THIRD AMENDED AND RESTATED CREDIT AGREEMENT Dated as of June 30, 2005 among WAMPOLE LABORATORIES, LLC and INVERNESS MEDICAL (UK) HOLDINGS LIMITED, as Borrowers, THE OTHER CREDIT PARTIES SIGNATORY HERETO, as Credit Parties, THE LENDERS SIGNATORY HERETO...

Exhibit 10.1

THIRD AMENDED AND RESTATED CREDIT AGREEMENT

Dated as of June 30, 2005

among

▇▇▇▇▇▇▇ LABORATORIES, LLC and
INVERNESS MEDICAL (UK) HOLDINGS LIMITED,

as Borrowers,

THE OTHER CREDIT PARTIES SIGNATORY HERETO,

as Credit Parties,

THE LENDERS SIGNATORY HERETO

FROM TIME TO TIME,

as Lenders,

GENERAL ELECTRIC CAPITAL CORPORATION,

as Agent and Lender,

▇▇▇▇▇▇▇ ▇▇▇▇▇ CAPITAL,
a division of ▇▇▇▇▇▇▇ ▇▇▇▇▇ Business Financial Services Inc.,

as Documentation Agent, Co-Syndication Agent and Lender,

and

UBS SECURITIES LLC,

as Co-Syndication Agent,

with

GECC CAPITAL MARKETS GROUP, INC. and ▇▇▇▇▇▇▇ ▇▇▇▇▇ CAPITAL,

as Co-Lead Arrangers

INDEX OF APPENDICES

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This THIRD AMENDED AND RESTATED CREDIT AGREEMENT (this “Agreement”), dated as of June 30, 2005, is by and among INVERNESS MEDICAL INNOVATIONS, INC., a Delaware corporation (“Innovations”), ▇▇▇▇▇▇▇ LABORATORIES, LLC, a Delaware limited liability company (“US Borrower”), INVERNESS MEDICAL (UK) HOLDINGS LIMITED, a company organized under the laws of England and Wales (“European Borrower”; US Borrower and European Borrower are sometimes collectively referred to as “Borrowers” and individually as a “Borrower”), the other Credit Parties signatory hereto, the Lenders signatory hereto from time to time, GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation, as administrative agent for Lenders, ▇▇▇▇▇▇▇ ▇▇▇▇▇ CAPITAL, a division of ▇▇▇▇▇▇▇ ▇▇▇▇▇ Business Financial Services Inc. (“ML Capital”), as documentation agent and co-syndication agent, UBS SECURITIES LLC, as co-syndication agent (“UBS Securities”), and GECC CAPITAL MARKETS GROUP, INC. and ML CAPITAL, as co-lead arrangers.

RECITALS

WHEREAS, pursuant to that certain Second Amended and Restated Credit Agreement, dated as of September 30, 2003 (as amended, supplemented or otherwise modified from time to time prior to the date hereof, the “Existing Credit Agreement”), by and among the Borrowers, the lending institutions party thereto (the “Existing Lenders”), the Agent, ML Capital, as documentation agent and co-syndication agent, and UBS Securities, as co-syndication agent, the Existing Lenders have made available certain financing to the Borrowers upon the terms and conditions contained therein;

WHEREAS, the Borrowers have requested, among other things, additional financing and Lenders are willing to provide such financing on the terms and conditions set forth herein;

WHEREAS, the Borrowers and Existing Lenders have agreed to amend and restate the Existing Credit Agreement as provided herein; and

WHEREAS, capitalized terms used in this Agreement, including the Recitals hereto, shall have the meanings ascribed to them in Annex A and, for purposes of this Agreement and the other Loan Documents, the rules of construction set forth in Annex A shall govern.  All Annexes, Disclosure Schedules, Exhibits and other attachments (collectively, “Appendices”) hereto, or expressly identified to this Agreement, are incorporated herein by reference, and taken together with this Agreement, shall constitute but a single agreement.  These Recitals shall be construed as part of the Agreement.

NOW, THEREFORE, in consideration of the premises and the mutual covenants hereinafter contained, and for other good and valuable consideration, the parties hereto agree that the Existing Credit Agreement shall be amended and restated as follows:

1.                                      AMOUNT AND TERMS OF CREDIT

1.1                                 Credit Facilities.

(a)                                  US Revolving Credit Facility.

(i)            Subject to the terms and conditions hereof, each US Revolving Lender agrees to make available (and continue outstanding any US Revolving Credit Advances (as defined in the Existing Credit Agreement) outstanding pursuant to the terms of the Existing Credit Agreement) to US Borrower from time to time until the Commitment Termination Date its Pro Rata Share of advances in Dollars (each, including any such US Revolving Credit Advances (as defined in the Existing Credit Agreement) outstanding pursuant to the terms of the Existing Credit Agreement, a “US Revolving Credit Advance”).  The Pro Rata Share of the US Revolving Loan of any US Revolving Lender shall not at any time exceed its separate US Revolving Loan Commitment.  The obligations of each US Revolving Lender hereunder shall be several and not joint.  Until the Commitment Termination Date, US Borrower may borrow, repay and reborrow under this Section 1.1(a)(i).  Each US Revolving Credit Advance shall be made on notice by US Borrower to one of the representatives of Agent identified in Schedule 1.1 at the address specified therein.  Any such notice must be given no later than (A) 11:00 a.m. (New York time) on the Business Day of the proposed US Revolving Credit Advance, in the case of an Index Rate Loan, or (B) 11:00 a.m. (New York time) on the date which is 3 Business Days prior to the proposed US Revolving Credit Advance, in the case of a LIBOR Loan.  Each such notice (a “Notice of US Revolving Credit Advance”) must be given in writing (by telecopy or overnight courier) substantially in the form of Exhibit 1.1(a)(i), and shall include the information required in such Exhibit and such other information as may be reasonably required by Agent.  If US Borrower desires to have the US Revolving Credit Advances bear interest by reference to a LIBOR Rate, US Borrower must comply with Section 1.5(e).

(ii)           Except as provided in Section 1.12, US Borrower shall execute and deliver to each US Revolving Lender a note to evidence the US Revolving Loan Commitment of that US Revolving Lender.  Each note shall be in the principal amount of the US Revolving Loan Commitment of the applicable US Revolving Lender, substantially in the form of Exhibit 1.1(a)(ii) (each a “US Revolving Note” and, collectively, the “US Revolving Notes”).  Each US Revolving Note shall represent the obligation of the US Borrower to pay the amount of the applicable US Revolving Lender’s US Revolving Loan Commitment or, if less, such US Revolving Lender’s Pro Rata Share of the aggregate unpaid principal amount of all US Revolving Credit Advances to US Borrower together with interest thereon as prescribed in Section 1.5.  The entire unpaid balance of the aggregate US Revolving Loan and all other non-contingent Obligations shall be immediately due and payable in full in immediately available funds on the Commitment Termination Date.

(b)                                 European Revolving Credit Facility.

(i)            Subject to the terms and conditions hereof, each European Revolving Lender agrees to make available (and continue outstanding any European Revolving Credit Advances (as defined in the Existing Credit Agreement)  to European Borrower from time to time until the Commitment Termination Date its Pro Rata Share of advances in Dollars (each, including any such European Revolving Credit Advances (as defined in the Existing Credit Agreement) outstanding pursuant to the terms of the Existing Credit Agreement, a “European Revolving Credit Advance”).  The Pro Rata Share of the European Revolving Loan of any European Revolving Lender shall not at any time exceed its separate European Revolving Loan

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Commitment.  The obligations of each European Revolving Lender hereunder shall be several and not joint.  Until the Commitment Termination Date, European Borrower may borrow, repay and reborrow under this Section 1.1(b)(i).  Each European Revolving Credit Advance shall be made on notice by European Borrower to one of the representatives of Agent identified in Schedule 1.1 at the address specified therein.  Any such notice must be given no later than (A) 11:00 a.m. (New York time) on the Business Day of the proposed European Revolving Credit Advance, in the case of an Index Rate Loan, or (B) 11:00 a.m. (New York time) on the date which is 3 Business Days prior to the proposed European Revolving Credit Advance, in the case of a LIBOR Loan.  Each such notice (a “Notice of European Revolving Credit Advance”) must be given in writing (by telecopy or overnight courier) substantially in the form of Exhibit 1.1(b)(i), and shall include the information required in such Exhibit and such other information as may be reasonably required by Agent.  If European Borrower desires to have the European Revolving Credit Advances bear interest by reference to a LIBOR Rate, European Borrower must comply with Section 1.5(e).

(ii)           Except as provided in Section 1.12, European Borrower shall execute and deliver to each European Revolving Lender a note to evidence the European Revolving Loan Commitment of that European Revolving Lender.  Each note shall be in the principal amount of the European Revolving Loan Commitment of the applicable European Revolving Lender, substantially in the form of Exhibit 1.1(b)(ii) (each a “European Revolving Note” and, collectively, the “European Revolving Notes”).  Each European Revolving Note shall represent the obligation of the European Borrower to pay the amount of the applicable European Revolving Lender’s European Revolving Loan Commitment or, if less, such European Revolving Lender’s Pro Rata Share of the aggregate unpaid principal amount of all European Revolving Credit Advances to European Borrower together with interest thereon as prescribed in Section 1.5.  The entire unpaid balance of the aggregate European Revolving Loan and all other non-contingent Obligations shall be immediately due and payable in full in immediately available funds on the Commitment Termination Date.

(c)                                  US Term Loan.

(i)            Subject to the terms and conditions hereof, each of the US Term Lenders agrees to make a term loan in Dollars (collectively, the “US Term Loan”) on the Closing Date to US Borrower in the amount of such US Term Lender’s US Term Loan Commitment.  The obligations of such US Term Lender hereunder shall be several and not joint.  Each such US Term Loan shall be evidenced by a promissory note substantially in the form of Exhibit 1.1(c)(i) (each a “US Term Note” and collectively the “US Term Notes”), and, except as provided in Section 1.12, the US Borrower shall execute and deliver the US Term Note to the applicable US Term Lender.  Each US Term Note shall represent the obligation of the US Borrower to pay the applicable US Term Lender’s US Term Loan Commitment, together with interest thereon as prescribed in Section 1.5.

(ii)           To the extent outstanding, the US Borrower shall repay the US Term Loan in eleven (11) consecutive quarterly installments on the last day of December, March, June and September of each year, commencing September 30, 2005, in an amount equal to .25% of the US Term Loan Commitment, as in effect on the Conversion Date after, if

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applicable, giving effect to the conversion of the US Revolving Loan Commitment contemplated by Section 1.1(i).

The final installment shall be due on March 31, 2008 and shall be in the amount of the remaining principal balance of the US Term Loan.

(iii)          Notwithstanding Section 1.1(c)(ii), the aggregate outstanding principal balance of the US Term Loan and all other non-contingent Obligations shall be due and payable in full in immediately available funds on the Commitment Termination Date, if not sooner paid in full.  No payment with respect to the US Term Loan may be reborrowed.

(iv)          Each payment of principal with respect to the US Term Loan shall be paid to Agent for the ratable benefit of each US Term Lender making a US Term Loan, ratably in proportion to each such US Term Lender’s respective US Term Loan Commitment.

(d)                                 European Term Loan.

(i)            Subject to the terms and conditions hereof, each of the European Term Lenders agrees to make a term loan in Dollars (collectively, the “European Term Loan”) on the Closing Date to European Borrower in the amount of such European Term Lender’s European Term Loan Commitment.  The obligations of each European Term Lender hereunder shall be several and not joint.  Each such European Term Loan shall be evidenced by a promissory note substantially in the form of Exhibit 1.1(d)(i) (each a “European Term Note” and collectively the “European Term Notes”), and, except as provided in Section 1.12, the European Borrower shall execute and deliver the European Term Note to the applicable European Term Lender.  Each European Term Note shall represent the obligation of the European Borrower to pay the applicable European Term Lender’s European Term Loan Commitment, together with interest thereon as prescribed in Section 1.5.

(ii)           To the extent still outstanding, European Borrower shall repay the European Term Loan in eleven (11) consecutive quarterly installments on the last day of December, March, June and September of each year, commencing September 30, 2005, in an amount equal to .25% of the European Term Loan Commitment, as in effect on the Conversion Date after, if applicable, giving effect to the conversion of the European Revolving Loan Commitment contemplated by Section 1.1(i).

(iii)          The final installment shall be due on March 31, 2008 and shall be in the amount of the remaining principal balance of the European Term Loan.

(iv)          Notwithstanding Section 1.1(d)(ii), the aggregate outstanding principal balance of the European Term Loan and all other non-contingent Obligations shall be due and payable in full in immediately available funds on the Commitment Termination Date, if not sooner paid in full.  No payment with respect to the European Term Loan may be reborrowed.

(v)           Each payment of principal with respect to the European Term Loan shall be paid to Agent for the ratable benefit of each European Term Lender making a European

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Term Loan, ratably in proportion to each such European Term Lender’s respective European Term Loan Commitment.

(e)                                  US Swing Line Facility.

(i)            Agent shall notify the Swing Line Lender upon Agent’s receipt of any Notice of US Revolving Credit Advance.  Subject to the terms and conditions hereof, the Swing Line Lender may, in its discretion, make available from time to time until the Commitment Termination Date advances of any Index Rate Loan in Dollars (each, including any such Swing Line Advances (as defined in the Existing Credit Agreement) outstanding pursuant to the terms of the Existing Credit Agreement, a “US Swing Line Advance”) in accordance with any such notice.  The provisions of this Section 1.1(e)(i) shall not relieve US Revolving Lenders of their obligations to make US Revolving Credit Advances under Section 1.1(a)(i); provided that if the Swing Line Lender makes a US Swing Line Advance pursuant to any such notice, such US Swing Line Advance shall be in lieu of any US Revolving Credit Advance that otherwise may be made by US Revolving Lenders pursuant to such notice.  The aggregate amount of US Swing Line Advances outstanding shall not exceed at any time the lesser of (A) the US Swing Line Commitment and (B) the US Maximum Amount less the outstanding balance of the US Revolving Loan at such time (“US Swing Line Availability”).  Until the Commitment Termination Date, US Borrower may from time to time borrow, repay and reborrow under this Section 1.1(e)(i).  Each US Swing Line Advance shall be made pursuant to a Notice of US Revolving Credit Advance delivered to Agent by US Borrower in accordance with Section 1.1(a)(i).  Any such notice must be given no later than 11:00 a.m. (New York time) on the Business Day of the proposed US Swing Line Advance.  Unless the Swing Line Lender has received at least one Business Day’s prior written notice from the Requisite Lenders or the US Requisite Revolving Lenders, instructing it not to make a US Swing Line Advance, the Swing Line Lender shall, notwithstanding the failure of any condition precedent set forth in Section 2.2, be entitled to fund that US Swing Line Advance, and to have each US Revolving Lender make US Revolving Credit Advances in accordance with Section 1.1(e)(iii) or purchase participating interests in accordance with Section 1.1(e)(iv).  Notwithstanding any other provision of this Agreement or the other Loan Documents, the US Swing Line Loan shall constitute an Index Rate Loan. US Borrower shall repay the aggregate outstanding principal amount of the US Swing Line Loan upon demand therefore by Agent.

(ii)           US Borrower shall execute and deliver to the Swing Line Lender a promissory note to evidence the US Swing Line Commitment.  Such note shall be in the principal amount of the US Swing Line Commitment of the Swing Line Lender, dated the Closing Date and substantially in the form of Exhibit 1.1(e)(ii) (each a “US Swing Line Note” and, collectively, the “US Swing Line Notes”). The US Swing Line Note shall represent the obligation of US Borrower to pay the amount of the US Swing Line Commitment or, if less, the aggregate unpaid principal amount of all US Swing Line Advances made to US Borrower together with interest thereon as prescribed in Section 1.5.  The entire unpaid balance of the US Swing Line Loan and all other noncontingent Obligations shall be immediately due and payable in full in immediately available funds on the Commitment Termination Date if not sooner paid in full.

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(iii)          The Swing Line Lender may, at any time and from time to time in its sole and absolute discretion, but not less frequently than weekly, on behalf of US Borrower (and US Borrower hereby irrevocably authorizes the Swing Line Lender to so act on its behalf), request each US Revolving Lender (including the Swing Line Lender) to make a US Revolving Credit Advance to US Borrower (which shall be an Index Rate Loan) in an amount equal to that US Revolving Lender’s Pro Rata Share of the principal amount of the US Borrower’s US Swing Line Loan (the “US Refunded Swing Line Loan”) outstanding on the date such notice is given.  Unless any of the events described in Sections 8.1(h) or 8.1(i) has occurred (in which event the procedures of Section 1.1(e)(iv) shall apply) and regardless of whether the conditions precedent set forth in this Agreement to the making of a US Revolving Credit Advance are then satisfied, each US Revolving Lender shall disburse directly to Agent, its Pro Rata Share of a US Revolving Credit Advance on behalf of the Swing Line Lender prior to 3:00 p.m. (New York time) in immediately available funds on the Business Day next succeeding the date that notice is given.  The proceeds of those US Revolving Credit Advances shall be immediately paid to the Swing Line Lender and applied to repay the US Refunded Swing Line Loan of the US Borrower.

(iv)          If, prior to refunding a US Swing Line Loan with a US Revolving Credit Advance pursuant to Section 1.1(e)(iii), one of the events described in Sections 8.1(h) or 8.1(i) has occurred, then, subject to the provisions of Section 1.1(d)(v) below, each US Revolving Lender shall, on the date such US Revolving Credit Advance was to have been made for the benefit of the US Borrower, purchase from the Swing Line Lender an undivided participation interest in the US Swing Line Loan to US Borrower in an amount equal to its Pro Rata Share of such US Swing Line Loan.  Upon request, each US Revolving Lender shall promptly transfer to the Swing Line Lender, in immediately available funds, the amount of its participation interest.

(v)           Each US Revolving Lender’s obligation to make US Revolving Credit Advances in accordance with Section 1.1(e)(iii) and to purchase participation interests in accordance with Section 1.1(e)(iv) shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any setoff, counterclaim, recoupment, defense or other right that such US Revolving Lender may have against the Swing Line Lender, US Borrower or any other Person for any reason whatsoever; (B) the occurrence or continuance of any Default or Event of Default; (C) any inability of US Borrower to satisfy the conditions precedent to borrowing set forth in this Agreement at any time; or (D) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing; provided that no US Revolving Lender shall have any obligation to make any US Revolving Credit Advances in accordance with Section 1.1(e)(iii) or to purchase participation interests in accordance with Section 1.1(e)(iv) in the event that the Swing Line Lender shall have been instructed not to make a US Swing Line Advance in accordance with Section 1.1(e)(i) prior to the date of any such US Swing Line Advance.  If any US Revolving Lender does not make available to Agent or the Swing Line Lender, as applicable, the amount required pursuant to Sections 1.1(e)(iii) or 1.1(e)(iv), as the case may be, the Swing Line Lender shall be entitled to recover such amount on demand from such US Revolving Lender, together with interest thereon for each day from the date of non-payment until such amount is paid in full at the Federal Funds Rate for the first two Business Days and at the Index Rate thereafter.

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(f)                                    European Swing Line Facility.

(i)            Agent shall notify the Swing Line Lender upon Agent’s receipt of any Notice of European Revolving Credit Advance.  Subject to the terms and conditions hereof, the Swing Line Lender may, in its discretion, make available from time to time until the Commitment Termination Date advances of any Index Rate Loan in Dollars (each, including any such Swing Line Advances (as defined in the Existing Credit Agreement) outstanding pursuant to the terms of the Existing Credit Agreement, a “European Swing Line Advance”) in accordance with any such notice.  The provisions of this Section 1.1(e)(i) shall not relieve European Revolving Lenders of their obligations to make European Revolving Credit Advances under Section 1.1(b)(i); provided that if the Swing Line Lender makes a European Swing Line Advance pursuant to any such notice, such European Swing Line Advance shall be in lieu of any European Revolving Credit Advance that otherwise may be made by European Revolving Lenders pursuant to such notice.  The aggregate amount of European Swing Line Advances outstanding shall not exceed at any time the lesser of (A) the European Swing Line Commitment and (B) the European Maximum Amount less the outstanding balance of the European Revolving Loan at such time (“European Swing Line Availability”).  Until the Commitment Termination Date, European Borrower may from time to time borrow, repay and reborrow under this Section 1.1(f)(i).  Each European Swing Line Advance shall be made pursuant to a Notice of European Revolving Credit Advance delivered to Agent by European Borrower in accordance with Section 1.1(b)(i).  Any such notice must be given no later than 11:00 a.m. (New York time) on the Business Day of the proposed European Swing Line Advance.  Unless the Swing Line Lender has received at least one Business Day’s prior written notice from the Requisite Lenders or the European Requisite Revolving Lenders, instructing it not to make a European Swing Line Advance, the Swing Line Lender shall, notwithstanding the failure of any condition precedent set forth in Section 2.2, be entitled to fund that European Swing Line Advance, and to have each European Revolving Lender make European Revolving Credit Advances in accordance with Section 1.1(f)(iii) or purchase participating interests in accordance with Section 1.1(f)(iv).  Notwithstanding any other provision of this Agreement or the other Loan Documents, the European Swing Line Loan shall constitute an Index Rate Loan. European Borrower shall repay the aggregate outstanding principal amount of the European Swing Line Loan upon demand therefore by Agent.

(ii)           European Borrower shall execute and deliver to the Swing Line Lender a promissory note to evidence the European Swing Line Commitment.  Such note shall be in the principal amount of the European Swing Line Commitment of the Swing Line Lender, dated the Closing Date and substantially in the form of Exhibit 1.1(f)(ii) (each a “European Swing Line Note” and, collectively, the “European Swing Line Notes”). The European Swing Line Note shall represent the obligation of European Borrower to pay the amount of the European Swing Line Commitment or, if less, the aggregate unpaid principal amount of all European Swing Line Advances made to European Borrower together with interest thereon as prescribed in Section 1.5.  The entire unpaid balance of the European Swing Line Loan and all other noncontingent Obligations shall be immediately due and payable in full in immediately available funds on the Commitment Termination Date if not sooner paid in full.

(iii)          The Swing Line Lender may, at any time and from time to time in its sole and absolute discretion, but not less frequently than weekly, on behalf of European Borrower (and European Borrower hereby irrevocably authorizes the Swing Line Lender to so act on its behalf), request each European Revolving Lender (including the Swing Line Lender) to

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make a European Revolving Credit Advance to European Borrower (which shall be an Index Rate Loan) in an amount equal to that European Revolving Lender’s Pro Rata Share of the principal amount of the European Borrower’s European Swing Line Loan (the “European Refunded Swing Line Loan”) outstanding on the date such notice is given.  Unless any of the events described in Sections 8.1(h) or 8.1(i) has occurred (in which event the procedures of Section 1.1(f)(iv) shall apply) and regardless of whether the conditions precedent set forth in this Agreement to the making of a European Revolving Credit Advance are then satisfied, each European Revolving Lender shall disburse directly to Agent, its Pro Rata Share of a European Revolving Credit Advance on behalf of the Swing Line Lender prior to 3:00 p.m. (New York time) in immediately available funds on the Business Day next succeeding the date that notice is given.  The proceeds of those European Revolving Credit Advances shall be immediately paid to the Swing Line Lender and applied to repay the European Refunded Swing Line Loan of the European Borrower.

(iv)          If, prior to refunding a European Swing Line Loan with a European Revolving Credit Advance pursuant to Section 1.1(f)(iii), one of the events described in Sections 8.1(h) or 8.1(i) has occurred, then, subject to the provisions of Section 1.1(f)(v) below, each European Revolving Lender shall, on the date such European Revolving Credit Advance was to have been made for the benefit of the European Borrower, purchase from the Swing Line Lender an undivided participation interest in the European Swing Line Loan to European Borrower in an amount equal to its Pro Rata Share of such European Swing Line Loan.  Upon request, each European Revolving Lender shall promptly transfer to the Swing Line Lender, in immediately available funds, the amount of its participation interest.

(v)           Each European Revolving Lender’s obligation to make European Revolving Credit Advances in accordance with Section 1.1(f)(iii) and to purchase participation interests in accordance with Section 1.1(f)(iv) shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any setoff, counterclaim, recoupment, defense or other right that such European Revolving Lender may have against the Swing Line Lender, European Borrower or any other Person for any reason whatsoever; (B) the occurrence or continuance of any Default or Event of Default; (C) any inability of European Borrower to satisfy the conditions precedent to borrowing set forth in this Agreement at any time; or (D) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing; provided that no European Revolving Lender shall have any obligation to make any European Revolving Credit Advances in accordance with Section 1.1(f)(iii) or to purchase participation interests in accordance with Section 1.1(f)(iv) in the event that the Swing Line Lender shall have been instructed not to make a European Swing Line Advance in accordance with Section 1.1(f)(i) prior to the date of any such European Swing Line Advance.  If any European Revolving Lender does not make available to Agent or the Swing Line Lender, as applicable, the amount required pursuant to Sections 1.1(f)(iii) or 1.1(f)(iv), as the case may be, the Swing Line Lender shall be entitled to recover such amount on demand from such European Revolving Lender, together with interest thereon for each day from the date of non-payment until such amount is paid in full at the Federal Funds Rate for the first two Business Days and at the Index Rate thereafter.

