long as the acquisition costs thereof are Capital Expenditures permitted hereunder; (ii) goods held for sale or lease or to be used in the manufacture of goods or the provision of services by such Consolidated Group Member in the Ordinary Course of Business; and (iii) current assets arising from the sale or lease of goods or the rendition of services in the Ordinary Course of Business of such Consolidated Group Member; (b) investments in Subsidiaries to the extent existing on the Closing Date; (c) investments in Cash Equivalents; (d) loans and other advances of money to the extent not prohibited by Section 10.2.2 ; (e) investments existing on the date hereof and described on Schedule 10.2.13 hereto; (f) investments in the Hedging Agreements permitted under this Agreement; (g) investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with, customers and suppliers, in each case in the Ordinary Course of Business, (h) Permitted Acquisitions; (i) Permitted Investments; (j) other investments not totaling more than $10,000,000 in the aggregate; (k) contingent obligations permitted under Section 10.2.3 ; (l) investments in Consolidated Group Members; and (m) investments in Subsidiaries of Parent that are not Consolidated Group Members subject to the limitations set forth in Section 10.2.2(iii) hereof.

Restrictive Agreement - an agreement (other than any of the Loan Documents) that, if and for so long as an Obligor is a party thereto, would prohibit, condition or restrict such Obligor's right to incur the Obligations; grant Liens upon any of such Obligor's assets (including Liens granted in favor of Agent pursuant to the Loan Documents); declare or make Distributions; amend, modify, extend or renew any of the Loan Documents; or repay any Debt owed to another Obligor.

Restrictive Subsidiary - each Subsidiary listed on Schedule 10.2.1 .

Restrictive Trigger Event - shall mean:

(i)          for purposes of Sections 3.2.4, and 8.2.5(ii ) , any of the following events: (a) if Average Availability is less than $15,000,000 during any 10 Business Day period, with such measurement period commencing on the first day that Availability is less than $15,000,000, (b) any Event of Default exists, or (c) Availability is less than $10,000,000 at any time ( provided , that , for purposes of this clause (c), Availability may be below $10,000,000 for 1 day during any consecutive 30 day period without causing a Restrictive Trigger Event to occur under this clause (c));

(ii)         for purposes of Section 7.6 , any of the following events:

(a)         Average Availability is less than $15,000,000 during any 10 Business Day period, with such measurement period commencing on the first day that Availability is less than $15,000,000, or

(b)         any Event of Default exists, or

(c)         Availability is less than $10,000,000 at any time ( provided , that , for purposes of this clause (c) Availability may be below $10,000,000 for 2 days during any consecutive 30 day period without causing a Restrictive Trigger Event to occur under this clause (c));

(iii)        for purposes of Section 10.1.3(ii ), any of the following events:

(a)         if Average Availability is less than $15,000,000 during any 10 Business Day period, with such measurement period commencing on the first day that Availability is less than such amount,

(b)         any Event of Default exists or

(c)         Availability is less than $10,000,000, at any time ( provided , that for purposes of this clause (c), Availability may be below such amount for 2 days during any consecutive 30 day period without causing a Restrictive Trigger Event to occur under this clause (c)); and

(iv)        for purposes of Section 10.3.1 , any of the following events:

(a)         if Average Availability is less than $15,000,000 during any 10 Business Day period, with such measurement period commencing on the first day that Availability is less than $15,000,000,

(b)         any Event of Default exists or

(c)         Availability is less than $10,000,000 at any time ( provided , that for purposes of this clause (c), Availability may be below such amount for 2 days during any consecutive 30 day period without causing a Restrictive Trigger Event to occur under this clause (c)).

Revolver Commitment - at any date for any Lender, the obligation of such Lender to make Revolver Loans and to purchase participations in LC Obligations pursuant to the terms and conditions of this Agreement, which shall not exceed the principal amount set forth opposite such Lender's name under the heading "Revolver Commitment" on the signature pages of this Agreement or the principal amount set forth in the Assignment and Acceptance by which it became a Lender, as modified from time to time pursuant to the terms of this Agreement or to give effect to any applicable Assignment and Acceptance; and " Revolver Commitments " means the aggregate principal amount of the Revolver Commitments of all Lenders, the maximum amount of which on any date shall be $75,000,000, as reduced from time to time pursuant to Section 2.1.5 .

Revolver Loan - a loan made by Lenders as provided in Section 2.1 (including any Out-of-Formula Loan) or a Swingline Loan funded solely by BofA.

Revolver Note - a Revolver Note to be executed by Borrowers in favor of each Lender in the form of Exhibit A attached hereto, which shall be in the face amount of such Lender's Revolver Commitment and which shall evidence all Revolver Loans made by such Lender to Borrowers pursuant to this Agreement.

Royalties - with respect to a License Agreement, all royalties, fees, expense reimbursement and other amounts at any time owing by a Borrower under such License Agreement.

S&P - Standard & Poor's Ratings Group, a division of McGraw-Hill, Inc.

Schedule of Accounts  - as defined in Section 8.2.1 .

SEC - Securities and Exchange Commission.

Secured Parties - Agent, Issuing Bank, Lenders (including BofA as the provider of Swingline Loans) and any Lender or any Affiliate of a Lender as the provider of any Bank Products.

Security Documents - the Patent Security Agreements, each Guaranty, the Trademark Security Agreements, the Deposit Account Control Agreements, the Pledge Agreements, the Mortgages, the Environmental Agreement, the Negative Pledge Agreements, and all other instruments and agreements now or at any time hereafter securing the whole or any part of the Obligations.

Senior Officer - the chairman of the board of directors, the president, the chief financial officer, in-house legal counsel, the chief executive officer, the principal accounting officer or the treasurer of a Borrower (or the equivalent of any of the foregoing) or any other officer, partner or member (or person performing similar functions) of a Borrower responsible for overseeing the administration of, or reviewing compliance with, all or any portion of this Agreement or any of the other Loan Documents.

Settlement Date - as defined in Section 4.1.3(i) .

Settlement Report - a report delivered by Agent to Lenders summarizing the amount of the outstanding Revolver Loans as of the Settlement Date and the calculation of the Borrowing Base as of such Settlement Date.

Software - shall have the meaning given to the term "software" in the UCC.

Solvent - as to any Person, such Person (i) owns Property whose fair salable value is greater than the amount required to pay all of such Person's debts (including contingent liabilities), (ii) owns Property whose present fair salable value (as defined below) is greater than the amount that will be required to pay the probable total liabilities (including contingent liabilities), of such Person on its debts as they become absolute and matured, (iii) is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person's property would constitute an unreasonably small capital, and (iv) does not intend to, and does not believe that it will, incur debt or liabilities beyond such Person's ability to pay such debts and liabilities as they mature. As used herein, the term "fair salable value" of a Person's assets means the amount that may be realized within a reasonable time, either through collection or sale of such assets at the regular market value, based upon the amount that could be obtained for such assets within such period by a capable and diligent seller from an interested buyer who is willing (but is under no compulsion) to purchase under ordinary selling conditions. The amount of contingent liabilities at any time shall be computed as the amount that in light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

Specified Real Estate - the Real Estate of Borrowers located in Salisbury, Maryland, Terre Haute, Indiana, Lowell, Arkansas and Palmyra, Missouri on the Closing Date.

