10-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended January 1, 2005

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     .

Commission File Number 333-116038

SYMMETRY MEDICAL INC.

(Exact name of Registrant as Specified in its Charter)

Delaware	35-1996126
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

220 W. Market Street, Warsaw, Indiana	46580
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s Telephone Number, Including Area Code: (574) 268-2252

Securities Registered Pursuant to Section 12(b) of the Act:

Title of Each Class	Name of Exchange on Which Registered
Common Stock, $0.0001 par value	New York Stock Exchange

Securities Registered Pursuant to Section 12(g) of the Act:

None

(Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  x

Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2)    Yes  ¨    No  x

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.    Yes  x    No  ¨

The aggregate market value of the registrant’s common stock held by non-affiliates based on the New York Stock Exchange closing price as of March 24, 2005, was approximately $259,725,400.

The number of shares outstanding of the registrant’s common stock as of March 24, 2005, was 33,174,056.

DOCUMENTS INCORPORATED BY REFERENCE

None.

TABLE OF CONTENTS

		Page
PART I
Item 1.	Business	2
Item 2.	Properties	12
Item 3.	Legal Proceedings	13
Item 4.	Submission of Matters to a Vote of Security Holders	13
PART II
Item 5.	Market for the Registrant’s Common Stock, Related Stockholder Matters and Issuer Purchases of Equity Securities	14
Item 6.	Selected Financial Data	15
Item 7.	Management’s Discussion and Analysis of Results of Operations and Financial Condition	17
Item 7a.	Quantitative and Qualitative Disclosures About Market Risks	26
Item 8.	Financial Statements and Supplementary Data	28
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.	51
Item 9a.	Controls and Procedures.	51
PART III
Item 10.	Directors and Executive Officers of the Registrant	51
Item 11.	Executive Compensation	57
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	60
Item 13.	Certain Relationships and Related Transactions	61
Item 14.	Principal Accounting Fees and Services	64
PART IV
Item 15.	Exhibits and Financial Statement Schedules	66
Signatures		69

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PART I

Item 1. BUSINESS

General

Symmetry Medical Inc. (which we sometimes refer to, together with its consolidated subsidiaries, as the “Corporation”) is the world’s largest independent provider of implants and related instruments and cases to orthopedic device manufacturers. The Corporation also designs, develops and produces these products for companies in other segments of the medical device market, including the dental, osteobiologic and endoscopy segments, and the Corporation provides limited specialized products and services to non-healthcare markets, such as the aerospace market. Through the Corporation’s “Total Solutions” approach, the Corporation offers its customers a broad range of products, as well as comprehensive services and production capabilities to help them bring their implant systems to market quickly and efficiently. The Corporation believes that its Total Solutions approach gives it a competitive advantage.

During fiscal year 2004, the Corporation generated revenue of $205.4 million, derived primarily from the sale of products and services to the orthopedic device market. The Corporation’s Total Solutions approach is supported by an experienced team of designers, development engineers and logistics specialists that work with its customers to coordinate all of its products and services.

Our primary products and services include:

• implants, including forged, cast and machined products for the global orthopedic device market;

• instruments used in the placement and removal of orthopedic implants and in other surgical procedures;

• cases, including plastic, metal and hybrid cases used to organize, secure and transport medical devices for orthopedic and other surgical procedures; and

• other specialized products and services for non-healthcare markets, primarily the aerospace market.

History

The Corporation was established in 1976 as a supplier of instruments to orthopedic device manufacturers. In 1996, the Corporation acquired a manufacturer of cases, which allowed it to extend its product offerings to include cases custom-designed for various medical devices and their related instruments. This acquisition and product line extension also allowed the Corporation to expand its customer base to medical device manufacturers beyond the orthopedic market. In 1998 and 1999, the Corporation expanded its European presence by acquiring an instrument manufacturer in the United Kingdom and a cases manufacturer and distributor in France. In October 2000, investment funds controlled by Olympus Partners (which we sometimes refer to as the “Olympus Funds”) acquired control of the Corporation through a recapitalization. In this transaction, the Olympus funds invested a total of $40.5 million in cash to acquire securities representing approximately 94% of the Corporation’s then outstanding voting stock. In June 2003, the Corporation acquired Mettis (UK) Limited (which we sometimes refer to, together with its consolidated subsidiaries, as “Mettis”), a leading manufacturer of forged, cast and machined implants for the global orthopedic device market. This acquisition significantly expanded the Corporation’s product offerings and increased its European presence, allowing it to develop and manufacture implants, instruments and cases for orthopedic device manufacturers on a global basis. In connection with the Mettis acquisition, the Olympus funds collectively invested an additional $63.0 million in equity and loaned the Corporation $8.0 million through the purchase of senior subordinated notes and stock purchase warrants. In December, 2004, the Corporation completed an initial public offering of its common stock and entered into a new senior credit facility. In connection with this offering, the Corporation used approximately $36.4 million of the net proceeds from the offering to repay all of its existing subordinated indebtedness, $58.0 million to repay a portion of its existing senior indebtedness and $23.3 million to fund the repurchase of a portion of its Class A Convertible Preferred Stock and warrants to purchase Class A Convertible Preferred Stock. In addition, the remaining outstanding shares of Class A Convertible Preferred Stock and warrants to purchase Class A Convertible Preferred Stock converted into approximately 8.0 million shares of the Corporation’s Common Stock and warrants to purchase approximately 255.3 thousand shares of the Corporation’s Common Stock.

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Products and Services

The Corporation designs, develops and manufactures implants and related surgical instruments and cases for orthopedic device companies. The Corporation also designs, develops and manufactures products for companies in other medical device markets, such as dental, osteobiologic and endoscopy, and it provides limited specialized products and services used in the aerospace and other non-healthcare markets. The Corporation’s revenue from the sale of implants, instruments, cases and other products and services represented 36.6%, 33.0%, 23.0% and 7.4%, respectively, of its revenue in fiscal 2004, compared with 27.3%, 37.4%, 29.6% and 5.7%, respectively, of its revenue in fiscal 2003.

Implants

The Corporation designs, develops and manufactures implants for use in specific implant systems developed by its customers. The Corporation makes orthopedic implants used primarily in knee and hip implant systems. The Corporation’s orthopedic implants are used in reconstructive surgeries to replace or repair hips, knees and other joints, such as shoulders, ankles and elbows, sometimes referred to as extremities, that have deteriorated as a result of disease or injury. An orthopedic implant system is generally comprised of several implants designed to work in concert to replicate the structure and function of a healthy joint.

The Corporation also manufactures implant products for trauma, spine and other implant systems. Trauma implant systems are used primarily to reattach or stabilize damaged bone or tissue while the body heals. Spinal implant systems are used by orthopedic surgeons and neurosurgeons in the treatment of degenerative diseases, deformities and injuries in various regions of the spine.

The Corporation’s design, engineering and prototyping expertise is an integral part of its implant offering. Medical device companies, which typically focus their resources on developing new implant systems as well as sales and marketing, often rely on us and companies like us to design, develop and manufacture the implants that comprise their implant systems. The Corporation’s manufacturing capabilities, including its net shaped forging capabilities, technologically advanced casting facility and machining expertise, allow it to produce consistent, tight tolerance implants in large volumes for its customers.

The Corporation produces gross shaped, near-net shaped and net shaped implants for medical device manufacturers. Gross shaped implants require a significant amount of machining and hand processing post-forging. Near-net shaped implants are distinguished by geometric features that are thinner, more detailed and have tighter tolerances. Net shaped and near-net shaped implants require far fewer machine and hand operations post-forging. Net shaped implants typically require machining only on vital areas, such the taper segment of a hip where it is joined to the femoral head.

The Corporation has the machining expertise needed to provide finished implants to its customers. Some customers purchase finished implants from the Corporation while others purchase unfinished implants and machine them to final specifications.

The Corporation’s primary implant products and their applications are:

• Knees. The knee joint includes the surfaces of three distinct bones: the lower end of the femur, the upper end of the tibia or shin bone, and the patella (knee cap). Cartilage on any of these surfaces can be compromised by disease or injury, leading to pain and inflammation that may require knee reconstruction. The Corporation’s knee implants include a femoral component, a patella, a tibial tray and an articulating surface (placed on the tibial tray) and are used in total knee reconstruction, partial knee reconstruction and revision procedures. The Corporation provides one or more, and in some cases all, of these implants for its customers’ knee implant systems. The Corporation uses proprietary manufacturing know-how and advanced computer aided simulation techniques to produce tight tolerance near-net shaped to net shaped tibial implants that require minimal if any machining.

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• Hips. The hip joint consists of a ball-and-socket joint that enables a wide range of motion. The hip joint is often replaced due to degeneration of the cartilage between the head of the femur (the ball) and the acetabulum or hollow portion of the pelvis (the socket). This loss of cartilage causes pain, stiffness and a reduction in hip mobility. The Corporation produces tight tolerance femoral heads, hip stems, acetabular cups and spiked acetabular cups used in bone conservation, total-hip reconstruction and revision replacement procedures. The Corporation’s hip stems are forged with tight tolerance details.

• Extremities, Trauma and Spine. Extremity reconstruction involves the use of an implant system to replace or reconstruct injured or diseased joints, such as the finger, toe, wrist, elbow, foot, ankle and shoulder. The Corporation’s forging capabilities allow it to produce thin cross sections of material to very tight tolerances for these smaller joint procedures. Trauma implant procedures commonly involve the internal fixation of bone fragments using an assortment of plates, screws, rods, wires and pins. The Corporation’s spinal implant products consist primarily of plates and screws. The Corporation manufactures trauma and spinal plate implants to exact details to fit bone contours.

Instruments

The Corporation makes high-precision surgical instruments used in hip, knee and shoulder reconstruction procedures, as well as in spinal, trauma and other implant procedures. The Corporation designs, develops and manufactures implant-specific and procedure-specific instruments. The Corporation rarely manufactures general surgical instruments, but will procure them as a service to its customers in order to provide its customers with complete instrument sets.

The Corporation primarily makes a wide range of knee cutting blocks (instruments that guide blades that cut bone), osteotome revision systems (instruments used to cut through bone), reamers (instruments used for shaping bone sockets or cavities) and retractors (instruments used to pull back tissue for clear sight during surgery). The Corporation’s instrument handles are made of patented plastic procured from a third party, which is designed to withstand the intense heat produced during frequent sterilizations, that is attached to the instrument using the Corporation’s patented process. The Corporation’s instruments are made to tight tolerances to ensure precise alignment and fitting of implants.

Each implant system typically has an associated instrument set that is used in the surgical procedure to insert that specific implant system. Instruments included in a set vary by implant system. For example, hip and knee implant procedure instrument sets often contain in excess of 100 instruments, whereas revision procedure sets contain approximately 50 instruments. Usually, instrument sets are sterilized after each use and then reused.

The instruments the Corporation produces are typically used in either open, minimally invasive, or revision implant procedures and can generally be categorized as:

• Implant-specific instruments, which are used solely for a specific brand of implant, such as high-precision knee cutting blocks, certain reamers and broaches; and

• Procedure-specific instruments, which are designed for a particular type of procedure, such as a minimally invasive hip implant procedure, but can be used with the implant systems of multiple companies.

Implant-Specific Instruments. The size, shape and other features of each implant system are unique. Consequently, unique instruments must be used to ensure precise alignment and fitting during the surgical procedure to insert an implant system. Accordingly, when a medical device company develops a new implant system, it typically also develops instruments specifically designed to insert the implant system. Medical device companies typically provide complete, customized implant-specific instrument sets to end users (hospitals, outpatient centers and physicians) in order to facilitate use of the implant.

The Corporation seeks to collaborate with its customers early in the development process to facilitate the concurrent design of the implant system and the instruments that will accompany the system. The Corporation’s

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implant-specific instruments generally include customized reamers, cutting blocks, broaches, rasps, guides and other instruments designed to accommodate the unique size, shape and other features of its customers’ implant systems. These instruments are used by the surgeon to cut and shape bone and cavities during the surgical procedure and to align and fit the implant system. The Corporation is recognized in the orthopedic community for constructing these instruments to extremely tight tolerances.

Procedure-Specific Instruments. The Corporation also manufactures independently developed instruments referred to as its Symmetry Products. The Corporation has developed these products through its years of experience serving the orthopedic market and its investments in research and development. Complete implant procedure instrument sets typically include certain instruments that are designed for a particular type of procedure but can be used with the implant systems of multiple companies. By purchasing the Corporation’s proven Symmetry Products, customers can leverage its extensive experience and expertise to complete their instrument sets more quickly and efficiently.

The Corporation’s Symmetry Products include successful hip and knee revision systems. Instruments that make up revision systems, which are used to remove orthopedic implants, are typically designed for a specific type of procedure but can be used to remove various brands of implants. These self-contained systems include an assortment of osteotome blades that assist the surgeon in separating an implant from cement or bony in-growth where access is limited, while minimizing damage to the bone. The Corporation’s established revision systems can also be readily modified for a customer by adding additional instruments. For example, the Corporation developed a hip revision system in 1996 that it currently sells to six different customers, with the system being customized for each customer.

Cases

The Corporation produces a wide range of plastic, metal and hybrid cases used in over 25 medical device markets, including orthopedic, arthroscopy, osteobiologic, endoscopy, cardiovascular, dental, ophthalmology, diagnostic imaging and ear, nose and throat surgical procedures. Cases are used to store, transport and arrange implant systems and other medical devices and related surgical instruments. The Corporation’s cases are generally designed to allow for sterilization and re-use after an implant or other surgical procedure is performed. The Corporation’s plastic cases are designed to withstand the intense heat produced during the sterilization process.

The majority of the cases the Corporation makes are tailored for specific implant procedures so that the instruments, implants and other devices are arranged within the case to match the order of use in the procedure and are securely held in clearly labeled, custom-formed pockets. The Corporation seeks to collaborate with its customers early in the development processes to facilitate the concurrent design of the case and related instruments.

The Corporation also produces standard cases which are primarily used in those non-orthopedic market segments where the security or presentation of the instruments and devices is less important. Over the past two years, the Corporation has made a significant investment to obtain 510(k) clearance for its PolyVac line of standard cases through the FDA pre-market notification process. The Corporation believes this allows its customers to reduce time to market and to reallocate financial and human resources that would otherwise be spent on compliance efforts, which provides it with a significant competitive advantage in selling its standard cases.

The Corporation has more than 20 patents related to its case designs and manufacturing processes. The Corporation believes that its complete line of plastic, metal and hybrid product offerings strategically positions it in the case market.

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Highlights of our case product offerings include:

• Orthopedic Cases. The Corporation produces custom metal, plastic and hybrid cases designed to store, transport and arrange surgical instruments and related implant systems for orthopedic device manufacturers. Proper identification of instruments, such as reamers which are generally included in a range of sizes in one to two millimeter increments, is critical in orthopedic implant procedures. The Corporation’s graphics and thermo formed tray pockets provide a secure and organized arrangement to assist surgeons during procedures.

• Dental Cases. The Corporation produces cases used in dental implant and general dental procedures. Dental implant cases are typically complex and include many levels of trays, while cases used in general dental procedures tend to be smaller and less complex.

• Other Cases. The Corporation also manufactures and sells cases for arthroscopy, osteobiologic, endoscopy, cardiovascular, ophthalmology, diagnostic imaging and ear, nose and throat procedures.

Specialized Non-healthcare Products and Services

The Corporation offers specialized non-healthcare products and services on a limited basis. One of the Corporation’s UK based facilities acquired as part of the Mettis acquisition produced a range of cutting tools, cutlery and surgical instruments in the 1950’s. This facility evolved to focus on net shaped forgings, which resulted in a business focusing on orthopedic instruments and aerospace products for jet engines in the late 1990’s. In 2002, this facility began focusing its net shaped forging capabilities on orthopedic implants and shifting its non-healthcare operations toward product development support and specialized products. The Corporation’s core design, engineering and manufacturing competencies give it the expertise to offer specialized non-healthcare products and services. The Corporation’s non-healthcare products primarily are net shaped aerofoils and non-rotating aircraft engine forgings produced for its aerospace customers.

Product Development

The Corporation’s Design and Development Center provides dedicated expertise and greater coordination for its design, engineering and prototyping services. The Design and Development Center is located in Warsaw, Indiana, and brings together talented engineering and design personnel and provides them with state-of-the-art design software and prototyping equipment. The Design and Development Center serves to centralize and better institutionalize the Corporation’s design and engineering knowledge and creates a fertile environment for new product development. The Corporation can coordinate the product development projects for its customers as well as the efforts of the Corporation’s engineers and designers in order to ensure that the Corporation has the appropriate people and technology focused on particular product development initiatives.

The Corporation seeks to collaborate with its customers’ product development teams and to assist in the design, engineering and prototyping of new medical device systems from the beginning of the development process. The Corporation’s sales staff is technically trained and works closely with the customer’s staff. As new product concepts are formulated, the Corporation’s sales people bring in the Corporation’s design and engineering personnel and leverage the resources of its Design and Development Center to provide dedicated design teams with exceptional knowledge and experience. As a project evolves, the Corporation can rapidly create prototypes of the proposed implant. Working closely with the Corporations customers through the conceptual, planning and prototyping stages positions the Corporation to quickly scale up for manufacturing of the product.

In addition to supporting the Corporation customers’ product development efforts, its Design and Development Center is continuously developing the Corporation’s own product lines, referred to as Symmetry Products. The Corporation develops products by leveraging years of experience and knowledge, investing in research and development and continually seeking to expand its knowledge of the marketplace by consulting

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surgeons and other end users of the Corporation’s products. The Corporation currently offers over 300 internally developed products, including instruments for minimally invasive surgical implant procedures and hip and knee revision systems.

Environmental Issues

Our discussion of environmental issues is presented under the caption “Environmental” in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of this Form 10-K.

Capital Investment

Information concerning our capital expenditures is presented under the caption “Capital Expenditures” in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of this Form 10-K.

Customers

The Corporation supplies its products primarily to manufacturers in the medical device market. The Corporation’s customers include all of the large orthopedic device manufacturers, including Biomet Inc., DePuy Inc. (a subsidiary of Johnson & Johnson), Kyocera Corporation, Medtronic Sofamor Danek, Smith & Nephew plc, Stryker Corporation, Synthes, Inc. (formerly Synthes-Stratec, Inc.) and Zimmer Holdings, Inc. The Corporation also has established relationships, primarily through its cases product offerings, with leading medical device manufacturers in numerous other medical device market segments, including Cardinal Health, Inc., Nobel Biocare AB and St. Jude Medical Inc. The Corporation sold to approximately 600 customers, including 66 new customers, in fiscal 2004. Our revenue generally does not vary from season to season.

Sales to the Corporation’s ten largest customers represented 78.7% and 68.3% of its revenue in 2004 and fiscal 2003, respectively. The Corporation’s four largest customers accounted for 25.4%, 14.6%, 13.6% and 9.5% of its revenue in fiscal 2004 and its three largest customers accounted for 19.5%, 14.7% and 10.5% of its revenue in fiscal 2003. The Corporation’s four largest customers in alphabetical order in fiscal 2004 were DePuy, Smith & Nephew, Stryker and Zimmer and the Corporation’s three largest customers in alphabetical order for fiscal 2003 were DePuy, Smith & Nephew and Zimmer. No other customer accounted for more than 10% of the Corporation’s revenue in fiscal 2004 or fiscal 2003. The Corporation typically serves several product teams and facilities within each of its largest customers, which mitigates its reliance on any particular customer.

The Corporation sells its products to customers in a number of regions outside the United States. In addition, its customers often distribute globally products purchased from us in the United States. Set forth below is a summary of revenue by selected geographic locations in the Corporation’s last three fiscal years, based on the location to which it shipped its products:

Percent of Revenue by Geographic Location

	Fiscal Year
Region	2002		2003		2004
United States	80.7	%	73.2	%	66.6	%
United Kingdom	10.1		16.1		13.3
Rest of World	9.2		10.7		20.1
Total	100.0	%	100.0	%	100.0	%

The acquisition of Mettis increased the geographic diversification of the Corporation’s revenue. For additional information regarding the Corporation’s historical revenue by geographic locations, see note 13 to its consolidated financial statements included elsewhere in this prospectus.

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Sales and Marketing

The Corporation’s sales and marketing efforts emphasize its industry leading design and engineering expertise, internally developed Symmetry Products, manufacturing capabilities, international distribution network and its ability to provide customers with a comprehensive product offering. The Corporation is increasingly presenting its products and services to customers in a Total Solutions concept which offers the customer a collaborator for developing complete implant, instrument and case solutions.

The Corporation has over 60 sales and marketing personnel worldwide. In addition to its internal sales efforts, the Corporation also sell standard cases through distributors. Its sales personnel are trained in all of its products and services in order to cross-sell and identify opportunities outside their immediate area of focus. The Corporation typically serves several product teams and facilities within each customer which diminishes its reliance on any one purchasing decision. Its customer base for cases extends into nearly every segment of the medical device market. The Corporation believes there is a significant opportunity to leverage its existing relationships among this customer base to achieve greater penetration of its customized instrument and implant products. The Corporation intends to increase its marketing of implants, instruments and its Total Solutions concept to these customers.

The Corporation’s sales personnel are technically trained and are based in close proximity to or located at its largest customers’ sites. This physical proximity allows sales personnel to engage quickly with the marketing, design, engineering and purchasing staffs of these orthopedic device manufacturers. The Corporation’s sales people are empowered to bring in design and engineering product development teams to facilitate a customer’s efforts. The Corporation’s goal is to collaborate with customers early in the development cycle and to continue through production, packaging, delivery and logistics.

Manufacturing

The Corporation has manufacturing facilities in the United States, the United Kingdom and France. The Corporation has made significant investments in recent years to modernize its production facilities, improve its production processes and develop superior technical skills that complement its manufacturing capabilities. These investments have allowed it to continue to improve the quality of its products, increase its manufacturing capacity and improve its efficiency. The Corporation’s manufacturing processes include:

• Forging. The Corporation’s forging process uses presses to force heated metal between two dies (called tooling) that contain a precut profile of the desired implant. The forging process enhances the strength of an implant, which is important for hip stems and other implants that must withstand significant stress. Many customers prefer forging because it provides greater mechanical properties. The Corporation forges gross shaped, near-net shaped and net shaped implants. The Corporation’s know-how enables it to produce precision net shaped forgings in large volumes.

• Casting. In the casting process, metal is heated until it is liquid and then poured into an implant mold. Casting can be used to produce implants with intricate shapes. The Corporation has developed a technologically advanced, highly automated, casting facility in Sheffield, United Kingdom.

• Plastic and Metal Forming. The Corporation’s know-how and technology facilitates our extensive plastic and metal forming capabilities. The Corporation uses thermo form processes to draw uniform plastic cases and specialized equipment to form metal. The Corporation’s laser controlled metal working machines allow it to punch and shape metal in intricate and complex detail.

• Machining / Finishing. Machining is used extensively to enhance the Corporation’s forged, cast and formed products. The Corporation uses computer numerically controlled, multi-axis and wire electric discharge equipment to cut, bend, punch, polish and otherwise shape or detail metal or plastic. The Corporation’s finishing processes include polishing, laser etch marking, graphics and other customer specific processes.

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The majority of products that the Corporation produces are customized to the unique specifications of its customers. The Corporation’s ability to maintain flexible operations is an important factor in maintaining high levels of productivity. The Corporation primarily uses “just-in-time” manufacturing and flexible manufacturing cells in its production processes. Just-in-time manufacturing is a production technique that minimizes work-in-process inventory and manufacturing cycles. Manufacturing cells are clusters of individual manufacturing operations and work stations grouped in a circular configuration, with the operators placed centrally within the configuration. Cell manufacturing provides flexibility by allowing efficient changes to the number of operations each operator performs, which enhances the Corporation’s ability to maintain product volumes that are consistent with its customers’ requirements and reduce its level of inventory.

The Corporation uses a number of raw materials, including titanium, cobalt chrome, stainless steel and nickel alloys, and various other components in the manufacture of its products. Although the Corporation generally believes these materials are readily available from multiple sources, from time to time the Corporation relies on a limited number of suppliers and in some cases on a single source vendor. For example, the Corporation obtains patented plastic, which is designed to withstand intense heat produced during frequent sterilizations, from a single supplier for use in its instrument handles and plastic cases.

Quality Assurance

The Corporation maintains a comprehensive quality assurance and quality control program, which includes the control and documentation of all material specifications, operating procedures, equipment maintenance and quality control methods. The Corporation’s quality systems are based upon FDA requirements and the ISO standards for medical device manufacturers. The Corporation believes that all of its facilities are currently in substantial compliance with regulations applicable to them. For example, in the United States these regulations include the current good manufacturing practice regulations and other quality system regulations imposed by the FDA. The Corporation’s United States based facilities are registered with and audited by the FDA. The Corporation’s line of PolyVac standard case received FDA 510(k) clearance, which can reduce its customers’ burden in obtaining FDA approval. The Corporation’s facilities have obtained numerous industry-specific quality and regulatory assurance certifications.

Competition

The Corporation’s customers, to varying degrees, are capable of internally developing and producing the products the Corporation provides. While the Corporation believes that its comprehensive services and core production competencies allow medical device companies to reduce costs and shorten time to market, one or more of its customers may seek to expand their development and manufacturing operations which may reduce their reliance on independent suppliers such as the Corporation. The Corporation is not aware of any medical device manufacturers who currently sell products similar to the ones the Corporation produces to third parties, however, there can be no assurance that one or more of these companies will not begin to do so in the future.

The Corporation also competes with independent suppliers of implants, instruments and cases to medical device companies. The majority of these suppliers are privately owned and produce some, but not all, of the products required in orthopedic implant systems. The Corporation believes that it is the only independent supplier to offer a complete implant, instrument and case solution to orthopedic device manufacturers. The Corporation competes with other independent suppliers primarily on the basis of development capability, breadth of product offering, manufacturing quality, cost and service. The Corporation believe that it is the largest independent supplier of implants, instruments and cases to orthopedic device manufacturers. However, other independent suppliers may consolidate and some of the Corporation’s current and future competitors, either alone or in conjunction with their respective parent corporate groups, may have financial resources and research and development, sales and marketing, and manufacturing capabilities and brand recognition that are greater than the Corporation’s.

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Intellectual Property

Although the Corporation believes its patents are valuable, its knowledge, experience and proprietary and trade secret information with respect to manufacturing processes and product design and development, and its experienced, creative and technically trained design, engineering and sales staffs have been equally or more important in maintaining its competitive position. The Corporation seeks to protect its non-patented know-how, trade secrets, processes and other proprietary confidential information principally through confidentiality, non-compete and invention assignment agreements.

The Corporation currently owns 37 U.S. and 14 foreign patents related to its cases and instruments. These patents expire at various times beginning in 2006 and ending in 2020. The Corporation also has 28 U.S. and 3 foreign patent applications at various stages of approval. The Corporation’s policy is to aggressively protect technology, inventions and improvements that it considers important through the use of patents, trademarks, copyrights and trade secrets in the United States and significant foreign markets.

While the Corporation does not believe that any of its products infringe any valid claims of patents or other proprietary rights held by third parties, the Corporation cannot provide complete assurance that it does not infringe any patents or other proprietary rights held by third parties. If the Corporation’s products were found to infringe any proprietary right of a third party, it could be required to pay significant damages or license fees to the third party or cease production, marketing and distribution of those products. Litigation may also be necessary to enforce the Corporation’s intellectual property rights, to protect its trade secrets or other proprietary information it owns and to determine the validity and scope of its proprietary rights.

The Corporation cannot provide complete assurance that its existing or future patents, if any, will afford adequate protection, that any existing patent applications will result in issued patents, that its patents will not be circumvented, invalidated, or held unenforceable, that its proprietary information will not become known to, or be independently developed by, its competitors, or that the validity or enforceability of any patents or other intellectual property owned by or licensed to us will be upheld if challenged by others in litigation. Due to these and other risks, the Corporation does not rely solely on its patents and other intellectual property to maintain its competitive position. Although intellectual property is important to the Corporation’s business operations and in the aggregate constitutes a valuable asset, the Corporation does not believe that any single patent, trade secret, trademark or copyright, or group of patents, trade secrets, trademarks or copyrights is critical to the success of its business.

Employees

As of January 1, 2005, the Corporation had 1,673 employees. The Corporation’s employees are not represented by any unions. From time to time in the past, however, some of its employees have attempted to unionize at two of its facilities. The Corporation believes that it has a good relationship with its employees.

Executive Officers of the Registrant

See Part III, Item 10. Directors and Executive Officers of the Registrant—Executive Officers of the Registrant.

Available Information

The Corporation maintains a website at www.symmetrymedical.com and makes available at this website its annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports as soon as reasonably practicable after such material is electronically filed with or furnished to the Securities and Exchange Commission (the “SEC”). Information contained on the Corporation’s website is not a

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part of this report. If you wish to receive a hard copy of any exhibit to the Corporation’s reports filed with or furnished to the SEC, such exhibit may be obtained, upon payment of reasonable expenses, by writing to: Fred Hite, Senior Vice President, Chief Financial Officer and Secretary, Symmetry Medical Inc., 220 W. Market Street, Warsaw, IN 46580 You may read and copy any materials the Corporation files with the SEC at the SEC’s Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The Corporation was not subject to the New York Stock Exchange’s annual certification requirement in 2004. The certifications by the Corporation’s Chief Executive Officer and our Chief Financial Officer required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 are filed with the SEC as exhibits to this Annual Report on Form 10-K.

Item 2. PROPERTIES

The Corporation’s corporate office is located in Warsaw, Indiana. The Corporation has operations facilities, including warehouse, administrative and manufacturing facilities, located at ten sites throughout the world. The Corporation believes that these facilities are adequate for its current and foreseeable purposes and that additional space will be available if needed.

The lease on the Corporation’s approximately 112,000 square foot Manchester, New Hampshire facility is a capital lease that runs through October 1, 2016. The initial annual base rent under the lease, as amended, was $0.6 million, payable in equal monthly installments. On October 31, 2001, and every five years thereafter, including extensions, the annual base rent will change based on the percentage increase, if any, in the Consumer Price Index for the Northeast U.S. region. The current annual base rent under the lease is $0.7 million. The Corporation has an option to extend the lease for an additional five-year period and has a right of first opportunity to purchase the leased property.

The table below provides selected information regarding the Corporation’s facilities.

Location	Use	Approximate Square Footage(1)	Own/ Lease	Number of Employees
Warsaw, Indiana	Instrument design and manufacturing	63,000	Own	312
Warsaw, Indiana	Design and Development Center; instrument design and manufacturing	17,000	Lease	31
Warsaw, Indiana	Corporate headquarters	10,000	Own	7
Claypool, Indiana	Instrument design and manufacturing	22,500	Own	75
Cheltenham, United Kingdom	Instrument design and manufacturing	9,000	Lease	39
Manchester, New Hampshire	Plastic and metal case design and manufacturing	122,000	Lease	271
Villeneuve d’Ascq, France	Case design and assembly	10,800	Lease	22
Lansing, Michigan	Implant design, forging and machining	65,000	Own	336
Sheffield, United Kingdom	Implant and specialized non-healthcare product design, forging, casting and machining	134,600	Own	295
Sheffield, United Kingdom	Implant machining	43,400	Own	93
Avilla, Indiana	Instrument and implant design and manufacturing	35,000	Lease	192

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(1) The Corporation owns approximately 21 acres of land in Warsaw, Indiana and approximately 9 acres in Lansing, Michigan that are available for future expansion.

Item 3. LEGAL PROCEEDINGS

From time to time the Corporation may be involved in various disputes and litigation matters that arise in the ordinary course of business. The Corporation is not aware of any legal proceedings pending or threatened against it that it expects would have a material adverse affect on its financial condition or results of operations.

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

On December 8, 2004, the Corporation’s shareholders acted by written consent to approve (i) the Amended and Restated Certificate of Incorporation of the Corporation, (ii) the Restated By-laws of the Corporation, (iii) the initial public offering and sale of the Corporation’s common stock, (iv) the election of the Corporation’s current board of directors, (v) the adoption of the 2004 Employee Stock Purchase Plan and (vi) the adoption of the 2004 Equity Incentive Plan. All of the issued and outstanding shares of stock of the Corporation entitled to vote thereon voted in favor of the foregoing.

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PART II

Item 5. MARKET FOR THE REGISTRANT’S COMMON STOCK, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

The Corporation’s common stock trades on the New York Stock Exchange (the “NYSE”) under the trading symbol SMA. As of December 31, 2004, there were 133 holders of record of the Corporation’s common stock. The transfer agent and registrar for the Corporation’s common stock is Equiserve Trust Company, N.A., P.O. Box 43023, Providence, RI 02940-3023, telephone (877) 282-1168.

The Corporation has not in the two most recent fiscal years, and does not expect for the foreseeable future, to pay dividends on its common stock. Instead, it anticipates that its earnings in the foreseeable future will be used in the operation and growth of its business. The payment of dividends by the Corporation to holders of its common stock is restricted by its senior credit facility. Any future determination to pay dividends will be at the discretion of its board of directors and will depend upon, among other factors, its results of operations, financial condition, capital requirements and contractual restrictions.

See Part III, Item 12, Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters, for information regarding common stock authorized for issuance under equity compensation plans.

The Corporation’s common stock has been listed on the New York Stock Exchange since the Corporation’s initial public offering on December 9, 2004. The following table sets forth, for the period indicated, the highest and lowest closing sale price for its common stock since its initial public offering, as reported by the New York Stock Exchange:

	2004
	High		Low
Fourth quarter (commencing December 9, 2004)	$	21.42	$	17.02

The closing sale price for the Corporation’s common stock on March 24, 2005 was $20.00.

Purchases of equity securities by or on behalf of the Corporation during the fourth quarter of 2004 were as follows:

2004 Period	Total Number of Shares (or Units) Purchased (a)	Average Price Paid per Share (or Unit)		Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs (b)	Maximum Number (or Approximate Dollar Value of Shares (or Units) That May Yet Be Purchased Under the Plans or Programs (b)
October	—		—	—	—
November	—		—	—	—
December	19,000	$	1,226.15	—	—
Total Fourth Quarter	19,000	$	1,226.15	—	—

(a) Reflects 18,361 shares of the Corporation’s Class A Convertible Preferred Stock and warrants to purchase 639 shares of Class A Convertible Preferred stock (in each case plus accrued but unpaid dividends thereon) repurchased in connection with the Corporation’s initial public offering of common stock.

(b) The Corporation currently does not have a share repurchase plan or program.

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Item 6. SELECTED FINANCIAL DATA

The following table sets forth the Corporation’s selected financial data for the year indicated and should be read in conjunction with the disclosures to Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations and Item 8. Financial Statements and Supplementary Data of this Form 10-K.

	Fiscal Year
	2000			2001			2002			2003(1)			2004
	(dollars in thousands, except share and per share data)
Consolidated Statements of Operations Data:
Revenue	$	61,203		$	66,495		$	65,395		$	122,029		$	205,391
Cost of Revenue		43,005			48,205			47,859			86,124			145,081
Gross profit		18,198			18,290			17,536			35,905			60,310
Selling, general and administrative expenses		9,862			10,494			9,440			17,115			22,569
Operating income		8,336			7,796			8,096			18,790			37,741
Interest expense, net		2,835			5,070			4,968			10,172			13,757
Loss on debt extinguishment		—			—			—			1,436	(2)		8,956	(5)
Interest rate swap valuation(3)		—			847			979			(1,358	)		(1,451	)
Expenses related to recapitalization		14,179			—			—			—			—
Other expense (income)		28			290			(42	)		(374	)		(740	)
Income (loss) before income taxes and cumulative effect of change in accounting		(8,706	)		1,589			2,191			8,914			17,219
Provision (benefit) for income taxes		(2,775	)		1,400			841			3,009			5,524
Net income (loss) before cumulative effect of accounting change		(5,931	)		189			1,350			5,905			11,695
Cumulative effect of change in accounting(4)		—			(293	)		(1,146	)		—			—
Net income (loss)		(5,931	)		(104	)		204			5,905			11,695
Preferred stock dividends		(683	)		(3,185	)		(4,410	)		(7,028	)		(8,977	)
Net income (loss) applicable to common shareholders	$	(6,614	)	$	(3,289	)	$	(4,206	)	$	(1,123	)	$	2,718

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	Fiscal Year
	2000		2001		2002		2003(1)		2004
	(dollars in thousands, except share and per share data)
Basic per share:
Net income (loss) applicable to common shareholders before cumulative effect of accounting change	$(1.59	)	$(0.44	)	$(0.44	)	$(0.10	)	$0.16
Cumulative effect of accounting change, net of tax	—		(0.04	)	(0.17	)	—		—
Net income (loss)	$(1.59	)	$(0.48	)	$(0.61	)	$(0.10	)	$0.16
Diluted per share:
Net income (loss) applicable to common shareholders before cumulative effect of accounting change	$(1.59	)	$(0.44	)	$(0.44	)	$(0.10	)	$0.15
Cumulative effect of accounting change, net of tax	—		(0.04	)	(0.17	)	—		—
Net income (loss)	$(1.59	)	$(0.48	)	$(0.61	)	$(0.10	)	$0.15
Weighted average common shares outstanding:
Basic	4,157,787		6,854,736		6,905,800		11,797,842		16,905,396
Diluted	4,157,787		6,854,736		6,905,800		11,797,842		17,767,281
Consolidated Balance Sheet Data (at end of period):
Cash and cash equivalents	$642		$835		$781		$2,348		$4,849
Working capital	5,006		10,533		9,587		36,064		50,854
Total assets	62,091		59,714		63,554		267,217		306,868
Long-term debt and capital lease obligations less current portion	46,244		48,641		47,234		129,696		43,209
Redeemable preferred stock	—		—		3,530		—		—
Total stockholders’ equity (deficit)	(1,630	)	(1,629	)	(1,121	)	100,390		216,145
Other Financial Data:
Depreciation and amortization	$4,311		$4,151		$2,744		$6,662		$11,198

(1) Includes the results of Mettis since its acquisition on June 11, 2003.

(2) In fiscal 2003, the Corporation refinanced substantially all of its existing indebtedness as part of the financing of the acquisition of Mettis, resulting in a loss on debt extinguishment of $1,436.

(3) The Corporation enter into interest rate swap agreements to offset against changes in interest rates on its variable rate long-term debt. In accordance with SFAS No. 133, as amended, Accounting For Derivative Instruments and Hedging Activities, these agreements do not qualify for hedge accounting and accordingly, changes in the fair market value of such agreements are recorded each period in earnings.

(4) For fiscal 2001, reflects the cumulative effect of change in accounting principles resulting in the adoption of SFAS No. 133. For fiscal 2002, reflects a write-off of goodwill in connection with the adoption of SFAS No. 142, Goodwill and Other Intangible Assets. Upon completion of the adoption of SFAS No. 142, the Corporation determined that the fair market value of the goodwill was lower than book value for one reporting unit, which resulted in an impairment charge.

(5) In fiscal 2004, the Corporation refinanced substantially all of its existing indebtedness as part of the proceeds from its December 9, 2004 initial public offering, resulting in a loss on debt extinguishment of $8,956. This charge includes $5.1 million of unamortized discount recorded upon the issuance of the subordinated notes and $3.9 million of deferred debt issuance costs as a result of the Mettis acquisition on June 11, 2003.

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Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION

Overview

The Corporation is the world’s largest independent provider of implants and related instruments and cases to orthopedic device manufacturers. The Corporation also designs, develops and produces these products for companies in other segments of the medical device market, including dental, osteobiologic and endoscopy sectors, and provides limited specialized products and services to non-healthcare markets.

The Corporation acquired Mettis on June 11, 2003 for aggregate consideration of approximately $164 million. Mettis is a leading manufacturer of forged, cast and machined implants for global orthopedic device manufacturers. This acquisition added implants to the Corporation’s product offerings and increased our European presence. The Corporation now offers a comprehensive line of implants, surgical instruments and cases for orthopedic device manufacturers on a global basis. In fiscal 2004, the Corporation had revenue of $205.4 million, operating income of $37.7 million and net income applicable to common shareholders of $2.7 million.

The Corporation’s acquisition of Mettis enabled it to offer its customers “Total Solutions” for complete implant systems—implants, instruments and cases. While the Corporation’s revenue to date has been derived primarily from the sale of implants, instruments and cases separately, or instruments and cases together, its ability to provide Total Solutions for complete implant systems has already proven to be attractive to its customers and the Corporation expects this capability will provide it with growth opportunities. In addition, the Corporation expects that its Total Solutions capability will increase the relative percentage of value added products that it supplies to its customers.

The Corporation’s revenue from the sale of implants, instruments, cases and other products and services represented 36.6%, 33.0%, 23.0% and 7.4%, respectively, of its revenue in fiscal 2004, compared with 27.3%, 37.4%, 29.6% and 5.7%, respectively, of its revenue in fiscal 2003.

During fiscal 2004, the Corporation sold its products and services to approximately 600 customers, including 66 new customers. The Corporation’s four largest customers accounted for approximately 25.4%, 14.6%, 13.6% and 9.5% of its revenue in fiscal 2004 and its three largest customers accounted for 19.5%, 14.7% and 10.5% of its revenue in fiscal 2003. The Corporation’s ten largest customers collectively accounted for approximately 78.7% and 68.3% of its revenue in fiscal 2004 and fiscal 2003, respectively. Within each of its largest customers, the Corporation typically serves several product teams and facilities, which diminishes its reliance on any single purchasing decision. Approximately 66.6%, 13.3% and 20.1% of its revenue in fiscal 2004 and approximately 73.2%, 16.1% and 10.7% of its revenue in fiscal 2003 was from sales to customers in the United States, United Kingdom and other foreign countries, respectively.

The Corporation has well-established relationships with its major customers and these relationships to a significant extent involve the sale of products that it has developed or modified specifically for its customers’ particular product lines. In connection with the launch of a new implant system, its customers typically provide a customized implant-specific instrument set in cases to end users (hospitals, outpatient centers and physicians) for use with the new implant system. As a result, the Corporation’s sales of instruments and cases in any particular period are significantly impacted by the amount of new product launch activity by its customers.

As a result of the Mettis acquisition, the Corporation has significant operations in the United Kingdom. Consequently, a significant portion of the Corporation’s operating results are generated in currencies other than the U.S. dollar, principally the pound sterling and euro. The Corporation’s operating results are therefore impacted by exchange rate fluctuations to the extent it is unable to match revenue received in such currencies with costs incurred in such currencies. The Corporation intends to manage its exposure to exchange rate fluctuations through the use of foreign currency exchange contracts.

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Historically, the Corporation has had a significant amount of variable rate long-term indebtedness. The Corporation has managed its exposure to changes in interest rates by entering into interest rate swap agreements. These agreements do not qualify for hedge accounting under the applicable accounting guidelines and, as a result, the Corporation is required to record changes to the fair market value of these agreements in its statement of operations for each period. The Corporation recorded interest rate swap valuation expense (income) of $(1.5) million, $(1.4) million and $1.0 million for fiscal 2004, fiscal 2003 and fiscal 2002, respectively. For additional information regarding the Corporation’s interest rate swap agreements, see “—Quantitative and Qualitative Disclosures about Market Risks—Interest Rate Risk.”

The Corporation’s management reviews and analyzes several trends and key performance indicators in order to manage its business. To assist the Corporation in evaluating its capacity, it monitors long-term trends in the orthopedic industry, which currently include the growing elderly population, general aging of the population, affluent and active “baby boomers”, improving technologies that expand the market, including minimally invasive surgeries, and other factors. Further, the Corporation considers the information obtained from discussions with its customers on the upcoming demand for its products, including new product launches. The Corporation uses this information to determine an appropriate level of capital expenditures to meet the anticipated demand for its products. To this end, the Corporation recently finished construction and began operations at its new UK facility, has expanded its facility located in Avilla, Indiana and has opened an additional facility located just outside of Warsaw, Indiana in Claypool, Indiana.

On an ongoing basis, the Corporation’s management considers several variables associated with the ongoing operations of the business, including scheduled production, utilization of machinery and equipment, monitoring purchasing activity and inventory levels and associated costs, headcount, overhead costs, and selling and general and administrative expenses. Although the Corporation is currently focused on increasing the size, level and effectiveness of its sales force and marketing expenses, it do not expect these investments to negatively impact its ongoing operating margins or liquidity.

The Corporation’s revenues are affected by changes in the number and size of orders and the timing of delivery dates. The Corporation’s revenues have fluctuated in the past and may vary in the future due to the effects of changes in inventory management practices and new product introductions by its customers.

In December, 2004, the Corporation completed an initial public offering (IPO) of its common stock and entered into a new senior credit facility. In connection with this offering, the Corporation received net proceeds of $122.4 million. Approximately $36.4 million of the net proceeds from the offering were used to repay all of its existing subordinated indebtedness, $58.0 million to repay a portion of its existing senior indebtedness and $23.3 million to repurchase a portion of its Class A Convertible Preferred Stock and warrants to purchase Class A Convertible Preferred Stock. In addition, the remaining outstanding shares of Class A Convertible Preferred Stock and warrants to purchase Class A Convertible Preferred Stock converted into approximately 8.0 million shares of the Corporation’s Common Stock and warrants to purchase approximately 255.3 thousand shares of the Corporation’s Common Stock.

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Results of Operations

The table below sets forth certain operating data expressed as a percentage of revenue for the periods indicated. Fiscal 2003 operating data in the table below includes the results of Mettis since its acquisition on June 11, 2003. Interest expense for the periods presented is primarily attributable to indebtedness incurred in connection with our October 2000 recapitalization and our June 2003 acquisition of Mettis. Our historical results are not necessarily indicative of the operating results that may be expected in the future.

	Fiscal Year
	2002		2003		2004
Statement of Operations Data:
Revenue	100.0	%	100.0	%	100.0	%
Cost of revenue	73.2		70.6		70.6
Gross profit	26.8		29.4		29.4
Selling, general and administrative expenses	14.4		14.0		11.0
Operating income	12.4		15.4		18.4
Interest expense	7.6		8.3		6.7
Loss on debt extinguishment	—		1.2		4.4
Interest rate swap valuation expense (income)	1.5		(1.1	)	(0.7	)
Other expense (income)	(0.1	)	(0.3	)	(0.4	)
Income before income taxes and cumulative effect of accounting change	3.4		7.3		8.4
Income tax expense	1.3		2.5		2.7
Net income before cumulative effect of accounting change	2.1		4.8		5.7
Cumulative effect of accounting change, net of tax	(1.8	)	—		—
Net income	0.3	%	4.8	%	5.7	%

Fiscal Year 2004 Compared to Fiscal Year 2003

Revenue. Revenue increased $83.4 million, or 68.3%, to $205.4 million in fiscal 2004 from $122.0 million in fiscal 2003. Revenue for each of the Corporation’s principal product categories in these periods was as follows:

Product Category	2003		2004
	(in millions)
Implants	$	33.3	$	75.1
Instruments		45.6		67.7
Cases		36.1		47.3
Non-healthcare and other		7.0		15.3
Total	$	122.0	$	205.4

This $83.4 million increase in revenue resulted from increased implant, instruments, cases, and non-heathcare/other sales of $14.3 million, $18.7 million, $11.2 million, and $2.8 million respectively as a result of increased demand from its customers due primarily to their launches of new implant systems; and an increase of $27.5 million, $3.4 million, and $5.5 million from implant, instrument, and non-healthcare/other sales as a result of a full year of sales from the Mettis acquisition. The sales from these operations are included in the full year of fiscal 2004, while fiscal 2003 only include sales from the date of acquisition, June 11, 2003.

Gross Profit. Gross profit increased $24.4 million, or 68.0%, to $60.3 million in fiscal 2004 from $35.9 million in fiscal 2003. This increase in gross profit resulted from $10.7 million of additional gross profit related to increased revenue resulting from the Mettis acquisition coupled with higher revenue by the Corporation. As a percentage of revenue, gross profit was 29.4% in fiscal 2004, flat to fiscal 2003.

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Selling, General and Administrative Expenses. Selling, general and administrative expenses increased $5.5 million, or 31.9%, to $22.6 million in fiscal 2004 from $17.1 million in fiscal 2003. This increase in expenses primarily resulted from the Mettis acquisition partially offset by controlled spending with the overall increase in revenue. As a percentage of revenue, selling, general and administrative expenses declined to 11.0% of revenue in fiscal 2004 from 14.0% of revenue in fiscal 2003. This 3.0% decrease as a percentage of revenue was attributable to controlled spending combined with a 68.3% increase in revenue.

Interest Expense. Interest expense increased $3.6 million, or 35.2%, to $13.8 million in fiscal 2004 from $10.2 million in fiscal 2003. This increase primarily reflects higher average borrowings under the Corporation’s senior credit facility during fiscal 2004 as compared to fiscal 2003 as a result of increased borrowings used primarily to finance a portion of the purchase price for Mettis.

Loss on Debt Extinguishment. In fiscal 2004, the Corporation realized a $9.0 million loss on debt extinguishment. This charge inclues $5.1 million of unamortized discount recorded upon the issuance of the subordinated notes and $3.9 million of deferred debt issuance costs as a result of the Mettis acquisition on June 11, 2003.

Provision for Income Taxes. The Corporation’s effective tax rate was 32.1% in fiscal 2004 as compared to 33.8% in fiscal 2003. The decrease was due to realization of deferred assets and net operating losses that were fully reserved and tax rate differentials in foreign tax jurisdictions. Provision for income taxes increased by $2.5 million, or 83.6% to $5.5 million in fiscal 2004 from $3.0 million in fiscal 2003, due primarily to higher pre-tax earnings in that period.

Fiscal Year 2003 Compared to Fiscal Year 2002

Revenue. Revenue increased $56.6 million, or 86.6%, to $122.0 million in fiscal 2003 from $65.4 million in fiscal 2002. Revenue for each of the Corporation’s principal product categories in these periods was as follows:

Product Category	2002		2003
	(in millions)
Implants	$	—	$	33.3
Instruments		32.3		45.6
Cases		33.1		36.1
Non-healthcare and other		—		7.0
Total	$	65.4	$	122.0

This $56.6 million increase was primarily due to $33.3 million of implant sales, $3.7 million of instrument sales and $7.0 million of sales of other products and services after June 11, 2003 resulting from the Mettis acquisition. In addition, revenue from Symmetry’s instruments and cases increased by approximately $12.6 million in fiscal 2003 as compared to fiscal 2002. This increase in the Corporation’s revenue was the result of increased demand from its customers due primarily to their launches of new implant systems.

Gross Profit. Gross profit increased $18.4 million, or 104.8%, to $35.9 million in fiscal 2003 from $17.5 million in fiscal 2002. This increase in gross profit resulted from $11.7 million of additional gross profit related to increased implant and instrument revenue resulting from the Mettis acquisition coupled with higher revenue by the Corporation. As a percentage of revenue, gross margin increased to 29.4% in fiscal 2003 from 26.8% in fiscal 2002. The increase in gross profit as a percentage of revenue primarily resulted from increased sales of metal cases and instruments, which led to improved leverage of labor and overhead costs.

Selling, General and Administrative Expenses. Selling, general and administrative expenses increased $7.7 million, or 81.3%, to $17.1 million in fiscal 2003 from $9.4 million in fiscal 2002. This increase in expenses

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primarily resulted from $4.5 million of expenses attributable to the Mettis acquisition and increases in selling expenses on a stand-alone basis consistent with the overall increase in revenue. As a percentage of revenue, selling, general and administrative expenses decreased to 14.0% in fiscal 2003 from 14.4% in fiscal 2002.

Interest Expense. Interest expense increased $5.2 million, or 104.8%, to $10.2 million in fiscal 2003 from $5.0 million in fiscal 2002. This increase primarily reflects higher average borrowings as debt and capital lease obligations increased $85.0 million year over year primarily to finance the Mettis acquisition. This increase in debt included $36.0 million of subordinated notes with an interest rate of 12.0% per annum, which increased interest expense by approximately $2.2 million in fiscal 2003 with the remaining increase resulting from additional borrowings under the Corporation’s existing senior credit facility.

Loss on Debt Extinguishment. In fiscal 2003, the Corporation realized a $1.4 million loss on debt extinguishment related to the write-off of unamortized debt issuance costs resulting from the extinguishment of substantially all of its existing debt obligations prior to the acquisition of Mettis.

Provision for Income Taxes. The Corporation’s effective tax rate was 33.8% in fiscal 2003 and 38.4% in fiscal 2002. Provision for income taxes increased by $2.2 million, or 257.8%, to $3.0 million in fiscal 2003 from $0.8 million in fiscal 2002. The increase in provision for income taxes for fiscal 2003 is due to our higher pre-tax earnings in that period.

Cumulative Effect of Accounting Change. In fiscal 2002, the Corporation recorded a cumulative effect of change in accounting principle of $1.1 million related to the adoption of SFAS No. 142, Goodwill and Intangible Assets. Upon adoption of SFAS No. 142, the Corporation completed the transitional goodwill impairment test, using a combination of valuation techniques, including the discounted cash flow approach and the multiple market approach. Upon completion of the required assessments under SFAS No. 142, it was determined that the fair market value of a reporting unit was lower than book value, resulting in a transitional impairment charge of approximately $1.1 million.

Liquidity and Capital Resources

The Corporation’s principal sources of cash have included cash generated from operations, the issuance of equity, private debt, and bank borrowings. Principal uses of cash have included acquisitions, debt service, preferred stock redemptions, capital expenditures and the financing of working capital. The Corporation expects that its principal uses of cash in the future will be to finance working capital, capital expenditures and to service debt.

Cash Flows

The following table summarizes our primary sources of cash in the periods presented:

	Fiscal Year Ended
	2002			2003			2004
	(in thousands)
Cash provided by (used in):
Operating activities	$	4,875		$	13,151		$	25,328
Investing activities		(6,565	)		(171,944	)		(19,891	)
Financing activities		1,654			160,212			(3,082	)
Effect of exchange rates on changes in cash		(18	)		148			146
Net Increase (decrease) in cash and cash equivalents	$	(54	)	$	1,567		$	2,501

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Operating Activities. The Corporation generated cash from operations of $25.3 million in fiscal 2004 compared to $13.2 million in fiscal 2003. This increase is primarily the result of a $18.1 million increase in net income, adjusted for non-cash items, including depreciation expense, deferred income tax provision and loss on debt extinguishment. This increase was partially offset by increases in working capital, due primarily to increases in accounts receivable of $8.8 million and inventory of $6.8 million partially offset by a $8.0 million increase in accounts payables, which are in line with our year over year growth in revenue. In fiscal 2002, operating activities provided net cash of $4.9 million.

Investing Activities. Net cash used in investing activities was $19.9 million for fiscal 2004 compared to $171.9 million in fiscal 2003. This decrease was primarily due to the acquisition of Mettis in 2003.

Financing Activities. Financing activities used $3.1 million of cash in fiscal 2004 compared providing $160.2 million of cash in fiscal 2003. The fiscal 2004 amount was due primarily to cash generated by the initial public offering of the Corporation’s common stock, which included the issuance of 9.2 million shares of the Corporation’s common stock resulting in gross proceeds to the Corporation of $138.0 million. The per share price of the Corporation’s common stock sold in our initial public offering, before underwriting discounts and commissions, was $15.00. The proceeds were used to (i) fund the repurchase of 18,361 shares of Class A Convertible Preferred Stock and warrants to purchase 639 shares of Class A Convertible Preferred Stock for an aggregate price of approximately $23.3 million, (ii) repay all of the Corporation’s existing subordinated indebtedness in an amount of $36.0 million and (iii) repay $58.0 million, net of additional borrowings, of the Corporation’s existing senior indebtedness. The fiscal 2003 amount was due primarily to cash generated to finance the Mettis acquisition, which included the issuance of $134.0 million in long-term indebtedness consisting of $98.0 million of borrowing under a senior credit facility and $36.0 million of subordinated notes, together with warrants to purchase common stock and preferred stock, and the sale of common stock and preferred stock for approximately $85.7 million. The per share purchase price for the common stock and preferred stock was $3.04 and $1,000, respectively. These items were partially offset by the extinguishment of the Corporation’s prior senior credit facility and scheduled debt maturities. In fiscal 2002, net cash provided by financing activities was $1.7 million.