(g)           Reliance on Notices; Appointment of Borrower Representative.  Agent shall be entitled to rely upon, and shall be fully protected in relying upon, any Notice of US

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Revolving Credit Advance, Notice of European Revolving Credit Advance, Notice of Conversion/Continuation or similar notice believed by Agent to be genuine.  Agent may assume that each Person executing and delivering any notice in accordance herewith was duly authorized, unless the responsible individual acting thereon for Agent has actual knowledge to the contrary.  Each of US Borrower and European Borrower hereby designates Innovations as its representative and agent on its behalf for the purposes of giving and receiving all other notices and consents hereunder or under any of the other Loan Documents and taking all other actions (including in respect of compliance with covenants) on behalf of such Borrower under the Loan Documents.  Borrower Representative hereby accepts such appointment.  Agent and each Lender may regard any notice or other communication pursuant to any Loan Document from Borrower Representative as a notice or communication from all Borrowers, and may give any notice or communication required or permitted to be given to any Borrower or Borrowers hereunder to Borrower Representative on behalf of such Borrower or Borrowers.  Each of US Borrower and European Borrower agrees that each notice, election, representation and warranty, covenant, agreement and undertaking made on its behalf by Borrower Representative shall be deemed for all purposes to have been made by such Borrower and shall be binding upon and enforceable against such Borrower to the same extent as if the same had been made directly by such Borrower.

(h)           Loans Under Existing Credit Agreement.  The Credit Parties acknowledge and agree that, as of the Closing Date, (i) the outstanding principal amount of the US Revolving Credit Advances under the Existing Credit Agreement equals $9,000,000, and that such US Revolving Credit Advances are continued as US Revolving Credit Advances hereunder, (ii) the outstanding principal amount of the European Revolving Credit Advances under the Existing Credit Agreement equals $22,000,000, and that such European Revolving Credit Advances are continued as European Revolving Credit Advances hereunder and are deemed to be advanced on the Closing Date; and (iii) no Letters of Credit are outstanding under the Existing Credit Agreement.  All US Revolving Loan Commitments and European Revolving Loan Commitments under the Existing Credit Agreement shall be continued under this Agreement and are as set forth on Annex I hereto.  Notwithstanding anything set forth herein to the contrary, in order to effect the continuation of the outstanding Loans contemplated by the foregoing, the additional amount to be funded on the Closing Date by each Revolving Lender hereunder in respect of its Revolving Loan Commitment shall be net of the principal amount of such Lender’s Revolving Loans outstanding under the Existing Credit Agreement and continued hereunder.

(i)            Conversion of Revolving Loan Commitment on the Conversion Date.  If on the Conversion Date, if applicable, (A) GE Capital’s and ML Capital’s (together with their respective successors’ and assigns’) aggregate Pro Rata Share of outstanding US Revolving Credit Advances does not exceed Fifteen Million Dollars ($15,000,000) (the “Minimum US Conversion Amount”), the US Borrower shall deliver a Notice of US Revolving Credit Advance to Agent requesting a US Revolving Credit Advance in an amount such that after giving effect to such requested US Revolving Credit Advance the Minimum US Conversion Amount has been achieved, or (B) GE Capital’s and ML Capital’s (together with their respective successors’ and assigns’) aggregate Pro Rata Share of outstanding European Revolving Credit Advances does not exceed Fifteen Million Dollars ($15,000,000) (the “Minimum European Conversion Amount”), the European Borrower shall deliver a Notice of European Revolving Credit Advance requesting a European Revolving Credit Advance in an amount such that after giving effect to such

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requested European Revolving Credit Advance the Minimum European Conversion Amount has been achieved.  On the Conversion Date and provided that the conditions set forth in Section 2.3 hereof have been satisfied, (A) Seven Million Five Hundred Thousand Dollars of the aggregate US Revolving Loan Commitment held by GE Capital together with its successors and assigns shall be converted into a US Term Loan Commitment and, on the Conversion Date, the aggregate US Term Loan Commitment of GE Capital (together with its successors and assigns, as applicable) shall be the amount reflected on Annex I hereto under the heading “Commitments as of the Conversion Date”; (B) Seven Million Five Hundred Thousand Dollars of the aggregate US Revolving Loan Commitment held by ML Capital together with its successors and assigns shall be converted into a US Term Loan Commitment and, on the Conversion Date, the aggregate US Term Loan Commitment of ML Capital (together with its successors and assigns, as applicable) shall be the amount reflected on Annex I hereto under the heading “Commitments as of the Conversion Date”; (C) Seven Million Five Hundred Thousand Dollars of the aggregate European Revolving Loan Commitment held by GE Capital together with its successors and assigns shall be converted into a European Term Loan Commitment and, on the Conversion Date, the aggregate European Term Loan Commitment of GE Capital (together with its successors and assigns, as applicable) shall be the amount reflected on Annex I hereto under the heading “Commitments as of the Conversion Date”; and (D) Seven Million Five Hundred Thousand Dollars of the aggregate European Revolving Loan Commitment held by ML Capital together with its successors and assigns shall be converted into a European Term Loan Commitment and, on the Conversion Date, the aggregate European Term Loan Commitment of ML Capital (together with its successors and assigns, as applicable) shall be the amount reflected on Annex I hereto under the heading “Commitments as of the Conversion Date”.  Immediately upon the conversion of such Revolving Loan Commitments pursuant to the preceding sentence, the converted Loans shall bear interest at the rate then applicable to the US Term Loan or the European Term Loan as provided in Section 1.5(a)(iii) or (iv), as the case may be, and the aggregate US Revolving Loan Commitment and European Revolving Loan Commitment shall be permanently reduced to Fifty Million Dollars ($50,000,000).  Within a reasonable time following the Conversion Date, if any, (i) US Borrower shall execute and deliver to each of GE Capital and ML Capital and/or their respective assignees a US Revolving Note reflecting the reduced US Revolving Loan Commitment of each of GE Capital and ML Capital and/or their respective assignees and (ii) European Borrower shall execute and deliver to each of GE Capital and ML Capital and/or their respective assignees a European Revolving Note reflecting the reduced European Revolving Loan Commitment of each of GE Capital and ML Capital and/or their respective assignees.  Within a reasonable period of time following receipt of such replacement notes, each of GE Capital and ML Capital and/or their respective assignees shall return the US Revolving Notes previously issued to them to Borrowers.

1.2           Letters of Credit.  Subject to and in accordance with the terms and conditions contained herein and in Annex B, Borrowers shall have the right to request, and Revolving Lenders agree to incur, or purchase participations in, Letter of Credit Obligations.

1.3                                 Prepayments.

(a)           Voluntary Prepayments; Reductions in Revolving Loan Commitments. Borrowers may at any time on at least 5 days’ prior written notice by Borrower Representative to Agent (i) without premium or penalty, voluntarily prepay all or part of the Term Loans, and/or

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(ii) without premium or penalty, permanently reduce the US Revolving Loan Commitment or the European Revolving Loan Commitment; provided that (A) any such prepayments or reductions shall be in a minimum amount of $1,000,000 and equivalent multiples in excess thereof, (B) the US Revolving Loan Commitment or the European Revolving Loan Commitment, as applicable, shall not be reduced to an amount less than $5,000,000 unless the US Revolving Loan Commitment or the European Revolving Loan Commitment, as applicable, is terminated in its entirety after payment of the Term Loans in full in cash by the applicable Borrower, and (C) after giving effect to such reductions, the applicable Borrower shall comply with Section 1.3(b)(i).  In addition, US Borrower or European Borrower, as the case may be, may at any time on at least 10 days’ prior written notice to Agent terminate the US Revolving Loan Commitment or the European Revolving Loan Commitment, as applicable; provided that upon such termination, all Loans and other Obligations shall be immediately due and payable in full and all Letter of Credit Obligations shall be cash collateralized or otherwise satisfied in accordance with Annex B hereto.  Any voluntary prepayment and any reduction or termination of the US Revolving Loan Commitment or the European Revolving Loan Commitment must be accompanied by payment of the Fee required by Sections 1.9(b) and (c), if any, plus the payment of any LIBOR funding breakage costs in accordance with Section 1.13(b).  Upon any such reduction or termination of the US Revolving Loan Commitment, US Borrower’s right to request US Revolving Credit Advances, or request that Letter of Credit Obligations be incurred on its behalf, or request US Swing Line Advances, shall simultaneously be permanently reduced or terminated, as the case may be, and there shall be a corresponding pro rata reduction in the L/C Sublimit.  Upon any such reduction or termination of the European Revolving Loan Commitment, European Borrower’s right to request European Revolving Credit Advances, or request that Letter of Credit Obligations be incurred on its behalf, or request European Swing Line Advances, shall simultaneously be permanently reduced or terminated, as the case may be, and there shall be a corresponding pro rata reduction in the L/C Sublimit.  Each notice of partial prepayment shall designate the Loans or other Obligations to which such prepayment is to be applied; and provided, further, that any voluntary partial prepayments of any Term Loan made by or on behalf of any Borrower shall be applied pro rata to prepay the scheduled installments of such Borrower’s Term Loan.

(b)                                 Mandatory Prepayments.

(i)            If at any time the aggregate outstanding balances of the US Revolving Loan and the US Swing Line Loan exceeds the US Maximum Amount, US Borrower shall immediately repay the aggregate outstanding US Revolving Credit Advances to the extent required to eliminate such excess.  If any such excess remains after repayment in full of the aggregate outstanding US Revolving Credit Advances, US Borrower shall provide cash collateral for the Letter of Credit Obligations incurred on behalf of the US Borrower in the manner set forth in Annex B to the extent required to eliminate such excess.  If at any time the aggregate outstanding balances of the European Revolving Loan and the European Swing Line Loan exceed the European Maximum Amount, European Borrower shall immediately repay the aggregate outstanding European Revolving Credit Advances to the extent required to eliminate such excess.  If any such excess remains after repayment in full of the aggregate outstanding European Revolving Credit Advances, European Borrower shall provide cash collateral for the Letter of Credit Obligations incurred on behalf of the European Borrower in the manner set forth in Annex B to the extent required to eliminate such excess.

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(ii)           Immediately upon receipt by any US Credit Party of proceeds of any asset disposition (excluding proceeds of asset dispositions permitted by Section 6.8(a)) or any sale of Stock of any Subsidiary of any US Credit Party (other than any issuance or sale of Stock to any other Credit Party permitted by Section 6.5(b), 6.8(d) or 6.8(e)), Borrowers shall prepay the Loans in an amount equal to all such proceeds in excess of the Asset Disposition Threshold Amount, net of (A) commissions and other reasonable and customary transaction costs, fees and expenses properly attributable to such transaction and payable by such US Credit Party in connection therewith (in each case, paid to non-Affiliates), (B) transfer taxes, (C) amounts payable to holders of senior Liens (to the extent such Liens constitute Permitted Encumbrances hereunder), if any, and (D) an appropriate reserve for income taxes in accordance with GAAP in connection therewith.  Any such prepayment shall be paid and applied in accordance with Section 1.3(c)(i).

(iii)          Immediately upon receipt by any European Credit Party of proceeds of any asset disposition (excluding proceeds of asset dispositions permitted by Section 6.8(a)) or any sale of Stock of any Subsidiary of any European Credit Party (other than any issuance or sale of Stock to any other Credit Party permitted by Section 6.5(b), 6.8(d) or 6.8(e)), Borrowers shall prepay the Loans in an amount equal to all such proceeds in excess of the Asset Disposition Threshold Amount, net of (A) commissions and other reasonable and customary transaction costs, fees and expenses properly attributable to such transaction and payable by such European Credit Party in connection therewith (in each case, paid to non-Affiliates), (B) transfer taxes, (C) amounts payable to holders of senior Liens (to the extent such Liens constitute Permitted Encumbrances hereunder), if any, and (D) an appropriate reserve for taxes in accordance with generally accepted accounting principles in effect in the jurisdiction of organization of the applicable European Credit Party in connection therewith.  Any such prepayment shall be paid and applied in accordance with Section 1.3(c)(ii).

(iv)          If any Credit Party issues Stock (other than any issuance of Stock to any other Credit Party permitted by Section 6.5(b) or in connection with the 2005 Equity Raise), no later than the Business Day following the date of receipt of the proceeds thereof, Borrowers shall prepay the Loans in an amount equal to fifty percent (50%) of the cash proceeds for any such issuance, net of underwriting discounts and commissions and other reasonable fees, costs and expenses paid to non-Affiliates in connection therewith.  Any such prepayment shall be applied in accordance with Section 1.3(c)(iii).  If Innovations consummates the 2005 Equity Raise, no later than the Business Day following the date of receipt of the proceeds thereof, Borrowers shall (A) prepay the Term Loans in an amount equal to 100% of the cash proceeds of such issuance, net of underwriting discounts and commissions and other reasonable fees, costs and expenses paid to non-Affiliates in connection therewith and (B) prepay the Revolving Loans in an amount equal to fifty percent (50%) of the remainder (after giving effect to clause (A)) of such net cash proceeds.  Any such prepayment shall be paid and applied in accordance with Section 1.3(c)(iv).

(v)           If any Credit Party issues any Subordinated Debt (other than any refinancing thereof to the extent permitted by Section 6.3(a)(vi)), no later than the Business Day following the date of receipt of the cash proceeds thereof, Borrowers shall prepay the Loans in an amount equal to one hundred percent (100%) of the proceeds of any such issuance, net of commissions and other reasonable and customary transaction costs, fees and expenses properly

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attributable to such transaction and payable by such Credit Party in connection therewith (in each case, paid to non-Affiliates).  Any such prepayment shall be paid and applied in accordance with Section 1.3(c)(v).

(vi)          [Intentionally Omitted.]

(vii)         Until the Termination Date, Borrowers shall prepay the Obligations on the date that is 10 days after the earlier of (A) the date on which the Credit Parties’ annual audited Financial Statements for the immediately preceding Fiscal Year, commencing with the Fiscal Year ending December 31, 2005, are delivered pursuant to Annex E or (B) the date on which such annual audited Financial Statements were required to be delivered pursuant to Annex E, in an amount equal to (1) seventy-five percent (75%) of Excess Cash Flow for the immediately preceding Fiscal Year if the Total Leverage Ratio for such Fiscal Year is equal to or greater than 3.25:1.00, and (2) fifty percent (50%) of Excess Cash Flow for the immediately preceding Fiscal Year if the Total Leverage Ratio for such Fiscal Year is less than 3.25:1.00.  Any prepayments paid pursuant to this clause (vii) shall be applied in accordance with Section 1.3(c)(vii).  Each such prepayment shall be accompanied by a certificate signed by Borrower Representative’s Chief Financial Officer, Treasurer or Vice President, Finance, certifying the manner in which Excess Cash Flow and the resulting prepayment were calculated, which certificate shall be in form and substance reasonably satisfactory to Agent.

(c)                                  Application of Certain Mandatory Prepayments.

(i)            If the 2005 Equity Raise has not yet occurred or does not occur, any prepayments pursuant to Section 1.3(b)(ii) above arising from any asset disposition by any US Credit Party and any prepayments pursuant to Section 5.4(c) arising from any casualty or condemnation proceeds with respect to property of any US Credit Party shall be paid and applied as follows: (A) an amount equal to 50% of such proceeds shall be paid and applied first, by US Borrower to pay interest then due any payable on the US Term Loan; second, by US Borrower to prepay the scheduled principal installments of the US Term Loan in inverse order of maturity until prepaid in full; third, by European Borrower to pay interest then due and payable on the European Term Loan; fourth, by European Borrower to prepay the scheduled principal installments of the European Term Loan in inverse order of maturity until prepaid in full; fifth, , by US Borrower in respect of any Eligible Swap Obligations to the extent such Eligible Swap Obligations are due and payable; and any excess shall be returned to Borrowers or to any other Person entitled thereto under applicable law; and (B) an amount equal to 50% of such proceeds shall be paid and applied first, by US Borrower to pay interest then due and payable on the US Swing Line Loan; second, by US Borrower to prepay the principal balance of the US Swing Line Loan until paid in full; third, by US Borrower to pay interest then due and payable on US Revolving Credit Advances; fourth, by US Borrower to prepay the principal balance of the US Revolving Credit Advances until paid in full; fifth, by US Borrower to provide cash collateral in the manner set forth in Annex B for any Letter of Credit Obligations incurred on its behalf, until all such Letter of Credit Obligations have been fully cash collateralized; sixth, by US Borrower in respect of any Eligible Swap Obligations to the extent such Eligible Swap Obligations are due and payable; seventh, by European Borrower to pay interest then due and payable on the European Swing Line Loan; eighth, by European Borrower to prepay the principal balance of the European Swing Line Loan until paid in full, ninth, by European Borrower to pay interest then

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due and payable on European Revolving Credit Advances; tenth, by European Borrower to prepay European Revolving Credit Advances until paid in full; eleventh, by European Borrower to provide cash collateral in the manner set forth in Annex B for any Letter of Credit Obligations incurred on its behalf, until all such Letter of Credit Obligations have been fully cash collateralized; and any excess shall be returned to Borrowers or to any other Person entitled thereto under applicable law.  If the 2005 Equity Raise has occurred, any prepayments pursuant to Section 1.3(b)(ii) above arising from any asset disposition by any US Credit Party and any prepayments pursuant to Section 5.4(c) arising from any casualty or condemnation proceeds with respect to property of any US Credit Party shall be paid and applied as follows:  first, by US Borrower to pay interest then due and payable on the US Swing Line Loan; second, by US Borrower to prepay the principal balance of the US Swing Line Loan until paid in full; third, by US Borrower to pay interest then due and payable on US Revolving Credit Advances; fourth, by US Borrower to prepay the principal balance of the US Revolving Credit Advances until paid in full; fifth, by US Borrower to provide cash collateral in the manner set forth in Annex B for any Letter of Credit Obligations incurred on its behalf, until all such Letter of Credit Obligations have been fully cash collateralized; sixth, by US Borrower in respect of any Eligible Swap Obligations to the extent such Eligible Swap Obligations are due and payable; seventh, by European Borrower to pay interest then due and payable on the European Swing Line Loan; eighth, by European Borrower to prepay the principal balance of the European Swing Line Loan until paid in full, ninth, by European Borrower to pay interest then due and payable on European Revolving Credit Advances; tenth, by European Borrower to prepay European Revolving Credit Advances until paid in full; eleventh, by European Borrower to provide cash collateral in the manner set forth in Annex B for any Letter of Credit Obligations incurred on its behalf, until all such Letter of Credit Obligations have been fully cash collateralized; and any excess shall be returned to Borrowers or to any other Person entitled thereto under applicable law.  If, when and to the extent Innovations and/or any of its Subsidiaries is required to use the proceeds of Asset Sales (as such term is defined in the Indenture) to repay the Revolving Loans and permanently reduce the availability of the Revolving Loan Commitments, the European Revolving Loan Commitment shall be so reduced to the extent the proceeds of such Asset Sale were applied to the European Revolving Loan and the US Revolving Loan Commitment shall be so reduced to the extent the proceeds of such Asset Sale were applied to the US Revolving Loan.  Otherwise, none of the US Revolving Loan Commitment or the European Revolving Loan Commitment shall be permanently reduced by the amount of any such prepayment.

(ii)           If the 2005 Equity Raise has not yet occurred or does not occur, any prepayments pursuant to Section 1.3(b)(iii) above arising from any asset disposition by any European Credit Party and any prepayments pursuant to Section 5.4(c) arising from any casualty or condemnation proceeds with respect to property of any European Credit Party shall be paid and applied as follows: (A) an amount equal to 50% of such proceeds shall be paid and applied first, by European Borrower to pay interest then due and payable on the European Term Loan; second, by European Borrower to prepay the scheduled principal installments of the European Term Loan in inverse order of maturity until prepaid in full; third, by US Borrower to pay any interest then due and payable on the US Term Loan; fourth, by US Borrower to prepay the scheduled principal installments of the US Term Loan in inverse order of maturity until prepaid in full; fifth, by US Borrower in respect of any Eligible Swap Obligations to the extent such Eligible Swap Obligations are due and payable; and any excess shall be returned to Borrowers or to any other Person entitled thereto under applicable law; and (B) an amount equal to 50% of

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such proceeds shall be paid and applied first, by European Borrower to pay interest then due and payable on the European Swing Line Loan; second, by European Borrower to prepay the principal balance of the European Swing Line Loan until paid in full; third, by European Borrower to pay interest then due and payable on European Revolving Credit Advances; fourth, by European Borrower to prepay the principal balance of the European Revolving Credit Advances until paid in full; fifth, by European Borrower to provide cash collateral in the manner set forth in Annex B for any Letter of Credit Obligations incurred on its behalf until all such Letter of Credit Obligations have been fully cash collateralized; sixth, by US Borrower to pay interest then due and payable on the US Swing Line Loan; seventh, by US Borrower to prepay the principal balance of the Swing Line Loan until paid in full; eighth, by US Borrower to pay interest then due and payable on US Revolving Credit Advances; ninth, by US Borrower to prepay the principal balance of the US Revolving Credit Advances until paid in full; tenth, by US Borrower to provide cash collateral in the manner set forth in Annex B for any Letter of Credit Obligations incurred on its behalf, until all such Letter of Credit Obligations have been fully cash collateralized; eleventh, by US Borrower in respect of any Eligible Swap Obligations to the extent such Eligible Swap Obligations are due and payable; and any excess shall be returned to Borrowers or to any other Person entitled thereto under applicable law.  If the 2005 Equity Raise has occurred, any prepayments pursuant to Section 1.3(b)(iii) above arising from any asset disposition by any European Credit Party and any prepayments pursuant to Section 5.4(c) arising from any casualty or condemnation proceeds with respect to property of any European Credit Party shall be paid and applied as follows: first, by European Borrower to pay interest then due and payable on the European Swing Line Loan; second, by European Borrower to prepay the principal balance of the European Swing Line Loan until paid in full; third, by European Borrower to pay interest then due and payable on European Revolving Credit Advances; fourth, by European Borrower to prepay the principal balance of the European Revolving Credit Advances until paid in full; fifth, by European Borrower to provide cash collateral in the manner set forth in Annex B for any Letter of Credit Obligations incurred on its behalf until all such Letter of Credit Obligations have been fully cash collateralized, sixth; by US Borrower to pay interest then due and payable on the US Swing Line Loan; seventh, by US Borrower to prepay the principal balance of the Swing Line Loan until paid in full; eighth, by US Borrower to pay interest then due and payable on US Revolving Credit Advances; ninth, by US Borrower to prepay the principal balance of the US Revolving Credit Advances until paid in full; tenth, by US Borrower to provide cash collateral in the manner set forth in Annex B for any Letter of Credit Obligations incurred on its behalf, until all such Letter of Credit Obligations have been fully cash collateralized; eleventh, by US Borrower in respect of any Eligible Swap Obligations to the extent such Eligible Swap Obligations are due and payable; and any excess shall be returned to Borrowers or to any other Person entitled thereto under applicable law. None of the European Revolving Loan Commitments or US Revolving Loan Commitments shall be permanently reduced by the amount of any such prepayments except as otherwise provided in the last sentence of clause (i).

(iii)          Any prepayments pursuant to Section 1.3(b)(iv) above (other than as a result of the 2005 Equity Raise) shall be paid and applied as follows: first, by US Borrower to pay interest then due and payable on the US Term Loan; second, by US Borrower to prepay the scheduled principal installments of the US Term Loan in inverse order of maturity until prepaid in full; third, by European Borrower to pay any interest then due and payable on the European Term Loan; fourth, by European Borrower to prepay the scheduled principal

15

installments of the European Term Loan in inverse order of maturity until prepaid in full; fifth, by US Borrower to pay interest then due and payable on the US Swing Line Loan; sixth, by US Borrower to prepay the principal balance of the US Swing Line Loan until paid in full; seventh, by US Borrower to pay interest then due and payable on US Revolving Credit Advances; eighth, by US Borrower to prepay the principal balance of the US Revolving Credit Advances until paid in full; ninth, by US Borrower to provide cash collateral in the manner set forth in Annex B for any Letter of Credit Obligations incurred on its behalf, until all such Letter of Credit Obligations have been fully cash collateralized; tenth, by US Borrower in respect of any Eligible Swap Obligations to the extent such Eligible Swap Obligations are due and payable; eleventh, by European Borrower to pay interest then due and payable on the European Swing Line Loan; twelfth, by European Borrower to prepay the principal balance of the European Swing Line Loan until paid in full, thirteenth, by European Borrower to pay interest then due and payable on European Revolving Credit Advances; fourteenth, by European Borrower to prepay European Revolving Credit Advances until paid in full; fifteenth, by European Borrower to provide cash collateral in the manner set forth in Annex B for any Letter of Credit Obligations incurred on its behalf, until all such Letter of Credit Obligations have been fully cash collateralized; and any excess shall be returned to Borrowers or to any other Person entitled thereto under applicable law.  None of the US Revolving Loan Commitments or the European Revolving Loan Commitments shall be permanently reduced by the amount of any such prepayments.