Statutory Reserves - on any date, the percentage (expressed as a decimal) established by the Board of Governors which is the then stated maximum rate for all reserves (including all basic, emergency, supplemental or other marginal reserve requirements and taking into account any transitional adjustments or other scheduled in reserve requirements) applicable to any member bank of the Federal Reserve System in respect to Eurocurrency Liabilities (or any successor category of liabilities under Regulation D). Such reserve percentage shall include those imposed pursuant to said Regulation D. The Statutory Reserve shall be adjusted automatically on and as of the effective date of any change in such percentage.

Subordinated Debt - Debt incurred by a Borrower that is expressly subordinated and made junior in right of payment to the Full Payment of the Obligations and, to the extent that such Debt is incurred on or after the Closing Date, such Debt is payable on terms and conditions (including terms relating to repayment and subordination but excluding interest, fees and any call protection provisions) that are reasonably satisfactory to Agent.

Subsidiary - any Person in which more than 50% of its outstanding Voting Securities or more than 50% of all Equity Interests is owned directly or indirectly by a Borrower, by one or more other Subsidiaries of such Borrower or by a Borrower and one or more other Subsidiaries.

Supporting Obligation - shall have the meaning given to the term "supporting obligation" in the UCC.

Swingline Loan - as defined in Section 4.1.3(ii) .

Swingline Note - the Swingline Note to be executed by Borrowers to the order of BofA in the form of Exhibit B , to evidence the outstanding Swingline Loans owing to BofA from time to time pursuant to Section 4.1.3 .

Taxes - any present or future taxes, levies, imposts, duties, fees, assessments, deductions, withholdings or other charges of whatever nature, including income, receipts, excise, property, sales, use, transfer, license, payroll, withholding, social security and franchise taxes now or hereafter imposed or levied by the United States or any other Governmental Authority and all interest, penalties, additions to tax and similar liabilities with respect thereto, but excluding, in the case of each Lender, taxes imposed on or measured by the net income or overall gross receipts of such Lender.

Term - as defined in Section 6.1 .

Trademark Security Agreement - each Trademark Security Agreement executed by the applicable Borrower in favor of Agent on or before the Original Closing Date and by which such Borrower granted to Agent, for the benefit of Secured Parties, as security for the Obligations, a security interest in all of such Borrower's right, title and interest in and to all of the trademark registrations and trademark applications listed therein.

Transferee - as defined in Section 14.3.3 .

Type - any type of a Loan determined with respect to the interest option applicable thereto, which shall be either a LIBOR Loan or a Base Rate Loan.

UCC - the Uniform Commercial Code (or any successor statute) as adopted and in force in the State of New York or, when the laws of any other state govern the method or manner of the perfection or enforcement of any security interest in any of the Collateral, the Uniform Commercial Code (or any successor statute) of such state.

Undrawn Amount - on any date with respect to a particular Letter of Credit, the total amount then available to be drawn under such Letter of Credit in Dollars.

Unused Line Fee - as defined in Section 3.2.2 .

Upstream Payment - a payment or distribution directly or indirectly of cash or other Property by a Subsidiary of an Obligor to such Obligor, or by a Subsidiary that is not an Obligor to another Subsidiary that is not an Obligor, whether in repayment of Debt owed by such Subsidiary to such Obligor, as a dividend or distribution on account of such Obligor's ownership of Equity Interests or otherwise.

USA Patriot Act - the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. No. 107-56, 115 Stat. 272 (2001).

Value - with reference to the value of Inventory, value determined by Agent in good faith on the basis of the lower of cost or market of such Eligible Inventory, with the cost thereof calculated on a first-in, first-out basis in accordance with GAAP consistently applied.

Voting Securities - Equity Interests of any class or classes of a corporation or other entity the holders of which are ordinarily, in the absence of contingencies, entitled to elect a majority of the corporate directors or individuals performing similar functions.

1. 1. Accounting Terms

. Unless otherwise specified herein, all terms of an accounting character used in this Agreement shall be interpreted, all accounting determinations under this Agreement shall be made, and all financial statements required to be delivered under this Agreement shall be prepared in accordance with GAAP, applied on a basis consistent with the most recent audited Consolidated financial statements of Parent and its Subsidiaries delivered to Agent and Lenders hereunder and using the same method for inventory valuation as used in such audited financial statements, except for any change required by GAAP; provided , however , that for purposes of determining Borrowers' compliance with financial covenants contained in Section 10.3 and other financial terms and definitions used therein, all accounting terms shall be interpreted and all accounting determinations shall be made in accordance with GAAP as in effect on the date of this Agreement and applied on a basis consistent with the application used in the financial statements referred to in Section 9.1.9 ; provided , further however , that in the event that any accounting change under GAAP shall occur and such change results in a material change in the method of calculation of financial covenants or related financial definitions in this Agreement, then Borrowers and Agent agree to enter into negotiations in order to amend such provisions of this Agreement so as to equitably reflect such accounting changes with the desired result that the criteria for evaluating Borrowers' financial condition shall be the same after such accounting changes as if such accounting changes had not been made. Until such time as such an amendment shall have been executed and delivered by Borrowers, Agent and Required Lenders, all financial covenants and related financial definitions in this Agreement shall continue to be calculated or construed as if such accounting changes had not occurred.

1. 2. Other Terms

. All other terms contained in this Agreement shall have, when the context so indicates, the meanings provided for by the UCC to the extent the same are used or defined therein.

1. 3. Certain Matters of Construction

. The terms "herein," "hereof" and "hereunder" and other words of similar import refer to this Agreement as a whole and not to any particular section, paragraph or subdivision. Any pronoun used shall be deemed to cover all genders. 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." The section titles, table of contents and list of exhibits appear as a matter of convenience only and shall not affect the interpretation of this Agreement. All references to statutes shall include all related rules and implementing regulations and any amendments of same and any successor statutes, rules and regulations; to any agreement, instrument or other documents (including any of the Loan Documents) shall include any and all modifications and supplements thereto and any and all restatements, extensions or renewals thereof to the extent such modifications, supplements, restatements, extensions or renewals of any such documents are permitted by the terms thereof; to any Person (including Agent, a Borrower, a Lender or BofA) shall mean and include the successors and permitted assigns of such Person; to "including" and "include" shall be understood to mean "including, without limitation" (and, for purposes of each Loan Document, the parties agree that the rule of ejusdem generis shall not be applicable to limit a general statement, which is followed by or referable to an enumeration of specific matters to matters similar to the matters specifically mentioned); to the time of day shall mean the time of day on the day in question in New York, New York, unless otherwise expressly provided in this Agreement; or to the "discretion" of Agent or a Lender shall mean the sole and absolute discretion of such Person unless otherwise qualified. An Event of Default shall be deemed to exist at all times during the period commencing on the date that such Event of Default occurs to the date on which such Event of Default is waived in writing by Agent (acting with the consent or at the direction of the Lenders or the Required Lenders, as applicable) pursuant to this Agreement or, in the case of a Default, is cured within any period of cure expressly provided in this Agreement; and an Event of Default shall "continue" or be "continuing" until such Event of Default has been waived in writing by Agent (acting with the consent or at the direction of the Lenders or the Required Lenders, as applicable). All calculations of Value shall be in Dollars, all Loans shall be funded in Dollars and all Obligations shall be repaid in Dollars. Whenever the phrase "to the best of Borrowers' knowledge" or words of similar import relating to the knowledge or the awareness of a Borrower are used in this Agreement or other Loan Documents, such phrase shall mean and refer to the actual knowledge of a Senior Officer of any Borrower.