Capital Expenditures

Capital expenditures totaled $19.9 million in fiscal 2004, compared to $8.8 million in fiscal 2003, and were primarily used to expand and enhance production capacity in several of the Corporations’s facilities. The Corporation expects capital expenditures for fiscal 2005 to total approximately $22.0 million.

Debt and Credit Facilities

In connection with the Corporation’s initial public offering, it entered into a $75.0 million senior secured credit facility, consisting of a $35.0 million five-year term loan and a $40.0 million five-year revolving credit facility. The Corporation used borrowings under this senior credit facility as well as proceeds from the issuance and sale of its common stock to fund the repurchase of its Class A Convertible Preferred Stock, the repayment of all of its existing subordinated indebtedness and the refinancing of its current credit facility.

As of January 1, 2005, the Corporation had an aggregate of $48.9 million of outstanding indebtedness, which consisted of the following:

• $1.2 million of revolving credit borrowings and an aggregate of $32.4 million of term loan borrowings under its senior credit facility; and

• $15.3 million of capital lease obligations.

Borrowings under this senior credit facility bear interest at a floating rate, which is either a base rate, or at the Corporation’s option, a LIBOR rate, plus an applicable margin. As of January 1, 2005, an aggregate of $32.4 million was outstanding under the term loans at a weighted average interest rate of 4.56%. As of January 1, 2005, there were $1.2 million borrowings outstanding under the revolving credit facility at a weighted average interest rate of 6.75%. The Corporation had no outstanding letters of credit as of January 1, 2005.

22

The term loans require quarterly payments of scheduled principal and interest, with annual scheduled principal payments increasing each year. The term loans and borrowings under the revolving credit facility mature in December 2009. The Corporation’s obligations under the senior credit facility are secured by substantially all of its assets.

The senior credit agreement contains various financial covenants, including covenants requiring a maximum total debt to EBITDA ratio, minimum EBITDA to interest ratio and a minimum EBITDA to fixed charges ratio. The senior credit agreement also contains covenants restricting certain corporate actions, including asset dispositions, acquisitions, paying dividends and certain other restricted payments, changes of control, incurring indebtedness, incurring liens, making loans and investments and transactions with affiliates. The senior credit facility is secured by substantially all of the Corporation’s assets. The Corporation’s senior credit agreement also contains customary events of default. The Corporation was in compliance with our financial and restrictive covenants under the senior credit facility at the end of fiscal 2003 and fiscal 2004.

The Corporation holds certain property and equipment pursuant to capital leases. As of January 1, 2005, these leases have future minimum lease payments of $4.6 million, $4.0 million, $3.6 million, $2.5 million and $1.2 million in each of the next 5 fiscal years. At January 1, 2005, the Corporation had total capital lease obligations of $15.3 million. The Corporation does not anticipate incurring additional capital lease obligations in fiscal 2005.

The Corporation believes that cash flow from operating activities and borrowings under its senior credit facility will be sufficient to fund currently anticipated working capital, planned capital spending and debt service requirements for the foreseeable future, including at least the next twelve months. The Corporation regularly reviews acquisitions and other strategic opportunities, which may require additional debt or equity financing. The Corporation currently does not have any pending agreements or understandings with respect to any acquisition or other strategic opportunity.

Contractual Obligations and Commercial Commitments

The following table reflects the Corporation’s contractual obligations as of January 1, 2005:

	Payments due by period
	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
	(dollars in millions)
Long-term debt obligations(1)	$	32.4	$	0.9	$	12.3	$	19.2	$	—
Capital lease obligations		20.5		4.6		7.6		3.7		4.6
Operating lease obligations		2.8		1.5		1.1		0.2		—
Total	$	55.7	$	7.0	$	21.0	$	23.1	$	4.6

(1) Represents principal maturities only and, therefore, excludes the effects of interest and interest rate swaps. The company has prepaid $2.6 million in term debt as of January 1, 2005.

Off-Balance Sheet Arrangements

The Corporation’s off-balance sheet arrangements include the Corporation’s operating leases and letters of credit. The Corporation had no letters of credit outstanding as of January 1, 2005.

Environmental

In 2004, the Corporation was notified by the Indiana Department of Environmental Management of certain regulatory compliance issues. The Corporation has corrected these issues, and did not receive any fines. The cost to correct these issues was not material to the Corporation’s results of operations or financial condition.

23

The Corporation has been notified by the U.S. Environmental Protection Agency or by state governments that it may be liable under environmental laws with respect to the cleanup of hazardous substances at sites we previously used for the disposal of wastes. Based on information currently available, the Corporation does not believe these liabilities will be material to its results of operations or financial position.

Critical Accounting Policies and Estimates

The Corporation’s discussion and analysis of results of operations and financial condition are based upon its audited consolidated financial statements. These audited financial statements have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires the Corporation to make estimates and judgments that affect the amounts reported in those financial statements. On an ongoing basis, the Corporation evaluates estimates. The Corporation bases its estimates on historical experiences and assumptions believed to be reasonable under the circumstances. Those estimates form the basis for its judgments that affect the amounts reported in the financial statements. Actual results could differ from the Corporation’s estimates under different assumptions or conditions. The Corporation’s significant accounting policies, which may be affected by its estimates and assumptions, are more fully described in Note 2 to our consolidated financial statements that appear elsewhere in this Form 10-K.

Revenue Recognition

The Corporation recognizes revenue in accordance with Staff Accounting Bulletin No. 101, as amended by Staff Accounting Bulletin No. 104, on orders received from customers when there is persuasive evidence of an arrangement with the customer that is supportive of revenue recognition, the customer has made a fixed commitment to purchase the product for a fixed or determinable sales price, collection is reasonably assured under our normal billing and credit terms and ownership and all risks of loss have been transferred to the buyer, which is normally upon shipment.

Inventory

Inventories are stated at the lower of cost (first-in, first-out) or market (net realizable value). Costs include material, labor and manufacturing overhead costs. The Corporation reviews its inventory balances monthly for excess products or obsolete inventory levels and write down, if necessary, the inventory to net realizable value.

Business Combinations, Goodwill and Intangible Assets

In July 2001, the Financial Accounting Standards Board, or “FASB,” issued SFAS No. 141, Business Combinations, and SFAS No. 142, Goodwill and Intangible Assets. SFAS No. 141 requires all business combinations initiated after June 30, 2001 to be accounted for using the purchase method of accounting. Under SFAS No. 142, goodwill and intangible assets with indefinite lives are no longer amortized, but reviewed annually, or more frequently if impairment indicators arise. Separable intangible assets that are not deemed to have indefinite lives will continue to be amortized over their useful lives. The amortization provisions of SFAS No. 142 apply to goodwill and intangible assets acquired after June 30, 2001. With respect to goodwill and intangible assets acquired prior to July 1, 2001, the Corporation adopted SFAS No. 142 effective January 1, 2002.

Upon adoption of SFAS No. 142, the Corporation completed step one of the transitional goodwill impairment test, using a combination of valuation techniques, including the discounted cash flow approach and the market multiple approach. Upon completion of the required assessments under SFAS No. 142, it was determined that the fair market value of one reporting unit was lower than book value, resulting in a transition impairment charge of approximately $1.1 million in 2002. The write-off was recorded as a cumulative effect of a change in accounting in the Corporation’s consolidated statement of operations for fiscal 2002. Except for this transition impairment, the Corporation recorded no impairments as a result of SFAS 142 during 2003 or 2004.

24

The Corporation performs impairment tests annually and whenever events or circumstances occur indicating that goodwill or other intangible assets might be impaired. Examples of such events or circumstances include, but are not limited to, a significant adverse change in legal or business climate or an adverse regulatory action.

Environmental Liability

Governmental regulations relating to the discharge of materials into the environment, or otherwise relating to the protection of the environment, have had, and will continue to have, an effect on the Corporation’s operations and the Corporation. The Corporation has made and continues to make expenditures for projects relating to the protection of the environment.

Any loss contingencies with respect to environmental matters are recorded as liabilities in the consolidated financial statements when it is both (1) probable or known that a liability has been incurred and (2) the amount of the loss is reasonably estimable, in accordance with Financial Accounting Standards Statement No. 5, “Accounting for Contingencies.” If the reasonable estimate of the loss is a range and no amount within the range is a better estimate, the minimum amount of the range is recorded as a liability. If a loss contingency is not probable or not reasonably estimable, a liability is not recorded in the consolidated financial statements. In the opinion of the Corporation’s management, there are no known environmental matters that are expected to have a material impact on the Corporation’s consolidated balance sheet or results of operations; however, the outcome of such matters are not within its control and are subject to inherent uncertainty.

Recent Accounting Pronouncements

On December 16, 2004, the FASB issued Statement No. 123 (revised 2004), Share-Based Payment, which is a revision of FASB Statement No. 123, Accounting for Stock Based Compensation. Statement 123(R) supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees, and amends FASB Statement No. 95, Statement of Cash Flows. Generally, the approach in Statement 123(R) is similar to the approach described in Statement 123. However, Statement 123 (R) requires all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. Pro forma disclosure is no longer an alternative.

Statement 123(R) must be adopted by the Corporation no later than July 1, 2005. The Corporation expects to adopt Statement 123(R) on July 1, 2005 using the “modified prospective” method in which compensation cost is recognized beginning with the effective date based on the requirements of Statement 123(R) for all share-based payments granted after the effective date and based on the requirements of Statement 123 for all awards granted to employees prior to the effective date of Statement 123(R) that remain unvested on the effective date.

As permitted by Statement 123, Symmetry currently accounts for share-based payments to employees using Opinion 25’s intrinsic value method and, as such, generally recognizes no compensation cost for employee stock options. Accordingly, the adoption of Statement 123(R)’s fair value method will have a significant impact on our results of operations, although it will have no impact on our overall financial position. The impact of adoption of Statement 123(R) cannot be predicted at this time because it will depend on levels of share-based payments granted in the future. However, had we adopted Statement 123(R) in prior periods, the impact of that standard would have approximated the impact of Statement 123 as described in the disclosure of pro forma net income and earnings per share in Note 2 to our consolidated financial statements. Statement 123(R) also requires the benefits of tax deductions in excess of recognized compensation cost to be reported as a financing cash flow, rather than as an operating cash flow as required under current literature. This requirement will reduce net operating cash flows and increase net financing cash flows in periods after adoption. There were no such cash flows in prior periods.

In May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity. This statement establishes standards for how an issuer classifies

25

and measures in its statement of financial position certain financial instruments with characteristics of both liabilities and equity. SFAS No. 150 requires issuers to classify as liabilities (or assets in some circumstances) three classes of freestanding financial instruments that embody obligations for the issuer. Generally, SFAS No. 150 is effective for the Corporation at the beginning of the first interim period beginning after June 15, 2003. The adoption of SFAS No. 150 did not have an impact on the Corporation’s consolidated balance sheet or results of operations.

In January 2003, the FASB issued FASB Interpretation No. 46 (“FIN 46”), Consolidation of Variable Interest Entities. FIN 46 addresses the consolidation of variable interest entities, including entities commonly referred to as special purposes entities. The Corporation was required to apply FIN 46 to any variable interest entities as of December 31, 2003. The adoption of FIN 46 did not have an impact on the Corporation’s consolidated balance sheet or results of operations.

In April 2002, the FASB issued SFAS No. 145, Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical Corrections. This statement eliminates the automatic classification of gain or loss on extinguishment of debt as an extraordinary item of income and requires that such gain or loss be evaluated for extraordinary classification under the criteria of Accounting Principles Board No. 30, Reporting Results of Operations. This statement also requires sales-leaseback accounting for certain transactions, and makes various other technical corrections to existing pronouncements. The statement is effective for financial statements issued on or after May 15, 2002. The adoption of this statement on January 1, 2003 resulted in classifying the loss from early extinguishment of debt in connection with the acquisition of Mettis as a separate component of net income before provision for income taxes.

Item 7a. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

Interest Rate Risk

The Corporation is exposed to market risk from fluctuations in interest rates. The Corporation manages its interest rate risk by balancing the amount of its fixed rate and variable rate debt and through the use of interest rate swaps. The objective of the swaps is to more effectively balance borrowing costs and interest rate risk. For fixed rate debt, interest rate changes affect the fair market value of such debt but do not impact earnings or cash flows. Conversely for variable rate debt, interest rate changes generally do not affect the fair market value of such debt, but do impact future earnings and cash flows, assuming other factors are held constant. At January 1, 2005, the Corporation had approximately $39.3 million of variable rate debt. The weighted average interest rate for this debt in 2005 was 5.45%. Holding other variables constant (such as foreign exchange rates and debt levels), a one percentage point change in interest rates would be expected to have an impact on pre-tax earnings and cash flows for the next year of approximately $0.4 million, before giving effect to the interest rate swap agreements described below.

In 2000, the Corporation entered into an interest rate swap agreement that effectively converted $19 million of a portion of its variable rate term loans into a fixed rate obligation for the five-year period commencing October 24, 2000. The Corporation receives payments at variable rates, while the swap agreement counterparty makes payments at a fixed rate (6.25% at October 2, 2004). This agreement was terminated effective December 13, 2004 in conjunction with the Corporation’s initial public offering and reduced debt levels. In 2003, the Corporation entered into a second interest rate swap agreement that effectively converted $71.0 million of a portion of its variable rate term loans into a fixed rate obligation for an approximately three-year period ending June 30, 2006. The Corporation receives payments at variable rates, while it makes payments at a fixed rate (2.285% at January 1, 2005). Effective December 13, 2004, this agreement was reduced in size from $71.0 million to $35.0 million in conjunction with our initial public offering and reduced debt levels. The net cost to change these agreements was $0.3 million.

On December 13, 2004, the Corporation also entered into a new interest rate swap agreement that effectively converts $15.0 million of our variable rate term loans into a fixed rate obligation. The new agreement is effective June 30, 2006 and expires December 31, 2007.

26

Foreign Currency Risk

As a global company with operations in the UK and in France, the Corporation has a positive impact from foreign exchange. The Corporation’s revenue for the fourth quarter 2004 benefited from translation of foreign currency by $1.2 million and total year 2004 benefited by $6.0 million. Net income also benefited from translation of foreign currency by $0.2 million in the fourth quarter and $0.6 million for the total year of 2004.

Foreign currency risk is the risk that the Corporation will incur economic losses due to adverse changes in foreign currency exchange rates. The Corporation does not hold or issue foreign exchange options or forward contracts for trading purposes at this time. However, the Corporation may utilize these tools to manage foreign exchange risk in the future.

The Corporation’s primary exposures to foreign currency exchange fluctuations are pound sterling/U.S. dollar and euro/U.S. dollar. At January 1, 2005, the potential reduction in earnings from a hypothetical instantaneous 10% increase or decrease in quoted foreign currency spot rates applied to foreign currency sensitive instruments would be approximately $0.5 million, net of tax. This foreign currency sensitivity model is limited by the assumption that all of the foreign currencies to which the Corporation is exposed would simultaneously decrease by 10% because such synchronized changes are unlikely to occur.

Commodity Price Risk

The Corporation is exposed to fluctuations in commodity prices through the purchase of raw materials that are processed from commodities, such as titanium, stainless steel, cobalt chrome and aluminum. Given the historical volatility of certain commodity prices, this exposure can impact product costs. Because the Corporation typically does not set prices for its products in advance of its commodity purchases, it can take into account the cost of the commodity in setting its prices for each order. However, to the extent that the Corporation is unable to offset the increased commodity costs in its product prices, its results would be affected. A hypothetical instantaneous 10% change in commodity prices would have an immaterial impact on our results of operations in fiscal 2005.

Effects of Inflation

Inflation potentially affects the Corporation in two principal ways. First, a significant portion of its debt is tied to prevailing short-term interest rates that may change as a result of inflation rates, translating into changes in interest expense. The Corporation has historically reduced its exposure to interest rate risk through interest rate swap agreements. Second, general inflation can impact material purchases, labor and other costs. In many cases, the Corporation has limited ability to pass through inflation-related cost increases due to the competitive nature of the markets that it serves. In the past few years, however, inflation has not been a significant factor.

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Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

	Page
CONSOLIDATED FINANCIAL STATEMENTS:
Consolidated Balance Sheets	29
Consolidated Statements of Operations	30
Consolidated Statements of Shareholders’ Equity (Deficit)	31
Consolidated Statements of Cash Flows	32
Notes to Consolidated Financial Statements	33
Report of Independent Registered Public Accounting Firm	50

All schedules have been omitted because they are not required or applicable or the information is included in the consolidated financial statements or notes thereto.

28

Symmetry Medical Inc.

Consolidated Balance Sheets

(In Thousands, Except Share Data)

	January 3, 2004			January 1, 2005
Assets:
Current Assets:
Cash and cash equivalents	$	2,348		$	4,849
Accounts receivables, net		30,101			39,640
Inventories		26,699			34,083
Refundable income taxes		905			2,578
Deferred income taxes		1,875			2,036
Other current assets		3,667			5,635
Total current assets		65,595			88,821
Property and equipment, net		53,896			71,854
Interest rate swap valuation asset		—			486
Goodwill		125,413			127,369
Intangible assets, net of accumulation amortization		17,677			17,327
Other assets		4,636			1,011
Total Assets	$	267,217		$	306,868
Liabilities and Shareholders’ Equity:
Current Liabilities:
Accounts payable	$	9,637		$	17,908
Accrued wages and benefits		6,922			9,384
Other accrued expenses		4,771			3,012
Income tax payable		620			2,008
Revolving line of credit		—			1,204
Current portion of capital lease obligations		2,204			3,572
Current portion of long-term debt		5,377			879
Total current liabilities		29,531			37,967
Deferred income taxes		6,635			9,547
Interest rate swap valuation liability		965			—
Capital lease obligations, less current portion		8,377			11,709
Long-term debt, less current portion		121,319			31,500
Total Liabilities		166,827			90,723
Commitments and contingencies (Notes 15)		—			—
Shareholders’ Equity:
Class A Convertible Preferred Stock, $.01 par value—150,000 shares authorized at January 3, 2004; 101,625 shares issued at January 3, 2004		115,831			—
Common Stock, $.0001 par value—Class A—72,410,000 shares authorized; shares issued (January 1, 2005—33,174,056, January 3, 2004—15,789,486)		2			3
Additional paid-in capital		31,651			255,509
Unearned compensation		(57	)		—
Retained earnings (deficit)		(51,896	)		(49,178	)
Accumulated other comprehensive income		4,859			9,811
Total Shareholders’ Equity		100,390			216,145
Total Liabilities and Shareholders Equity	$	267,217		$	306,868

See accompanying notes to consolidated financial statements.

29

Symmetry Medical Inc.

Consolidated Statements of Operations

(In Thousands, Except Share and Per Share Data)

	Fiscal Year Ended
	December 28, 2002			January 3, 2004			January 1, 2005
Revenue	$	65,395		$	122,029		$	205,391
Cost of revenue		47,859			86,124			145,081
Gross profit		17,536			35,905			60,310
Selling, general, and administrative expenses		9,440			17,115			22,569
Operating income		8,096			18,790			37,741
Other (income) expense:
Interest expense		4,968			10,172			13,757
Loss on debt extinguishment		—			1,436			8,956
Interest rate swap valuation		979			(1,358	)		(1,451	)
Other		(42	)		(374	)		(740	)
Income before income taxes and cumulative effect of accounting change, net of tax		2,191			8,914			17,219
Income tax expense		841			3,009			5,524
Net income before cumulative effect of accounting change, net of tax		1,350			5,905			11,695
Cumulative effect of accounting change, net of tax		(1,146	)		—			—
Net income		204			5,905			11,695
Preferred stock dividends		(4,410	)		(7,028	)		(8,977	)
Net income (loss) applicable to common shareholders	$	(4,206	)	$	(1,123	)	$	2,718
Basic net income (loss) per share:
Net income (loss) applicable to common shareholders before cumulative effect of accounting change, net of tax	$	(0.44	)	$	(0.10	)	$	0.16
Cumulative effect of accounting change, net of tax		(0.17	)		—			—
Net income (loss) applicable to common shareholders	$	(0.61	)	$	(0.10	)	$	0.16
Diluted net income (loss) per share:
Net income (loss) applicable to common shareholders before cumulative effect of accounting change, net of tax	$	(0.44	)	$	(0.10	)	$	0.15
Cumulative effect of accounting change, net of tax		(0.17	)		—			—
Net income (loss) applicable to common shareholders	$	(0.61	)	$	(0.10	)	$	0.15
Weighted average common shares and equivalent shares outstanding:
Basic		6,905,800			11,797,842			16,905,396
Diluted		6,905,800			11,797,842			17,767,281

See accompanying notes to consolidated financial statements.

30

Symmetry Medical Inc.

Consolidated Statements of Shareholders’ Equity (Deficit)

(In Thousands)

	Class A Convertible Preferred Stock			Class B Redeemable Convertible Preferred Stock		Common Stock		Additional Paid-in Capital			Unearned Compensation Cost			Retained Earnings (Deficit)			Accumulated Other Comprehensive Income (Loss)			Total
Balance at December 29, 2001	$	45,707		$	—	$	1	$	9		$	(161	)	$	(46,495	)	$	(690	)	$	(1,629	)
Comprehensive income:
Net income before cumulative effect of accounting change															1,350						1,350
Cumulative effect of accounting change, net of tax (Note 2)															(1,146	)					(1,146	)
Other comprehensive income—foreign currency translation adjustment																		784			784
Comprehensive income																					988
Amortization of unearned compensation cost												8									8
Forfeiture of restricted stock												72			(72	)					—
Preferred stock dividends		3,922													(4,410	)					(488	)
Balance at December 28, 2002		49,629			—		1		9			(81	)		(50,773	)		94			(1,121	)
Comprehensive income:
Net income															5,905						5,905
Other comprehensive income—foreign currency translation adjustment																		4,765			4,765
Comprehensive income																					10,670
Amortization of unearned compensation cost												24									24
Conversion of Preferred Stock—Class B to Common Stock and Preferred Stock—Class A		2,652					—		1,170												3,822
Repurchase of stock		(2,672	)				—		(1,085	)											(3,757	)
Sale of stock		59,486					1		26,246												85,733
Common Stock and Preferred Stock Class A warrants									5,311												5,311
Preferred stock dividends		6,736													(7,028	)					(292	)
Balance at January 3, 2004		115,831			—		2		31,651			(57	)		(51,896	)		4,859			100,390
Comprehensive income:
Net income															11,695						11,695
Other comprehensive income—foreign currency translation adjustment																		4,952			4,952
Comprehensive income																					16,647
Amortization of unearned compensation cost												57									57
Redemption of Preferred Stock—Class A warrants		720					—		(720	)											—
Repurchase of stock		(23,332	)				—														(23,332	)
Sale of stock, net of expenses							1		122,382												122,383
Preferred stock dividends		8,977													(8,977	)					—
Conversion of Preferred Stock— Class A to Common Stock		(102,196	)		—		—		102,196												—
Balance at January 1, 2005	$	—		$	—	$	3	$	255,509		$	—		$	(49,178	)	$	9,811		$	216,145

See accompanying notes to consolidated financial statements.

31

Symmetry Medical Inc.

Consolidated Statements of Cash Flows

(In Thousands)

	Fiscal Year Ended
	December 28, 2002			January 3, 2004			January 1, 2005
Operating activities
Net income	$	204		$	5,905		$	11,695
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation		2,744			6,339			10,589
Amortization		—			323			609
Cumulative change in accounting principle, net of tax		1,146			—			—
(Gain) loss from sale of assets		(77	)		62			35
Deferred income tax provision		(152	)		1,813			2,751
Loss on debt extinguishment		—			1,436			8,346
Interest rate swap valuation change		979			(1,358	)		(1,451	)
Change in operating assets and liabilities:
Accounts receivable		858			(2,429	)		(8,844	)
Other assets		(24	)		1,444			(549	)
Inventories		262			(4,009	)		(6,773	)
Accounts payable		(701	)		801			7,959
Accrued expenses and other		(364	)		2,824			961
Net cash provided by operating activities		4,875			13,151			25,328
Investing activities
Purchases of property and equipment		(6,565	)		(8,816	)		(19,891	)
Acquisition, net of cash received		—			(163,128	)		—
Net cash used in investing activities		(6,565	)		(171,944	)		(19,891	)
Financing activities
Proceeds from bank revolver		11,447			14,779			36,079
Payments on bank revolver		(8,326	)		(28,461	)		(34,864	)
Issuance of long-term debt		—			134,000			35,000
Payments on long-term debt and capital lease obligations		(4,509	)		(36,889	)		(137,275	)
Proceeds from issuance of common and preferred stock, net of expenses		3,042			85,733			122,383
Payments for redemption of common and preferred stock		—			(3,757	)		(23,332	)
Debt issuance costs paid		—			(5,193	)		(1,073	)
Net cash provided by (used in) financing activities		1,654			160,212			(3,082	)
Effect of exchange rate changes on cash		(18	)		148			146
Net increase (decrease) in cash and cash equivalents		(54	)		1,567			2,501
Cash and cash equivalents at beginning of year		835			781			2,348
Cash and cash equivalents at end of year	$	781		$	2,348		$	4,849
Supplemental disclosures
Cash paid for interest	$	4,616		$	8,339		$	13,377
Cash paid for income taxes	$	807		$	1,734		$	2,976
Assets acquired under capital leases	$	592		$	4,042		$	7,357

See accompanying notes to consolidated financial statements.

32

Symmetry Medical Inc.

Notes to Consolidated Financial Statements

(in thousands, except share and per share data)

1. Description of the Business

The consolidated financial statements include the accounts of Symmetry Medical, Inc. and its wholly-owned subsidiaries (collectively referred to as the Corporation), Symmetry Medical USA Inc., Jet Engineering, Inc. (Jet), Ultrexx, Inc. (Ultrexx), Othy Limited, Poly-Vac S.A. and Mettis UK Limited, including its wholly-owned subsidiary, Thornton Precision Components Limited (TPC).

The Corporation is a global supplier of integrated products and services consisting of surgical implants, instruments and cases to orthopedic and other medical device companies.

During 2003, the Corporation acquired Mettis UK Limited, including Jet, Ultrexx and TPC from the Mettis Companies (the Mettis Acquisition). Refer to note 3 for further discussion.

In December, 2004, the Corporation completed an initial public offering (IPO) of its common stock and entered into a new senior credit facility. In connection with this offering, the Corporation received net proceeds of $122,383. Approximately $36,360 of the net proceeds from the offering were used to repay all of its existing subordinated indebtedness, $58,025 to repay a portion of its existing senior indebtedness and $23,332 to repurchase a portion of its Class A Convertible Preferred Stock and warrants to purchase Class A Convertible Preferred Stock. In addition, the remaining outstanding shares of Class A Convertible Preferred Stock and warrants to purchase Class A Convertible Preferred Stock converted into 8,015,150 shares of the Corporation’s Common Stock and warrants to purchase 255,334 shares of the Corporation’s Common Stock.

2. Summary of Significant Accounting Policies

Principles of Consolidation

The consolidated financial statements include the accounts of the Corporation and its wholly-owned subsidiaries. Significant intercompany accounts and transactions have been eliminated in consolidation. Certain prior period amounts have been reclassified to conform to the current year presentation. Such reclassifications had no impact on net income previously reported.

Year End

The Corporation’s year end is the 52 or 53 week period ending the Saturday closest to December 31, resulting in fiscal 2004 (ending January 1, 2005) being 52 weeks, fiscal 2003 (ending January 3, 2004) being 53 weeks, and fiscal 2002 (ending December 28, 2002) being 52 weeks. References in these consolidated financial statements to 2004, 2003 and 2002 refer to these financial years, respectively.

Use of Estimates

Preparation of these consolidated financial statements requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates, but management does not believe such differences will materially affect the Corporation’s financial position or results of operations.

Cash and Cash Equivalents

Cash and cash equivalents include all highly liquid investments with a maturity of three months or less at the time of purchase.

33

Symmetry Medical Inc.

Notes to Consolidated Financial Statements—(Continued)

(in thousands, except share data)

Inventories

Inventories are stated at the lower of cost, determined on the first-in, first-out (FIFO) method, or market. Costs include material, labor and manufacturing overhead costs. Inventory balances are reviewed monthly for excess products or obsolete inventory levels and write down, if necessary, the inventory to net realizable value.

Inventories consist of the following:

	January 3, 2004		January 1, 2005
Raw material and supplies	$	3,678	$	6,012
Work-in-process		17,147		20,561
Finished goods		5,874		7,501
	$	26,699	$	34,083

Property and Equipment

Property and equipment are stated on the basis of cost. Depreciation is calculated on the straight-line method over the estimated useful lives of the respective assets or lease terms. Repair and maintenance costs are charged to expense as incurred.

Property and equipment, including depreciable lives, consists of the following:

	January 3, 2004		January 1, 2005
Land	$	1,284	$	1,337
Buildings and improvements (20 to 40 years)		14,865		22,117
Machinery and equipment (5 to 15 years)		56,964		74,064
Office equipment (3 to 5 years)		3,954		5,307
Construction-in-progress		1,337		4,170
		78,404		106,995
Less accumulated depreciation		24,508		35,141
	$	53,896	$	71,854

Goodwill

The changes in the carrying amounts of goodwill for the years ended January 1, 2005, January 3, 2004 and December 28, 2002 are as follows:

Balance as of December 28, 2002	$	23,140
Goodwill acquired		100,009
Effects of foreign currency		2,264
Balance as of January 3, 2004		125,413
Effects of foreign currency		1,956
Balance as of January 1, 2005	$	127,369

34

Symmetry Medical Inc.

Notes to Consolidated Financial Statements—(Continued)

(in thousands, except share data)

In accordance with Statement of Financial Accounting Standards (SFAS) No. 142, Goodwill and Other Intangible Assets, goodwill is no longer amortized but is subject to an annual impairment test in accordance with this statement. Goodwill is defined by the Corporation as the excess of purchase cost over the fair value of the net tangible and identifiable intangible assets acquired. Statement No. 142 requires the Corporation to test goodwill for impairment using a two-step process. The first step is a screen for potential impairment, while the second step measures the amount of impairment. Potential impairment is determined by comparing estimated fair value to the net book value of the reporting unit. Fair value is calculated as the present value of estimated future cash flows using a risk-adjusted discount rate commensurate with the Corporation’s weighted-average cost of capital. The Corporation has multiple operating segments as defined by SFAS 131. The Corporation has defined its reporting units at the operating segment level as this is the lowest level for which discrete financial information is available and the operating results of that component are regularly reviewed by management. During 2002, in connection with the adoption of SFAS 142, the Corporation completed the two-step impairment process. As a result, the Corporation recognized impairment of $1,146 as a component of the cumulative effect of an accounting change. The Corporation completed its annual impairment tests and concluded that no impairment of goodwill existed.

Other Intangible Assets

Intangible assets subject to amortization consist of technology and customer related intangible assets acquired in connection with the Mettis Acquisition. These assets ($13,482 at January 1, 2005 and $13,912 at January 3, 2004) are being amortized using the straight-line method over 9 to 25 years. The accumulated amortization related to these assets is $947 at January 1, 2005 and $326 at January 3, 2004. Amortization expense for the next 5 fiscal years approximates $607 per year. The Corporation is required to reassess the expected useful lives of existing intangible assets. The Corporation also evaluates the recoverability of intangible assets subject to amortization based on undiscounted operating cash flows when factors indicate impairment may exist. In the event of impairment, the Corporation makes appropriate write-downs of recorded costs to fair value.

In accordance with Statement of Financial Accounting Standards (SFAS) No. 142, Goodwill and Other Intangible Assets, intangible assets with an indefinite life are no longer amortized but are subject to review each reporting period to determine whether events and circumstances continue to support an indefinite useful life as well as an annual impairment test in accordance with this statement. The Corporation has $3,845 of indefinite lived intangible assets at January 1, 2005 and $3,765 at January 3, 2004.

The Corporation reviewed its intangible assets in accordance with SFAS No. 142 and has not recorded any impairment related to these assets for the year ended January 1, 2005.

Foreign Currency Accounting

The financial statements of the Corporation’s foreign subsidiaries are accounting for and have been translated into U.S. dollars in accordance with Financial Accounting Standards Board (FASB) Statement No. 52, Foreign Currency Translation. Foreign currency transaction gains and losses resulting from a subsidiary’s foreign currency denominated assets and liabilities included in other income were a $761 gain, $384 gain, and $46 gain in 2004, 2003 and 2002, respectively. Assets and liabilities have been translated using the exchange rate in effect at the balance sheet date. Revenues and expenses have been translated using a weighted-average exchange rate for the period. Currency translation adjustments have been recorded as a separate component of shareholders’ equity.

Revenue Recognition

The Corporation recognizes revenue on orders received from its customers when there is persuasive evidence of an arrangement with the customer that is supportive of revenue recognition, the customer has made a

35

Symmetry Medical Inc.

Notes to Consolidated Financial Statements—(Continued)

(in thousands, except share data)

fixed commitment to purchase the product for a fixed or determinable price, collection is reasonably assured under the Corporation’s normal billing and credit terms and ownership and all risks of loss have been transferred to the buyer, which is normally upon shipment.

Shipping and Handling Costs

In accordance with EITF 00-10: Accounting for Shipping and Handling Fees and Costs, the Corporation reflects freight costs associated with shipping its products to customers as a component of cost of revenues.

Advertising Costs

Advertising costs are expensed as incurred. Advertising costs were $265, $208 and $191 for the years ending January 1, 2005, January 3, 2004 and December 28, 2002, respectively.

Allowance for Doubtful Accounts

The Corporation performs periodic credit evaluations of customers’ financial condition and generally does not require collateral. Receivables are generally due within 30 to 60 days. The Corporation maintains an allowance for doubtful accounts for estimated losses in the collection of accounts receivable. The Corporation makes estimates regarding the future ability of its customers to make required payments based on historical credit experience and expected future trends.

The activity in the allowance for doubtful accounts was as follows:

	December 28, 2002			January 3, 2004			January 1, 2005
Beginning Balance	$	37		$	109		$	646
Provision		88			244			273
Acquired allowance		—			324			—
Write-offs, net		(16	)		(31	)		(190	)
Ending Balance	$	109		$	646		$	729

New Accounting Pronouncements

On December 16, 2004, the FASB issued Statement No. 123 (revised 2004), Share-Based Payment, which is a revision of FASB Statement No. 123, Accounting for Stock Based Compensation. Statement 123(R) supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees, and amends FASB Statement No. 95, Statement of Cash Flows. Generally, the approach in Statement 123(R) is similar to the approach described in Statement 123. However, Statement 123 (R) requires all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. Pro forma disclosure is no longer an alternative.

Statement 123(R) must be adopted by the Corporation no later than July 1, 2005. We expect to adopt Statement 123(R) on July 1, 2005 using the “modified prospective” method in which compensation cost is recognized beginning with the effective date based on the requirements of Statement 123(R) for all share-based payments granted after the effective date and based on the requirements of Statement 123 for all awards granted to employees prior to the effective date of Statement 123(R) that remain unvested on the effective date.

36

Symmetry Medical Inc.

Notes to Consolidated Financial Statements—(Continued)

(in thousands, except share data)

As permitted by Statement 123, the Corporation currently accounts for share-based payments to employees using Opinion 25’s intrinsic value method and, as such, generally recognizes no compensation cost for employee stock options. Accordingly, the adoption of Statement 123(R)’s fair value method will have a significant impact on the Corporation’s results of operations, although it will have no impact on its overall financial position. The impact of adoption of Statement 123(R) cannot be predicted at this time because it will depend on levels of share-based payments granted in the future. However, had the Corporation adopted Statement 123(R) in prior periods, the impact of that standard would have approximated the impact of Statement 123 as described in the disclosure of pro forma net income and earnings per share in Note 2 to its consolidated financial statements. Statement 123(R) also requires the benefits of tax deductions in excess of recognized compensation cost to be reported as a financing cash flow, rather than as an operating cash flow as required under current literature. This requirement will reduce net operating cash flows and increase net financing cash flows in periods after adoption. There were no such cash flows in prior periods.

In January 2003, the FASB issued Interpretation No. 46 (FIN 46), Consolidation of Variable Interest Entities and was effective for the Corporation beginning in the year ending January 1, 2005. FIN 46 defines a variable interest entity (VIE) as a corporation, partnership, trust or any other legal structure that does not have equity investors with a controlling financial interest or has equity investors that do not provide sufficient financial resources for the entity to support its activities. FIN 46 did not have a material impact on the Corporation’s financial position or results of operations.

In April 2003, the FASB issued SFAS No. 149, Amendment of Statement 133 on Derivative Instruments and Hedging Activities and was effective for the Corporation in fiscal year 2003. This statement amends and clarifies financial accounting and reporting for derivative instruments and hedging activities under SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, by requiring contracts with similar characteristics to be accounted for comparably. The adoption of SFAS No. 149 did not have a material effect on the Corporation’s financial position or results of operations.

In May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity. This statement changes the accounting for certain financial instruments that, under previous guidance, could be accounted for as equity. SFAS No. 150 may require that those instruments be classified as liabilities. SFAS No. 150 was effective for financial instruments entered into or modified after May 31, 2003, and otherwise was effective after June 15, 2003. The adoption of SFAS No. 150 did not have an impact on the Corporation’s financial position or results of operation.

In April 2002, the FASB issued SFAS No. 145, Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical Corrections. This statement eliminates the automatic classification of gain or loss on extinguishment of debt as an extraordinary item of income and requires that such gain or loss be evaluated for extraordinary classification under the criteria of Accounting Principles Board No. 30, Reporting Results of Operations. This statement also requires sales-leaseback accounting for certain transactions, and makes various other technical corrections to existing pronouncements. The statement is effective for financial statements issued on or after May 15, 2002. The adoption of this statement on January 1, 2003 resulted in classifying the loss from early extinguishment of debt in connection with the acquisition of Mettis (UK) Limited as a separate component of net income before provision for income taxes.

Derivative Financial Instruments

SFAS No. 133, as amended, requires recognition of every derivative instrument in the balance sheet as either an asset or liability measured at its fair value. Changes in the fair value of derivatives are to be recorded

37

Symmetry Medical Inc.

Notes to Consolidated Financial Statements—(Continued)

(in thousands, except share data)

each period in earnings or comprehensive income, depending on whether the derivative is designated and effective as part of a hedge accounting transaction. The Corporation’s derivatives discussed below do not qualify for hedge accounting and accordingly, adjustments to fair value are recorded in earnings.

The Corporation enters into interest rate swap agreements (SWAP) to offset against changes in interest rates on the Corporation’s variable rate long-term debt. The SWAP agreements are contracts to exchange variable rate obligations for fixed interest payments to be made periodically over the life of the SWAP agreement. Effective October 2000, the Corporation entered into a SWAP agreement to economically hedge $19,000 of outstanding long-term debt at a fixed rate payment obligation of 6.25% per annum for the five-year period commencing October 24, 2000; however, this SWAP was terminated in December 2004.

Effective July 2003, the Corporation entered into a SWAP agreement to economically hedge an additional $71,000 of outstanding long-term debt at a fixed payment obligation of 2.285% per annum for the period commencing on July 21, 2003 and ending on June 30, 2006. In December 2004, this SWAP was reduced to $35,000.

Effective December 2004, the Corporation entered into a SWAP agreement to economically hedge $15,000 of outstanding long-term debt at a fixed payment obligation of 3.98% per annum for the period commencing on June 30, 2006 and ending on December 31, 2007.

As of January 3, 2004, the Corporation had a derivative liability of $965, which is reflected in non-current liabilities in the consolidated balance sheets. The full portion of the net gain on valuation liability in 2003 of $1,358 was included in earnings.

As of January 1, 2005, the Corporation had a derivative asset of $486, which is reflected in non-current assets in the consolidated balance sheets. The full portion of the net gain on valuation asset/liability in 2004 of $1,451 was included in earnings.

Stock-Based Compensation

The Corporation has elected to follow APB No. 25, Accounting for Stock Issued to Employees, in accounting for its stock options and; accordingly, no compensation cost has been recognized for stock options in the consolidated financial statements. However, SFAS 123, Accounting for Stock-Based Compensation, as amended by SFAS No. 148, Accounting for Stock-Based Compensation-Transition and Disclosure, requires pro-forma presentation as if compensation costs had been expensed under the fair value method of SFAS No. 123. For purposes of pro forma disclosure, the estimated fair value of the options at the date of grant is amortized to expense over the vesting period.

38

Symmetry Medical Inc.

Notes to Consolidated Financial Statements—(Continued)

(in thousands, except share data)

The following table illustrates the effect on net income as if compensation expense had been recognized for the years ended:

	December 28, 2002			January 3, 2004			January 1, 2005
Reported net income	$	204		$	5,905		$	11,695
Stock-based compensation expense (net of tax)		(2	)		(122	)		(235	)
Adjusted net income	$	202		$	5,783		$	11,460
Basic net income (loss) per share applicable to common:
Reported net income (loss) per share	$	(0.61	)	$	(0.10	)	$	0.16
Stock-based compensation expense (net of tax) per share		—			(0.01	)		(0.01	)
Adjusted net income (loss) per share	$	(0.61	)	$	(0.11	)	$	0.15
Diluted net income (loss) per share applicable to common:
Reported net income (loss) per share	$	(0.61	)	$	(0.10	)	$	0.15
Stock-based compensation expense (net of tax) per share		—			(0.01	)		(0.01	)
Adjusted net income (loss) per share	$	(0.61	)	$	(0.11	)	$	0.14

3. Mettis Acquisition

On June 11, 2003, the Corporation acquired 100% of the ownership interests of Mettis UK Limited which included Jet, Ultrexx and TPC in exchange for aggregate consideration of $163,942 consisting of approximately $146,000 of cash, $15,000 of stock and acquisition costs, net of liabilities assumed. The acquisition provides the Corporation with a new product line, orthopedic implants which are forged at Jet and TPC as well as additional production capacity for instruments. The purchase price of the Mettis acquisition exceeded the fair value of identifiable tangible and intangible assets which reflects the synergistic and strategic fit of this acquisition into the Corporation’s business. Results of the Mettis acquisition are included in the statement of operations from the acquisition date.

The aggregate purchase price of $163,942 was allocated to the opening balance sheet as follows:

Current assets	$	33,970
PP&E		30,789
Acquired technology (amortized over 9 years)		445
Acquired customers (amortized over 25 years)		13,672
Acquired manufacturing processes (indefinite-lived)		3,626
Goodwill		100,009
Current liabilities		(11,025	)
Non-current liabilities		(7,544	)
Purchase price, net	$	163,942

39

Symmetry Medical Inc.

Notes to Consolidated Financial Statements—(Continued)

(in thousands, except share data)

The following unaudited pro forma consolidated revenues, net income and earnings per share amounts have been prepared by applying pro forma adjustments to our historical amounts. The unaudited pro forma information for the periods presented gives effect to the acquisition of Mettis (UK) Limited as if it had been consummated at the beginning of the periods presented. We completed the Mettis (UK) Limited acquisition on June 11, 2003.

	December 28, 2002			January 3, 2004
Revenue	$	149,861		$	158,355
Net Income (loss)		(206	)		5,871
Income (loss) available to common shareholders		(4,616	)		(1,157	)
Earnings (loss) per share—basic		(0.67	)		(0.10	)
Earnings (loss) per share—diluted		(0.67	)		(0.10	)

4. Debt Arrangements

Long-term debt consists of the following:

	January 3, 2004			January 1, 2005
Bank Term Loan payable in quarterly installments, plus interest at a variable rate (4.5625% at January 1, 2005), through December 14, 2009	$	—		$	32,375
Revolving line of credit, due December 2009		—			—
Term loan, paid off in 2004		95,800			—
Subordinated notes, paid off in 2004		36,000			—
Discount on subordinated notes		(5,111	)		—
Installment Loan		7			4
		126,696			32,379
Less current portion		(5,377	)		(879	)
	$	121,319		$	31,500

During 2003, the Corporation refinanced substantially all of its debt arrangements as part of financing the Mettis Acquisition resulting in a loss on debt extinguishment of $1,436. During 2004, the Corporation refinanced substantially all of its debt arrangements as part of the initial public offering resulting in a loss on debt extinguishment of $8,956.

The Corporation’s revolving credit facility has a total capacity of up to $40 million and the Corporation pays a .50% annual commitment fee for the average unused portion of the revolving line of credit facility. There are no borrowings under this line of credit at January 1, 2005.

The senior credit agreement contains various financial covenants, including covenants requiring a maximum total debt to EBITDA ratio, minimum EBITDA to interest ratio and a minimum EBITDA to fixed charges ratio. The senior credit agreement also contains covenants restricting certain corporate actions, including asset dispositions, acquisitions, paying dividends and certain other restricted payments, changes of control, incurring indebtedness, incurring liens, making loans and investments and transactions with affiliates. The senior credit facility is secured by substantially all of the Corporation’s assets. The Corporation’s senior credit agreement also contains customary events of default. The Corporation was in compliance with our financial and restrictive covenants under the senior credit facility at the end of fiscal 2003 and fiscal 2004.

40

Symmetry Medical Inc.

Notes to Consolidated Financial Statements—(Continued)

(in thousands, except share data)

On June 11, 2003, the Corporation issued $36,000 of 12% senior unsecured subordinated notes due 2011. These notes were issued with detachable warrants exercisable for an aggregate of 585,377 shares of common stock, par value $0.01 per share and 3,530 shares shares of Class A Preferred Stock par value $0.01 per share execercisable at any time prior to June 2013 at an exercise price of $0.01 per share. In accordance with Accounting Principles Board Opinion 14 (APB 14), Accounting for Convertible Debt and Debt Issued with Stock Purchase Warrants, the Corporation recorded a discount equal to the fair value of the warrants of $5,311. The remaining balance of the discount was recorded to loss on debt extinguishment during the fourth quarter of 2004 in connection with the Corporation’s extinguishment of the subordinated notes.

As of January 1, 2005, the Corporation had prepaid the next three scheduled quarterly term loan payments. Maturities of long-term debt for the five years succeeding January 1, 2005 are as follows:

2005	$	879
2006		5,250
2007		7,000
2008		8,750
2009		10,500
	$	32,379

5. Preferred Stock

The Class A Convertible Preferred Stock had a liquidation value of $1,000 per share, was nonvoting, and accrued cumulative dividends at 8% per annum on the sum of the liquidation value plus all accumulated and unpaid dividends. Holders of the Class A Convertible Preferred Stock had liquidation preference rights, including the right in the event of an initial public offering of the Corporation’s common stock to convert Class A convertible preferred stock into common stock, at a conversion price equal to 85% of the per share price paid by the public for the common stock in the initial public offering. In June 2003, the Corporation sold 59,486 shares of Class A convertible preferred stock for $1,000 per share. Of these shares, 44,499 were sold to related parties including Olympus Partners and employees of the Corporation. In December 2004 upon completion of the IPO, the Corporation repurchased $23,332 of its Class A Convertible Preferred Stock and warrants to purchase Class A Convertible Preferred Stock. In addition, the remaining outstanding shares of Class A Convertible Preferred Stock and warrants to purchase Class A Convertible Preferred Stock converted into 8,015,150 shares of the Corporation’s Common Stock and warrants to purchase 255,334 shares of the Corporation’s Common Stock at an exercise price of $0.01 per share which are exercisable at any time prior to June 2013.

In connection with a debt amendment, on February 22, 2002 the Corporation issued 3,000 shares of Class B Redeemable Convertible Preferred Stock (Class B Preferred Stock) for $1,000 per share. The Class B Preferred Stock was senior to all other outstanding equity securities issued by the Corporation and did not have voting rights. The Class B shareholders were entitled to a dividend of 18% per annum which is cumulative. All shares of the Class B Preferred Stock were converted into 2,652 shares of the Corporation’s Class A Preferred Stock and 383,773 shares of Common Stock during 2003.

6. Leases

The Corporation has a capital lease arrangement through October 1, 2016 for its New Hampshire plant facility. On October 1, 2001, and every five years thereafter, including extensions, the annual base rent will change based on the Consumer Price Index. The Corporation has an option to extend the lease for an additional five-year period and has a right of first opportunity to purchase the leased property. Additionally, the Corporation has entered into capital leases for various machinery and equipment.

41

Symmetry Medical Inc.

Notes to Consolidated Financial Statements—(Continued)

(in thousands, except share data)

Property and equipment and related accumulated amortization for building and equipment capital leases are as follows:

	January 3, 2004			January 1, 2005
Buildings and improvements	$	4,991		$	4,991
Machinery and equipment		9,550			17,285
		14,541			22,276
Less accumulated amortization		(3,017	)		(5,815	)
	$	11,524		$	16,461

Amortization of leased assets is included in depreciation expense.

Future minimum payments for capital leases with initial terms of one year or more are as follows at January 1, 2005:

2005	$	4,580
2006		4,039
2007		3,552
2008		2,477
2009		1,200
Thereafter		4,603
Total minimum payments		20,451
Amounts representing interest		(5,170	)
Present value of net minimum lease payments (including total current portion of $3,572)	$	15,281

7. Income Taxes

Income before income taxes consisted of:

	December 28, 2002		January 3, 2004		January 1, 2005
Domestic	$	1,725	$	6,602	$	9,455
Foreign		466		2,312		7,764
	$	2,191	$	8,914	$	17,219

42

Symmetry Medical Inc.

Notes to Consolidated Financial Statements—(Continued)

(in thousands, except share data)

Significant components of the Corporation’s net deferred tax liabilities are as follows:

	January 3, 2004			January 1, 2005
Compensation	$	787		$	660
Intangibles		(4,914	)		(4,855	)
Inventory		883			911
PP&E		(2,653	)		(4,772	)
Net operating loss carryforwards of states and foreign subsidiaries		753			425
SWAP agreements		382			(193	)
Other		622			584
		(4,140	)		(7,240	)
Valuation allowance		(620	)		(271	)
	$	(4,760	)	$	(7,511	)

Significant components of the income tax provision are as follows:

	December 28, 2002			January 3, 2004		January 1, 2005
Current:
Federal	$	758		$	205	$	922
State		161			60		202
Foreign		74			931		1,649
		993			1,196		2,773
Deferred		(152	)		1,813		2,751
	$	841		$	3,009	$	5,524

The provision for income taxes differs from that computed at the Federal statutory rate of 34% as follows:

	December 28, 2002			January 3, 2004			January 1, 2005
Tax at Federal statutory rate	$	745		$	3,031		$	5,854
State income taxes		88			257			244
Foreign taxes		(352	)		43			(260	)
Valuation allowance		323			(96	)		(349	)
Other		37			(226	)		35
	$	841		$	3,009		$	5,524

At January 1, 2005, the Corporation had state and foreign net operating loss carryforwards of approximately $5,416 and $386. The state carryforwards have an expiration period of up to twenty years, while the foreign carryforwards have no expiration date. However, due to the uncertainty of the realization of the full benefit of the foreign net operating loss carryforwards and certain other foreign deferred tax assets, the Corporation has established a valuation allowance of $271. No provision has been made for United States federal and state or foreign taxes that may result from future remittances of undistributed earnings of foreign subsidiaries because it is expected that such earnings will be reinvested in these foreign operations indefinitely.

43

Symmetry Medical Inc.

Notes to Consolidated Financial Statements—(Continued)

(in thousands, except share data)

8. Profit Sharing Plan

The Corporation maintains two qualified profit sharing plans, which qualify under Section 401(k) of the Internal Revenue Code. Contributions by the Corporation are based upon both discretionary and matching nondiscretionary amounts. The matching amounts represent a 50% match of employees’ contributions, up to a maximum of $1 per participant per year. Expense recorded for the plans was $857, $686 and $493 for 2004, 2003 and 2002, respectively.

9. Restrictive Stock Plan

In January 2001 certain members of management were awarded a total of 677,758 shares of common stock which vest on December 31, 2007 or earlier in increments of 25% per year, if the Corporation’s EBITDA, as defined, meets specified levels as outlined in the agreement. However, 263,572 shares have been forfeited. Compensation expense is charged to the income statement as earned over the vesting period. The unearned compensation resulting from this agreement is reflected as a reduction to shareholder equity. For the years ended January 1, 2005, January 3, 2004 and December 28, 2002, the Corporation recognized approximately $57, $24 and $8, respectively. The initial public offering in December 2004 resulted in all shares becoming vested, and these shares are no longer restricted as of January 1, 2005.

10. Stock Option Plan

2002 Stock Option Plan The 2002 Stock Option Plan provides for the grant of nonqualified stock options to the Corporation’s directors, officers and employees and other persons who provide services and us. A total of 52,135 shares of common stock are reserved for issuance under this plan. Options for 52,135 shares of common stock have been granted. These options vest ratably over a four year period as of the end of each of our fiscal years during that period, subject to the Corporation achieving certain minimum EBITDA targets in each fiscal year, and, if those targets are not met, on the seventh anniversary of the grant date so long as the option is still an employee. Options granted under the 2002 Stock Option Plan are generally not transferable by the optionee, and such options must be exercised within 30 days after the end of an optionee’s status as an employee, director or consultant of ours (other than a termination by us for cause, as defined in the 2002 Stock Option Plan), within 180 days after such optionee’s termination by death or disability, or within 90 days after such optionee’s retirement, but in no event later than the expiration of the option term. All options were granted at the fair market value of the Corporation’s common stock, as determined by its board of directors, on the date of grant. The term of all options granted under the 2002 Stock Option Plan may not exceed ten years.

2003 Stock Option Plan The 2003 Stock Option Plan provides for the grant of nonqualified stock options to the Corporation’s directors, officers and employees and other persons who provide services to it. A total of 907,167 shares of common stock are reserved for issuance under this plan. Options for 813,034 shares of common stock have been granted. These options vest ratably over a four year period as of the end of each of our fiscal years during that period. Options granted under the 2003 Stock Option Plan are generally not transferable by the optionee, and such options must be exercised within 30 days after the end of an optionee’s status as an employee, director or consultant of the Corporation (other than a termination by us for cause, as defined in the 2003 Stock Option Plan), within 180 days after such optionee’s termination by death or disability, or within 90 days after such optionee’s retirement, but in no event later than the expiration of the option term.

All options were granted at the fair market value of the Corporation’s common stock, as determined by its board of directors, on the date of grant. The term of all options granted under the 2003 Stock Option Plan may not exceed ten years.

44

Symmetry Medical Inc.

Notes to Consolidated Financial Statements—(Continued)

(in thousands, except share data)

A summary of stock option activity and weighted-average exercise prices for the periods indicated are as follows:

	Number of Options		Weighted-Average Exercise Price
Outstanding at December 29, 2001	—		$
Granted	52,135			0.28
Exercised	—			—
Cancelled	—			—
Outstanding at December 28, 2002	52,135		$	0.28
Granted	740,624			3.04
Exercised	—			—
Cancelled	—			—
Outstanding at January 3, 2004	792,759		$	2.86
Granted	72,410			4.83
Exercised	—			—
Cancelled	(34,214	)		3.04
Outstanding at January 1, 2005	830,955		$	3.02

The following table summarizes information about stock options outstanding at January 1, 2005:

Range of Exercise	Number Outstanding	Weighted Average Remaining Life	Weighted Average Exercise Price		Number Exercisable at January 1, 2005	Weighted Average Exercise Price
$0.28	52,135	7.0 years	$	0.28	39,102	$	0.28
3.04 – 4.83	778,820	8.1 years		3.21	372,672		3.13

Using the minimum value option valuation model, the estimated fair values of options granted during 2004, 2003 and 2002 were $1.62, $1.13 and $0.11 per option, respectively. There were no options granted subsequent to completion of the IPO. Principal assumptions used in applying the minimum value model were as follows:

	2002	2003	2004
Minimum Value Model Assumptions
Risk-free interest rate	5.09%	4.65%	4.08%
Expected dividend yield	0.00%	0.00%	0.00%
Expected term	10 years	10 years	10 years

11. Related Party Transactions

During the years ended January 1, 2005 and January 3, 2004, the Corporation purchased contract manufacturing services totaling $1,034 and $283, respectively, from ADS Precision Limited (ADS), a company controlled by a relative of the general manager of TPC. The Corporation maintains an ongoing relationship with this vendor and believes all transactions have been executed on an arms length basis. The Corporation has a payable to ADS of $368 as of January 1, 2005 and $135 as of January 3, 2004.