(iv)          Any prepayments pursuant to Section 1.3(b)(iv) resulting from the 2005 Equity Raise shall be paid and applied as follows: (A) an amount equal to 100% of the net cash proceeds described in Section 1.3(b)(iv) with respect thereto shall be paid and applied first, by US Borrower to pay interest then due and payable on the US Term Loan; second, by US Borrower to prepay the outstanding principal amount of the US Term Loan until prepaid in full; third, by European Borrower to pay any interest then due and payable on the European Term Loan; fourth, by European Borrower to prepay the outstanding principal amount of the European Term Loan until prepaid in full; and (B) any excess of the amount described in clause (A) above remaining after the prepayment contemplated in clause (A) above shall be paid and applied as follows: an amount equal to 50% of such excess amount shall be paid and applied first, by US Borrower to pay interest then due and payable on the US Swing Line Loan; second, by US Borrower to prepay the principal balance of the US Swing Line Loan until paid in full; third, by US Borrower to pay interest then due and payable on US Revolving Credit Advances; fourth, by US Borrower to prepay the principal balance of the US Revolving Credit Advances until paid in full; fifth, by US Borrower to provide cash collateral in the manner set forth in Annex B for any Letter of Credit Obligations incurred on its behalf, until all such Letter of Credit Obligations have been fully cash collateralized; sixth, by US Borrower in respect of any Eligible Swap Obligations to the extent such Eligible Swap Obligations are due and payable; seventh, by European Borrower to pay interest then due and payable on the European Swing Line Loan; eighth, by European Borrower to prepay the principal balance of the European Swing Line Loan until paid in full; ninth, by European Borrower to pay interest then due and payable on European Revolving Credit Advances; tenth, by European Borrower to prepay European Revolving Credit Advances until paid in full; eleventh, by European Borrower to provide cash collateral in the manner set forth in Annex B for any Letter of Credit Obligations incurred on its behalf, until all such Letter of Credit Obligations have been fully cash collateralized; and any excess shall be returned to Borrowers or to any other Person entitled thereto under applicable law.  None of the

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US Revolving Loan Commitments or the European Revolving Loan Commitments shall be permanently reduced by the amount of any such prepayments.

(v)           Any prepayments pursuant to Section 1.3(b)(v) above shall be paid and applied as follows: first, by US Borrower to pay interest then due any payable on the US Term Loan; second, by US Borrower to prepay the scheduled principal installments of the US Term Loan in inverse order of maturity until prepaid in full; third, by European Borrower to pay interest then due and payable on the European Term Loan; fourth,  by European Borrower to prepay the scheduled principal installments of the European Term Loan in inverse order of maturity until prepaid in full; fifth, by US Borrower to pay interest then due and payable on the US Swing Line Loan; sixth, by US Borrower to prepay the principal balance of the US Swing Line Loan until paid in full; seventh, by US Borrower to pay interest then due and payable on US Revolving Credit Advances; eighth, by US Borrower to prepay the principal balance of the US Revolving Credit Advances until paid in full; ninth, by US Borrower to provide cash collateral in the manner set forth in Annex B for any Letter of Credit Obligations incurred on its behalf, until all such Letter of Credit Obligations have been fully cash collateralized; tenth, by US Borrower in respect of any Eligible Swap Obligations to the extent such Eligible Swap Obligations are due and payable; eleventh, by European Borrower to pay interest then due and payable on the European Swing Line Loan; twelfth, by European Borrower to prepay the principal balance of the European Swing Line Loan until paid in full, thirteenth, by European Borrower to pay interest then due and payable on European Revolving Credit Advances; fourteenth, by European Borrower to prepay European Revolving Credit Advances until paid in full; fifteenth, by European Borrower to provide cash collateral in the manner set forth in Annex B for any Letter of Credit Obligations incurred on its behalf, until all such Letter of Credit Obligations have been fully cash collateralized; and any excess shall be returned to Borrowers or to any other Person entitled thereto under applicable law.  None of the US Revolving Loan Commitments or the European Revolving Loan Commitments shall be permanently reduced by the amount of any such prepayments.

(vi)          [Intentionally Omitted.]

(vii)         Any prepayments pursuant to Sections 1.3(b)(vii) above shall be paid and applied as follows: first, by US Borrower to pay interest then due and payable on the US Term Loan; second, by US Borrower to prepay the scheduled principal installments of the US Term Loan pro rata until prepaid in full; third, by European Borrower to pay interest then due and payable on the European Term Loan; fourth, by European Borrower to prepay the scheduled principal installments of the European Term Loan pro rata until prepaid in full; fifth, by US Borrower to pay interest then due and payable on the US Swing Line Loan; sixth, by US Borrower to prepay the principal balance of the Swing Line Loan until paid in full; seventh, by US Borrower to pay interest then due and payable on US Revolving Credit Advances; eighth, by US Borrower to prepay the principal balance of the US Revolving Credit Advances until paid in full; ninth, by US Borrower to provide cash collateral in the manner set forth in Annex B for any Letter of Credit Obligations incurred on its behalf, until all such Letter of Credit Obligations have been fully cash collateralized; tenth, by European Borrower to pay interest then due and payable on the European Swing Line Loan; eleventh, by European Borrower to prepay the principal balance of the European Swing Line Loan until paid in full; twelfth, by European Borrower to pay interest then due and payable on European Revolving Credit Advances;

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thirteenth, by European Borrower to prepay European Revolving Credit Advances until paid in full; fourteenth, by European Borrower to provide cash collateral in the manner set forth in Annex B for any Letter of Credit Obligations incurred on its behalf, until all such Letter of Credit Obligations have been fully cash collateralized; fifteenth, by US Borrower in respect of any Eligible Swap Obligations to the extent such Eligible Swap Obligations are due and payable; and any excess shall be returned to Borrowers or to any other Person entitled thereto under applicable law.

(viii)        Any prepayments required in this Section 1.3(c) shall be applied first to the repayment of Index Rate Loans of the type of Loan required to be prepaid and then to LIBOR Rate Loans.  In the event any LIBOR Rate Loans are required to be prepaid pursuant to this Section 1.3(c), payments may be made to a cash collateral account held by Agent and applied to the Loans at the end of the applicable LIBOR Period.  Loans repaid with proceeds held in the cash collateral account shall not be deemed repaid until such amounts are actually applied to the payment of the Loans.

(d)           No Implied Consent.  Nothing in this Section 1.3 shall be construed to constitute Agent’s or any Lender’s consent to any transaction that is not permitted by other provisions of this Agreement or the other Loan Documents.

1.4           Use of Proceeds.  Borrowers shall utilize the proceeds of the Term Loans, the Revolving Loans and the Swing Line Advances solely for the Acquisition, Permitted Acquisitions, other acquisitions consented to by Requisite Lenders pursuant to Section 6.1, and for the financing of Borrowers’ ordinary working capital and general corporate needs.  Disclosure Schedule (1.4) contains a description of Borrowers’ sources and uses of funds as of the Closing Date, including Loans and Letter of Credit Obligations to be made or incurred on that date, and a funds flow memorandum detailing how funds from each source are to be transferred to particular uses.

1.5                                 Interest and Applicable Margins.

(a)           Borrowers shall pay interest to Agent, for the ratable benefit of Lenders in accordance with the various Loans being made by each Lender, in arrears on each applicable Interest Payment Date, at the following rates:  (i) with respect to the US Revolving Credit Advances, the Index Rate plus the Applicable US Revolver Index Margin per annum or, at the election of US Borrower, the applicable LIBOR Rate plus the Applicable US Revolver LIBOR Margin per annum, based on the aggregate US Revolving Credit Advances outstanding from time to time; (ii) with respect to the European Revolving Credit Advances, the Index Rate plus the Applicable European Revolver Index Margin per annum or, at the election of European Borrower, the applicable LIBOR Rate plus the Applicable European Revolver LIBOR Margin per annum, based on the aggregate European Revolving Credit Advances outstanding from time to time; (iii) with respect to the US Term Loan, the Index Rate plus 2.25% per annum or, at the election of US Borrower, the applicable LIBOR Rate plus 3.50%; (iv) with respect to the European Term Loan, the Index Rate plus 2.25% per annum or, at the election of European Borrower, the applicable LIBOR Rate plus 3.50%; (v) with respect to the US Swing Line Loan, the Index Rate plus the Applicable US Revolver Index Margin per annum; and (vi) with respect

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to the European Swing Line Loan, the Index Rate plus the Applicable European Revolver Index Margin per annum.

The Applicable Margins will be as follows as of the Closing Date:

The Applicable L/C Margin, the Applicable US Revolver Index Margin, the Applicable US Revolver LIBOR Margin, the Applicable European Revolver Index Margin and the Applicable European Revolver LIBOR Margin shall be adjusted (up or down) prospectively on a quarterly basis as determined by Borrowers’ consolidated financial performance, commencing with the first day of the first calendar month that occurs more than 5 days after delivery of Borrowers’ quarterly Financial Statements to Lenders for the Fiscal Quarter ending June 30, 2005.  Adjustments in Applicable Margins shall be determined by reference to the following grids:

If any Event of Default has occurred and is continuing, the Applicable US Revolver Index Margin, the Applicable US Revolver LIBOR Margin, the Applicable European Revolver Index Margin and the Applicable European Revolver LIBOR Margin shall be the highest level set forth

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in the foregoing grid until the next Business Day following the earlier to occur of (A) the date on which such Event of Default has been waived in accordance with Section 11.2 or (B) the date on which the Chief Executive Officer and Chief Financial Officer, Treasurer or Vice President, Finance, of Innovations shall have provided to Agent a certificate, in form and substance satisfactory to Agent, certifying that such Event of Default has been cured.

All adjustments in the Applicable Margins after June 30, 2005 shall be implemented quarterly on a prospective basis, for each calendar month commencing at least 5 days after the date of delivery to Lenders of the quarterly unaudited or annual audited (as applicable) Financial Statements evidencing the need for an adjustment.  Failure to timely deliver such Financial Statements shall, in addition to any other remedy provided for in this Agreement, result in an increase in the Applicable Margins to the highest level set forth in the foregoing grid, until the first day of the first calendar month following the delivery of those Financial Statements demonstrating that such an increase is not required.  If a Default or Event of Default has occurred and is continuing at the time any reduction in the Applicable Margins is to be implemented, that reduction shall be deferred until the next Business Day following the earlier to occur of (A) the date on which such Event of Default has been waived in accordance with Section 11.2 or (B) the date on which the Chief Executive Officer and Chief Financial Officer, Treasurer or Vice President, Finance, of Innovations shall have provided to Agent a certificate, in form and substance satisfactory to Agent, certifying that such Event of Default has been cured.

(b)           If any payment on any Loan becomes due and payable on a day other than a Business Day, the maturity thereof will be extended to the next succeeding Business Day (except as set forth in the definition of LIBOR Period) and, with respect to payments of principal, interest thereon shall be payable at the then applicable rate during such extension.

(c)           All computations of interest on Index Rate Loans shall be made by Agent on the basis of a 365-day year, in each case for the actual number of days occurring in the period for which such interest and Fees are payable.  All computations of Fees calculated on a per annum basis and interest on LIBOR Rate Loans shall be made by Agent on the basis of a 360-day year, in each case for the actual number of days occurring in the period for which such interest is payable.  The Index Rate is a floating rate determined for each day.  Each determination by Agent of an interest rate and Fees hereunder shall be final, binding and conclusive on Borrowers, absent manifest error.

(d)           So long as an Event of Default has occurred and is continuing under Section 8.1(a), (h) or (i) or so long as any other Event of Default has occurred and is continuing and at the election of Agent (or upon the written request of Requisite Lenders) confirmed by written notice from Agent to Borrower Representative, the interest rates applicable to the Loans and the Letter of Credit Fees shall be increased by two percentage points (2%) per annum above the rates of interest or the rate of such Fees otherwise applicable hereunder (“Default Rate”), and all outstanding Obligations shall bear interest at the Default Rate applicable to such Obligations. Interest and Letter of Credit Fees at the Default Rate shall accrue from the initial date of such Event of Default until that Event of Default is cured or waived and shall be payable upon demand.

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(e)           So long as no Default or Event of Default shall have occurred and be continuing, the applicable Borrower shall have the option to (i) request that any Revolving Credit Advance be made as a LIBOR Loan, (ii) convert at any time all or any part of outstanding Loans (other than any US Swing Line Loan or European Swing Line Loan) from Index Rate Loans to LIBOR Loans, (iii) convert any LIBOR Loan to an Index Rate Loan, subject to payment of LIBOR breakage costs in accordance with Section 1.13(b) if such conversion is made prior to the expiration of the LIBOR Period applicable thereto, or (iv) continue all or any portion of any Loan (other than any US Swing Line Loan or European Swing Line Loan) as a LIBOR Loan upon the expiration of the applicable LIBOR Period and the succeeding LIBOR Period of that continued Loan shall commence on the first day after the last day of the LIBOR Period of the Loan to be continued.  Any Loan or group of Loans having the same proposed LIBOR Period to be made or continued as, or converted into, a LIBOR Loan must be in a minimum amount of $1,000,000 and integral multiples of $500,000 in excess of such amount.  Any such election must be made by 11:00 a.m. (New York time) on the 3rd Business Day prior to (1) the date of any proposed Revolving Credit Advance which is to bear interest at the LIBOR Rate, (2) the end of each LIBOR Period with respect to any LIBOR Loans to be continued as such, or (3) the date on which the applicable Borrower wishes to convert any Index Rate Loan to a LIBOR Loan for a LIBOR Period designated by such Borrower in such election.  If no election is received with respect to a LIBOR Loan by 11:00 a.m. (New York time) on the 3rd Business Day prior to the end of the LIBOR Period with respect thereto (or if a Default or an Event of Default has occurred and is continuing), that LIBOR Loan shall be converted to an Index Rate Loan at the end of its LIBOR Period.  The applicable Borrower must make such election by notice to Agent in writing, by telecopy or overnight courier.  In the case of any conversion or continuation, such election must be made pursuant to a written notice (a “Notice of Conversion/Continuation”) in the form of Exhibit 1.5(e).

(f)            Notwithstanding anything to the contrary set forth in this Section 1.5, if a court of competent jurisdiction determines in a final order that the rate of interest payable hereunder exceeds the highest rate of interest permissible under law (the “Maximum Lawful Rate”), then so long as the Maximum Lawful Rate would be so exceeded, the rate of interest payable hereunder shall be equal to the Maximum Lawful Rate; provided, however, that if at any time thereafter the rate of interest payable hereunder is less than the Maximum Lawful Rate, Borrowers shall continue to pay interest hereunder at the Maximum Lawful Rate until such time as the total interest received by Agent, on behalf of Lenders, is equal to the total interest that would have been received had the interest rate payable hereunder been (but for the operation of this paragraph) the interest rate payable since the Closing Date as otherwise provided in this Agreement. Thereafter, interest hereunder shall be paid at the rate(s) of interest and in the manner provided in Sections 1.5(a) through (e), unless and until the rate of interest again exceeds the Maximum Lawful Rate, and at that time this paragraph shall again apply.  In no event shall the total interest received by any Lender pursuant to the terms hereof exceed the amount that such Lender could lawfully have received had the interest due hereunder been calculated for the full term hereof at the Maximum Lawful Rate.  If the Maximum Lawful Rate is calculated pursuant to this paragraph, such interest shall be calculated at a daily rate equal to the Maximum Lawful Rate divided by the number of days in the year in which such calculation is made.  If, notwithstanding the provisions of this Section 1.5(f), a court of competent jurisdiction shall finally determine that a Lender has received interest hereunder in excess of the Maximum Lawful Rate, Agent shall, to the extent permitted by applicable law, promptly apply such excess

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in the order specified in Section 1.11 and thereafter shall refund any excess to Borrowers or as a court of competent jurisdiction may otherwise order.

1.6                                 Intentionally Omitted.

1.7                                 Intentionally Omitted.

1.8                                 Cash Management Systems.  The Credit Parties have established, and will maintain until the Termination Date, the cash management systems described in Annex C (the “Cash Management Systems”).

1.9                                 Fees.

(a)           Borrowers or Innovations, as applicable, shall pay to GE Capital the Fees specified in the GE Capital Fee Letter and the Closing Date Fee Letter in the amounts, and at the times, specified for payment therein.

(b)           As additional compensation for the US Revolving Lenders, US Borrower shall pay to Agent, for the ratable benefit of such US Revolving Lenders, in arrears, on the first Business Day of each month prior to the Commitment Termination Date and on the Commitment Termination Date, a Fee calculated on the average daily Unutilized US Amount for such month at the rate per annum set forth in the table below:

(c)           As additional compensation for the European Revolving Lenders, European Borrower shall pay to Agent, for the ratable benefit of such European Revolving Lenders, in arrears, on the first Business Day of each month prior to the Commitment Termination Date and on the Commitment Termination Date, a Fee calculated on the average daily Unutilized European Amount for such month at the rate per annum set forth in the table below:

(d)           The applicable Borrower shall pay to Agent, for the ratable benefit of Revolving Lenders, the Letter of Credit Fee as provided in Annex B.

1.10         Receipt of Payments.  Borrowers shall make each payment of principal, interest, Fees or other amounts due under this Agreement or any of the other Loan Documents not later than 2:00 p.m. (New York time) on the day when due in immediately available funds in Dollars to the Collection Account without setoff, counterclaim or deduction of any kind.  For purposes of computing interest and Fees as of any date, all payments shall be deemed received

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on the Business Day on which immediately available funds therefor are received in the Collection Account prior to 2:00 p.m. New York time.  Payments received after 2:00 p.m. New York time on any Business Day or on a day that is not a Business Day shall be deemed to have been received on the following Business Day.

1.11                           Application and Allocation of Payments.

(a)           So long as no Default or Event of Default has occurred and is continuing, (i) payments matching specific scheduled payments then due shall be applied to those scheduled payments; (ii) voluntary prepayments shall be applied as determined by the applicable Borrower and directed by Borrower Representative, subject to the provisions of Section 1.3(a); and (iii) mandatory prepayments shall be applied as set forth in Sections 1.3(b) and (c).  All payments and prepayments applied to a particular Loan shall be applied ratably to the portion thereof held by each Lender as determined by its Pro Rata Share. As to any other payment, and as to all payments made when a Default or Event of Default has occurred and is continuing or following the Commitment Termination Date, each Borrower hereby irrevocably waives the right to direct the application of any and all payments received from or on behalf of such Borrower, and each Borrower hereby irrevocably agrees that Agent shall have the continuing exclusive right to apply any and all such payments against the Obligations of Borrowers as Agent may deem advisable notwithstanding any previous entry by Agent in the Loan Account or any other books and records.  The Borrowers acknowledge and agree that, in the absence of a specific determination by Agent with respect thereto, payments shall be applied to amounts then due and payable in the following order:  (1) to Fees and Agent’s expenses reimbursable hereunder; (2) to interest on the US Swing Line Loan and European Swing Line Loan, ratably in proportion to the interest accrued as to each such Loan; (3) to principal payments on the US Swing Line Loan and European Swing Line Loan; (4) to interest on the other Loans, ratably in proportion to the interest accrued as to each Loan; (5) to principal payments on the other Loans; (6) to provide cash collateral for Letter of Credit Obligations in the manner described in Annex B; (7) to any Eligible Swap Obligations; and (8) to all other Obligations, including expenses of Lenders to the extent reimbursable under Section 11.3.

(b)           Agent is authorized to, and at its sole election may, charge to the applicable US Revolving Loan balance on behalf of US Borrower and cause to be paid all Fees, expenses, Charges, costs (including insurance premiums in accordance with Section 5.4(a)) and interest and principal, other than principal of such US Revolving Loan, owing by US Borrower under this Agreement or any of the other Loan Documents if and to the extent US Borrower fails to pay promptly any such amounts as and when due.  Agent shall use reasonable efforts to provide Borrower Representative with notice prior to charging such amounts but failure to do so shall not effect its rights to so charge.  At Agent’s option and to the extent permitted by law, any charges so made shall constitute part of the applicable US Revolving Loan hereunder.

(c)           Agent is authorized to, and at its sole election may, charge to the applicable European Revolving Loan balance on behalf of European Borrower and cause to be paid all Fees, expenses, Charges, costs (including insurance premiums in accordance with Section 5.4(a)) and interest and principal, other than principal of such European Revolving Loan, owing by European Borrower under this Agreement or any of the other Loan Documents if and to the extent European Borrower fails to pay promptly any such amounts as and when due.

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Agent shall use reasonable efforts to provide Borrower Representative with notice prior to charging such amounts but failure to do so shall not effect its rights to so charge.  At Agent’s option and to the extent permitted by law, any charges so made shall constitute part of the applicable European Revolving Loan hereunder.

(d)           Upon the exercise of any rights and remedies by Agent under any of the Loan Documents with respect to Collateral pledged by any US Credit Party to secure the Obligations of the US Credit Parties after an Event of Default shall have occurred and be continuing, any and all Proceeds received by Agent pursuant to any of the Loan Documents with respect to such Collateral shall be applied and distributed by Agent in the following order:  (i) to Fees and expenses of the Agent reimbursable hereunder that have been allocated to the US Credit Parties as determined by Agent; (ii) to interest on the US Swing Line Loan; (iii) to principal of the US Swing Line Loan; (iv) to interest on the US Revolving Loan and the US Term Loan ratably in proportion to interest accrued thereon; (vi) to principal of the US Revolving Loan and the US Term Loan ratably in proportion to the outstanding principal amounts thereof; (vii) to all other Obligations of the US Credit Parties to the Lenders to the extent reimbursable under Section 11.3; (v) to the Eligible Swap Obligations; (vi) to interest on the European Swing Line Loan; (vii) to principal of the European Swing Line Loan; (viii) to interest on the European Revolving Loan and the European Term Loan ratably in proportion to interest accrued thereon; (ix) to principal of the European Revolving Loan and the European Term Loan ratably in proportion to the outstanding principal amounts thereof; (x) to all other Obligations of the European Credit Parties to the Lenders to the extent reimbursable under Section 11.3; and (xi) to the US Borrower or to whomsoever may be lawfully entitled to receive the same or as a court of competent jurisdiction may direct.

(e)           Upon the exercise of any rights and remedies by Agent under any of the Loan Documents with respect to Collateral pledged by any European Credit Party to secure the Obligations of the European Credit Parties after an Event of Default shall have occurred and be continuing, any and all Proceeds received by Agent pursuant to any of the Loan Documents with respect to such Collateral shall be applied and distributed by Agent in the following order:  (i) to Fees and expenses of the Agent reimbursable hereunder that have been allocated to the European Credit Parties as determined by Agent; (ii) to interest on the European Swing Line Loan; (iii) to principal of the European Swing Line Loan; (iv) to interest on the European Revolving Loan and the European Term Loan, ratably in proportion to the accrued interest thereon; (v) to principal payments on the European Revolving Loan and the European Term Loan, ratably in proportion to the outstanding amounts thereof; (vi) to all other Obligations of the European Lenders to the extent reimbursable under Section 11.3; (vii) as contemplated by Section 5.11  to the extent such European Credit Party has guaranteed or secured the payment of the US Swing Line Loan, the US Revolving Loan and the US Term Loan, (w) to interest on the US Swing Line Loan; (x) to principal of the US Swing Line Loan; (y) to interest on the US Revolving Loan and the US Term Loan, ratably in proportion to the accrued interest thereon, (z) then to the principal of the US Revolving Loan and the US Term Loan, ratably in proportion to the outstanding amounts thereof, (viii) as contemplated by Section 5.11 to the extent such European Credit Party has guaranteed or secured the payment of the US Swing Line Loan, the US Revolving Loan and the US Term Loan, then to all other obligations of the US Credit Parties to the Lenders to the extent reimbursed under Section 11.3; and (xii) to the European Borrower or to whomsoever may be lawfully entitled to receive the same or as a court of competent jurisdiction may direct.