1. CREDIT FACILITIES

Subject to the terms and conditions of, and in reliance upon the representations and warranties made in, this Agreement and the other Loan Documents, Lenders severally agree to the extent and in the manner hereinafter set forth to make their respective shares of the Commitments available to Borrowers in an aggregate amount up to $75,000,000, as set forth hereinbelow:

1. 1. Revolver Commitments.
   2. 1. Revolver Loans

. Each Lender agrees, severally to the extent of its Revolver Commitment and not jointly with the other Lenders, upon the terms and subject to the conditions set forth herein, to make Revolver Loans to Borrowers on any Business Day during the period from the Closing Date through the Business Day before the last day of the Term, not to exceed in aggregate principal amount outstanding at any time such Lender's Revolver Commitment at such time, which Revolver Loans may be repaid and reborrowed in accordance with the provisions of this Agreement; provided , however , that Lenders shall have no obligation to Borrowers whatsoever to honor any request for a Revolver Loan on or after the Commitment Termination Date or if at the time of the proposed funding thereof the aggregate principal amount of all of the Revolver Loans then outstanding (including Swingline Loans) and Pending Revolver Loans exceeds, or would exceed after the funding of such Revolver Loan, the Borrowing Base. Each Borrowing of Revolver Loans shall be funded by Lenders on a Pro Rata basis in accordance with their respective Revolver Commitments (except for BofA with respect to Swingline Loans). The Revolver Loans shall bear interest as set forth in Section 3.1. Each Revolver Loan shall, at the option of Borrowers, be made or continued as, or converted into, part of one or more Borrowings that, unless specifically provided herein, shall consist of Base Rate Loans or LIBOR Loans.

1. 1. 2. Out-of-Formula Loans

. If the unpaid balance of Revolver Loans outstanding at any time should exceed the Borrowing Base at such time (an "Out-of-Formula Condition"), such Revolver Loans shall nevertheless constitute Obligations that are secured by the Collateral and entitled to all of the benefits of the Loan Documents. In the event that Lenders are willing in their discretion to make Out-of-Formula Loans or are required to do so by Section 13.9.4 or Section 2.1.6 , such Out-of-Formula Loans shall bear interest as provided in Section 3.1.5 and shall be payable on demand , provided , that , any Out-of-Formula Loans made by Lenders under Section 13.9.4 or Section 2.1.6 shall be payable at the end of the applicable period permitted by Lenders under Section 13.9.4 , or on demand if an Event of Default exists.

1. 1. 3. Use of Proceeds

. The proceeds of the Revolver Loans shall be used by Borrowers solely for one or more of the following purposes: (i) to pay the fees and transaction expenses associated with the closing of the transactions described herein; (ii) to pay any of the Obligations in accordance with this Agreement; and (iii) to make expenditures for working capital and other lawful corporate purposes of Borrowers to the extent such expenditures are not prohibited by this Agreement or Applicable Law. In no event may any Revolver Loan proceeds be used by any Borrower (x) to purchase or to carry, or to reduce, retire or refinance any Debt incurred to purchase or carry, any Margin Stock or for any related purpose that violates the provisions of Regulations T, U or X of the Board of Governors, or (y) to fund any operations or finance any investments or activities in, or to make payments to, a Blocked Person.

1. 1. 4. Revolver Notes

. The Revolver Loans made by each Lender and interest accruing thereon shall be evidenced by the records of Agent and such Lender and by the Revolver Note payable to such Lender (or the assignee of such Lender), which shall be executed by Borrowers, completed in conformity with this Agreement and delivered to such Lender. All outstanding principal amounts and accrued interest under the Revolver Notes shall be due and payable as set forth in Section 5.2 .

1. 1. 5. Voluntary Reductions of Revolver Commitments

. Borrowers shall have the right to permanently reduce the amount of the Revolver Commitments, on a Pro Rata basis for each Lender, at any time and from time to time upon 3 Business Days written notice to Agent of such reduction, which notice shall specify the amount of such reduction, shall be irrevocable once given, and shall be effective on the fourth day after Agent's receipt of such notice. Agent shall promptly transmit such notice to each Lender. If on the effective date of any such reduction in the Revolver Commitments and after giving effect thereto an Out-of-Formula Condition exists, then the provisions of Section 5.2.1(iii) shall apply, except that such repayment shall be due immediately upon such effective date without further notice to or demand upon Borrowers. If the Revolver Commitments are reduced to zero, then such reduction shall be deemed a termination of the Commitments by Borrowers pursuant to Section 6.2.2 . The Revolver Commitments, once reduced, may not be reinstated without the written consent of all Lenders.

1. 1. 6. Agent Advances .

Agent shall be authorized, in its discretion, at any time or times that an Event of Default exists or any of the conditions precedent set forth in Section 11 have not been satisfied, to make Revolver Loans that are Base Rate Loans in an aggregate amount outstanding at any time not to exceed $5,000,000, but only to the extent that Agent, in the exercise of its sole credit judgment, deems the funding of such Loans (herein called "Agent Advances") to be necessary or desirable (i) to preserve or protect the Collateral or any portion thereof, (ii)  to enhance the likelihood, or increase the amount, of repayment of the Obligations or (iii) to pay any other amount chargeable to Borrowers pursuant to the terms of this Agreement, including costs, fees and expenses, all of which Agent Advances shall be deemed part of the Obligations and secured by the Collateral, and shall be treated for all purposes of this Agreement (including Sections 5.6.1 and 15.4 ) as advances for the repayment to Agent and Lenders of Extraordinary Expenses; provided ,  however , that the Required Lenders may at any time revoke Agent's authorization to make any such Agent Advances by written notice to Agent, which shall become effective prospectively upon and after Agent's actual receipt thereof. Absent such revocation, Agent's determination that the making of an Agent Advance is required for any such purposes shall be conclusive. Each Lender shall participate in each Agent Advance in an amount equal to its Pro Rata share of the Revolver Commitments. Notwithstanding the foregoing, the maximum amount of Agent Advances outstanding at any time, when added to the aggregate of Revolver Loans and LC Obligations outstanding at such time, shall not exceed the total of the Revolver Commitments (unless otherwise agreed by the Required Lenders) and shall not exceed 30 days if such Agent Advance constitutes an Out-of-Formula Loan. The aggregate amount of Loans made pursuant to this Section 2.1.6 and Section 13.9.4 shall not exceed $5,000,000 in the aggregate at any time. Nothing in this Section 2.1.6 shall be construed to limit in any way the amount of Extraordinary Expenses that may be incurred by Agent and that Borrowers shall be obligated to reimburse to Agent to the extent provided for in the Loan Documents.