During 2004, 2003 and 2002, the Corporation paid management fees to a related party of $375, $375 and $250, respectively. These fees are included in selling, general and administrative expenses. Additionally, the Corporation paid a transaction fee upon the completion of the Mettis acquisition and the sale of senior subordinated notes to this related party of $1,717 in 2003 and a transaction fee upon completion of the initial public offering of $2,000 in 2004.

45

Symmetry Medical Inc.

Notes to Consolidated Financial Statements—(Continued)

(in thousands, except share data)

12. Fair Value of Financial Instruments

Financial instruments consist of cash and cash equivalents, accounts receivable, and long-term debt, including interest-rate swap agreements. The carrying value of these financial instruments approximates fair value.

13. Segment Reporting

The Corporation primarily designs, develops and manufactures implants and related surgical instruments and cases for orthopedic device companies and companies in other medical device markets such as dental, osteobiologic and edoscopy. The Corporation also has a special services business serving primarily aerospace customers, which does not meet the quantitative disclosure requirements of SFAS 131. The Corporation manages its business and operates in a single reportable business segment. Because of the similar economic characteristics of the operations, including the nature of the products, comparable level of FDA regulations, same or similar customers, those operations have been aggregated following the provisions of SFAS 131 for segment reporting purposes.

The Corporation is a multi-national corporation with operations in the United States, the United Kingdom and France. As a result, the Corporation’s financial results can be impacted by currency exchange rates in the foreign markets in which the Corporation sells its products. While exposure to variability in foreign currency exists, the Corporation does not believe it is significant to its operations and any variability is somewhat offset through the location of its manufacturing facilities. Revenues are attributed to geographic locations based on the location to which we ship our products.

Revenues to External Customers:

	December 28, 2002		January 3, 2004		January 1, 2005
United States	$	52,829	$	89,408	$	136,791
United Kingdom		6,576		19,624		27,222
Other foreign countries		5,990		12,997		41,378
Total Net Revenues	$	65,395	$	122,029	$	205,391

Long-Lived Assets:

	January 3, 2004		January 1, 2005
United States	$	152,531	$	157,886
United Kingdom		45,381		55,969
France		3,710		4,192
Total Long-Lived Assets	$	201,622	$	218,047

Concentration of Credit Risk:

A substantial portion of the Corporation’s net revenues is derived from a limited number of customers. Net revenues include revenues to customers of the Corporation which individually account for 10% or more of net revenues as follows:

2004 – Four customers representing approximately 25%, 15% 14% and 10% of net revenues, respectively

46

Symmetry Medical Inc.

Notes to Consolidated Financial Statements—(Continued)

(in thousands, except share data)

2003 – Three customers representing approximately 19%, 15% and 11% of net revenues, respectively

2002 – Two customers representing approximately 17% and 16% of net revenues, respectively

The customers listed above, which are orthopedic implant manufacturers, comprised approximately 52% and 31% of the accounts receivable balance at January 1, 2005 and January 3, 2004, respectively.

Following is a summary of the composition by product category of the Corporation’s revenues to external customers. Revenues of the specialty services business are included in the “other” category.

	December 28, 2002		January 3, 2004		January 1, 2005
Implants	$	—	$	33,289	$	75,130
Instruments		32,294		45,624		67,675
Cases		33,101		36,118		47,292
Other		—		6,998		15,294
Total Net Revenues	$	65,395	$	122,029	$	205,391

14. Net Income (Loss) Per Share

The following table sets forth the computation of earnings per share.

	December 28, 2002			January 3, 2004			January 1, 2005
Net income before cumulative effect of accounting change	$	1,350		$	5,905		$	11,695
Preferred stock dividends		(4,410	)		(7,028	)		(8,977	)
Net income (loss) available to common shareholders before cumulative effect of accounting change		(3,060	)		(1,123	)		2,718
Cumulative effect of accounting change, net of tax		(1,146	)		—			—
Net income (loss) available to common shareholders	$	(4,206	)	$	(1,123	)	$	2,718
Weighted-average common shares outstanding—basic		6,905,800			11,797,842			16,905,396
Effect of stock options and warrants		—			—			861,885
Weighted-average common shares outstanding and assumed conversions		6,905,800			11,797,842			17,767,281
Net income (loss) per share—basic:
Net income available to common shareholders before cumulative effect of accounting change	$	(0.44	)	$	(0.10	)	$	0.16
Cumulative effect of accounting change, net of tax		(0.17	)		—			—
Net income (loss) per share—basic	$	(0.61	)	$	(0.10	)	$	0.16
Net income (loss) per share—diluted:
Net income available to common shareholders before cumulative effect of accounting change	$	(0.44	)	$	(0.10	)	$	0.15
Cumulative effect of accounting change, net of tax		(0.17	)		—			—
Net income (loss) per share—diluted	$	(0.61	)	$	(0.10	)	$	0.15

47

Symmetry Medical Inc.

Notes to Consolidated Financial Statements—(Continued)

(in thousands, except share data)

15. Commitments and Contingencies

Environmental

In 2004, the Corporation was notified by the Indiana Department of Environmental Management of certain regulatory compliance issues. These issues have been corrected, and we did not receive any fines. The cost to correct these issues was not material to the Corporation’s results of operations or financial position.

The Corporation has been notified by the U.S. Environmental Protection Agency or by state governments that it may be liable under environmental laws with respect to the cleanup of hazardous substances at sites we previously used for the disposal of wastes. Based on information currently available, the Corporation does not believe these liabilities will be material to its results of operations or financial position.

Operating Leases

The Corporation also has various operating leases, primarily for equipment. Total rental expense for these operating leases amounted to $ 2,214, $1,889 and $3,235 in 2004, 2003 and 2002, respectively. Future minimum payments for operating leases with initial terms of one year or more are as follows at January 1, 2005:

2005	$	1,532
2006		693
2007		376
2008		165
2009		16
Thereafter		56
Total minimum payments	$	2,838

Legal Matters

The Corporation is involved, from time to time, in various contractual, product liability, patent (or intellectual property) and other claims and disputes incidental to its business. Currently, no material environmental or other material litigation is pending or, to the knowledge of the Corporation, threatened. The Corporation currently believes that the disposition of all claims and disputes, individually or in the aggregate, should not have a material adverse effect on the Corporation’s consolidated and combined financial condition, results of operations or liquidity.

48

Symmetry Medical Inc.

Notes to Consolidated Financial Statements—(Continued)

(in thousands, except share data)

16. Quarterly Results of Operations (Unaudited)

The quarterly results of operations are as follows (in thousands, except per share data):

2004	First			Second			Third			Fourth(1)
Revenue	$	45,838		$	53,089		$	54,126		$	52,338
Gross profit		12,583			16,067			16,039			15,620
Net income (loss)		2,210			5,148			4,434			(99	)
Net income (loss) applicable to common shareholders		(106	)		2,804			2,025			(2,007	)
Basic net income (loss) per share	$	(0.01	)	$	0.18		$	0.13		$	(0.10	)
Diluted net income (loss) per share	$	(0.01	)	$	0.17		$	0.12		$	(0.10	)
2003	First			Second(2)			Third			Fourth
Revenue	$	17,823		$	26,274		$	40,639		$	37,293
Gross profit		5,639			8,358			11,728			10,180
Net income (loss)		1,191			1,186			2,083			1,390
Net income (loss) applicable to common shareholders		40			(183	)		(154	)		(881	)
Basic net income (loss) per share	$	0.01		$	(0.02	)	$	(0.01	)	$	(0.06	)
Diluted net income (loss) per share	$	0.01		$	(0.02	)	$	(0.01	)	$	(0.06	)

(1) The fourth quarter of 2004 includes a loss on debt extinguishment, net of tax, of $5,409.

(2) The second quarter of 2003 includes a loss on debt extinguishment, net of tax, of $867.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of Symmetry Medical Inc.:

We have audited the accompanying consolidated balance sheets of Symmetry Medical Inc. as of January 1, 2005 and January 3, 2004, and the related consolidated statements of operations, shareholders’ equity (deficit), and cash flows for each of the three years in the period ended January 1, 2005. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Symmetry Medical Inc. as of January 1, 2005 and January 3, 2004, and the consolidated results of its operations and its cash flows for each of the three years in the period ended January 1, 2005 in conformity with U.S. generally accepted accounting principles.

As discussed in Note 2 to the consolidated financial statements, effective January 1, 2002, the Company adopted Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets.”

Indianapolis, Indiana

March 17, 2005

/S/    ERNST & YOUNG LLP

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Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

Item 9a. CONTROLS AND PROCEDURES

(a) Evaluation of disclosure controls and procedures.

The Corporation’s chief executive officer and chief financial officer, after evaluating the effectiveness of the Corporation’s “disclosure controls and procedures” (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934), have concluded that, as of the end of the fiscal year covered by this report on Form 10-K, the Corporation’s disclosure controls and procedures were adequate and designed to ensure that material information relating to the Corporation and its consolidated subsidiaries would be made known to them by others within those entities.

(b) Changes in internal control over financial reporting.

There was no change in the Corporation’s “internal control over financial reporting” (as defined in Rule 13a-15(f) of the Securities Exchange Act of 1934) identified in connection with the evaluation required by Rule 13a-15(d) of the Securities Exchange Act of 1934 that occurred during the fourth quarter of the fiscal year covered by this report on Form 10-K that has materially affected, or is reasonably likely to materially affect, the Corporation’s internal control over financial reporting.

Item 9b. Other Information

On March 24, 2005 the Corporation’s board of directors amended and restated its by-laws to provide that the Corporation was not required by its by-laws to have an annual meeting of stockholders until 2006. A copy of the amended and restated by-laws are attached as an exhibit to this Annual Report on Form 10-K.

PART III

Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Set forth below are the name, age, position and a brief account of the business experience of each of the Corporation’s executive officers, directors and key employees, as of January 1, 2005.

Name	Age	Position
Directors and Executive Officers:
Brian Moore	58	President, Chief Executive Officer and Director
Fred Hite	37	Senior Vice President and Chief Financial Officer
Andrew Miclot	49	Senior Vice President, Marketing, Sales & Business Development
D. Darin Martin	53	Senior Vice President, Quality Assurance/Regulatory Affairs
Richard J. Senior	41	Senior Vice President and General Manager, Europe
Robert S. Morris	50	Director
James A. Conroy	44	Director
Manu Bettegowda	31	Director
Frank Turner	61	Director
Francis T. Nusspickel	64	Director
Stephen B. Oresman	72	Director
Other Key Employees:
D. Alec McPherson, Jr.	58	Vice President and General Manager
Matthew R. Rudd	41	Vice President and General Manager
Michael W. Curtis	50	Vice President and General Manager

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BRIAN MOORE, has served as the Corporation’s President and Chief Executive Officer and a director of the Corporation since the Corporation’s acquisition of Mettis in June 2003. From April 1999 to June 2003, Mr. Moore served as the Chief Executive Officer of Mettis Group Limited, the parent company of Mettis. From April 1994 to March 1999, Mr. Moore held various positions with EIS Group plc, including Chairman of the Aircraft and Precision Engineering Division, and from 1987 to 1999, Mr. Moore served as Chief Executive Officer of AB Precision (Poole) Limited. Prior thereto, Mr. Moore served in various management positions at Vanderhoff plc, Land Rover Vehicles, Bass Brewing and Prudential Insurance, and as the Financial Director for a subsidiary of GEC Ltd. (UK). Mr. Moore has qualified as a Graduate Mechanical Engineer by the Institution of Mechanical Engineers (the qualifying body for mechanical engineers in the United Kingdom) and as an Accountant with the U.K. Chartered Institute of Management Accountants.

FRED HITE has served as the Corporation’s Chief Financial Officer since March 2004. From 1997 to 2004, Mr. Hite served in various capacities at General Electric Industrial Systems, including Finance Manager of General Electric Motors and Controls from 2001 to 2004, Manufacturing Finance Manager from 2000 to 2001, and Finance Manager of Engineering Services from 1997 to 2000. From 1995 to 1997, Mr. Hite served as Sourcing Finance Manager and Commercial Finance Analyst at General Electric Industrial Control Systems. From 1990 to 1995, Mr. Hite served in various finance positions at General Electric Appliances. Mr. Hite received a B.S. in Finance at Indiana University.

ANDREW MICLOT has served as the Corporation’s Senior Vice President of Sales, Marketing and Business Development since June 2003 and as the Corporation’s Vice President of Marketing, Sales & Business Development since 1994. From 1992 to 1994, Mr. Miclot served as the Director of the Medical Products Group of DePuy Inc. From 1987 to 1992, Mr. Miclot served as Marketing Manager for Zimmer, Inc. and from 1986 to 1987, Mr. Miclot served as Director of Marketing for Ulti-Med, Inc. Mr. Miclot received a B.A. and M.A. in Speech and Hearing Sciences and Audiology from Indiana University and a M.B.A. from Lake Forest Graduate School of Management.

D. DARIN MARTIN has served as the Corporation’s Senior Vice President of Quality Assurance and Regulatory Affairs since June 2003. From 1994 to 2003, Mr. Martin served as the Corporation’s Vice President of Quality Assurance and Regulatory Affairs. Mr. Martin joined the Corporation in 1990 as Director of Quality Assurance. From 1984 to 1990, Mr. Martin served as Quality Assurance Supervisor for Owens-Illinois Inc.’s Kimble HealthCare Division. Mr. Martin has been a member in various medical device industry associations, including a 20 year membership with the American Society of Quality, Biomedical Devices-NE Indiana Division. Mr. Martin received a B.S. in Business Management from Ball State University, a S.P.C. Instructor Certification from Baldwin-Wallace College and a M.B.A. from Kennedy-Western University.

RICHARD J. SENIOR has served as Senior Vice President and General Manager of the Corporation’s European Operations since the Corporation’s acquisition of Mettis in June 2003. He previously served in various capacities at Mettis in the Thornton Precision Components operating unit, including Managing Director from 1999 to 2003, Director and General Manager from 1997 to 1998, Operations Director from 1995 to 1996, Production Manager during 1995, CMR Operations Manager from 1993 to 1994 and Orthopaedic Sales Manager (UK) from 1990 to 1995. Mr. Senior attended Myers Grove Comprehensive School in the United Kingdom.

ROBERT S. MORRIS has been a director of the Corporation since October 2000 and currently serves as the chairman of the Board and as a member of the Board’s Nominating and Corporate Governance Committee. Mr. Morris founded Olympus Partners in 1989 and currently serves as the Managing Partner of Olympus Partners and its affiliated investment partnerships. Mr. Morris serves as a director of Homax Holdings, Inc., Shemin Holdings Corp., Client Distribution Services, and Club Staffing and has served on the boards of directors of multiple other Olympus portfolio companies. From 1978 to 1988, Mr. Morris held a variety of management positions in various manufacturing and financial services businesses at General Electric Corporation, the last of which was Senior Vice President of General Electric Investment Corporation, where he managed General Electric Pension Trust’s private equity portfolio. Mr. Morris received his A.B. from Hamilton College and his M.B.A. from the Amos Tuck School of Business at Dartmouth College.

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JAMES A. CONROY has been a director of the Corporation since October 2000 and is a member of the Board’s Compensation Committee. Mr. Conroy has been a partner at Olympus Partners since 1991. Mr. Conroy serves as a director of Club Staffing and Shemin Holdings Corp. and has served on the board of directors of numerous other portfolio companies including Eldorado Bancshares, AMN Healthcare, FrontierVision Partners, and American Residential Holding Corporation. Prior to joining Olympus, Mr. Conroy served as a management consultant at Bain & Company, and prior thereto, Mr. Conroy worked at General Electric Investment Corporation. Mr. Conroy received his B.A. from the University of Virginia and his M.B.A. from the Amos Tuck School of Business at Dartmouth College.

MANU BETTEGOWDA has been a director of the Corporation since October 2000 and is a member of the Board’s Nominating and Corporate Governance Committee. Mr. Bettegowda joined Olympus Partners in 1998 and has served as a Vice President at Olympus Partners since 2003. Mr. Bettegowda serves as a director of Homax Holdings Inc. Prior to joining Olympus, Mr. Bettegowda worked at Bowles Hollowell Conner & Co., where he focused on mergers and acquisitions, leveraged buyouts and refinancings of middle market companies. He received his A.B. from Duke University.

FRANK TURNER has served as a director of the Corporation since August 2003 and is a member of the Board’s Audit and Compensation Committees. Mr. Turner served as Chief Executive Officer of British Midland Aviation Services Limited from 1996 to 1999 as well as a director of British Midland plc from 1997 to 1999. He served as Managing Director of Lucas Aerospace Limited as well as a director of Lucas Industries plc from 1992 to 1995. Prior thereto, Mr. Turner spent 33 years at Rolls-Royce plc during which he was a Main Board Member from 1987 to 1991. Mr. Turner currently serves as Chairman of the Board of Potenza Enterprises Ltd., which provides corporate support through non-executive and advisory board roles. He also serves as Chairman for Potenza Group and Aero Inventory plc, as a non-executive director for SRTechnics Holding, as a director for Mott MacDonald plc and Mettis Group Limited, the former parent company of Mettis, and as an advisor on the aerospace and aviation industry to 3i plc and Star Capital Partners. Over the past 17 years, Mr. Turner has sat on the boards of directors of 13 companies, including among others, Rolls-Royce Inc., Rolls-Royce plc, Allied Steel & Wire plc, Apollo Metals Ltd, Cooper Rolls Inc., International Aero Engines AG and Wagon plc. He received his BSc in mechanical and production engineering from the University of Salford in the United Kingdom and his business education from the International Executive Program at Columbia University.

FRANCIS T. NUSSPICKEL has been a director of the Corporation since the completion of the Corporation’s initial public offering in December 2004 and is a member of the Board’s Audit and Nominating and Corporate Governance Committees. Mr. Nusspickel is a retired audit partner of Arthur Andersen LLP. Mr. Nusspickel spent the majority of his 35 years of public accounting expertise in Arthur Andersen’s Transportation Industry Group and was the worldwide Industry Head for the Ocean Shipping Segment. Mr. Nusspickel is a certified public accountant and currently serves as Chairman of the Professional Ethics Committee of the New York State Society of Certified Public Accountants. Mr. Nusspickel was a former member of the Council of the American Institute of Certified Public Accountants and a former President of the New York State Society of Certified Public Accountants. Mr. Nusspickel serves as a director for Tsakos Energy Navigation Limited. Mr. Nusspickel received his B.A. from Manhattan College.

STEPHEN B. ORESMAN has been a director of the Corporation since the completion of the Corporation’s initial public offering in December 2004 and is a member of the Board’s Audit and Compensation Committees. Since 1991, Mr. Oresman has served as President of Saltash, Ltd., a management consulting firm. From 1988 to 1991, he was a partner and Vice President of The Canaan Group consulting firm. Mr. Oresman’s early career included ten years in the manufacturing sector, including Bausch & Lomb, Inc. and Interlake Steel Corp. Subsequently, Mr. Oresman joined Booz-Allen Hamilton, Inc., where he served various positions, including Managing Officer of the firm’s Eastern Region and Chairman of Booz-Allen Hamilton International. Mr. Oresman later joined BBDO International as President of the firm’s independent marketing companies. Mr. Oresman currently serves as Chairman of the Board of Technology Solutions Company and as a director of Cleveland-Cliffs Inc. and numerous conservation and ornithology institutions. Mr. Oresman received his B.A. from Amherst College and his M.B.A. from the Harvard Business School.

53

Other Key Employees

D. ALEC MCPHERSON, JR. has served as the Corporation’s Vice President and General Manager since 2002. Mr. McPherson joined the Corporation in 2001 as General Manager/Vice President of Operations of the Corporation’s PolyVac operating unit. From 1996 to 2001, Mr. McPherson served as President and Chief Operations Officer of Pemco Die Cast Corporation. Prior thereto, he served in various capacities at Allied Signal, including General Manager, Plant Manager and Director of Manufacturing. Mr. McPherson earned his B.S.M.E. from Michigan State University, a M.A. in Industrial Administration and Statistics from Central Michigan University and a M.B.A. from Penn State University. Mr. McPherson has been a member of 360 Associates, Inc., a team of executives that focuses on coaching and consulting, since 2001.

MATTHEW R. RUDD has served as the Corporation’s Vice President and General Manager since the Corporation’s acquisition of Mettis in June 2003. He previously served in various capacities at Mettis, including Chief Operations Officer of Jet Engineering and UltreXX from 2000 to 2003, Senior Vice President/General Engineering of Jet Engineering from 1996 to 2000, Manager of Program Development/ Engineering Manager of Jet Engineering from 1993 to 1996, Machining & Tooling Operations Manager of Jet Engineering from 1991 to 1993 and Floor Supervisor/CNC Programmer/Machinist of Jet Engineering from 1988 to 1991. Mr. Rudd earned his Associates Degree through Lansing Community College.

MICHAEL W. CURTIS has served as the Corporation’s Vice President and General Manager since November 2002. Prior to joining the Corporation, Mr. Curtis served as Vice President of Operations for Lightchip, Inc. from May 2000 to 2002, and from 1998 to 2000, Mr. Curtis served as Vice President/General Manager of Communications Products at Thomas & Betts Corporation. From 1994 to 1997, Mr. Curtis was employed at Amphenol Aerospace—Amphenol Corporation, initially as a Business Unit Manager and subsequently as Director of Filter Products. From 1976 through 1994, Mr. Curtis served in various capacities at Hamilton Standard Division of United Technologies Corporation, the last of which was Product Line Manager. Mr. Curtis received his B.S., M.B.A. and M.S. in Engineering Management from Western New England College.

Family Relationships

There are no family relationships between any of the executive officers or directors of the Corporation.

Number of Meetings of the Board of Directors

The Board held four meetings during 2004. The standing committees of the Board, which were established in connection with the Corporation’s initial public offering in December 2004, did not hold any meetings during the year. Each director attended at least 75% of the aggregate number of meetings of the Board and the Board committees on which he served held during the period for which he served as a director in 2004.

Director Compensation

All non-employee directors who are not otherwise affiliated with the Corporation or its principal stockholders receive an annual cash payment of $25,000 and received a one-time grant of common stock having a value of $25,000 upon being elected to the Board. On February 15, 2005, Messrs. Turner, Nusspickel and Oresman were each granted 1,667 shares of restricted Common Stock pursuant to the Corporation’s 2004 Equity Incentive Plan. The shares vest ratably over a three year period as of December 31 of each year, beginning on December 31, 2005. The Chairman of the Audit Committee receives additional annual cash compensation of $20,000. In 2004, Frank Turner received $40,000 in compensation for serving as a member of the Board. All directors are reimbursed for their out-of-pocket expenses incurred in connection with such services.

Attendance at Annual Meetings of the Stockholders

All directors are encouraged to attend annual meetings of the shareholders and all directors properly nominated for election are expected to attend the annual meetings of the stockholders. On March 24, 2005 the

54

Corporation’s board of directors amended and restated its by-laws to provide that the Corporation was not required by its by-laws to have an annual meeting of stockholders until 2006. A copy of the amended and restated by-laws are attached as an exhibit to this Annual Report on Form 10-K.

Director Independence

The Corporation is deemed to be a “controlled company” under the rules of the New York Stock Exchange (the “NYSE”), and qualifies for the “controlled company” exception to the board of directors and committee composition requirements under the rules of the NYSE. Pursuant to this exception, the Corporation is exempt from the rules that would otherwise require that the Board be comprised of a majority of “independent directors,” that the compensation committee be comprised solely of “independent directors,” and that the nominating and Nominating and Corporate Governance Committee be comprised solely of “independent directors” as defined under the rules of the NYSE. The “controlled company” exception does not modify the requirements of the Sarbanes-Oxley Act and the NYSE rules which require that the audit committee be comprised of independent directors exclusively.

Based upon the information submitted by each of its directors, and following the recommendation of the Nominating and Corporate Governance Committee, the Board has made a determination that Messrs. Nusspickel, Oresman and Turner are independent as that term is defined by the NYSE listing standards. The standards for determining independence are those set forth in the Corporation’s Corporate Governance Guidelines as well as those in the New York Stock Exchange listing standards.

Executive Sessions

The Corporation’s Corporate Governance Guidelines, adopted in connection with the initial public offering in December 2004, require the non-management directors to meet in executive sessions on a periodic basis without management. The presiding director, for purposes of leading these meetings, will be the Chairman of the Nominating and Corporate Governance Committee, unless the Board determines otherwise and such presiding director is disclosed in the Corporation’s annual proxy statement.

Communications between Stockholders and the Board

Stockholders may send communications to the Corporation’s directors as a group or individually, by writing to those individuals or the group: c/o the Corporate Secretary, 220 West Water Street, Warsaw Indiana, 46580. The Corporate Secretary will review all correspondence received and will forward all correspondence that is relevant to the duties and responsibilities of the Board or the business of the Corporation to the intended director(s). Examples of inappropriate communication include business solicitations, advertising and communication that is frivolous in nature, relates to routine business matters (such as product inquiries, complaints or suggestions), or raises grievances that are personal to the person submitting the communication. Upon request, any director may review communication that is not forwarded to the directors pursuant to this policy.

Concerns regarding the Corporation’s accounting or auditing matters may be submitted to the audit committee. Reports may be sent anonymously in writing to the attention of the Audit Committee, Symmetry Medical Inc., 220 West Market Street, Warsaw, IN 46580. The confidentiality of all reports will be maintained to the extent consistent with law.

Committees of the Board of Directors

In connection with the Corporation’s initial public offering in December 2004, the Board established an Audit committee, a Compensation and Nominating and Corporate Governance Committees. As mentioned above, the Corporation qualifies for the “controlled company” exception under the rules of the NYSE, pursuant to which

55

the Corporation is exempt from the rules that would otherwise require that the Compensation Committee be comprised solely of “independent directors,” and that the nominating and Nominating and Corporate Governance Committee be comprised solely of “independent directors” as defined under the rules of the NYSE. The Board has determined that Messrs. Nusspickel, Oresman and Turner are independent as so defined.

Audit Committee. The Audit Committee is responsible for providing independent and objective oversight of the Corporation’s accounting functions and internal controls and monitors the objectivity of the Corporation’s financial statements. The Committee assists in the Board’s oversight of (1) the integrity of the Corporation’s financial statements, (2) the Corporation’s compliance with legal and regulatory requirements, (3) the independent auditor’s qualifications and independence, and (4) the performance of the Corporation’s internal audit function and independent auditors. In performing these functions, the Committee has the responsibility to review and discuss the annual audited financial statements and quarterly financial statements and related reports with management and independent auditors, including the Corporation’s disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” to monitor the adequacy of financial disclosure; to retain and terminate the Corporation’s independent auditors and exercise the Committee’s sole authority to review and approve all audit engagement fees and terms and approve in advance the nature, extent, and cost of all non-audit services provided by independent auditors; and to review annual reports from the independent auditors regarding their internal quality control procedures.

The Committee members are Messrs. Nusspickel, Oresman and Turner. Each member of the Committee is independent as so defined. The Board has determined that each member meets the financial literacy qualifications of the NYSE listing standards and that Messrs. Nusspickel and Oresman are “audit committee financial experts” as such term is defined in the Sarbanes-Oxley Act and related SEC regulations. The Committee did not hold any meetings in 2004.

Compensation Committee. The Compensation Committee assists the Board in addressing matters relating to the fair and competitive compensation of the Corporation’s executives, employees and non-employee directors, together with matters relating to retirement, welfare and other benefit plans. The Committee’s principal responsibilities include: (1) reviewing key employee compensation policies, plans and programs, (2) reviewing and approving the compensation of our executive officers, (3) reviewing and approving employment contracts and other similar arrangements between us and our executive officers, (4) reviewing and consulting with the chief executive officer on the selection of officers and evaluation of executive performance and other related matters and (5) administration of stock plans and other incentive compensation plans. The members of the Committee are Messrs. Turner, Conroy and Oresman. The Committee did not hold any meetings in 2004.

Nominating and Corporate Governance. The Corporate Governance and Nominating Committee assists the Board by identifying individuals qualified to become members of the Board consistent with criteria set by the Board and developing corporate governance principles. The committee’s responsibilities include: (1) evaluating the composition, size and governance of the Board and its committees and making recommendations regarding future planning and the appointment of directors to committees, (2) establishing a policy for considering stockholder nominees for election to the board of directors, (3) recommending ways to enhance communications and relations with our stockholders, (4) evaluating and recommending candidates for election to our board of directors, (5) overseeing our board of directors performance and self-evaluation process and developing continuing education programs for our directors, (6) reviewing our corporate governance principles and providing recommendations to the board regarding possible changes, and (7) reviewing and monitoring compliance with our code of ethics and our insider trading policy. The members of the Committee are Messrs. Bettegowda, Nusspickel and Morris. The Committee did not hold any meetings in 2004.

Committee Charters and Code of Ethics

The Corporation’s code of business conduct and ethics (which applies to directors, officers (including the Corporation’s chief executive officer, chief financial officer and controller) and employees ), its corporate

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governance guidelines, and the charters of committees of the board of directors, including the audit committee, corporate governance and nominating committee, and compensation committee, are available on the Corporation’s website at www.symmetrymedical.com. Shareholders may request a copy of this information by writing to: Fred Hite, Senior Vice President, Chief Financial Officer and Secretary. Any waivers of, or changes to, the Corporation’s code of business conduct and ethics that apply to the Corporation’s executive officers, directors, or persons performing similar functions, will be promptly disclosed on the Corporation’s website in the “Investors” section, as required by the Securities and Exchange Commission and the New York Stock Exchange.

Section 16(a) beneficial ownership reporting compliance

Section 16(a) of the Securities Exchange Act of 1934 requires that the Corporation’s executive officers, directors and greater than 10% owners file reports of ownership and changes of ownership of Common Stock with the Securities and Exchange Commission and the New York Stock Exchange. Based on a review of the Securities and Exchange Commission filed ownership reports during 2004, the Corporation believes that all filing requirements were met during the year.

Item 11. EXECUTIVE COMPENSATION

The following discussion has been prepared, based on the actual compensation paid and benefits provided, by the Corporation during the periods indicated to the Chief Executive Officer and the four other most highly compensated executive officers of the Corporation (collectively, the “Named Executives”) during 2004. This data is not necessarily indicative of the compensation and benefits that may be provided to the Named Executives in the future.

Summary Compensation Table

The following table summarizes for the years indicated the compensation awarded to, earned by, or paid to, the Named Executives for services rendered in all capacities to the Corporation and its subsidiaries.

Summary Compensation Table

Name and Principal Position	Annual Compensation					Long-Term Compensation Securities Underlying Options (#)	All Other Compensation ($)(4)
	Year	Salary ($)	Bonus ($)	Other Annual Compensation ($)(2)
Brian Moore, President and Chief Executive Officer (1)	2004 2003	320,000 177,779	256,000 88,889	—   32,374	(3)	318,480 318,480	4,200 —
Fred Hite, Senior Vice President and Chief Financial Officer (5)	2004 2003	166,667 —	80,000 —	—   —		72,410 —	—   —
Andrew Miclot, Senior Vice President, Marketing, Sales & Business Development	2004 2003	200,000 175,000	160,000 142,692	—   —		26,067 26,067	4,058 4,196
D. Darin Martin, Senior Vice President, Quality Assurance/Regualtory Affairs	2004 2003	141,000 135,000	112,800 110,077	—   —		—   —	2,870 3,472
Richard J. Senior, Senior Vice President and General Manager	2004 2003	219,600 100,244	102,742 9,113	—   —		90,513 90,513	17,568 8,020

(1) The compensation amounts in this table represent compensation for Mr. Moore since June 11, 2003, the date on which he commenced employment with the Corporation as President and Chief Executive Officer. Mr. Moore earned a salary of $142,221 and a bonus of $71,111 from December 29, 2002 through June 10, 2003 as an employee of Mettis.

(2) In accordance with the rules of the SEC, the other annual compensation disclosed in this table does not include various prerequisites and other personal benefits received by a named executive officer that does not exceed the lesser of $50,000 or 10% of such officers salaries and bonus disclosed in this table.

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(3) Includes $30,000 reimbursement for relocation expenses.

(4) Represents our matching contributions under our 401(k) plans.

(5) The compensation amounts in this table represent compensation for Mr. Hite since March 1, 2004, the date on which he commenced employment as Senior Vice President and Chief Financial Officer.

Option Grants

The following table sets forth information regarding options granted to each of our named executive officers during fiscal year 2004. Potential realizable value is based upon a per share price of $21.05, the last reported sales price of our common stock on December 31, 2004. These assumed 5% and 10% rats of appreciation comply with the rules of the SEC and do not represent the Corporation’s estimate of future stock price. Actual gains, if any, on stock option exercises will be dependent on the future performance of the Corporation’s common stock. The outstanding options listed below may be exercised only upon the vesting of such options. These options vest ratably over a four year period as of the end of each of our fiscal years during that period and may be exercised only upon the vesting of such options. All options were granted at the fair market value of our common stock, as determined by the Board, on the date of grant.

Option Grants in Fiscal 2004

	Individual Grants
	Number of Securities Underlying Options Granted	% of Total Options Granted to Employees in Fiscal Year		Exercise Price		Expiration Date	Potential Realizable Value of Assumed Annual Rates of Stock Price Appreciation for Option Term
Name							5%	10%
Brian Moore	—	—			—	—	—	—
Fred Hite	72,140	100	%	$	4.83	March 1, 2014	2,026,933	3,290,660
Andrew Miclot	—	—			—	—	—	—
D. Darin Martin	—	—			—	—	—	—
D. Alec McPherson, Jr.	—	—			—	—	—	—

Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Value

The following table shows information concerning the number and value of unexercised options held by each of the executive officers listed in the Summary Compensation Table at January 1, 2005. The fiscal year-end value of unexercised in-the-money options listed below has been calculated based upon a per share price of $21.05, the last reported sales price of the Corporation’s common stock on December 31, 2004, less the applicable exercise price per share, multiplied by the number of shares underlying such options. The Named Executives did not exercise any options during fiscal year 2004.

Aggregated Fiscal 2004 Year-End Option Values

Name	Shares Acquired on Exercise (#)	Value Realized ($)	Number of Securities Underlying Unexercised Options		Value of Unexercised in- the-Money Options
			Exercisable	Unexercisable	Exercisable		Unexercisable
Brian Moore	—	—	159,240	159,240	$	2,867,921	$	2,867,921
Fred Hite	—	—	18,103	54,308		293,623		880,868
Andrew Miclot	—	—	13,034	13,034		234,742		234,742
D. Darin Martin	—	—	—	—		—		—
Richard J. Senior	—	—	45,257	45,257		815,070		815,070

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Employment Agreements

In June 2003, the Corporation entered into an employment agreement with Brian Moore to serve as its President and Chief Executive Officer and a member of the board of directors until June 11, 2006, subject to a one year automatic renewal. Mr. Moore’s current annual salary is $320,000, subject to annual review and potential increase by Board. In addition, Mr. Moore is eligible to receive an annual cash bonus, based upon the satisfaction of certain performance criteria. Pursuant to a recent board of directors decision, this bonus may be up to 80% of his annual salary. Pursuant to the agreement, Mr. Moore was reimbursed for up to $30,000 of moving and related expenses in connection with his relocation to Warsaw, Indiana. If Mr. Moore’s employment is terminated by us without “cause”, or by Mr. Moore for “good reason” (as those terms are defined in his agreement) during the employment term, then Mr. Moore will be entitled to continue to receive his base salary for twelve months after the date of such termination. He will also be entitled to receive a pro rata portion of his performance bonus for the year in which such termination occurs. Mr. Moore has agreed not to compete with the Corporation during the term of his employment and for 24 months following termination.

In June 2003, the Corporation entered into an employment agreement with Richard J. Senior to serve as the managing director of Thornton Precision Components Ltd. for a continuous period, subject to twelve months prior notice of termination. Pursuant to his contract, Mr. Senior also serves as the Senior Vice President and General Manager, Europe of Symmetry Medical Inc. If Mr. Senior’s employment is terminated by the Corporation with less than twelve months prior notice, Mr. Senior is entitled to receive a payment equal to his base salary and benefits for 12 months, or the unexpired portion of the notice period, if less. Mr. Senior’s current salary is $218,400 per year, subject to annual review in April of each year. In addition, Mr. Senior is eligible to receive an annual cash bonus of up to 50% of his base salary, which amount will be determined by the Board. Mr. Senior has agreed not to compete with the Corporation during the term of his employment and for 6 months following termination.

In January 2004, the Corporation and Fred Hite signed an offer letter outlining the terms of employment for Mr. Hite as the Chief Financial Officer of the Corporation commencing on March 1, 2004. Mr. Hite’s current annual salary is $200,000, subject to annual review beginning in January 2005. In addition, Mr. Hite will receive an annual bonus, based upon the satisfaction of certain performance criteria, of up to 40% of his annual salary. If Mr. Hite’s employment terminates in the event of the sale of the Corporation, he will be entitled to continue to receive his base salary for 12 months after the date of such termination and he will be entitled to receive an average of 12 months bonus. Mr. Hite was granted 72,410 stock options at $4.83 per share under the 2003 Stock Option Plan. Pursuant to the terms of the offer letter, the benefits of these options are capped under certain circumstances.

Long Term Incentive Plans

No long-term incentive compensation awards were granted by the Corporation in 2004.

Effective March 21, 2005, the Corporation amended its 2004 Equity Incentive Plan to make certain technical amendments to make the plan compliant with Rule 409A of the Internal Revenue Code. On March 24, 2005, the Corporation amended its 2004 Employee Stock Purchase Plan to provide for certain technical amendments to the plan administration guidelines and to change the “offering periods” during which participants are granted options to purchase the Corporation’s common stock from 24 month periods to six month periods.

401(k) Plans

The Corporation sponsors two qualified employee savings and retirement plans, or 401(k) plans, that cover most of its employees who satisfy certain eligibility requirements relating to minimum age and length of service. Under the 401(k) plan, eligible employees may elect to contribute up to a maximum amount equal to 25% of their annual compensation up to a statutorily prescribed annual limit. The Corporation may also elect to make

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profit-sharing contributions and a matching contribution to the 401(k) plans in an amount equal to a discretional percentage of the employee contributions, subject to certain statutory limitations and vesting requirements. The Corporation announces annually the amount of funds which it will match. The Corporation’s expenses related to these plans amounted to approximately $0.9 million, $0.7 million and $0.5 million in fiscal years 2004, 2003 and 2002, respectively.

Compensation Committee Interlocks and Insider Participation

No member of our compensation committee is currently an officer or employee of our company. There is no interlocking relationship between any of our executive officers and compensation committee, on the one hand, and the executive officers and compensation committee of any other companies, on the other hand, nor has any such interlocking relationship existed in the past.

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table lists the beneficial ownership of the Corporation’s common stock of the only persons known by the Corporation as of December 31, 2005, to beneficially own more than 5% of our Common Stock based upon statements on Schedule 13G filed by such persons with the Securities and Exchange Commission.

Date of 13G Report	Name of Beneficial Owner	Number of Shares Beneficially Owned	Percent of Class
12/31/04	Olympus Partners Funds (1)	20,084,800	60.2	%

(1) Consists of: 19,897,975 shares beneficially owned by Olympus/Symmetry Holdings LLC, 157,958 shares beneficially owned by Olympus Growth Fund III, L.P., that are issuable upon exercise of currently exercisable warrants, 27,349 shares beneficially owned by Olympus Growth Co-Investment Fund III, L.P. that are issuable upon exercise of currently exercisable warrants, and 1,518 shares beneficially owned by Olympus Executive Fund that are issuable upon exercise of currently exercisable warrants. Mr. Robert S. Morris, the chairman of the Board, is the managing director of Olympus Partners, and, in such capacity, exercises voting and investment power with respect to the shares held by the Olympus entities and has a pecuniary interest in certain of those shares. Mr. James A. Conroy, a member of the Board, is a partner at Olympus Partners, and, as a result, has a pecuniary interest in certain of the shares held by the Olympus entities. Mr. Manu Bettegowda, a member of the Board, is a vice president at Olympus Partners, and, as a result, has a pecuniary interest in certain of the shares held by the Olympus entities. Each of Messrs. Morris, Conroy and Bettegowda disclaims beneficial ownership of the shares owned by these entities, except to the extent of his proportionate pecuniary interest therein. The address for Olympus Partners and the Olympus entities is Metro Center, One Station Place, Stamford, Connecticut, 06902.

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Security Ownership of Management

The following table sets forth information known to the Corporation regarding beneficial ownership of the Corporation’s Common Stock, as of the Record Date, by each director and each of the executive officers identified in the Summary Compensation Table and by all of its directors and executive officers as a group (11 persons). Information in the table is derived from Securities and Exchange Commission filings made by such persons under Section 16(a) of the Securities Exchange Act of 1934, as amended and other information received by the Corporation.

Name of Beneficial Owner	Number of Shares Beneficially Owned (1)	Percent of Class
Brian Moore (2)	181,808	*
Fred Hite (3)	18,103	*
D. Darin Martin	109,419	*
Andrew Miclot (4)	137,010	*
Richard J. Senior (5)	56,540	*
Robert S. Morris (6)	20,084,800	60.2	%
James A. Conroy (6)	20,084,800	60.2	%
Manu Bettegowda (6)	20,084,800	60.2	%
Frank Turner (7)	22,566	*
Francis T. Nuspickel	—	—
Stephen B. Oresman	—	—
All directors and executive officers as a group (11 persons)	20,610,244	61.3	%

 * Less than one percent

(1) Unless otherwise indicated and subject to community property laws where applicable, the individuals and entities named in the table above have sole voting and investment power with respect to all shares of our common stock shown as beneficially owned by them. Beneficial ownership and percentage ownership are determined in accordance with the rules of the SEC. In calculating the number of shares beneficially owned by an individual or entity and the percentage ownership of that individual or entity, shares underlying options and warrants held by that individual or entity that are either currently exercisable or exercisable within 60 days from March 25, 2005 are deemed outstanding. These shares, however, are not deemed outstanding for the purpose of computing the percentage ownership of any other individual or entity.

(2) Includes 159,241 shares of Common Stock issuable upon exercise of currently exercisable options.

(3) Consists of 18,103 shares of Common Stock issuable upon exercise of currently exercisable options.

(4) Includes 13,034 shares of Common Stock issuable upon exercise of currently exercisable options.

(5) Includes 45,257 shares of Common Stock issuable upon exercise of currently exercisable options.

(6) Consists of: 19,897,975 shares beneficially owned by Olympus/Symmetry Holdings LLC, 157,958 shares beneficially owned by Olympus Growth Fund III, L.P., that are issuable upon exercise of currently exercisable warrants, 27,349 shares beneficially owned by Olympus Growth Co-Investment Fund III, L.P. that are issuable upon exercise of currently exercisable warrants, and 1,518 shares beneficially owned by Olympus Executive Fund that are issuable upon exercise of currently exercisable warrants. Mr. Robert S. Morris, the chairman of the Board, is the managing director of Olympus Partners, and, in such capacity, exercises voting and investment power with respect to the shares held by the Olympus entities and has a pecuniary interest in certain of those shares. Mr. James A. Conroy, a member of the Board, is a partner at Olympus Partners, and, as a result, has a pecuniary interest in certain of the shares held by the Olympus entities. Mr. Manu Bettegowda, a member of the Board, is a vice president at Olympus Partners, and, as a result, has a pecuniary interest in certain of the shares held by the Olympus entities. Each of Messrs. Morris, Conroy and Bettegowda disclaims beneficial ownership of the shares owned by these entities, except to the extent of his proportionate pecuniary interest therein.

(7) Consists of 22,566 shares beneficially owned by Potenza Enterprises Ltd. Mr. Turner is the chairman of Potenza Enterprises Ltd.

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The following table sets forth information about the Corporation’s common stock that may be issued upon exercise of options, and rights associated with any such option exercises, under all of the Corporation’s equity compensation plans as of January 1, 2005, including the 2002 Stock Option Plan, 2003 Stock Option Plan, 2004 Employee Stock Purchase Plan and the 2004 Equity Incentive Plan. Each of the plans was approved by the Corporation’s stockholders.

Plan Category	Number of securities to be issued upon exercise of outstanding options and rights	Weighted average exercise price of outstanding options and rights		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reported in column one)
Equity compensation plans approved by stockholders	830,955	$	3.02	2,301,860
Equity compensation plans not approved by stockholders	—		—	—
Total	830,955	$	3.02	2,301,860

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Repurchase of Preferred Stock, Subordinated Debt and Preferred Stock Warrants

The Corporation used approximately $23.3 million of the net proceeds from the initial public offering of its Common Stock, completed on December 8, 2004, to fund the repurchase of a portion of the Corporation’s then outstanding preferred stock and warrants to purchase preferred stock. The following table sets forth the number of shares of preferred stock and warrants to purchase preferred stock that were repurchased from certain of our directors, executive officers and security holders who, at that time, beneficially owned more than five percent of any class of the Corporation’s voting securities.

Name	Aggregate Number of Shares of Preferred Stock and Warrants to Purchase Preferred Stock	Aggregate Purchase Price
Mettis Group Limited	1,883.04	$	2,088,143
Olympus/Symmetry Holdings LLC	15,389.15	$	18,877,935
Olympus Growth Fund III, L.P.	120.01	$	133,076
Olympus Growth Co-Investment Fund III, L.P.	20.78	$	23,041
Olympus Executive Fund	1.15	$	1,279
Windjammer Mezzanine & Equity Fund II, L.P.	982.52	$	1,089,539
Brian Moore	18.83	$	20,728
Andrew Miclot	35.15	$	47,263
D. Darin Martin	24.77	$	33,063
Richard J. Senior	9.42	$	10,364
Potenza Enterprises (owned by Frank Turner, a Director)	18.83	$	20,728

The per share purchase price for each share of preferred stock or warrant to purchase preferred stock repurchased by the Corporation was equal to the liquidation value of the preferred stock of $1,000 per share plus all accumulated and unpaid dividends through the repurchase date minus, in the case of the preferred stock warrants, the exercise price thereof of $.01 per share. All of the shares of the preferred stock repurchased by the Corporation were initially sold to the holders thereof at a price of $1,000 per share and all preferred stock warrants were issued in connection with our sale of our 12.0% senior subordinated notes. See “—Issuances of Common Stock and Preferred Stock” and “Sale of Senior Subordinated Notes and Warrants” below.

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All of the shares of preferred stock and preferred stock warrants not repurchased were converted into shares of Common Stock or warrants to purchase Common Stock prior to the completion of the initial public offering. Each share of preferred stock not repurchased was converted into that number of shares of Common Stock determined by dividing its liquidation value of $1,000 per share plus all accumulated and unpaid dividends through the conversion date by $12.75, which represents 85% of the initial public offering price.

In addition, the Corporation used approximately $36.4 million of the net proceeds from the initial public offering to repurchase all of its outstanding senior subordinated notes, bearing interest at 12% per annum, including an aggregate of $8.0 million of senior subordinated notes held by Olympus Growth Fund III, L.P., Olympus Growth Co-Investment Fund III, L.P. and Olympus Executive Fund. The senior subordinated notes and warrants to purchase an aggregate of 585,377 shares Common Stock at a purchase price of $0.01 per share and warrants to purchase an aggregate of 3,530 shares of preferred stock at a purchase price of $0.01 per share were issued on June 11, 2003 in connection with the borrowing by the Corporation of an aggregate of $36 million. The proceeds from that borrowing were used to fund a portion of the purchase price for Mettis UK Limited.

In the aggregate, Olympus and its affiliates received approximately $27.0 million of the net proceeds from the initial public offering.

Transaction Fee Agreement

Pursuant to the terms of an amended and restated transaction fee agreement, dated June 11, 2003, Olympus Advisory Partners, Inc. agreed to provide financial and management consulting services to the Corporation. This transaction fee agreement was for an initial term of five years, automatically renewable after five years on a year-to-year basis unless either party gives 30 days’ prior written notice to the other party of its intent to terminate the agreement. The Corporation has paid Olympus Advisory Partners approximately $375,000, $375,000 and $250,000 for services rendered under this agreement in fiscal years 2004, 2003 and 2003, respectively. In connection with the initial public offering, the Corporation and Olympus Advisory Partners terminated this agreement.

In addition, Olympus Advisory Partners, Inc. received a fee, including expense reimbursement, upon consummation of the Corporation’s acquisition of Mettis UK Limited in June, 2003, of approximately $1.64 million for services provided in structuring, negotiating and financing that transaction.

Stockholders Agreement

The agreement provides that the holders of a majority of the Corporation’s stock held by the stockholders party to the agreement may request, at any time, an unlimited number of registrations of all or any portion of their stock on Form S-1 or any similar long-form registration statement or, if available, an unlimited number of registrations of all or any portion of their stock on Form S-2 or S-3 or any similar short-form registration statement, each at the Corporation’s expense. The agreement also grants to the parties thereto piggyback registration rights with respect to all registrations by the Corporation and the Corporation will pay all expenses related to such piggyback registrations. Pursuant to an amendment to this agreement executed in connection with the initial public offering, the piggyback registration rights were not applicable to the offering of shares in the initial public offering. The agreement also restricts the rights of holders of shares to make a public sale or distribution of such shares for the seven days prior to and the 180 day period beginning on the effective date of any initial public offering, or, in certain circumstances, piggyback registration, unless the underwriters of such offering otherwise agree. The agreement also provides that a representative of Windjammer Mezzanine & Equity Fund II, L.P. has the right to attend all board meetings as an observer and has the right to inspect the books, records and facilities of the Corporation.

Certain provisions, including those providing for standard drag-along and tag-along rights, restrictions on the transfer of stock, participation rights, management stockholder repurchase rights and pre-emptive rights and certain drag-along rights, terminated in accordance with the terms of the agreement upon the completion of the initial public offering.

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Financial Advisory Fee

The Corporation agreed to pay $2.0 million to Olympus Advisory Partners, Inc. as compensation for financial advisory services rendered by Olympus Advisory Partners, Inc. to the Corporation in connection with the initial public offering. Such financial advisory services included extensive analysis of the offering as compared to other strategic alternatives, evaluation and selection of the managing underwriters for the offering, structuring advice as to the proposed terms of the offering, assistance in the preparation of the offering-related documentation and assistance in the structuring, preparation and negotiation of the terms of the new senior credit facility.

Other Related-Party Transactions

During fiscal 2004, the Corporation purchased contract manufacturing services totaling approximately $1,034 thousand from ADS Precision Limited, a company controlled by a relative of Mr. Richard J. Senior, a Senior Vice President and General Manager of our European Operations. The Corporation maintains an ongoing relationship with this vendor and believes all transactions have been executed on an arms-length basis. As of January 1, 2005, the Corporation had accounts payable to ADS Precision Limited of approximately $368 thousand.

Item 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

Fees Paid to Independent Registered Public Accounting Firm

The following is a summary of the fees billed to the Corporation by Ernst & Young LLP for professional services rendered for fiscal years 2004 and 2003:

	Fiscal Year
Fee Category (thousands)	2004		2003
Audit Fees	$	1,462	$	417
Audit-Related Fees		—		—
Tax Fees		304		140
All Other Fees		—		—
Total Fees	$	1,786	$	479

Audit Fees: Consists of fees billed for professional services rendered for the audit of Symmetry Medical Inc.’s consolidated financial statements and services that are normally provided by Ernst & Young LLP in connection with statutory and regulatory filings or engagements.

Tax Fees are principally comprised of fees for services provided in connection with worldwide tax planning and compliance services, expatriate tax services, and assistance with tax audits and appeals.

Audit Committee Pre-Approval Policies

Pursuant to its written charter, the Audit Committee, is responsible for approving in advance all audit and permitted non-audit services to be performed for the Corporation by its independent auditors. In connection with this responsibility, the Audit Committee has established a policy to approve in advance all audit and permissible non-audit services provided by the Corporation’s independent auditor. Pursuant to this policy each year the audit committee pre approves certain services and fee estimates, expected to be rendered during that year for each of the four categories of services outlined in the table above. The policy requires management to inform the Audit Committee of each service performed by the independent auditor pursuant to the policy. During the year, circumstances may arise when it may become necessary to engage the independent auditor for additional services not contemplated in the original advance approval. In those instances, the Audit Committee requires specific

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approval in advance before engaging the independent auditor. The Audit Committee may delegate authority to make advance approval to one or more of its members, who are independent directors, and has delegated such authority to each of its members. The member or members to whom such authority is delegated must report, for information purposes only, any such approval decisions to the Audit Committee at its next scheduled meeting. The Corporation did not have an audit committee until December 9, 2004. Prior to such time, the Corporation’s board of directors approved the services performed by the Corporation’s independent auditor.

Audit Committee Report

The Audit Committee of the Board of Directors has reviewed and discussed the audited financial statements with management, which has represented that the financial statements were prepared in accordance with accounting principles generally accepted in the United States. The Committee discussed with management the quality and acceptability of the accounting principles employed including all critical accounting policies used in the preparation of the financial statements and related notes, the reasonableness of judgments made, and the clarity of the disclosures included in the statements.

The Committee also reviewed the consolidated financial statements of the Corporation for 2004 with Ernst & Young LLP, the Corporations independent auditors for 2004, who are responsible for expressing an opinion on the conformity of those audited financial statements with accounting principles generally accepted in the United States. The Committee has discussed with Ernst & Young LLP, the matters required to be discussed by Statement on Auditing Standards No. 61, Communication with Audit Committees.

The Committee has received the written disclosures and the letter from Ernst & Young LLP required by Independence Standards Board Standard No. 1 (Independence Discussion with Audit Committees) and has discussed with Ernst & Young LLP its independence and has considered whether the provision of non-audit services by Ernst & Young LLP to the Corporation is compatible with maintaining Ernst & Young LLP’s independence.

In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board that the audited financial statements be included in the Corporation’s Annual Report on Form 10-K for the year ended January 1, 2005 for filing with the Securities and Exchange Commission. The Committee has selected Ernst & Young LLP as the Corporation’s independent auditor for 2005.

This report is submitted by the members of the Audit Committee:

Frank Turner

Stephen B. Oresman

Francis T. Nusspickel

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PART IV

Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) 1. and 2. See Part II, Item 8. Financial Statements and Supplementary Data for an index of the Corporation’s consolidated financial statements and supplementary data schedule.

Exhibit Number	3. Exhibits (Reg. S-K, Item 601)
1.1	Underwriting Agreement dated as of December 8, 2004 between Symmetry Medical Inc. and Bank of America Securities LLC and Credit Suisse First Boston LLC, as representatives of the underwriters set forth in Schedule A thereto. (incorporated by reference to Exhibit 1.1 of Symmetry Medical Inc.’s Registration Statement on Form S-1 (Reg. No. 333-116038), as amended, which became effective on December 8, 2004 (the “Registration Statement”).
3.1	Restated Certificate of Incorporation of Symmetry Medical Inc. (incorporated by reference to Exhibit 3.2 of the Registration Statement).
3.2	Amended and Restated By-Laws of Symmetry Medical Inc., as amended through March 24, 2005. **
4.1	Form of Common Stock certificate (incorporated by reference to Exhibit 4.1 of the Registration Statement).
10.1	Form of Common Stock Purchase Warrant of Symmetry Medical Inc. (incorporated by reference to Exhibit 10.2 of the Registration Statement).
10.2	Credit Agreement, dated as of December 14, 2004, by and among Symmetry Medical Inc., Wachovia Bank, National Association as administrative agent and several financial institutions named therein as lenders. **
10.3	Stockholders Agreement, dated as of October 18, 2000, by and among Symmetry Medical Inc., Olympus/Symmetry Holdings LLC, each of the management stockholders named therein and each management employee who at any time acquires securities of the Company (incorporated by reference to Exhibit 10.6 of the Registration Statement).
10.4	Amendment to Stockholders Agreement, dated as of June 11, 2003, by Symmetry Medical Inc. and Olympus/Symmetry Holdings LLC (incorporated by reference to Exhibit 10.7 of the Registration Statement).
10.5	Joinder to Stockholders Agreement, dated as of June 11, 2003, by and among Mettis Group Limited, Symmetry Medical Inc. and Olympus/Symmetry Holdings LLC (incorporated by reference to Exhibit 10.8 of the Registration Statement).
10.6	Form of Joinder and Amendment to Stockholders Agreement, dated as of June 11, 2003, by and among Symmetry Medical Inc. and each of the stockholders party thereto (incorporated by reference to Exhibit 10.9 of the Registration Statement).
10.7	Amendment to Stockholders Agreement dated as of August 3, 2004, by and among Symmetry Medical Inc. and each of the Stockholders party thereto. **
10.8	Symmetry Medical Inc. 2002 Stock Option Plan (incorporated by reference to Exhibit 10.10 of the Registration Statement). *
10.9	Form of Nonqualified Stock Option Agreement issued under 2002 Stock Option Plan (incorporated by reference to Exhibit 10.11 of the Registration Statement). *
10.10	Symmetry Medical Inc. 2003 Stock Option Plan (incorporated by reference to Exhibit 10.12 of the Registration Statement). *

66

Exhibit Number	3. Exhibits (Reg. S-K, Item 601)
10.11	Form of Nonqualified Stock Option Agreement issued under 2003 Stock Option Plan (incorporated by reference to Exhibit 10.13 of the Registration Statement). *
10.12	Symmetry Medical Inc. Amended and Restated 2004 Equity Incentive Plan. **
10.13	Symmetry Medical Inc. Amended and Restated 2004 Employee Stock Purchase Plan. **
10.14	Amendment to Symmetry Medical Inc. 2004 Employee Stock Purchase Plan.
10.15	Employment Agreement, dated as of June 11, 2003, by and between Symmetry Medical Inc. and Brian Moore (incorporated by reference to Exhibit 10.16 of the Registration Statement). *
10.16	Employment Agreement, dated as of January 6, 2004, by and between Symmetry Medical Inc. and Fred Hite (incorporated by reference to Exhibit 10.17 of the Registration Statement). *
10.17	Employment Agreement, dated as of June 5, 2003, by and between Thornton Precision Components Ltd. and Richard J. Senior (incorporated by reference to Exhibit 10.18 of the Registration Statement). *
21	Subsidiaries **
24	Power of Attorney **
31.1	Rule 13a—14(a) Certifications of Symmetry Medical Inc.’s Chief Executive Officer **
31.2	Rule 13a—14(a) Certifications of Symmetry Medical Inc.’s Chief Financial Officer **
32.1	Section 1350 Certifications of Symmetry Medical Inc.’s Chief Executive Officer **
32.2	Section 1350 Certifications of Symmetry Medical Inc.’s Chief Financial Officer **

* Management Contract of compensatory plan or arrangement required to be filed and an exhibit pursuant to Item 15 of Form 10-K.