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1.12         Loan Account and Accounting.  Agent shall maintain a loan account (the “Loan Account”) on its books to record:  all Advances and the Term Loans, all payments made by Borrowers, and all other debits and credits as provided in this Agreement with respect to the Loans or any other Obligations.  All entries in the Loan Account shall be made in accordance with Agent’s customary accounting practices as in effect from time to time. The balance in the Loan Account, as recorded on Agent’s most recent printout or other written statement, shall, absent manifest error, be presumptive evidence of the amounts due and owing to Agent and Lenders by each Borrower; provided that any failure to so record or any error in so recording shall not limit or otherwise affect any Borrower’s duty to pay the Obligations.  Agent shall render to Borrower Representative a monthly accounting of transactions with respect to the Loans setting forth the balance of the Loan Account as to each Borrower for the immediately preceding month.  Unless Borrower Representative notifies Agent in writing of any objection to any such accounting (specifically describing the basis for such objection), within 30 days after the date thereof, each and every such accounting shall (absent manifest error) be deemed final, binding and conclusive on Borrowers in all respects as to all matters reflected therein.  Only those items expressly objected to in such notice shall be deemed to be disputed by Borrowers.  Notwithstanding any provision herein contained to the contrary, any Lender may elect (which election may be revoked) to dispense with the issuance of Notes to that Lender and may rely on the Loan Account as evidence of the amount of Obligations from time to time owing to it.

1.13                           Indemnity.

(a)           Each Credit Party that is a signatory hereto shall jointly and severally indemnify and hold harmless each of Agent, Lenders and their respective Affiliates, and each such Person’s respective officers, directors, employees, attorneys, agents and representatives (each, an “Indemnified Person”), from and against any and all suits, actions, proceedings, claims, damages, losses, liabilities and expenses (including reasonable attorneys’ fees and disbursements and other costs of investigation or defense, including those incurred upon any appeal) that may be instituted or asserted against or incurred by any such Indemnified Person as the result of credit having been extended, suspended or terminated under this Agreement and the other Loan Documents and the administration of such credit, and in connection with or arising out of the transactions contemplated hereunder and thereunder and any actions or failures to act in connection therewith, including any and all Environmental Liabilities and legal costs and expenses arising out of or incurred in connection with disputes between or among any parties to any of the Loan Documents (collectively, “Indemnified Liabilities”); provided, that no such Credit Party shall be liable for any indemnification to an Indemnified Person to the extent that any such suit, action, proceeding, claim, damage, loss, liability or expense results from that Indemnified Person’s gross negligence or willful misconduct.  NO INDEMNIFIED PERSON SHALL BE RESPONSIBLE OR LIABLE TO ANY OTHER PARTY TO ANY LOAN DOCUMENT, ANY SUCCESSOR, ASSIGNEE OR THIRD PARTY BENEFICIARY OF SUCH PERSON OR ANY OTHER PERSON ASSERTING CLAIMS DERIVATIVELY THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT OF CREDIT HAVING BEEN EXTENDED, SUSPENDED OR TERMINATED UNDER ANY LOAN DOCUMENT OR AS A RESULT OF ANY OTHER TRANSACTION CONTEMPLATED HEREUNDER OR THEREUNDER.

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(b)           To induce Lenders to provide the LIBOR Rate option on the terms provided herein, if (i) any LIBOR Loans are repaid in whole or in part prior to the last day of any applicable LIBOR Period (whether that repayment is made pursuant to any provision of this Agreement or any other Loan Document or occurs as a result of acceleration, by operation of law or otherwise); (ii) any Borrower shall default in payment when due of the principal amount of or interest on any LIBOR Loan; (iii) any Borrower shall refuse to accept any borrowing of, or shall request a termination of, any borrowing of, conversion into or continuation of, LIBOR Loans after such Borrower has given notice requesting the same in accordance herewith; or (iv) any Borrower shall fail to make any prepayment of a LIBOR Loan after such Borrower has given a notice thereof in accordance herewith, the applicable Borrower shall indemnify and hold harmless each Lender from and against all losses, costs and expenses resulting from or arising from any of the foregoing.  Such indemnification shall include any loss (excluding loss of margin) or expense arising from the reemployment of funds obtained by it or from fees payable to terminate deposits from which such funds were obtained.  For the purpose of calculating amounts payable to a Lender under this subsection, each Lender shall be deemed to have actually funded its relevant LIBOR Loan through the purchase of a deposit bearing interest at the LIBOR Rate in an amount equal to the amount of that LIBOR Loan and having a maturity comparable to the relevant LIBOR Period; provided that each Lender may fund each of its LIBOR Loans in any manner it sees fit, and the foregoing assumption shall be utilized only for the calculation of amounts payable under this subsection.  This covenant shall survive the termination of this Agreement and the payment of the Notes and all other amounts payable hereunder.  As promptly as practicable under the circumstances, each Lender shall provide Borrower Representative with its written calculation in reasonable detail of all amounts payable pursuant to this Section 1.13(b), and such calculation shall be binding on the parties hereto unless Borrower Representative shall object in writing within 10 Business Days of receipt thereof, specifying the basis for such objection in detail.

1.14         Access.  Each Credit Party that is a party hereto shall, during normal business hours, from time to time upon three Business Days’ prior notice by Agent to Borrower Representative (or, if a Default or an Event of Default shall have occurred and be continuing, upon same-day notice by Agent to Borrower Representative), as frequently as Agent determines to be appropriate but in no event more often than twice in any period of twelve (12) consecutive months unless a Default or Event of Default shall have occurred and be continuing: (a) provide Agent and any of its officers, employees and agents access to its properties, facilities, advisors and employees (including officers) of each Credit Party and to the Collateral; (b) permit Agent, and any of its officers, employees and agents, to inspect, audit and make extracts from any Credit Party’s books and records; and (c) permit Agent, and its officers, employees and agents, to inspect, review, evaluate and make test verifications and counts of the Accounts, Inventory and other Collateral of any Credit Party.  If a Default or Event of Default has occurred and is continuing or if access is necessary to preserve or protect the Collateral as determined by Agent, each such Credit Party shall provide such access to Agent and to each Lender at all times and without advance notice.  Furthermore, so long as any Event of Default has occurred and is continuing, Credit Parties shall provide Agent and each Lender with access to their suppliers and customers.  Each Credit Party shall make available to Agent and its counsel, as quickly as is possible under the circumstances, originals or copies of all books and records that Agent may reasonably request.  Each Credit Party shall deliver any document or instrument necessary for Agent, as it may from time to time reasonably request, to obtain records from any service bureau

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or other Person that maintains records for such Credit Party, and shall maintain duplicate material records or supporting documentation on media, including computer tapes and discs owned by such Credit Party. Agent will give Lenders at least 5 days’ prior written notice of regularly scheduled audits.  Representatives of other Lenders may accompany Agent’s representatives on regularly scheduled audits.

1.15                           Taxes.

(a)           Except as required by law, any and all payments by each Borrower hereunder or under the Notes shall be made, in accordance with this Section 1.15, free and clear of and without deduction for any and all present or future Taxes.  If any Borrower shall be required by law to deduct any Taxes from or in respect of any sum payable hereunder or under the Notes, (i) the sum payable shall be increased as much as shall be necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 1.15) Agent or Lenders, as applicable, receive an amount equal to the sum they would have received had no such deductions been made, (ii) such Borrower shall make such deductions, and (iii) such Borrower shall pay the full amount deducted to the relevant taxing or other authority in accordance with applicable law.  Within 30 days after the date of any payment of Taxes, Borrower Representative shall furnish to Agent the original or a certified copy of a receipt evidencing payment thereof.  Agent and Lenders shall not be obligated to return or refund any amounts received pursuant to this Section 1.15 except as provided in clause (d) below.

(b)           Each Credit Party that is a signatory hereto shall indemnify and, within 10 days of demand therefor, pay Agent and each Lender for the full amount of Taxes (including any Taxes imposed by any jurisdiction on amounts payable under this Section 1.15) paid on demand by a Tax authority or pursuant to law, by Agent or such Lender, as appropriate, and in connection with any payments made by such Credit Party, any liability (including penalties, interest and expenses) arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally asserted.

(c)           Each Lender organized under the laws of a jurisdiction outside the United States of America (a “Foreign Lender”) as to which payments to be made under this Agreement or under the Notes are exempt from United States’ withholding tax under an applicable statute or tax treaty shall provide to Borrower Representative and Agent a properly completed and executed IRS Form W-8ECI or Form W-8BEN or other applicable form, certificate or document prescribed by the IRS or the United States of America certifying as to such Foreign Lender’s entitlement to such complete exemption (a “Certificate of Exemption”).  Any foreign Person that seeks to become a Lender under this Agreement shall provide a Certificate of Exemption to Borrower Representative and Agent prior to becoming a Lender hereunder.  No foreign Person may become a Lender hereunder if such Person fails to deliver a Certificate of Exemption as to such complete exemption in advance of becoming a Lender.

(d)           In the event that any Lender receives a refund in respect of Taxes as to which it has been paid additional sums by a Credit Party pursuant to clause (a) or indemnified by a Credit Party pursuant to clause (b) and such Lender determines in its good faith judgment that such refund is attributable to such additional sums or indemnification, then such Lender shall promptly notify Agent, Administrative Borrower and such Credit Party (if other than

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Administrative Borrower) and shall within 30 Business Days after delivery of such notification remit to the applicable Credit Party an amount as such Lender determines to be the proportion of the refunded amount as will leave it, after such remittance, in no better or worse position that it would have been if the Taxes had not been imposed and the corresponding additional sums or indemnification payment not been made.

1.16                           Capital Adequacy; Increased Costs; Illegality.

(a)           If any Lender shall have determined in good faith that any law, treaty, governmental (or quasi-governmental) rule, regulation, guideline or order regarding capital adequacy, reserve requirements or similar requirements or compliance by any Lender with any request or directive regarding capital adequacy, reserve requirements or similar requirements (whether or not having the force of law), in each case, adopted after the Closing Date, from any central bank or other Governmental Authority increases or would have the effect of increasing the amount of capital, reserves or other funds required to be maintained by such Lender and thereby reducing the rate of return on such Lender’s capital as a consequence of its obligations hereunder, then, to the extent such reduction occurs with respect to a Lender’s return on an Obligation of any US Credit Party or Parties, US Borrower shall, and to the extent such reduction occurs with respect to a Lender’s return on an Obligation of any European Credit Party or Parties, Borrowers shall from time to time upon demand by such Lender (with a copy of such demand to Agent) pay to Agent as additional interest, for the account of such Lender, additional amounts sufficient to compensate such Lender for such reduction.  A certificate as to the amount of that reduction and showing the basis of the computation thereof in reasonable detail submitted by such Lender to Borrower Representative and to Agent shall, absent manifest error, be final, conclusive and binding for all purposes.

(b)           If, due to either (i) the introduction of or any change in any law or regulation (or any change in the interpretation thereof) or (ii) the compliance with any guideline or request from any central bank or other Governmental Authority (whether or not having the force of law), in each case adopted after the Closing Date, there shall be any increase in the cost to any Lender of agreeing to make or making, funding or maintaining any Loan, then, to the extent such increase in costs occurs with respect to an Obligation of any US Credit Party or Parties, US Borrower shall, and to the extent such increase occurs with respect to an Obligation of any European Credit Party or Parties, Borrowers shall from time to time, upon demand by such Lender (with a copy of such demand to Agent), pay to Agent as additional interest, for the account of such Lender additional amounts sufficient to compensate such Lender for such increased cost.  A certificate as to the amount of such increased cost in reasonable detail, submitted to Borrower Representative and to Agent by such Lender, shall be conclusive and binding on Borrowers for all purposes, absent manifest error.  Each Lender agrees that, as promptly as practicable after it becomes aware of any circumstances referred to above which would result in any such increased cost, the affected Lender shall, to the extent not inconsistent with such Lender’s internal policies of general application, use reasonable commercial efforts to minimize costs and expenses incurred by it and payable to it by Borrowers pursuant to this Section 1.16(b).

(c)           Notwithstanding anything to the contrary contained herein, if the introduction of or any change in any law or regulation (or any change in the interpretation

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thereof) shall make it unlawful, or any central bank or other Governmental Authority shall assert that it is unlawful, for any Lender to agree to make or to make or to continue to fund or maintain any LIBOR Loan, then, unless that Lender is able to make or to continue to fund or to maintain such LIBOR Loan at another branch or office of that Lender without, in that Lender’s good faith opinion, adversely affecting it or its Loans or the income obtained therefrom, on notice thereof and demand therefor by such Lender to Borrower Representative through Agent, (i) the obligation of such Lender to agree to make or to make or to continue to fund or maintain LIBOR Loans shall terminate and (ii) each Borrower shall forthwith prepay in full all outstanding LIBOR Loans owing by such Borrower to such Lender, together with interest accrued thereon, unless Borrower Representative on behalf of such Borrower, within 5 Business Days after the delivery of such notice and demand, converts all LIBOR Loans into Index Rate Loans.

(d)           Within 15 days after receipt by Borrower Representative of written notice and demand from any Lender (an “Affected Lender”) for payment of additional amounts or increased costs as provided in Sections 1.15(a), 1.16(a) or 1.16(b), Borrower Representative may, at its option, notify Agent and such Affected Lender of its intention to replace the Affected Lender.  So long as no Default or Event of Default has occurred and is continuing, Borrower Representative, with the consent of Agent, may obtain, at Borrowers’ expense, a replacement Lender (“Replacement Lender”) for the Affected Lender, which Replacement Lender must be reasonably satisfactory to Agent.  If Borrowers obtain a Replacement Lender within 90 days following notice of their intention to do so, the Affected Lender must sell and assign its Loans and Commitments to such Replacement Lender for an amount equal to the principal balance of all Loans held by the Affected Lender and all accrued interest and Fees with respect thereto through the date of such sale; provided, that Borrowers shall have reimbursed such Affected Lender for the additional amounts or increased costs that it is entitled to receive under this Agreement through the date of such sale and assignment.  Notwithstanding the foregoing, Borrowers shall not have the right to obtain a Replacement Lender if the Affected Lender rescinds its demand for increased costs or additional amounts within 15 days following its receipt of Borrowers’ notice of intention to replace such Affected Lender.  Furthermore, if Borrowers give a notice of intention to replace and do not so replace such Affected Lender within 90 days thereafter, Borrowers’ rights under this Section 1.16(d) shall terminate and Borrowers shall promptly pay all increased costs or additional amounts demanded by such Affected Lender pursuant to Sections 1.15(a), 1.16(a) and 1.16(b).

1.17         Single Loan.  The US Term Loan, the US Revolving Loan and all of the other Obligations of US Borrower arising under this Agreement and the other Loan Documents shall constitute one general obligation of US Borrower secured, until the Termination Date, by the Collateral pledged by the US Credit Parties to secure such Obligations pursuant to the Collateral Documents.  All Loans to European Borrower and all of the other Obligations of European Borrower arising under this Agreement and the other Loan Documents shall constitute one general obligation of European Borrower secured, until the Termination Date, by all of the Collateral pursuant to the Collateral Documents.

1.18                           Limitations on Obligations of European Credit Parties.

(a)           Notwithstanding anything set forth in this Agreement or any other Loan Documents to the contrary, other than as may be required by Section 5.11, no European Credit

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Party shall at any time be liable in any manner (whether pursuant to any guaranty or otherwise) for any portion of the principal of the US Term Loan, the US Revolving Loan or any interest thereon or Fees or in respect of any Indemnified Liabilities, any Eligible Swap Obligations or any other Obligations payable with respect thereto (and the US Credit Parties are solely liable for such Obligations), and no assets of any European Credit Party shall at any time serve, directly or indirectly, as security for, and in no event shall more than 65% (or with respect to Swissco, 66%) of the total stock or other equity interests of any European Credit Party secure, any portion of the principal of the US Term Loan, the US Revolving Loan or any interest thereon or any Fees or in respect of any Indemnified Liabilities or any other Obligations payable with respect thereto or any Eligible Swap Obligations.

(b)           The Lenders acknowledge the terms and conditions of that certain Pledge of Shares, dated June 30, 2005, among Innovations Inc., Orgenics International Holdings B.V.,  and Agent.

(c)           To the extent that any of the German Credit Parties is liable as a result of its execution or, as the case may be, accession to this Agreement as Credit Party and Guarantor under this Agreement and the other Loan Documents for any of the Obligations of an affiliated company (verbundenes Unternehmen) of another German Credit Party within the meaning of § 15 of the German Stock Corporation Act (Aktiengesetz) (other than the relevant German Credit Party’s subsidiaries), the enforcement of any claims, indemnities or guarantees under this Agreement and the other relevant Loan Documents against the relevant German Credit Party shall at all times, until the full and complete discharge of any and all Obligations of the Credit Parties, be limited to an amount equal to the net assets of the relevant German Credit Party, which are calculated as that German Credit Party’s total assets less its liabilities (including liability reserves (Rückstellungen)) less its registered share capital (Stammkapital) from time to time (the “Net Assets”).  For the purposes of calculating the Net Assets the following balance sheet items shall be adjusted as follows:

(i)            the amount of any increase of the registered share capital out of retained earnings (Kapitalerhöhung aus Gesellschaftsmitteln) after the date of this Agreement that has been effected without the prior written consent of the Agent shall be deducted from the registered share capital of the relevant German Credit Party; and

(ii)           loans and other contractual liabilities incurred in violation of the provisions of the Loan Documents shall be disregarded.

(d)           Furthermore, if and to the extent legally permissible and commercially justifiable in respect of the relevant German Credit Party’s business, such German Credit Party shall, in a situation where

(i)                                     it does not have sufficient assets to maintain its capital; and

(ii)                                  the Agent would (but for this clause) be entitled to enforce the security granted hereunder,

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realise any and all of its assets that (i) are shown in the balance sheet with a book value (Buchwert) which is significantly lower than the market value of such assets, and (ii) are not necessary for the that German Credit Party’s business (betriebsnotwendig).

(e)           None of the claims, indemnities or guarantees under this Agreement and the other relevant Loan Documents against the relevant German Credit Party will be enforced to the extent that the relevant German Credit Party demonstrates in reasonable detail by way of legal opinion by a German law firm of national good standing which is reasonably acceptable to the Agent or a firm of auditors of national good standing reasonably acceptable to the Agent that there is a substantial likelihood that the entering into this Agreement or the enforcement of claims, indemnities or guarantees under this Agreement and the other relevant Loan Documents against the relevant German Credit Party leads to personal civil or criminal liability of, actual or former managing directors of the relevant German Credit Party or of the companies affiliated with it (regardless of the fact that the managing director acted in good faith) due to a breach of the duty of care owing by the relevant director, vis-à-vis the respective company (Gebot der Rücksichtnahme auf die Eigenbelange der Gesellschaft) or of the prohibition of an intervention effacing the existence of a company (Verbot des existenzvernichtenden Eingriffs). The Agent shall be obliged to retransfer proceeds from such enforcement which occurred in violation of the above.

(f)            For the avoidance of doubt, none of the above restrictions on enforcement set forth in paragraphs (c), (d) and (e) above shall apply if the enforcement relates to obligations of the relevant German Credit Party.

1.19         Eligible Swap Obligations.  Notwithstanding anything to the contrary contained herein or in any other Loan Document, following the Termination Date, the Eligible Swap Obligations shall no longer be secured by any Collateral under any Collateral Document or subject to, or guarantied by, any Guaranty.

2.                                      CONDITIONS PRECEDENT

2.1           Conditions to the Initial Loans.  No Lender shall be obligated to enter into this Agreement, to make any Loan or incur any Letter of Credit Obligations on the Closing Date, or to take, fulfill, or perform any other action hereunder, until the following conditions have been satisfied or provided for in a manner satisfactory to Agent, or waived in writing by Agent and Lenders:

(a)           Credit Agreement; Loan Documents.  This Agreement or counterparts hereof shall have been duly executed by, and delivered to, Borrowers, each other Credit Party, Agent and Requisite Lenders; and Agent shall have received such documents, instruments, agreements and legal opinions as Agent shall reasonably request in connection with the transactions contemplated by this Agreement and the other Loan Documents, including all those listed in the Closing Checklist attached hereto as Annex D, each in form and substance reasonably satisfactory to Agent.

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(b)                                 Availability.  US Borrower and European Borrower shall have aggregate US Revolving Borrowing Availability and European Revolving Borrowing Availability of at least $5,000,000 (on a pro forma basis, after giving effect to the consummation of the Related Transactions and with trade payables being paid currently, and expenses and liabilities being paid in the ordinary course of business and without acceleration of sales and without a deterioration of working capital).

(c)                                  Approvals.  Agent shall have received (i) satisfactory evidence that the Credit Parties have obtained all required consents and approvals of all Persons including all requisite Governmental Authorities, to the execution, delivery and performance of this Agreement and the other Loan Documents and the consummation of the Related Transactions or (ii) an officer’s certificate in form and substance reasonably satisfactory to Agent affirming that no such consents or approvals are required.

(d)                                 Payment of Fees. Borrowers and Innovations, as applicable, shall have (i) paid the Fees required to be paid on the Closing Date in the respective amounts specified in Section 1.9 (including the Fees specified in the GE Capital Fee Letter and the Closing Fee Letter), and (ii) reimbursed Agent for all fees, costs and expenses (including, without limitation, reasonable legal fees and expenses) of closing presented as of the Closing Date.

(e)                                  Capital Structure: Other Indebtedness.  The capital structure of each Credit Party and the terms and conditions of all Indebtedness of each Credit Party after giving effect to the Acquisition, shall be acceptable to Agent in its sole discretion.

(f)                                    Due Diligence.  Agent and Co-Syndication Agents shall have completed their business and legal due diligence, including, without limitation, in respect of the rules, regulations and policies of the FDA, with respect to the Acquisition with results reasonably satisfactory to Agent and Co-Syndication Agents.

(g)                                 Consummation of Related Transactions.  Agent shall have received fully executed copies of the Acquisition Agreement and each of the Related Transactions Documents requested by Agent, each of which shall be in form and substance reasonably satisfactory to Agent and its counsel and Lenders.  The Acquisition and the other Related Transactions shall have been consummated (simultaneously with the Loans made on the Closing Date) in accordance with the terms of the Acquisition Agreement and the other Related Transactions Documents.

The aggregate purchase price for the Acquisition shall consist of not more than aggregate cash consideration equal to $56,500,000 plus certain tax payments plus aggregate fees and closing costs (including those payable to Agent and Lenders) payable on the Closing Date which shall not exceed $2,500,000 in the aggregate.

(h)                                 LTM EBITDA; Senior Consolidated Leverage Ratio; Total Leverage Ratio.  The Reporting Credit Parties shall have LTM EBITDA, after giving pro forma effect to the Acquisition as if the Acquisition had been consummated on the first day of the period, calculated on a consolidated basis for the twelve-month period ended March 31, 2005 of not less than $44,000,000.  The Reporting Credit Parties shall have a Senior Consolidated Leverage Ratio

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and Total Leverage Ratio, after giving pro forma effect to the Acquisition as if the Acquisition had occurred on the first day of the period and the borrowings hereunder on the Closing Date, calculated on a consolidated basis for the twelve-month period ended March 31, 2005 of not more than 2.30:1.00 and 6.10:1.00, respectively.

(i)                                     [Intentionally Omitted.]

(j)                                     Minimum Cash.  Agent shall have received evidence reasonably satisfactory to it that the Credit Parties, on a consolidated basis, shall have available cash of at least $10,000,000 in Blocked Accounts or in a bank account of Stirling Medical Innovations Limited on the Closing Date, after giving pro forma effect to the Acquisition.

2.2                                 Further Conditions to Each Loan.  Except as otherwise expressly provided herein, no Lender shall be obligated to fund any Advance or incur any Letter of Credit Obligation, if, as of the date thereof:

(a)                                  any representation or warranty by any Credit Party contained herein or in any other Loan Document is untrue or incorrect as of such date, except to the extent that such representation or warranty expressly relates to an earlier date and except for changes therein expressly permitted or expressly contemplated by this Agreement, and Agent, Majority Lenders, US Requisite Revolving Lenders (with respect to any US Revolving Credit Advance or incurring any Letter of Credit Obligation on behalf of US Borrower), European Requisite Revolving Lenders (with respect to any European Revolving Credit Advance or incurring any Letter of Credit Obligation on behalf of European Borrower), Requisite Term Lenders (with respect to any Term Loan), or Requisite Lenders have determined not to make such Advance or incur such Letter of Credit Obligation as a result of the fact that such warranty or representation is untrue or incorrect;

(b)                                 any event or circumstance having a Material Adverse Effect has occurred since December 31, 2004 as determined by the Agent, Majority Lenders, US Requisite Revolving Lenders, European Requisite Revolving Lenders or Requisite Lenders and Agent, Majority Lenders, US Requisite Revolving Lenders (with respect to any US Revolving Credit Advance or incurring any Letter of Credit Obligation on behalf of US Borrower), European Requisite Revolving Lenders (with respect to any European Revolving Credit Advance or incurring any Letter of Credit Obligation on behalf of European Borrower), Requisite Term Lenders (with respect to any Term Loan), or Requisite Lenders have determined not to make such Advance or incur such Letter of Credit Obligation as a result of the fact that such event or circumstance has occurred;

(c)                                  any Default or Event of Default has occurred and is continuing or would result after giving effect to any Advance (or the incurrence of any Letter of Credit Obligation), and Agent, Majority Lenders, US Requisite Revolving Lenders (with respect to any US Revolving Credit Advance or incurring any Letter of Credit Obligation on behalf of US Borrower), European Requisite Revolving Lenders (with respect to any European Revolving Credit Advance or incurring any Letter of Credit Obligation on behalf of European Borrower), Requisite Term Lenders (with respect to any Term Loan), or Requisite Lenders shall have

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determined not to make such Advance or incur any Letter of Credit Obligation as a result of that Default or Event of Default; or

(d)                                 after giving effect to any Advance (or the incurrence of any Letter of Credit Obligations), (i) the outstanding principal amount of the aggregate US Revolving Loan would exceed the US Maximum Amount, in each case, less the then outstanding principal amount of the US Swing Line Loan, or (ii) the outstanding principal amount of the aggregate European Revolving Loan would exceed the European Maximum Amount, in each case, less the then outstanding principal amount of the European Swing Line Loan.