1. 2. Reserved .
   3. LC Facility .
   4. 1. Issuance of Letters of Credit

. Subject to all of the terms and conditions hereof, Issuing Bank agrees to establish the LC Facility pursuant to which, during the period from the date hereof to (but excluding) the 30th day prior to the last day of the Term, Issuing Bank shall issue one or more Letters of Credit on any Borrower's request therefor from time to time, subject to the following terms and conditions:

(i)          Each Borrower acknowledges that Issuing Bank's willingness to issue any Letter of Credit is conditioned upon Issuing Bank's receipt of (A) an LC Application with respect to the requested Letter of Credit and (B) such other standard instruments and agreements as Issuing Bank may customarily require for the issuance of a letter of credit of equivalent type and amount as the requested Letter of Credit. Issuing Bank shall have no obligation to issue any Letter of Credit unless (x) Issuing Bank receives an LC Request and LC Application at least 3 Business Days prior to the date of issuance of a Letter of Credit, and (y) each of the LC Conditions is satisfied on the date of Issuing Bank's receipt of the LC Request and at the time of the requested issuance of a Letter of Credit. If Issuing Bank shall have received written notice from a Lender on or before the Business Day immediately prior to the date of Issuing Bank's issuance of a Letter of Credit that one or more of the conditions set forth in Section 11.2 has not been satisfied, Issuing Bank shall have no obligation to issue the requested Letter of Credit or any other Letter of Credit until such notice is withdrawn in writing by that Lender or until the Required Lenders shall have effectively waived such condition in accordance with this Agreement. In no event shall Issuing Bank be deemed to have notice or knowledge of any existence of any Default or Event of Default or the failure of any conditions in Section 11.2 to be satisfied prior to its receipt of such notice from a Lender.

(ii)         Letters of Credit may be requested by a Borrower only if they are to be used (a) to support obligations of such Borrower incurred in the Ordinary Course of Business of such Borrower or (b) for such other purposes as Agent may approve from time to time.

(iii)        Borrowers shall comply with all of the terms and conditions imposed on Borrowers by Issuing Bank that are contained in any LC Application or in any other standard agreement customarily or reasonably required by Issuing Bank in connection with the issuance of any Letter of Credit. If Issuing Bank shall honor any request for payment under a Letter of Credit, Borrowers shall be jointly and severally obligated to pay to Issuing Bank, in Dollars on the same day as the date on which payment was made by Issuing Bank (the "Reimbursement Date"), an amount equal to the amount paid by Issuing Bank under such Letter of Credit, together with interest from and after the Reimbursement Date until Full Payment is made by Borrowers at the Default Rate for Revolver Loans constituting Base Rate Loans. Until Issuing Bank has received payment from Borrowers in accordance with the foregoing provisions of this clause (iii), Issuing Bank, in addition to all of its other rights and remedies under this Agreement and any LC Application, shall be fully subrogated to the rights and remedies of each beneficiary under such Letter of Credit whose claims against Borrowers have been discharged with the proceeds of such Letter of Credit. Whether or not a Borrower submits any Notice of Borrowing to Agent, Borrowers shall be deemed to have requested from Lenders a Borrowing of Base Rate Loans in an amount necessary to pay to Issuing Bank all amounts due Issuing Bank on any Reimbursement Date and each Lender agrees to fund its Pro Rata share of such Borrowing whether or not any Default or Event of Default has occurred or exists, the Commitments have been terminated, the funding of the Borrowing would result in (or increase the amount of) any Out-of-Formula Condition, or any of the conditions set forth in Section 11 are not satisfied.

(iv)        Borrowers assume all risks of the acts, omissions or misuses of any Letter of Credit by the beneficiary thereof. The obligation of Borrowers to reimburse Issuing Bank for any payment made by Issuing Bank under a Letter of Credit shall be absolute, unconditional, irrevocable and joint and several and shall be paid without regard to any lack of validity or enforceability of any Letter of Credit or the existence of any claim, setoff, defense or other right which Borrowers may have at any time against a beneficiary of any Letter of Credit. In connection with the issuance of any documentary Letter of Credit, none of Agent, Issuing Bank or any Lender shall be responsible for the existence, character, quality, quantity, condition, packing, value or delivery of any goods purported to be represented by any Documents; any differences or variation in the character, quality, quantity, condition, packing, value or delivery of any goods from that expressed in the Documents; the form, validity, sufficiency, accuracy, genuineness or legal effect of any Documents or of any endorsements thereon, even if such Documents should in fact prove to be in any or all respects invalid, insufficient, fraudulent or forged; the time, place, manner or order in which shipment of goods is made; partial or incomplete shipment of, or failure or omission to ship, any or all of the goods referred to in a documentary Letter of Credit or Documents applicable thereto; any deviation from instructions, delay, default or fraud by the shipper and/or any Person in connection with any goods or any shipping or delivery thereof; any breach of contract between the shipper or vendors and a Borrower; errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex or otherwise, whether or not they be in cipher, unless such errors, omissions, interruptions or delays are the result of the gross negligence or willful misconduct of Issuing Bank; errors in interpretation of technical terms; the misapplication by the beneficiary of any Letter of Credit of the proceeds of any drawing under such Letter of Credit; or any consequences arising from causes beyond the control of Issuing Bank including any act or omission (whether rightful or wrongful) of any present or future Governmental Authority. The rights, remedies, powers and privileges of Issuing Bank under this Agreement with respect to Letters of Credit shall be in addition to, and cumulative with, all rights, remedies, powers and privileges of Issuing Bank under any of the LC Documents. Nothing herein shall be deemed to release Issuing Bank from any liability or obligation that it may have in respect to any Letter of Credit arising out of and directly resulting from its own gross negligence or willful misconduct.

(v)         No Letter of Credit shall be extended or increased in amount, unless all of the LC Conditions are met as though a new Letter of Credit were being requested and issued. With respect to any Letter of Credit that contains any "evergreen" or automatic renewal provision, each Lender shall be deemed to have consented to any such extension or renewal, unless any such Lender shall have provided to Agent written notice that it declines to consent to any such extension or renewal at least 30 days prior to the date on which Issuing Bank is entitled to decline to extend or renew the Letter of Credit. If all of the LC Conditions are met and no Default or Event of Default exists, each Lender shall be deemed to have consented to any such extension or renewal.

(vi)        Unless otherwise provided in any of the LC Documents, each LC Application and each Letter of Credit shall be subject to the Uniform Customs and Practice for Documentary Credits (1993 Revision), International Chamber of Commerce No. 500, and any amendments or revisions thereto.

1. 3. 2. Participations.

(i)          Immediately upon the issuance of any Letter of Credit, each Lender shall be deemed to have irrevocably and unconditionally purchased and received from Issuing Bank, without recourse or warranty, an undivided interest and participation equal to the Pro Rata share of such Lender (a "Participating Lender") in all LC Obligations arising in connection with such Letter of Credit, but in no event greater than an amount which, when added to such Lender's Pro Rata share of all Revolver Loans and LC Obligations then outstanding, exceeds such Lender's Revolver Commitment.

(ii)         If Issuing Bank makes any payment under a Letter of Credit and Borrowers do not repay or cause to be repaid the amount of such payment on the Reimbursement Date, Issuing Bank shall promptly notify Agent, which shall promptly notify each Participating Lender, of such payment and each Participating Lender shall promptly (and in any event within 1 Business Day after its receipt of notice from Agent) and unconditionally pay to Agent, for the account of Issuing Bank, in immediately available funds, the amount of such Participating Lender's Pro Rata share of such payment, and Agent shall promptly pay such amounts to Issuing Bank. If a Participating Lender does not make its Pro Rata share of the amount of such payment available to Agent on a timely basis as herein provided, such Participating Lender agrees to pay to Agent for the account of Issuing Bank, forthwith on demand , such amount together with interest thereon at the Federal Funds Rate until paid. The failure of any Participating Lender to make available to Agent for the account of Issuing Bank such Participating Lender's Pro Rata share of the LC Obligations shall not relieve any other Participating Lender of its obligation hereunder to make available to Agent its Pro Rata share of the LC Obligations. No Participating Lender shall be responsible for the failure of any other Participating Lender to make available to Agent its Pro Rata share of the LC Obligations on the date such payment is to be made.