** Filed or furnished herewith.

67

Index to Exhibits Filed or Furnished

with the Annual Report on Form 10-K

for the year ended January 1, 2005

Exhibit
3.2	Amended and Restated By-Laws of Symmetry Medical Inc., as amended through March 24, 2005.
10.2	Credit Agreement, dated as of December 14, 2004, by and among Symmetry Medical Inc., Wachovia Bank, National Association as administrative agent and several financial institutions named therein as lenders.
10.7	Amendment to Stockholders Agreement dated as of August 3, 2004, by and among Symmetry Medical Inc. and each of the Stockholders party thereto.
10.12	Symmetry Medical Inc. Amended and Restated 2004 Equity Incentive Plan.
10.13	Symmetry Medical Inc. Amended and Restated 2004 Employee Stock Purchase Plan.
10.14	Amendment to Symmetry Medical Inc. 2004 Employee Stock Purchase Plan.
21	Subsidiaries
24	Power of Attorney
31.1	Rule 13a—14(a) Certifications of Symmetry Medical Inc.’s Chief Executive Officer
31.2	Rule 13a—14(a) Certifications of Symmetry Medical Inc.’s Chief Financial Officer
32.1	Section 1350 Certifications of Symmetry Medical Inc.’s Chief Executive Officer
32.2	Section 1350 Certifications of Symmetry Medical Inc.’s Chief Financial Officer

68

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	SYMMETRY MEDICAL INC.
March 25, 2005	By:	/s/    BRIAN MOORE
		Chief Executive Officer and President

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the date indicated.

/s/    BRIAN MOORE		March 25, 2005
Chief Executive Officer and President
(Principal Executive Officer)
/s/    FRED HITE		March 25, 2005
Senior Vice President,
Chief Financial Officer and Secretary
(Principal Financial and Accounting Officer)
ROBERT S. MORRIS, JAMES A. CONROY,	)	By:	/s/    BRIAN MOORE
MANU BETTEGOWDA, FRANK TURNER,	)		Brian Moore
STEPHEN B. ORESMAN, FRANCIS T.	)		Attorney-in-fact
NUSSPICKEL	)		Pursuant to Power of Attorney
Directors	)		(Exhibit 24 hereto)
	)		March 25, 2005

69

EX-3.2

Exhibit 3.2

AMENDED AND RESTATED

BYLAWS OF

SYMMETRY MEDICAL INC.

ARTICLE I

OFFICES

SECTION 1. Registered Office. The registered office of the Corporation in the State of Delaware shall be located at 1209 Orange Street, in the City of Wilmington, County of New Castle, Delaware 19801. The name of the Corporation’s registered agent at such address shall be The Corporation Trust Company. The registered office and/or registered agent of the Corporation may be changed from time to time by action of the Board of Directors.

SECTION 2. Other Offices. The Corporation may have an office or offices other than said registered office at such place or places, either within or without the State of Delaware, as the Board of Directors shall from time to time determine or the business of the Corporation may require.

ARTICLE II

MEETINGS OF STOCKHOLDERS

SECTION 1. Place of Meetings. All meetings of the stockholders for the election of directors or for any other purpose shall be held at any such place, either within or without the State of Delaware, as shall be designated from time to time by the Board of Directors and stated in the notice of meeting or in a duly executed waiver thereof.

SECTION 2. Annual Meeting. Beginning in 2006, an annual meeting of stockholders shall be held each year and stated in a notice of meeting or in a duly executed waiver thereof. The date, time and place of such meeting shall be determined by the Chief Executive Officer of the Corporation; provided that if the Chief Executive Officer does not act, the Board of Directors shall determine the date, time, and place of such meeting. At such annual meeting, the stockholders shall elect directors to replace those directors whose terms expire at such annual meeting and transact such other business as may properly be brought before the meeting.

SECTION 3. Special Meetings. Special meetings of stockholders may be called for any purpose in the manner provided in the Amended and Restated Certificate of Incorporation of the Corporation (the “Certificate of Incorporation”) and may be held at such time and place, within or without the State of Delaware, as shall be stated in a notice of meeting or in a duly executed waiver of notice thereof. Such meetings may be called only by the Chairman of the Board or pursuant to a resolution adopted by the affirmative vote of the majority of the total number of directors then in office or by the Chief Executive Officer.

SECTION 4. Notice of Meetings. Except as otherwise expressly required by statute, written notice of each annual and special meeting of stockholders stating the date, place and hour of the meeting, and, in the case of a special meeting, the purpose or purposes for which the

meeting is called, shall be given to each stockholder of record entitled to vote thereat not less than ten (10) nor more than sixty (60) days before the date of the meeting. Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice. Notice shall be given personally or by mail and, if by mail, shall be sent in a postage prepaid envelope, addressed to the stockholder at his address as it appears on the records of the Corporation. Notice by mail shall be deemed given at the time when the same shall be deposited in the United States mail, postage prepaid. Notice of any meeting shall not be required to be given to any person who attends such meeting, except when such person attends the meeting in person or by proxy for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened, or who, either before or after the meeting, shall submit a signed written waiver of notice, in person or by proxy. Neither the business to be transacted at, nor the purpose of, an annual or special meeting of stockholders need be specified in any written waiver of notice.

SECTION 5. List of Stockholders. The officer who has charge of the stock ledger of the Corporation shall prepare and make, at least ten (10) days before each meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, showing the address of and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten (10) days prior to the meeting: (i) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting, or (ii) during ordinary business hours, at the principal place of business of the Corporation. If the meeting is to be held at a place, then the list shall be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. If the meeting is to be held solely by means of remote communication, then the list shall be open to the examination of any stockholder during the whole time of the meeting on a reasonably accessible electronic network, and the information required to access such list shall be provided with the notice of the meeting.

SECTION 6. Quorum; Adjournments. The holders of a majority of the voting power of the issued and outstanding stock of the Corporation entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum for the transaction of business at all meetings of stockholders, except as otherwise provided by statute or by the Certificate of Incorporation. If, however, such quorum shall not be present or represented by proxy at any meeting of stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have the power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented by proxy. At such adjourned meeting at which a quorum shall be present or represented by proxy, any business may be transacted which might have been transacted at the meeting as originally called. If the adjournment is for more than thirty (30) days, or, if after adjournment a new record date is set, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.

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SECTION 7. Organization. At each meeting of stockholders, the Chairman of the Board, if one shall have been elected, or, in his absence or if one shall not have been elected, the Chief Executive Officer shall act as chairman of the meeting. The Secretary or, in his absence or inability to act, the person whom the chairman of the meeting shall appoint secretary of the meeting shall act as secretary of the meeting and keep the minutes thereof.

SECTION 8. Order of Business. The order of business at all meetings of the stockholders shall be as determined by the chairman of the meeting.

SECTION 9. Voting. Except as otherwise provided by the Certificate of Incorporation (including pursuant to any duly authorized certificate of designation) or the General Corporation Law of the State of Delaware, each stockholder of the Corporation shall be entitled at each meeting of stockholders to one (1) vote for each share of capital stock of the Corporation standing in his name on the record of stockholders of the Corporation:

(a) on the date fixed pursuant to the provisions of Section 14 of Article III of these Amended and Restated Bylaws (the “Bylaws”) as the record date for the determination of the stockholders who shall be entitled to notice of and to vote at such meeting; or

(b) if no such record date shall have been so fixed, then at the close of business on the day next preceding the day on which notice thereof shall be given, or, if notice is waived, at the close of business on the date next preceding the day on which the meeting is held.

Each stockholder entitled to vote at any meeting of stockholders may authorize another person or persons to act for him by a proxy which is in writing or transmitted as permitted by law, including, without limitation, electronically, via telegram, internet, interactive voice response system, or other means of electronic transmission executed or authorized by such stockholder or his attorney-in-fact, but no proxy shall be voted after (3) three years from its date, unless the proxy provides for a longer period. Any such proxy shall be delivered to the secretary of the meeting at or prior to the time designated in the order of business for so delivering such proxies. Any proxy transmitted electronically shall set forth information from which it can be determined by the secretary of the meeting that such electronic transmission was authorized by the stockholder. When a quorum is present at any meeting, the vote of the holders of a majority of the voting power of the issued and outstanding stock of the Corporation entitled to vote thereon, present and voting, in person or represented by proxy, shall decide any question brought before such meeting, unless the question is one upon which by express provision of statute or of the Certificate of Incorporation or of these Bylaws, a different vote is required, in which case such express provision shall govern and control the decision of such question. Unless required by statute, or determined by the chairman of the meeting to be advisable, the vote on any question need not be by ballot. On a vote by ballot, each ballot shall be signed by the stockholder voting, or by his proxy, if there be such proxy, and shall state the number of shares voted and the number of votes to which each share is entitled.

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SECTION 10. Inspectors. The Board of Directors may, in advance of any meeting of stockholders, appoint one or more inspectors to act at such meeting or any adjournment thereof. If any of the inspectors so appointed shall fail to appear or act, the chairman of the meeting shall, or if inspectors shall not have been appointed, the chairman of the meeting may, appoint one or more inspectors. Each inspector, before entering upon the discharge of his duties, shall take and sign an oath faithfully to execute the duties of inspector at such meeting with strict impartiality and according to the best of his ability. The inspectors shall determine the number of shares of capital stock of the Corporation outstanding and the voting power of each, the number of shares represented at the meeting, the existence of a quorum, the validity and effect of proxies, and shall receive votes, ballots or consents, hear and determine all challenges and questions arising in connection with the right to vote, count and tabulate all votes, ballots or consents, determine the results, and do such acts as are proper to conduct the election or vote with fairness to all stockholders. On request of the chairman of the meeting, the inspectors shall make a report in writing of any challenge, request or matter determined by them and shall execute a certificate of any fact found by them. No director or candidate for the office of director shall act as an inspector of an election of directors. Inspectors need not be stockholders.

SECTION 11. Advance Notice Provisions for Election of Directors. Only persons who are nominated in accordance with the following procedures shall be eligible for election as directors of the Corporation. Nominations of persons for election to the Board of Directors may be made at any annual meeting of stockholders, or at any special meeting of stockholders called for the purpose of electing directors as provided under Section 3 of this Article II, (a) by or at the direction of the Board of Directors (or any duly authorized committee thereof) or (b) by any stockholder of the Corporation who (i) is a stockholder of record on the date of the giving of the notice provided for in this Section 11 and on the record date for the determination of stockholders entitled to vote at such meeting, (ii) is entitled to vote at such meeting and (iii) complies with the notice procedures set forth in this Section 11.

In addition to any other applicable requirements, for a nomination to be made by a stockholder such stockholder must have given timely notice thereof in proper written form to the Secretary of the Corporation.

To be timely, a stockholder’s notice to the Secretary must be delivered to or mailed and received at the principal executive offices of the Corporation (a) in the case of an annual meeting, not less than ninety (90) days prior to the date of the anniversary of the previous year’s annual meeting; provided, however, that in the event the annual meeting is scheduled to be held on a date more than thirty (30) days prior to or delayed by more than sixty (60) days after such anniversary date, notice by the stockholder in order to be timely must be so received not later than the later of the close of business ninety (90) days prior to such annual meeting or the tenth (10th) day following the day on which such notice of the date of the annual meeting was mailed or such public disclosure of the date of the annual meeting was made and (b) in the case of a special meeting of stockholders called for the purpose of electing directors, not later than the close of business on the tenth (10th) day following the day on which notice of the date of the special meeting was mailed or public disclosure of the date of the special meeting was made, whichever first occurs.

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To be in proper written form, a stockholder’s notice to the Secretary must set forth (a) as to each person whom the stockholder proposes to nominate for election as a director (i) the name, age, business address and residence address of the person, (ii) the principal occupation or employment of the person, (iii) the class or series and number of shares of capital stock of the Corporation which are owned beneficially or of record by the person and (iv) any other information relating to the person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations promulgated thereunder; and (b) as to the stockholder giving the notice (i) the name and record address of such stockholder, (ii) the class or series and number of shares of capital stock of the Corporation which are owned beneficially or of record by such stockholder, (iii) a description of all arrangements or understandings between such stockholder and each proposed nominee and any other person or persons (including their names) pursuant to which the nomination(s) are to be made by such stockholder, (iv) a representation that such stockholder intends to appear in person or by proxy at the meeting to nominate the persons named in its notice and (v) any other information relating to such stockholder that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder. Such notice must be accompanied by a written consent of each proposed nominee to being named as a nominee and to serve as a director if elected.

No person shall be eligible for election as a director of the Corporation unless nominated in accordance with the procedures set forth in this Section 11. If the chairman of the meeting determines that a nomination was not made in accordance with the foregoing procedures, the chairman shall declare to the meeting that the nomination was defective and such defective nomination shall be disregarded.

SECTION 12. Advance Notice Provisions for Business to be Transacted at Annual Meeting. No business may be transacted at an annual meeting of stockholders, other than business that is either (a) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors (or any duly authorized committee thereof), (b) otherwise properly brought before the annual meeting by or at the direction of the Board of Directors (or any duly authorized committee thereof) or (c) otherwise properly brought before the annual meeting by any stockholder of the Corporation who (i) is a stockholder of record on the date of the giving of the notice provided for in this Section 12 and on the record date for the determination of stockholders entitled to vote at such meeting, (ii) is entitled to vote at such meeting and (iii) complies with the notice procedures set forth in this Section 12.

In addition to any other applicable requirements, for business to be properly brought before an annual meeting by a stockholder, such stockholder must have given timely notice thereof in proper written form to the Secretary of the Corporation.

To be timely, a stockholder’s notice to the Secretary must be delivered to or mailed and received at the principal executive offices of the Corporation not less than ninety (90) days prior

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to the date of the anniversary of the previous year’s annual meeting; provided, however, that in the event the annual meeting is scheduled to be held on a date more than thirty (30) days prior to or delayed by more than sixty (60) days after such anniversary date, notice by the stockholder in order to be timely must be so received not later than the later of the close of business ninety (90) days prior to such annual meeting or the tenth (10th) day following the day on which such notice of the date of the annual meeting was mailed or such public disclosure of the date of the annual meeting was made.

To be in proper written form, a stockholder’s notice to the Secretary must set forth as to each matter such stockholder proposes to bring before the annual meeting (i) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, (ii) the name and record address of such stockholder, (iii) the class or series and number of shares of capital stock of the Corporation which are owned beneficially or of record by such stockholder, (iv) a description of all arrangements or understandings between such stockholder and any other person or persons (including their names) in connection with the proposal of such business by such stockholder and any material interest of such stockholder in such business and (v) a representation that such stockholder intends to appear in person or by proxy at the annual meting to bring such business before the meeting.

No business shall be conducted at the annual meeting of stockholders except business brought before the annual meeting in accordance with the procedures set forth in this Section 12; provided, however, that, once business has been properly brought before the annual meeting in accordance with such procedures, nothing in this Section 12 shall be deemed to preclude discussion by any stockholder of any such business. If the chairman of an annual meeting determines that business was not properly brought before the annual meeting in accordance with the foregoing procedures, the chairman shall declare to the meeting that the business was not properly brought before the meeting and such business shall not be transacted.

SECTION 13. Action by Written Consent. Unless restricted by the Certificate of Incorporation, whenever the vote of stockholders at a meeting thereof is required or permitted to be taken for or in connection with any corporate action, by any provision of statute or of the Certificate of Incorporation or of these Bylaws, the meeting and vote of stockholders may be dispensed with, and the action taken without such meeting and vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of the outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares of stock of the Corporation entitled to vote thereon were present and voted. The consent shall be delivered to the Corporation by delivery to its registered office in the State of Delaware, or the Corporation’s principal place of business, or an officer or agent of the Corporation having custody of the book or books in which the proceedings of meetings of the stockholders are recorded. Delivery made to the Corporation’s registered office shall be by hand or by certified or registered mail, return receipt requested; provided, however, that no consent delivered by certified or registered mail shall be deemed delivered until such consent is actually received at the Corporation’s registered office. All consents properly delivered in accordance with this Section 13 shall be deemed to be recorded when so delivered.

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No written consent shall be effective to take the corporate action referred to therein unless, within sixty (60) days of the earliest dated consent delivered to the Corporation as required by this Section 13, written consents signed by the holders of a sufficient number of shares to take such corporate action are so recorded. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing. Any action taken pursuant to such written consent of the stockholders shall have the same force and effect as if taken by the stockholders at a meeting thereof.

SECTION 14. Fixing the Record Date. In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be more than sixty (60) nor less than ten (10) days before the date of such meeting, nor more than sixty (60) days prior to any other action. If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be the close of business on the day next preceding the day on which notice is given, or if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.

In order that the Corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which date shall not be more than ten (10) days after the date upon which the resolution fixing the record date is adopted by the Board of Directors. Any stockholder of record seeking to have the stockholders authorize or take corporate action by written consent shall, by written notice to the Secretary, request the Board of Directors to fix a record date. Such notice shall specify the action proposed to be consented to by stockholders. The Board of Directors shall promptly, but in all events within ten (10) days after the date on which such a request is received, adopt a resolution fixing the record date. If no record date has been fixed by the Board of Directors within ten (10) days after the date on which such a request is received, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is required by applicable law, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation. Such delivery to the Corporation shall be made to its registered office in the State of Delaware, its principal place of business, or any officer or agent of the Corporation having custody of the book or books in which proceedings of meetings of stockholders are recorded, to the attention of the Secretary of the Corporation. Such delivery shall be by hand or by certified or registered mail, return receipt requested. If no record date has been fixed by the Board of Directors and prior action by the Board of Directors is required by applicable law, the record date for determining stockholders

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entitled to consent to corporate action in writing without a meeting shall be the close of business on the date on which the Board of Directors adopts the resolution taking such prior action.

In the event of delivery to the Corporation of a written consent or written consents purporting to authorize or take corporate action, and/or related revocation or revocations, (each such written consent and related revocation, individually and collectively, a “Consent”), the Secretary of the Corporation shall provide for the safekeeping of such Consent and shall as soon as practicable thereafter conduct such reasonable investigation as the Secretary deems necessary or appropriate for the purpose of ascertaining the validity of such Consent and all matters incident thereto, including, without limitation, whether holders of shares having the requisite voting power to authorize or take the action specified in the Consent have given consent. If after such investigation the Secretary shall determine that the Consent is sufficient and valid, that fact shall be certified on the records of the Corporation kept for the purpose of recording the proceedings of meetings of the stockholders, and the Consent shall be filed in such records, at which time the Consent shall become effective as stockholder action.

ARTICLE III

BOARD OF DIRECTORS

SECTION 1. General Powers. The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors. The Board of Directors may exercise all such authority and powers of the Corporation and do all such lawful acts and things as are not by statute or the Certificate of Incorporation directed or required to be exercised or done by the stockholders.

SECTION 2. Number, Election and Term. Subject to any rights of the holders of any class or series of Preferred Stock to elect additional directors under specified circumstances, the number of directors which shall constitute the Board of Directors shall be fixed from time to time by resolution adopted by the affirmative vote of two thirds of the total number of directors then in office. The directors shall be elected by a plurality of the votes of the shares present in person or represented by proxy at the meeting and entitled to vote in the election of directors; provided, however, that whenever the holders of any class or series of Preferred Stock of the Corporation are entitled to elect one or more directors pursuant to the provisions of the Certificate of Incorporation (including pursuant to any duly authorized certificate of designation), such directors shall be elected by a plurality of the votes of such class or series of Preferred Stock present in person or represented by proxy at the meeting and entitled to vote in the election of such directors. The directors shall be elected and shall hold office in the manner provided in the Certificate of Incorporation.

SECTION 3. Place of Meetings. Meetings of the Board of Directors shall be held at such place or places, within or without the State of Delaware, as the Board of Directors may from time to time determine or as shall be specified in the notice of any such meeting.

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SECTION 4. Annual Meetings. The Board of Directors shall meet for the purpose of organization, the election of officers and the transaction of other business, as soon as practicable after each annual meeting of stockholders, on the same day and at the same place where such annual meeting shall be held. In the event such annual meeting is not so held, the annual meeting of the Board of Directors may be held at such other time or place (within or without the State of Delaware) as shall be specified in a notice thereof given as hereinafter provided in Section 7 of this Article III.

SECTION 5. Regular Meetings. Regular meetings of the Board of Directors shall be held at such time and place as the Board of Directors may fix. If any day fixed for a regular meeting shall be a legal holiday at the place where the meeting is to be held, then the meeting which would otherwise be held on that day shall be held at the same hour on the next succeeding business day.

SECTION 6. Special Meetings. Special meetings of the Board of Directors may be called by the Chairman of the Board, if one shall have been elected, or by two or more directors of the Corporation or by the Chief Executive Officer.

SECTION 7. Notice of Meetings. Notice of regular meetings of the Board of Directors need not be given except as otherwise required by law or these Bylaws. Notice of each special meeting of the Board of Directors, and of each regular and annual meeting of the Board of Directors for which notice shall be required, shall be given by the Secretary as hereinafter provided in this Section 7, in which notice shall be stated the time and place of the meeting. Except as otherwise required by these Bylaws, such notice need not state the purposes of such meeting. Notice of any special meeting, and of any regular or annual meeting for which notice is required, shall be given to each director at least (a) twenty-four (24) hours before the meeting if by telephone or by being personally delivered or sent by telex, telecopy, or similar means or (b) five (5) days before the meeting if delivered by mail to the director’s residence or usual place of business. Such notice shall be deemed to be delivered when deposited in the United States mail so addressed, with postage prepaid, or when transmitted if sent by telex, telecopy, or similar means. Neither the business to be transacted at, nor the purpose of, any special meeting of the Board of Directors need be specified in the notice or waiver of notice of such meeting. Any director may waive notice of any meeting by a writing signed by the director entitled to the notice and filed with the minutes or corporate records.

SECTION 8. Waiver of Notice and Presumption of Assent. Any member of the Board of Directors or any committee thereof who is present at a meeting shall be conclusively presumed to have waived notice of such meeting except when such member attends for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened. Such member shall be conclusively presumed to have assented to any action taken unless his or her dissent shall be entered in the minutes of the meeting or unless his or her written dissent to such action shall be filed with the person acting as the secretary of the meeting before the adjournment thereof or shall be forwarded by registered mail to the Secretary of the Corporation immediately after the adjournment of the meeting. Such right to dissent shall not apply to any member who voted in favor of such action.

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SECTION 9. Quorum and Manner of Acting. A majority of the entire Board of Directors shall constitute a quorum for the transaction of business at any meeting of the Board of Directors, and, except as otherwise expressly required by statute or the Certificate of Incorporation or these Bylaws, the act of a majority of the directors present at any meeting at which a quorum is present shall be the act of the Board of Directors. In the absence of a quorum at any meeting of the Board of Directors, a majority of the directors present thereat may adjourn such meeting to another time and place. Notice of the time and place of any such adjourned meeting shall be given to all of the directors unless such time and place were announced at the meeting at which the adjournment was taken, in which case such notice shall only be given to the directors who were not present thereat. At any adjourned meeting at which a quorum is present, any business may be transacted which might have been transacted at the meeting as originally called. The directors shall act only as a Board and the individual directors shall have no power as such.

SECTION 10. Organization. At each meeting of the Board of Directors, the Chairman of the Board, if one shall have been elected, or, in the absence of the Chairman of the Board or if one shall not have been elected, the Chief Executive Officer (or, in his absence, another director chosen by a majority of the directors present) shall act as chairman of the meeting and preside thereat. The Secretary or, in his absence, any person appointed by the chairman, shall act as secretary of the meeting and keep the minutes thereof.

SECTION 11. Resignations; Newly Created Directorships; Vacancies; and Removals. Any director of the Corporation may resign at any time by giving notice in writing or by electronic transmission of his resignation to the Corporation. Any such resignation shall take effect at the time specified therein or, if the time when it shall become effective shall not be specified therein, immediately upon its receipt. Unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. Newly created directorships resulting from any increase in the number of directors or any vacancies in the Board of Directors resulting from death, resignation, retirement, disqualification, removal or any other cause shall be filled in the manner provided in the Certificate of Incorporation. Any director may be removed in the manner provided in the Certificate of Incorporation.

SECTION 12. Compensation. The Board of Directors shall have authority to fix the compensation, including fees and reimbursement of expenses, of directors for services to the Corporation in any capacity.

SECTION 13. Committees. The Board of Directors may, by resolution passed by a majority of the entire Board of Directors, designate one or more committees, each committee to consist of one or more of the directors of the Corporation. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. Except to the extent restricted by statute or the Certificate of Incorporation, each such committee, to the extent provided in the resolution creating it, shall have and may exercise all the powers and authority of the Board of Directors and may authorize the seal of the Corporation to be affixed to all papers which require it. Each such committee shall serve at the pleasure of the Board of Directors and have such name as may be determined from time to time by resolution adopted by the Board of Directors. Each

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committee shall keep regular minutes of its meetings and report the same to the Board of Directors when required.

SECTION 14. Committee Rules. Each committee of the Board of Directors may fix its own rules of procedure and shall hold its meetings as provided by such rules, except as may otherwise be provided by a resolution of the Board of Directors designating such committee. Unless otherwise provided in such a resolution, the presence of at least a majority of the members of the committee shall be necessary to constitute a quorum. In the event that a member and that member’s alternate, if alternates are designated by the Board of Directors as provided in Section 13 of this Article III, of such committee is or are absent or disqualified, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in place of any such absent or disqualified member.

SECTION 15. Action by Written Consent. Unless restricted by the Certificate of Incorporation, any action required or permitted to be taken by the Board of Directors or any committee thereof may be taken without a meeting if all members of the Board of Directors or such committee, as the case may be, consent thereto in writing or by electronic transmission, and the writing or writings are filed with the minutes of the proceedings of the Board of Directors or such committee, as the case may be. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.

SECTION 16. Telephonic and Other Meetings. Unless restricted by the Certificate of Incorporation, any one or more members of the Board of Directors or any committee thereof may participate in a meeting of the Board of Directors or such committee by means of a conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other. Participation by such means shall constitute presence in person at a meeting.

ARTICLE IV

OFFICERS

SECTION 1. Number and Qualifications. The officers of the Corporation shall be elected by the Board of Directors and shall include the Chief Executive Officer, the President, the Chief Financial Officer, and the Secretary. The Corporation may also have, at the discretion of the Board of Directors, such other officers as are desired, including a Chairman of the Board, one or more Vice Presidents, one or more Assistant Treasurers, one or more Assistant Secretaries, and such other officers as may be necessary or desirable for the business of the Corporation. In the event there are two or more Vice Presidents, then one or more may be designated as Executive Vice President, Senior Vice President, or other similar or dissimilar title. At the time of the election of officers, the directors may by resolution determine the order of their rank. Any number of offices may be held by the same person, and no officer except the Chairman of the

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Board, if any, need be a director. In its discretion, the Board of Directors may choose not to fill any office for any period as it may deem advisable, except that the offices of Chief Executive Officer and Secretary shall be filled as expeditiously as possible. The Board of Directors may elect a non-executive Chairman of the Board, in which case such Chairman of the Board shall not be deemed an officer or employee of the Corporation.

SECTION 2. Election and Term of Office. The officers of the Corporation shall be elected annually by the Board of Directors at its first meeting held after each annual meeting of stockholders or as soon thereafter as conveniently may be. The Chairman of the Board, if any, shall be elected annually by the Board of Directors at the first meeting of the Board of Directors held after each annual meeting of stockholders or as soon thereafter as is convenient. Vacancies may be filled or new offices created and filled at any meeting of the Board of Directors. Each officer shall hold office until his successor shall have been duly elected and shall have qualified, or until his death, or until he shall have resigned or have been removed, as hereinafter provided in these Bylaws.

SECTION 3. Resignations. Any officer of the Corporation may resign at any time by giving written notice of his resignation to the Corporation. Any such resignation shall take effect at the time specified therein or, if the time when it shall become effective shall not be specified therein, immediately upon receipt. Unless otherwise specified therein, the acceptance of any such resignation shall not be necessary to make it effective.

SECTION 4. Removal. Any officer of the Corporation may be removed, either with or without cause, at any time, by the Board of Directors at any meeting thereof.

SECTION 5. Vacancies. Any vacancy occurring in any office because of death, resignation, removal, disqualification or otherwise, may be filled by the Board of Directors for the unexpired portion of the term by the Board of Directors then in office.

SECTION 6. Compensation. The compensation of the officers of the Corporation for their services as such officers shall be fixed from time to time by the Board of Directors. An officer of the Corporation shall not be prevented from receiving compensation by reason of the fact that he is also a director of the Corporation.

SECTION 7. Chairman of the Board. The Chairman of the Board, if such an officer or non-executive director be elected, shall, if present, preside at all meetings of the Board of Directors and exercise and perform such other powers and duties as may be from time to time assigned to him by the Board of Directors or prescribed by these Bylaws. If there is no Chief Executive Officer, the Chairman of the Board, if an officer, shall in addition be the Chief Executive Officer of the Corporation and shall have the powers and duties prescribed in Section 8 of this Article IV.

SECTION 8. Chief Executive Officer. The Chief Executive Officer shall be the chief executive officer of the Corporation and shall have the powers and perform the duties incident to that position. He shall, in the absence of the Chairman of the Board, or if a Chairman of the Board shall not have been elected, preside at each meeting of the Board of Directors or the

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stockholders. Subject to the powers of the Board of Directors, he shall be in the general and active charge of the entire business and affairs of the Corporation, including authority over its officers, agents and employees, and shall have such other duties as may from time to time be assigned to him by the Board of Directors. The Chief Executive Officer shall see that all orders and resolutions of the Board of Directors are carried into effect, and execute bonds, mortgages and other contracts requiring a seal under the seal of the Corporation, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the Board of Directors to some other officer or agent of the Corporation.

SECTION 9. President. The President shall be the chief operating officer of the Corporation. He shall perform all duties incident to the office of President, and be responsible for the general direction of the operations of the business, reporting to the Chief Executive Officer, and shall have such other duties as may from time to time be assigned to him by the Board of Directors or as may be provided in these Bylaws. At the written request of the Chief Executive Officer, or in his absence or in the event of his inability to act, the President shall perform the duties of the Chief Executive Officer, and, when so acting, shall have the powers of and be subject to the restrictions placed upon the Chief Executive Officer in respect of the performance of such duties.

SECTION 10. Vice President. Each Vice President shall perform all such duties as from time to time may be assigned to him by the Board of Directors. At the written request of the President, or in the absence or disability of the President, the Vice Presidents, in order of their rank as fixed by the Board of Directors, or if not ranked, the Vice President designated by the Board of Directors, shall perform the duties of the President, and when so acting shall have all the powers of and be subject to all the restrictions placed upon the President in respect of the performance of such duties.

SECTION 11. Chief Financial Officer. The Chief Financial Officer shall:

(a) have charge and custody of, and be responsible for, all the funds and securities of the Corporation;

(b) keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation;

(c) deposit all moneys and other valuables to the credit of the Corporation in such depositories as may be designated by the Board of Directors or pursuant to its direction;

(d) receive, and give receipts for, moneys due and payable to the Corporation from any source whatsoever;

(e) disburse the funds of the Corporation and supervise the investments of its funds, taking proper vouchers therefore;

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(f) render to the Board of Directors, whenever the Board of Directors may require, an account of the financial condition of the Corporation; and

(g) in general, perform all duties incident to the office of Chief Financial Officer and such other duties as from time to time may be assigned to him by the Board of Directors.

The Chief Financial Officer may also be the Treasurer if so determined by the Board of Directors.

SECTION 12. Secretary. The Secretary shall:

(a) keep or cause to be kept in one or more books provided for the purpose, the minutes of all meetings of the Board of Directors, the committees of the Board of Directors and the stockholders;

(b) see that all notices are duly given in accordance with the provisions of these Bylaws and as required by law;

(c) be custodian of the records and the seal of the Corporation and affix and attest the seal to all certificates for shares of the Corporation (unless the seal of the Corporation on such certificates shall be a facsimile, as hereinafter provided) and affix and attest the seal to all other documents to be executed on behalf of the Corporation under its seal;

(d) see that the books, reports, statements, certificates and other documents and records required by law to be kept and filed are properly kept and filed; and

(e) in general, perform all duties incident to the office of Secretary and such other duties as from time to time may be assigned to him by the Board of Directors.

SECTION 13. The Assistant Treasurer. The Assistant Treasurer, or if there shall be more than one, the Assistant Treasurers in the order determined by the Board of Directors (or, if there be no such determination, then in the order of their election), shall, in the absence of the Treasurer or in the event of his inability to act or his failure to act (in violation of a duty to act or in contravention of direction to act by the Board of Directors), perform the duties and exercise the powers of the Treasurer and shall perform such other duties as from time to time may be assigned by the Board of Directors.

SECTION 14. The Assistant Secretary. The Assistant Secretary, or if there be more than one, the Assistant Secretaries in the order determined by the Board of Directors (or if there be no such determination, then in the order of their election), shall, in the absence of the Secretary or in the event of his inability to act or his failure to act (in violation of a duty to act or in contravention of direction to act by the Board of Directors), perform the duties and exercise the

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powers of the Secretary and shall perform such other duties as from time to time may be assigned by the Board of Directors.

SECTION 15. Other Officers, Assistant Officers and Agents. Officers, assistant officers and agents, if any, other than those whose duties are provided for in these Bylaws, shall have such authority and perform such duties as may from time to time be prescribed by resolution of the Board of Directors.

SECTION 16. Officers’ Bonds or Other Security. If required by the Board of Directors, any officer of the Corporation shall give a bond or other security for the faithful performance of his duties, in such amount and with such surety as the Board of Directors may require.

SECTION 17. Absence or Disability of Officers. In the case of the absence or disability of any officer of the Corporation and of any person hereby authorized to act in such officer’s place during such officer’s absence or disability, the Board of Directors may by resolution delegate the powers and duties of such officer to any other officer or to any director, or to any other person whom it may select.

ARTICLE V

STOCK CERTIFICATES AND THEIR TRANSFER

SECTION 1. Stock Certificates. The Board of Directors may issue stock certificates, or may provide by resolution or resolutions that some or all of any or all classes or series of stock of the Corporation shall be uncertificated shares of stock. Notwithstanding the adoption of such a resolution by the Board of Directors, every holder of stock represented by a certificate and, upon request, every holder of uncertificated shares shall be entitled to have a certificate, signed by, or in the name of the Corporation by, the Chairman of the Board or, the Chief Executive Officer, the President or a Vice-President and by the Chief Financial Officer or an Assistant Treasurer or the Secretary or an Assistant Secretary of the Corporation, certifying the number of shares owned by him or her in the Corporation. A certificate representing shares issued by the Corporation shall, if the Corporation is authorized to issue more than one class or series of stock, set forth upon the face or back of the certificate, or shall state that the Corporation will furnish to any stockholder upon request and without charge, a full statement of the designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights. The Corporation shall furnish to any holder of uncertificated shares, upon request and without charge, a full statement of the designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights. Any request by a holder for a certificate shall be in writing and directed to the Secretary of the Corporation.

SECTION 2. Facsimile Signatures. Any or all of the signatures on a certificate may be a facsimile, engraved or printed. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer,

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transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if he or she were such officer, transfer agent or registrar at the date of issue.

SECTION 3. Lost Certificates. The Board of Directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the Corporation alleged to have been lost, stolen, or destroyed. When authorizing such issue of a new certificate or certificates, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen, or destroyed certificate or certificates, or his legal representative, to give the Corporation a bond in such sum as it may direct sufficient to indemnify it against any claim that may be made against the Corporation on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate

SECTION 4. Transfers of Stock. Upon surrender to the Corporation or the transfer agent of the Corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, it shall be the duty of the Corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its records; provided, however, that the Corporation shall be entitled to recognize and enforce any lawful restriction on transfer. Whenever any transfer of stock shall be made for collateral security, and not absolutely, it shall be so expressed in the entry of transfer if, when the certificates are presented to the Corporation for transfer, both the transferor and the transferee request the Corporation to do so.

SECTION 5. Transfer Agents and Registrars. The Board of Directors may appoint, or authorize any officer or officers to appoint, one or more transfer agents and one or more registrars.

SECTION 6. Regulations. The Board of Directors may make such additional rules and regulations, not inconsistent with these Bylaws, as it may deem expedient concerning the issue, transfer and registration of certificates for shares of stock of the Corporation.

SECTION 7. Registered Stockholders. The Corporation shall be entitled to recognize the exclusive right of a person registered on its records as the owner of shares of stock to receive dividends and to vote as such owner, shall be entitled to hold liable for calls and assessments a person registered on its records as the owner of shares of stock, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares of stock on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware.

ARTICLE VI

GENERAL PROVISIONS

SECTION 1. Dividends. Subject to the provisions of statutes and the Certificate of Incorporation, dividends upon the shares of capital stock of the Corporation may be declared by

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the Board of Directors at any regular or special meeting. Dividends may be paid in cash, in property or in shares of stock of the Corporation, unless otherwise provided by statute or the Certificate of Incorporation.

SECTION 2. Reserves. Before payment of any dividend, there may be set aside out of any funds of the Corporation available for dividends such sum or sums as the Board of Directors may, from time to time, in its absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation or for such other purpose as the Board of Directors may think conducive to the interests of the Corporation. The Board of Directors may modify or abolish any such reserves in the manner in which it was created.

SECTION 3. Seal. The seal of the Corporation shall be in such form as shall be approved by the Board of Directors, which form may be changed by resolution of the Board of Directors.

SECTION 4. Fiscal Year. The fiscal year of the Corporation shall end on December 31 of each fiscal year and may thereafter be changed by resolution of the Board of Directors.

SECTION 5. Checks, Notes, Drafts, Etc. All checks, notes, drafts or other orders for the payment of money of the Corporation shall be signed, endorsed or accepted in the name of the Corporation by such officer, officers, person or persons as from time to time may be designated by the Board of Directors or by an officer or officers authorized by the Board of Directors to make such designation.

SECTION 6. Execution of Contracts, Deeds, Etc. The Board of Directors may authorize any officer or officers, agent or agents, in the name and on behalf of the Corporation to enter into or execute and deliver any and all deeds, bonds, mortgages, contracts and other obligations or instruments, and such authority may be general or confined to specific instances.

SECTION 7. Loans. The Corporation may lend money to, or guarantee any obligation of, or otherwise assist any officer or other employee of the Corporation or of its subsidiary, including any officer or employee who is a director of the Corporation or its subsidiary, whenever, in the judgment of the directors, such loan, guaranty or assistance may reasonably be expected to benefit the Corporation. The loan, guaranty or other assistance may be with or without interest, and may be unsecured, or secured in such manner as the board of Directors shall approve, including, without limitation, a pledge of shares of stock of the Corporation. Nothing in this section contained shall be deemed to deny, limit or restrict the powers of guaranty or warranty of the Corporation at common law or under any statute.

SECTION 8. Voting of Stock in Other Corporations. Unless otherwise provided by resolution of the Board of Directors, the Chairman of the Board, or the Chief Executive Officer, from time to time, may (or may appoint one or more attorneys or agents to) cast the votes which the Corporation may be entitled to cast as a shareholder or otherwise in any other corporation, any of whose shares or securities may be held by the Corporation, at meetings of the holders of the shares or other securities of such other corporation. In the event one or more attorneys or

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agents are appointed, the Chairman of the Board, or the Chief Executive Officer may instruct the person or persons so appointed as to the manner of casting such votes or giving such consent. The Chairman of the Board, or the Chief Executive Officer may, or may instruct the attorneys or agents appointed to, execute or cause to be executed in the name and on behalf of the Corporation and under its seal or otherwise, such written proxies, consents, waivers or other instruments as may be necessary or proper in the circumstances.

SECTION 9. Inspection of Books and Records. Any stockholder of record, in person or by attorney or other agent, shall, upon written demand under oath stating the purpose thereof, have the right during the usual hours for business to inspect for any proper purpose the Corporation’s stock ledger, a list of its stockholders, and its other books and records, and to make copies or extracts therefrom. A proper purpose shall mean any purpose reasonably related to such person’s interest as a stockholder. In every instance where an attorney or other agent shall be the person who seeks the right of inspection, the demand under oath shall be accompanied by a power of attorney or such other writing which authorizes the attorney or other agent to so act on behalf of the stockholder. The demand under oath shall be directed to the Corporation at its registered office in the State of Delaware or at its principal place of business.

SECTION 10. Section Headings. Section headings in these By-laws are for convenience of reference only and shall not be given any substantive effect in limiting or otherwise construing an provision herein.

SECTION 11. Inconsistent Provisions. In the event that any provision of these By-laws is or becomes inconsistent with any provision of the Certificate of Incorporation, the General Corporation Law of the State of Delaware or any other applicable law, the provision of these By-laws shall not be given any effect to the extent of such inconsistency but shall otherwise be given full force and effect.

ARTICLE VII

AMENDMENTS

These By-laws may be amended, altered, changed or repealed or new By-laws adopted only in accordance with Article X of the Certificate of Incorporation.

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EX-10.2

Execution Copy

Exhibit 10.2

CREDIT AGREEMENT

among

SYMMETRY MEDICAL INC.,

as Borrower,

THE LENDERS NAMED HEREIN,

WACHOVIA BANK, NATIONAL ASSOCIATION,

as Administrative Agent,

ANTARES CAPITAL CORPORATION

and

GENERAL ELECTRIC CAPITAL CORPORATION,

as Syndication Agents,

and

CIT LENDING SERVICES CORPORATION

and

THE ROYAL BANK OF SCOTLAND plc,

as Documentation Agents

$75,000,000 Senior Secured Credit Facilities

WACHOVIA CAPITAL MARKETS, LLC

Sole Lead Arranger and Sole Book Manager

Dated as of December 14, 2004

TABLE OF CONTENTS

		Page
ARTICLE I DEFINITIONS
1.1	Defined Terms	1
1.2	Accounting Terms	27
1.3	Other Terms; Construction	28
ARTICLE II AMOUNT AND TERMS OF THE LOANS
2.1	Commitments	28
2.2	Borrowings	29
2.3	Disbursements; Funding Reliance; Domicile of Loans	32
2.4	Evidence of Debt; Notes	33
2.5	Termination and Reduction of Commitments and Swingline Commitment	34
2.6	Mandatory Payments and Prepayments	35
2.7	Voluntary Prepayments	38
2.8	Interest	39
2.9	Fees	40
2.10	Interest Periods	41
2.11	Conversions and Continuations	42
2.12	Method of Payments; Computations	43
2.13	Recovery of Payments	44
2.14	Use of Proceeds	45
2.15	Pro Rata Treatment	45
2.16	Increased Costs; Change in Circumstances; Illegality; etc.	46
2.17	Taxes	48
2.18	Compensation	50
2.19	Replacement of Lenders	51
ARTICLE III LETTERS OF CREDIT
3.1	Issuance	52
3.2	Notices	53
3.3	Participations	54
3.4	Reimbursement	54
3.5	Payment by Revolving Loans	55
3.6	Payment to Revolving Credit Lenders	55
3.7	Obligations Absolute	56
3.8	Cash Collateral Account	57

i

3.9	Effectiveness	58
ARTICLE IV CONDITIONS OF BORROWING
4.1	Conditions of Initial Borrowing	58
4.2	Conditions of All Borrowings	63
ARTICLE V REPRESENTATIONS AND WARRANTIES
5.1	Corporate Organization and Power	64
5.2	Authorization; Enforceability	64
5.3	No Violation	64
5.4	Governmental and Third-Party Authorization; Permits	65
5.5	Litigation	65
5.6	Taxes	65
5.7	Subsidiaries	66
5.8	Full Disclosure	66
5.9	Margin Regulations	66
5.10	No Material Adverse Effect	66
5.11	Financial Matters	67
5.12	Ownership of Properties	68
5.13	ERISA	68
5.14	Environmental Matters	69
5.15	Compliance with Laws	69
5.16	Intellectual Property	69
5.17	Regulated Industries	70
5.18	Insurance	70
5.19	Security Documents	70
5.20	Labor Relations	71
5.21	No Burdensome Restrictions	71
5.22	OFAC	71
5.23	Deposit Accounts	71
ARTICLE VI AFFIRMATIVE COVENANTS
6.1	Financial Statements	72
6.2	Other Business and Financial Information	73
6.3	Existence; Franchises; Maintenance of Properties	75
6.4	Compliance with Laws	75
6.5	Payment of Obligations	75
6.6	Insurance	76
6.7	Maintenance of Books and Records; Inspection	76

ii

6.8	Permitted Acquisitions	76
6.9	Creation or Acquisition of Subsidiaries	78
6.10	Additional Security	80
6.11	Environmental Laws	80
6.12	Further Assurances	81
6.13	Deposit Accounts	82
6.14	Revisions or Updates to Schedules	82
ARTICLE VII FINANCIAL COVENANTS
7.1	Total Leverage Ratio	82
7.2	Interest Coverage Ratio	82
7.3	Fixed Charge Ratio	82
ARTICLE VIII NEGATIVE COVENANTS
8.1	Merger; Consolidation	83
8.2	Indebtedness	83
8.3	Liens	86
8.4	Disposition of Assets	88
8.5	Investments	89
8.6	Restricted Payments	91
8.7	Transactions with Affiliates	93
8.8	Lines of Business	93
8.9	Sale-Leaseback Transactions	93
8.10	Certain Amendments	94
8.11	Limitation on Certain Restrictions	94
8.12	No Other Negative Pledges	94
8.13	Fiscal Year	95
8.14	Accounting Changes	95
8.15	Ownership of Subsidiaries	95
ARTICLE IX EVENTS OF DEFAULT
9.1	Events of Default	95
9.2	Remedies: Termination of Commitments, Acceleration, etc.	98
9.3	Remedies: Set-Off	98

iii

ARTICLE X THE ADMINISTRATIVE AGENT
10.1	Appointment	99
10.2	Nature of Duties	99
10.3	Exculpatory Provisions	100
10.4	Reliance by Administrative Agent	100
10.5	Non-Reliance on Administrative Agent and Other Lenders	101
10.6	Notice of Default	101
10.7	Indemnification	101
10.8	The Administrative Agent in its Individual Capacity	102
10.9	Successor Administrative Agent	102
10.10	Collateral Matters	103
10.11	Issuing Lender and Swingline Lender	103
10.12	Other Agents, Managers	103
ARTICLE XI MISCELLANEOUS
11.1	Fees and Expenses	104
11.2	Indemnification	105
11.3	Governing Law; Consent to Jurisdiction	105
11.4	Waiver of Jury Trial	106
11.5	Notices	107
11.6	Amendments, Waivers, etc.	108
11.7	Assignments, Participations	109
11.8	No Waiver	113
11.9	Successors and Assigns	113
11.10	Survival	113
11.11	Severability	114
11.12	Construction	114
11.13	Confidentiality	114
11.14	Counterparts; Effectiveness	114
11.15	Disclosure of Information	115
11.16	USA PATRIOT Act Notice	115
11.17	Entire Agreement	115

iv

EXHIBITS

Exhibit A-1	Form of Term Note
Exhibit A-2	Form of Revolving Note
Exhibit A-3	Form of Swingline Note
Exhibit B-1	Form of Notice of Borrowing
Exhibit B-2	Form of Notice of Swingline Borrowing
Exhibit B-3	Form of Notice of Conversion/Continuation
Exhibit B-4	Form of Letter of Credit Notice
Exhibit C	Form of Compliance Certificate
Exhibit D	Form of Assignment and Acceptance
Exhibit E	Form of Security Agreement
Exhibit F	Form of Pledge Agreement
Exhibit G	Form of Subsidiary Guaranty
Exhibit H	Form of Financial Condition Certificate

SCHEDULES

Schedule 1.1(a)	Commitments and Notice Addresses
Schedule 5.4	Consents and Approvals
Schedule 5.6	Taxes
Schedule 5.7	Subsidiaries
Schedule 5.12	Real Property Interests
Schedule 5.14	Environmental Matters
Schedule 5.16	Intellectual Property
Schedule 5.18	Insurance Coverage
Schedule 5.23	Deposit Accounts
Schedule 8.2	Indebtedness
Schedule 8.3	Liens
Schedule 8.5	Investments
Schedule 8.7	Transactions with Affiliates

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CREDIT AGREEMENT

THIS CREDIT AGREEMENT, dated as of the 14^th day of December, 2004, is made among SYMMETRY MEDICAL INC., a Delaware corporation (the “Borrower”), the Lenders (as hereinafter defined), WACHOVIA BANK, NATIONAL ASSOCIATION, as Administrative Agent for the Lenders, ANTARES CAPITAL CORPORATION and GENERAL ELECTRIC CAPITAL CORPORATION, as Syndication Agents for the Lenders, and CIT LENDING SERVICES CORPORATION and THE ROYAL BANK OF SCOTLAND plc, as Documentation Agents for the Lenders.

BACKGROUND STATEMENT

The Borrower has requested that the Lenders make available to the Borrower term loan facilities in the aggregate principal amount of $35,000,000 and a revolving credit facility in the aggregate principal amount of $40,000,000.

The Borrower will use the proceeds of these facilities as provided in Section 2.14. The Lenders are willing to make available to the Borrower the credit facilities described herein subject to and on the terms and conditions set forth in this Agreement.

AGREEMENT

NOW, THEREFORE, in consideration of the mutual provisions, covenants and agreements herein contained, the parties hereto hereby agree as follows:

ARTICLE I

DEFINITIONS

1.1 Defined Terms. For purposes of this Agreement, in addition to the terms defined elsewhere herein, the following terms shall have the meanings set forth below (such meanings to be equally applicable to the singular and plural forms thereof):

“Account Designation Letter” shall mean a letter from the Borrower to the Administrative Agent, duly completed and signed by an Authorized Officer of the Borrower and in form and substance reasonably satisfactory to the Administrative Agent, listing any one or more accounts to which the Borrower may from time to time request the Administrative Agent to forward the proceeds of any Loans made hereunder.

“Acquisition” shall mean any transaction or series of related transactions, consummated on or after the date hereof, by which the Borrower directly, or indirectly through one or more Subsidiaries, (i) acquires any going business, division thereof or line of business, or all or substantially all of the assets, of any Person, whether through purchase of assets, merger or otherwise, or (ii) acquires securities or other ownership interests of any Person having at least a majority of combined voting power of the then outstanding securities or other ownership interests of such Person.

“Adjusted Base Rate” shall mean, at any time with respect to any Base Rate Loan of any Class, a rate per annum equal to the Base Rate as in effect at such time plus the Applicable Percentage for Base Rate Loans of such Class as in effect at such time.

“Adjusted LIBOR Rate” shall mean, at any time with respect to any LIBOR Loan of any Class, a rate per annum equal to the LIBOR Rate as in effect at such time plus the Applicable Percentage for LIBOR Loans of such Class as in effect at such time.

“Administrative Agent” shall mean Wachovia, in its capacity as Administrative Agent appointed under Section 10.1, and its successors and permitted assigns in such capacity.

“Affiliate” shall mean, as to any Person, each other Person that directly, or indirectly through one or more intermediaries, owns or controls, is controlled by or under common control with, such Person or is a director or officer of such Person. For purposes of this definition, with respect to any Person “control” shall mean (i) the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise, or (ii) the beneficial ownership of securities or other ownership interests of such Person having 10% or more (A) of the combined voting power of the then outstanding securities or other ownership interests of such Person (and apart from rights accruing under special circumstances) ordinarily having the right to vote in the election of directors or other governing body of such Person or (B) of the Total Voting Power of such Person; provided, however, that with respect to the Borrower or any of its Subsidiaries the term “Affiliate” shall not include (i) any limited partner of the Sponsor solely by reason of its status as a limited partner or (ii) any Affiliate of 3i Group plc that, absent such affiliation with 3i Group plc, is not otherwise an Affiliate of the Borrower or any of its Subsidiaries. Notwithstanding the foregoing, neither the Administrative Agent nor any Lender shall be deemed an “Affiliate” of any Credit Party.

“Aggregate Revolving Credit Exposure” shall mean, at any time, the sum of (i) the aggregate principal amount of Revolving Loans outstanding at such time, (ii) the aggregate Letter of Credit Exposure of all Revolving Credit Lenders at such time and (iii) the aggregate principal amount of Swingline Loans outstanding at such time.

“Agreement” shall mean this Credit Agreement, as amended, modified, restated or supplemented from time to time in accordance with its terms.

“Applicable Percentage” shall mean, at any time from and after the Closing Date, the applicable percentage (i) to be added to the Base Rate for purposes of determining the Adjusted Base Rate, (ii) to be added to the LIBOR Rate for purposes of determining the Adjusted LIBOR Rate and (iii) to be used in calculating the commitment fee payable pursuant to Section 2.9(b), in each case as determined under the following matrix with reference to the Total Leverage Ratio:

Level	Total Leverage Ratio	Applicable LIBOR Margin		Applicable Base Rate Margin		Applicable Commitment Fee Percentage
I	Greater than or equal to 2.0 to 1.0	2.50	%	1.50	%	0.50	%
II	Less than 2.0 to 1.0 but greater than or equal to 1.5 to 1.0	2.25	%	1.25	%	0.50	%
III	Less than 1.5 to 1.0 but greater than or equal to 1.0 to 1.0	2.00	%	1.00	%	0.50	%
IV	Less than 1.0 to 1.0	1.50	%	0.50	%	0.375	%

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On each Adjustment Date (as hereinafter defined), the Applicable Percentage for all Loans and the commitment fee payable pursuant to Section 2.9(b) shall be adjusted effective as of such Adjustment Date (based upon the calculation of the Total Leverage Ratio as of the last day of the Reference Period to which such Adjustment Date relates) in accordance with the above matrix; provided, however, that, notwithstanding the foregoing or anything else herein to the contrary, if at any time the Borrower shall have failed to deliver any of the financial statements as required by Sections 6.1(a) or 6.1(b), as the case may be, or the Compliance Certificate as required by Section 6.2(a), then at all times from and including the fifth (5^th) Business Day following the date on which such statements and Compliance Certificate are required to have been delivered until the date on which the same shall have been delivered, each Applicable Percentage shall be determined based on Level I above (notwithstanding the actual Total Leverage Ratio). For purposes of this definition, “Adjustment Date” shall mean, with respect to any Reference Period of the Borrower beginning with the Reference Period ending as of the last day of the fourth fiscal quarter of fiscal year 2004, the tenth (10th) day (or, if such day is not a Business Day, the next succeeding Business Day) after delivery by the Borrower in accordance with Section 6.1(a) or Section 6.1(b), as the case may be, of (i) financial statements as of the end of and for such Reference Period and (ii) a duly completed Compliance Certificate with respect to such Reference Period. From the Closing Date until the first Adjustment Date requiring any change in any Applicable Percentage as provided herein, each Applicable Percentage shall be based on Level III.