The request and acceptance by any Borrower of the proceeds of any Advance or the incurrence of any Letter of Credit Obligations shall be deemed to constitute, as of the date thereof, (i) a representation and warranty by Borrowers that the conditions in this Section 2.2 have been satisfied and (ii) a reaffirmation by the Credit Parties of the granting and continuance of Agent’s Liens, on behalf of itself and Lenders, pursuant to the Collateral Documents.

2.3                                 Conditions to Conversion of the Revolving Loan Commitment on the Conversion Date.  GE Capital and ML Capital (or their respective successors or assigns) shall not be obligated to convert any portion of its respective Revolving Loan Commitment into a Term Loan Commitment as provided in Section 1.1(i) hereof if, as of the date thereof:

(a)                                  GE Capital’s and ML Capital’s (together with their respective successors’ and assigns’) aggregate Pro Rata Share of outstanding US Revolving Credit Advances does not equal or exceed the Minimum US Conversion Amount;

(b)                                 GE Capital’s and ML Capital’s (together with their respective successors’ and assigns’) aggregate Pro Rata Share of outstanding European Revolving Credit Advances does not equal or exceed the Minimum European Conversion Amount;

(c)                                  US Borrower shall not have executed and delivered to each of GE Capital and ML Capital (or their respective successors or assigns) an amended and restated note to evidence the increased US Term Loan Commitment and shall be deemed to replace the US Term Note referenced in Section 1.1(c)(i).  Each note shall be in the principal amount of the US Term Loan Commitment allocable to each of GE Capital and ML Capital (or their respective successors or assigns), as applicable, as adjusted on the Conversion Date, and substantially in the form of Exhibit 2.3(c) (each a “Conversion US Term Note” and, collectively, the “Conversion US Term Notes”); and

(d)                                 European Borrower shall not have executed and delivered to each of GE Capital and ML Capital (or their respective successors or assigns) an amended and restated note to evidence the increased European Term Loan Commitment and shall be deemed to replace the European Term Note referenced in Section 1.1(d)(i).  Each note shall be in the principal amount of the European Term Loan Commitment allocable to each of GE Capital and ML Capital (or their respective successors or assigns), as applicable, as adjusted on the Conversion Date, and substantially in the form of Exhibit 2.3(d) (each a “Conversion European Term Note” and, collectively, the “Conversion European Term Notes”).

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3.                                      REPRESENTATIONS AND WARRANTIES

To induce Lenders to make the Loans and to incur Letter of Credit Obligations, the Credit Parties executing this Agreement, jointly and severally, make the following representations and warranties, after giving effect to the Acquisition, to Agent and each Lender with respect to all Credit Parties, each and all of which shall survive the execution and delivery of this Agreement.

3.1                                 Corporate Existence; Compliance with Law.

(a)                                  Each Credit Party (i) is a corporation, limited liability company or limited partnership duly organized, validly existing and in good standing (or the foreign equivalent thereof, if any) under the laws of its respective jurisdiction of incorporation or organization set forth in Disclosure Schedule (3.1); (ii) is duly qualified to conduct business and is in good standing (or the foreign equivalent thereof, if any) in each other jurisdiction where its ownership or lease of property or the conduct of its business requires such qualification, except where the failure to be so qualified could not reasonably be expected to result in a Material Adverse Effect; (iii) has the requisite corporate, company or partnership power and corporate, company or partnership authority and the legal right to own, pledge, mortgage or otherwise encumber and operate its properties, to lease the property it operates under lease and to conduct its business as now, heretofore and proposed to be conducted; (iv) subject to specific representations regarding Environmental Laws, has all material licenses, permits, consents or approvals from or by, and has made all material filings with, and has given all material notices to, all Governmental Authorities having jurisdiction, to the extent required for such ownership, operation and conduct; (v) is in compliance with its charter and bylaws or equivalent constitutive documents or partnership or operating agreement, as applicable; (vi) subject to specific representations set forth herein regarding ERISA or a Foreign Government Scheme or Arrangement, as applicable, Environmental Laws, tax and other laws, is in compliance with all applicable provisions of law, except where the failure to comply, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect; and (vii) without limiting any other provision of this Section 3.1, has received all approvals required by applicable regulations of the FDA (and the equivalent Governmental Authority of each country in which any Credit Party operates, conducts business or distributes products), and each such approval is and remains in full force and effect, except where the failure to have received or maintained such approvals could not reasonably be expected to have a Material Adverse Effect.

(b)                                 Without limiting the generality of Section 3.1 or any other representation or warranty made herein, each Credit Party and each of the facilities operated by such Credit Party and, to such Credit Party’s knowledge, each of such Credit Party’s licensed employees and contractors (other than contracted agencies), if any, in the exercise of their respective duties on behalf of such Credit Party or any such facilities, is in compliance with all applicable statutes, laws, ordinances, rules and regulations of any federal, state or local governmental authority with respect to regulatory matters primarily relating to patient healthcare and/or patient healthcare information, including without limitation the HIPAA (collectively, “Healthcare Laws”), except where the failure to comply could not reasonably be expected to have a Material Adverse Effect.  Each Credit Party has maintained in all material respects all records required to be maintained by any governmental agency or authority or otherwise under the Healthcare Laws and, to the

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knowledge of such Credit Party, there are no presently existing circumstances which could reasonably be expected to result in material violations of the Healthcare Laws.  Each Credit Party and its Affiliates and, to the knowledge of such Credit Party, the owners of the facilities and other businesses managed by such Credit Party or its Affiliates, if any, have such permits, licenses, franchises, certificates and other approvals or authorizations of governmental or regulatory authorities as are necessary under applicable law to own their respective properties and to conduct their respective business (including without limitation such permits as are required under such Healthcare Laws), except where the failure to comply could not reasonably be expected to have a Material Adverse Effect.

(c)                                  None of the Credit Parties is a “covered entity” within the meaning of HIPAA and none of the Credit Parties and/or its business and operations are subject to or covered by the so-called “Administrative Simplification” provisions of HIPAA.

3.2                                 Executive Offices, Collateral Locations, FEIN.  As of the Closing Date, the current location of each Credit Party’s chief executive office and the warehouses and premises at which any Collateral is located are set forth in Disclosure Schedule (3.2), and none of such locations has changed within the 12 months preceding the Closing Date.  In addition, Disclosure Schedule (3.2) lists the federal employer identification number or other organizational number set forth on its organizational documents of each Credit Party taxable in the United States of America.

3.3                                 Corporate Power, Authorization, Enforceable Obligations.  The execution, delivery and performance by each Credit Party of the Loan Documents to which it is a party and the creation of all Liens provided for therein: (a) are within such Person’s corporate, company or partnership power; (b) have been duly authorized by all necessary corporate, limited liability company or limited partnership action; (c) do not contravene any provision of such Person’s charter, bylaws or equivalent constitutive documents or partnership or operating agreement, as applicable; (d) do not violate any law or regulation, or any order or decree of any court or Governmental Authority; (e) do not conflict with or result in the breach or termination of, constitute a default under or accelerate or permit the acceleration of any performance required by, any indenture, mortgage, deed of trust, lease, agreement or other instrument to which such Person is a party or by which such Person or any of its property is bound; (f) do not result in the creation or imposition of any Lien upon any of the property of such Person other than those in favor of Agent, on behalf of itself and Lenders, pursuant to the Loan Documents; and (g) do not require the consent or approval of any Governmental Authority or any other Person, except those referred to in Section 2.1(c), all of which will have been duly obtained, made or complied with prior to the Closing Date.  Each of the Loan Documents shall be duly executed and delivered by each Credit Party that is a party thereto and each such Loan Document shall constitute a legal, valid and binding obligation of such Credit Party enforceable against it in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, fraudulent conveyance or transfer or other laws affecting creditors’ rights generally or by equitable principles of general applicability.

3.4                                 Financial Statements and Projections.  Except for the Projections, and subject to the matters disclosed in that the certain current report on Form 8-K filed by Innovations with the Securities and Exchange Commission under the Exchange Act on June 29, 2005,

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all Financial Statements concerning the Reporting Credit Parties that are referred to below have been prepared in accordance with GAAP consistently applied throughout the periods covered (except as disclosed therein and except, with respect to unaudited Financial Statements, for the absence of footnotes and normal year-end audit adjustments) and present fairly in all material respects the financial position of the Persons covered thereby as at the dates thereof and the results of their operations and cash flows for the periods then ended.

(a)                                  Financial Statements.

(i)                                     The audited consolidated balance sheets at December 31, 2004 and the related statements of income and cash flows of Innovations for the Fiscal Year then ended, certified by BDO ▇▇▇▇▇▇▇, LLP (the “2004 Audited Financials”) are attached hereto as Disclosure Schedule (3.4(a)(i)).

(ii)                                  The unaudited balance sheet at March 31, 2005 and the related statement of income and cash flows of Innovations for the Fiscal Quarter then ended, each of which shall have been reviewed by BDO ▇▇▇▇▇▇▇, LLP as provided in Statement on Auditing Standards No. 71 are attached hereto as Disclosure Schedule (3.4(a)(ii)).

(b)                                 Pro Forma.  The Pro Forma delivered on the date hereof and attached hereto as Disclosure Schedule (3.4(b)) was prepared by Innovations giving pro forma effect to the Related Transactions and was based on the unaudited consolidated balance sheet of the Reporting Credit Parties, dated March 31, 2005, and is in any event subject to the matters disclosed in that the certain current report on Form 8-K filed by Innovations with the Securities and Exchange Commission under the Exchange Act on June 29, 2005.

(c)                                  Projections.  The Projections delivered on the date hereof and attached hereto as Disclosure Schedule (3.4(c)) have been prepared by the Reporting Credit Parties in light of the past operations of their businesses, but including future payments of known contingent liabilities stated at the reasonably estimated present values thereof and reflect projections through December 31, 2008, beginning on January 1, 2005 on a quarter-by-quarter basis for the first year and on a year-by-year basis thereafter.  Subject to the matters disclosed in that the certain current report on Form 8-K filed by Innovations with the Securities and Exchange Commission under the Exchange Act on June 29, 2005, the Projections are based upon estimates and assumptions stated therein, all of which the Reporting Credit Parties believe to be reasonable and fair in light of current conditions and current facts known to the Reporting Credit Parties and, as of the Closing Date, reflect the Reporting Credit Parties’ good faith and reasonable estimates of the future financial performance of the Reporting Credit Parties and of the other information projected therein for the period set forth therein.  It is understood that the Projections are estimates only and not a guarantee of actual results.

3.5                                 Material Adverse Effect.  Between December 31, 2004 and the Closing Date:  (a) no Credit Party has incurred any obligations, contingent or noncontingent liabilities, liabilities for Charges, long-term leases or unusual forward or long-term commitments that are not reflected in the Pro Forma and that, alone or in the aggregate, could reasonably be expected to have a Material Adverse Effect, (b) no contract, lease or other agreement or instrument has been entered into by any Credit Party or has become binding upon any Credit Party’s assets and

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no law or regulation applicable to any Credit Party has been adopted, in each case, that has had or could reasonably be expected to have a Material Adverse Effect, and (c) no Credit Party is in default and, to the best of Borrowers’ knowledge, no third party is in default under any material contract, lease or other agreement or instrument, that alone or in the aggregate could reasonably be expected to have a Material Adverse Effect.  Between December 31, 2004 and the Closing Date, no event has occurred, that alone or together with other events, could reasonably be expected to have a Material Adverse Effect.

3.6                                 Ownership of Property; Liens.  As of the Closing Date, the real estate (“Real Estate”) listed in Disclosure Schedule (3.6) constitutes all of the real property owned, leased, subleased, or used by any Credit Party.  Except as set forth in Disclosure Schedule (3.6), the aggregate value of Collateral located on any property leased or subleased by any Credit Party does not exceed $500,000.  Each Credit Party owns good and marketable fee simple title to all of its owned Real Estate, and valid leasehold interests in all of its leased Real Estate, all as described on Disclosure Schedule (3.6), and copies of all such leases or a summary of terms thereof reasonably satisfactory to Agent have been delivered to Agent.  Disclosure Schedule (3.6) further describes any Real Estate with respect to which any Credit Party is a lessor, sublessor or assignor as of the Closing Date.  Each Credit Party also has good and marketable title to, or valid leasehold interests in, all of its personal property and assets.  As of the Closing Date, none of the properties and assets of any Credit Party are subject to any Liens other than Permitted Encumbrances, and there are no facts, circumstances or conditions known to any Credit Party that may result in any Liens (including Liens arising under Environmental Laws) other than Permitted Encumbrances.  Each Credit Party has received all deeds, assignments, waivers, consents, nondisturbance and attornment or similar agreements, bills of sale and other documents, and has duly effected all recordings, filings and other actions necessary to establish, protect and perfect such Credit Party’s right, title and interest in and to all such Real Estate and other properties and assets.  Disclosure Schedule (3.6) also describes any purchase options, rights of first refusal or other similar contractual rights pertaining to any Real Estate.  As of the Closing Date, no portion of any Credit Party’s Real Estate has suffered any material damage by fire or other casualty loss that has not heretofore been repaired and restored in all material respects to its original condition or otherwise remedied.  As of the Closing Date, all material permits required to have been issued or appropriate to enable the Real Estate to be lawfully occupied and used for all of the purposes for which it is currently occupied and used have been lawfully issued and are in full force and effect.

3.7                                 Labor Matters.  As of the Closing Date, (a) no strikes or other material labor disputes against any Credit Party are pending or, to any Credit Party’s knowledge, threatened; (b) hours worked by and payment made to employees of each Credit Party comply with the Fair Labor Standards Act and each other federal, state, local or foreign law applicable to such matters; (c) all payments due from any Credit Party for employee health and welfare insurance have been paid or accrued as a liability on the books of such Credit Party; (d) except as set forth in Disclosure Schedule (3.7), no Credit Party is a party to or bound by any collective bargaining agreement, management agreement, consulting agreement, employment agreement, bonus, restricted stock, stock option, or stock appreciation plan or agreement or any similar plan, agreement or arrangement (and true and complete copies of any agreements described on Disclosure Schedule (3.7) have been delivered to Agent); (e) there is no organizing activity involving any Credit Party pending or, to any Credit Party’s knowledge, threatened by any labor

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union or group of employees; (f) there are no representation proceedings pending or, to any Credit Party’s knowledge, threatened with the National Labor Relations Board, and no labor organization or group of employees of any Credit Party has made a pending demand for recognition; and (g) except as set forth in Disclosure Schedule (3.7), there are no material complaints or charges against any Credit Party pending or, to the knowledge of any Credit Party, threatened to be filed with any Governmental Authority or arbitrator based on, arising out of, in connection with, or otherwise relating to the employment or termination of employment by any Credit Party of any individual.

3.8                                 Ventures, Subsidiaries and Affiliates; Outstanding Stock and Indebtedness.  Except as set forth in Disclosure Schedule (3.8), as of the Closing Date, no Credit Party has any Subsidiaries, is engaged in any joint venture or partnership with any other Person, or is an Affiliate of any other Person.  As of the Closing Date, all of the issued and outstanding Stock of each Credit Party (other than Innovations) is owned by each of the Stockholders and in the amounts set forth in Disclosure Schedule (3.8).  Except as set forth in Disclosure Schedule (3.8), there are no outstanding rights to purchase, options, warrants or similar rights or agreements pursuant to which any Credit Party may be required to issue, sell, repurchase or redeem any of its Stock or other equity securities or any Stock or other equity securities of its Subsidiaries.  All outstanding Indebtedness and Guaranteed Indebtedness of each Credit Party as of the Closing Date (except for the Obligations) is described in Section 6.3 (including Disclosure Schedule (6.3)).

3.9                                 Government Regulation.  No Credit Party is an “investment company” or an “affiliated person” of, or “promoter” or “principal underwriter” for, an “investment company,” as such terms are defined in the Investment Company Act of 1940.  No Credit Party is subject to regulation under the Public Utility Holding Company Act of 1935, the Federal Power Act, or any other federal or state statute that restricts or limits its ability to incur Indebtedness or to perform its obligations hereunder. The making of the Loans by Lenders to Borrowers, the incurrence of the Letter of Credit Obligations on behalf of Borrowers, and the application of the proceeds thereof and repayment thereof and the consummation of the Related Transactions will not violate any provision of any such statute or any rule, regulation or order issued by the Securities and Exchange Commission.

3.10                           Margin Regulations.  No Credit Party is engaged, nor will it engage, principally or as one of its important activities, in the business of extending credit for the purpose of “purchasing” or “carrying” any “margin stock” as such terms are defined in Regulation U of the Federal Reserve Board as now and from time to time hereafter in effect (such securities being referred to herein as “Margin Stock”).  None of the proceeds of the Loans or other extensions of credit under this Agreement will be used, directly or indirectly, for the purpose of purchasing or carrying any Margin Stock, for the purpose of reducing or retiring any Indebtedness that was originally incurred to purchase or carry any Margin Stock or for any other purpose that might cause any of the Loans or other extensions of credit under this Agreement to be considered a “purpose credit” within the meaning of Regulations T, U or X of the Federal Reserve Board.  No Credit Party will take or permit to be taken any action that might cause any Loan Document to violate any regulation of the Federal Reserve Board.

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3.11                           Taxes.  All material tax returns, reports and statements, including information returns, required by any Governmental Authority (“Tax Returns”) to be filed by any Credit Party have been filed with the appropriate Governmental Authority; all such Tax Returns are true, correct and complete in all material respects; and all material Charges have been paid prior to the date on which any fine, penalty, interest or late charge may be added thereto for nonpayment thereof (or any such fine, penalty, interest, late charge or loss has been paid),  excluding Charges or other amounts being contested in accordance with Section 5.2(b).  There are no Liens for Charges (other than for current Charges not yet due and payable) upon the assets of any Credit Party.  No material adjustment relating to such Tax Returns has been proposed formally or informally by any Governmental Authority and, to the knowledge of each Credit Party, no basis exists for any such adjustment.  Proper and accurate amounts have been withheld by each Credit Party from its respective employees, independent contractors, creditors and other third parties for all periods in material compliance with all applicable federal, state, local and foreign laws and such withholdings have been timely paid to the respective Governmental Authorities.  Disclosure Schedule (3.11) sets forth as of the Closing Date those taxable years for which any Credit Party’s tax returns are currently being audited by the IRS or any other applicable Governmental Authority, and any assessments or threatened assessments in connection with such audit, or otherwise currently outstanding. Except as indicated on Disclosure Schedule (3.11), as of the Closing Date, all Charges that have been claimed, proposed, asserted or assessed against any Credit Party  (or with respect to any of their assets) have been fully paid or finally settled.  None of the Credit Parties and their respective predecessors are liable for any Charges:  (a) under any agreement (including any tax sharing agreements), or (b) to each Credit Party’s knowledge, as a transferee, except, in the case of each of clauses (a) and (b), under the Acquisition Agreement in an amount not to exceed $650,000 or to the extent assumed in connection with a Permitted Acquisition.  As of the Closing Date, no Credit Party has agreed or been requested to make any adjustment under IRC Section 481(a), by reason of a change in accounting method or otherwise, which would have a Material Adverse Effect.

3.12                           ERISA.

(a)                                  Disclosure Schedule (3.12) lists (i) all ERISA Affiliates and (ii) all Plans and separately identifies all Pension Plans, including Title IV Plans, Multiemployer Plans, ESOPs and Welfare Plans, including all Retiree Welfare Plans.  Copies of all such listed Plans, together with a copy of the latest IRS/DOL 5500-series form for each such Plan, have been delivered to Agent.  Except with respect to Multiemployer Plans, each Qualified Plan has been determined by the IRS to qualify under Section 401 of the IRC, the trusts created thereunder have been determined to be exempt from tax under the provisions of Section 501 of the IRC, and nothing has occurred that would cause the loss of such qualification or tax-exempt status.  Each Plan is in compliance in all material respects with the applicable provisions of ERISA and the IRC, including the timely filing of all reports required under the IRC or ERISA, including the statement required by 29 CFR Section 2520.104-23.  Neither any Credit Party nor ERISA Affiliate has failed to make any contribution or pay any amount due as required by either Section 412 of the IRC or Section 302 of ERISA or the terms of any such Plan.  Neither any Credit Party nor ERISA Affiliate has engaged in a “prohibited transaction,” as defined in Section 406 of ERISA and Section 4975 of the IRC, in connection with any Plan, that would

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subject any Credit Party to a material tax on prohibited transactions imposed by Section 502(i) of ERISA or Section 4975 of the IRC.

(b)                                 Except as set forth in Disclosure Schedule (3.12):  (i) no Title IV Plan has any Unfunded Pension Liability; (ii) no ERISA Event or event described in Section 4062(e) of ERISA with respect to any Title IV Plan has occurred or is reasonably expected to occur; (iii) there are no pending, or to the knowledge of any Credit Party, threatened claims (other than claims for benefits in the normal course), sanctions, actions or lawsuits, asserted or instituted against any Plan or any Person as fiduciary or sponsor of any Plan; (iv) no Credit Party or ERISA Affiliate has incurred or reasonably expects to incur any liability as a result of a complete or partial withdrawal from a Multiemployer Plan; (v) within the last five years no Title IV Plan of any Credit Party or ERISA Affiliate has been terminated, whether or not in a “standard termination” as that term is used in Section 4041(b)(1) of ERISA, nor has any Title IV Plan of any Credit Party or any ERISA Affiliate (determined at any time within the last five years) with Unfunded Pension Liabilities been transferred outside of the “controlled group” (within the meaning of Section 4001(a)(14) of ERISA) of any Credit Party or ERISA Affiliate (determined at such time); (vi) except in the case of any ESOP, Stock of all Credit Parties and their ERISA Affiliates makes up, in the aggregate, no more than 10% of fair market value of the assets of any Plan measured on the basis of fair market value as of the latest valuation date of any Plan; and (vii) no liability under any Title IV Plan has been satisfied with the purchase of a contract from an insurance company that is not rated AAA by the Standard & Poor’s Corporation or an equivalent rating by another nationally recognized rating agency.

(c)                                  Except as set forth in Disclosure Schedule (3.12), with respect to each scheme or arrangement mandated by a government other than the United States of America providing for post-employment benefits (a “Foreign Government Scheme or Arrangement”) and with respect to each employee benefit plan maintained or contributed to by any Credit Party or any Subsidiary of any Credit Party that is not subject to United States law providing for post-employment benefits (a “Foreign Plan”):  (i) all material employer and employee contributions required by law or by the terms of any Foreign Government Scheme or Arrangement or any Foreign Plan have been made, or, if applicable, accrued, in accordance with normal accounting practices;  (ii) the fair market value of the assets of each funded Foreign Plan, the liability of each insurer for any Foreign Plan funded through insurance or the book reserve established for any Foreign Plan, together with any accrued contributions, is sufficient to procure or provide for the accumulated benefit obligations, as of the date hereof, with respect to all current and former participants in such Foreign Plan according to the actuarial assumptions and valuations most recently used to account for such obligations, in accordance with applicable generally accepted accounting principles, and the liability of each Credit Party and each Subsidiary of a Credit Party with respect to a Foreign Plan is reflected in accordance with normal accounting practices on the financial statements of such Credit Party or such Subsidiary, as the case may be; and (iii) each Foreign Plan required to be registered has been registered and has been maintained in good standing with applicable regulatory authorities unless, in each case, the failure to do so would not be reasonably likely to have a Material Adverse Effect.