(iii)        Whenever Issuing Bank receives a payment on account of the LC Obligations, including any interest thereon, as to which Agent has previously received payments from any Participating Lender for the account of Issuing Bank, Issuing Bank shall promptly pay to each Participating Lender which has funded its participating interest therein, in immediately available funds, an amount equal to such Participating Lender's Pro Rata share thereof.

(iv)        The obligation of each Participating Lender to make payments to Agent for the account of Issuing Bank in connection with Issuing Bank's payment under a Letter of Credit shall be absolute, unconditional and irrevocable, not subject to any counterclaim, setoff, qualification or exception whatsoever, and shall be made in accordance with the terms and conditions of this Agreement under all circumstances and irrespective of whether or not Borrowers may assert or have any claim for any lack of validity or unenforceability of this Agreement or any of the other Loan Documents; any Borrower's dispute as to its liability for any of the LC Obligations; the existence of any Default or Event of Default; any draft, certificate or other document presented under a Letter of Credit having been determined to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; the existence of any setoff or defense any Obligor may have with respect to any of the Obligations; or the termination of the Commitments.

(v)         Neither Issuing Bank nor any of its officers, directors, employees or agents shall be liable to any Participating Lender for any action taken or omitted to be taken under or in connection with any of the LC Documents except as a result of actual gross negligence or willful misconduct on the part of Issuing Bank. Issuing Bank does not assume any responsibility for any failure or delay in performance or breach by a Borrower or any other Person of its obligations under any of the LC Documents. Issuing Bank does not make to Participating Lenders any express or implied warranty, representation or guaranty with respect to the Collateral, the LC Documents, or any Obligor. Issuing Bank shall not be responsible to any Participating Lender for any recitals, statements, information, representations or warranties contained in, or for the execution, validity, genuineness, effectiveness or enforceability of or any of the LC Documents; the validity, genuineness, enforceability, collectibility, value or sufficiency of any of the Collateral or the perfection of any Lien therein; or the assets, liabilities, financial condition, results of operations, business, creditworthiness or legal status of any Obligor or any Account Debtor. In connection with its administration of and enforcement of rights or remedies under any of the LC Documents, Issuing Bank shall be entitled to act, and shall be fully protected in acting upon, any certification, notice or other communication in whatever form believed by Issuing Bank, in good faith, to be genuine and correct and to have been signed, sent or made by a proper Person. Issuing Bank may consult with and employ legal counsel, accountants and other experts and to advise it concerning its rights, powers and privileges under the LC Documents and shall be entitled to act upon, and shall be fully protected in any action taken in good faith reliance upon, any advice given by such experts. Issuing Bank may employ agents and attorneys-in-fact in connection with any matter relating to the LC Documents and shall not be liable for the negligence, default or misconduct of any such agents or attorneys-in-fact selected by Issuing Bank with reasonable care. Issuing Bank shall not have any liability to any Participating Lender by reason of Issuing Bank's refraining to take any action under any of the LC Documents without having first received written instructions from the Required Lenders to take such action.

(vi)        Upon the request of any Participating Lender, Issuing Bank shall furnish to such Participating Lender copies (to the extent then available to Issuing Bank) of each outstanding Letter of Credit and related LC Documents as may be in the possession of Issuing Bank and reasonably requested from time to time by such Participating Lender.

1. 3. 3. Cash Collateral Account

. If any LC Obligations, whether or not then due or payable, shall for any reason be outstanding (i) on any date that Availability is less than zero, (ii) on or at any time after the Commitment Termination Date, or (iii) on the day that is 5 Business Days prior to the last day of the Term, then Borrowers shall, on Issuing Bank's or Agent's request, forthwith pay to Agent, for the account of Issuing Bank, the amount of any LC Obligations that are then due and payable and shall, upon the occurrence of any of the events described in clauses (ii) or (iii) hereinabove, Cash Collateralize all outstanding Letters of Credit. If any LC Obligations, whether or not then due or payable, shall for any reason be outstanding at any time that an Event of Default exists, then Borrowers shall, on Issuing Bank's or Agent's (acting at the direction of the Required Lenders) request, forthwith pay to Agent, for the account of Issuing Bank, the amount of any LC Obligations that are then due and payable and shall Cash Collateralize all outstanding Letters of Credit. If Borrowers fail to Cash Collateralize any outstanding Letters of Credit on the first Business Day following Agent's or Issuing Bank's demand therefor as provided in the immediately preceding sentences, Lenders may (and shall upon direction of Agent) advance such amount as Revolver Loans (whether or not the Commitment Termination Date has occurred or an Out-of-Formula Condition is created thereby), to be funded to Agent for the account of Borrowers. Such cash (together with any interest accrued thereon) shall be held by Agent in the Cash Collateral Account and may be invested, in Agent's discretion, in Cash Equivalents. Each Borrower hereby pledges to Agent and grants to Agent a security interest in, for the benefit of Agent in such capacity and for the Pro Rata benefit of Lenders, all Cash Collateral held in the Cash Collateral Account from time to time and all proceeds thereof, as security for the payment of all Obligations (including LC Obligations), whether or not then due or payable. From time to time after cash is deposited in the Cash Collateral Account, Agent may apply Cash Collateral then held in the Cash Collateral Account to reimburse the Issuing Bank for payments on account of drawings under Letters of Credit for which it has not been reimbursed, and, to the extent not so applied, to the payment of the other LC Obligations. Neither Borrowers nor any other Person claiming by, through or under or on behalf of Borrowers shall have any right to withdraw any of the Cash Collateral held in the Cash Collateral Account, including any accrued interest, provided that upon termination or expiration of all Letters of Credit and the payment and satisfaction of all of the LC Obligations, any Cash Collateral remaining in the Cash Collateral Account shall be returned to Borrowers unless an Event of Default then exists (in which event Agent may apply such Cash Collateral to the payment of any other Obligations outstanding in accordance with the provisions of Section 5.6 , with any surplus to be turned over to Borrowers).

1. 3. 4. Indemnifications.

(i)          In addition to and without limiting any other indemnity which Borrowers may have to any Indemnitees under any of the Loan Documents, each Borrower hereby agrees to indemnify and defend each of the Indemnitees and to hold each of the Indemnitees harmless from and against any and all actual out-of-pocket losses, claims, damages and expenses which any Indemnitee may suffer, incur or be subject to as a consequence, directly or indirectly, of (a) the issuance of, payment or failure to pay or any performance or failure to perform under any Letter of Credit, (b) any suit, investigation or proceeding as to which Agent or any Lender is or may become a party to as a consequence, directly or indirectly, of the issuance of any Letter of Credit or the payment or failure to pay thereunder or (c) Issuing Bank following any instructions of a Borrower with respect to any Letter of Credit or any Document received by Issuing Bank with reference to any Letter of Credit, in each case, unless such losses, claims, damages or expenses result from the gross negligence or willful misconduct of such Indemnitee (including such Indemnitee's officers, directors, employees, agents and attorneys but such defense shall not apply to any other Indemnitees).