“Approved Fund” shall mean any trust, limited or general partnership, limited liability company, corporation or other limited purpose entity that invests in loans (a “fund”) and is managed by a Lender, an Affiliate of a Lender or the same investment advisor of a Lender or by an Affiliate of such investment advisor, or any finance company, insurance company, investment bank or other financial institution which temporarily warehouses loans for any of the foregoing.

“Arranger” shall mean Wachovia Capital Markets, LLC and its successors.

“Asset Disposition” shall mean any sale, assignment, transfer or other disposition by the Borrower or any of its Domestic Subsidiaries to any other Person, whether in one transaction or in a series of related transactions, of any of its assets, business units or other properties (including any interests in property, whether tangible or intangible, and including Capital Stock of Subsidiaries), excluding (i) any such sale, assignment, transfer or other disposition permitted under Sections 8.4(i), 8.4(ii), 8.4(iii) and 8.4(iv), (ii) any Debt Issuance, Equity Issuance or

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Casualty Event, and (iii) any other such sales, assignments, transfers or other dispositions the Net Cash Proceeds from which do not exceed $1,500,000 in any single fiscal year.

“Assignee” shall have the meaning given to such term in Section 11.7(a).

“Assignment and Acceptance” shall mean an Assignment and Acceptance entered into between a Lender and an Assignee and accepted by the Administrative Agent and, if appropriate, the Borrower, in substantially the form of Exhibit D.

“Authorized Officer” shall mean, with respect to any action specified herein, any officer of the Borrower duly authorized by resolution of the board of directors of the Borrower to take such action on its behalf, and whose signature and incumbency shall have been certified on behalf of the Borrower to the Administrative Agent by the secretary or an assistant secretary of the Borrower.

“Bankruptcy Code” shall mean 11 U.S.C. §§ 101 et seq., as amended from time to time, and any successor statute.

“Bankruptcy Event” shall mean the occurrence of an Event of Default pursuant to Section 9.1(f) or Section 9.1(g).

“Base Rate” shall mean the higher of (i) the per annum interest rate publicly announced from time to time by Wachovia in Charlotte, North Carolina, to be its prime rate (which may not necessarily be its lowest or best lending rate), as adjusted to conform to changes as of the opening of business on the date of any such change in such prime rate, and (ii) the Federal Funds Rate plus 0.5% per annum, as adjusted to conform to changes as of the opening of business on the date of any such change in the Federal Funds Rate.

“Base Rate Loan” shall mean, at any time, any Loan that bears interest at such time at the applicable Adjusted Base Rate.

“Borrower” shall have the meaning given to such term in the introductory paragraph hereof.

“Borrowing” shall mean the incurrence by the Borrower (including as a result of conversions and continuations of outstanding Loans pursuant to Section 2.11) on a single date of a group of Loans of a single Class and Type (or a Swingline Loan made by the Swingline Lender) and, in the case of LIBOR Loans, as to which a single Interest Period is in effect.

“Borrowing Date” shall mean, with respect to any Borrowing, the date upon which such Borrowing is made.

“Business Day” shall mean (i) any day other than a Saturday or Sunday, a legal holiday or a day on which commercial banks in Charlotte, North Carolina or New York, New York are authorized or required by law to be closed and (ii) in respect of any determination relevant to a LIBOR Loan, any such day that is also a day on which trading in Dollar deposits is conducted by banks in London, England in the London interbank Eurodollar market.

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“Capital Expenditures” shall mean, for any period, the aggregate amount paid in cash that would, in accordance with GAAP, be included on the consolidated statement of cash flows of the Borrower and its Subsidiaries for such period as additions to equipment, fixed assets, real property or improvements or other capital assets (including, without limitation, Capital Lease expenditures); provided, however, that Capital Expenditures shall not include any such expenditures (i) for replacements and substitutions for capital assets, to the extent made with the proceeds of insurance in accordance with Section 2.6(e), (ii) for replacements and substitutions for capital assets, to the extent made with proceeds from the sale, exchange or other disposition of assets as permitted under Sections 8.4(iii), 8.4(iv) or 8.4(v) or (iii) made as part of a Permitted Acquisition.

“Capital Lease” shall mean, with respect to any Person, any lease of property (whether real, personal or mixed) by such Person as lessee that is or is required to be, in accordance with GAAP, recorded as a capital lease on such Person’s balance sheet.

“Capital Stock” shall mean (i) with respect to any Person that is a corporation, any and all shares, interests or equivalents in capital stock (whether voting or nonvoting, and whether common or preferred) of such corporation, and (ii) with respect to any Person that is not a corporation, any and all partnership, membership, limited liability company or other equity interests of such Person; and in each case, any and all warrants, rights or options to purchase any of the foregoing.

“Cash Collateral Account” shall have the meaning given to such term in Section 3.8.

“Cash Equivalents” shall mean (i) securities issued or unconditionally guaranteed or insured by the United States of America or any agency or instrumentality thereof, backed by the full faith and credit of the United States of America and maturing within one year from the date of acquisition (“Government Obligations”), (ii) commercial paper issued by any Person organized under the laws of the United States of America, maturing within 364 days from the date of acquisition and, at the time of acquisition, having a rating of at least A-1 or the equivalent thereof by Standard & Poor’s Ratings Services, at least P-1 or the equivalent thereof by Moody’s Investors Service, Inc. or at least F-1 or the equivalent thereof by Fitch, (iii) time deposits and certificates of deposit maturing within 364 days from the date of issuance and issued by, or demand deposits with, (A) a bank or trust company organized under the laws of the United States of America or any state thereof (y) that has combined capital and surplus of at least $250,000,000 or (z) that has (or is a subsidiary of a bank holding company that has) a long-term unsecured debt rating of at least A or the equivalent thereof by Standard & Poor’s Ratings Services or Fitch or at least A2 or the equivalent thereof by Moody’s Investors Service, Inc., or (B) any Eligible Assignee that is a commercial bank, (iv) repurchase obligations with a term not exceeding thirty (30) days with respect to underlying securities of the types described in clause (i) above entered into with any bank or trust company meeting the qualifications specified in clause (iii) above, (v) obligations of any state of the United States of America or any political subdivision thereof, for the payment of the principal and redemption price of, and interest on, which there shall have been irrevocably deposited Government Obligations in amounts sufficient to provide such payment, and (vi) money market funds at least ninety-five percent (95%) of the assets of which are continuously invested in securities of the foregoing types; provided that in the case of any investment by a Foreign Subsidiary, “Cash Equivalents” shall also include

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(a) direct obligations of the sovereign nation (or any political subdivision or agency thereof) in which such Foreign Subsidiary is organized and is conducting business or in obligations fully and unconditionally guaranteed by such sovereign nation (or any political subdivision or agency thereof), (b) investments of the type and maturity described in clauses (i), (ii), (iii), (iv) and (v) above of foreign obligors, which investments or obligors (or the parents of such obligors) have ratings described in such clauses or equivalent ratings from comparable foreign rating agencies, and (c) money market funds at least ninety-five percent (95%) of the assets of which are continuously invested in securities of the foregoing types.

“Casualty Event” shall mean, with respect to any property (including any interest in property) of the Borrower or any of its Domestic Subsidiaries, any loss of, damage to, or condemnation or other taking of, such property for which the Borrower or such Domestic Subsidiary receives insurance proceeds, proceeds of a condemnation award or other compensation.

“Class” shall have the meaning given to such term in Section 2.2(a).

“Class A Preferred Stock Repurchase” shall mean the repurchase by the Borrower of outstanding shares of its Class A Preferred Stock on or before the Closing Date of up to approximately $50,000,000 in principal and accrued interest outstanding, together with associated warrants to purchase Class A Preferred Stock.

“Closing Date” shall mean the date upon which the initial extensions of credit are made pursuant to this Agreement, which shall be the date upon which each of the conditions set forth in Sections 4.1 and 4.2 shall have been satisfied or waived in accordance with the terms of this Agreement.

“Collateral” shall mean all the assets, property and interests in property that shall from time to time be pledged or be purported to be pledged as direct or indirect security for the Obligations pursuant to any one or more of the Security Documents.

“Commitment” shall mean, with respect to any Lender, such Lender’s Term Loan Commitment, and/or Revolving Credit Commitment, as applicable.

“Commitment Letter” shall mean the commitment letter from the Administrative Agent and the Arranger to the Borrower, dated November 17, 2004, as amended, modified or supplemented from time to time.

“Compliance Certificate” shall mean a fully completed and duly executed certificate in the form of Exhibit C, together with a Covenant Compliance Worksheet.

“Consolidated EBITDA” shall mean, for any Reference Period, the aggregate of (i) Consolidated Net Income for such Reference Period, plus (ii) the sum (without duplication) of (A) Consolidated Interest Expense, (B) federal, state, local and other income taxes, (C) depreciation and amortization, (D) noncash charges related to Hedge Agreements, (E) losses from Asset Dispositions (including, for this purpose, any asset dispositions expressly excluded from the definition of such term under item (iii) of such definition and any asset dispositions made pursuant to Section 8.4(iv)), (F) extraordinary or nonrecurring noncash losses or charges

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relating to the impairment of goodwill calculated in accordance with FAS 142, (G) up to $2,500,000 in extraordinary or nonrecurring noncash losses or charges (excluding noncash charges relating to accounts receivable or inventories) (it being understood that the inclusion of any greater amount shall require the approval of the Required Lenders), and (H) nonrecurring fees and expenses incurred by the Borrower in connection with the IPO to the extent the aggregate thereof does not exceed $17,000,000, in each case under clauses (A) through (H) above to the extent taken into account in the calculation of Consolidated Net Income for such Reference Period and all calculated in accordance with GAAP (provided that any cash expenses in respect of or associated with any such losses, expenses or charges in clauses (F) and (G) above will be included (i.e., deducted) in the calculation of Consolidated EBITDA for the Reference Period in which expended), minus (iv) the sum (without duplication) of (A) noncash gains related to Hedge Agreements, (B) gains from Asset Dispositions (including, for this purpose, any asset dispositions expressly excluded from the definition of such term as item (iii) of such definition and any asset dispositions made pursuant to Section 8.4(iv)), and (C) other extraordinary or nonrecurring gains (including in connection with the sale or write-up of assets) and other noncash credits increasing income for such Reference Period, in each case under clauses (A) through (C) above to the extent taken into account in the calculation of Consolidated Net Income for such Reference Period and all calculated in accordance with GAAP; provided that Consolidated EBITDA (1) shall be deemed to include, without duplication, historical Consolidated EBITDA of any Person acquired in a Permitted Acquisition and operated by the Borrower after the commencement of the relevant Reference Period, as if such Person had been acquired by the Borrower as of the first day of such Reference Period (such Consolidated EBITDA calculated for such Person and its Subsidiaries for such Reference Period in the same manner as Consolidated EBITDA is calculated for the Borrower and all of its Subsidiaries for such Reference Period as set forth herein, mutatis mutandis), but only so long as the Consolidated EBITDA of such Person is supported by financial statements of such Person or other financial data reasonably acceptable to the Administrative Agent, (2) shall be deemed to exclude the results of the operation of any Person or business sold or disposed of by the Borrower at any time after the first day of the relevant Reference Period, and (3) shall be increased by any cost savings demonstrated by the Borrower as reasonably likely to occur as a result of a Permitted Acquisition and which are reasonably acceptable to the Administrative Agent, which savings shall be deemed to have been realized on the first day of the relevant Reference Period.

“Consolidated Fixed Charges” shall mean, for any Reference Period, the aggregate (without duplication) of the following, all determined on a consolidated basis for the Borrower and its Subsidiaries in accordance with GAAP for such Reference Period: (a) Consolidated Interest Expense for such Reference Period, (b) aggregate cash tax expense for federal (or national), state, local and other income taxes for such Reference Period, (c) Capital Expenditures for such Reference Period, (d) the aggregate (without duplication) of all scheduled payments of principal on Funded Debt (with respect to the Term Loans, as set forth in Sections 2.6(a)) required to have been made by the Borrower and its Subsidiaries during such Reference Period (whether or not such payments are actually made), it being understood (for the avoidance of doubt) that prepayments of the Term Loans made during any Reference Period shall not be included under this clause (d) for such Reference Period, and (e) the aggregate of all Restricted Payments made by the Borrower or any of its Subsidiaries during such Reference Period (excluding the Class A Preferred Stock Repurchase and the payment of accrued dividends on the

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Class A Preferred Stock in connection therewith); provided that, for each of the Reference Periods ending as of the last day of the first, second and third fiscal quarters of 2005, for purposes of clause (d) above the aggregate scheduled payments made on the Term Loans during such Reference Period shall be deemed to be $3,500,000 and scheduled payments actually made on the term loans under the Existing Senior Bank Facilities shall be disregarded.

“Consolidated Interest Expense” shall mean, for any Reference Period, the sum (without duplication) of (i) total interest expense (calculated net of interest income) of the Borrower and its Subsidiaries for such Reference Period in respect of Consolidated Total Funded Debt (including, without limitation, all such interest expense accrued or capitalized during such Reference Period, whether or not actually paid during such Reference Period), determined on a consolidated basis in accordance with GAAP, (ii) all net amounts payable under or in respect of Hedge Agreements, to the extent paid or accrued by the Borrower and its Subsidiaries during such Reference Period, and (iii) all recurring unused fees and other ongoing fees in respect of Funded Debt (including the unused fees and letter of credit fees provided for under Section 2.9 of this Agreement) paid, accrued or capitalized by the Borrower and its Subsidiaries during such Reference Period; provided, however, that solely for purposes of calculating the Interest Coverage Ratio and the Fixed Charge Coverage Ratio, all noncash expenses, fees and other amounts of the types described in clauses (i) through (iii) above (including, without limitation, the amortization or write-off of deferred financing fees, debt discount and debt issuance costs and commissions, premiums paid in respect of Hedge Agreements, and other noncash fees and charges associated with Indebtedness) shall be excluded in the determination of Consolidated Interest Expense and Consolidated Fixed Charges; provided, further, that (A) for the Reference Period ending as of the last day of the first fiscal quarter of fiscal year 2005, Consolidated Interest Expense shall be calculated as Consolidated Interest Expense for such quarter multiplied by four (4), (B) for the Reference Period ending as of the last day of the second fiscal quarter of fiscal year 2005, Consolidated Interest Expense shall be calculated as Consolidated Interest Expense for the period of two consecutive fiscal quarter ending on such date multiplied by two (2), and (C) for the Reference Period ending as of the last day of the third fiscal quarter of fiscal year 2005, Consolidated Interest Expense shall be calculated as Consolidated Interest Expense for the period of three consecutive fiscal quarter ending on such date multiplied by 4/3.

“Consolidated Net Income” shall mean, for any Reference Period, net income (or loss) for the Borrower and its Subsidiaries for such Reference Period, determined on a consolidated basis in accordance with GAAP (after deduction for minority interests); provided that, in making such determination, there shall be excluded (i) the net income of any other Person that is not a Subsidiary of the Borrower (or is accounted for by the Borrower by the equity method of accounting) except to the extent of actual payment of cash dividends or distributions by such Person to the Borrower or any Subsidiary of the Borrower during such period, (ii) the net income (or loss) of any other Person acquired by, or merged with, the Borrower or any of its Subsidiaries for any period prior to the date of such acquisition, and (iii) the net income of any Subsidiary of the Borrower to the extent that the declaration or payment of dividends or similar distributions by such Subsidiary of such net income is not at the time permitted by operation of the terms of its charter, certificate of incorporation or formation or other constituent document or any agreement or instrument (other than a Credit Document) or Requirement of Law applicable to such Subsidiary.

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“Consolidated Total Funded Debt” shall mean, as of any date of determination, the aggregate (without duplication) of all Funded Debt of the Borrower and its Subsidiaries, net of their Cash and Cash Equivalents held in a branch of a bank or other financial institution located in the United States in excess of $1,500,000, as of such date, determined on a consolidated basis in accordance with GAAP. For purposes of determining Consolidated Total Funded Debt as of any date, each Guaranty Obligation of the Borrower and its Subsidiaries required to be included in such determination shall be valued at the maximum aggregate principal amount (whether or not drawn or outstanding) of the Indebtedness that is the corresponding “primary obligation” (as such term is defined in the definition of Guaranty Obligation) as of such date.

“Contingent Purchase Price GAAP Amount” shall mean, at any time, the Contingent Purchase Price Obligation liability that, in accordance with GAAP, should be recorded at such time as a liability on the balance sheet, or (without duplication) an expense on the income statement, of the Borrower and its Subsidiaries.

“Contingent Purchase Price Obligations” shall mean any earnout obligations or similar deferred or contingent purchase price obligations of the Borrower or any of its Subsidiaries incurred or created in connection with an Acquisition.

“Contingent Purchase Price Reserve Amount” shall mean, with respect to any Contingent Purchase Price Obligation, as of any date of determination, the maximum amount payable with respect to such Contingent Purchase Price Obligation on such date of determination (on a pro forma basis, assuming the consummation of any Acquisition to be consummated on such date of determination) pursuant to the acquisition agreement and other documentation evidencing such Contingent Purchase Price Obligation, assuming the remaining maximum performance standards related thereto are satisfied; provided that, to the extent that any portion of a Contingent Purchase Price Obligation becomes a fixed, matured or earned amount (through satisfaction of performance goals or targets or otherwise), the Contingent Purchase Price Reserve Amount for such fixed amount shall be the Contingent Purchase Price GAAP Amount therefor; and provided further that, to the extent the calculation of the maximum amount payable with respect to a Contingent Purchase Price Obligation cannot be determined on the date of such determination, such amount shall be determined in good faith by the Administrative Agent after consultation with the Borrower.

“Covenant Compliance Worksheet” shall mean a fully completed worksheet in the form of Attachment A to Exhibit C.

“Credit Documents” shall mean this Agreement, the Notes, the Letters of Credit, the Fee Letter, the Security Agreement, the Pledge Agreement, the Mortgages, any other Security Documents, the Subsidiary Guaranty and all other written agreements, instruments, documents and certificates in favor of the Administrative Agent and the Lenders now or hereafter executed and delivered to the Administrative Agent or any Lender by or on behalf of the Borrower or any other Credit Party with respect to this Agreement, in each case as amended, modified, supplemented or restated from time to time, but specifically excluding any Hedge Agreement to which the Borrower and any Lender or Affiliate of any Lender are parties.

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“Credit Parties” shall mean the Borrower, the Borrower’s Subsidiaries, and their respective successors.

“Debt Issuance” shall mean the issuance or sale by the Borrower or any of its Subsidiaries of any debt securities or other Indebtedness, whether in a public offering or otherwise, except for any Indebtedness permitted under Section 8.2.

“Default” shall mean any event or condition that, with the passage of time or giving of notice, or both, would constitute an Event of Default.

“Defaulting Lender” shall mean any Lender that (i) has refused to fund, or otherwise defaulted in the funding of, its ratable share of any Borrowing requested and permitted to be made hereunder, including the funding of a participation interest in Letters of Credit or Swingline Loans in accordance with the terms hereof, (ii) has failed to pay to the Administrative Agent or any Lender when due an amount owed by such Lender pursuant to the terms of this Credit Agreement, or (c) has been deemed insolvent or has become subject to a bankruptcy or insolvency proceeding or to a receiver, trustee or similar official, and such refusal has not been withdrawn or such default has not been cured within three (3) Business Days.

“Disqualified Capital Stock” shall mean, with respect to any Person, any Capital Stock of such Person that, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event or otherwise, (i) matures or is mandatorily redeemable or subject to any mandatory repurchase requirement, pursuant to a sinking fund obligation or otherwise, (ii) is redeemable or subject to any mandatory repurchase requirement at the sole option of the holder thereof, or (iii) is convertible into or exchangeable for (whether at the option of the issuer or the holder thereof) (y) debt securities or (z) any Capital Stock referred to in (i) or (ii) above, in each case under (i), (ii) or (iii) above at any time on or prior to the first anniversary of the later of the Term Loan Maturity Date or Revolving Credit Maturity Date; provided, however, that only the portion of Capital Stock that so matures or is mandatorily redeemable, is so redeemable at the option of the holder thereof, or is so convertible or exchangeable on or prior to such date shall be deemed to be Disqualified Capital Stock.

“Dollars” or “$” shall mean dollars of the United States of America.

“Documentation Agents” shall mean CIT Lending Services Corporation and The Royal Bank of Scotland plc in their capacity as such under Section 10.12, and their respective successors and permitted assigns in such capacity.

“Domestic Subsidiary” shall mean any Subsidiary that is not a Foreign Subsidiary.

“Domestic Subsidiary Guarantor” shall mean any Domestic Subsidiary that is also a Subsidiary Guarantor.

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

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“ERISA Affiliate” shall mean any Person (including any trade or business, whether or not incorporated) that would be deemed to be under “common control” with, or a member of the same “controlled group” as, the Borrower or any of its Subsidiaries, within the meaning of Sections 414(b), (c), (m) or (o) of the Internal Revenue Code or Section 4001 of ERISA.

“ERISA Event” shall mean any of the following with respect to a Plan or Multiemployer Plan, as applicable: (i) a Reportable Event, (ii) a complete or partial withdrawal by the Borrower or any ERISA Affiliate from a Multiemployer Plan that results in liability under Section 4201 or 4204 of ERISA, or the receipt by the Borrower or any ERISA Affiliate of notice from a Multiemployer Plan that it is in reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA or that it intends to terminate or has terminated under Section 4041A of ERISA, (iii) the distribution by the Borrower or any ERISA Affiliate under Section 4041 or 4041A of ERISA of a notice of intent to terminate any Plan or the taking of any action to terminate any Plan, (iv) the commencement of proceedings by the PBGC under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan, or the receipt by the Borrower or any ERISA Affiliate of a notice from any Multiemployer Plan that such action has been taken by the PBGC with respect to such Multiemployer Plan, (v) the institution of a proceeding by any fiduciary of any Multiemployer Plan against the Borrower or any ERISA Affiliate to enforce Section 515 of ERISA, which is not dismissed within thirty (30) days, (vi) the imposition upon the Borrower or any ERISA Affiliate of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, or the imposition or threatened imposition of any Lien upon any assets of the Borrower or any ERISA Affiliate as a result of any alleged failure to comply with the Internal Revenue Code or ERISA in respect of any Plan, (vii) the engaging in or otherwise becoming liable for a nonexempt Prohibited Transaction by the Borrower or any ERISA Affiliate, or a violation of the applicable requirements of Section 404 or 405 of ERISA or the exclusive benefit rule under Section 401(a) of the Internal Revenue Code by any fiduciary of any Plan for which the Borrower or any of its ERISA Affiliates may be directly or indirectly liable, (viii) the occurrence with respect to any Plan of any “accumulated funding deficiency” (within the meaning of Section 302 of ERISA and Section 412 of the Internal Revenue Code), whether or not waived, or (ix) the adoption of an amendment to any Plan that, pursuant to Section 401(a)(29) of the Internal Revenue Code or Section 307 of ERISA, would result in the loss of tax-exempt status of the trust of which such Plan is a part if the Borrower or an ERISA Affiliate fails to timely provide security to such Plan in accordance with the provisions of such sections.

“Eligible Assignee” shall mean (i) a Lender, (ii) an Affiliate of a Lender, (iii) an Approved Fund with respect to a Lender, and (iv) any other Person (other than a natural person) approved by (x) the Administrative Agent, (y) in the case of any assignment of a Revolving Credit Commitment or portion thereof, the Issuing Lender, and (z) unless a Default or Event of Default has occurred and is continuing, the Borrower (each such approval to be evidenced by the approving party’s counter execution of the relevant Assignment and Acceptance and not to be unreasonably withheld or delayed); provided, however, that for purposes of clauses (i) through (iii) of this definition, with respect to assignments of a Revolving Credit Commitment or portion thereof the term “Eligible Assignee” shall mean only another Revolving Credit Lender or an Affiliate of a Revolving Credit Lender; and provided further that (y) in no event shall any Credit Party qualify as an Eligible Assignee and (z) no other Affiliate of the Borrower shall qualify as an Eligible Assignee except in accordance with the provisions of Section 11.7(h).

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“Environmental Claims” shall mean any and all actions, suits, demands, demand letters, claims, liens, notices of noncompliance or violation, investigations by a Governmental Authority, or proceedings (including, without limitation, administrative, regulatory and judicial proceedings) relating in any way to any Hazardous Substance, any actual or alleged violation of or liability under any Environmental Law or relating to any actual or alleged violation of any permit issued, or any approval given, under any Environmental Law (collectively, “Claims”), including, without limitation, (i) any and all Claims by Governmental Authorities for enforcement, cleanup, removal, response, remedial or other actions or damages pursuant to any applicable Environmental Law and (ii) any and all Claims by any third party seeking damages, contribution, indemnification, cost recovery, compensation or injunctive relief in connection with any Hazardous Substance or arising from alleged injury or threat of injury to human health or the environment.

“Environmental Laws” shall mean any and all federal, state and local laws, statutes, ordinances, rules, regulations, permits, licenses, approvals, rules of common law and orders of courts or Governmental Authorities, relating to the protection of human health, occupational safety with respect to exposure to Hazardous Substances, or the environment, now or hereafter in effect, and in each case as amended from time to time, including, without limitation, requirements pertaining to the manufacture, processing, distribution, use, treatment, storage, disposal, transportation, handling, reporting, licensing, permitting, investigation or remediation of Hazardous Substances.

“Equity Issuance” shall mean the issuance, sale or other disposition by the Borrower or any of its Subsidiaries of its Capital Stock, any rights, warrants or options to purchase or acquire any shares of its Capital Stock or any other security or instrument representing, convertible into or exchangeable for an equity interest in the Borrower or any of its Subsidiaries; provided, however, that the term Equity Issuance shall not include the issuance or sale of (i) any Capital Stock by any of the Subsidiaries of the Borrower to the Borrower or any other Subsidiary of the Borrower, (ii) any Capital Stock of the Borrower issued or sold in connection with any Permitted Acquisition and constituting all or a portion of the applicable purchase price, (iii) the Capital Stock issued in connection with the IPO, (iv) any Capital Stock of the Borrower, any rights or options for the Borrower’s Capital Stock, and the underlying Capital Stock issued upon the exercise thereof, issued, sold or granted to managers, directors and employees of the Borrower, and (v) the Warrants and any Capital Stock issued upon exercise thereof.

“Event of Default” shall have the meaning given to such term in Section 9.1.

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from time to time, and any successor statute, and all rules and regulations from time to time promulgated thereunder.

“Existing Senior Bank Facilities” shall have the meaning given to such term in Section 4.1(h).

“Fair Market Value” shall mean, with respect to any Capital Stock of the Borrower given in connection with an Acquisition, the value given to such Capital Stock for purposes of such

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Acquisition by the parties thereto, as and when determined in good faith pursuant to the relevant acquisition agreement or otherwise in connection with such Acquisition.

“Federal Funds Rate” shall mean, for any period, a fluctuating per annum interest rate (rounded upwards, if necessary, to the nearest 1/100 of one percentage point) equal for each day during such period to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or if such rate is not so published for any day that is a Business Day, the average of the quotations for such day on such transactions received by the Administrative Agent from three federal funds brokers of recognized standing selected by the Administrative Agent.

“Federal Reserve Board” shall mean the Board of Governors of the Federal Reserve System or any successor thereto.

“Fee Letter” shall mean the letter from the Administrative Agent and the Arranger to the Borrower, dated November 17, 2004, relating to certain fees payable by the Borrower in respect of the transactions contemplated by this Agreement, as amended, modified, restated or supplemented from time to time.

“Financial Condition Certificate” shall mean a fully completed and duly executed certificate, in substantially the form of Exhibit H, together with the attachments thereto.

“Financial Officer” shall mean, with respect to the Borrower, the chief financial officer, vice president—finance, principal accounting officer or treasurer of the Borrower.

“fiscal quarter” or “FQ” shall mean a fiscal quarter of the Borrower and its Subsidiaries.

“fiscal year” or “FY” shall mean a fiscal year of the Borrower and its Subsidiaries.

“Fixed Charge Coverage Ratio” shall mean, as of the last day of any Reference Period, the ratio of (i) Consolidated EBITDA for such Reference Period to (ii) Consolidated Fixed Charges for such Reference Period.

“Foreign Subsidiary” shall mean a Subsidiary of the Borrower that is a “controlled foreign corporation,” as such term is defined in Section 957 of the Internal Revenue Code.

“Foreign Working Capital Facility” shall mean a credit facility entered into by a Foreign Subsidiary after the Closing Date.

“Funded Debt” shall mean, with respect to any Person, without duplication, the aggregate of (a) all Indebtedness of such Person (other than Indebtedness of the types referred to in clauses (iii) (but only to the extent letters of credit and bankers’ acceptances are not drawn upon), (ix), (x) and (xi) of the definition of “Indebtedness”), (b) all Guaranty Obligations with respect to Funded Debt of other Persons, and (c) all Funded Debt (I) of any partnership or unincorporated joint venture in which such Person is a general partner or joint venturer to the extent such Person is liable therefor or (II) secured by any Lien on any property or asset owned

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or held by such Person regardless of whether or not the indebtedness secured thereby shall have been incurred or assumed by such Person or is nonrecourse to the credit of such Person.

“GAAP” shall mean generally accepted accounting principles in the United States of America, as set forth in the statements, opinions and pronouncements of the Accounting Principles Board, the American Institute of Certified Public Accountants and the Financial Accounting Standards Board, consistently applied and maintained, as in effect from time to time (subject to the provisions of Section 1.2).

“Governmental Authority” shall mean any nation or government, any state or other political subdivision thereof and any central bank thereof, any municipal, local, city or county government, and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, and any corporation or other entity owned or controlled, through stock or capital ownership or otherwise, by any of the foregoing.

“Guarantor” shall mean any of the Subsidiary Guarantors.

“Guaranty Obligation” shall mean, with respect to any Person, any direct or indirect liability of such Person with respect to any Indebtedness, liability or other obligation (the “primary obligation”) of another Person (the “primary obligor”), whether or not contingent, (i) to purchase, repurchase or otherwise acquire such primary obligation or any property constituting direct or indirect security therefor, (ii) to advance or provide funds (x) for the payment or discharge of any such primary obligation or (y) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency or any balance sheet item, level of income or financial condition of the primary obligor (including, without limitation,, keep well agreements, maintenance agreements, comfort letters or similar agreements or arrangements), (iii) to lease or purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor in respect thereof to make payment of such primary obligation or (iv) otherwise to assure or hold harmless the owner of any such primary obligation against loss or failure or inability to perform in respect thereof; provided, however, that, with respect to the Borrower and its Subsidiaries, the term Guaranty Obligation shall not include endorsements for collection or deposit in the ordinary course of business. The amount of any Guaranty Obligation of any guaranteeing Person hereunder shall be deemed to be the lower of (a) an amount equal to the stated or determinable amount of the primary obligation in respect of which such Guaranty Obligation is made and (b) the maximum amount for which such guaranteeing Person may be liable pursuant to the terms of the instrument embodying such Guaranty Obligation, unless such primary obligation and the maximum amount for which such guaranteeing Person may be liable are not stated or determinable, in which case the amount of such Guaranty Obligation shall be such guaranteeing Person’s maximum reasonably anticipated liability in respect thereof as determined by such guaranteeing Person in good faith.

“Hazardous Substance” shall mean any substance or material meeting any one or more of the following criteria: (i) it is or contains a substance designated as a hazardous waste, hazardous substance, hazardous material, pollutant, contaminant or toxic substance under any Environmental Law, (ii) it is toxic, explosive, corrosive, ignitable, infectious, radioactive, mutagenic or otherwise hazardous, (iii) its presence may require investigation or response under

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any Environmental Law, (iv) it constitutes a nuisance, trespass or health or safety hazard to Persons or neighboring properties, or (v) it is or contains, without limiting the foregoing, asbestos, polychlorinated biphenyls, urea formaldehyde foam insulation, petroleum hydrocarbons, petroleum derived substances or wastes, crude oil, nuclear fuel, natural gas or synthetic gas.

“Hedge Agreement” shall mean any interest or foreign currency rate swap, cap, collar, option, hedge, forward rate or other similar agreement or arrangement designed to protect against fluctuations in interest rates or currency exchange rates.

“IPO” shall mean the underwritten initial public offering of common stock of the Borrower pursuant to Registration Statement No. 333-116038 filed with the Securities and Exchange Commission on May 28, 2004, together with all amendments thereto.

“Indebtedness” shall mean, with respect to any Person (without duplication), (i) all obligations of such Person for borrowed money, (ii) all obligations of such Person evidenced by notes, bonds, debentures or similar instruments, or upon which interest payments are customarily made, (iii) the maximum stated or face amount of all letters of credit and bankers’ acceptances issued or created for the account of such Person and, without duplication, all drafts drawn thereunder (to the extent unreimbursed), (iv) all obligations of such Person to pay the deferred purchase price of property or services, including any Seller Subordinated Indebtedness and including any Contingent Purchase Price Obligations other than Contingent Purchase Price Obligations that are payable in Capital Stock of the Borrower at the Borrower’s option (but excluding (x) trade payables, other accounts payable and accrued expenses, in each case to the extent incurred in the ordinary course of business and outstanding for a period of time no greater than 120 days after such obligation is incurred (regardless of actual terms), and (y) trade payables, other accounts payable and accrued expenses between or among the Borrower and its Subsidiaries, in each case to the extent incurred in the ordinary course of business), (v) all indebtedness created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person, (vi) all obligations for principal of such Person as lessee under Capital Leases which obligations should be recorded as a liability on a balance sheet of such Person under GAAP, (vii) all Disqualified Capital Stock issued by such Person, with the amount of Indebtedness represented by such Disqualified Capital Stock being equal to the greater of its voluntary or involuntary liquidation preference and its maximum fixed repurchase price, but excluding accrued dividends, if any (for purposes hereof, the “maximum fixed repurchase price” of any Disqualified Capital Stock that does not have a fixed repurchase price shall be calculated in accordance with the terms of such Disqualified Capital Stock as if such Disqualified Capital Stock were purchased on any date on which Indebtedness shall be required to be determined pursuant to this Agreement, and if such price is based upon, or measured by, the fair market value of such Disqualified Capital Stock, such fair market value shall be determined reasonably and in good faith by the board of directors or other governing body of the issuer of such Disqualified Capital Stock), (viii) the principal balance outstanding and owing by such Person under any synthetic lease, tax retention operating lease or similar off-balance sheet financing product, (ix) all Guaranty Obligations of such Person with respect to Indebtedness of another Person, (x) the net termination obligations of such Person under any Hedge Agreements, calculated as of any date as if such agreement or arrangement were terminated as of such date, and (xi) all indebtedness of the types referred to in clauses (i) through (x) above (A) of any

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partnership or unincorporated joint venture in which such Person is a general partner or joint venturer to the extent such Person is liable therefor or (B) secured by any Lien on any property or asset owned or held by such Person regardless of whether or not the indebtedness secured thereby shall have been incurred or assumed by such Person or is nonrecourse to the credit of such Person; provided that (A) Indebtedness of any Person shall not include any Contingent Purchase Price Obligations of such Person except to the extent such obligations constitute Contingent Purchase Price GAAP Amounts and (B) the amount of Indebtedness that is nonrecourse to the obligor thereunder or to such Person or for which recourse is limited to identified property shall be equal to the lesser of (y) the principal amount of such obligation and (z) the fair market value of such property as determined by such Person in good faith.

“Intellectual Property” shall mean (i) all inventions (whether or not patentable and whether or not reduced to practice), all improvements thereto, and all patents, patent applications, and patent disclosures, together with all reissues, continuations, continuations-in-part, divisions, revisions, extensions, and reexaminations thereof, (ii) all trademarks, service marks, trade dress, logos, trade names, and corporate names, together with all goodwill associated therewith, and all applications, registrations, and renewals in connection therewith, (iii) all copyrightable works and all copyrights (registered and unregistered), (iv) all trade secrets and confidential information (including, without limitation, financial, business and marketing plans and customer and supplier lists and related information), (v) all computer software and software systems (including, without limitation, data, databases and related documentation), (vi) all Internet web sites and domain names, (vii) all technology, know-how, processes and other proprietary rights, and (viii) all licenses or other agreements to or from third parties regarding any of the foregoing.

“Interest Coverage Ratio” shall mean, as of the last day of any Reference Period, the ratio of (i) Consolidated EBITDA for such Reference Period to (ii) Consolidated Interest Expense for such Reference Period.

“Interest Period” shall have the meaning given to such term in Section 2.10.

“Internal Revenue Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, and any successor statute, and all rules and regulations from time to time promulgated thereunder.

“Issuing Lender” shall mean Wachovia in its capacity as issuer of the Letters of Credit, and its successors in such capacity.

“LIBOR Loan” shall mean, at any time, any Loan that bears interest at such time at the applicable Adjusted LIBOR Rate.

“LIBOR Rate” shall mean, with respect to each LIBOR Loan comprising part of the same Borrowing for any Interest Period, an interest rate per annum obtained by dividing (i) (y) the rate of interest (rounded upward, if necessary, to the nearest 1/16 of one percentage point) appearing on Telerate Page 3750 (or any successor page) or (z) if no such rate is available, the rate of interest determined by the Administrative Agent to be the rate or the arithmetic mean of rates (rounded upward, if necessary, to the nearest 1/16 of one percentage point) at which Dollar

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deposits in immediately available funds are offered to first-tier banks in the London interbank Eurodollar market, in each case under (y) and (z) above at approximately 11:00 a.m., London time, two (2) Business Days prior to the first day of such Interest Period for a period substantially equal to such Interest Period and in an amount substantially equal to the amount of Wachovia’s LIBOR Loan comprising part of such Borrowing, by (ii) the amount equal to 1.00 minus the Reserve Requirement (expressed as a decimal) for such Interest Period.

“Lender” shall mean each bank or other financial institution signatory hereto and each other bank or other financial institution that becomes a “Lender” hereunder pursuant to Section 11.7, and their respective successors and assigns.

“Lending Office” shall mean, with respect to any Lender, the office of such Lender designated as its “Lending Office” on Schedule 1.1(a) or in an Assignment and Acceptance, or such other office as may be otherwise designated in writing from time to time by such Lender to the Borrower and the Administrative Agent. A Lender may designate separate Lending Offices as provided in the foregoing sentence for the purposes of making or maintaining different Types of Loans, and, with respect to LIBOR Loans, such office may be a domestic or foreign branch or Affiliate of such Lender.

“Letter of Credit Exposure” shall mean, with respect to any Revolving Credit Lender at any time, such Lender’s ratable share (based on the proportion that its Revolving Credit Commitment bears to the aggregate Revolving Credit Commitments at such time) of the sum of (i) the aggregate Stated Amount of all Letters of Credit outstanding at such time and (ii) the aggregate amount of all Reimbursement Obligations outstanding at such time.

“Letter of Credit Maturity Date” shall mean the fifth (5^th) Business Day prior to the Revolving Credit Maturity Date.

“Letter of Credit Notice” shall have the meaning given to such term in Section 3.2.

“Letters of Credit” shall have the meaning given to such term in Section 3.1.

“Lien” shall mean any mortgage, pledge, hypothecation, assignment, security interest, lien (statutory or otherwise), preference, priority, charge or other encumbrance of any nature, whether voluntary or involuntary, including, without limitation, the interest of any vendor or lessor under any conditional sale agreement, title retention agreement, Capital Lease or any other lease or arrangement having substantially the same effect as any of the foregoing.

“Loans” shall mean any or all of the Term Loans, the Revolving Loans and the Swingline Loans.

“Margin Stock” shall have the meaning given to such term in Regulation U.

“Material Adverse Effect” shall mean a material adverse effect upon (i) the financial condition, operations, business or properties of the Borrower and its Subsidiaries, taken as a whole, (ii) the ability of the Credit Parties (taken as a whole) to perform their material obligations under this Agreement or any of the other Credit Documents or (iii) the legality, validity or enforceability of this Agreement or any of the other Credit Documents or the rights

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and remedies of the Administrative Agent and the Lenders hereunder and thereunder taken as a whole.

“Mettis” shall mean Mettis (UK) Limited, a company organized under the laws of England and Wales with registered number 03532114.

“Mortgage” shall mean any mortgage, deed of trust, deed to secure debt, collateral assignment of lease or similar agreement or instrument pursuant to which any Credit Party grants in favor of the Administrative Agent, for its benefit and the benefit of the Lenders, a security interest in and Lien upon any fee or leasehold interest in real property owned by it, as amended, modified, restated or supplemented from time to time.

“Multiemployer Plan” shall mean any “multiemployer plan” within the meaning of Section 4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate makes, is making or is obligated to make contributions or has made or been obligated to make contributions within the five (5) year period prior to any date of determination.

“Net Cash Proceeds” shall mean (i) in the case of any Equity Issuance, Debt Issuance or the Capital Stock issued in connection with the IPO, the aggregate cash payments received by the Borrower or any of its Subsidiaries less (A) fees and expenses (including, without limitation, underwriting and placement discounts and other reasonable costs associated therewith, sales commissions, investment banking fees, and reasonable accounting and legal fees and expenses) incurred by the Borrower or any of its Subsidiaries in connection therewith, and (B) taxes paid or payable as a result thereof, (ii) in the case of any Casualty Event, the aggregate cash proceeds of insurance, condemnation awards and other compensation received by the Borrower or any of its Domestic Subsidiaries in respect of such Casualty Event less (A) fees and expenses incurred by the Borrower or any of its Domestic Subsidiaries in connection therewith and (B) contractually required repayments of Indebtedness to the extent secured by Liens on the property subject to such Casualty Event and any taxes paid or payable by the Borrower or any of its Domestic Subsidiaries as a result of such Casualty Event, and (iii) in the case of any Asset Disposition, the aggregate amount of all cash payments received by the Borrower or any of its Domestic Subsidiaries in connection with such Asset Disposition less (A) fees and expenses incurred by the Borrower or any of its Domestic Subsidiaries in connection therewith, (B) Indebtedness to the extent the amount thereof is secured by a Lien on the property that is the subject of such Asset Disposition and the transferee of (or holder of the Lien on) such property requires that such Indebtedness be repaid as a condition to such Asset Disposition, (C) any taxes paid or payable by the Borrower or any of its Domestic Subsidiaries as a result of such Asset Disposition, and (D) a reasonable reserve established in good faith by the Borrower to satisfy any indemnification obligations that may be incurred by the Borrower or any of its Domestic Subsidiaries in connection with such Asset Disposition.

“Non-Stock Acquisition Amount” shall mean, with respect to any Acquisition, the sum (without duplication) of (i) the amount of cash paid on the Acquisition closing date as part of the purchase price thereof by the Borrower and its Subsidiaries to the selling company, stockholders or other selling Person or Persons (the “Sellers”) in connection with such Acquisition, (ii) the amount (determined by using the face amount or the principal amount payable at maturity, whichever is greater) of all Indebtedness incurred, assumed or acquired by the Borrower and its

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Subsidiaries in connection with such Acquisition, (iii) all Contingent Purchase Price GAAP Amounts with respect to such Acquisition to the extent required to be paid in cash or other consideration other than Capital Stock of the Borrower, (iv) all amounts paid in respect of covenants not to compete and consulting agreements entered into in connection with such Acquisition (but in each case only to the extent such amounts exceed amounts that would be paid under fair and reasonable terms no less favorable to the Borrower than it would obtain in a comparable arms’-length transaction with a third party in a transaction unrelated to such Acquisition), and (v) the aggregate fair market value of all other real, mixed or personal property (other than Capital Stock of the Borrower) paid as purchase price to the Sellers by the Borrower and its Subsidiaries in connection with such Acquisition.

“Non-U.S. Lender” shall have the meaning given to such term in Section 2.17(d).

“Notes” shall mean any or all of the Term Notes, the Revolving Notes and the Swingline Note.

“Notice of Borrowing” shall have the meaning given to such term in Section 2.2(b).

“Notice of Conversion/Continuation” shall have the meaning given to such term in Section 2.11(b).

“Notice of Swingline Borrowing” shall have the meaning given to such term in Section 2.2(d).

“Obligations” shall mean all principal of and interest (including, to the greatest extent permitted by law, post-petition interest) on the Loans and Reimbursement Obligations and all fees, expenses, indemnities and other obligations owing, due or payable at any time by the Borrower or any Subsidiary Guarantor to the Administrative Agent, any Lender, the Swingline Lender, the Issuing Lender or any other Person entitled thereto, under this Agreement or any of the other Credit Documents, and all payment and other obligations owing or payable at any time by the Borrower to any Lender or any Affiliate of any Lender under or in connection with any Hedge Agreement required or permitted by this Agreement, in each case whether direct or indirect, joint or several, absolute or contingent, matured or unmatured, liquidated or unliquidated, secured or unsecured, and whether existing by contract, operation of law or otherwise.

“Olympus” shall mean Olympus Growth Fund III, L.P., a Delaware limited partnership.

“PBGC” shall mean the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA, and any successor thereto.

“Participant” shall have the meaning given to such term in Section 11.7(d).

“PATRIOT Act” shall mean the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT Act of 2001), as amended from time to time, and any successor statute, and all rules and regulations from time to time promulgated thereunder.

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“Payment Office” shall mean the office of the Administrative Agent designated on Schedule 1.1(a) under the heading “Instructions for wire transfers to the Administrative Agent,” or such other office as the Administrative Agent may designate to the Lenders and the Borrower for such purpose from time to time.

“Permitted Acquisition” shall mean (A) any Acquisition with respect to which all of the following conditions are satisfied: (i) each business acquired shall be within the permitted lines of business described in Section 8.8, (ii) any Capital Stock given as consideration in connection therewith shall be Capital Stock of the Borrower, (iii) in the case of an Acquisition involving the acquisition of control of Capital Stock of any Person, immediately after giving effect to such Acquisition such Person (or the surviving Person, if the Acquisition is effected through a merger or consolidation) shall be a Wholly Owned Subsidiary of the Borrower, (iv) in the case of an Acquisition of assets, the acquiring Person shall be a Wholly Owned Subsidiary of the Borrower, (v) the Person to be acquired (or its board of directors or equivalent governing body) has not (y) announced it will oppose such Acquisition or (z) commenced any action which alleges that such Acquisition violates, or will violate, any Requirement of Law, and (vi) all of the conditions and requirements of Sections 6.8 and 6.9 applicable to such Acquisition are satisfied; or (B) any other Acquisition to which the Required Lenders (or the Administrative Agent on their behalf) shall have given their prior written consent (which consent may be in their sole discretion and may be given subject to such additional terms and conditions as the Required Lenders shall establish) and with respect to which all of the conditions and requirements set forth in this definition and in Sections 6.8 and 6.9, and in or pursuant to any such consent, have been satisfied or waived in writing by the Required Lenders (or the Administrative Agent on their behalf); provided that with respect to each Permitted Acquisition (and, in any event, in order to qualify as a “Permitted Acquisition”):

(a) no Default or Event of Default shall have occurred and be continuing at the time of the consummation of such Permitted Acquisition or would exist immediately after giving effect thereto;

(b) after giving effect to such Permitted Acquisition, the Borrower shall be in compliance with the financial covenants contained in Article VII, such compliance determined with regard to calculations made on a pro forma basis for the Reference Period most recently ended, calculated in accordance with GAAP as if each acquired Person or business had been consolidated with the Borrower for those periods applicable to such covenants; provided that, in addition to the foregoing, the Total Leverage Ratio (calculated on a pro forma basis as set forth above after giving effect to such Permitted Acquisition) shall not exceed the level that is 0.25 to 1.00 below the maximum Total Leverage Ratio permitted on the date of the consummation of such Permitted Acquisition under Section 7.1;

(c) the aggregate of the Total Acquisition Amounts with respect to all Permitted Acquisitions involving the Capital Stock, business or assets of any non-U.S. Person (“Foreign Permitted Acquisitions”) consummated from and after the Closing Date shall not exceed $25,000,000 (including for this purpose, without duplication, all Contingent Purchase Price Obligations incurred by the Borrower or its Subsidiaries in connection with any such Foreign Permitted Acquisition that are paid at a subsequent

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date, but excluding any such Contingent Purchase Price Obligations paid in Capital Stock of the Borrower as part of a Foreign Permitted Acquisition that, at the time of consummation thereof, qualified or would have qualified under subsection (e) below);

(d) the aggregate of the Total Acquisition Amounts with respect to all Permitted Acquisitions (including Foreign Permitted Acquisitions) consummated from and after the Closing Date shall not exceed $50,000,000 (including for this purpose, without duplication, all Contingent Purchase Price Obligations incurred by the Borrower or its Subsidiaries in connection with any such Permitted Acquisition that are paid at a subsequent date, but excluding any such Contingent Purchase Price Obligations paid in Capital Stock of the Borrower as part of a Permitted Acquisition that, at the time of consummation thereof, qualified or would have qualified under subsection (e) below); and

(e) notwithstanding clauses (c) and (d) above, but subject to the other provisions set forth in this definition and elsewhere in this Agreement, the Borrower may consummate a Permitted Acquisition in which the Fair Market Value of all Capital Stock of the Borrower issued or given in connection with such Permitted Acquisition, when taken together with the aggregate of the Total Acquisition Amounts with respect to all Foreign Permitted Acquisitions (or all Permitted Acquisitions) consummated from and after the Closing Date, would exceed the aggregate limits set forth in clauses (c) and/or (d) above, as the case may be (provided that in no event shall the aggregate of all Non-Stock Acquisition Amounts with respect to Foreign Permitted Acquisitions consummated from and after the Closing Date exceed $25,000,000 and in no event shall the aggregate of all Non-Stock Acquisition Amounts with respect to all Permitted Acquisitions consummated from and after the Closing Date exceed $50,000,000), but only so long as the Total Leverage Ratio (calculated on a pro forma basis as set forth above after giving effect to such Permitted Acquisition) does not exceed 1.75 to 1.0.

“Permitted Liens” shall have the meaning given to such term in Section 8.3.

“Person” shall mean any corporation, association, joint venture, partnership, limited liability company, organization, business, individual, trust, government or agency or political subdivision thereof or any other legal entity.

“Plan” shall mean any “employee pension benefit plan” within the meaning of Section 3(2) of ERISA that is subject to the provisions of Title IV of ERISA (other than a Multiemployer Plan) and to which the Borrower or any ERISA Affiliate may have any liability.

“Pledge Agreement” shall mean a pledge agreement made by the Borrower and the Subsidiaries of the Borrower party thereto in favor of the Administrative Agent, in substantially the form of Exhibit F, as amended, modified, restated or supplemented from time to time.

“Pro Forma Balance Sheet” shall have the meaning given to such term in Section 4.1(l).

“Prohibited Transaction” shall mean any transaction described in (i) Section 406 of ERISA that is not exempt by reason of Section 408 of ERISA or by reason of a Department of Labor prohibited transaction individual or class exemption or (ii) Section 4975(c) of the Internal

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Revenue Code that is not exempt by reason of Section 4975(c)(2) or 4975(d) of the Internal Revenue Code.

“Projections” shall have the meaning given to such term in Section 5.11(c).

“Realty” shall mean all real property and interests in real property now or hereafter acquired or leased by any Credit Party.

“Reference Period” with respect to any date of determination, shall mean the period of twelve consecutive fiscal months of the Borrower immediately preceding such date or, if such date is the last day of a fiscal quarter, the period of four consecutive fiscal quarters ending on such date.

“Refunded Swingline Loans” shall have the meaning given to such term in Section 2.2(e).

“Register” shall have the meaning given to such term in Section 11.7(b).

“Regulations D, T, U and X” shall mean Regulations D, T, U and X, respectively, of the Federal Reserve Board, and any successor regulations.

“Reimbursement Obligation” shall have the meaning given to such term in Section 3.4.

“Reportable Event” shall mean, with respect to any Plan, (i) any “reportable event” within the meaning of Section 4043(c) of ERISA for which the 30-day notice under Section 4043(a) of ERISA has not been waived by the PBGC (including, without limitation, any failure to meet the minimum funding standard of, or timely make any required installment under, Section 412 of the Internal Revenue Code or Section 302 of ERISA, regardless of the issuance of any waivers in accordance with Section 412(d) of the Internal Revenue Code), (ii) any such “reportable event” subject to advance notice to the PBGC under Section 4043(b)(3) of ERISA, (iii) any application for a funding waiver or an extension of any amortization period pursuant to Section 412 of the Internal Revenue Code, and (iv) a cessation of operations described in Section 4062(e) of ERISA.

“Required Lenders” shall mean, at any time, the Lenders holding outstanding Loans (excluding Swingline Loans) and unutilized Commitments (or, after the termination of the Revolving Credit Commitments, outstanding Loans, Letter of Credit Exposure and participations in outstanding Swingline Loans) representing at least a majority of the aggregate, at such time, of all outstanding Loans (excluding Swingline Loans) and unutilized Commitments (or, after the termination of the Revolving Credit Commitments, the aggregate at such time of all outstanding Loans, Letter of Credit Exposure and participations in outstanding Swingline Loans).

“Required Revolving Credit Lenders” shall mean, at any time, the Revolving Credit Lenders holding outstanding Revolving Loans and Unutilized Revolving Credit Commitments (or, after the termination of the Revolving Credit Commitments, outstanding Revolving Loans, Letter of Credit Exposure and participations in outstanding Swingline Loans) representing at least a majority of the aggregate, at such time, of all outstanding Revolving Loans and Unutilized Revolving Credit Commitments (or, after the termination of the Revolving Credit Commitments,

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the aggregate at such time of all outstanding Revolving Loans, Letter of Credit Exposure and participations in outstanding Swingline Loans).

“Requirement of Law” shall mean, with respect to any Person, the charter, articles or certificate of organization or incorporation and bylaws or other organizational or governing documents of such Person, and any statute, law, treaty, rule, regulation, order, decree, writ, injunction or determination of any arbitrator or court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject or otherwise pertaining to any or all of the transactions contemplated by this Agreement and the other Credit Documents.

“Reserve Requirement” shall mean, with respect to any Interest Period, the reserve percentage (expressed as a decimal and rounded upwards, if necessary, to the next higher 1/100^th of 1%) in effect from time to time during such Interest Period, as provided by the Federal Reserve Board, applied for determining the maximum reserve requirements (including, without limitation, basic, supplemental, marginal and emergency reserves) applicable to Wachovia under Regulation D with respect to “Eurocurrency liabilities” within the meaning of Regulation D, or under any similar or successor regulation with respect to Eurocurrency liabilities or Eurocurrency funding.

“Responsible Officer” shall mean, with respect to any Credit Party, the president, the chief executive officer, the chief financial officer, any executive officer, or any other Financial Officer of such Credit Party, and any other officer or similar official thereof responsible for the administration of the obligations of such Credit Party in respect of this Agreement or any other Credit Document.

“Restricted Payments” shall have the meaning given to such term in Section 8.6(a).

“Revolving Credit Commitment” shall mean, with respect to any Lender at any time, the commitment of such Lender to make Revolving Loans in an aggregate principal amount at any time outstanding up to the amount set forth opposite such Lender’s name on Schedule 1.1(a) under the caption “Revolving Credit Commitment” or, if such Lender has entered into one or more Assignment and Acceptances, the amount set forth for such Lender at such time in the Register maintained by the Administrative Agent pursuant to Section 11.7(b) as such Lender’s “Revolving Credit Commitment,” in either case, as such amount may be reduced at or prior to such time pursuant to the terms hereof.

“Revolving Credit Exposure” shall mean, with respect to any Revolving Credit Lender at any time, the sum of (i) the aggregate principal amount of all Revolving Loans made by such Lender that are outstanding at such time, (ii) such Lender’s Letter of Credit Exposure at such time and (iii) such Lender’s Swingline Exposure at such time.