3.13                           No Litigation.  No action, claim, lawsuit, demand, investigation or proceeding is now pending or, to the knowledge of any Credit Party, threatened against any Credit Party, before any Governmental Authority or before any arbitrator or panel of arbitrators

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(collectively, “Litigation”), that (a) challenges any Credit Party’s right or power to enter into or perform any of its obligations under the Loan Documents to which it is a party, or the validity or enforceability of any Loan Document or any action taken thereunder, (b) except as set forth on Disclosure Schedule (3.13), would prohibit or affect the licensing, approvals or marketing of products subject to regulatory approval and, if so prohibiting or affecting, could reasonably be expected to have a Material Adverse Effect, or (c) has a reasonable risk of being determined adversely to any Credit Party and that, if so determined, could reasonably be expected to have a Material Adverse Effect.  Except as set forth on Disclosure Schedule (3.13), as of the Closing Date there is no Litigation pending or, to any Credit Party’s knowledge, threatened, that seeks damages in excess of $500,000 (or the Equivalent Amount thereof) or injunctive relief against, or alleges criminal misconduct of, any Credit Party.

3.14                           Brokers.  Except for ▇▇▇▇▇▇▇▇▇ Associates, the fees of which have been paid by the Borrowers, no broker or finder brought about the obtaining, making or closing of the Loans or the Related Transactions, and no Credit Party or Affiliate thereof has any obligation to any Person in respect of any finder’s or brokerage fees in connection therewith.

3.15                           Intellectual Property.  As of the Closing Date, each Credit Party owns or has rights to use all Intellectual Property necessary to continue to conduct its business as now or heretofore conducted by it or proposed to be conducted by it in all material respects.  As of the Closing Date, each material Patent registration and application therefor, Trademark registration and application therefor, Copyright registration and application therefor and License owned or licensed by any Credit Party is listed, together with application or registration numbers to the extent available and determinable, as applicable, in Disclosure Schedule (3.15).  To the knowledge of the Credit Parties, each of the Credit Parties conducts its business and affairs without infringement of or interference with any Intellectual Property of any other Person other than any infringement or interference that could not reasonably be expected to have a Material Adverse Effect.  Except as set forth in Disclosure Schedule (3.15), no Credit Party is aware of any infringement claim by any other Person with respect to any Intellectual Property, which infringement could reasonably be expected to have a Material Adverse Effect.

3.16                           Full Disclosure.  No information contained in this Agreement, any of the other Loan Documents or Financial Statements or other written reports from time to time delivered hereunder or any written statement furnished by or on behalf of any Credit Party to Agent or any Lender pursuant to the terms of this Agreement (in each case, other than the Projections), taken together with all other such information and statements, contains or will contain any untrue statement of a material fact or omits or will omit to state a material fact necessary to make the statements contained herein or therein not misleading in light of the circumstances under which they were made or such information was provided.  The Liens granted to Agent, on behalf of itself and Lenders, pursuant to the Collateral Documents will at all times be fully perfected first priority Liens in and to the Collateral described therein, subject, as to priority, only to Permitted Encumbrances.

3.17                           Environmental Matters.

(a)                                  Except as set forth in Disclosure Schedule (3.17), as of the Closing Date: (i) the Real Estate is free of contamination from any Hazardous Material except for such

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contamination that would not adversely impact the value or marketability of such Real Estate and that would not result in Environmental Liabilities that could reasonably be expected to exceed $500,000 (or the Equivalent Amount thereof); (ii) no Credit Party has caused or suffered to occur any Release of Hazardous Materials on, at, in, under, above, to, from or about any of its Real Estate; (iii) the Credit Parties are and have been in compliance with all Environmental Laws, except for such noncompliance that would not result in Environmental Liabilities which could reasonably be expected to exceed $500,000 (or the Equivalent Amount thereof); (iv) the Credit Parties have obtained, and are in compliance with, all Environmental Permits required by Environmental Laws for the operations of their respective businesses as presently conducted or as proposed to be conducted, except where the failure to so obtain or comply with such Environmental Permits would not result in Environmental Liabilities that could reasonably be expected to exceed $500,000 (or the Equivalent Amount thereof), and all such Environmental Permits are valid, uncontested and in good standing; (v) no Credit Party is involved in operations or knows of any facts, circumstances or conditions, including any Releases of Hazardous Materials, that are likely to result in any Environmental Liabilities of such Credit Party which could reasonably be expected to exceed $500,000 (or the Equivalent Amount thereof), and no Credit Party has permitted any current or former tenant or occupant of the Real Estate to engage in any such operations; (vi) there is no Litigation arising under or related to any Environmental Laws, Environmental Permits or Hazardous Material that seeks damages, penalties, fines, costs or expenses in excess of $500,000 (or the Equivalent Amount thereof) or injunctive relief against, or that alleges criminal misconduct by, any Credit Party; (vii) no notice has been received by any Credit Party identifying it as a “potentially responsible party” or requesting information under CERCLA or analogous state statutes, and to the knowledge of the Credit Parties, there are no facts, circumstances or conditions that may result in any Credit Party being identified as a “potentially responsible party” under CERCLA or analogous state statutes; and (viii) the Credit Parties have provided to Agent copies of all existing environmental reports, reviews and audits and all written information pertaining to actual or potential Environmental Liabilities, in each case relating to any Credit Party.

(b)                                 Each Credit Party hereby acknowledges and agrees that Agent (i) is not now, and has not ever been, in control of any of the Real Estate or any Credit Party’s affairs, and (ii) does not have the capacity through the provisions of the Loan Documents or otherwise to influence any Credit Party’s conduct with respect to the ownership, operation or management of any of its Real Estate or compliance with Environmental Laws or Environmental Permits.

3.18                           Insurance.  Disclosure Schedule (3.18) lists all insurance policies of any nature maintained, as of the Closing Date, for current occurrences by each Credit Party.

3.19                           Deposit Accounts.  Disclosure Schedule (3.19) lists all banks and other financial institutions at which any Credit Party maintains deposit or other accounts as of the Closing Date, and such Schedule correctly identifies the name of each depository, the name in which the account is held, a description of the purpose of the account, and the complete account number therefor.

3.20                           Government Contracts.  Except as set forth in Disclosure Schedule (3.20), as of the Closing Date, no Credit Party is a party to any contract or agreement with any

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Governmental Authority and no Credit Party’s Accounts are subject to the Federal Assignment of Claims Act (31 U.S.C. Section 3727) or any similar state or local law.

3.21                           Customer and Trade Relations.  As of the Closing Date, there exists no actual or, to the knowledge of any Credit Party, threatened termination or cancellation of, or any material adverse modification or change in:  (i) the business relationship of any Credit Party with any customer or group of customers whose purchases during the preceding 12 months caused them to be ranked among the ten largest customers of such Credit Party; or (ii) the business relationship of any Credit Party with any supplier material to its operations.

3.22                           [Intentionally Omitted.]

3.23                           Solvency.  Both before and after giving effect to (a) the Loans and Letter of Credit Obligations to be made or incurred on the Closing Date or such other date as Loans and Letter of Credit Obligations requested hereunder are made or incurred, (b) the disbursement of the proceeds of such Loans pursuant to the instructions of the Borrowers; (c) the consummation of the Related Transactions; and (d) the payment and accrual of all transaction costs in connection with the foregoing, the Credit Parties, taken as a group on a consolidated basis, will be Solvent.

3.24                           Acquisition Agreement.  As of the Closing Date, Borrowers have delivered to Agent a complete and correct copy of the Acquisition Agreement (including all schedules, exhibits, amendments, supplements, modifications, assignments and all other documents delivered pursuant thereto or in connection therewith).  No Credit Party and, to the Credit Parties’ knowledge, no other Person party thereto is in default in the performance or compliance with any provisions thereof.  The Acquisition Agreement complies with, and the Acquisition has been consummated (simultaneously with the Loans made on the Closing Date) in accordance with, all applicable laws.  The Acquisition Agreement is in full force and effect as of the Closing Date and has not been terminated, rescinded or withdrawn.  All requisite approvals by Governmental Authorities having jurisdiction over Seller, any Credit Party and other Persons referenced therein with respect to the consummation of the Acquisition have been obtained, and no such approvals impose any conditions to the consummation of the Acquisition or, other than as described in the Acquisition Agreement,  to the conduct by any Credit Party of its business thereafter.  To the best of each Credit Party’s knowledge, none of the Seller’s representations or warranties in the Acquisition Agreement contain any untrue statement of a material fact or omit any fact necessary to make the statements therein not misleading.  Each of the representations and warranties given by each applicable Credit Party in the Acquisition Agreement is true and correct in all material respects, and, notwithstanding anything contained in the Acquisition Agreement to the contrary, such representations and warranties of the Credit Parties are incorporated into this Agreement by this Section 3.24 and shall, solely for purposes of this Agreement and the benefit of Agent and Lenders, survive the consummation of the Acquisition; provided that a breach by any of the Credit Parties of any such representations and warranties so incorporated and as to which a similar representation and warranty is not independently made herein shall not constitute a breach of this Section 3.24 unless such breach causes any such representation and warranty to be materially inaccurate.

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3.25                           Foreign Assets Control Regulations.  Each Credit Party is and will remain in full compliance with the following laws and regulations applicable to it: (a) ensuring that no person who owns a controlling interest in or otherwise controls such Credit Party is or shall be (i) listed on the Specially Designated Nationals and Blocked Person List maintained by the Office of Foreign Assets Control (“OFAC” ), Department of the Treasury, and/or any other similar lists maintained by OFAC pursuant to any authorizing statute, Executive Order or regulation or (ii) a person designated under Section 1(b), (c) or (d) of Executive Order No. 13224 (September 23, 2001), any related enabling legislation or any other similar Executive Orders, and (b) except where the failure to comply individually or in the aggregate could not reasonably be expected to have a Material Adverse Effect, compliance with all applicable Bank Secrecy Act (“BSA”) laws, regulations and government guidance on BSA compliance and on the prevention and detection of money laundering violations.

3.26                           Subordinated Debt.  As of the Closing Date, Borrowers have delivered to Agent a complete and correct copy of the Subordinated Note Documents (including all schedules, exhibits, amendments, supplements, modifications, assignments and all other documents delivered pursuant thereto or in connection therewith).  Innovations, at the time of incurrence thereof, had the corporate power and authority to incur the Indebtedness evidenced by the Subordinated Notes.  The subordination provisions of the Subordinated Notes and the Intercreditor Agreement are enforceable against the holders of the Subordinated Notes by Agent and Lenders, except as enforcement may be limited by bankruptcy, insolvency or other laws affecting creditors’ rights generally.  All Obligations, including the Loans and the Letter of Credit Obligations, constitute senior Indebtedness entitled to the benefits of the subordination provisions contained in the Subordinated Notes and the Intercreditor Agreement.  Borrowers acknowledge that Agent and each Lender are entering into this Agreement and are extending the Commitments in reliance upon the subordination provisions of the Subordinated Notes and the Intercreditor Agreement and this Section 3.26.  The incurrence of the Obligations by the Credit Parties (assuming that the Revolving Loans and the Term Loans are fully extended on the Closing Date) does not violate the Indenture.

3.27                           [Intentionally Omitted.]

3.28.                        Acquisition.

(a)                                  The Acquisition involves only assets comprising a business, or those assets of a business, of the same general type engaged in by Borrowers as of the Closing Date, and which business would not subject Agent or any Lender to regulatory or third party approvals in connection with the exercise of its rights and remedies under this Agreement or any other Loan Documents other than approvals applicable to the exercise of such rights and remedies with respect to Borrowers prior to the Acquisition;

(b)                                 The Acquisition has been approved by Seller’s board of directors or otherwise duly authorized by Seller; and

(c)                                  Except as set forth on Disclosure Schedule (3.28(c)) and except for the Loans hereunder, no additional Indebtedness, Guaranteed Indebtedness, contingent obligations or

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other liabilities have been incurred, assumed or otherwise been required to be reflected on a consolidated balance sheet of Borrowers and Seller after giving effect to the Acquisition.

4.                                      FINANCIAL STATEMENTS AND INFORMATION

4.1                                 Reports and Notices.  Each Credit Party executing this Agreement hereby agrees that from and after the Closing Date and until the Termination Date, it shall deliver to Agent or to Agent and Lenders, as required, the Financial Statements, notices, Projections and other information at the times, to the Persons and in the manner set forth in Annex E.

4.2                                 Communication with Accountants.  Each Credit Party executing this Agreement authorizes (a) Agent and each Co-Syndication Agent, twice in any twelve (12) month period or more frequently with the consent of Borrower Representative, which consent shall not be unreasonably withheld, and (b) so long as an Event of Default has occurred and is continuing, Agent and each Lender, to communicate directly with its independent certified public accountants, including BDO ▇▇▇▇▇▇▇, LLP, and authorizes and, at Agent’s request, shall instruct those accountants and advisors to disclose and make available to Agent and each Lender any and all Financial Statements and other supporting financial documents, schedules and information relating to any Credit Party (including copies of any issued management letters) with respect to the business, financial condition and other affairs of any Credit Party.

5.                                      AFFIRMATIVE COVENANTS

Each Credit Party executing this Credit Agreement jointly and severally agrees as to all Credit Parties that from and after the date hereof and until the Termination Date:

5.1                                 Maintenance of Existence and Conduct of Business.  Except as permitted under Section 6.1, each Credit Party shall:  (a) do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence and its material rights and franchises; (b) continue to conduct its business substantially as now conducted or as otherwise permitted hereunder; (c) at all times maintain, preserve and protect all of its assets and properties used or useful in the conduct of its business, and keep the same in good repair, working order and condition in all material respects (taking into consideration ordinary wear and tear) and from time to time make, or cause to be made, all necessary or appropriate repairs, replacements and improvements thereto consistent with industry practices, except where the failure to comply could not reasonably be expected to have a Material Adverse Effect; and (d) transact business only in such corporate and trade names as are set forth in Disclosure Schedule (5.1).

5.2                                 Payment of Charges.

(a)                                  Subject to Section 5.2(b), each Credit Party shall pay and discharge or cause to be paid and discharged promptly all Charges payable by it, including (i) Charges imposed upon it, its income and profits, or any of its property (real, personal or mixed) and all Charges with respect to tax, social security and unemployment withholding with respect to its employees, (ii) lawful claims for labor, materials, supplies and services or otherwise, and (iii) all storage or rental charges payable to warehousemen or bailees, in each case, before any thereof shall become past due.

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(b)                                 Each Credit Party may in good faith contest, by appropriate proceedings, the validity or amount of any Charges, Taxes or claims described in Section 5.2(a); provided, that (i) adequate reserves with respect to such contest are maintained on the books of such Credit Party, in accordance with GAAP; (ii) no Lien shall be imposed to secure payment of such Charges (other than payments to warehousemen and/or bailees) that is superior to any of the Liens securing the Obligations or the Eligible Swap Obligations and such contest is maintained and prosecuted continuously and with diligence and operates to suspend collection or enforcement of such Charges; (iii) none of the Collateral becomes subject to forfeiture or loss as a result of such contest; (iv) such Credit Party shall promptly pay or discharge such contested Charges, Taxes or claims and all additional charges, interest, penalties and expenses, if any, and shall deliver to Agent, at Agent’s request, evidence reasonably acceptable to Agent of such compliance, payment or discharge, if such contest is terminated or discontinued adversely to such Credit Party or the conditions set forth in this Section 5.2(b) are no longer met; and (v) Agent has not advised Borrowers in writing that Agent reasonably believes that nonpayment or nondischarge thereof could have or result in a Material Adverse Effect.

5.3                                 Books and Records.  Each Credit Party shall keep adequate books and records with respect to its business activities in which proper entries, reflecting all financial transactions, are made in accordance with GAAP and on a basis consistent with the Financial Statements attached as Disclosure Schedule (3.4(a)).

5.4                                 Insurance; Damage to or Destruction of Collateral.

(a)                                  The Credit Parties shall, at their sole cost and expense, maintain the policies of insurance described on Disclosure Schedule (3.18) as in effect on the date hereof or otherwise in form and amounts and with insurers reasonably acceptable to Agent.  Such policies of insurance (or the loss payable and additional insured endorsements delivered to Agent) shall contain provisions pursuant to which the insurer agrees to provide 30 days prior written notice to Agent in the event of any non-renewal, cancellation or amendment of any such insurance policy.  If any Credit Party at any time or times hereafter shall fail to obtain or maintain any of the policies of insurance required above, or to pay all premiums relating thereto, Agent may at any time or times thereafter obtain and maintain such policies of insurance and pay such premiums and take any other action with respect thereto that Agent deems advisable.  Agent shall have no obligation to obtain insurance for any Credit Party or pay any premiums therefor.  By doing so, Agent shall not be deemed to have waived any Default or Event of Default arising from any Credit Party’s failure to maintain such insurance or pay any premiums therefor.  All sums so disbursed, including reasonable attorneys’ fees, court costs and other charges related thereto, shall be payable on demand by Borrowers to Agent and shall be additional Obligations hereunder secured by the Collateral.

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

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report of a reputable insurance broker, reasonably satisfactory to Agent, with respect to its insurance policies.

(c)                                  Each Credit Party shall deliver to Agent, in form and substance reasonably satisfactory to Agent, endorsements to (i) all “All Risk” and business interruption insurance naming Agent, on behalf of itself and Lenders, as loss payee, and (ii) all general liability and other liability policies naming Agent, on behalf of itself and Lenders, as additional insured.  Each Credit Party irrevocably makes, constitutes and appoints Agent (and all officers, employees or agents designated by Agent), so long as any Default or Event of Default has occurred and is continuing or the anticipated insurance proceeds exceed $2,000,000 (or the Equivalent Amount thereof), as such Credit Party’s true and lawful agent and attorney-in-fact for the purpose of making, settling and adjusting claims under such “All Risk” policies of insurance, endorsing the name of such Credit Party on any check or other item of payment for the proceeds of such “All Risk” policies of insurance and for making all determinations and decisions with respect to such “All Risk” policies of insurance.  Agent shall have no duty to exercise any rights or powers granted to it pursuant to the foregoing power-of-attorney.  Borrower Representative shall promptly notify Agent of any loss, damage, or destruction to the Collateral in the amount of $2,000,000 (or the Equivalent Amount thereof) or more, whether or not covered by insurance.  After deducting from such proceeds the expenses, if any, incurred by Agent in the collection or handling thereof, Agent may, at its option, either apply such proceeds to the reduction of the Obligations in accordance with Section 1.3(c), or permit or require the applicable Credit Party to use such money, or any part thereof, to replace, repair, restore or rebuild the Collateral in a diligent and expeditious manner with materials and workmanship of substantially the same quality as existed before the loss, damage or destruction.  Notwithstanding the foregoing, if the casualty giving rise to such insurance proceeds could not reasonably be expected to have a Material Adverse Effect and such insurance proceeds do not exceed $2,000,000 (or the Equivalent Amount thereof) in the aggregate, Agent shall permit the applicable Credit Party to replace, restore, repair or rebuild the property; provided that if such Credit Party shall not have completed or entered into binding agreements to complete such replacement, restoration, repair or rebuilding within 180 days of such casualty, Agent may apply such insurance proceeds to the Obligations in accordance with Section 1.3(c).  All insurance proceeds that are to be made available to US Borrower to replace, repair, restore or rebuild the Collateral shall be applied by Agent to reduce the outstanding principal balance of the US Revolving Loan of US Borrower (which application shall not result in a permanent reduction of the US Revolving Loan Commitment).  All insurance proceeds that are to be made available to European Borrower to replace, repair, restore or rebuild the Collateral shall be applied by Agent to reduce the outstanding principal balance of the European Revolving Loan of European Borrower (which application shall not result in a permanent reduction of the European Revolving Loan Commitment).  All insurance proceeds made available to any Credit Party (other than Borrowers) to replace, repair, restore or rebuild Collateral shall be deposited in a cash collateral account.  Thereafter, such funds shall be made available to such Credit Party to provide funds to replace, repair, restore or rebuild the Collateral as follows:  (x) European Borrower shall request a European Revolving Credit Advance or a release from the cash collateral account be made to such Credit Party in the amount requested to be released and US Borrower shall request a US Revolving Credit Advance or a release from the cash collateral account to be made to such Credit Party in the amount requested to be so released; and (y) so long as the conditions set forth in Section 2.2 have been met, Revolving Lenders shall make such US Revolving Credit Advance

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or such European Revolving Credit Advance, as the case may be, or Agent shall release funds from the cash collateral account upon such request.  To the extent not used to replace, repair, restore or rebuild the Collateral in accordance with this Section 5.4, such insurance proceeds shall be applied in accordance with Section 1.3(c).

5.5                                 Compliance with Laws.  Each Credit Party shall comply with all federal, state, local and foreign laws and regulations applicable to it, including those relating to HIPAA and labor matters, those affecting the licensing, labeling, marketing and distribution of products, including those related to the FDA (and the equivalent Governmental Authority of each jurisdiction in which any Credit Party operates, conducts business or distributes products) and Environmental Laws and Environmental Permits, except to the extent that the failure to comply, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

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

5.7                                 Intellectual Property.  Each Credit Party will conduct its business and affairs (a) without intentional infringement of or intentional interference with any Patents or trade secrets of any other Person in any material respect and (b) without infringement of or interference with any Intellectual Property (other than Patents and trade secrets) of any other Person in any material respect, provided that no Credit Party shall be deemed to have violated the covenant set forth in clause (b) if, prior to taking action which is later judged by a court of competent jurisdiction to have infringed or interfered with any such Intellectual Property, such Credit Party shall have (i) obtained an opinion of reputable intellectual property counsel which (A) provides that such action will not infringe or interfere with such Intellectual Property and (B) is in such form which would reasonably entitle such Credit Party to rely on such opinion, (ii) notified Agent of its intent to take such action and (iii) within ten (10) days of Agent’s request, delivered a copy of such opinion to Agent.

5.8                                 Environmental Matters.  Each Credit Party shall and shall cause each Person within its control to: (a) conduct its operations and keep and maintain its Real Estate in compliance with all Environmental Laws and Environmental Permits other than noncompliance that could not reasonably be expected to have a Material Adverse Effect; (b) implement any and

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all investigation, remediation, removal and response actions that are appropriate or necessary to maintain the value and marketability of the Real Estate or to otherwise comply in all material respects with Environmental Laws and Environmental Permits pertaining to the presence, generation, treatment, storage, use, disposal, transportation or Release of any Hazardous Material on, at, in, under, above, to, from or about any of its Real Estate; (c) notify Agent promptly after such Credit Party becomes aware of any violation of Environmental Laws or Environmental Permits or any Release on, at, in, under, above, to, from or about any Real Estate that is reasonably likely to result in Environmental Liabilities in excess of $500,000 (or the Equivalent Amount thereof); and (d) promptly forward to Agent a copy of any order, notice, request for information or any communication or report received by such Credit Party in connection with any such violation or Release or any other matter relating to any Environmental Laws or Environmental Permits that could reasonably be expected to result in Environmental Liabilities in excess of $500,000 (or the Equivalent Amount thereof), in each case whether or not the Environmental Protection Agency or any Governmental Authority has taken or threatened any action in connection with any such violation, Release or other matter.  If Agent at any time has a reasonable basis to believe that there may be a violation of any Environmental Laws or Environmental Permits by any Credit Party or any Environmental Liability arising thereunder, or a Release of Hazardous Materials on, at, in, under, above, to, from or about any of its Real Estate, that, in each case, could reasonably be expected to have a Material Adverse Effect, then each Credit Party shall, upon Agent’s written request (i) cause the performance of such environmental audits including subsurface sampling of soil and groundwater, and preparation of such environmental reports, at Borrowers’ expense, as Agent may from time to time reasonably request, which shall be conducted by reputable environmental consulting firms reasonably acceptable to Agent and shall be in form and substance reasonably acceptable to Agent, and (ii) permit Agent or its representatives to have access to all Real Estate for the purpose of conducting such environmental audits and testing as Agent deems appropriate, including subsurface sampling of soil and groundwater.  Borrowers shall reimburse Agent for the costs of such audits and tests and the same will constitute a part of the Obligations secured hereunder.

5.9                                 Landlords’ Agreements, Mortgagee Agreements, Bailee Letters and Real Estate Purchases.  Subject to the penultimate sentence of Section 6.15 hereof, except as otherwise agreed to by Agent in its sole discretion, each Credit Party shall obtain a landlord’s agreement, mortgagee agreement or bailee letter, as applicable, from the lessor of each leased property, mortgagee of owned property or bailee with respect to any warehouse, processor or converter facility or other location where Collateral is stored or located, which agreement or letter shall contain a waiver or subordination of all Liens or claims that the landlord, mortgagee or bailee may assert against the Collateral at that location, and shall otherwise be reasonably be satisfactory in form and substance to Agent.  Each Credit Party shall timely and in all material respects pay and perform its obligations under all leases and other agreements with respect to each leased location or public warehouse where any Collateral is or may be located except as otherwise consented to by Agent.  If any Credit Party proposes to acquire a fee ownership interest in Real Estate after the Closing Date, it shall, if required by Agent, concurrently provide to Agent a mortgage or deed of trust granting Agent a first priority Lien on such Real Estate, together with environmental audits, mortgage title insurance commitment, real property survey, local counsel opinions(s), and, if required by Agent, supplemental casualty insurance and flood insurance, and such other documents, instruments or agreements reasonably requested by Agent, in each case, in form and substance reasonably satisfactory to Agent.