(ii)         Each Participating Lender agrees to indemnify and defend each of the Issuing Bank Indemnitees (to the extent the Issuing Bank Indemnitees are not reimbursed by Borrowers or any other Obligor, but without limiting the indemnification obligations of Borrowers under this Agreement), to the extent of such Lender's Pro Rata share of the Revolver Commitments, from and against any and all Claims which may be imposed on, incurred by or asserted against any of the Issuing Bank Indemnitees in any way related to or arising out of Issuing Bank's administration or enforcement of rights or remedies under any of the LC Documents or any of the transactions contemplated thereby (including costs and expenses which Borrowers are obligated to pay under Section 15.2 ).

1. 4. Bank Products .

Borrowers may request any Lender to provide, or to arrange for one or more of its Affiliates to provide, Bank Products, but no Lender shall have any obligation whatsoever to provide, or to arrange for the provision of, any Bank Products. If Bank Products are provided by an Affiliate of a Lender, Borrowers agree to indemnify and hold Agent and Lenders harmless from and against any and all Claims at any time incurred by Agent or any Lender that arise from any indemnity given to such Affiliates that relate to such Bank Products other than those Claims that arise from Agent's or any such Lender's gross negligence or willful misconduct. Borrowers acknowledge that obtaining Bank Products from any Lender or any Lender's Affiliate is in the discretion of such Lender or its Affiliates and is subject to all rules and regulations of such Lender and its Affiliates that are applicable to such Bank Products.

2. INTEREST, FEES AND CHARGES
3. 1. Interest.
   2. 1. Rates of Interest

. Borrowers agree to pay interest in respect of all unpaid principal amounts of the Revolver Loans from the respective dates such principal amounts are advanced until paid (whether at stated maturity, on acceleration or otherwise) at a rate per annum equal to the applicable rate indicated below:

(i)          for Revolver Loans made or outstanding as Base Rate Loans, the Applicable Margin plus the Base Rate in effect from time to time; or

(ii)         for Revolver Loans made or outstanding as LIBOR Loans, the Applicable Margin plus the relevant Adjusted LIBOR Rate for the applicable Interest Period selected by Borrowers in conformity with this Agreement.

Upon determining the Adjusted LIBOR Rate for any Interest Period requested by Borrowers, Agent shall promptly notify Borrowers thereof by telephone and, if so requested by Borrowers, confirm the same in writing. Such determination shall, absent manifest error, be final, conclusive and binding on all parties and for all purposes. The applicable rate of interest for all Loans (or portions thereof) bearing interest based upon the Base Rate shall be increased or decreased, as the case may be, by an amount equal to any increase or decrease in the Base Rate, with such adjustments to be effective as of the opening of business on the day that any such change in the Base Rate becomes effective. Interest on each Loan shall accrue from and including the date on which such Loan is made, converted to a Loan of another Type or continued as a LIBOR Loan to (but excluding) the date of any repayment thereof; provided , however , that, if a Loan is repaid on the same day made, one day's interest shall be paid on such Loan.

2. 1. 2. Conversions and Continuations.

(i)          Borrowers may on any Business Day, subject to the giving of a proper Notice of Conversion/Continuation as hereinafter described, elect (A) to continue all or any part of a LIBOR Loan by selecting a new Interest Period therefor, to commence on the last day of the immediately preceding Interest Period, or (B) to convert all or any part of a Loan of one Type into a Loan of another Type; provided , however , during the period that any Default or Event of Default exists, Agent may (and shall at the direction of the Required Lenders) declare that no Loan may be made or continued as or converted into a LIBOR Loan. Any conversion of a LIBOR Loan into a Base Rate Loan shall be made on the last day of the Interest Period for such LIBOR Loan. Any conversion or continuation made with respect to less than the entire outstanding balance of the Loans must be allocated among Lenders on a Pro Rata basis, and the Interest Period for Loans converted into or continued as LIBOR Loans shall be coterminous for each Lender.

(ii)         Whenever Borrowers desire to convert or continue Loans under Section 3.1.2(i) , Borrower Representative shall give Agent written notice (or telephonic notice promptly confirmed in writing) substantially in the form of Exhibit C (a "Notice of Conversion/Continuation"), signed by an authorized officer of Borrower Representative, at least 1 Business Day before the requested conversion date, in the case of a conversion into Base Rate Loans, and at least 3 Business Days before the requested conversion or continuation date, in the case of a conversion into or continuation of LIBOR Loans. Promptly after receipt of a Notice of Conversion/Continuation, Agent shall notify each Lender in writing of the proposed conversion or continuation. Each such Notice of Conversion/Continuation shall be irrevocable and shall specify the aggregate principal amount of the Loans to be converted or continued, the date of such conversion or continuation (which shall be a Business Day) and whether the Loans are being converted into or continued as LIBOR Loans (and, if so, the duration of the Interest Period to be applicable thereto and, in the absence of any specification by Borrowers of the Interest Period, an Interest Period of one month will be deemed to be specified) or Base Rate Loans. If, upon the expiration of any Interest Period in respect of any LIBOR Loans, Borrowers shall have failed to deliver the Notice of Conversion/Continuation, Borrowers shall be deemed to have elected to convert such LIBOR Loans to Base Rate Loans.

2. 1. 3. Interest Periods

. In connection with the making or continuation of, or conversion into, each Borrowing of LIBOR Loans, Borrowers shall select an interest period (each an "Interest Period") to be applicable to such LIBOR Loan, which interest period shall consist of 1, 2, 3 or 6 months and shall commence on the date such LIBOR Loan is made; provided ,  however , that:

(i)          the initial Interest Period for a LIBOR Loan shall commence on the date of such Borrowing (including the date of any conversion from a Loan of another Type) and each Interest Period occurring thereafter in respect of such Revolver Loan shall commence on the date on which the next preceding Interest Period expires;

(ii)         if any Interest Period would otherwise expire on a day that is not a Business Day, such Interest Period shall expire on the next succeeding Business Day, provided that, if any Interest Period in respect of LIBOR Loans would otherwise expire on a day that is not a Business Day but is a day of the month after which no further Business Day occurs in such month, such Interest Period shall expire on the immediately preceding Business Day;

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

(iv)        no Interest Period shall extend beyond the last day of the Term.

2. 1. 4. Interest Rate Not Ascertainable

. If Agent shall reasonably determine (which determination shall, absent manifest error, be final, conclusive and binding upon all parties) that on any date for determining the Adjusted LIBOR Rate for any Interest Period, by reason of any changes arising after the date of this Agreement affecting the London interbank market or any Lender's position in such market, adequate and fair means do not exist for ascertaining the applicable interest rate on the basis provided for in the definition of Adjusted LIBOR Rate, then, and in any such event, Agent shall forthwith give notice (by telephone promptly confirmed in writing) to Borrowers of such determination. Until Agent notifies Borrowers that the circumstances giving rise to the suspension described herein no longer exist, the obligation of Lenders to make LIBOR Loans shall be suspended, and such affected Loans then outstanding shall, at the end of the then applicable Interest Period or at such earlier time as may be required by Applicable Law, bear the same interest as Base Rate Loans.