“Revolving Credit Lender” shall mean any Lender having a Revolving Credit Commitment (or, after the Revolving Credit Commitments have terminated, any Lender holding outstanding Revolving Loans).

“Revolving Credit Maturity Date” shall mean the fifth anniversary of the Closing Date.

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“Revolving Credit Termination Date” shall mean the Revolving Credit Maturity Date or such earlier date of termination of the Revolving Credit Commitments pursuant to Section 2.5 or Section 9.2.

“Revolving Loans” shall have the meaning given to such term in Section 2.1(b).

“Revolving Note” shall mean, with respect to any Revolving Credit Lender requesting the same, the promissory note of the Borrower in favor of such Revolving Credit Lender evidencing the Revolving Loans made by such Lender pursuant to Section 2.1(b), in substantially the form of Exhibit A-2, together with any amendments, modifications and supplements thereto, substitutions therefor and restatements thereof.

“Security Agreement” shall mean the Security Agreement made by the Borrower and the Subsidiaries of the Borrower party thereto in favor of the Administrative Agent, in substantially the form of Exhibit E, as amended, modified, restated or supplemented from time to time.

“Security Documents” shall mean the Security Agreement, the Pledge Agreement and all other pledge or security agreements, Mortgages, assignments or other similar agreements or instruments executed and delivered by any Credit Party pursuant to Section 6.9 or 6.10 or otherwise in connection with the transactions contemplated hereby, in each case as amended, modified, restated or supplemented from time to time.

“Seller Subordinated Indebtedness” shall have the meaning given to such term in Section 8.2(viii).

“Solvency Certificate” means a certificate of the Borrower executed on its behalf by the chief financial officer (or, in the absence of a chief financial officer, the chief executive officer) of the Borrower, in form and substance satisfactory to the Administrative Agent, certifying that the Credit Parties taken as a whole on a consolidated basis (i) have capital sufficient to carry on their businesses as conducted and as proposed to be conducted, (ii) have assets with a fair saleable value, determined on a going concern basis, which are (y) not less than the amount required to pay the probable liability on their existing debts as they become absolute and matured in their ordinary course and (z) greater than the total amount of their liabilities (including identified contingent liabilities, valued at the amount that can reasonably be expected to become absolute and matured in their ordinary course), and (iii) do not intend to, and do not believe that they will, incur debts or liabilities beyond their ability to pay such debts and liabilities as they mature in their ordinary course.

“Sponsor” shall mean, collectively, Olympus, Olympus Executive Fund, L.P., a Delaware limited partnership, Olympus Growth Co-Investment Fund III, L.P., a Delaware limited partnership, any other fund managed by Olympus Advisory Partners, Inc., and any funds controlled by or under common control with Olympus.

“Stated Amount” shall mean, with respect to any Letter of Credit at any time, the aggregate amount available to be drawn thereunder at such time (regardless of whether any conditions for drawing could then be met).

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“Subordinated Indebtedness” shall mean, collectively, (i) any Seller Subordinated Indebtedness issued pursuant to Section 8.2(viii), and (ii) any other unsecured Indebtedness of the Borrower and its Subsidiaries that is expressly subordinated in right of payment and performance to the Obligations and that is evidenced by a written instrument in form and substance (including subordination provisions) reasonably acceptable to and approved in writing by the Administrative Agent.

“Subordinated Loan Agreement” shall mean the Senior Subordinated Loan Agreement, dated as of June 11, 2003, made among the Borrower and the purchasers named therein, providing for the issuance of the Subordinated Notes, as amended, modified, restated or supplemented from time to time.

“Subordinated Notes” shall mean the 12% Senior Subordinated Notes due 2011 of the Borrower in substantially the form of Exhibit A to the Subordinated Loan Agreement, issued pursuant to the Subordinated Loan Agreement in the aggregate initial principal amount of $36,000,000, as amended, modified, restated or supplemented from time to time.

“Subsidiary” shall mean, with respect to any Person, any corporation or other Person of which more than fifty percent (50%) of the outstanding Capital Stock having ordinary voting power to elect a majority of the board of directors, board of managers or other governing body of such Person, is at the time, directly or indirectly, owned or controlled by such Person and one or more of its other Subsidiaries or a combination thereof (irrespective of whether, at the time, securities of any other class or classes of any such corporation or other Person shall or might have voting power by reason of the happening of any contingency). When used without reference to a parent entity, the term “Subsidiary” shall be deemed to refer to a Subsidiary of the Borrower.

“Subsidiary Guarantor” shall mean any Subsidiary of the Borrower that is a guarantor of the Obligations under the Subsidiary Guaranty (or under another guaranty agreement in form and substance satisfactory to the Administrative Agent) and has granted to the Administrative Agent a Lien upon and security interest in its personal property assets pursuant to the Security Agreement.

“Subsidiary Guaranty” shall mean a guaranty agreement made by the Subsidiary Guarantors in favor of the Administrative Agent and the Lenders, in substantially the form of Exhibit G, as amended, modified, restated or supplemented from time to time.

“Swingline Commitment” shall mean $5,000,000 or, if less, the aggregate Revolving Credit Commitments at the time of determination, as such amount may be reduced at or prior to such time pursuant to the terms hereof.

“Swingline Exposure” shall mean, with respect to any Revolving Credit Lender at any time, its maximum aggregate liability to make Refunded Swingline Loans pursuant to Section 2.2(e) to refund, or to purchase participations pursuant to Section 2.2(f) in, Swingline Loans that are outstanding at such time.

“Swingline Lender” shall mean Wachovia in its capacity as maker of Swingline Loans, and its successors in such capacity.

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“Swingline Loans” shall have the meaning given to such term in Section 2.1(c).

“Swingline Maturity Date” shall mean the date that is five (5) Business Days prior to the Revolving Credit Maturity Date.

“Swingline Note” shall mean, if requested by the Swingline Lender, the promissory note of the Borrower in favor of the Swingline Lender evidencing the Swingline Loans made by the Swingline Lender pursuant to Section 2.1(c), in substantially the form of Exhibit A-3, together with any amendments, modifications and supplements thereto, substitutions therefor and restatements thereof.

“Symmetry USA” shall mean Symmetry Medical USA Inc., a Delaware corporation and a Wholly Owned Subsidiary of the Borrower.

“Syndication Agents” shall mean Antares Capital Corporation and General Electric Capital Corporation in their capacity as such under Section 10.12, and their respective successors and permitted assigns in such capacity.

“Taxes” shall have the meaning given to such term in Section 2.17(a).

“Terminating Indebtedness” shall have the meaning given to such term in Section 4.1(h).

“Term Loan Commitment” shall mean, with respect to any Lender at any time, the commitment of such Lender to make Term Loans in an aggregate principal amount up to the amount set forth opposite such Lender’s name on Schedule 1.1(a) under the caption “Term Loan Commitment” or, if such Lender has entered into one or more Assignment and Acceptances, the amount set forth for such Lender at such time in the Register maintained by the Administrative Agent pursuant to Section 11.7(b) as such Lender’s “Term Loan Commitment,” as such amount may be reduced at or prior to such time pursuant to the terms hereof.

“Term Loan Lender” shall mean any Lender having a Term Loan Commitment (or, after the Term Loan Commitments have terminated, any Lender holding outstanding Term Loans).

“Term Loan Maturity Date” shall mean the fifth anniversary of the Closing Date.

“Term Loans” shall have the meaning given to such term in Section 2.1(a).

“Term Note” shall mean, with respect to any Term Lender requesting the same, the promissory note of the Borrower in favor of such Term Lender evidencing the Term Loan made by such Lender pursuant to Section 2.1(a), in substantially the form of Exhibit A-1, together with any amendments, modifications and supplements thereto, substitutions therefor and restatements thereof.

“Total Acquisition Amount” shall mean, with respect to any Acquisition, the sum (without duplication) of (i) the Non-Stock Acquisition Amount with respect thereto and (ii) the Fair Market Value of all Capital Stock of the Borrower issued or given in connection with such Acquisition.

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“Total Leverage Ratio” shall mean, as of the last day of any Reference Period, the ratio of (i) Consolidated Total Funded Debt as of such date to (ii) Consolidated EBITDA for such Reference Period.

“Total Voting Power” shall mean, with respect to any Person, the total number of votes which may be cast in the election of directors of such Person at any meeting of stockholders of such Person if all securities entitled to vote in the election of directors of such Person (on a fully diluted basis, assuming the exercise, conversion or exchange of all rights, warrants, options and securities exercisable for, exchangeable for or convertible into, such voting securities) were present and voted at such meeting (other than votes that may be cast only upon the happening of a contingency).

“Transactions” shall mean, collectively, (i) the IPO, (ii) the initial extensions of credit hereunder on the Closing Date, (iii) the repayment of the Existing Senior Bank Facilities, the Subordinated Notes and the other Terminating Indebtedness, (iv) the Class A Preferred Stock Repurchase, and (v) the payment of permitted fees and expenses in connection with the foregoing.

“Type” shall have the meaning given to such term in Section 2.2(a).

“Unfunded Pension Liability” shall mean, with respect to any Plan or Multiemployer Plan, the excess of its benefit liabilities under Section 4001(a)(16) of ERISA over the current value of its assets, determined in accordance with the applicable assumptions used for funding under Section 412 of the Internal Revenue Code for the applicable plan year.

“Unutilized Revolving Credit Commitment” shall mean, with respect to any Revolving Credit Lender at any time, such Lender’s Revolving Credit Commitment at such time less the sum of (i) the aggregate principal amount of all Revolving Loans made by such Lender that are outstanding at such time, (ii) such Lender’s Letter of Credit Exposure at such time and (iii) such Lender’s Swingline Exposure at such time.

“Unutilized Swingline Commitment” shall mean, with respect to the Swingline Lender at any time, the Swingline Commitment at such time less the aggregate principal amount of all Swingline Loans that are outstanding at such time.

“Wachovia” shall mean Wachovia Bank, National Association, and its successors and assigns.

“Warrants” shall mean the warrants issued to the purchasers, or any assignee or successor thereto, of the Subordinated Notes.

“Wholly Owned” shall mean, with respect to any Subsidiary of any Person, that 100% of the outstanding Capital Stock of such Subsidiary (excluding any directors’ qualifying shares and shares required to be held by foreign nationals, in the case of a Foreign Subsidiary) is owned, directly or indirectly, by such Person.

1.2 Accounting Terms. Unless otherwise specified herein, all accounting terms used herein shall be interpreted, all accounting determinations hereunder shall be made, and all

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financial statements required to be delivered hereunder shall be prepared in accordance with GAAP applied on a basis consistent with the most recent audited consolidated financial statements of the Borrower delivered to the Lenders prior to the Closing Date; provided that if the Borrower notifies the Administrative Agent that it wishes to amend any financial covenant in Article VII to eliminate the effect of any change in GAAP on the operation of such covenant (or if the Administrative Agent notifies the Borrower that the Required Lenders wish to amend Article VII for such purpose), then the Borrower’s compliance with such covenant shall be determined on the basis of GAAP as in effect immediately before the relevant change in GAAP became effective, until either such notice is withdrawn or such covenant is amended in a manner satisfactory to the Borrower and the Required Lenders. Notwithstanding the foregoing, no financial instrument issued by any Credit Party shall be deemed to constitute Indebtedness or Funded Debt hereunder, nor shall any payments or accruals of dividends to holders of such financial instruments be deemed to constitute interest expense in respect of Indebtedness or Funded Debt, in either case solely because FAS 150 requires such financial instrument to be classified as a liability on its balance sheet (unless such financial instrument constitutes Disqualified Capital Stock within the meaning of that term hereunder).

1.3 Other Terms; Construction.

(a) Unless otherwise specified or unless the context otherwise requires, all references herein to sections, annexes, schedules and exhibits are references to sections, annexes, schedules and exhibits in and to this Agreement, and all terms defined in this Agreement shall have the defined meanings when used in any other Credit Document or any certificate or other document made or delivered pursuant hereto.

(b) All references herein to the Lenders or any of them shall be deemed to include the Issuing Lender and the Swingline Lender unless specifically provided otherwise or unless the context otherwise requires.

(c) The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement.

(d) The meanings given to terms defined herein shall be equally applicable to both the singular and plural form of such terms.

ARTICLE II

AMOUNT AND TERMS OF THE LOANS

2.1 Commitments.

(a) Each Term Loan Lender severally agrees, subject to and on the terms and conditions of this Agreement, to make a loan (each, a “Term Loan,” and collectively, the “Term Loans”) to the Borrower on the Closing Date in a principal amount not to exceed its Term Loan Commitment. No Term Loans shall be made at any time after the Closing Date. To the extent repaid, Term Loans may not be reborrowed.

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(b) Each Revolving Credit Lender severally agrees, subject to and on the terms and conditions of this Agreement, to make loans (each, a “Revolving Loan,” and collectively, the “Revolving Loans”) to the Borrower, from time to time on any Business Day during the period from and including the Closing Date to but not including the Revolving Credit Termination Date, provided that (i) no Borrowing of Revolving Loans shall be made if, immediately after giving effect thereto (and to any concurrent repayment of Swingline Loans with proceeds of Revolving Loans made pursuant to such Borrowing), (y) the Revolving Credit Exposure of any Revolving Credit Lender would exceed its Revolving Credit Commitment at such time or (z) the Aggregate Revolving Credit Exposure would exceed the aggregate Revolving Credit Commitments at such time and (ii) the aggregate principal amount of Borrowings of Revolving Loans that may be made on the Closing Date shall be no more than $25,000,000. Subject to and on the terms and conditions of this Agreement, the Borrower may borrow, repay and reborrow Revolving Loans.

(c) The Swingline Lender agrees, subject to and on the terms and conditions of this Agreement, to make loans (each, a “Swingline Loan,” and collectively, the “Swingline Loans”) to the Borrower, from time to time on any Business Day during the period from the Closing Date to but not including the Swingline Maturity Date (or, if earlier, the Revolving Credit Termination Date), in an aggregate principal amount at any time outstanding not exceeding the Swingline Commitment. Swingline Loans may be made even if the aggregate principal amount of Swingline Loans outstanding at any time, when added to the aggregate principal amount of the Revolving Loans made by the Swingline Lender in its capacity as a Revolving Credit Lender outstanding at such time and its Letter of Credit Exposure at such time, would exceed the Swingline Lender’s own Revolving Credit Commitment at such time, but provided that no Borrowing of Swingline Loans shall be made if, immediately after giving effect thereto, (y) the Revolving Credit Exposure of any Revolving Credit Lender would exceed its Revolving Credit Commitment at such time or (z) the Aggregate Revolving Credit Exposure would exceed the aggregate Revolving Credit Commitments at such time. Subject to and on the terms and conditions of this Agreement, the Borrower may borrow, repay (including by means of a Borrowing of Revolving Loans pursuant to Section 2.2(e)) and reborrow Swingline Loans.

2.2 Borrowings.

(a) The Term Loans and Revolving Loans (each, together with the Swingline Loans, a “Class” of Loan) shall, at the option of the Borrower and subject to the terms and conditions of this Agreement, be either Base Rate Loans or LIBOR Loans (each, a “Type” of Loan), provided that (i) all Loans comprising the same Borrowing shall, unless otherwise specifically provided herein, be of the same Type, and (ii) no LIBOR Loans may be borrowed at any time prior to the third (3^rd) Business Day after the Closing Date. The Swingline Loans shall be made and maintained as Base Rate Loans at all times.

(b) In order to make a Borrowing (other than (x) Borrowings of Swingline Loans, which shall be made pursuant to Section 2.2(d), (y) Borrowings for the purpose of repaying Refunded Swingline Loans, which shall be made pursuant to Section 2.2(e), and (z) Borrowings involving continuations or conversions of outstanding Loans, which shall be made pursuant to Section 2.11), the Borrower will give the Administrative Agent written notice not later than 1:00 p.m., Charlotte, North Carolina time, three (3) Business Days prior to each Borrowing to be comprised of LIBOR Loans and one (1) Business Day prior to each Borrowing to be comprised

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of Base Rate Loans; provided, however, that requests for the Borrowing of the Term Loans and any Revolving Loans to be made on the Closing Date may, at the discretion of the Administrative Agent, be given with less advance notice than as specified hereinabove. Each such notice (each, a “Notice of Borrowing”) shall be given in the form of Exhibit B-1 and shall specify (1) the aggregate principal amount, Class and initial Type of the Loans to be made pursuant to such Borrowing, (2) in the case of a Borrowing of LIBOR Loans, the initial Interest Period to be applicable thereto, and (3) the requested Borrowing Date, which shall be a Business Day. Once given, a Notice of Borrowing may not be revoked by the Borrower except upon payment of any amounts required under Section 2.18 to be paid as a consequence of such revocation. Upon its receipt of a Notice of Borrowing, the Administrative Agent will promptly notify each applicable Lender of the proposed Borrowing by facsimile transmission. Notwithstanding anything to the contrary contained herein:

(i) the aggregate principal amount of the Borrowing of Term Loans shall be in the amount of the aggregate Term Loan Commitments;

(ii) the aggregate principal amount of each Borrowing comprised of Base Rate Loans shall not be less than $500,000 or, if greater, an integral multiple of $100,000 in excess thereof (or, in the case of a Borrowing of Revolving Loans, if less, in the amount of the aggregate Unutilized Revolving Credit Commitments), and the aggregate principal amount of each Borrowing comprised of LIBOR Loans shall not be less than $1,000,000 or, if greater, an integral multiple of $500,000 in excess thereof;

(iii) if the Borrower shall have failed to designate the Type of Loans comprising a Borrowing, the Borrower shall be deemed to have requested a Borrowing comprised of Base Rate Loans; and

(iv) if the Borrower shall have failed to select the duration of the Interest Period to be applicable to any Borrowing of LIBOR Loans, then the Borrower shall be deemed to have selected an Interest Period with a duration of one month.

(c) Not later than 2:00 p.m., Charlotte, North Carolina time, on the requested Borrowing Date (which shall be the Closing Date, in the case of the Term Loans), each applicable Lender will make available to the Administrative Agent at the Payment Office an amount, in Dollars and in immediately available funds, equal to the amount of the Loan or Loans to be made by such Lender. To the extent such Lenders have made such amounts available to the Administrative Agent as provided hereinabove, the Administrative Agent will make the aggregate of such amounts available to the Borrower in accordance with Section 2.3(a) and in like funds as received by the Administrative Agent.

(d) In order to make a Borrowing of a Swingline Loan (other than borrowings pursuant to any loan sweep product or other cash management arrangement in effect between the Borrower and the Swingline Lender, which shall be effected as provided thereunder), the Borrower will give the Administrative Agent (and the Swingline Lender, if the Swingline Lender is not also the Administrative Agent) written notice not later than 1:00 p.m., Charlotte, North Carolina time, on the Business Day of such Borrowing. Each such notice (each, a “Notice of Swingline Borrowing”) shall be given in the form of Exhibit B-2 and shall specify (i) the

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principal amount of the Swingline Loan to be made pursuant to such Borrowing (which shall not be less than $200,000 and, if greater, shall be in an integral multiple of $100,000 in excess thereof (or, if less, in the amount of the Unutilized Swingline Commitment)) and (ii) the requested Borrowing Date, which shall be a Business Day. Once given, a Notice of Swingline Borrowing may not be revoked by the Borrower except upon payment of any amounts required under Section 2.18 to be paid as a consequence of such revocation. Not later than 1:00 p.m., Charlotte, North Carolina time, on the requested Borrowing Date, the Swingline Lender will make available to the Administrative Agent at the Payment Office an amount, in Dollars and in immediately available funds, equal to the amount of the requested Swingline Loan. To the extent the Swingline Lender has made such amount available to the Administrative Agent as provided hereinabove, the Administrative Agent will make such amount available to the Borrower in accordance with Section 2.3(a) and in like funds as received by the Administrative Agent.

(e) With respect to any outstanding Swingline Loans, the Swingline Lender may at any time (whether or not an Event of Default has occurred and is continuing) in its sole and absolute discretion (and shall, within seven (7) days after any Borrowing of Swingline Loans causes the aggregate outstanding principal amount thereof to exceed $2,000,000), and is hereby authorized and empowered by the Borrower to, cause a Borrowing of Revolving Loans to be made for the purpose of repaying such Swingline Loans by delivering to the Administrative Agent (if the Administrative Agent is not also the Swingline Lender) and each other Revolving Credit Lender (on behalf of, and with a copy to, the Borrower), not later than 11:00 a.m., Charlotte, North Carolina time, one (1) Business Day prior to the proposed Borrowing Date therefor, a notice (which shall be deemed to be a Notice of Borrowing given by the Borrower) requesting the Revolving Credit Lenders to make Revolving Loans (which shall be made initially as Base Rate Loans) on such Borrowing Date in an aggregate amount equal to the amount of such Swingline Loans (the “Refunded Swingline Loans”) outstanding on the date such notice is given that the Swingline Lender requests to be repaid. Not later than 2:00 p.m., Charlotte, North Carolina time, on the requested Borrowing Date, each Revolving Credit Lender (other than the Swingline Lender) will make available to the Administrative Agent at the Payment Office an amount, in Dollars and in immediately available funds, equal to the amount of the Revolving Loan to be made by such Lender. To the extent the Revolving Credit Lenders have made such amounts available to the Administrative Agent as provided hereinabove, the Administrative Agent will make the aggregate of such amounts available to the Swingline Lender in like funds as received by the Administrative Agent, which shall apply such amounts in repayment of the Refunded Swingline Loans. Notwithstanding any provision of this Agreement to the contrary, on the relevant Borrowing Date, the Refunded Swingline Loans (including the Swingline Lender’s ratable share thereof, in its capacity as a Revolving Credit Lender) shall be deemed to be repaid with the proceeds of the Revolving Loans made as provided above (including a Revolving Loan deemed to have been made by the Swingline Lender), and such Refunded Swingline Loans deemed to be so repaid shall no longer be outstanding as Swingline Loans but shall be outstanding as Revolving Loans. If any portion of any such amount repaid (or deemed to be repaid) to the Swingline Lender shall be recovered by or on behalf of the Borrower from the Swingline Lender in any bankruptcy, insolvency or similar proceeding or otherwise, the loss of the amount so recovered shall be shared ratably among all the Revolving Credit Lenders in the manner contemplated by Section 2.15(b).

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(f) If, as a result of any bankruptcy, insolvency or similar proceeding with respect to the Borrower, Revolving Loans are not made pursuant to subsection (e) above in an amount sufficient to repay any amounts owed to the Swingline Lender in respect of any outstanding Swingline Loans, or if the Swingline Lender is otherwise precluded for any reason from giving a notice on behalf of the Borrower as provided for hereinabove, the Swingline Lender shall be deemed to have sold without recourse, representation or warranty (except for the absence of Liens thereon created, incurred or suffered to exist by, through or under the Swingline Lender), and each Revolving Credit Lender shall be deemed to have purchased and hereby agrees to purchase, a participation in such outstanding Swingline Loans in an amount equal to its ratable share (based on the proportion that its Revolving Credit Commitment bears to the aggregate Revolving Credit Commitments at such time) of the unpaid amount thereof together with accrued interest thereon. Upon one (1) Business Day’s prior notice from the Swingline Lender, each Revolving Credit Lender (other than the Swingline Lender) will make available to the Administrative Agent at the Payment Office an amount, in Dollars and in immediately available funds, equal to its respective participation. To the extent the Revolving Credit Lenders have made such amounts available to the Administrative Agent as provided hereinabove, the Administrative Agent will make the aggregate of such amounts available to the Swingline Lender in like funds as received by the Administrative Agent. In the event any such Revolving Credit Lender fails to make available to the Administrative Agent the amount of such Lender’s participation as provided in this Section 2.2(f), the Swingline Lender shall be entitled to recover such amount on demand from such Lender, together with interest thereon for each day from the date such amount is required to be made available for the account of the Swingline Lender until the date such amount is made available to the Swingline Lender at the Federal Funds Rate for the first three (3) Business Days and thereafter at the Adjusted Base Rate applicable to Revolving Loans. Promptly following its receipt of any payment by or on behalf of the Borrower in respect of a Swingline Loan, the Swingline Lender will pay to each Revolving Credit Lender that has acquired a participation therein such Lender’s ratable share of such payment.

(g) Notwithstanding any provision of this Agreement to the contrary, the obligation of each Revolving Credit Lender (other than the Swingline Lender) to make Revolving Loans for the purpose of repaying any Refunded Swingline Loans pursuant to Section 2.2(e) and each such Lender’s obligation to purchase a participation in any unpaid Swingline Loans pursuant to Section 2.2(f) shall be absolute and unconditional and shall not be affected by any circumstance or event whatsoever, including, without limitation, (i) any set-off, counterclaim, recoupment, defense or other right that such Lender may have against the Swingline Lender, the Administrative Agent, the Borrower or any other Person for any reason whatsoever, (ii) the occurrence or continuance of any Default or Event of Default, (iii) any adverse change in the business, operations, properties, assets, condition (financial or otherwise) or prospects of the Borrower or any of its Subsidiaries, or (iv) any breach of this Agreement by any party hereto.

2.3 Disbursements; Funding Reliance; Domicile of Loans.

(a) The Borrower hereby authorizes the Administrative Agent to disburse the proceeds of each Borrowing in accordance with the terms of any written instructions from any of the Authorized Officers, provided that the Administrative Agent shall not be obligated under any circumstances to forward amounts to any account not listed in an Account Designation Letter. The Borrower may at any time deliver to the Administrative Agent an Account Designation

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Letter listing any additional accounts or deleting any accounts listed in a previous Account Designation Letter.

(b) Unless the Administrative Agent has received, prior to 2:00 p.m., Charlotte, North Carolina time, on the relevant Borrowing Date, written notice from a Lender that such Lender will not make available to the Administrative Agent such Lender’s ratable portion, if any, of the relevant Borrowing, the Administrative Agent may assume that such Lender has made such portion available to the Administrative Agent in immediately available funds on such Borrowing Date in accordance with the applicable provisions of Section 2.2 or Section 3.5, and the Administrative Agent may, in reliance upon such assumption, but shall not be obligated to, make a corresponding amount available to the Borrower on such Borrowing Date. If and to the extent that such Lender shall not have made such portion available to the Administrative Agent, and the Administrative Agent shall have made such corresponding amount available to the Borrower, such Lender, on the one hand, and the Borrower, on the other, severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount, together with interest thereon for each day from the date such amount is made available to the Borrower until the date such amount is repaid to the Administrative Agent, (i) in the case of such Lender, at the Federal Funds Rate, and (ii) in the case of the Borrower (without duplication), at the rate of interest applicable at such time to the Type and Class of Loans comprising such Borrowing, as determined under the provisions of Section 2.8. If such Lender shall repay to the Administrative Agent such corresponding amount, such amount shall constitute such Lender’s Loan as part of such Borrowing for purposes of this Agreement. The failure of any Lender to make any Loan required to be made by it as part of any Borrowing shall not relieve any other Lender of its obligation, if any, hereunder to make its Loan as part of such Borrowing, but no Lender shall be responsible for the failure of any other Lender to make the Loan to be made by such other Lender as part of any Borrowing.

(c) Each Lender may, at its option, make and maintain any Loan at, to or for the account of any of its Lending Offices, provided that any exercise of such option shall not affect the obligation of the Borrower to repay such Loan to or for the account of such Lender in accordance with the terms of this Agreement.

2.4 Evidence of Debt; Notes.

(a) Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the Borrower to the applicable Lending Office of such Lender resulting from each Loan made by such Lending Office of such Lender from time to time, including the amounts of principal and interest payable and paid to such Lending Office of such Lender from time to time under this Agreement.

(b) The Administrative Agent shall maintain the Register pursuant to Section 11.7(b), and a subaccount for each Lender, in which Register and subaccounts (taken together) shall be recorded (i) the amount of each such Loan, the Class and Type of each such Loan and the Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender hereunder in respect of each such Loan and (iii) the amount of any sum received by the Administrative Agent hereunder from the Borrower in respect of each such Loan and each Lender’s share thereof.

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(c) The entries made in the Register and subaccounts maintained pursuant to Section 2.4(b) (and, if consistent with the entries in the accounts maintained pursuant to Section 2.4(a)) shall, to the extent permitted by applicable law, be prima facie evidence of the existence and amounts of the obligations of the Borrower therein recorded; provided, however, that the failure of any Lender or the Administrative Agent to maintain any such account, Register or subaccount, as applicable, or any error therein, shall not in any manner affect the obligation of the Borrower to repay (with applicable interest) the Loans made to the Borrower by such Lender in accordance with the terms of this Agreement.

(d) The Loans of each Class made by each Lender shall, if requested by the applicable Lender (which request shall be made to the Administrative Agent), be evidenced (i) in the case of Term Loans, by a Term Note appropriately completed in substantially the form of Exhibit A-1, (ii) in the case of Revolving Loans, by a Revolving Note appropriately completed in substantially the form of Exhibit A-2, and (iii) in the case of the Swingline Loans, by a Swingline Note appropriately completed in substantially the form of Exhibit A-3, in each case executed by the Borrower and payable to the order of such Lender. Each Note shall be entitled to all of the benefits of this Agreement and the other Credit Documents and shall be subject to the provisions hereof and thereof.

2.5 Termination and Reduction of Commitments and Swingline Commitment.

(a) The Term Loan Commitments shall be automatically and permanently terminated on December 31, 2004, if the Closing Date shall not have occurred on or prior to such date. The Revolving Credit Commitments shall be automatically and permanently terminated on the Revolving Credit Termination Date (or on December 31, 2004, if the Closing Date shall not have occurred on or prior to such date). The Swingline Commitment shall be automatically and permanently terminated on the Swingline Maturity Date (or on December 31, 2004, if the Closing Date shall not have occurred on or prior to such date), unless sooner terminated pursuant to any other provision of this Section 2.5 or Section 9.2.

(b) At any time and from time to time after the date hereof, upon not less than three (3) Business Days’ prior written notice to the Administrative Agent (and, in the case of a termination or reduction of the Unutilized Swingline Commitment, the Swingline Lender), the Borrower may terminate in whole or reduce in part the aggregate Unutilized Revolving Credit Commitments (but not to an amount lower than the aggregate principal amount of Swingline Loans outstanding at the time of reduction) or the Unutilized Swingline Commitment, provided that any such partial reduction shall be in an aggregate amount of not less than $1,000,000 ($200,000 in the case of the Unutilized Swingline Commitment) or, if greater, an integral multiple of $500,000 in excess thereof ($100,000 in the case of the Unutilized Swingline Commitment). The amount of any termination or reduction made under this Section 2.5(b) may not thereafter be reinstated.

(c) Each reduction of the Revolving Credit Commitments pursuant to this Section shall be applied ratably among the Revolving Credit Lenders according to their respective Revolving Credit Commitments. Notwithstanding any provision of this Agreement to the contrary, any reduction of the Revolving Credit Commitments pursuant to this Section 2.5 that has the effect of reducing the aggregate Revolving Credit Commitments to an amount less than

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the amount of the Swingline Commitment at such time shall result in an automatic corresponding reduction of the Swingline Commitment to the amount of the aggregate Revolving Credit Commitments (as so reduced), without any further action on the part of the Borrower or the Swingline Lender.

2.6 Mandatory Payments and Prepayments.

(a) Except to the extent due or paid sooner pursuant to the provisions of this Agreement, the Borrower will repay the aggregate outstanding principal of the Term Loans on the dates and in the amounts set forth below:

Date	Payment Amount
March 31, 2005	$	875,000
June 30, 2005	$	875,000
September 30, 2005	$	875,000
December 31, 2005	$	875,000
March 31, 2006	$	1,312,500
June 30, 2006	$	1,312,500
September 30, 2006	$	1,312,500
December 31, 2006	$	1,312,500
March 31, 2007	$	1,750,000
June 30, 2007	$	1,750,000
September 30, 2007	$	1,750,000
December 31, 2007	$	1,750,000
March 31, 2008	$	2,187,500
June 30, 2008	$	2,187,500
September 30, 2008	$	2,187,500
December 31, 2008	$	2,187,500
March 31, 2009	$	2,625,000
June 31, 2009	$	2,625,000
September 30, 2009	$	2,625,000
Term Loan Maturity Date	$	2,625,000

(b) Except to the extent due or paid sooner pursuant to the provisions of this Agreement, (i) the aggregate outstanding principal of the Term Loans shall be due and payable in full on the Term Loan Maturity Date, (ii) the aggregate outstanding principal of the Revolving Loans shall be due and payable in full on the Revolving Credit Maturity Date, and (iii) the aggregate outstanding principal of the Swingline Loans shall be due and payable in full on the Swingline Maturity Date.

(c) In the event that, at any time, the Aggregate Revolving Credit Exposure (excluding the aggregate amount of any Swingline Loans to be repaid with proceeds of Revolving Loans made on the date of determination) shall exceed the aggregate Revolving Credit Commitments at such time (after giving effect to any concurrent termination or reduction thereof), the Borrower will, within two (2) Business Days after such time, prepay the outstanding

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principal amount of the Swingline Loans and, to the extent of any excess remaining after prepayment in full of outstanding Swingline Loans, the outstanding principal amount of the Revolving Loans in the amount of such excess; provided that, to the extent such excess amount is greater than the aggregate principal amount of Swingline Loans and Revolving Loans outstanding immediately prior to the application of such prepayment, the amount so prepaid shall be retained by the Administrative Agent and held in the Cash Collateral Account as cover for Letter of Credit Exposure, as more particularly described in Section 3.8, and thereupon such cash shall be deemed to reduce the aggregate Letter of Credit Exposure by an equivalent amount.

(d) Promptly upon (and in any event not later than five (5) Business Days after) its receipt thereof, the Borrower will prepay the outstanding principal amount of the Loans in an amount equal to 75% of the Net Cash Proceeds from any Equity Issuance and 100% of the Net Cash Proceeds from any Debt Issuance, and will deliver to the Administrative Agent, concurrently with such prepayment, a certificate signed on behalf of the Borrower by a Financial Officer of the Borrower in form reasonably satisfactory to the Administrative Agent and setting forth the calculation of such Net Cash Proceeds; provided, however, that in the event the Total Leverage Ratio (calculated on a pro forma basis after giving effect to any Equity Issuance) is equal to or less than 2.0 to 1.0, the Borrower shall not be required to prepay the Loans in respect of any such Equity Issuance.

(e) Not later than 270 days after its receipt of any proceeds of insurance, condemnation award or other compensation in respect of any Casualty Event in excess of (y) $500,000 for any single Casualty Event or (z) $1,000,000 when aggregated with such proceeds for all Casualty Events during any single fiscal year (or, in either case, if earlier, upon its determination not to repair or replace any property subject to such Casualty Event or to acquire assets used or useable in the business of the Borrower or its Subsidiaries), the Borrower will prepay the outstanding principal amount of the Loans in an amount equal to 100% of the Net Cash Proceeds from such Casualty Event (less any amounts theretofore applied (or contractually committed to be applied) to the repair or replacement of property subject to such Casualty Event or to acquire assets used or useable in the business of the Borrower or its Subsidiaries) and will deliver to the Administrative Agent, concurrently with such prepayment, a certificate signed on behalf of the Borrower by a Financial Officer of the Borrower in form reasonably satisfactory to the Administrative Agent and setting forth the calculation of such Net Cash Proceeds; provided, however, that, notwithstanding the foregoing, (i) except as otherwise provided in this Agreement (including in clause (ii) below) or in any other Credit Document, the Administrative Agent shall promptly turn over to the Borrower any such proceeds received during such 270-day period (unless the Borrower has, prior to the Administrative Agent’s receipt of such proceeds, notified the Administrative Agent of its determination not to repair or replace the property subject to the applicable Casualty Event or to acquire assets used or useable in the business of the Borrower or its Subsidiaries), but nothing in this Section 2.6(e) shall be deemed to limit or otherwise affect any right of the Administrative Agent herein or in any of the other Credit Documents to receive and hold such proceeds as loss payee and to disburse the same to the Borrower upon the terms hereof or thereof, or any obligation of the Borrower or any of its Subsidiaries herein or in any of the other Credit Documents to remit any such proceeds to the Administrative Agent upon its receipt thereof, and (ii) any and all such proceeds received or held by the Administrative Agent or the Borrower or any of its Subsidiaries during the continuance of an Event of Default (regardless of any proposed use thereof for repair, replacement or reinvestment, but less any

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amounts theretofore applied (or contractually committed to be applied) to the repair or replacement of property subject to such Casualty Event) shall be applied to prepay the outstanding principal amount of the Loans. Subject to the foregoing, any proceeds of insurance, condemnation award or other compensation in respect of any Casualty Event applied (or contractually committed to be applied) within 270 days to the repair or replacement of property subject to such Casualty Event or to acquire assets used or useable in the business of the Borrower or its Subsidiaries in accordance with the provisions of this Section 2.6(e) shall not be required to be applied by the Borrower as a prepayment of the outstanding principal amount of the Loans.

(f) Promptly upon (and in any event not later than five (5) Business Days after) its receipt thereof, the Borrower will prepay the outstanding principal amount of the Loans in an amount equal to 100% of the Net Cash Proceeds from any Asset Disposition and will deliver to the Administrative Agent, concurrently with such prepayment, a certificate signed on behalf of the Borrower by a Financial Officer of the Borrower in form reasonably satisfactory to the Administrative Agent and setting forth the calculation of such Net Cash Proceeds; provided, however, that with respect to Asset Dispositions permitted under Section 8.4(v), the Borrower shall not be required to apply such Net Cash Proceeds as a prepayment of the Loans as provided herein, so long as (and to the extent that) such Net Cash Proceeds are applied towards (or are contractually committed to be applied towards) assets used or useable in the business of the Borrower or its Subsidiaries within 180 days after such Asset Disposition; but provided further that any such Net Cash Proceeds not applied within 180 days (regardless of any contractual commitments) to the replacement of property subject to such Asset Disposition shall be applied by the Borrower as a prepayment of the outstanding principal amount of the Loans no later than the fifth (5^th) Business Day immediately following such 180-day period. Notwithstanding the foregoing, nothing in this Section 2.6(f) shall be deemed to permit any Asset Disposition not expressly permitted under Section 8.4.

(g) Each prepayment of the Loans made pursuant to Sections 2.6(d) through Section (f) shall be applied (i) first, to reduce the outstanding principal amount of the Term Loans, with such reduction to be applied (y) first, to the next four (4) scheduled unpaid principal payments (as set forth in subsection (a) above) (excluding any scheduled principal payment due on the date of such prepayment), in the direct order of maturity, and (z) second, to the extent of any excess remaining after application as provided in clause (y) above, to the other remaining scheduled principal payments (as set forth in subsection (a) above), in the inverse order of maturity, (ii) second, to the extent of any excess remaining after application as provided in clause (i) above, to reduce the outstanding principal amount of the Swingline Loans (but without any corresponding permanent reduction of the Swingline Commitment or the Revolving Credit Commitments), (iii) third, to the extent of any excess remaining after application as provided in clauses (i) and (ii) above, to reduce the outstanding principal amount of the Revolving Loans (but without any corresponding permanent reduction of the Revolving Credit Commitments), and (iv) fourth, to the extent of any excess remaining after application as provided in clauses (i), (ii) and (iii) above, to pay any outstanding Reimbursement Obligations, and within each Class of Loans shall be applied first to prepay all Base Rate Loans before any LIBOR Loans are prepaid; provided that such prepayments shall be applied against LIBOR Loans in such a manner as to minimize any amounts required to be paid under Section 2.18 as a consequence thereof. Each payment or prepayment pursuant to the provisions of this Section 2.6 shall be applied ratably

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among the Lenders holding the Loans being prepaid, in proportion to the principal amount held by each. Swingline Loans and Revolving Loans (but not Term Loans) prepaid pursuant to this Section 2.6(g) may be reborrowed, subject to the terms and conditions of this Agreement.

(h) Each payment or prepayment of a LIBOR Loan made pursuant to the provisions of this Section on a day other than the last day of the Interest Period applicable thereto shall be made together with all amounts required under Section 2.18 to be paid as a consequence thereof.

(i) In the event the Administrative Agent receives a notice of prepayment with respect to Sections 2.6(d) through 2.6(f), the Administrative Agent will give prompt notice thereof to the Lenders; provided that if such notice has also been furnished to the Lenders, the Administrative Agent shall have no obligation to notify the Lenders with respect thereto. Upon request by any Lender, the Administrative Agent will forward to such Lender a copy of the certificate of the Borrower with respect to any such prepayment.

2.7 Voluntary Prepayments.

(a) At any time and from time to time, the Borrower shall have the right to prepay the Loans, in whole or in part, without premium or penalty (except as provided in clause (iii) below), upon written notice given to the Administrative Agent not later than 1:00 p.m., Charlotte, North Carolina time, three (3) Business Days prior to each intended prepayment of LIBOR Loans and one (1) Business Day prior to each intended prepayment of Base Rate Loans (other than Swingline Loans, which may be prepaid on a same-day basis), provided that (i) each partial prepayment of LIBOR Loans shall be in an aggregate principal amount of not less than $1,000,000 or, if greater, an integral multiple of $500,000 in excess thereof, and each partial prepayment of Base Rate Loans shall be in an aggregate principal amount of not less than $500,000 or, if greater, an integral multiple of $100,000 in excess thereof ($200,000 and $100,000, respectively, in the case of Swingline Loans), (ii) no partial prepayment of LIBOR Loans made pursuant to any single Borrowing shall reduce the aggregate outstanding principal amount of the remaining LIBOR Loans under such Borrowing to less than $1,000,000 or to any greater amount not an integral multiple of $500,000 in excess thereof, and (iii) unless made together with all amounts required under Section 2.18 to be paid as a consequence of such prepayment, a prepayment of a LIBOR Loan may be made only on the last day of the Interest Period applicable thereto. Each such notice shall specify the proposed date of such prepayment and the aggregate principal amount, Class and Type of the Loans to be prepaid (and, in the case of LIBOR Loans, the Interest Period of the Borrowing pursuant to which made), and shall be irrevocable and shall bind the Borrower to make such prepayment on the terms specified therein. Revolving Loans and Swingline Loans (but not Term Loans) prepaid pursuant to this Section 2.7(a) may be reborrowed, subject to the terms and conditions of this Agreement. In the event the Administrative Agent receives a notice of prepayment under this Section, the Administrative Agent will give prompt notice thereof to the Lenders; provided that if such notice has also been furnished to the Lenders, the Administrative Agent shall have no obligation to notify the Lenders with respect thereto.

(b) Each prepayment of the Term Loans made pursuant to Section 2.7(a) shall be applied to reduce the outstanding principal amount of the Term Loans, with such reduction to be applied (y) first, to the next four (4) scheduled unpaid principal payments (as set forth in

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Section 2.6(a)) (excluding any scheduled principal payment due on the date of such prepayment), in the direct order of maturity, and (z) second, to the extent of any excess remaining after application as provided in clause (y) above, to the other remaining scheduled principal payments (as set forth in Section 2.6(a)), in the inverse order of maturity. Each prepayment of the Loans made pursuant to Section 2.7(a) shall be applied ratably among the Lenders holding the Loans being prepaid, in proportion to the principal amount held by each.

2.8 Interest.

(a) The Borrower will pay interest in respect of the unpaid principal amount of each Loan, from the date of Borrowing thereof until such principal amount shall be paid in full, (i) at the Adjusted Base Rate, as in effect from time to time during such periods as such Loan is a Base Rate Loan, and (ii) at the Adjusted LIBOR Rate, as in effect from time to time during such periods as such Loan is a LIBOR Loan.

(b) Upon the occurrence and during the continuance of any default by the Borrower in the payment of any principal of or interest on any Loan, any fees or other amount hereunder when due (whether at maturity, pursuant to acceleration or otherwise), all outstanding principal amounts of the Loans and, to the greatest extent permitted by law, all interest accrued on the Loans and all other accrued and payable fees and other amounts hereunder, shall bear interest at a rate per annum equal to the interest rate applicable from time to time thereafter to such Loans (whether the Adjusted Base Rate or the Adjusted LIBOR Rate) plus 2% (or, in the case of interest, fees and other amounts for which no rate is provided hereunder, at the Adjusted Base Rate applicable to Revolving Loans plus 2%), and, in each case, such default interest shall be payable on demand. To the greatest extent permitted by law, interest shall continue to accrue after the filing by or against the Borrower of any petition seeking any relief in bankruptcy or under any law pertaining to insolvency or debtor relief.

(c) Accrued (and theretofore unpaid) interest shall be payable as follows:

(i) in respect of each Base Rate Loan (including any Base Rate Loan or portion thereof paid or prepaid pursuant to the provisions of Section 2.6, except as provided hereinbelow), in arrears on the last Business Day of each calendar quarter, beginning with the first such day to occur after the Closing Date; provided, that in the event the Loans are repaid or prepaid in full and the Commitments have been terminated, then accrued interest in respect of all Base Rate Loans shall be payable together with such repayment or prepayment on the date thereof;

(ii) in respect of each LIBOR Loan (including any LIBOR Loan or portion thereof paid or prepaid pursuant to the provisions of Section 2.6, except as provided hereinbelow), in arrears (y) on the last Business Day of the Interest Period applicable thereto (subject to the provisions of Section 2.10(iv)) and (z) in addition, in the case of a LIBOR Loan with an Interest Period having a duration of six months or longer, on each date on which interest would have been payable under clause (y) above had successive Interest Periods of three months’ duration been applicable to such LIBOR Loan; provided, that in the event all LIBOR Loans made pursuant to a single Borrowing are

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repaid or prepaid in full, then accrued interest in respect of such LIBOR Loans shall be payable together with such repayment or prepayment on the date thereof; and

(iii) in respect of any Loan, at maturity (whether pursuant to acceleration or otherwise) and, after maturity, on demand.

(d) Nothing contained in this Agreement or in any other Credit Document shall be deemed to establish or require the payment of interest to any Lender at a rate in excess of the maximum rate permitted by applicable law. If the amount of interest payable for the account of any Lender on any interest payment date would exceed the maximum amount permitted by applicable law to be charged by such Lender, the amount of interest payable for its account on such interest payment date shall be automatically reduced to such maximum permissible amount. In the event of any such reduction affecting any Lender, if from time to time thereafter the amount of interest payable for the account of such Lender on any interest payment date would be less than the maximum amount permitted by applicable law to be charged by such Lender, then the amount of interest payable for its account on such subsequent interest payment date shall be automatically increased to such maximum permissible amount, provided that at no time shall the aggregate amount by which interest paid for the account of any Lender has been increased pursuant to this sentence exceed the aggregate amount by which interest paid for its account has theretofore been reduced pursuant to the previous sentence.

(e) The Administrative Agent shall promptly notify the Borrower and the Lenders upon determining the interest rate for each Borrowing of LIBOR Loans after its receipt of the relevant Notice of Borrowing or Notice of Conversion/Continuation, and upon each change in the Base Rate; provided, however, that the failure of the Administrative Agent to provide the Borrower or the Lenders with any such notice shall neither affect any obligations of the Borrower or the Lenders hereunder nor result in any liability on the part of the Administrative Agent to the Borrower or any Lender. Each such determination (including each determination of the Reserve Requirement) shall, absent manifest error, be conclusive and binding on all parties hereto.

2.9 Fees. The Borrower agrees to pay:

(a) To the Arranger and Wachovia, for their own account, on the Closing Date, the fees required under the Fee Letter to be paid to them on the Closing Date, in the amounts due and payable on the Closing Date as required by the terms thereof;

(b) To the Administrative Agent, for the account of each Revolving Credit Lender (other than a Defaulting Lender), a commitment fee for each calendar quarter (or portion thereof) for the period from the date of this Agreement to the Revolving Credit Termination Date, at a per annum rate equal to the Applicable Percentage in effect for such fee from time to time during such quarter, on such Lender’s ratable share (based on the proportion that its Revolving Credit Commitment bears to the aggregate Revolving Credit Commitments) of the average daily aggregate Unutilized Revolving Credit Commitments, payable in arrears (i) on the last Business Day of each calendar quarter, beginning with the first such day to occur after the Closing Date, and (ii) on the Revolving Credit Termination Date;

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(c) To the Administrative Agent, for the account of each Revolving Credit Lender (other than a Defaulting Lender), a letter of credit fee for each calendar quarter (or portion thereof) in respect of all Letters of Credit outstanding during such quarter, at a per annum rate equal to the Applicable Percentage in effect from time to time during such quarter for Revolving Loans that are maintained as LIBOR Loans, on such Lender’s ratable share (based on the proportion that its Revolving Credit Commitment bears to the aggregate Revolving Credit Commitments) of the daily average aggregate Stated Amount of such Letters of Credit, payable in arrears (i) on the last Business Day of each calendar quarter, beginning with the first such day to occur after the Closing Date, and (ii) on the later of the Revolving Credit Termination Date and the date of termination of the last outstanding Letter of Credit;

(d) To the Issuing Lender, for its own account, a facing fee for each calendar quarter (or portion thereof) in respect of all Letters of Credit outstanding during such quarter, at a per annum rate of 0.25% on the daily average aggregate Stated Amount of such Letters of Credit, payable in arrears (i) on the last Business Day of each calendar quarter, beginning with the first such day to occur after the Closing Date, and (ii) on the later of the Revolving Credit Termination Date and the date of termination of the last outstanding Letter of Credit;

(e) To the Issuing Lender, for its own account, such commissions, transfer fees and other fees and charges incurred in connection with the issuance and administration of each Letter of Credit as are customarily and reasonably charged from time to time by the Issuing Lender for the performance of such services in connection with similar letters of credit, or as may be otherwise agreed to by the Issuing Lender, but without duplication of amounts payable under Section 2.9(d); and

(f) To the Administrative Agent, for its own account, the annual administrative fee described in the Fee Letter, on the terms, in the amount and at the times set forth therein.

2.10 Interest Periods. Concurrently with the giving of a Notice of Borrowing or Notice of Conversion/Continuation in respect of any Borrowing (whether in respect of Term Loans or Revolving Loans) comprised of Base Rate Loans to be converted into, or LIBOR Loans to be continued as, LIBOR Loans, the Borrower shall have the right to elect, pursuant to such notice, the interest period (each, an “Interest Period”) to be applicable to such LIBOR Loans, which Interest Period shall, at the option of the Borrower, be a one, two, three, six or (if agreed to by all of the Lenders) nine-month period; provided, however, that:

(i) all LIBOR Loans comprising a single Borrowing shall at all times have the same Interest Period;

(ii) the initial Interest Period for any LIBOR Loan shall commence on the date of the Borrowing of such LIBOR Loan (including the date of any continuation of, or conversion into, such LIBOR Loan), and each successive Interest Period applicable to such LIBOR Loan shall commence on the day on which the next preceding Interest Period applicable thereto expires;

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(iii) LIBOR Loans may not be outstanding under more than eight (8) separate Interest Periods at any one time (for which purpose Interest Periods shall be deemed to be separate even if they are coterminous);

(iv) if any Interest Period otherwise would expire on a day that is not a Business Day, such Interest Period shall expire on the next succeeding Business Day unless such next succeeding Business Day falls in another calendar month, in which case such Interest Period shall expire on the next preceding Business Day;

(v) no Interest Period may be selected with respect to the Term Loans that would end after a scheduled date for repayment of principal of the Term Loans occurring on or after the first day of such Interest Period unless, immediately after giving effect to such selection, the aggregate principal amount of Term Loans that are Base Rate Loans or that have Interest Periods expiring on or before such principal repayment date equals or exceeds the principal amount required to be paid on such principal repayment date;

(vi) the Borrower may not select any Interest Period that expires (y) after the Term Loan Maturity Date, with respect to Term Loans that are to be maintained as LIBOR Loans, or (z) after the Revolving Credit Maturity Date, with respect to Revolving Loans that are to be maintained as LIBOR Loans;

(vii) if any Interest Period begins on a day for which there is no numerically corresponding day in the calendar month during which such Interest Period would otherwise expire, such Interest Period shall expire on the last Business Day of such calendar month; and

(viii) the Borrower may not select any Interest Period (and consequently, no LIBOR Loans shall be made) if a Default or Event of Default shall have occurred and be continuing at the time of such Notice of Borrowing or Notice of Conversion/Continuation with respect to any Borrowing.

2.11 Conversions and Continuations.

(a) The Borrower shall have the right, on any Business Day occurring on or after the Closing Date, to elect (i) to convert all or a portion of the outstanding principal amount of any Base Rate Loans of any Class into LIBOR Loans of the same Class, or to convert any LIBOR Loans of any Class the Interest Periods for which end on the same day into Base Rate Loans of the same Class, or (ii) upon the expiration of any Interest Period, to continue all or a portion of the outstanding principal amount of any LIBOR Loans of any Class the Interest Periods for which end on the same day for an additional Interest Period, provided that (w) any such conversion of LIBOR Loans into Base Rate Loans shall involve an aggregate principal amount of not less than $500,000 or, if greater, an integral multiple of $100,000 in excess thereof; any such conversion of Base Rate Loans into, or continuation of, LIBOR Loans shall involve an aggregate principal amount of not less than $1,000,000 or, if greater, an integral multiple of $500,000 in excess thereof; and no partial conversion of LIBOR Loans made pursuant to a single Borrowing shall reduce the outstanding principal amount of such LIBOR Loans to less than $1,000,000 or to any greater amount not an integral multiple of $500,000 in excess thereof,

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(x) except as otherwise provided in Section 2.16(d), LIBOR Loans may be converted into Base Rate Loans only on the last day of the Interest Period applicable thereto (and, in any event, if a LIBOR Loan is converted into a Base Rate Loan on any day other than the last day of the Interest Period applicable thereto, the Borrower will pay, upon such conversion, all amounts required under Section 2.18 to be paid as a consequence thereof), (y) no such conversion or continuation shall be permitted with regard to any Base Rate Loans that are Swingline Loans, and (z) no conversion of Base Rate Loans into LIBOR Loans or continuation of LIBOR Loans shall be permitted during the continuance of a Default or Event of Default.

(b) The Borrower shall make each such election by giving the Administrative Agent written notice not later than 1:00 p.m., Charlotte, North Carolina time, three (3) Business Days prior to the intended effective date of any conversion of Base Rate Loans into, or continuation of, LIBOR Loans and one (1) Business Day prior to the intended effective date of any conversion of LIBOR Loans into Base Rate Loans. Each such notice (each, a “Notice of Conversion/Continuation”) shall be given in the form of Exhibit B-3 and shall specify (x) the date of such conversion or continuation (which shall be a Business Day), (y) in the case of a conversion into, or a continuation of, LIBOR Loans, the Interest Period to be applicable thereto, and (z) the aggregate amount, Class and Type of the Loans being converted or continued. Once given, a Notice of Conversion/Continuation may not be revoked by the Borrower except upon payment of any amounts required under Section 2.18 to be paid as a consequence of such revocation. Upon the receipt of a Notice of Conversion/Continuation, the Administrative Agent will promptly notify each applicable Lender of the proposed conversion or continuation by facsimile transmission. In the event that the Borrower shall fail to deliver a Notice of Conversion/Continuation as provided herein with respect to any outstanding LIBOR Loans, such LIBOR Loans shall automatically be converted to Base Rate Loans upon the expiration of the then current Interest Period applicable thereto (unless repaid pursuant to the terms hereof). In the event the Borrower shall have failed to select in a Notice of Conversion/Continuation the duration of the Interest Period to be applicable to any conversion into, or continuation of, LIBOR Loans, then the Borrower shall be deemed to have selected an Interest Period with a duration of one month.

2.12 Method of Payments; Computations.

(a) All payments by the Borrower hereunder shall be made without setoff, counterclaim or other defense, in Dollars and in immediately available funds to the Administrative Agent, for the account of the Lenders entitled to such payment or the Swingline Lender, as the case may be (except as otherwise expressly provided herein as to payments required to be made directly to the Issuing Lender or the Lenders) at the Payment Office prior to 1:00 p.m., Charlotte, North Carolina time, on the date payment is due. Any payment made as required hereinabove, but after 1:00 p.m., Charlotte, North Carolina time, shall be deemed to have been made on the next succeeding Business Day. If any payment falls due on a day that is not a Business Day, then such due date shall be extended to the next succeeding Business Day (except that in the case of LIBOR Loans to which the provisions of Section 2.10(iv) are applicable, such due date shall be the next preceding Business Day), and such extension of time shall then be included in the computation of payment of interest, fees or other applicable amounts.