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5.10                           ERISA.  Each Credit Party shall comply in all material respects with the applicable provisions of ERISA and the Code and any foreign laws and regulations relating to any Foreign Plan or Foreign Government Scheme or Arrangement, except to the extent such failure(s) to comply, individually and in the aggregate, could not reasonably be expected to have a Material Adverse Affect.  Each Credit Party shall furnish to the Agent (a) written notice as soon as possible, and in any event within 10 Business Days after any Credit Party knows or has reason to know, of: (i) a material increase in the benefits of any existing Plan, the establishment of any new Pension Plan, or the commencement of contributions to any Multiemployer Plan; (ii) an ERISA Event,  together with a statement of an officer setting forth the details of such ERISA Event and the action(s) which the Credit Parties propose to take with respect thereto; (iii) the imposition of a Lien under Section 412 of the IRC or Section 302 or 4058 of ERISA; (iv) the imposition of a Lien with respect to any Foreign Plan; and (b) written notice on an annual basis on each anniversary of the Closing Date until the Termination Date, of the circumstances where the fair market value of the assets of a funded Foreign Plan, the liability of each insurer for such Foreign Plan funded through insurance or the book reserve established for such Foreign Plan, together with any accrued contributions, are insufficient to satisfy all the accumulated benefit obligations with respect to all current and former participants in such Foreign Plan according to the actuarial assumptions and valuations most recently used to account for such obligations in accordance with generally accepted accounting principles.  At Agent’s request, the Credit Parties shall furnish to the Agent copies of each annual report (From 5500 series) filed for each Plan.  The Credit Parties shall furnish to the Agent, within 30 days after receipt by any Credit Party or ERISA Affiliate,  copies of each actuarial report for each Title IV Plan or Multiemployer Plan and each annual report for any Multiemployer Plan.

5.11                           European Credit Parties.  If at any time any European Credit Party that is treated for purposes of Section 956 of the IRC as a “controlled foreign corporation, thereafter fails to be treated as a controlled foreign corporation, then at the request of the Agent or the Requisite Lenders, Innovations shall cause each such European Credit Party to execute and deliver to the Agent (a) a Guaranty in form and substance reasonably satisfactory to the Agent, guarantying the Obligations of US Borrower hereunder and under the other Loan Documents, and (b) Collateral Documents in form and substance reasonably satisfactory to Agent, granting to Agent a Lien over such European Credit Party’s properties and assets, in each case, to the extent such European Credit Party has, or is required to have, entered into a Guaranty or a Collateral Document with respect to the Obligations of the European Credit Parties, and to the extent such Guaranty or Collateral Document is not prohibited by the law of the jurisdiction of formation of such European Credit Party, and shall cause the pledge of all Stock of such European Credit Party to Agent to secure all of the Obligations to the extent only a portion of such Stock was previously pledged to Agent to secure the Obligations of US Credit Parties.  If Innovations shall at any time file consolidated US federal income tax returns which include its and all of its Subsidiaries’ worldwide income on a world-wide basis, then at the request of the Agent or the Requisite Lenders, Innovations shall cause each European Credit Party to execute and deliver to the Agent (a) a Guaranty in form and substance reasonably satisfactory to the Agent, guarantying the Obligations of US Borrower hereunder and under the other Loan Documents, and (b) Collateral Documents in form and substance reasonably satisfactory to Agent, granting to Agent a Lien over such European Credit Party’s properties and assets, in each case, to the extent such European Credit Party has, or is required to have, entered into a Guaranty or a Collateral Document with respect to the Obligations of the European Credit Parties, and to the extent such

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Guaranty or Collateral Document is not prohibited by the law of the jurisdiction of formation of such European Credit Party, and shall cause the pledge of all Stock of such European Credit Party to Agent to secure all of the Obligations to the extent only a portion of such Stock was previously pledged to Agent to secure the Obligations of US Credit Parties.  The security interests required to be granted pursuant to this Section 5.11 shall be valid and enforceable perfected security interests prior to the rights of all third Persons and subject to no other Liens except Permitted Encumbrances, except as enforcement may be limited by bankruptcy, insolvency and other laws affecting creditors’ rights generally.  The Collateral Documents and other instruments related thereto shall be duly recorded or filed in such manner and in such places and at such times, and such other actions shall be taken, as are required by law to establish, perfect, preserve and protect the Liens, in favor of Agent, required to be granted pursuant to such documents and all taxes, fees and other charges payable in connection therewith shall be paid in full by European Credit Parties.  At the time of the execution and delivery of the additional documents, European Credit Parties shall cause to be delivered to Agent such opinions of counsel, mortgage policies, title surveys, real estate appraisals, certificates of title, stock certificates and other related documents as may be reasonably requested by Agent to assure themselves that this Section 5.11 has been complied with.

5.12                           [Intentionally Omitted.]

5.13                           Post-Closing Covenant.

(a)                                  Within 60 days following the Closing Date, Borrowers shall deliver a schedule to Agent listing each material Patent registration and application therefor, Trademark registration and application therefor, Copyright registration and application therefor and License owned or licensed by any Credit Party, together with application or registration numbers to the extent available and determinable, as applicable.  Such schedule shall be certified by an officer of Innovations and shall contain a representation that the Person (to the extent such Person is Innovations or any of its Subsidiaries) identified as the owner or assignee of each material Patent, Trademark and Copyright set forth on such schedule owns each such Patent, Trademark or Copyright, as applicable.  Promptly following delivery of such schedule, the Credit Parties shall provide Agent with such information as is necessary to enable Agent to take action to obtain a fully perfected first priority security interest, in accordance with, and subject to limitations under, applicable law, in all of the intellectual property of the Credit Parties to the extent such intellectual property is registered in the United States, the United Kingdom or Switzerland (to the extent such perfected first priority security interest is not in effect on the date hereof or prior to delivery of such schedule).   In addition, following delivery of such schedule, the Credit Parties shall promptly take all actions as may be reasonably requested by Agent in order for Agent to perfect its security interest, in accordance with, and subject to limitations under, applicable law, in the Patents, Trademarks and Copyrights owned by the Credit Parties to the extent such intellectual property is registered in Canada, Japan, Germany, Italy or France.

(b)                                 On or before September 28, 2005, Innovations and Borrowers shall deliver to Agent and Lenders, (i) a restated audited consolidated balance sheet of Innovations at December 31, 2004 and the related statements of income and cash flows of Innovations for the Fiscal Year then ended, certified without qualification by BDO ▇▇▇▇▇▇▇, LLP and (ii) a restated unaudited balance sheet at March 31, 2005 and the related statement of income and cash flows of

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Innovations for the Fiscal Quarter then ended, each of which shall have been reviewed by BDO ▇▇▇▇▇▇▇, LLP as provided in Statement on Auditing Standards No. 71 ((i) and (ii) are collectively referred to herein as the “Restated Financial Statements”).  The Restated Financial Statements shall be accompanied by (i) a statement prepared in reasonable detail showing the calculation used in determining the calculation of EBITDA for the Reporting Credit Parties on a consolidated basis for, to the extent delivered prior to August 15, 2005,  the 12 month period ended March 31, 2005 and, to the extent delivered on or after August15, 2005,  the 12 month period ended June 30, 2005, and (ii) the certification of the Chief Financial Officer, Treasurer or Vice President, Finance, of Innovations (on behalf of Innovations and not in such Person’s individual capacity) that the Restated Financial Statements present fairly in accordance with GAAP (subject to normal year-end adjustments in the case of the March 31, 2005 Financial Statements) the financial position, results of operations and statement of cash flows of the Credit Parties on a consolidated and consolidating basis (in the case of consolidating Financial Statements, subject to intercompany eliminations and other consolidating adjustments), as at the end of each such period and for the period then ended.

(c)                                  Within 30 days following the Closing Date, Borrowers shall deliver to Agent fully executed copies of each of the Related Transaction Documents (to the extent not previously required to be delivered).

5.14                           IMC.  If at any time the fair market value or book value of IMC’s assets exceeds $65,000,000 Canadian Dollars, IMC shall promptly execute an amended and restated or additional Deed of Hypothec on the Universality of Movable Property increasing the sum secured by such Deed to an amount satisfactory to Agent.

5.15                           Covenants Relating to Foreign Subsidiaries.

(a)                                  Promptly upon Agent’s request, Borrowers shall take all actions necessary to cause Inverness Medical Australia Pty Ltd to join this Agreement as a European Credit Party and, in connection therewith, shall cause Inverness Medical Australia Pty Ltd to take such actions and execute and deliver such documents as Agent may reasonably request; provided, that, the Credit Parties shall not be liable for or required to reimburse Agent or any Lender for any stamp duty or other taxes that may be required to be paid by Agent or Lenders in connection with such request by Agent (unless such request is made in connection with (i) any request by the Credit Parties for consent to take any action with respect to Inverness Medical Australia Pty Ltd that would, without the prior consent of Agent and Requisite Lenders, result in a breach of Sections 6.2, 6.3, 6.14 or 11.19 hereof, or (ii) any action by any of the Credit Parties or any Excluded Subsidiary in violation of Sections 6.2, 6.3, 6.14 or 11.19) to the extent such stamp duty or other tax results solely from the guarantee by Inverness Medical Australia Pty Ltd of the Obligations in excess of the value of the assets of Inverness Medical Australia Pty Ltd at such time.

(b)                                 Inverness Medical Investments shall at all times own and control at least 50.1% of the economic and voting rights of Inverness Medical (Shanghai) Co., Ltd., have the right to appoint the majority of the directors to the board of directors of Inverness Medical (Shanghai) Co., Ltd. and possess, directly or indirectly, the power to direct the management of, policies of and requirements for capital contributions to Inverness Medical (Shanghai) Co., Ltd.

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No capital calls or other request for contributions of any type which would cause the amount of all funds or assets contributed to the capital of, or loaned or otherwise made available to Inverness Medical (Shanghai) Co., Ltd. to exceed $4,000,000 in the aggregate since the formation of Inverness Medical (Shanghai) Co., Ltd. shall occur under that certain Joint Venture Contract dated as of November 5, 2004 between Inverness Medical Investments and Shanghai Biochip Co., Ltd., any organizational documents of Inverness Medical (Shanghai) Co., Ltd. or any contract, agreement or requirement of law.  Upon the request of Agent, Inverness Medical Investments shall promptly provide Agent with a copy of the financial statements it receives pursuant to Section 14.1.2 of that certain Joint Venture Contract dated as of November 5, 2004 between Inverness Medical Investments and Shanghai Biochip Co., Ltd.

5.16                           Further Assurances.  Each Credit Party executing this Agreement agrees that it shall and shall cause each other Credit Party to, at such Credit Party’s expense and upon request of Agent, duly execute and deliver, or cause to be duly executed and delivered, to Agent such further instruments and do and cause to be done such further acts as may be necessary or proper in the reasonable opinion of Agent to carry out more effectively the provisions and purposes of this Agreement or any other Loan Document.

5.17                           Restated Financial Statements.  (a) If the Restated Financial Statements are delivered to Agent and Lenders prior to August 15, 2005, the Reporting Credit Parties on a consolidated basis shall have EBITDA of not less than $28,000,000 for the 12 month period ended March 31, 2005, calculated based on such Restated Financial Statements.

(b)                                 If the Restated Financial Statements are delivered to Agent and Lenders on or after August 15, 2005, the Reporting Credit Parties on a consolidated basis shall have EBITDA of not less than $30,000,000 for the 12 month period ended June 30, 2005, calculated based on such Restated Financial Statements and the other Financial Statements for any applicable period after March 31, 2005 delivered hereunder in accordance with the terms hereof.

6.                                      NEGATIVE COVENANTS

Each Credit Party executing this Agreement jointly and severally agrees as to all Credit Parties that from and after the date hereof until the Termination Date:

6.1                                 Mergers, Subsidiaries, Etc.  No Credit Party shall directly or indirectly, by operation of law or otherwise, (a) merge with, consolidate with, acquire all or substantially all of the assets or Stock of, or otherwise combine with or acquire, any Person, except that (i) any wholly-owned Subsidiary of US Borrower may merge with US Borrower so long as US Borrower is the survivor thereof, (ii) any wholly-owned Subsidiary of European Borrower may merge with European Borrower so long as European Borrower is the survivor thereof, (iii) any US Credit Party (other than Innovations and US Borrower) may merge with any other US Credit Party (other than Innovations and US Borrower), (iv) any European Credit Party (other than European Borrower) may merge with any other European Credit Party (other than European Borrower), and (v) Innovations, Swissco and Inverness Japan may consummate the Acquisition in accordance with the Acquisition Agreement or (b) except for the formation of any Subsidiary or any acquisition of all of the Stock of any Person (an “Acquisition Subsidiary”) solely for the purpose of consummating an acquisition which is reasonably expected to be a Permitted

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Acquisition or for which the Credit Parties are seeking approval of the Requisite Lenders and provided that (A) prior to the consummation of such acquisition (I) such Acquisition Subsidiary shall constitute an Excluded US Subsidiary or Excluded European Subsidiary, as applicable (and, after consummation of such acquisition, shall constitute a US Credit Party or European Credit Party, as applicable), (II) such Acquisition Subsidiary shall hold no assets (other than the greater of $10,000 and any minimum capital required by law), (III) such Acquisition Subsidiary shall not conduct any business and (IV) no Credit Party shall transfer any funds or other assets to such Acquisition Subsidiary other than capital contributions permitted under the foregoing clause (II) and as necessary to consummate a Permitted Acquisition, and (B) such Acquisition Subsidiary shall be dissolved and the assets of such Acquisition Subsidiary shall be distributed to a Credit Party if (I) such Permitted Acquisition is not consummated within 120 days following the formation or acquisition of such Acquisition Subsidiary, or (II) the Credit Parties do not receive the consent of Requisite Lenders to such acquisition within 120 days following the formation or acquisition of such Acquisition Subsidiary, form any Subsidiary or acquire all or substantially all of the assets or Stock of any Person without the prior written consent of Requisite Lenders.  Notwithstanding the foregoing, any Credit Party may acquire all or substantially all of the assets or Stock of any Person (or in the case of an asset acquisition of substantially all of the assets of a business line or division of a Person) (the “Target”) (in each case, a “Permitted Acquisition”), subject to the satisfaction of each of the following conditions:

(i)                                     Agent shall receive at least ten (10) Business Days prior written notice of such proposed Permitted Acquisition, which notice shall include a reasonably detailed description of such proposed Permitted Acquisition (Agent hereby agreeing to provide copies of such notice to the Lenders promptly following receipt thereof);

(ii)                                  such Permitted Acquisition shall only involve assets comprising a business, or those assets of a business, of the type engaged in by Borrowers as of the Closing Date, and which business would not subject Agent or any Lender to regulatory or third party approvals in connection with the exercise of its rights and remedies under this Agreement or any other Loan Documents other than approvals applicable to the exercise of such rights and remedies with respect to Borrowers prior to such Permitted Acquisition;

(iii)                               such Permitted Acquisition shall be consensual and shall have been approved by the Target’s board of directors or otherwise duly authorized by the Target;

(iv)                              no additional Indebtedness, Guaranteed Indebtedness, contingent obligations or other liabilities shall be incurred, assumed or otherwise be reflected on a consolidated balance sheet of the Reporting Credit Parties and Target after giving effect to such Permitted Acquisition, except ordinary course trade payables, accrued expenses and Indebtedness of the Target to the extent no Default or Event of Default has occurred and is continuing or would result after giving effect to such Permitted Acquisition;

(v)                                 the consideration payable in connection with all Permitted Acquisitions, including all transaction costs, ordinary course trade payables, accrued expenses and Indebtedness incurred, assumed or otherwise to be reflected on a consolidated balance sheet of Reporting Credit Parties and Target after giving effect to such Permitted Acquisition shall consist solely of (A) common stock, par value $.001 per share of Innovations containing

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substantially the same rights and preferences as in effect on the date hereof and/or (B) cash not to exceed $20,000,000 in the aggregate for all Permitted Acquisitions in any Fiscal Year;

(vi)                              the Target shall have positive EBITDA for the trailing twelve-month period preceding the date of the Permitted Acquisition, as determined based upon the Target’s financial statements for its most recently completed fiscal year and its most recent interim financial period completed within 60 days prior to the date of consummation of such Permitted Acquisition; provided, that if the consideration payable in connection with such Permitted Acquisition consists solely of common stock, par value $.001 per share of Innovations containing substantially the same rights and preferences as in effect on the date hereof, this condition need not be satisfied;

(vii)                           the business and assets acquired in such Permitted Acquisition shall be free and clear of all Liens (other than Permitted Encumbrances);

(viii)                        subject to clause (ix) below, Agent will be granted a first priority perfected Lien (subject to Permitted Encumbrances) in all assets acquired pursuant thereto (other than with respect to intellectual property that is not material in which case such Lien shall be perfected within 60 days following the closing of such Permitted Acquisition) or in the assets and Stock of the Target and any Acquisition Subsidiary (other than with respect to intellectual property that is not material in which case such Lien shall be perfected within 60 days following the closing of such Permitted Acquisition), and each Credit Party, any Acquisition Subsidiary and the Target shall have executed such documents and taken such actions as may be required by Agent in connection therewith;

(ix)                                within 60 days following the closing of any Permitted Acquisition in which the Target or any Acquisition Subsidiary is an entity formed outside of the United States, Agent will be granted a first priority Lien (subject to Permitted Encumbrances) in all assets acquired pursuant thereto or in the assets and Stock of the Target and any Acquisition Subsidiary (provided, that, in the case of Stock held by a Domestic Subsidiary, Agent shall be granted a Lien in such Stock under, and subject to any applicable limitations set forth in, the US Pledge Agreement concurrently with the closing of such Permitted Acquisition), and each Credit Party, any Acquisition Subsidiary and the Target shall have executed such documents and taken such actions as may be required by Agent in connection therewith; provided, that, prior to the closing of such Permitted Acquisition, (A) the Borrowers shall have provided Agent with reasonably detailed written information as to the procedure required under applicable law for Agent to be granted a first priority Lien in all such assets along with confirmation reasonably acceptable to Agent from Borrowers’ local counsel from such jurisdiction that such procedure is correct; (B) Agent shall have consented in writing to the delay in providing such Lien; and (C) both before and immediately after giving effect to such Permitted Acquisition, the European Credit Parties shall have Accounts, Inventory, Real Property, plant, Equipment and available cash (not subject to any Lien other than Permitted Encumbrances (except for Permitted Encumbrances of the type described in clauses (j) and (k) of the definition thereof)) with a net book value of not less than $50,000,000;

(x)                                   notwithstanding the foregoing clause (ix), the Agent may, in its sole discretion, elect to waive such condition with respect to all or a portion of the assets of the

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Target or any Acquisition Subsidiary to the extent that (A) the grant of such first priority perfected Lien, the execution of any such documents or the performance of any such actions is prohibited by the law of the jurisdiction of formation of the applicable Credit Party, any Acquisition Subsidiary or the Target, (B) the Agent determines that, taking into consideration the costs associated therewith in relation to the value or importance of such first priority perfected Lien, it is not in the best interest of both the Lenders and the Credit Parties to grant such Lien, or (3) the value of the assets or Stock with respect to any Permitted Acquisition which shall be the subject of any waiver under this Section 6.1(x) is, in the aggregate, less than $10,000,000 (or the Equivalent Amount thereof); provided, that Agent may, at any time and from time to time elect, in its sole discretion, to enforce the conditions that had been previously waived under this Section 6.1(x);

(xi)                                within 30 days following the closing of any Permitted Acquisition, or, if earlier, the date upon which any Credit Party files a current report on Form 8-K with the Securities and Exchange Commission under the Exchange Act which discloses such Permitted Acquisition and includes the financial information provided for below, Borrowers shall deliver to Agent, in form and substance reasonably satisfactory to Agent (Agent hereby agreeing to provide copies of such documents to the Lenders promptly following receipt thereof), (A) if such Permitted Acquisition constitutes a merger or consolidation with, or acquisition of all of the Stock of, any Person, (x) an audited (or, if not available, unaudited) balance sheet and income statement and, if available, cash flow statement of the Target for the most recently completed fiscal year of the Target, and (y) a balance sheet as of the end of the most recently completed fiscal quarter of the Target and an income statement and, if available, cash flow statement, in each case, for the elapsed portion of the fiscal year of the Target to date ending on the last day of the most recently completed fiscal quarter of the Target, in each case, which shall be complete and shall fairly present in all material respects the assets, liabilities, financial condition and results of operations of the Target in accordance with GAAP consistently applied, and (B) if such Permitted Acquisition constitutes the acquisition of all or substantially all of the assets of any Person and the financial statements described in clause (A) above are not available, a schedule setting forth the assets acquired and the book value thereof and, if available, an income statement reflecting the performance of such assets for the most recently ended Fiscal Year;

(xii)                             both before and immediately after giving effect to such Permitted Acquisition, the Credit Parties shall have aggregate US Revolving Borrowing Availability, European Revolving Borrowing Availability and available cash (not subject to any Lien other than Permitted Encumbrances (except for Permitted Encumbrances of the type described in clauses (j) and (k) of the definition thereof)) of at least $10 million (or the Equivalent Amount thereof);

(xiii)                          at or prior to the closing of any Permitted Acquisition, the Borrowers shall deliver to Agent a certificate of the Chief Financial Officer, Treasurer or Vice President, Finance, of Innovations to the effect that: (A) each Credit Party (after taking into consideration all rights of contribution and indemnity such Credit Party has against Innovations and each other Subsidiary of Innovations) is Solvent immediately prior to and will be Solvent upon the consummation of the Permitted Acquisition; (B) each of the applicable conditions set forth in this Section 6.1 have been satisfied; (C) on a pro forma basis, no Event of Default shall have occurred and be continuing or would result after giving effect to such Permitted Acquisition

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and the Reporting Credit Parties would have been in compliance with the financial covenants set forth in Annex F for the four quarter period reflected in the Compliance Certificate most recently delivered to Agent pursuant to Annex E prior to the consummation of such Permitted Acquisition (giving effect to such Permitted Acquisition and all Loans funded in connection therewith as if made on the first day of such period); and (D) the Reporting Credit Parties have completed their due diligence investigation with respect to the Target and such Permitted Acquisition, which investigation was conducted in a manner similar to that which would have been conducted by a prudent purchaser of a comparable business and the results of which investigation were delivered to Agent and Lenders;

(xiv)                         on or prior to the date of such Permitted Acquisition, Agent shall have received, in form and substance reasonably satisfactory to Agent, copies of the executed acquisition agreement and related agreements and instruments, and all opinions, certificates, lien search results and other documents reasonably requested by Agent; and

(xv)                            at the time of such Permitted Acquisition and after giving effect thereto, no Default or Event of Default has occurred and is continuing.

6.2                                 Investments; Loans and Advances.  Except as otherwise expressly permitted by this Section 6, no Credit Party shall make or permit to exist any investment in, or make, accrue or permit to exist loans or advances of money to, any Person, through the direct or indirect lending of money, holding of securities or otherwise, except that:  (a) Borrowers may hold investments comprised of notes payable, or stock or other securities issued by Account Debtors to any Credit Party pursuant to negotiated agreements with respect to settlement of such Account Debtor’s Accounts in the ordinary course of business, so long as the aggregate amount of such Accounts so settled by Borrowers does not exceed $500,000 (or the Equivalent Amount thereof); (b) each Credit Party may maintain its existing investments and loans as of the Closing Date as set forth on Disclosure Schedule (6.2) hereof; (c) the Credit Parties may make investments and loans to Restricted Credit Parties, provided that the aggregate amount of such investments and loans permitted by this clause (c) shall not exceed $2,000,000 (or the Equivalent Amount thereof) at any time; (d) so long as Agent has not delivered an Activation Notice, the Credit Parties may make investments, subject to Control Letters in favor of Agent for the benefit of Lenders or otherwise subject to a perfected security interest in favor of Agent for the benefit of Lenders, in (i) marketable direct obligations issued or unconditionally guaranteed by the United States of America or any agency thereof maturing within one year from the date of acquisition thereof, (ii) commercial paper maturing no more than one year from the date of creation thereof and currently having the highest rating obtainable from either Standard & Poor’s Ratings Group or ▇▇▇▇▇’▇ Investors Service, Inc., (iii) certificates of deposit maturing no more than one year from the date of creation thereof issued by commercial banks incorporated under the laws of the United States of America, each having combined capital, surplus and undivided profits of not less than $300,000,000 and having a senior unsecured rating of “A” or better by a nationally recognized rating agency (an “A Rated Bank”), (iv) time deposits maturing no more than 30 days from the date of creation thereof with A Rated Banks and (v) mutual funds that invest solely in one or more of the investments described in clauses (i) through (iv) above; (e) the Credit Parties may make loans to Inverness Japan in an amount necessary to consummate the Acquisition; (f) each Credit Party may make investments specifically permitted under Section 6.3(a)(viii); (g) the Credit Parties may make investments permitted under Section 6.1; (h) the

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Credit Parties may make additional investments and loans not otherwise permitted by this Section 6.2 (other than loans or other investments in Restricted Credit Parties), provided that the aggregate amount of such investments and loans permitted by this clause (h) shall not exceed $2,000,000 (or the Equivalent Amount thereof) at any time; and (i) the Credit Parties may make investments in and/or loans to Inverness Medical (Shanghai) Co., Ltd. to the extent contemplated by Section 5.15(b); (j) any Credit Party may make capital contributions to any other Credit Party it holds an interest in and any Credit Party may make any other investment in any other Credit Parties to the extent permitted under Section 6.5(b).