2. 1. 5. Default Rate of Interest

. Borrowers shall pay interest at a rate per annum equal to the Default Rate (i) with respect to the principal amount of any portion of the Obligations (and, to the extent permitted by Applicable Law, all past due interest) that is not paid on the due date thereof (whether due at stated maturity, on demand , upon acceleration or otherwise) until Full Payment; (ii) with respect to the principal amount of all of the Obligations (and, to the extent permitted by Applicable Law, all past due interest) upon the earlier to occur of (x) Borrower Representative's receipt of notice from Agent of the Required Lenders' election to charge the Default Rate based upon the existence of any Event of Default (which notice Agent shall send only with the consent or at the direction of the Required Lenders), whether or not acceleration or demand for payment of the Obligations has been made, or (y) the commencement by or against any Borrower of an Insolvency Proceeding whether or not under the circumstances described in clauses (i) or (ii) hereof Lenders elect to accelerate the maturity or demand payment of any of the Obligations; and (iii) with respect to the principal amount of any Out-of-Formula Loans (unless otherwise agreed in writing by the Required Lenders), whether or not demand for payment thereof has been made by Agent. To the fullest extent permitted by Applicable Law, the Default Rate shall apply and accrue on any judgment entered with respect to any of the Obligations and to the unpaid principal amount of the Obligations during any Insolvency Proceeding of a Borrower. Each Borrower acknowledges that the cost and expense to Agent and each Lender attendant upon the occurrence of an Event of Default are difficult to ascertain or estimate and that the Default Rate is a fair and reasonable estimate to compensate Agent and Lenders for such added cost and expense. Interest accrued at the Default Rate shall be due and payable on demand .

2. 2. Fees

. In consideration of Lenders' establishment of the Commitments in favor of Borrowers, and Agent's agreement to serve as collateral and administrative agent hereunder, Borrowers jointly and severally agree to pay the following fees:

2. 2. 1. Fee Letter

. Borrowers shall be jointly and severally obligated to pay to Agent such fees as are required by the Fee Letter on the dates set forth therein.

2. 2. 2. Unused Line Fee

. Borrowers shall be jointly and severally obligated to pay to Agent for the Pro Rata benefit of Lenders a fee (the "Unused Line Fee") equal to the Applicable Margin (for the Unused Line Fee) of the amount by which the Average Revolver Loan Balance for any quarter (or portion thereof that the Commitments are in effect) is less than the aggregate Revolver Commitments, such Unused Line Fee to be paid quarterly, in arrears, on the first day of each calendar quarter and on the Commitment Termination Date; provided , however , that if an Event of Default exists and the Default Rate is then in effect, then such Unused Line Fees shall be paid on a monthly basis, on the first day of each calendar month.

2. 2. 3. LC Facility Fees

. Borrowers shall be jointly and severally obligated to pay: (a)(i) to Agent for the Pro Rata account of each Lender for all Letters of Credit, the Applicable Margin in effect for Revolver Loans that are LIBOR Loans on a per annum basis based on the average amount available to be drawn under Letters of Credit outstanding and all Letters of Credit that are paid or expire during the period of measurement, payable quarterly, in arrears, on the first day of each calendar quarter; (ii) to Issuing Bank for its own account a Letter of Credit fronting fee of 0.125% per annum based on the average amount available to be drawn under all Letters of Credit outstanding and all Letters of Credit that are paid or expire during the period of measurement, payable quarterly, in arrears, on the first Business Day of the following calendar quarter; and (iii) to Issuing Bank for its own account all customary charges associated with the issuance, amending, negotiating, payment, processing and administration of all Letters of Credit; provided , however , that if an Event of Default exists and the Default Rate is then in effect, then such fees and charges shall be paid on a monthly basis, on the first day of each calendar month. All Letter of Credit fees that are expressed as a percentage shall be increased to a percentage that is 2% greater than the percentage that would otherwise be applicable to LIBOR Loans when the Default Rate is in effect.

2. 2. 4. Audit and Appraisal Fees and Expenses

. Borrowers shall reimburse Agent for all reasonable costs and expenses incurred by Agent (including standard fees charged by Agent's internal appraisal department) in connection with (i) examinations and reviews of any Obligor's books and records, (A) up to 3 times per Loan Year for any and all such examinations and reviews unless a Default or Event of Default exists (in which event, there shall be no limit on the number of examinations and reviews for which Borrowers shall be obligated to reimburse Agent) and (B) up to 2 times per Loan Year if no Restrictive Trigger Event has occurred and is continuing, and shall pay to Agent the standard amount charged by Agent per day ($850 per day as of the Closing Date) plus reasonable out-of-pocket expenses for each day that an employee or agent of Agent shall be engaged in an examination or review of any Obligor's books and records under this clause (i), and (ii) appraisals of Inventory no more frequently than 2 times per Loan Year, unless a Default or Event of Default exists (in which event, there shall be no limit on the number of Inventory appraisals for which Borrowers shall be obligated to reimburse Agent). If after the occurrence of a Restrictive Trigger Event, Availability is at least $15,000,000 for 90 consecutive days and no Event of Default exists, then as soon as practicable but in any event within 1 Business Day thereafter (the "Audit Spring-Back Date"), Agent will not require such examinations and reviews more frequently than 2 times per Loan Year unless another Restrictive Trigger Event occurs. If a Restrictive Trigger Event has occurred as a result of an Event of Default and not as a result of the failure of Borrowers to meet the Availability or Average Availability requirements, and Agent (or to the extent required by this Agreement, all Lenders or Required Lenders) waive the Event of Default in writing, then the Audit Spring-Back Date shall occur on the date of the waiver in writing of such Event of Default. The foregoing shall not be construed to limit Agent's right to conduct audits as provided in Section 10.1.1 (but shall limit Borrowers' obligation to reimburse Agent and Lenders for any such audit) or as provided in the definition of Permitted Acquisitions or to otherwise obtain appraisals of the Collateral at the expense of Agent and Lenders.

2. 2. 5. General Provisions

. All fees shall be fully earned by the identified recipient thereof pursuant to the foregoing provisions of this Agreement on the due date thereof (and, in the case of Letters of Credit, upon each issuance, renewal or extension of such Letter of Credit) and, except as otherwise set forth herein or required by Applicable Law, shall not be subject to rebate, refund or proration. All fees provided for in Section 3.2 are and shall be deemed to be compensation for services and are not, and shall not be deemed to be, interest or any other charge for the use, forbearance or detention of money.

2. 3. Computation of Interest and Fees

. All fees and other charges provided for in this Agreement that are calculated as a per annum percentage of any amount and all interest shall be calculated daily and shall be computed on the actual number of days elapsed over a year of 360 days (except 365/366 days for Base Rate Loans). Each determination by Agent of interest and fees hereunder shall be presumptive evidence of the correctness of such interest and fees.