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(b) The Administrative Agent will distribute to the Lenders like amounts relating to payments made to the Administrative Agent for the account of the Lenders as follows: (i) if the payment is received by 1:00 p.m., Charlotte, North Carolina time, in immediately available funds, the Administrative Agent will make available to each relevant Lender on the same date, by wire transfer of immediately available funds, such Lender’s ratable share of such payment (based on the percentage that the amount of the relevant payment owing to such Lender bears to the total amount of such payment owing to all of the relevant Lenders), and (ii) if such payment is received after 1:00 p.m., Charlotte, North Carolina time, or in other than immediately available funds, the Administrative Agent will make available to each such Lender its ratable share of such payment by wire transfer of immediately available funds on the next succeeding Business Day (or in the case of uncollected funds, as soon as practicable after collected). If the Administrative Agent shall not have made a required distribution to the appropriate Lenders as required hereinabove after receiving a payment for the account of such Lenders, the Administrative Agent will pay to each such Lender, on demand, its ratable share of such payment with interest thereon at the Federal Funds Rate for each day from the date such amount was required to be disbursed by the Administrative Agent until the date repaid to such Lender. The Administrative Agent will distribute to the Issuing Lender like amounts relating to payments made to the Administrative Agent for the account of the Issuing Lender in the same manner, and subject to the same terms and conditions, as set forth hereinabove with respect to distributions of amounts to the Lenders.

(c) Unless the Administrative Agent shall have received written notice from the Borrower prior to the date on which any payment is due to any Lender hereunder that such payment will not be made in full, the Administrative Agent may assume that the Borrower has made such payment in full to the Administrative Agent on such date, and the Administrative Agent may, in reliance on such assumption, but shall not be obligated to, cause to be distributed to such Lender on such due date an amount equal to the amount then due to such Lender. If and to the extent the Borrower shall not have so made such payment in full to the Administrative Agent, and without limiting the obligation of the Borrower to make such payment in accordance with the terms hereof, such Lender shall repay to the Administrative Agent forthwith on demand such amount so distributed to such Lender, together with interest thereon for each day from the date such amount is so distributed to such Lender until the date repaid to the Administrative Agent, at the Federal Funds Rate.

(d) All computations of interest and fees hereunder (including computations of the Reserve Requirement) shall be made on the basis of a year consisting of (i) in the case of interest on Base Rate Loans, 365/366 days, as the case may be, or (ii) in all other instances, 360 days; and in each case under (i) and (ii) above, with regard to the actual number of days (including the first day, but excluding the last day) elapsed.

2.13 Recovery of Payments.

(a) The Borrower agrees that to the extent the Borrower makes a payment or payments to or for the account of the Administrative Agent, the Swingline Lender, any Lender or the Issuing Lender, which payment or payments or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside or required to be repaid to a trustee, receiver or any other party under any bankruptcy, insolvency or similar state or federal law, common law or equitable cause (whether as a result of any demand, settlement, litigation or otherwise), then, to

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the extent of such payment or repayment, the Obligation intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been received.

(b) If any amounts distributed by the Administrative Agent to any Lender are subsequently returned or repaid by the Administrative Agent to the Borrower, its representative or successor in interest or any other Person, whether by court order or by settlement approved by the Lender in question or pursuant to applicable Requirements of Law, such Lender will, promptly upon receipt of notice thereof from the Administrative Agent, pay the Administrative Agent such amount. If any such amounts are recovered by the Administrative Agent from the Borrower, its representative or successor or any other Person in interest, the Administrative Agent will redistribute such amounts to the Lenders on the same basis as such amounts were originally distributed.

2.14 Use of Proceeds. The proceeds of the Loans shall be used (i) together with the Net Cash Proceeds from the IPO, to repay the Existing Senior Bank Facilities, the Subordinated Notes and the other Terminating Indebtedness in full, to make the Class A Preferred Stock Repurchase, if any, and to pay or reimburse permitted fees and expenses in connection with the Transactions, and (ii) after the foregoing, to provide for working capital and general corporate purposes and in accordance with the terms and provisions of this Agreement (including, without limitation, to finance Capital Expenditures and Permitted Acquisitions in accordance with the terms and provisions of this Agreement).

2.15 Pro Rata Treatment.

(a) Except in the case of Swingline Loans, all fundings, continuations and conversions of Loans of any Class shall be made by the Lenders pro rata on the basis of their respective Commitments to provide Loans of such Class (in the case of the funding of Loans of such Class pursuant to Section 2.2) or on the basis of their respective outstanding Loans of such Class (in the case of continuations and conversions of Loans of such Class pursuant to Section 2.11, and additionally in all cases in the event the Commitments for Loans of such Class have expired or have been terminated), as the case may be from time to time. All payments on account of principal of or interest on any Loans, fees or any other Obligations owing to or for the account of any one or more Lenders shall be apportioned ratably among such Lenders in proportion to the amounts of such principal, interest, fees or other Obligations owed to them respectively.

(b) Each Lender agrees that if it shall receive any amount hereunder (whether by voluntary payment, realization upon security, exercise of the right of setoff or banker’s lien, counterclaim or cross action, or otherwise, other than pursuant to Section 2.16(a), 2.16(b), 2.16(d), 2.17, or 11.7) applicable to the payment of any of the Obligations that exceeds its ratable share (according to the proportion of (i) the amount of such Obligations due and payable to such Lender at such time to (ii) the aggregate amount of such Obligations due and payable to all Lenders at such time) of payments on account of such Obligations then or therewith obtained by all the Lenders to which such payments are required to have been made, such Lender shall forthwith purchase from the other Lenders such participations in such Obligations as shall be necessary to cause such purchasing Lender to share the excess payment or other recovery ratably with each of them; provided, however, that if all or any portion of such excess payment is

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thereafter recovered from such purchasing Lender (whether as a result of any demand, settlement, litigation or otherwise), such purchase from each such other Lender shall be rescinded and each such other Lender shall repay to the purchasing Lender the purchase price to the extent of such recovery, together with an amount equal to such other Lender’s ratable share (according to the proportion of (i) the amount of such other Lender’s required repayment to (ii) the total amount so recovered from the purchasing Lender) of any interest or other amount paid or payable by the purchasing Lender in respect of the total amount so recovered. The Borrower agrees that any Lender so purchasing a participation from another Lender pursuant to the provisions of this Section 2.15(b) may, to the fullest extent permitted by law, exercise any and all rights of payment (including, without limitation, setoff, banker’s lien or counterclaim) with respect to such participation as fully as if such participant were a direct creditor of the Borrower in the amount of such participation. If under any applicable bankruptcy, insolvency or similar law, any Lender receives a secured claim in lieu of a setoff to which this Section 2.15(b) applies, such Lender shall, to the extent practicable, exercise its rights in respect of such secured claim in a manner consistent with the rights of the Lenders entitled under this Section 2.15(b) to share in the benefits of any recovery on such secured claim.

2.16 Increased Costs; Change in Circumstances; Illegality; etc.

(a) If the introduction of or any change in any applicable law, rule or regulation or in the interpretation or administration thereof by any Governmental Authority charged with the interpretation or administration thereof, in each case after the date hereof, or compliance by any Lender with any guideline or request from any such Governmental Authority (whether or not having the force of law) given or made after the date hereof, shall (i) subject such Lender to any tax or other charge, or change the basis of taxation of payments to such Lender, in respect of any of its LIBOR Loans or any other amounts payable hereunder or its obligation to make, fund or maintain any LIBOR Loans (other than any change in the rate or basis of tax on the overall net income or profits of such Lender or its applicable Lending Office or franchise taxes imposed in lieu thereof), (ii) impose, modify or deem applicable any reserve, special deposit or similar requirement (but excluding any reserves to the extent actually included within the Reserve Requirement in the calculation of the LIBOR Rate) against assets of, deposits with or for the account of, or credit extended by, such Lender or its applicable Lending Office, or (iii) impose on such Lender or its applicable Lending Office any other condition, and the result of any of the foregoing shall be to increase the cost to such Lender of making or maintaining any LIBOR Loans or issuing or participating in Letters of Credit or to reduce the amount of any sum received or receivable by such Lender hereunder (including in respect of Letters of Credit), the Borrower will, promptly upon (and in any event within fifteen (15) Business Days after) demand therefor by such Lender and delivery by such Lender of the certificate required by Section 2.16(e), pay to such Lender such additional amounts as shall compensate such Lender for such increase in costs or reduction in return occurring.

(b) If any Lender shall have reasonably determined that the introduction of or any change in any applicable law, rule or regulation regarding capital adequacy or in the interpretation or administration thereof by any Governmental Authority charged with the interpretation or administration thereof, in each case after the date hereof, or compliance by such Lender with any guideline or request from any such Governmental Authority (whether or not having the force of law) given or made after the date hereof, has or would have the effect, as a

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consequence of such Lender’s Commitment, Loans or issuance of or participations in Letters of Credit hereunder, of reducing the rate of return on the capital of such Lender or any Person controlling such Lender to a level below that which such Lender or controlling Person could have achieved but for such introduction, change or compliance (taking into account such Lender’s or controlling Person’s policies with respect to capital adequacy), the Borrower will, promptly upon (and in any event within fifteen (15) Business Days after) demand therefor by such Lender and delivery by such Lender of the certificate required by Section 2.16(e), pay to such Lender such additional amounts as will compensate such Lender or controlling Person for such reduction in return occurring.

(c) If, on or prior to the first day of any Interest Period, (y) the Administrative Agent shall have determined that adequate and reasonable means do not exist for ascertaining the applicable LIBOR Rate for such Interest Period or (z) the Administrative Agent shall have received written notice from the Required Lenders of their determination that the rate of interest referred to in the definition of “LIBOR Rate” upon the basis of which the Adjusted LIBOR Rate for LIBOR Loans for such Interest Period is to be determined will not adequately and fairly reflect the cost to such Lenders of making or maintaining LIBOR Loans during such Interest Period, the Administrative Agent will forthwith so notify the Borrower and the Lenders. Upon such notice, (i) all then outstanding LIBOR Loans shall automatically, on the expiration date of the respective Interest Periods applicable thereto (unless then repaid in full), be converted into Base Rate Loans, (ii) the obligation of the Lenders to make, to convert Base Rate Loans into, or to continue, LIBOR Loans shall be suspended (including pursuant to the Borrowing to which such Interest Period applies), and (iii) any Notice of Borrowing or Notice of Conversion/Continuation given at any time thereafter with respect to LIBOR Loans shall be deemed to be a request for Base Rate Loans, in each case until the Administrative Agent or the Required Lenders, as the case may be, shall have determined that the circumstances giving rise to such suspension no longer exist (and the Required Lenders, if making such determination, shall have so notified the Administrative Agent), and the Administrative Agent shall have so notified the Borrower and the Lenders. The Administrative Agent will notify the Borrower promptly upon the termination of any such suspension; provided, however, that the failure of the Administrative Agent to provide the Borrower with any such notice shall not result in any liability on the part of the Administrative Agent to the Borrower.

(d) Notwithstanding any other provision in this Agreement, if, at any time after the date hereof and from time to time, any Lender shall have determined in good faith that the introduction of or any change in any applicable law, rule or regulation or in the interpretation or administration thereof by any Governmental Authority charged with the interpretation or administration thereof, or compliance with any guideline or request from any such Governmental Authority (whether or not having the force of law), has or would have the effect of making it unlawful for such Lender to make or to continue to make or maintain LIBOR Loans, such Lender will forthwith so notify the Administrative Agent and the Borrower. Upon such notice, (i) each of such Lender’s then outstanding LIBOR Loans shall automatically, on the expiration date of the respective Interest Period applicable thereto (or, to the extent any such LIBOR Loan may not lawfully be maintained as a LIBOR Loan until such expiration date, upon such notice) and to the extent not sooner prepaid, be converted into a Base Rate Loan, (ii) the obligation of such Lender to make, to convert Base Rate Loans into, or to continue, LIBOR Loans shall be suspended (including pursuant to any Borrowing for which the Administrative Agent has

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received a Notice of Borrowing but for which the Borrowing Date has not arrived), and (iii) any Notice of Borrowing or Notice of Conversion/Continuation given at any time thereafter with respect to LIBOR Loans shall, as to such Lender, be deemed to be a request for a Base Rate Loan, in each case until such Lender shall have determined that the circumstances giving rise to such suspension no longer exist and shall have so notified the Administrative Agent, and the Administrative Agent shall have so notified the Borrower. The Administrative Agent will notify the Borrower promptly upon the termination of any such suspension; provided, however, that the failure of the Administrative Agent to provide the Borrower with any such notice shall not result in any liability on the part of the Administrative Agent to the Borrower.

(e) A certificate (which shall be in reasonable detail) showing the bases for the determinations set forth in this Section 2.16 by any Lender as to any additional amounts payable pursuant to this Section 2.16 shall be submitted by such Lender to the Borrower either directly or through the Administrative Agent. The determinations set forth in any such certificate for purposes of this Section 2.16 of any increased costs, reduction in return, market contingencies, illegality or any other matter shall, absent manifest error, be conclusive, provided that such determinations are made in good faith. Nothing in this Section 2.16 shall require or be construed to require the Borrower to pay any interest, fees, costs or other amounts in excess of that permitted by applicable law.

2.17 Taxes.

(a) Any and all payments by the Borrower hereunder or under any Note shall be made, in accordance with the terms hereof and thereof, free and clear of and without deduction for any and all present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto, excluding taxes imposed on, or measured by, the overall net income or profits (or franchise taxes imposed in lieu thereof) of the Administrative Agent or any Lender by the jurisdiction (or any political subdivision thereof) under the laws of which the Administrative Agent or such Lender is organized or in which its principal office is located or, in the case of any Lender, in which its applicable Lending Office is located (all such nonexcluded taxes, levies, imposts, deductions, charges, withholdings and liabilities being hereinafter referred to as “Taxes”). If the Borrower shall be required by law to deduct any Taxes from or in respect of any sum payable hereunder or under any Note to the Administrative Agent or any Lender, (i) the sum payable shall be increased as may be necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 2.17), the Administrative Agent or such Lender, as the case may be, receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower will make such deductions, (iii) the Borrower will pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law and (iv) the Borrower will deliver to the Administrative Agent or such Lender, as the case may be, evidence of such payment.

(b) The Borrower will indemnify the Administrative Agent and each Lender for the full amount of Taxes (including, without limitation, any Taxes imposed by any jurisdiction on amounts payable under this Section 2.17) paid by the Administrative Agent or such Lender, as the case may be, and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally asserted. This indemnification shall be made within 30 days from the date the Administrative Agent or such

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Lender, as the case may be, makes written demand therefor. Such written demand shall set forth in reasonable detail the amount of Taxes payable and the calculation thereof.

(c) Each of the Administrative Agent and the Lenders agrees that if it subsequently recovers, or receives a permanent net tax benefit with respect to, any amount of Taxes (i) previously paid by it and as to which it has been indemnified by or on behalf of the Borrower or (ii) previously deducted by the Borrower (including, without limitation, any Taxes deducted from any additional sums payable under Section 2.17(a)(i)), the Administrative Agent or such Lender, as the case may be, shall reimburse the Borrower to the extent of the amount of any such recovery or permanent net tax benefit (but only to the extent of indemnity payments made, or additional amounts paid, by or on behalf of the Borrower under this Section 2.17 with respect to the Taxes giving rise to such recovery or tax benefit); provided, however, that the Borrower, upon the request of the Administrative Agent or such Lender, agrees to repay to the Administrative Agent or such Lender, as the case may be, the amount paid over to the Borrower (together with any penalties, interest or other charges), in the event the Administrative Agent or such Lender is required to repay such amount to the relevant taxing authority or other Governmental Authority. The determination by the Administrative Agent or any Lender of the amount of any such recovery or permanent net tax benefit shall be made in good faith and, in the absence of manifest error, be conclusive and binding. The Administrative Agent or such Lender shall provide the Borrower with a certificate (which shall be in reasonable detail) showing the calculations of the distributions to the Borrower pursuant to this Section 2.17(c).

(d) If any Lender is not a United States person (as such term is defined in Section 7701(a)(30) of the Code) for federal income tax purposes (a “Non-U.S. Lender”) and is entitled to an exemption from or a reduction of United States withholding tax pursuant to the Internal Revenue Code, such Non-U.S. Lender will deliver to each of the Administrative Agent and the Borrower, on or prior to the Closing Date (or, in the case of a Non-U.S. Lender that becomes a party to this Agreement as a result of an assignment after the Closing Date, on the effective date of such assignment), (i) in the case of a Non-U.S. Lender that is a “bank” for purposes of Section 881(c)(3)(A) of the Internal Revenue Code, two accurate and properly completed original signed copies of Internal Revenue Service Form W-8BEN, W-8IMY (including all appropriate attachments) or W-8ECI, as applicable (or successor forms), certifying that such Non-U.S. Lender is entitled to an exemption from or a reduction of withholding or deduction for or on account of United States federal income taxes in connection with payments under this Agreement or any of the Notes, (ii) in the case of a Non-U.S. Lender that is not a “bank” for purposes of Section 881(c)(3)(A) of the Internal Revenue Code, a certificate in form and substance reasonably satisfactory to the Administrative Agent and the Borrower and to the effect that (x) such Non-U.S. Lender is not a “bank” for purposes of Section 881(c)(3)(A) of the Internal Revenue Code, is not subject to regulatory or other legal requirements as a bank in any jurisdiction, and has not been treated as a bank for purposes of any tax, securities law or other filing or submission made to any governmental authority, any application made to a rating agency or qualification for any exemption from any tax, securities law or other legal requirements, (y) is not a ten (10) percent shareholder for purposes of Section 881(c)(3)(B) of the Internal Revenue Code and (z) is not a controlled foreign corporation receiving interest from a related person for purposes of Section 881(c)(3)(C) of the Internal Revenue Code, together with two accurate and properly completed Internal Revenue Service Form W-8BEN (or successor form) or (iii) any other form or certificate required by any taxing authority (including any

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certificate required by Section 871(h) of the Code), certifying that such Non-U.S. Lender is entitled to an exemption from or a reduction of withholding or deduction for or on account of United States federal income taxes in connection with payments under this Agreement or any of the Notes. Each such Non-U.S. Lender further agrees to deliver to each of the Administrative Agent and the Borrower additional copies of each such relevant form (or such successor forms as shall be adopted from time to time by the relevant United States taxing authorities) on or before the date that such form expires or becomes obsolete or after the occurrence of any event (including a change in its applicable Lending Office) requiring a change in the most recent forms so delivered by it, in each case certifying that such Non-U.S. Lender is entitled to an exemption from or a reduction of withholding or deduction for or on account of United States federal income taxes in connection with payments under this Agreement or any of the Notes, unless an event (including, without limitation, any change in treaty, law or regulation) has occurred prior to the date on which any such delivery would otherwise be required, which event renders all such forms inapplicable or the exemption or reduction to which such forms relate unavailable and such Non-U.S. Lender notifies the Administrative Agent and the Borrower that it is not entitled to receive payments without or at a reduced rate of deduction or withholding of United States federal income taxes. Each such Non-U.S. Lender will promptly notify the Administrative Agent and the Borrower of any changes in circumstances that would modify or render invalid any claimed exemption or reduction. In addition, any Lender, if requested by the Borrower or the Administrative Agent, will deliver such other documentation prescribed by applicable law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements.

(e) The Borrower shall not be required to indemnify any Non-U.S. Lender, or to pay any additional amounts to any Non-U.S. Lender, in respect of United States federal withholding tax to the extent that (i) the obligation to withhold amounts with respect to United States federal withholding tax existed on the date such Non-U.S. Lender became a party to this Agreement; provided, however, that this clause (i) shall not apply to the extent that (y) the indemnity payments or additional amounts any Lender would be entitled to receive (without regard to this clause (i)) do not exceed the indemnity payment or additional amounts that the person making the assignment, participation or transfer to such Lender would have been entitled to receive in the absence of such assignment, participation or transfer, or (z) such assignment, participation or transfer was requested by the Borrower, (ii) the obligation to pay such additional amounts would not have arisen but for a failure by such Non-U.S. Lender to comply with the provisions of Section 2.17(d), or (iii) any of the representations or certifications made by a Non-U.S. Lender pursuant to Section 2.17(d) are incorrect at the time a payment hereunder is made, other than by reason of any change in treaty, law or regulation having effect after the date such representations or certifications were made.

(f) At the Borrower’s request and at the Borrower’s cost, each Lender shall take reasonable steps (i) to contest such Lender’s liability for Taxes that have not been paid or (ii) to seek a refund of Taxes. Nothing in this Section 2.17 shall obligate any Lender to disclose any information regarding its tax affairs or computations to the Borrower.

2.18 Compensation. The Borrower will compensate each Lender upon demand for all losses, expenses and liabilities (including, without limitation, any loss, expense or liability

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incurred by reason of the liquidation or reemployment of deposits or other funds required by such Lender to fund or maintain LIBOR Loans) that such Lender may incur or sustain (i) if for any reason (other than a default by such Lender) a Borrowing or continuation of, or conversion into, a LIBOR Loan does not occur on a date specified therefor in a Notice of Borrowing or Notice of Conversion/Continuation, (ii) if any repayment, prepayment or conversion of any LIBOR Loan occurs on a date other than the last day of an Interest Period applicable thereto (including as a consequence of acceleration of the maturity of the Loans pursuant to Section 9.2), (iii) if any prepayment of any LIBOR Loan is not made on any date specified in a notice of prepayment given by the Borrower or (iv) as a consequence of any other failure by the Borrower to make any payments with respect to any LIBOR Loan when due hereunder. Calculation of all amounts payable to a Lender under this Section 2.18 shall be made as though such Lender had actually funded its relevant LIBOR Loan through the purchase of a Eurodollar deposit bearing interest at the LIBOR Rate in an amount equal to the amount of such LIBOR Loan, having a maturity comparable to the relevant Interest Period; provided, however, that each Lender may fund 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 Section 2.18. A certificate (which shall be in reasonable detail) showing the bases for the determinations set forth in this Section 2.18 by any Lender as to any additional amounts payable pursuant to this Section 2.18 shall be submitted by such Lender to the Borrower either directly or through the Administrative Agent. Determinations set forth in any such certificate made in good faith for purposes of this Section 2.18 of any such losses, expenses or liabilities shall, absent manifest error, be conclusive.

2.19 Replacement of Lenders.

(a) The Borrower may, at any time and so long as no Default or Event of Default has then occurred and is continuing, replace any Lender (i) that has requested compensation from the Borrower under Section 2.16(a), 2.16(b) or 2.17, (ii) the obligation of which to make or maintain LIBOR Loans has been suspended under Section 2.16(d) or (iii) that is a Defaulting Lender, in any case under clauses (i) through (iii) above by written notice to such Lender and the Administrative Agent given not more than sixty (60) days after any such event and identifying one or more Persons each of which shall be an Eligible Assignee and reasonably acceptable to the Administrative Agent (each, a “Replacement Lender,” and collectively, the “Replacement Lenders”) to replace such Lender (the “Replaced Lender”), provided that (i) the notice from the Borrower to the Replaced Lender and the Administrative Agent provided for hereinabove shall specify an effective date for such replacement (the “Replacement Effective Date”), which shall be at least five (5) Business Days after such notice is given, (ii) as of the relevant Replacement Effective Date, each Replacement Lender shall enter into an Assignment and Acceptance with the Replaced Lender pursuant to Section 11.7(a) (but shall not be required to pay the processing fee otherwise payable to the Administrative Agent pursuant to Section 11.7(a), which fee, for purposes hereof, shall be waived), pursuant to which such Replacement Lenders collectively shall acquire, in such proportion among them as they may agree with the Borrower and the Administrative Agent, all (but not less than all) of the Commitments and outstanding Loans of the Replaced Lender, and, in connection therewith, shall pay (x) to the Replaced Lender, as the purchase price in respect thereof, an amount equal to the sum as of the Replacement Effective Date (without duplication) of (1) the unpaid principal amount of, and all accrued but unpaid interest on, all outstanding Loans of the Replaced Lender and (2) the Replaced Lender’s ratable

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share of all accrued but unpaid fees owing to the Replaced Lender hereunder, (y) to the Administrative Agent, for its own account, any amounts owing to the Administrative Agent by the Replaced Lender under Section 2.3(b), and (z) to the Administrative Agent, for the account of the Swingline Lender, any amounts owing to the Swingline Lender under Section 2.2(e), and (iii) all other obligations of the Borrower owing to the Replaced Lender (other than those specifically described in clause (ii) above in respect of which the assignment purchase price has been, or is concurrently being, paid), including, without limitation, amounts payable under Sections 2.16(a), 2.16(b) and 2.17 which give rise to the replacement of such Replaced Lender and amounts payable under Section 2.18 as a result of the actions required to be taken under this Section 2.19, shall be paid in full by the Borrower to the Replaced Lender on or prior to the Replacement Effective Date.

(b) Any Lender (including the Issuing Lender in such capacity) claiming any amounts pursuant to Section 2.16(a), 2.16(b) or 2.17 shall use reasonable efforts (consistent with legal and regulatory restrictions) to avoid any costs, reductions or Taxes in respect of which such amounts are claimed, including the filing of any certificate or document reasonably requested by the Borrower or the changing of the jurisdiction of its Lending Office if such efforts would avoid the need for or reduce the amount of any such amounts which would thereafter accrue and would not, in the sole determination of such Lender, result in any additional costs, expenses or risks to such Lender or be otherwise disadvantageous to such Lender.

(c) Notwithstanding anything to the contrary contained herein, the Borrower shall not be required to compensate any Lender pursuant to Section 2.16(a), 2.16(b), 2.17 or 2.18 for any increased costs, reductions in return, Taxes or other amounts incurred more than 180 days prior to the date that such Lender or the Administrative Agent notifies the Borrower of the circumstances or event giving rise thereto and of its intention to claim compensation in respect thereof; provided that if any change in law (or change in interpretation or administration thereof) or any other such event giving rise to any claim for compensation pursuant to Sections 2.16(a), 2.16(b), 2.17 or 2.18 is retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof.

ARTICLE III

LETTERS OF CREDIT

3.1 Issuance. Subject to and upon the terms and conditions herein set forth, so long as no Default or Event of Default has occurred and is continuing, the Issuing Lender will, at any time and from time to time on and after the Closing Date and prior to the Revolving Credit Termination Date, and upon request by the Borrower in accordance with the provisions of Section 3.2, issue for the account of the Borrower one or more irrevocable letters of credit denominated in Dollars and in a form customarily used or otherwise approved by the Issuing Lender (together with all amendments, modifications and supplements thereto, substitutions therefor and renewals and restatements thereof, collectively, the “Letters of Credit”). The Stated Amount of each Letter of Credit shall not be less than such amount as may be acceptable to the Issuing Lender. Notwithstanding the foregoing:

(a) No Letter of Credit shall be issued if the Stated Amount upon issuance (i) when added to the aggregate Letter of Credit Exposure of the Revolving Credit Lenders at such time, would exceed $10,000,000, or (ii) when added to the Aggregate Revolving Credit Exposure, would exceed the aggregate Revolving Credit Commitments at such time;

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(b) No Letter of Credit shall be issued that by its terms expires later than the Revolving Credit Maturity Date or, in any event, more than one (1) year after its date of issuance; provided, however, that a Letter of Credit may, if requested by the Borrower, provide by its terms, and on terms acceptable to the Issuing Lender, for renewal for successive periods of one year or less (but not beyond the Revolving Credit Maturity Date), unless and until the Issuing Lender shall have delivered a notice of nonrenewal to the beneficiary of such Letter of Credit; and

(c) The Issuing Lender shall be under no obligation to issue any Letter of Credit if, at the time of such proposed issuance, (i) any order, judgment or decree of any Governmental Authority or arbitrator shall purport by its terms to enjoin or restrain the Issuing Lender from issuing such Letter of Credit, or any Requirement of Law applicable to the Issuing Lender or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the Issuing Lender shall prohibit, or request that the Issuing Lender refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the Issuing Lender with respect to such Letter of Credit any restriction or reserve or capital requirement (for which the Issuing Lender is not otherwise compensated) not in effect on the Closing Date, or any unreimbursed loss, cost or expense that was not applicable, in effect or known to the Issuing Lender as of the Closing Date and that the Issuing Lender in good faith deems material to it, or (ii) the Issuing Lender shall have actual knowledge, or shall have received notice from any Lender, prior to the issuance of such Letter of Credit that one or more of the conditions specified in Sections 4.1 (if applicable) or 4.2 are not then satisfied (or have not been waived in writing as required herein) or that the issuance of such Letter of Credit would violate the provisions of Section 3.1(a).

3.2 Notices. Whenever the Borrower desires the issuance of a Letter of Credit, the Borrower will give the Issuing Lender written notice with a copy to the Administrative Agent not later than 12:00 noon (Charlotte, North Carolina time) three (3) Business Days (or such shorter period as is acceptable to the Issuing Lender in any given case) prior to the requested date of issuance thereof. Each such notice (each, a “Letter of Credit Notice”) shall be irrevocable, shall be given in the form of Exhibit B-4 and shall specify (i) the requested date of issuance, which shall be a Business Day, (ii) the requested Stated Amount and expiry date of the Letter of Credit, and (iii) the name and address of the requested beneficiary or beneficiaries of the Letter of Credit. The Borrower will also complete any customary application procedures and documents reasonably required by the Issuing Lender in connection with the issuance of any Letter of Credit. Upon its issuance of any Letter of Credit, the Issuing Lender will promptly notify the Administrative Agent of such issuance, and the Administrative Agent will give prompt notice thereof to each Revolving Credit Lender. The renewal or extension of any outstanding Letter of Credit shall, for purposes of this Article III, be treated in all respects as the issuance of a new Letter of Credit.

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3.3 Participations. Immediately upon the issuance of any Letter of Credit, the Issuing Lender shall be deemed to have sold and transferred to each Revolving Credit Lender, and each Revolving Credit Lender shall be deemed irrevocably and unconditionally to have purchased and received from the Issuing Lender, without recourse or warranty (except for the absence of Liens thereon created, incurred or suffered to exist by, through or under the Issuing Lender), an undivided interest and participation, pro rata (based on the percentage of the aggregate Revolving Credit Commitments represented by such Revolving Credit Lender’s Revolving Credit Commitment), in such Letter of Credit, each drawing made thereunder and the obligations of the Borrower under this Agreement with respect thereto and any Collateral or other security therefor or guaranty pertaining thereto; provided, however, that the fee relating to Letters of Credit described in Section 2.9(d) shall be payable directly to the Issuing Lender as provided therein, and the other Revolving Credit Lenders shall have no right to receive any portion thereof. In consideration and in furtherance of the foregoing, upon the receipt of notice from the Issuing Lender each Revolving Credit Lender hereby absolutely and unconditionally agrees to pay to the Administrative Agent, for the account of the Issuing Lender, such Revolving Credit Lender’s pro rata share (determined as provided above) of each Reimbursement Obligation not reimbursed by the Borrower on the date due as provided in Section 3.4 or through the Borrowing of Revolving Loans as provided in Section 3.5 (because the conditions set forth in Section 4.2 cannot be satisfied, or for any other reason), or of any reimbursement payment required to be refunded to the Borrower for any reason. Upon any change in the Revolving Credit Commitments of any of the Revolving Credit Lenders pursuant to Section 11.7(a), with respect to all outstanding Letters of Credit and Reimbursement Obligations there shall be an automatic adjustment to the participations pursuant to this Section 3.3 to reflect the new pro rata shares of the assigning Lender and the Assignee. Each Revolving Credit Lender’s obligation to make payment to the Issuing Lender pursuant to this Section 3.4 shall be absolute and unconditional and shall not be affected by any circumstance whatsoever, including the termination of the Revolving Credit Commitments or the existence of any Default or Event of Default, and each such payment shall be made without any offset, abatement, reduction or withholding whatsoever.

3.4 Reimbursement. The Borrower hereby agrees to reimburse the Issuing Lender by making payment to the Administrative Agent, for the account of the Issuing Lender, in immediately available funds, for any payment made by the Issuing Lender under any Letter of Credit (each such amount so paid until reimbursed, together with interest thereon payable as provided hereinbelow, a “Reimbursement Obligation”) immediately after, and in any event within one (1) Business Day after its receipt of notice of, such payment (provided that any such Reimbursement Obligation shall be deemed timely satisfied (but nevertheless subject to the payment of interest thereon as provided hereinbelow) if satisfied pursuant to a Borrowing of Revolving Loans made on or prior to the next Business Day following the date of the Borrower’s receipt of notice of such payment), together with interest on the amount so paid by the Issuing Lender, to the extent not reimbursed prior to 2:00 p.m. (Charlotte, North Carolina time) on the date of such payment or disbursement, for the period from the date of the respective payment to the date the Reimbursement Obligation created thereby is satisfied, at the Adjusted Base Rate applicable to Revolving Loans as in effect from time to time during such period, such interest also to be payable on demand. The Issuing Lender will provide the Administrative Agent and the Borrower with prompt notice of any payment or disbursement made or to be made under any Letter of Credit, although the failure to give, or any delay in giving, any such notice shall not release, diminish or otherwise affect the Borrower’s obligations under this Section 3.4 or any

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other provision of this Agreement. The Administrative Agent will promptly pay to the Issuing Lender any such amounts received by it under this Section 3.4.

3.5 Payment by Revolving Loans. In the event that the Issuing Lender makes any payment under any Letter of Credit and the Borrower shall not have timely satisfied in full its Reimbursement Obligation to the Issuing Lender pursuant to Section 3.4, and to the extent that any amounts then held in the Cash Collateral Account established pursuant to Section 3.8 shall be insufficient to satisfy such Reimbursement Obligation in full, the Issuing Lender will promptly notify the Administrative Agent, and the Administrative Agent will promptly notify each Revolving Credit Lender, of such failure. If the Administrative Agent gives such notice prior to 12:00 noon (Charlotte, North Carolina time) on any Business Day, each Revolving Credit Lender will make available to the Administrative Agent, for the account of the Issuing Lender, its pro rata share (based on the percentage of the aggregate Revolving Credit Commitments represented by such Lender’s Revolving Credit Commitment) of the amount of such payment on such Business Day in immediately available funds. If the Administrative Agent gives such notice after 12:00 noon (Charlotte, North Carolina time) on any Business Day, each such Revolving Credit Lender shall make its pro rata share of such amount available to the Administrative Agent on the next succeeding Business Day. If and to the extent any Revolving Credit Lender shall not have so made its pro rata share of the amount of such payment available to the Administrative Agent, such Lender agrees to pay to the Administrative Agent, for the account of the Issuing Lender, forthwith on demand such amount, together with interest thereon at the Federal Funds Rate for each day from such date until the date such amount is paid to the Administrative Agent. The failure of any Revolving Credit Lender to make available to the Administrative Agent its pro rata share of any payment under any Letter of Credit shall not relieve any other Revolving Credit Lender of its obligation hereunder to make available to the Administrative Agent its pro rata share of any payment under any Letter of Credit on the date required, as specified above, but no Revolving Credit Lender shall be responsible for the failure of any other Revolving Credit Lender to make available to the Administrative Agent such other Revolving Credit Lender’s pro rata share of any such payment. Each such payment by a Revolving Credit Lender under this Section 3.5 of its pro rata share of an amount paid by the Issuing Lender shall constitute a Revolving Loan by such Revolving Credit Lender (the Borrower being deemed to have given a timely Notice of Borrowing therefor) and shall be treated as such for all purposes of this Agreement; provided that for purposes of determining the aggregate Unutilized Revolving Credit Commitments immediately prior to giving effect to the application of the proceeds of such Revolving Loans, the Reimbursement Obligation being satisfied thereby shall be deemed not to be outstanding at such time. Each Revolving Credit Lender’s obligation to make Revolving Loans pursuant to this Section 3.5 shall be absolute and unconditional and shall not be affected by any circumstance whatsoever, including, without limitation, the existence of any Default or Event of Default or the failure of the amount of such Borrowing of Revolving Loans to meet the minimum Borrowing amount specified in Section 2.2(b); provided, however, that each Revolving Credit Lender’s obligation to make Revolving Loans pursuant to this Section 3.5 is subject to the conditions set forth in Section 4.2 (other than delivery by the Borrower of a Notice of Borrowing).

3.6 Payment to Revolving Credit Lenders. Whenever the Issuing Lender receives a payment in respect of a Reimbursement Obligation as to which the Administrative Agent has received, for the account of the Issuing Lender, any payments from the Revolving Credit Lenders

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pursuant to Section 3.5, the Issuing Lender will promptly pay to the Administrative Agent, and the Administrative Agent will promptly pay to each Revolving Credit Lender that has paid its pro rata share thereof, in immediately available funds, an amount equal to such Revolving Credit Lender’s ratable share (based on the proportionate amount funded by such Revolving Credit Lender to the aggregate amount funded by all Revolving Credit Lenders) of such Reimbursement Obligation.

3.7 Obligations Absolute. The Reimbursement Obligations of the Borrower shall be irrevocable, shall remain in effect until the Issuing Lender shall have no further obligations to make any payments or disbursements under any circumstances with respect to any Letter of Credit, and, except to the extent resulting from any gross negligence, bad faith or willful misconduct on the part of the Issuing Lender, shall be absolute and unconditional, shall not be subject to counterclaim, setoff or other defense or any other qualification or exception whatsoever and shall be made in accordance with the terms and conditions of this Agreement under all circumstances, including, without limitation, any of the following circumstances:

(a) Any lack of validity or enforceability of this Agreement, any of the other Credit Documents or any documents or instruments relating to any Letter of Credit;

(b) Any change in the time, manner or place of payment of, or in any other term of, all or any of the Obligations in respect of any Letter of Credit or any other amendment, modification or waiver of or any consent to departure from any Letter of Credit or any documents or instruments relating thereto, in each case whether or not the Borrower has notice or knowledge thereof;

(c) The existence of any claim, setoff, defense or other right that the Borrower may have at any time against a beneficiary named in a Letter of Credit, any transferee of any Letter of Credit (or any Person for whom any such transferee may be acting), the Administrative Agent, the Issuing Lender, any Lender or other Person, whether in connection with this Agreement, any Letter of Credit, the transactions contemplated hereby or any unrelated transactions (including any underlying transaction between the Borrower and the beneficiary named in any such Letter of Credit);

(d) Any draft, certificate or any other document presented under the Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect (provided that such draft, certificate or other document appears on its face to comply with the terms of such Letter of Credit), any errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, telecopier or otherwise, or any errors in translation or in interpretation of technical terms;

(e) Any defense based upon the failure of any drawing under a Letter of Credit to conform to the terms of the Letter of Credit (provided that any draft, certificate or other document presented pursuant to such Letter of Credit appears on its face to comply with the terms thereof), any nonapplication or misapplication by the beneficiary or any transferee of the proceeds of such drawing or any other act or omission of such beneficiary or transferee in connection with such Letter of Credit;

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(f) The exchange, release, surrender or impairment of any Collateral or other security for the Obligations;

(g) The occurrence of any Default or Event of Default; or

(h) Any other circumstance or event whatsoever, including, without limitation, any other circumstance that might otherwise constitute a defense available to, or a discharge of, the Borrower or a guarantor.

Any action taken or omitted to be taken by the Issuing Lender under or in connection with any Letter of Credit, if taken or omitted in the absence of gross negligence, bad faith or willful misconduct, shall be binding upon the Borrower and each Lender and shall not create or result in any liability of the Issuing Lender to the Borrower or any Lender. It is expressly understood and agreed that, for purposes of determining whether a wrongful payment under a Letter of Credit resulted from the Issuing Lender’s gross negligence, bad faith or willful misconduct, (i) the Issuing Lender’s acceptance of documents that appear on their face to comply with the terms of such Letter of Credit, without responsibility for further investigation, regardless of any notice or information to the contrary, (ii) the Issuing Lender’s exclusive reliance on the documents presented to it under such Letter of Credit as to any and all matters set forth therein, including the amount of any draft presented under such Letter of Credit, whether or not the amount due to the beneficiary thereunder equals the amount of such draft and whether or not any document presented pursuant to such Letter of Credit proves to be insufficient in any respect (so long as such document appears on its face to comply with the terms of such Letter of Credit), and whether or not any other statement or any other document presented pursuant to such Letter of Credit proves to be forged or invalid or any statement therein proves to be inaccurate or untrue in any respect whatsoever, and (iii) any noncompliance in any immaterial respect of the documents presented under such Letter of Credit with the terms thereof shall, in each case, be deemed not to constitute gross negligence, bad faith or willful misconduct of the Issuing Lender.

3.8 Cash Collateral Account. At any time and from time to time (i) after the occurrence and during the continuance of an Event of Default, the Administrative Agent may, and at the direction or with the consent of the Required Lenders shall, require the Borrower to deliver to the Administrative Agent such additional amount of cash as is equal to the aggregate Stated Amount of all Letters of Credit at any time outstanding (whether or not any beneficiary under any Letter of Credit shall have drawn or be entitled at such time to draw thereunder) and (ii) in the event of a prepayment under Section 2.6(c), the Administrative Agent will retain such amount as may then be required to be retained, such amounts in each case under clauses (i) and (ii) above to be held by the Administrative Agent in a cash collateral account (the “Cash Collateral Account”). The Borrower hereby grants to the Administrative Agent, for the benefit of the Issuing Lender and the Lenders, a Lien upon and security interest in the Cash Collateral Account and all amounts held therein from time to time as security for Letter of Credit Exposure, and for application to the Borrower’s Obligations as and when the same shall arise. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. Other than any interest on the investment of such amounts in Cash Equivalents, which investments shall be made at the direction of the Borrower (unless a Default or Event of Default shall have occurred and be continuing, in which case the determination as to investments shall be made at the option and in the discretion of the

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Administrative Agent), amounts in the Cash Collateral Account shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. In the event of a drawing, and subsequent payment by the Issuing Lender, under any Letter of Credit at any time during which any amounts are held in the Cash Collateral Account, the Administrative Agent will deliver to the Issuing Lender an amount equal to the Reimbursement Obligation created as a result of such payment (or, if the amounts so held are less than such Reimbursement Obligation, all of such amounts) to reimburse the Issuing Lender therefor. Any amounts remaining in the Cash Collateral Account (including interest) after the expiration of all Letters of Credit and reimbursement in full of the Issuing Lender for all of its obligations thereunder shall be held by the Administrative Agent, for the benefit of the Borrower, to be applied against the Obligations in such order and manner as the Administrative Agent may direct. If the Borrower is required to provide cash collateral pursuant to Sections 2.6(c) or 2.6(g), such amount (including interest), to the extent not applied as aforesaid, shall be returned to the Borrower on demand; provided that after giving effect to such return (i) the Aggregate Revolving Credit Exposure would not exceed the aggregate Revolving Credit Commitments at such time and (ii) no Default or Event of Default shall have occurred and be continuing at such time. If the Borrower is required to provide cash collateral as a result of an Event of Default, such amount (to the extent not applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived.

3.9 Effectiveness. Notwithstanding any termination of the Revolving Credit Commitments or repayment of the Loans, or both, the obligations of the Borrower under this Article III shall remain in full force and effect until the Issuing Lender and the Revolving Credit Lenders shall have no further obligations to make any payments or disbursements under any circumstances with respect to any Letter of Credit.

ARTICLE IV

CONDITIONS OF BORROWING

4.1 Conditions of Initial Borrowing. The obligation of each Lender to make Loans in connection with the initial Borrowing hereunder, and the obligation of the Issuing Lender to issue Letters of Credit hereunder on the Closing Date, is subject to the satisfaction of the following conditions precedent:

(a) The Administrative Agent shall have received the following, each dated as of the Closing Date (unless otherwise specified) and, except for the Notes and any certificates or instruments required to be delivered under the Security Documents, in sufficient copies for each Lender:

(i) to the extent requested by any Lender in accordance with Section 2.4(d), a Note or Notes for such Lender, in each case duly completed in accordance with the provisions of Section 2.4(d) and executed by the Borrower;

(ii) the Subsidiary Guaranty, duly completed and executed by each Subsidiary (other than any Foreign Subsidiary);

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(iii) the Security Agreement, duly completed and executed by the Borrower and each Subsidiary (other than any Foreign Subsidiary);

(iv) the Pledge Agreement, duly completed and executed by the Borrower and each Subsidiary (other than any Foreign Subsidiary) that owns Capital Stock of another Subsidiary, together with any certificates evidencing the Capital Stock being pledged thereunder as of the Closing Date (limited to 65% of the Capital Stock of any Foreign Subsidiary) and undated assignments separate from certificate for any such certificate, duly executed in blank; and in connection with the pledged Capital Stock of any Foreign Subsidiary, such pledge agreements, instruments and other documents as shall, in the reasonable judgment of the Administrative Agent, be required or advisable under applicable foreign Requirements of Law in order to effect such pledge;

(v) Mortgages with respect to each owned of Realty located in the United States and the leased parcel located in Manchester, New Hampshire, duly completed and executed by the applicable Credit Party, and such documents relating to any such Realty as may be reasonably requested by the Administrative Agent, including, without limitation, (A) policies of title insurance for the owned Realty from title insurance companies with respect thereto, as endorsed in a manner reasonably satisfactory to the Administrative Agent, together with such coinsurance and reinsurance as may be reasonably required by the Administrative Agent, insuring such Mortgage, as a valid first lien on the Realty, free of Liens other than Permitted Liens or other exceptions to title approved and accepted by the Administrative Agent, (B) surveys for the owned Realty, (C) flood certifications for the owned Realty, and (D) a landlord agreement for each parcel of leased Realty, each of which shall be in form and substance reasonably satisfactory to the Administrative Agent;

(vi) Assignments and Grants of Security Interests for the federally registered Intellectual Property referred to in Annexes C, D and E of the Security Agreement, in substantially the form of Exhibits B and C (as applicable) to the Security Agreement, in each case duly completed and executed by each applicable Credit Party; and

(vii) the favorable opinions of (A) Kirkland & Ellis, special counsel to the Borrower and its Subsidiaries, (B) local counsel to the Credit Parties in such jurisdictions as may be reasonably requested by the Administrative Agent, and (C) local foreign counsel to the applicable Credit Parties in such jurisdictions as may be reasonably requested by the Administrative Agent in connection with the pledge of Capital Stock of any Foreign Subsidiary, all in form and substance reasonably satisfactory to the Administrative Agent.

(b) The Administrative Agent shall have received a certificate, signed by the president, the chief executive officer or the chief financial officer of the Borrower, in form reasonably satisfactory to the Administrative Agent, certifying on behalf of the Borrower that (i) all representations and warranties of the Credit Parties contained in this Agreement and the other Credit Documents are true and correct in all material respects as of the Closing Date, both immediately before and after giving effect to the consummation of the Transactions, the making of the initial Loans hereunder and the application of the proceeds thereof (except to the extent

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any such representation or warranty is expressly stated to have been made as of a specific date, in which case such representation or warranty shall be true and correct in all material respects as of such date), (ii) no Default or Event of Default has occurred and is continuing, both immediately before and after giving effect to the consummation of the Transactions, the making of the initial Loans hereunder and the application of the proceeds thereof, (iii) both immediately before and after giving effect to the consummation of the Transactions, the making of the initial Loans hereunder and the application of the proceeds thereof, no Material Adverse Effect has occurred since January 3, 2004, and there exists no event, condition or state of facts that would reasonably be expected to result in a Material Adverse Effect, and (iv) all conditions to the initial extensions of credit hereunder set forth in this Section 4.1 and in Section 4.2 have been satisfied or waived in writing as required hereunder.

(c) The Administrative Agent shall have received a certificate of the secretary or an assistant secretary on behalf of each Credit Party executing any Credit Documents as of the Closing Date, in form and substance reasonably satisfactory to the Administrative Agent, certifying (i) that attached thereto is a true and complete copy of the articles or certificate of incorporation, certificate of formation or other organizational document and all amendments thereto of such Credit Party, certified as of a recent date by the Secretary of State (or comparable Governmental Authority) of its jurisdiction of organization, and that the same has not been amended since the date of such certification, (ii) that attached thereto is a true and complete copy of the bylaws, operating agreement or similar governing document of such Credit Party, as then in effect and as in effect at all times from the date on which the resolutions referred to in clause (iii) below were adopted to and including the date of such certificate, and (iii) that attached thereto is a true and complete copy of resolutions adopted by the board of directors (or similar governing body) of such Credit Party, authorizing the execution, delivery and performance of this Agreement and the other Credit Documents to which it is a party, and as to the incumbency and genuineness of the signature of each officer of such Credit Party executing this Agreement or any of such other Credit Documents, and attaching all such copies of the documents described above.

(d) The Administrative Agent shall have received (i) a certificate as of a recent date of the good standing of each Credit Party executing any Credit Documents as of the Closing Date, under the laws of its jurisdiction of organization, from the Secretary of State (or comparable Governmental Authority) of such jurisdiction, and (ii) a certificate as of a recent date of the qualification of each Credit Party to conduct business as a foreign corporation in each jurisdiction where it is so qualified as of the Closing Date, from the Secretary of State (or comparable Governmental Authority) of such jurisdiction.

(e) The Administrative Agent shall be reasonably satisfied with the corporate and capital structure and management of the Borrower and its Subsidiaries after giving effect to the Transactions, all legal, tax and accounting matters relating to the Transactions or to the Borrower and its Subsidiaries after giving effect thereto, and all documentation relating to the Transactions as it shall have reasonably requested.

(f) All approvals, permits and consents of any Governmental Authorities or other Persons required in connection with the execution and delivery of this Agreement and the other Credit Documents and the consummation of the Transactions shall have been obtained, without

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the imposition of conditions that are not reasonably acceptable to the Administrative Agent, and all related filings, if any, shall have been made, and all such approvals, permits, consents and filings shall be in full force and effect and the Administrative Agent shall have received such copies thereof as it shall have reasonably requested; all applicable waiting periods shall have expired without any adverse action being taken or threatened by any Governmental Authority having jurisdiction; and no action, proceeding, investigation, regulation or legislation shall have been instituted, threatened or proposed before, and no order, injunction or decree shall have been entered by, any court or other Governmental Authority, in each case to enjoin, restrain or prohibit, to obtain substantial damages in respect of, or to impose materially adverse conditions upon, this Agreement, any of the other Credit Documents, or the consummation of any of the other Transactions or that could reasonably be expected to have a Material Adverse Effect.

(g) The IPO shall have been consummated, and in connection therewith, the Administrative Agent shall be reasonably satisfied that, after giving effect thereto, the Borrower shall have received Net Cash Proceeds in an aggregate amount of not less than $70,000,000 (before giving effect to any underwriters’ overallotment).

(h) Concurrently with the making of the initial Loans hereunder, (i) all principal, interest, premium and other amounts outstanding under the Borrower’s existing senior bank credit agreement (the “Existing Senior Bank Facilities”) and under the Subordinated Notes and the Subordinated Loan Agreement (the Indebtedness described in clauses (A) and (B), collectively, the “Terminating Indebtedness”), or required to be paid as a condition to repayment in full thereof, shall be repaid and satisfied in full and all guarantees by the Credit Parties relating thereto extinguished, (ii) all commitments to extend credit under the agreements and instruments relating to the Existing Senior Bank Facilities or any other Terminating Indebtedness shall be terminated, (iii) any Liens securing the Existing Senior Bank Facilities or any other Terminating Indebtedness shall be released and any related filings terminated of record (or arrangements reasonably satisfactory to the Administrative Agent made therefore), and (iv) any letters of credit outstanding under the Existing Senior Bank Facilities or any other Terminating Indebtedness for which any Credit Party is obligated shall have been terminated, canceled or replaced (or, in the case of any letters of credit outstanding under the Existing Senior Bank Facilities and issued by Wachovia, deemed issued hereunder as of the Closing Date), and the Administrative Agent shall have received evidence of the foregoing reasonably satisfactory to it.

(i) The Administrative Agent shall have received certified reports from an independent search service reasonably satisfactory to it listing any judgment or tax lien filing or Uniform Commercial Code financing statement that names the Borrower, or any of the Borrower’s Domestic Subsidiaries as debtor in any of the jurisdictions listed beneath its name on Annex B to the Security Agreement, as well as lien search results with respect to Foreign Subsidiaries in their jurisdiction of organization, and the results thereof shall be reasonably satisfactory to the Administrative Agent.

(j) The Administrative Agent shall have received evidence in form and substance reasonably satisfactory to it that all filings, recordings, registrations and other actions (including, without limitation, the filing of duly completed UCC-1 financing statements in each jurisdiction listed on Annex A to the Security Agreement) necessary to perfect the Liens created by the

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Security Documents shall have been completed, or arrangements reasonably satisfactory to the Administrative Agent for the completion thereof shall have been made.

(k) The Borrower shall have paid (i) to the Arranger and Wachovia, the fees required under the Fee Letter to be paid on the Closing Date, in the amounts due and payable on the Closing Date as required by the terms thereof, (ii) to the Administrative Agent, the initial payment of the annual administrative fee described in the Fee Letter, and (iii) all other fees and reasonable expenses of the Arranger, the Administrative Agent and the Lenders required hereunder or under any other Credit Document to be paid on or prior to the Closing Date (including reasonable fees and out-of-pocket expenses of counsel) in connection with this Agreement, the other Credit Documents and the Transactions.

(l) The Administrative Agent shall have received (i) copies of the financial statements referred to in Section 5.11(a) and a Financial Condition Certificate, (ii) the Projections, (iii) unaudited consolidated financial statements of the Borrower and its Subsidiaries as of the last day of the month most recently ended prior to the Closing Date for which financial statements of the Borrower and its Subsidiaries are available and (iv) an unaudited consolidated balance sheet of the Borrower and its Subsidiaries as of the last day of the month most recently ended prior to the Closing Date for which financial statements of the Borrower and its Subsidiaries are available and for that portion of the current fiscal year then ended, giving pro forma effect to the consummation of the IPO, the repayment of the Existing Senior Bank Facilities and the other Terminating Indebtedness, the initial extensions of credit made under this Agreement, the Class A Preferred Stock Repurchase, the payment of transaction fees and expenses related to the foregoing, and the consummation of the other Transactions, all as if such events had occurred on such date (the “Pro Forma Balance Sheet”), all of which shall be in form and substance reasonably satisfactory to the Administrative Agent.

(m) The Administrative Agent shall be reasonably satisfied that, on a pro forma basis after giving effect to the consummation of the IPO, the repayment of the Existing Senior Bank Facilities and the other Terminating Indebtedness, the Class A Preferred Stock Repurchase, the initial extensions of credit made under this Agreement, the payment of transaction fees and expenses related to the foregoing, and the consummation of the other Transactions, all as if such transactions had occurred on the date of the Pro Forma Balance Sheet, (i) Consolidated EBITDA for the most recent twelve-month period ended prior to the Closing Date for which financial information is available (which shall not be more than 45 days prior to the Closing Date) is not less than $40,000,000, (ii) the aggregate Unutilized Revolving Credit Commitments shall not be less than $15,000,000, (iii) Consolidated Total Funded Debt is not greater than (A) Consolidated EBITDA for the period set forth in clause (i) above multiplied by (B) 2.0; and (iv) the Borrower is in compliance with all financial covenants set forth in Article VII; and the Administrative Agent shall have received a certificate as to the foregoing, duly completed and certified on behalf of the Borrower by a Financial Officer of the Borrower, together with a Covenant Compliance Worksheet (completed only as to the relevant information required under clauses (i), (iii) and (iv) above) and other supporting documentation, all in form and substance reasonably satisfactory to the Administrative Agent.

(n) The Administrative Agent shall have received evidence in form and substance reasonably satisfactory to it that all of the requirements of Section 6.6 and those provisions of

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the Security Agreement relating to the maintenance of insurance with respect to the Collateral have been satisfied, including receipt of certificates of insurance evidencing the insurance coverages described on Schedule 5.18 and all other or additional coverages required under the Security Agreement and naming the Administrative Agent as loss payee or additional insured (or assignee with respect to business interruption insurance), as its interests may appear.

(o) There shall not have occurred any material disruption or material adverse change in, or other condition with respect to, the United States financial and capital markets that could reasonably be expected to have a material adverse effect on the syndication of the credit facilities provided for hereunder.

(p) The Administrative Agent shall have received an Account Designation Letter, together with written instructions from an Authorized Officer, including wire transfer information, directing the payment of the proceeds of the initial Loans to be made hereunder.