6.3                                 Indebtedness.

(a)                                  No Credit Party shall create, incur, assume or permit to exist any Indebtedness, except (without duplication) (i) Indebtedness secured by purchase money security interests and Capital Leases permitted in Section 6.7(c), (ii) the Loans and the other Obligations, (iii) unfunded pension fund and other employee benefit plan obligations and liabilities to the extent they are permitted to remain unfunded under applicable law, (iv)(A) existing Indebtedness described in Disclosure Schedule (6.3), and refinancings thereof or amendments or modifications thereto that do not have the effect of increasing the principal amount thereof or changing the amortization thereof (other than to extend the same) and that are otherwise on terms and conditions no less favorable to any Credit Party, Agent or any Lender, as determined by Agent in good faith, than the terms of the Indebtedness being refinanced, amended or modified, and (B) Indebtedness secured solely by a Lien on the IVC Mortgaged Property in an outstanding principal amount not exceeding the lesser of (x) $6,000,000 and (y) the fair market value of the IVC Mortgaged Property at the time of the incurrence of such Indebtedness, as determined by a nationally recognized independent real property appraisal firm; (v) Indebtedness specifically permitted under Section 6.17; (vi) the Subordinated Debt evidenced by the Subordinated Notes and refinancings thereof or amendments thereto to the extent permitted hereunder or by the Intercreditor Agreement; (vii) the Subordinated Bonds; (viii) Indebtedness consisting of intercompany loans and advances made by a Credit Party to any other Credit Party; provided that:  (A) each Credit Party receiving such loan or advance shall, within 30 days of the date of such loan or advance, execute and deliver to the other Credit Parties making such loan or advance a demand note or such other documentation reasonably satisfactory to Agent, to evidence any such intercompany Indebtedness owing at any time by such Credit Party to such other Credit Parties which demand note or other documentation shall be in form and substance reasonably satisfactory to Agent and shall be pledged and delivered to Agent pursuant to the applicable Pledge Agreement or Collateral Document (i) as additional collateral security for the Obligations of all of the Credit Parties and the Eligible Swap Obligations of the US Credit Parties in the case of intercompany loans from a US Credit Party, and (ii) as additional collateral security for the Obligations of the European Credit Parties only in the case of intercompany loans from a European Credit Party; provided that if the execution and delivery of a note or other documentation evidencing such loan or advance is not required to provide Agent, on behalf of Lenders, with a first priority perfected security interest in such intercompany Indebtedness, such execution and delivery shall not be required; (B) each of the Credit Parties shall record all intercompany transactions on its books and records in a manner reasonably satisfactory to Agent; (C) the obligations of the Credit Parties with respect to such intercompany loans and advances shall be subordinated to the Obligations and the Eligible Swap Obligations pursuant to Section 11.18; (D) no Default or Event of Default would occur and be continuing after giving

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effect to any such proposed intercompany loan; and (E) the Restricted Credit Parties shall not be permitted to incur any Indebtedness to any Credit Party if such Credit Party is not permitted to advance such Indebtedness under Section 6.2(c), (ix) [Intentionally Omitted]; (x) [Intentionally Omitted]; (xi) [Intentionally Omitted]; (xii) Indebtedness under Interest Hedge Agreements and Foreign Exchange Agreements (including, without limitation, Lender Swap Contracts) entered into in the ordinary course of business; provided that such agreements (A) are designed solely to protect Credit Parties against fluctuations in foreign currency exchange rates or interest rates and (B) do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in foreign currency exchange rates or interest rates or by reason of fees, indemnities and compensation payable thereunder; and (xiii) Indebtedness incurred by any Credit Party not to exceed at any time $1,000,000 in the aggregate (or the Equivalent Amount thereof) for all Credit Parties.

(b)                                 No Credit Party shall, directly or indirectly, voluntarily purchase, redeem, defease or prepay any principal of, premium, if any, interest or other amount payable in respect of any Indebtedness, other than (i) the Obligations; (ii) Indebtedness secured by a Permitted Encumbrance if the asset securing such Indebtedness has been sold or otherwise disposed of in accordance with Sections 6.8(b) or (c); (iii) Indebtedness permitted by Section 6.3(a)(i) so long as any Liens securing such Indebtedness are terminated simultaneously therewith; (iv) Indebtedness permitted by Section 6.3(a)(iv) upon any refinancing thereof in accordance with Section 6.3(a)(iv); (v) Indebtedness permitted by Section 6.3(a)(viii); (vi) payments of interest by Innovations on the Subordinated Notes to the extent permitted by the Intercreditor Agreement, and (vii) as otherwise permitted in Section 6.14.

6.4                                 Employee Loans and Affiliate Transactions.

(a)                                  Except as set forth on Disclosure Schedule (6.4) and except as otherwise expressly permitted in this Section 6, with respect to (i) Restricted Credit Parties (other than Orgenics Holding), no Credit Party shall enter into or be a party to any transaction with any Restricted Credit Parties, except in the ordinary course of business and consistent with past practices; and (ii)Affiliates, no Credit Party shall enter into or be a party to any transaction with any Affiliate of such Credit Party (other than any Affiliate which is a Credit Party (other than Orgenics Holdings)) except in the ordinary course of and pursuant to the reasonable requirements of such Credit Party’s business and upon fair and reasonable terms that are no less favorable to such Credit Party than would be obtained in a comparable arm’s length transaction with a Person not an Affiliate of such Credit Party.  In addition, if any such transaction or series of related transactions with any Affiliate (other than a Credit Party) involves payments in excess of $500,000 (or the Equivalent Amount thereof) in the aggregate, the terms of these transactions must be disclosed in advance to Agent and Lenders.  All such transactions existing as of the date hereof are described in Disclosure Schedule (6.4(a)).

(b)                                 Except as set forth on Disclosure Schedule (6.4(b)), no Credit Party shall enter into any lending or borrowing transaction with any employees of any Credit Party, except loans to its respective employees in the ordinary course of business consistent with past practices for travel and entertainment expenses, relocation costs and similar purposes up to a maximum of  $500,000 (or the Equivalent Amount thereof) in the aggregate at any one time outstanding.

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6.5                                 Capital Structure and Business.  No Credit Party shall (a) make any changes in any of its business objectives, purposes or operations that could reasonably be expected to have or result in a Material Adverse Effect, (b) make any change in its capital structure as described in Disclosure Schedule (3.8), including the issuance or sale of any shares of Stock, warrants or other securities convertible into Stock or any revision of the terms of its outstanding Stock, except that (i) Innovations may issue or sell shares of its Stock (x) for cash so long as the proceeds thereof are applied in prepayment of the Obligations to the extent required by Section 1.3(b)(iv), and (y) in connection with consummation of a Permitted Acquisition, in each case, so long as no Change of Control occurs after giving effect thereto, (ii) any US Credit Party may issue or sell shares of its Stock to any other US Credit Party (except that US Borrower shall not issue or sell any of its Stock to any US Credit Party other than Innovations), (iii) any European Credit Party may issue or sell shares of its Stock to any US Credit Party, and (iv) any European Credit Party may issue or sell shares of its Stock to any other European Credit Party, provided that Borrower Representative shall have provided Agent prior written notice of such issuance or sale and, upon Agent’s request, the Borrowers shall have delivered to Agent an opinion of counsel acceptable to Agent which shall provide (A) that Agent’s Lien on the Stock so sold or issued shall, after giving effect to such sale or issuance, continue in full force and effect and shall continue to have the priority contemplated by this Credit Agreement and the other Loan Documents, (B) that such issuance or sale does not violate applicable law, and (C) such other opinions as Agent may reasonably request, all in form and substance satisfactory to Agent, or (c) amend its charter or bylaws in a manner that would adversely affect Agent, Lenders or any Eligible Swap Counterparty or such Credit Party’s duty or ability to repay the Obligations and the Eligible Swap Obligations.  No Credit Party shall engage in any business other than the businesses currently engaged in by it or businesses reasonably related thereto.

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

6.7                                 Liens.  No Credit Party shall create, incur, assume or permit to exist any Lien on or with respect to its Accounts or any of its other properties or assets (whether now owned or hereafter acquired) except for (a) Permitted Encumbrances; (b) Liens (A) in existence on the date hereof and summarized on Disclosure Schedule (6.7) securing the Indebtedness described on Disclosure Schedule (6.3) and permitted refinancings, extensions and renewals thereof, including extensions or renewals of any such Liens; provided that the principal amount of the Indebtedness so secured is not increased and the Lien does not attach to any other property, and (B) on the IVC Mortgaged Property which secures Indebtedness permitted under clause (iv)(B) of Section 6.3; (c) Liens created after the date hereof by conditional sale or other title retention agreements (including Capital Leases) or in connection with purchase money Indebtedness with respect to Equipment and Fixtures acquired by any Credit Party in the ordinary course of business, involving the incurrence of an aggregate amount of purchase money Indebtedness and Capital Lease Obligations of not more than $3,000,000 (or the Equivalent Amount thereof) outstanding at any one time for all such Liens (provided that such Liens attach only to the assets subject to such purchase money debt and such Indebtedness is incurred within 20 days following such purchase and does not exceed 100% of the purchase price of the subject

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assets); and (d) other Liens securing Indebtedness permitted by Section 6.3(a)(xiii).  In addition, no Credit Party shall become a party to any agreement, note, indenture or instrument, or take any other action, that would prohibit the creation of a Lien on any of its properties or other assets in favor of Agent, on behalf of itself and Lenders and any Eligible Swap Counterparty, as additional collateral for the Obligations and the Eligible Swap Obligations, except operating leases, Capital Leases or Licenses which prohibit Liens upon the assets that are subject thereto.

6.8                                 Sale of Stock and Assets.  No Credit Party shall sell, transfer, convey, assign or otherwise dispose of any of its properties or other assets, except as permitted under Section 6.3 or 6.5, including the Stock of any of its Subsidiaries (whether in a public or a private offering or otherwise) or any of its Accounts, other than (a) the sale of Inventory in the ordinary course of business, (b) the sale, transfer, conveyance or other disposition by a Credit Party of Equipment, Fixtures or Real Estate that are obsolete or no longer used or useful in such Credit Party’s business, other Equipment and Fixtures and other assets (including the Stock of any Subsidiary) having a value not exceeding $2,000,000 (or the Equivalent Amount thereof) in the aggregate in any Fiscal Year; (c) [Intentionally Omitted.] (d) the transfer by a US Credit Party of assets or the Stock of a Subsidiary of such US Credit Party to another US Credit Party; provided that Innovations shall not transfer the Stock of US Borrower to another US Credit Party; and (e) the transfer by a European Credit Party of assets or the Stock of a Subsidiary of such European Credit Party to another European Credit Party, provided that Borrower Representative shall have provided Agent prior written notice of such transfer and, upon Agent’s request, the Borrowers shall have delivered to Agent an opinion of counsel acceptable to Agent which shall provide (i) that Agent’s Lien on the Stock or assets so transferred shall, after giving effect to such transfer, continue in full force and effect and shall continue to have the priority contemplated by this Credit Agreement and the other Loan Documents, (ii) that such transfer does not violate applicable law and (iii) such other opinions as Agent may reasonably request, all in form and substance satisfactory to Agent.  With respect to any disposition of assets or other properties permitted pursuant to clauses (b) and (c) above, subject to Section 1.3(b), Agent agrees on reasonable prior written notice to release its Lien on such assets or other properties in order to permit the applicable Credit Party to effect such disposition and shall execute and deliver to Borrowers, at Borrowers’ expense, appropriate UCC-3 termination statements and other releases as reasonably requested by Borrowers.

6.9                                 ERISA.  No Credit Party shall, or shall cause or permit any ERISA Affiliate to, cause or permit to occur an event that could result in the imposition of a Lien under Section 412 of the IRC or Section 302 or 4068 of ERISA or cause or permit to occur an ERISA Event to the extent such ERISA Event could reasonably be expected to have a Material Adverse Effect. No Credit Party shall cause of permit an event that could result in the imposition of a Lien with respect to any Foreign Plan.  No Credit Party shall cause or permit the fair market value of the assets of any funded Foreign Plan, the liability of each insurer for such Foreign Plan funded through insurance or the book reserve established for such Foreign Plan, together with any accrued contributions, to become insufficient to satisfy all the accumulated benefit obligations with respect to all current and former participants in such Foreign Plan according to the actuarial assumptions and valuations most recently used to account for such obligations in accordance with generally accepted accounting principles to the extent such underfunding could reasonably be expected to have a Material Adverse Effect.

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6.10                           Financial Covenants.  No Credit Party shall breach or fail to comply with any of the Financial Covenants.

6.11                           Hazardous Materials.  No Credit Party shall cause or permit a Release of any Hazardous Material on, at, in, under, above, to, from or about any of the Real Estate where such Release would (a) violate in any respect, or form the basis for any Environmental Liabilities under, any Environmental Laws or Environmental Permits or (b) otherwise adversely impact the value or marketability of any of the Real Estate or any of the Collateral, other than such violations or Environmental Liabilities that could not reasonably be expected to have a Material Adverse Effect.

6.12                           Sale-Leasebacks.  Except as set forth on Disclosure Schedule (6.12), no Credit Party shall engage in any sale-leaseback, Synthetic Lease or similar transaction involving any of its assets.

6.13                           Cancellation of Indebtedness.  No Credit Party shall cancel any claim or debt owing to it, except for reasonable consideration negotiated on an arm’s length basis and in the ordinary course of its business consistent with past practices.

6.14                           Restricted Payments.  No Credit Party shall make any Restricted Payment, except (a) intercompany loans and advances between Credit Parties to the extent permitted by Section 6.3, provided that any such intercompany loans and advances to Innovations shall be used solely for the purposes set forth in the proviso in Section 6.20, (b) dividends and distributions by any Subsidiary of a Credit Party to any Credit Party (other than Innovations) which holds an interest in such Subsidiary, (c) payments of principal and interest of intercompany loans issued in accordance with Section 6.3, (d) employee loans permitted under Section 6.4(b), (e) the Credit Parties may make cash distributions to Innovations to enable Innovations to pay, and Innovations may pay, debt service on the Subordinated Notes to the extent permitted by the Intercreditor Agreement, provided that, with respect to this clause (e), (i) no Default or Event of Default has occurred and is continuing or would result after giving effect to any such Restricted Payment, and (ii) the timing of any such Restricted Payments shall be set at a date that permits the delivery of Financial Statements necessary to determine current compliance with the Financial Covenants prior to such payment, (f) the Credit Parties may make cash distributions to Innovations to enable Innovations to pay, and Innovations may pay, regularly scheduled interest payments on Indebtedness incurred pursuant to the Subordinated Bonds to the extent required by the Indenture; and (g) the Credit Parties may make cash distributions to Innovations to enable Innovations to prepay, and Innovations may prepay the outstanding obligations under the Subordinated Notes; provided, that, with respect to this clause (g), (i) no Default or Event of Default has occurred and is continuing or would result after giving effect to such Restricted Payment, (ii) the 2005 Equity Raise shall have occurred; (iii) such payment shall be made within 270 days following the Closing Date; (iv) after giving effect to such payment, Borrowers shall be in pro forma compliance with the Financial Covenants most recently tested for which Financial Statements are available as if such payment had occurred on the first day of the relevant test period; and (v) after giving effect to such payment, US Borrower and European Borrower shall have aggregate US Revolving Borrowing Availability, European Revolving Borrowing Availability and available cash (not subject to any Lien other than

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Permitted Encumbrances (except for Permitted Encumbrances of the type described in clauses (j) and (k) of the definition thereof)) of at least $30,000,000.

6.15                           Change of Corporate Name or Location; Change of Fiscal Year.  No Credit Party shall (a) change its name as it appears in official filings in the jurisdiction of its incorporation or other organization, (b) change its chief executive office, principal place of business, corporate offices or warehouses or locations at which Collateral is held or stored, or the location of its records concerning the Collateral, (c) change the type of entity that it is, (d) change its organization identification number, if any, issued by its jurisdiction of incorporation or other organization, or (e) change its jurisdiction of incorporation or organization, in each case without at least 15 days prior written notice to Agent and after Agent’s written acknowledgment that any reasonable action requested by Agent in connection therewith, including to continue the perfection of any Liens in favor of Agent, on behalf of Lenders, in any Collateral, including requiring delivery of reasonably satisfactory landlord agreements or bailee letters, has been completed or taken, and provided that any such new location for any Credit Party shall be in the same country in which such Collateral is held or stored as of the Closing Date.  Notwithstanding the foregoing, any Credit Party may change the warehouses or locations at which Collateral is held or stored without prior notice to Agent and Agent’s acknowledgement and without obtaining a landlord agreement or bailee letter, as applicable, if the value of the Collateral so transferred, together with all Collateral previously transferred and not disposed of in accordance with the terms of this Agreement and for which Agent has not received a reasonably satisfactory landlord waiver or bailee letter is less than $2,000,000 in the aggregate,.  No Credit Party shall change its Fiscal Year.

6.16                           No Impairment of Intercompany Transfers.  No Credit Party shall directly or indirectly enter into or become bound by any agreement, instrument, indenture or other obligation (other than this Agreement, the other Loan Documents, the Indebtedness incurred pursuant to the Subordinated Bonds and the Subordinated Notes and any agreement or indenture in connection therewith) that could directly or indirectly restrict, prohibit or require the consent of any Person with respect to the payment of dividends or distributions or the making or repayment of intercompany loans by a Subsidiary of Innovations to Innovations or to any Borrower or between Borrowers.

6.17                           No Speculative Transactions.  No Credit Party shall engage in any transaction involving commodity options, futures contracts or similar transactions, except solely to hedge against fluctuations in the prices of commodities owned or purchased by it and the values of foreign currencies receivable or payable by it and interest swaps, caps or collars.

6.18                           Leases.  No Credit Party shall enter into any operating lease for Equipment or Real Estate, if the aggregate of all such operating lease payments payable in any Fiscal Year for all Credit Parties on a consolidated basis would exceed $13,500,000 (or the Equivalent Amount thereof).

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6.19                           Changes Relating to Subordinated Debt; Material Contracts.

(a)                                  No Credit Party shall change or amend the terms of any Subordinated Debt Documents unless otherwise expressly permitted under the Intercreditor Agreement or with the consent of the Agent and the Requisite Lenders.

(b)                                 No Credit Party shall change or amend the terms of any Material Contract.

6.20                           Business Activities.  From and after the consummation of the Related Transactions on the Closing Date, Innovations shall not engage in any business or have any assets or incur any Indebtedness or Guaranteed Indebtedness (other than the Obligations) other than (i) owning the Stock of its Subsidiaries owned by it as of the Closing Date or acquired following the Closing Date in accordance with Section 6.1, (ii) the entering into, and the performance of obligations under, this Agreement, the other Loan Documents to which it is a party and the Related Transaction Documents to which it is a party, (iii) the receipt of cash dividend or cash distribution from US Borrower in accordance with the terms hereof, (iv) activities associated with expenses and other amounts paid (including, but not limited to, prepayments of the obligations outstanding under the Subordinated Notes) with any distributions paid to Innovations which are permitted under Section 6.14, (v) Subordinated Debt as evidenced by the Subordinated Debt Documents, (vi) incurring Indebtedness to the extent permitted under Section 6.3(a)(viii), (vii) entering into any agreements in connection with a Permitted Acquisition and undertaking or assuming any obligations contemplated thereby (to the extent such entry, undertaking or assumption does not and could not cause Innovations to violate any other requirement of this Section 6.20), and (viii) the activities described on Disclosure Schedule (6.20); provided, however, Innovations may engage in activities incidental to (A) the maintenance of its corporate existence in compliance with applicable law, (B) legal, tax and accounting matters in connection with any of the foregoing activities and (C) the licensing of intellectual property rights by Innovations from Swissco.  Unipath BV shall not engage in any business or have any assets or incur any Indebtedness or Guaranteed Indebtedness and shall dissolve on or before September 30, 2005.  Inverness Medical Germany GmbH shall not engage in any business or have any assets or incur any Indebtedness or Guaranteed Indebtedness other than, without duplication (i) owning the Stock of its Subsidiaries owned by it as of the Closing Date or acquired following the Closing Date in accordance with Section 6.1, (ii) the entering into, and the performance of obligations (including the incurrence of Indebtedness or Guaranteed Indebtedness) under, this Agreement, the other Loan Documents to which it is a party and the Related Transaction Documents to which it is a party, (iii) incurring Indebtedness to the extent permitted under Section 6.3(a)(viii); provided, that, the proceeds of any such Indebtedness shall be promptly contributed or loaned to one or more of its Subsidiaries or distributed to one or more of its stockholders to the extent otherwise permitted pursuant to the terms hereof; and (iv) owning assets consisting of bank accounts and cash and financial assets therein in an amount not to exceed $250,000 (or the Equivalent Amount thereof) at any time and intercompany Indebtedness owing by its Subsidiaries.

6.21                           Collateral In China.  At no time shall the aggregate value of all assets, other than the value of Inverness Medical (Shanghai) Co., Ltd., owned by the Credit Parties or any of the Excluded Subsidiaries (other than Inverness Medical (Shanghai) Co. Ltd.) and located in China exceed $2,500,000.

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7.                                      TERM

7.1                                 Termination.  The financing arrangements contemplated hereby shall be in effect until the Commitment Termination Date, and the Loans and all other Obligations shall be automatically due and payable in full on such date.

7.2                                 Survival of Obligations Upon Termination of Financing Arrangements.  Except as otherwise expressly provided for in the Loan Documents, no termination or cancellation (regardless of cause or procedure) of any financing arrangement under this Agreement shall in any way affect or impair the obligations, duties and liabilities of the Credit Parties or the rights of Agent and Lenders relating to any unpaid portion of the Loans or any other Obligations, due or not due, liquidated, contingent or unliquidated, or any transaction or event occurring prior to such termination, or any transaction or event, the performance of which is required after the Commitment Termination Date.  Except as otherwise expressly provided herein or in any other Loan Document, all undertakings, agreements, covenants, warranties and representations of or binding upon the Credit Parties, and all rights of Agent and each Lender, all as contained in the Loan Documents, shall not terminate or expire, but rather shall survive any such termination or cancellation and shall continue in full force and effect until the Termination Date; provided, that the provisions of Section 11, the payment obligations under Sections 1.15 and 1.16, and the indemnities contained in the Loan Documents shall survive the Termination Date.

8.                                      EVENTS OF DEFAULT; RIGHTS AND REMEDIES

8.1                                 Events of Default.  The occurrence of any one or more of the following events (regardless of the reason therefor) shall constitute an “Event of Default” hereunder:

(a)                                  Any Borrower (i) fails to make any payment of principal of, or interest on, the Loans or any of the other Obligations when due and payable, (ii) fails to make any payment of Fees owing in respect of the Loans or any of the other Obligations when due and payable and such failure continues for a period of 3 Business Days or more, or (iii) fails to pay or reimburse Agent or Lenders for any expense reimbursable hereunder or under any other Loan Document within 10 days following Agent’s demand for such reimbursement or payment of expenses.

(b)                                 Any Credit Party fails or neglects to perform, keep or observe any of the provisions of Sections 1.1(i), 1.4, 1.8, 5.1, 5.4(a), 5.9, 5.10, 5.13(b), 5.14, 5.15, 5.17 or 6, or any of the provisions set forth in Annexes C or F,  respectively.

(c)                                  Any Borrower fails or neglects to perform, keep or observe any of the provisions of Section 4 or any provisions set forth in Annexes E, respectively, and the same shall remain unremedied for 3 Business Days or more.

(d)                                 Any Credit Party fails or neglects to perform, keep or observe any other provision of this Agreement or of any of the other Loan Documents (other than any provision embodied in or covered by any other clause of this Section 8.1) and the same shall remain unremedied for 30 days or more.