2. 4. Reimbursement Obligations.
   5. 1. Borrowers shall reimburse Agent and Lenders for any Extraordinary Expenses, on the sooner to occur of 10 Business Days after Agent's demand therefor or Agent's receipt of any proceeds of Collateral in connection with any Enforcement Action (subject to the provisions of Section 5.6 with respect to the application of any proceeds of Collateral). Borrowers also shall reimburse Agent for all reasonable accounting, appraisal and consulting fees, and reasonable attorney's fees and out-of-pocket expenses of one counsel to Agent (and local counsels as determined by Agent) and other reasonable fees and expenses suffered or incurred by Agent in connection with: (i) the negotiation and preparation of any of the Loan Documents, any amendment or modification thereto; (ii) the administration of the Loan Documents and the transactions contemplated thereby; (iii) action taken to perfect or maintain the perfection or priority of any of Agent's Liens with respect to any of the Collateral; (iv) any inspection of or audits conducted by Agent with respect to any Obligor's books and records or any of the Collateral (subject to the limitations set forth in Section 3.2.4 hereof); and (v) any effort by Agent to verify or appraise any of the Collateral (subject to the limitations set forth in Section 3.2.4 ). All amounts chargeable to or reimbursable Borrowers under this Section 3.4 shall constitute Obligations that are secured by all of the Collateral and if not sooner paid, shall be payable to Agent within 10 Business Days after demand by Agent. Borrowers shall also reimburse Agent for reasonable expenses incurred by Agent in its administration of any of the Collateral to the extent and in the manner provided in Section 8 or in any of the other Loan Documents. The foregoing shall be in addition to, and shall not be construed to limit, any other provision of any of the Loan Documents regarding the indemnification or reimbursement by Borrowers of Claims suffered or incurred by Agent or any Lender.
      2. If at any time Agent or (with the prior consent of Agent) any Lender shall agree to indemnify any Person against losses or damages that such Person may suffer or incur in its dealings or transactions with Borrowers, or shall guarantee or otherwise assure payment of any liability or obligation of Borrowers to such Person, or otherwise shall provide assurances of Borrowers' payment or performance under any agreement with such Person, including indemnities, guaranties or other assurances of payment or performance given by Agent or any Lender with respect to Banking Relationship Debt, then the Contingent Obligation of Agent or any Lender providing any such indemnity, guaranty or other assurance of payment or performance, together with any payment made or liability incurred by Agent or any Lender in connection therewith, shall constitute Obligations that are secured by the Collateral and Borrowers shall repay, within 10 Business Days, any amount so paid or any liability incurred by Agent or any Lender in connection with any such indemnity, guaranty or assurance (other than liabilities resulting from Agent's or such Lender's gross negligence or willful misconduct). Nothing herein shall be construed to impose upon Agent or any Lender any obligation to provide any such indemnity, guaranty or assurance. The foregoing agreement of Borrowers shall apply whether or not such indemnity, guaranty or assurance is in writing or oral and regardless of any Borrower's knowledge of the existence thereof, shall survive termination of the Commitments and Full Payment of the Obligations and any other provisions of the Loan Documents regarding reimbursement or indemnification by Borrowers of Claims suffered or incurred by Agent or any Lender.
   6. Bank Charges

. Borrowers shall pay to Agent, on demand , any and all fees, costs or expenses which Agent pays to a bank or other similar institution (including any fees paid by Agent or any Lender to any Participant) arising out of or in connection with (i) the forwarding to a Borrower or any other Person on behalf of Borrower by Agent of proceeds of Loans made by Lenders to a Borrower pursuant to this Agreement and (ii) the depositing for collection by Agent of any Payment Item received or delivered to Agent on account of the Obligations.

2. 6. Illegality

. Notwithstanding anything to the contrary contained elsewhere in this Agreement, if (i) any change in any law or regulation or in the interpretation thereof after the Closing Date by any Governmental Authority charged with the administration thereof shall make it unlawful for a Lender to make or maintain a LIBOR Loan or to give effect to its obligations as contemplated hereby with respect to a LIBOR Loan or (ii) at any time such Lender determines that the making or continuance of any LIBOR Loan has become impracticable as a result of a contingency occurring after the date hereof which adversely affects the London interbank market or the position of such Lender in such market, then such Lender shall give after such determination Agent and Borrowers notice thereof and may thereafter (1) declare that LIBOR Loans will not thereafter be made by such Lender, whereupon any request by a Borrower for a LIBOR Loan from such Lender shall be deemed a request for a Base Rate Loan unless such Lender's declaration shall be subsequently withdrawn (which declaration shall be withdrawn promptly after the cessation of the circumstances described in clause (i) or (ii) above); and (2) require that all outstanding LIBOR Loans made by such Lender be converted to Base Rate Loans, under the circumstances of clause (i) or (ii) of this Section 3.6 insofar as such Lender determines the continuance of LIBOR Loans to be impracticable, in which event all such LIBOR Loans of such Lender shall be converted automatically to Base Rate Loans as of the date of any Borrower's receipt of the aforesaid notice from such Lender.

2. 7. Increased Costs

. If, by reason of (a) the introduction after the date hereof of or any change (including any change by way of imposition or increase of Statutory Reserves or other reserve requirements) in or in the interpretation of any law or regulation, or (b) the compliance with any guideline or request from any central bank or other Governmental Authority or quasi-Governmental Authority exercising control over banks or financial institutions generally (whether or not having the force of law) made after the date hereof (any such event a "Change in Law"):

(i)          any Lender shall be subject after the date hereof to any Tax, duty or other charge with respect to any LIBOR Loan or Letter of Credit or its obligation to make LIBOR Loans or to issue Letters of Credit or participate in the LC Obligations arising from the issuance of Letters of Credit, or a change shall result in the basis of taxation of payment to any Lender of the principal of or interest on its LIBOR Loans or its obligation to make LIBOR Loans, issue Letters of Credit or participate in the LC Obligations arising from the issuance of Letters of Credit (except for changes in the rate of Tax on the overall net income or gross receipts or franchise tax of such Lender imposed by the jurisdiction in which such Lender's principal executive office is located); or

(ii)         any reserve (including any imposed by the Board of Governors), special deposits or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Lender shall be imposed or deemed applicable or any other condition affecting its LIBOR Loans or Letters of Credit or its obligation to make LIBOR Loans or to issue Letters of Credit or participate in the LC Obligations arising from the issuance of Letters of Credit shall be imposed on such Lender or the London interbank market;

and as a result thereof there shall be any increase in the cost to such Lender in any material amount in excess of those incurred by similarly situated Lenders of agreeing to make or making, funding or maintaining LIBOR Loans or issuing Letters of Credit (except to the extent already included in the determination of the applicable Adjusted LIBOR Rate for LIBOR Loans), or there shall be a reduction in any material respect in the amount received or receivable by such Lender, then such Lender shall, promptly after determining the existence or amount of any such increased costs for which such Lender seeks payment hereunder, give any Borrower notice thereof and Borrowers shall from time to time, upon written notice from and demand by such Lender setting forth in reasonable detail the manner in which such amount was determined (with a copy of such notice and demand to Agent), pay to Agent for the account of such Lender, within 10 Business Days after the date specified in such notice and demand, an additional amount sufficient to indemnify such Lender against such increased costs. A certificate as to the amount of such increased costs, submitted to Borrowers by such Lender, shall be final, conclusive and binding for all purposes, absent manifest error.

If any Lender shall advise Agent at any time that, because of the circumstances described hereinabove in this Section 3.7 or any other circumstances arising after the date of this Agreement affecting such Lender or the London interbank market or such Lender's position in such market, the Adjusted LIBOR