(q) The Administrative Agent shall have received a resolution of the shareholders of Mettis (UK) authorizing an amendment to the articles of association of Mettis (UK) Limited having the effect of removing the right of its directors to refuse the registration of a transfer of the shares of Mettis (UK) Limited in the case of a transfer due to an enforcement action by any of its lenders.

(r) Each of the Administrative Agent and each Lender shall have received such other documents, certificates, opinions and instruments in connection with the transactions contemplated hereby as it shall have reasonably requested.

4.2 Conditions of All Borrowings. The obligation of each Lender to make any Loans hereunder, including the initial Loans (but excluding Revolving Loans made for the purpose of repaying Refunded Swingline Loans pursuant to Section 2.2(e)), and the obligation of the Issuing Lender to issue any Letters of Credit hereunder, is subject to the satisfaction of the following conditions precedent on the relevant Borrowing Date or date of issuance:

(a) The Administrative Agent shall have received a Notice of Borrowing in accordance with Section 2.2(b), or (together with the Swingline Lender) a Notice of Swingline Borrowing in accordance with Section 2.2(d), or (together with the Issuing Lender) a Letter of Credit Notice in accordance with Section 3.2, as applicable;

(b) Each of the representations and warranties contained in Article V and in the other Credit Documents shall be true and correct in all material respects on and as of such Borrowing Date (including the Closing Date, in the case of the initial Loans made hereunder) or date of issuance of a Letter of Credit with the same effect as if made on and as of such date, both immediately before and after giving effect to the Loans to be made or Letter of Credit to be issued on such date (except to the extent any such representation or warranty is expressly stated to have been made as of a specific date, in which case such representation or warranty shall be true and correct in all material respects as of such date); and

(c) No Default or Event of Default shall have occurred and be continuing on such date, both immediately before and after giving effect to the Loans to be made or Letter of Credit to be issued on such date.

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Each giving of a Notice of Borrowing, a Notice of Swingline Borrowing or a Letter of Credit Notice, and the consummation of each Borrowing or issuance of a Letter of Credit, shall be deemed to constitute a representation by the Borrower that the statements contained in Sections 4.2(b) and 4.2(c) are true, both as of the date of such notice or request and as of the relevant Borrowing Date or date of issuance.

ARTICLE V

REPRESENTATIONS AND WARRANTIES

To induce the Administrative Agent, the Issuing Lender and the Lenders to enter into this Agreement and to induce the Lenders to extend the credit contemplated hereby and the Issuing Lender to issue Letters of Credit, the Borrower represents and warrants to the Administrative Agent, the Issuing Lender and the Lenders as follows:

5.1 Corporate Organization and Power. Each of the Credit Parties (i) is a corporation, a limited liability company, limited partnership or other legal entity, as the case may be, duly organized or formed, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation, as the case may be, (ii) has the full corporate, partnership, limited liability company or other power and authority to execute, deliver and perform the Credit Documents to which it is or will be a party, to own and hold its property and to engage in its business as presently conducted, and (iii) is duly qualified to do business as a foreign corporation, partnership, limited liability company or other legal entity and is in good standing in each jurisdiction where the nature of its business or the ownership of its properties requires it to be so qualified, except where the failure to be so qualified would not, individually or in the aggregate, be reasonably likely to have a Material Adverse Effect.

5.2 Authorization; Enforceability. Each of the Credit Parties has taken, or on the Closing Date will have taken, all necessary corporate, partnership, limited liability or other legal action, as applicable, to execute, deliver and perform each of the Credit Documents to which it is or will be a party, and has, or on the Closing Date (or any later date of execution and delivery) will have, validly executed and delivered each of the Credit Documents to which it is or will be a party. This Agreement constitutes, and each of the other Credit Documents upon execution and delivery will constitute, the legal, valid and binding obligation of each of the Credit Parties that is a party hereto or thereto, enforceable against it in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally, by general equitable principles or by principles of good faith and fair dealing (regardless of whether enforcement is sought in equity or at law).

5.3 No Violation. The execution, delivery and performance by each of the Credit Parties of each of the Credit Documents to which it is or will be a party, and compliance by it with the terms hereof and thereof, do not and will not (i) violate any provision of its articles or certificate of incorporation or formation, its bylaws or other applicable formation or organizational documents, (ii) contravene any other Requirement of Law applicable to it, (iii) conflict with, result in a breach of or constitute (with notice, lapse of time or both) a default under any indenture, agreement or other instrument to which it is a party, by which it or any of its properties is bound or to which it is subject, or (iv) except for the Liens granted in favor of the

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Administrative Agent pursuant to the Security Documents and other Permitted Liens, result in or require the creation or imposition of any Lien upon any of its properties, revenues or assets; except, in the case of clauses (ii) and (iii) above, where such violations or conflicts would not, individually or in the aggregate, be reasonably likely to have a Material Adverse Effect.

5.4 Governmental and Third-Party Authorization; Permits.

(a) No consent, approval, authorization or other action by, notice to, or registration or filing with, any Governmental Authority or other Person is or will be required as a condition to or otherwise in connection with the due execution, delivery and performance by each of the Credit Parties of this Agreement or any of the other Credit Documents to which it is or will be a party or the legality, validity or enforceability hereof or thereof, other than (i) filings of Uniform Commercial Code financing statements and other instruments and actions necessary to perfect the Liens created by the Security Documents, (ii) consents, authorizations and filings that have been (or on or prior to the Closing Date will have been) made or obtained and that are (or on the Closing Date will be) in full force and effect, which consents, authorizations and filings are listed on Schedule 5.4, and (iii) consents and filings the failure to obtain or make which would not, individually or in the aggregate, be reasonably likely to have a Material Adverse Effect.

(b) Each of the Credit Parties has, and is in good standing with respect to, all governmental approvals, licenses, permits and authorizations necessary to conduct its business as presently conducted and to own or lease and operate its properties, except for those the failure to obtain which would not, individually or in the aggregate, be reasonably likely to have a Material Adverse Effect.

5.5 Litigation. There are no actions, investigations, suits or proceedings pending or, to the knowledge of the Borrower, threatened, at law, in equity or in arbitration, before any court, other Governmental Authority or other Person, (i) against or affecting any of the Credit Parties or any of their respective properties that would, if adversely determined, be reasonably likely to have a Material Adverse Effect, or (ii) with respect to this Agreement, any of the other Credit Documents or any of the transactions contemplated hereby or thereby.

5.6 Taxes. Each of the Credit Parties has timely filed all material federal, state, local and foreign tax returns and reports required to be filed by it and has paid, prior to the date on which penalties would attach thereto or a Lien would attach to any of the properties of a Credit Party if unpaid, all taxes, assessments, fees and other charges levied upon it or upon its properties that are shown thereon as due and payable, other than those (i) that are not yet delinquent, (ii) the failure to pay which would not, individually or in the aggregate, be reasonably likely to have a Material Adverse Effect, (iii) that are disclosed on Schedule 5.6, or (iv) that are being contested in good faith and by proper proceedings and for which adequate reserves have been established in accordance with GAAP. Such returns accurately reflect in all material respects all liability for taxes of the Credit Parties for the periods covered thereby. As of the Closing Date, there is no ongoing audit or examination or, to the knowledge of the Borrower, other investigation by any Governmental Authority of the tax liability of any of the Credit Parties, and there is no material unresolved claim by any Governmental Authority concerning the tax liability of any of the Credit Parties for any period for which tax returns have been or were required to have been filed, other than unsecured claims for which adequate

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reserves have been established in accordance with GAAP. As of the Closing Date, no Credit Party has waived or extended or has been requested to waive or extend the statute of limitations relating to the payment of any taxes.

5.7 Subsidiaries. Schedule 5.7 sets forth a list, as of the Closing Date and after giving effect to the Transactions, of all of the Subsidiaries of the Borrower and (i) as to each such Subsidiary, the percentage ownership (direct and indirect) of the Borrower in each class of its Capital Stock and each direct owner thereof, and (ii) as to each of the Borrower and its Subsidiaries, the jurisdiction of its organization, the number of shares of each class of Capital Stock outstanding, and the number and effect, if exercised, of all outstanding options, warrants, rights of conversion or purchase and similar rights. Except for the shares of Capital Stock and the other equity arrangements expressly indicated on Schedule 5.7, as of the Closing Date there are no shares of Capital Stock, warrants, rights, options or other equity securities, or other Capital Stock of any Credit Party outstanding or reserved for any purpose.

5.8 Full Disclosure. All material factual information heretofore, contemporaneously or hereafter furnished in writing to the Administrative Agent, the Arranger or any Lender by or on behalf of any of the Credit Parties (other than projections, budgets or other estimates) for purposes of or in connection with this Agreement, the other Credit Documents, and the Transactions is or will be, taken as a whole, true and accurate in all material respects on the date as of which such information is dated or certified (or, if such information has been updated, amended or supplemented, on the date as of which any such update, amendment or supplement is dated or certified) and not made incomplete by omitting to state a material fact necessary to make the statements contained herein and therein, in light of the circumstances under which such information was provided, not misleading in any material respect when taken as a whole. As of the Closing Date, there is no fact known to any Credit Party which has, or would reasonably be expected to have, a Material Adverse Effect, which fact has not been set forth herein, in the financial statements of the Borrower and its Subsidiaries furnished to the Administrative Agent and/or the Lenders, or in any certificate, opinion, or other written statement made or furnished by the Borrower to the Administrative Agent and/or the Lenders. With respect to projections, budgets and other estimates, except as specifically represented in Section 5.11(c), the Borrower represents only that such information was prepared in good faith based upon reasonable assumptions, it being understood that any projected financial information represents projections, based upon various assumptions, of future results of operations and that actual results during the period or periods covered by such projections may differ from the projected results.

5.9 Margin Regulations. None of the Credit Parties is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying Margin Stock. No proceeds of the Loans will be used, directly or indirectly, to purchase or carry any Margin Stock, to extend credit for such purpose or for any other purpose, in each case that would violate or be inconsistent with Regulations T, U or X or any provision of the Exchange Act.

5.10 No Material Adverse Effect. There has been no Material Adverse Effect since January 3, 2004, and there exists no event, condition or state of facts that would reasonably be expected to result in a Material Adverse Effect.

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5.11 Financial Matters.

(a) The Borrower has heretofore furnished to the Administrative Agent copies of (i) the audited consolidated balance sheets of the Borrower and its Subsidiaries as of January 3, 2004, December 28, 2002 and December 29, 2001, and the related statements of income, cash flows and stockholders’ equity for the fiscal years then ended, together with the opinion of Ernst & Young LLP or Arthur Andersen LLP (as the case may be) thereon and (ii) the unaudited consolidated balance sheet of the Borrower and its Subsidiaries as of the last day of the ninth fiscal month of fiscal year 2004, and the related statements of income, cash flows and stockholders’ equity for the nine-month period then ended. Such financial statements have been prepared in accordance with GAAP (subject, with respect to the unaudited financial statements, to the absence of notes required by GAAP and to normal year-end adjustments and present fairly in all material respects the consolidated financial condition of the Borrower and its Subsidiaries as of the respective dates thereof and the consolidated results of operations of the Borrower and its Subsidiaries for the respective periods then ended. Except as fully reflected in the most recent financial statements referred to above and the notes thereto, there are no material liabilities or obligations with respect to the Borrower and its Subsidiaries of any nature whatsoever (whether absolute, contingent or otherwise and whether or not due) that are required in accordance with GAAP to be reflected in such financial statements and that are not so reflected.

(b) The Pro Forma Balance Sheet gives pro forma effect to the consummation of the IPO, repayment of the Existing Senior Bank Facilities, the Subordinated Notes and the other Terminating Indebtedness, the Class A Preferred Stock Repurchase, the initial extensions of credit made under this Agreement, the payment of transaction fees and expenses related to the foregoing, and the consummation of the other Transactions, all as if such events had occurred on the date as of which the Pro Forma Balance Sheet is prepared. The Pro Forma Balance Sheet has been prepared in accordance with GAAP (subject to the absence of footnotes required by GAAP and subject to normal year-end adjustments) and, based on stated assumptions made in good faith and having a reasonable basis set forth therein, presents fairly in all material respects the consolidated financial condition of the Borrower and its Subsidiaries on an unaudited pro forma basis as of the date set forth therein after giving effect to the consummation of the transactions described above.

(c) The Borrower has prepared, and has heretofore furnished to the Administrative Agent a copy of, projected consolidated balance sheets and statements of income and cash flows of the Borrower and its Subsidiaries for the six fiscal-quarter period through the end of the fourth fiscal quarter of fiscal year 2005, giving effect to the consummation of the IPO, the repayment of the Existing Senior Bank Facilities, the Subordinated Notes and the other Terminating Indebtedness, the Class A Preferred Stock Repurchase, the initial extensions of credit made under this Agreement, the payment of transaction fees and expenses related to the foregoing, and the consummation of the other Transactions (the “Projections”). In the good faith opinion of management of the Borrower, the assumptions used in the preparation of the Projections were fair, complete and reasonable when made and continue to be fair, complete and reasonable as of the date hereof. The Projections have been prepared in good faith by the executive and financial personnel of the Borrower, are complete and represent a reasonable estimate of the future performance and financial condition of the Borrower and its Subsidiaries, subject to the uncertainties and approximations inherent in any projections.

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(d) After giving effect to the consummation of the Transactions, the Credit Parties taken as a whole on a consolidated basis (i) have capital sufficient to carry on their businesses as conducted and as proposed to be conducted, (ii) have assets with a fair saleable value, determined on a going concern basis, which are (y) not less than the amount required to pay the probable liability on their existing debts as they become absolute and matured and (z) greater than the total amount of their liabilities (including identified contingent liabilities, valued at the amount that can reasonably be expected to become absolute and matured in their ordinary course), and (iii) do not intend to, and do not believe that they will, incur debts or liabilities beyond their ability to pay such debts and liabilities as they mature in their ordinary course.

5.12 Ownership of Properties. Each of the Credit Parties (i) has good and marketable title to all real property owned by it, (ii) holds interests as lessee under leases in full force and effect with respect to all material leased real and personal property used in connection with its business, and (iii) has good title to all of its other material properties and assets reflected in the most recent financial statements referred to in Section 5.11(a) (except as sold or otherwise disposed of since the date thereof prior to the Closing Date or as permitted under Section 8.4), in each case free and clear of all Liens other than Permitted Liens. Schedule 5.12 lists, as of the Closing Date and after giving effect to the Transactions, all Realty of the Credit Parties, indicating in each case the identity of the owner, the address of the property, the nature of use of the premises, and whether such interest is a leasehold or fee ownership interest.

5.13 ERISA.

(a) Each of the Credit Parties and its ERISA Affiliates is in compliance with the applicable provisions of ERISA, and each Plan is and has been administered in compliance with all applicable Requirements of Law, including, without limitation, the applicable provisions of ERISA and the Internal Revenue Code, except where the failure so to comply would not, individually or in the aggregate, be reasonably likely to have a Material Adverse Effect. No ERISA Event (i) has occurred within the five (5) year period prior to the Closing Date, (ii) has occurred and is continuing, or (iii) to the knowledge of the Borrower, is reasonably expected to occur with respect to any Plan, in each case under clauses (i) through (iii) above except to the extent the same would not, individually or in the aggregate, be reasonably likely to have a Material Adverse Effect. No Plan has any Unfunded Pension Liability as of the most recent annual valuation date applicable thereto, and none of the Credit Parties nor any of their respective ERISA Affiliates has engaged in a transaction that could be subject to Section 4069 or 4212(c) of ERISA, other than any such liabilities or transactions that would not, individually or in the aggregate, be reasonably likely to have a Material Adverse Effect.

(b) None of the Credit Parties nor any of their respective ERISA Affiliates has had a complete or partial withdrawal from any Multiemployer Plan, and none of the Credit Parties nor any of their respective ERISA Affiliates would become subject to any liability under ERISA if any such Credit Party or ERISA Affiliate were to withdraw completely from all Multiemployer Plans as of the most recent valuation date except where such withdrawal or liability would not, individually or in the aggregate, be reasonably likely to have a Material Adverse Effect. No Multiemployer Plan is in “reorganization” or is “insolvent” within the meaning of such terms under ERISA except where such reorganization or insolvency would not, individually or in the aggregate, be reasonably likely to have a Material Adverse Effect.

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5.14 Environmental Matters. Except as set forth on Schedule 5.14 and except as would not, individually or in the aggregate, be reasonably likely to have a Material Adverse Effect:

(a) No Hazardous Substances are or have been generated, used, located, released, treated, transported, disposed of or stored, currently or in the past, (i) by any Credit Party, or (ii) in, on, under, about or to or from any real property leased, operated or owned by any Credit Party, except in each case in compliance with all applicable Environmental Laws; and no portion of any such real property currently or at any time in the past leased, owned or operated by any Credit Party is contaminated by or contains any Hazardous Substance in amounts requiring investigation, remediation or any other action under any Environmental Law.

(b) (i) No real property leased, operated or owned by any Credit Party has been used by any Credit Party or, to the knowledge of the Borrower, by any other Person, as or for a mine, landfill, dump or other disposal facility, gasoline service station or bulk petroleum products storage facility, (ii) no portion of such real property or any other real property currently or at any time in the past leased, owned or operated by any Credit Party is currently, or to the knowledge of the Borrower has, pursuant to any Environmental Law, been placed on the “National Priorities List” or “CERCLIS List” (or any similar federal, state or local list), and (iii) there are not and, to the knowledge of the Borrower, have never been any underground storage tanks situated on any real property leased, operated or owned by any Credit Party.

(c) All activities and operations of the Credit Parties are in compliance with the requirements of all applicable Environmental Laws; each Credit Party has obtained all licenses and permits under Environmental Laws necessary to its respective operations; all such licenses and permits are being maintained in good standing and each of the Credit Parties is in compliance with all terms and conditions of such licenses and permits; and none of the Credit Parties is involved in or subject to any actual or alleged Environmental Claims and, to the knowledge of the Borrower, there are no threatened Environmental Claims involving any Credit Party.

5.15 Compliance with Laws. Each Credit Party has timely filed all material reports, documents and other materials required to be filed by it under all applicable Requirements of Law with any Governmental Authority, has retained all material records and documents required to be retained by it under all applicable Requirements of Law, and is otherwise in compliance with all applicable Requirements of Law in respect of the conduct of its business and the ownership and operation of its properties (including, without limitation, the PATRIOT Act), except in each case to the extent that the failure to comply therewith, individually or in the aggregate, would not be reasonably likely to have a Material Adverse Effect.

5.16 Intellectual Property. Each of the Credit Parties owns, or has the legal right to use, all Intellectual Property necessary for it to conduct its business as currently conducted. Schedule 5.16 lists, as of the Closing Date and after giving effect to the Transactions, all registered Intellectual Property owned by any Credit Party. No claim has been asserted or is pending by any Person challenging or questioning the use of any such Intellectual Property or the validity or effectiveness of any such Intellectual Property, nor does the Borrower know of any such claim, and to the knowledge of the Borrower, the use of such Intellectual Property by any

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Credit Party does not infringe on the known rights of any Person, except for such claims and infringements that would not, individually or in the aggregate, be reasonably likely to have a Material Adverse Effect.

5.17 Regulated Industries. None of the Credit Parties is (i) an “investment company,” a company “controlled” by an “investment company,” or an “investment advisor,” within the meaning of the Investment Company Act of 1940, as amended, or (ii) a “holding company,” a “subsidiary company” of a “holding company,” or an “affiliate” of a “holding company” or of a “subsidiary company” of a “holding company,” within the meaning of the Public Utility Holding Company Act of 1935, as amended.

5.18 Insurance. Schedule 5.18 sets forth, as of the Closing Date and after giving effect to the Transactions, an accurate and complete list and a brief description (including the insurer, policy number, type of insurance, coverage limits, deductibles, current premium, expiration dates and any special cancellation conditions) of all material policies of fire, liability (including, but not limited to, product liability), business interruption, workers’ compensation, and other forms of insurance owned or held by the Borrower and its Subsidiaries or pursuant to which any of their respective assets are insured as of the Closing Date. The assets, properties and business of the Borrower and its Subsidiaries are insured against such hazards and liabilities, under such coverages and in such amounts, as are customarily maintained by prudent companies similarly situated and under policies issued by insurers of recognized responsibility.

5.19 Security Documents.

(a) The provisions of each of the Security Documents other than the Mortgages (whether executed and delivered prior to or on the Closing Date or thereafter) are and will be effective to create in favor of the Administrative Agent, for its benefit and the benefit of the Lenders, a valid and enforceable security interest in and Lien upon all right, title and interest of each of the Credit Parties that is a party thereto in and to the Collateral purported to be pledged by it thereunder and described therein, and upon (i) the initial extension of credit hereunder, (ii) the filing of appropriately completed Uniform Commercial Code financing statements and continuations thereof in the jurisdictions specified therein, (iii) the filing of appropriately completed short-form assignments in the U.S. Patent and Trademark Office and the U.S. Copyright Office, and (iv) the possession by the Administrative Agent of any certificates evidencing the securities pledged thereby, duly endorsed or accompanied by duly executed stock powers, such security interest and Lien shall constitute a fully perfected and first priority security interest in and Lien upon such right, title and interest of the applicable Credit Party in and to such Collateral, to the extent that such security interest and Lien can be perfected by such filings, actions and possession, subject only to Permitted Liens.

(b) The provisions of each Mortgage (whether executed and delivered prior to or on the Closing Date or thereafter) are and will be effective to create in favor of the Administrative Agent, for its benefit and the benefit of the Lenders, a valid and enforceable security interest in and Lien upon all right, title and interest of each Credit Party that is a party thereto in and to the mortgaged premises described therein, and upon (i) the initial extension of credit hereunder and (ii) the filing of such Mortgage in the applicable real property recording office, such security interest and Lien shall constitute a fully perfected and first priority security interest in and Lien

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upon such right, title and interest of such Credit Party in and to such mortgaged premises, in each case prior and superior to the rights of any other Person and subject only to Permitted Liens.

5.20 Labor Relations. None of the Credit Parties is engaged in any unfair labor practice within the meaning of the National Labor Relations Act of 1947, as amended. As of the Closing Date, there is (i) no unfair labor practice complaint before the National Labor Relations Board, or grievance or arbitration proceeding arising out of or under any collective bargaining agreement, pending or, to the knowledge of the Borrower, threatened, against any of the Credit Parties, (ii) no strike, lock-out, slowdown, stoppage, walkout or other labor dispute pending or, to the knowledge of the Borrower, threatened, against any of the Credit Parties, and (iii) to the knowledge of the Borrower, no petition for certification or union election or union organizing activities taking place with respect to any of the Credit Parties. As of the Closing Date, there are no collective bargaining agreements or Multiemployer Plans covering the employees of the Credit Parties.

5.21 No Burdensome Restrictions.

(a) No Subsidiary is a party to any agreement or instrument or otherwise subject to any restriction or encumbrance that restricts or limits its ability to make dividend payments or other distributions in respect of its Capital Stock, to repay Indebtedness owed to the Borrower or any other Subsidiary, to make loans or advances to the Borrower or any other Subsidiary, or to transfer any of its assets or properties to the Borrower or any other Subsidiary, in each case other than such restrictions or encumbrances existing under or by reason of (i) this Agreement and the other Credit Documents, (ii) applicable Requirements of Law, (iii) customary non-assignment provisions in operating leases and licenses of real or personal property entered into by the Borrower or any of its Subsidiaries as lessee or licensee in the ordinary course of business, and (iv) the Foreign Working Capital Facility (subject to the provisions of Section 8.11).

(b) No Credit Party is a party to any written agreement or instrument or subject to any other obligations or any charter or corporate restriction or any provision of any applicable Requirement of Law that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

5.22 OFAC. No Credit Party (i) is or will become a Person whose property or interests in property are blocked or subject to blocking pursuant to Section 1 of Executive Order 13224 of September 23, 2001 Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)), (ii) engages or will engage in any dealings or transactions prohibited by Section 2 of such Executive Order, or be otherwise associated with any such Person in any manner violative of Section 2, or (iii) will otherwise become a Person on the list of Specially Designated Nationals and Blocked Persons or subject to the limitations or prohibitions under any other OFAC regulation or executive order.

5.23 Deposit Accounts. Schedule 5.23 lists, as of the Closing Date and after giving effect to the Transactions, all deposit accounts maintained by any Credit Party at any bank or other financial institution located in the United States (other than deposit accounts maintained with the Administrative Agent), and lists in each case the name in which the account is held, the name of the depository institution, the type of account and the account number.

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ARTICLE VI

AFFIRMATIVE COVENANTS

The Borrower covenants and agrees that, until the termination of the Commitments, the termination or expiration of all Letters of Credit and the payment in full of all principal and interest with respect to the Loans and all Reimbursement Obligations together with all other amounts then due and owing hereunder (other than contingent and indemnification obligations not then due and payable):

6.1 Financial Statements. The Borrower will deliver to the Administrative Agent and to each Lender:

(a) Within forty-five (45) days (or, if earlier and if applicable to the Borrower, the quarterly report deadline under the Exchange Act rules and regulations) after the end of each of the first three fiscal quarters of each fiscal year (and within sixty (60) days after the end of the fourth fiscal quarter of each fiscal year), beginning with the fourth fiscal quarter of fiscal year 2004, unaudited consolidated and consolidating balance sheets of the Borrower and its Subsidiaries as of the end of such fiscal quarter and unaudited consolidated and consolidating statements of income and cash flows for the Borrower and its Subsidiaries for the fiscal quarter then ended and for that portion of the fiscal year then ended, in each case setting forth comparative consolidated (or consolidating) figures as of the end of and for the corresponding period in the preceding fiscal year together with comparative budgeted figures for the fiscal year then ended, all in reasonable detail and prepared in accordance with GAAP (subject to the absence of notes required by GAAP and subject to normal year-end adjustments) applied on a basis consistent with that of the preceding quarter or containing disclosure of the effect on the financial condition or results of operations of any change in the application of accounting principles and practices during such quarter; and

(b) Within ninety (90) days (or, if earlier and if applicable to the Borrower, the annual report deadline under the Exchange Act rules and regulations) after the end of each fiscal year, beginning with the 2004 fiscal year, an audited consolidated and unaudited consolidating balance sheet of the Borrower and its Subsidiaries as of the end of such fiscal year and the related audited consolidated and unaudited consolidating statements of income, cash flows and stockholders’ equity for the Borrower and its Subsidiaries for the fiscal year then ended, including the notes thereto, in each case setting forth comparative figures as of the end of and for the preceding fiscal year together with comparative budgeted figures for the fiscal year then ended, and, to the extent audited, certified by Ernst & Young LLP or another independent certified public accounting firm of recognized national standing reasonably acceptable to the Administrative Agent, together with (y) a report thereon by such accountants that is not qualified as to going concern or scope of audit and to the effect that such audited financial statements present fairly in all material respects the consolidated financial condition and results of operations of the Borrower and its Subsidiaries as of the dates and for the periods indicated in accordance with GAAP applied on a basis consistent with that of the preceding year or containing disclosure of the effect on the financial condition or results of operations of any change in the application of accounting principles and practices during such year, and (z) a report by such accountants to the effect that, based on and in connection with their examination of the financial statements of the

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Borrower and its Subsidiaries, they obtained no knowledge of the occurrence or existence of any Default or Event of Default relating to any of the covenants contained in Article VII of this Agreement, or a statement specifying the nature and period of existence of any such Default or Event of Default disclosed by their audit.

6.2 Other Business and Financial Information. The Borrower will deliver to the Administrative Agent and each Lender:

(a) Concurrently with each delivery of the financial statements described in Sections 6.1(a) (including with respect to financial statements as of the end of and for the fourth fiscal quarter of each fiscal year) and 6.1(b), a Compliance Certificate with respect to the period covered by the financial statements being delivered thereunder, executed on behalf of the Borrower by a Financial Officer of the Borrower, together with a Covenant Compliance Worksheet reflecting the computation of the financial covenants set forth in Article VII as of the last day of the period covered by such financial statements;

(b) Within thirty (30) days after the end of each fiscal year, beginning with the 2004 fiscal year, a consolidated operating budget for the Borrower and its Subsidiaries for the succeeding fiscal year (prepared on a quarterly basis), consisting of a consolidated balance sheet and consolidated statements of income and cash flows, together with a certificate on behalf of the Borrower of a Financial Officer of the Borrower to the effect that such budget has been prepared in good faith and is a reasonable estimate of the financial position and results of operations of the Borrower and its Subsidiaries for the period covered thereby; and as soon as available from time to time thereafter, any modifications or revisions to or restatements of such budget;

(c) Promptly upon receipt thereof, copies of any “management letter” submitted to the Borrower or any of its Subsidiaries by its certified public accountants in connection with each annual, interim or special audit, and promptly upon completion thereof, any response reports from the Borrower or any such Subsidiary in respect thereof;

(d) Promptly upon the sending, filing or receipt thereof, copies of (i) all financial statements, reports, notices and proxy statements that any Credit Party shall make available generally to its shareholders, (ii) all regular, periodic and special reports, registration statements and prospectuses (other than on Form S-8) that any Credit Party shall render to or file with the Securities and Exchange Commission, the National Association of Securities Dealers, Inc. or any national securities exchange, and (iii) all press releases and other statements made available generally by any Credit Party to the public concerning material developments in the business of the Credit Parties;

(e) Promptly upon (and in any event within five (5) Business Days after) any Responsible Officer of any Credit Party obtaining knowledge thereof, written notice of any of the following:

(i) the occurrence of any Default or Event of Default, together with a written statement on behalf of the Borrower of a Responsible Officer of the Borrower specifying the nature of such Default or Event of Default, the period of existence thereof and the action that the Borrower has taken and proposes to take with respect thereto;

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(ii) the institution or threatened institution of any action, suit, investigation or proceeding against or affecting the Borrower or any other Credit Party, including any such investigation or proceeding by any Governmental Authority (other than routine periodic inquiries, investigations or reviews), that would, if adversely determined, be reasonably likely, individually or in the aggregate, to have a Material Adverse Effect, and any material development in any litigation or other proceeding previously reported pursuant to Section 5.5 or this Section 6.2(e)(ii);

(iii) the receipt by the Borrower or any other Credit Party from any Governmental Authority of (A) any notice asserting any failure by any Credit Party to be in compliance with applicable Requirements of Law or that threatens the taking of any action against any Credit Party or sets forth circumstances that, if taken or adversely determined, would be reasonably likely to have a Material Adverse Effect, or (B) any notice of any actual or threatened suspension, limitation or revocation of, failure to renew, or imposition of any restraining order, escrow or impoundment of funds in connection with, any license, permit, accreditation or authorization of any Credit Party, where such action would be reasonably likely to have a Material Adverse Effect;

(iv) the occurrence of any ERISA Event, together with (x) a written statement of a Responsible Officer of the Borrower specifying the details of such ERISA Event and the action that the applicable Credit Party has taken and proposes to take with respect thereto, (y) a copy of any notice with respect to such ERISA Event that may be required to be filed with the PBGC and (z) a copy of any notice delivered by the PBGC to any Credit Party or an ERISA Affiliate with respect to such ERISA Event;

(v) the occurrence of any of the following: (x) the assertion of any Environmental Claim against or affecting any Credit Party or any real property leased, operated or owned by any Credit Party, or any Credit Party’s discovery of a basis for any such Environmental Claim; (y) the receipt by any Credit Party of notice of any alleged violation of or noncompliance with any Environmental Laws or release of any Hazardous Substance; or (z) the taking of any investigation, remediation or other responsive action by any Credit Party or any other Person in response to the actual or alleged violation of any Environmental Law by any Credit Party or generation, storage, transport, release, disposal or discharge of any Hazardous Substances on, to, upon or from any real property leased, operated or owned by any Credit Party; but in each case under clauses (x), (y) and (z) above, only to the extent the same would be reasonably likely to have a Material Adverse Effect; and

(vi) any other matter or event that has, or would be reasonably likely to have, a Material Adverse Effect, together with a written statement on behalf of the Borrower of a Responsible Officer of the Borrower setting forth the nature and period of existence thereof and the action that the affected Credit Parties have taken and propose to take with respect thereto; and

(f) As promptly as reasonably possible, such other information about the business, financial condition, operations or properties of the Borrower or any other Credit Party (including

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any Plan and any information required to be filed under ERISA) as the Administrative Agent or any Lender may from time to time reasonably request.

Documents required to be delivered pursuant to Section 6.2(d) (to the extent any such documents are included in materials otherwise filed with the Securities and Exchange Commission) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which the Borrower posts such documents, or provides a link thereto on its website on the Internet at the website address listed in Section 11.5(a)(i), or (ii) on which such documents are posted on the Borrower’s behalf on an Internet or intranet website, if any, to which each Lender and the Administrative Agent have access (whether a commercial, third-party website or whether sponsored by the Administrative Agent); provided that the Borrower shall notify the Administrative Agent and each Lender (by telecopier or electronic mail) of the posting of any such documents and provide to the Administrative Agent by electronic mail electronic versions (i.e., soft copies) of such documents.

6.3 Existence; Franchises; Maintenance of Properties. The Borrower will, and will cause each of its Subsidiaries to, (i) maintain and preserve in full force and effect its legal existence, except as expressly permitted otherwise by Section 8.1, (ii) obtain, maintain and preserve in full force and effect all other rights, franchises, licenses, permits, certifications, approvals and authorizations required by Governmental Authorities and necessary to the ownership, occupation or use of its properties or the conduct of its business, except to the extent the failure to do so would not be reasonably likely to have a Material Adverse Effect, and (iii) keep all material properties in good working order and condition (normal wear and tear and damage by casualty excepted) and from time to time make all necessary repairs to and renewals and replacements of such properties, except to the extent that any of such properties are obsolete or are being replaced or, in the good faith judgment of the Borrower, are no longer useful or desirable in the conduct of the business of the Borrower or its Subsidiaries.

6.4 Compliance with Laws. The Borrower will, and will cause each of its Subsidiaries to, comply in all respects with all Requirements of Law applicable in respect of the conduct of its business and the ownership and operation of its properties, except to the extent the failure so to comply would not be reasonably likely to have a Material Adverse Effect.

6.5 Payment of Obligations. The Borrower will, and will cause each of its Subsidiaries to, (i) pay, discharge or otherwise satisfy at or before maturity all liabilities and obligations as and when due (subject to any applicable subordination, grace and notice provisions), except to the extent failure to do so would not be reasonably likely to have a Material Adverse Effect, and (ii) pay and discharge all taxes, assessments and governmental charges or levies imposed upon it, upon its income or profits or upon any of its properties, prior to the date on which penalties would attach thereto, and all lawful claims that, if unpaid, would become a Lien upon any of the properties of any Credit Party; provided, however, that no Credit Party shall be required to pay any such unsecured tax, assessment, charge, levy or claim (x) that is being contested in good faith and by proper proceedings and as to which such Credit Party is maintaining adequate reserves with respect thereto in accordance with GAAP, or (y) except where the failure so to pay would be reasonably likely to have a Material Adverse Effect.

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6.6 Insurance. The Borrower will, and will cause each of its Subsidiaries to, maintain with financially sound and reputable insurance companies insurance with respect to its assets, properties and business, against such hazards and liabilities, of such types and in such amounts, as is customarily maintained by companies in the same or similar businesses similarly situated (including at least $10,000,000 in business interruption insurance), and maintain such other or additional insurance on such terms and subject to such conditions as may be required under any Security Document.

6.7 Maintenance of Books and Records; Inspection. The Borrower will, and will cause each of its Subsidiaries to, (i) maintain books, accounts and records in which entries (which shall be true and correct in all material respects) shall be made of all financial transactions in relation to its business and properties sufficient to permit the preparation of all financial statements required under this Agreement in accordance with GAAP and in compliance with the requirements of any Governmental Authority having jurisdiction over it, and (ii) permit employees or agents of the Administrative Agent or any Lender to visit and inspect its properties and examine or audit its books, records, working papers and accounts and make copies and memoranda of them, and to discuss its affairs, finances and accounts with its officers and employees and, upon notice to the Borrower, the independent public accountants of the Borrower and its Subsidiaries (and by this provision the Borrower authorizes such accountants to discuss the finances and affairs of the Borrower and its Subsidiaries, provided that the Borrower shall be entitled to be present at any such discussions), all at such times and from time to time, upon reasonable notice and during business hours, as may be reasonably requested; provided that no Credit Party shall be required to disclose (a) any materials subject to a confidentiality obligation binding upon it (but provided further that such Credit Party shall, at the request of the Administrative Agent or any Lender, use commercially reasonable efforts to obtain permission for such disclosure and, in the event permission cannot be obtained, furnish such information regarding the matters to which such materials relate as can reasonably be furnished without violation of such confidentiality obligation) or (b) any communications protected by attorney-client privilege the disclosure or inspection of which, based on a written opinion of counsel to the Borrower reasonably acceptable to the Administrative Agent, would waive such privilege.

6.8 Permitted Acquisitions. In addition to the requirements contained in the definition of Permitted Acquisition and in the other applicable terms and conditions of this Agreement, the Borrower shall, with respect to any Permitted Acquisition, comply with, and cause each other applicable Credit Party to comply with, the following covenants:

(a) Not less than ten (10) Business Days prior to the consummation of any Permitted Acquisition, the Borrower shall have delivered to the Administrative Agent and each Lender the following (but with respect to any Permitted Acquisition having a Total Acquisition Amount less than $10,000,000, only the certificate and supporting calculations described in clause (v) below):

(i) a reasonably detailed description of the material terms of such Permitted Acquisition (including, without limitation, the purchase price and method and structure of payment) and of each Person or business that is the subject of such Permitted Acquisition (each, a “Target”);

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(ii) historical financial statements of the Target (or, if there are two or more Targets that are the subject of such Permitted Acquisition and that are part of the same consolidated group, consolidated historical financial statements for all such Targets) for the two (2) most recent fiscal years available and, if available, for any interim periods since the most recent fiscal year-end prepared by a firm of independent certified public accountants reasonably acceptable to the Administrative Agent;

(iii) consolidated projected income statements of the Borrower and its Subsidiaries (giving effect to such Permitted Acquisition and the consolidation with the Borrower of each relevant Target) for the twelve-month period following the consummation of such Permitted Acquisition, in reasonable detail, together with any appropriate statement of assumptions and pro forma adjustments;

(iv) with respect to any such Permitted Acquisition in which any Contingent Purchase Price Obligations or Seller Subordinated Indebtedness shall be incurred by the Borrower or any of its Subsidiaries, a copy of the most recent draft of the acquisition agreement (including schedules and exhibits thereto, to the extent available) and other material documents (including the documentation evidencing such Contingent Purchase Price Obligations or Seller Subordinated Indebtedness); and

(v) a certificate, in form reasonably satisfactory to the Administrative Agent, executed by a Financial Officer of the Borrower on behalf of the Borrower setting forth the Total Acquisition Amount (including the calculation of any Contingent Purchase Price GAAP Amount constituting part of such Total Acquisition Amount and any Contingent Purchase Price Reserve Amount associated with such Permitted Acquisition) and further to the effect that, to the best of such Financial Officer’s knowledge, (x) the consummation of such Permitted Acquisition will not result in a violation of any provision of this Section 6.8 or any other provision of this Agreement, and after giving effect to such Permitted Acquisition and any Borrowings made in connection therewith, the Borrower will be in compliance with the financial covenants contained in Article VII, such compliance determined with regard to calculations made on a pro forma basis for the Reference Period most recently ended, calculated in accordance with GAAP as if each such Target had been consolidated with the Borrower for those periods applicable to such covenants (such calculations to be attached to the certificate using the Covenant Compliance Worksheet), (y) the Borrower believes in good faith that it will continue to comply with such financial covenants for a period of one year following the date of the consummation of such Permitted Acquisition, and (z) after giving effect to such Permitted Acquisition and any Borrowings in connection therewith, the Borrower believes in good faith that the Borrower will have sufficient availability under the Revolving Credit Commitments to meet its ongoing working capital requirements.

(b) As soon as reasonably practicable after the consummation of any Permitted Acquisition, the Borrower will deliver to the Administrative Agent and each Lender true and correct copies of the fully executed acquisition agreement (including schedules and exhibits thereto) and other material documents and closing papers delivered in connection therewith, together with (in the case of any Permitted Acquisition having a Total Acquisition Amount less than $10,000,000, the items described in clauses (i) and (ii) of Section 6.8(a).

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(c) The consummation of each Permitted Acquisition shall be deemed to be a representation and warranty by the Borrower that (except as shall have been approved in writing by the Required Lenders) all conditions thereto set forth in this Section 6.8 and in the description furnished under Section 6.8(a)(i) have been satisfied, that the same is permitted in accordance with the terms of this Agreement, and that the matters certified to by the Financial Officer of the Borrower on behalf of the Borrower in the certificate referred to in Section 6.8(a)(v) are, to the best of such Financial Officer’s knowledge, true and correct in all material respects as of the date such certificate is given, which representation and warranty shall be deemed to be a representation and warranty as of the date thereof for all purposes hereunder, including, without limitation, for purposes of Sections 4.2 and 9.1.

6.9 Creation or Acquisition of Subsidiaries. Subject to the provisions of Section 8.5, the Borrower may from time to time create or acquire new Wholly Owned Subsidiaries in connection with Permitted Acquisitions or otherwise, and the Wholly Owned Subsidiaries of the Borrower may create or acquire new Wholly Owned Subsidiaries, provided that:

(a) Concurrently with (and in any event within fifteen (15) calendar days after) the creation or direct or indirect acquisition by the Borrower thereof, each such new Subsidiary will execute and deliver to the Administrative Agent (i) a joinder to the Subsidiary Guaranty, pursuant to which such new Subsidiary shall become a guarantor thereunder and shall guarantee the payment in full of the Obligations of the Borrower under this Agreement and the other Credit Documents, and (ii) a joinder to the Security Agreement, pursuant to which such new Subsidiary shall become a party thereto and shall grant to the Administrative Agent, for the benefit of the Lenders, a first priority Lien upon and security interest in its accounts receivable, inventory, equipment, general intangibles and other personal property as Collateral for its obligations under the Subsidiary Guaranty, subject only to Permitted Liens;

(b) Concurrently with (and in any event within fifteen (15) calendar days after) the creation or acquisition of any new Subsidiary all or a portion of the Capital Stock of which is directly owned by the Borrower, the Borrower will execute and deliver to the Administrative Agent an amendment or supplement to the Pledge Agreement pursuant to which all of the Capital Stock of such new Subsidiary owned by the Borrower shall be pledged to the Administrative Agent, for the benefit of the Lenders, together with the certificates evidencing such Capital Stock and undated stock powers duly executed in blank; and concurrently with (and in any event within fifteen (15) calendar days after) the creation or acquisition of any new Subsidiary all or a portion of the Capital Stock of which is directly owned by another Subsidiary, the parent Subsidiary will execute and deliver to the Administrative Agent an appropriate joinder, amendment or supplement to the Pledge Agreement, pursuant to which all of the Capital Stock of such new Subsidiary owned by such parent Subsidiary shall be pledged to the Administrative Agent, for the benefit of the Lenders, together with the certificates evidencing such Capital Stock and undated stock powers duly executed in blank;

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(c) Concurrently with (and in any event within fifteen (15) calendar days thereafter) the creation or acquisition of any new Subsidiary, the Borrower will deliver to the Administrative Agent:

(i) a written legal opinion of counsel to such new Subsidiary (the “New Guarantor”) addressed to the Administrative Agent and the Lenders in form and substance satisfactory to the Administrative Agent and its counsel, which shall cover such matters relating to such New Guarantor and the creation or acquisition thereof incident to the transactions contemplated by this Agreement and this Section 6.9 and the other Credit Documents as set forth in the legal opinion of counsel delivered to the Administrative Agent and the Lenders on the Closing Date;

(ii) (A) a copy of the certificate of incorporation (or other charter documents) of such New Guarantor certified as of a date that is acceptable to the Administrative Agent by the applicable Governmental Authority of the jurisdiction of incorporation or organization of such New Guarantor, (B) a copy of the bylaws or similar organizational document of such New Guarantor certified on behalf of such New Guarantor as of a date that is acceptable to the Administrative Agent by the corporate secretary or assistant secretary of such New Guarantor, (C) an original certificate of good standing for such New Guarantor issued by the applicable Governmental Authority of the jurisdiction of incorporation or organization of such New Guarantor and (D) copies of the resolutions of the Board of Directors and, if required, stockholders or other equity owners of such New Guarantor authorizing the execution, delivery and performance of the agreements, documents and instruments executed pursuant to Sections 6.9(a) and 6.9(b), certified on behalf of such New Guarantor by an Authorized Officer of such New Guarantor, all in form and substance reasonably acceptable to the Administrative Agent;

(iii) a report of Uniform Commercial Code financing statement, tax and judgment lien searches performed against such New Guarantor in each jurisdiction in which such New Guarantor is incorporated or organized, has a place of business or keeps any material property, which report shall show no Liens on such property (other than Permitted Liens);

(iv) a certificate on behalf of such New Guarantor of the corporate secretary or assistant secretary of such New Guarantor as to the incumbency and signature of the officers executing agreements, documents and instruments executed pursuant to Sections 6.9(a) and 6.9(b);

(v) a Solvency Certificate for such New Guarantor, addressed to the Administrative Agent and the Lenders dated as of the date of creation or acquisition of such New Guarantor;

(vi) evidence reasonably satisfactory to the Administrative Agent that no Default or Event of Default shall exist immediately before or after the creation or acquisition of such New Guarantor or be caused thereby; and

(vii) a certificate executed on behalf of the Company and such New Guarantor by an Authorized Officer of each of the Company and such New Guarantor, which shall constitute a representation and warranty by the Company and such New Guarantor as of the date of the creation or acquisition of such New Guarantor that all conditions

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contained in this Agreement to such creation or acquisition have been satisfied, in form and substance reasonably acceptable to the Administrative Agent.

(d) As promptly as reasonably possible, the Borrower and its Subsidiaries will deliver any such other documents, certificates and opinions, in form and substance reasonably satisfactory to the Administrative Agent, as the Administrative Agent or the Required Lenders may reasonably request in connection therewith and will take such other action as the Administrative Agent may reasonably request to create in favor of the Administrative Agent, for the benefit of the Lenders, a perfected security interest in the Collateral being pledged pursuant to the documents described above;

provided that, with respect to any Foreign Subsidiary, (i) the Capital Stock of such Foreign Subsidiary will not be required to be pledged to the extent (but only to the extent) that (y) such Foreign Subsidiary is a Subsidiary of a Foreign Subsidiary or (z) such pledge exceeds sixty-five percent (65%) of the voting Capital Stock of such Foreign Subsidiary, unless and to the extent that the pledge of greater than sixty-five percent (65%) of the voting Capital Stock of such Foreign Subsidiary would not cause any adverse tax consequences to the Borrower, and (ii) such Foreign Subsidiary will not be required to become a Subsidiary Guarantor if doing so would cause adverse tax consequences to the Borrower.

6.10 Additional Security. The Borrower will, and will cause each of its Subsidiaries to, grant to the Administrative Agent, for the benefit of the Lenders, from time to time security interests, Mortgages and other Liens in and upon such assets and properties of the Borrower or such Subsidiary as are not covered by the Security Documents executed and delivered on the Closing Date or pursuant to Section 6.9 and as may be reasonably requested from time to time by the Required Lenders (including, without limitation, Liens on real property owned or leased by the Borrower or any of its Subsidiaries, and Liens on assets acquired by the Borrower or a Subsidiary in connection with any Permitted Acquisition), but subject to the proviso at the end of Section 6.9. Such security interests, Mortgages and Liens shall be granted pursuant to documentation in form and substance reasonably satisfactory to the Administrative Agent and shall constitute valid and perfected security interests and Liens, subject to no Liens other than Permitted Liens. Without limitation of the foregoing, in connection with the grant of any Mortgage with respect to any interest in real property, the Borrower will, and will cause each applicable Subsidiary to, at the Borrower’s expense, prepare, obtain and deliver to the Administrative Agent any environmental assessments, appraisals, surveys, title insurance and other matters or documents as the Administrative Agent may reasonably request or as may be required under applicable banking laws and regulations.

6.11 Environmental Laws.

(a) The Borrower will, and will cause each of its Subsidiaries to, comply in all material respects with, and use commercially reasonable efforts to ensure compliance in all material respects by all tenants and subtenants, if any, with, all applicable Environmental Laws and obtain and comply in all material respects with and maintain, and use commercially reasonable efforts to ensure that all tenants and subtenants obtain and comply in all material respects with and maintain, any and all licenses, approvals, notifications, registrations or permits

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required by applicable Environmental Laws, except to the extent that the failure to do so would not be reasonably likely to have a Material Adverse Effect.

(b) The Borrower will, and will cause each of its Subsidiaries to, conduct and complete all investigations, studies, sampling and testing, and all remedial, removal and other actions, required under Environmental Laws and promptly comply in all material respects with all lawful orders and directives of all Governmental Authorities regarding Environmental Laws, except to the extent that the same are being contested in good faith by appropriate proceedings or to the extent the failure to conduct or complete any of the foregoing would not be reasonably likely to have a Material Adverse Effect.

(c) Without limitation of the provisions of Section 6.7, if the Administrative Agent or any Lender, in accordance with prudent banking practices, has any reason to suspect a material failure by any Credit Party to comply with the representations, warranties and covenants set forth herein concerning Hazardous Substances and Environmental Laws, employees and/or agents of the Administrative Agent may (but shall not be obligated to) enter upon any Realty of such Credit Party (subject to the provisions of Section 6.7 with respect to notice and time of visit) to conduct such inspections and tests, at the Borrower’s sole cost and expense, as may be reasonably desired by the Administrative Agent or the Required Lenders to evaluate compliance with Environmental Laws and presence of Hazardous Substances. If any such inspections or tests reveal facts, conditions or circumstances that, in the judgment of the Administrative Agent, need to be investigated, remediated or otherwise addressed under applicable Environmental Laws, or if the Administrative Agent or the Lenders otherwise learn of such facts, conditions or circumstances, the Borrower agrees to undertake all responsive actions required under applicable Environmental Laws. All costs of such actions shall be paid by the Borrower. In the event that the Borrower shall fail to timely prosecute to completion such work, the Administrative Agent may, but shall not be required to, cause such work to be performed, and all reasonable costs and expenses thereof shall become part of the Obligations. The Borrower hereby acknowledges that all hazardous waste handling practices and environmental practices and procedures are the sole responsibility of the Borrower and its Subsidiaries. The Borrower further acknowledges that neither the Administrative Agent nor any Lender is an environmental consultant, engineer, investigator or inspector of any type whatsoever. No act (or decision not to act) of the Administrative Agent or any Lender related to this Agreement or any other Credit Document shall give rise to any obligation or liability on the part of the Administrative Agent or any Lender with respect to environmental matters. In no event shall any information obtained from the Administrative Agent or any Lender or their respective employees, representatives or agents pursuant to this Agreement or any other Credit Document concerning the environmental condition of any Realty be considered by the Borrower or any of its Subsidiaries (or any other recipient of such information) as constituting legal or environmental consulting, engineering, investigating or inspecting advice, and neither the Borrower nor any of its Subsidiaries (nor any other recipient of such information) shall rely on such information. The responsibility for compliance with environmental laws rests solely with the Borrower and its Subsidiaries.

6.12 Further Assurances. The Borrower will, and will cause each of its Subsidiaries to, make, execute, endorse, acknowledge and deliver any amendments, modifications or supplements hereto and restatements hereof and any other agreements, instruments or documents, and take any and all such other actions, as may from time to time be reasonably

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requested by the Administrative Agent or the Required Lenders to perfect and maintain the validity and priority of the Liens granted pursuant to the Security Documents and to effect, confirm or further assure or protect and preserve the interests, rights and remedies of the Administrative Agent and the Lenders under this Agreement and the other Credit Documents.

6.13 Deposit Accounts. The Borrower will, and will cause each of its applicable Subsidiaries to, maintain all of its United States deposit accounts (other than accounts used exclusively for payroll purposes) either with the Administrative Agent or with a financial institution that, with respect to such account, has entered into a tri-party blocked account agreement in form and substance reasonably satisfactory to the Administrative Agent.

6.14 Revisions or Updates to Schedules. If any of the information or disclosures provided on any of the schedules to this Agreement originally attached hereto become outdated or incorrect in any material respect, the Borrower shall deliver to the Administrative Agent and the Lenders as part of the Compliance Certificate (or earlier if the Borrower so elects) such revisions or updates to such schedules as may be necessary or appropriate to update or correct such schedules, which revisions shall be effective from the date accepted in writing by the Required Lenders (or the Administrative Agent on behalf of and with the written consent of the Required Lenders) (other than with respect to updates of Schedule 5.7), such acceptance not to be unreasonably withheld or delayed; provided that no such revisions or updates to any such schedules shall be deemed to have cured any breach of warranty or misrepresentation occurring prior to the delivery of such revision or update by reason of the inaccuracy or incompleteness of any such schedules at the time such warranty or representation previously was made or deemed to be made.

ARTICLE VII

FINANCIAL COVENANTS

The Borrower covenants and agrees that, until the termination of the Commitments, the termination or expiration of all Letters of Credit and the payment in full of all principal and interest with respect to the Loans and all Reimbursement Obligations together with all other amounts then due and owing hereunder (other than contingent and indemnification obligations not then due and payable):

7.1 Total Leverage Ratio. The Borrower will not permit the Total Leverage Ratio as of the last day of any fiscal quarter, beginning with the fourth fiscal quarter of fiscal year 2004, to be greater than 2.5:1.0.

7.2 Interest Coverage Ratio. The Borrower will not permit the Interest Coverage Ratio as of the last day of any fiscal quarter, beginning with the first fiscal quarter of fiscal year 2005, to be less than 5.0:1.0.

7.3 Fixed Charge Ratio. The Borrower will not permit the Fixed Charge Coverage Ratio as of the last day of any fiscal quarter, beginning with the first fiscal quarter of fiscal year 2005, to be less than 1.1:1.0.

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ARTICLE VIII

NEGATIVE COVENANTS

The Borrower covenants and agrees that, until the termination of the Commitments, the termination or expiration of all Letters of Credit and the payment in full of all principal and interest with respect to the Loans and all Reimbursement Obligations together with all other amounts then due and owing hereunder (other than contingent and indemnification obligations not then due and payable):

8.1 Merger; Consolidation. The Borrower will not, and will not permit or cause any of its Subsidiaries to, liquidate, wind up or dissolve, or enter into any consolidation, merger or other combination, or agree to do any of the foregoing; provided, however, that:

(i) any Wholly Owned Subsidiary of the Borrower may merge or consolidate with any Subsidiary Guarantor (provided that a Subsidiary Guarantor is the surviving entity), or may be liquidated into a Subsidiary Guarantor, in each case provided further that no Default or Event of Default shall have occurred and be continuing or would result therefrom;

(ii) any Wholly Owned Subsidiary of the Borrower that is a Domestic Subsidiary may merge or consolidate with another Person other than the Borrower, provided that (x) the surviving entity is a Domestic Subsidiary and a Subsidiary Guarantor, (y) unless such other Person is a Wholly Owned Subsidiary immediately prior to giving effect thereto, such merger or consolidation shall constitute a Permitted Acquisition and the applicable conditions and requirements of Sections 6.8 and 6.9 shall be satisfied, and (z) no Default or Event of Default shall have occurred and be continuing or would result therefrom;

(iii) any Wholly Owned Subsidiary of the Borrower that is a Foreign Subsidiary may merge or consolidate with any other Wholly Owned Subsidiary of the Borrower that is a Foreign Subsidiary, provided that if either constituent corporation is a Subsidiary Guarantor, the surviving entity shall be a Subsidiary Guarantor, and provided further that no Default or Event of Default shall have occurred and be continuing or would result therefrom; and

(iv) to the extent not otherwise expressly permitted under the foregoing clauses, any Wholly Owned Subsidiary that has sold, transferred or otherwise disposed of all or substantially all of its assets in connection with an Asset Disposition permitted under this Agreement and no longer conducts any active trade or business may be liquidated, wound up and dissolved.

8.2 Indebtedness. The Borrower will not, and will not permit or cause any of its Subsidiaries to, create, incur, assume or suffer to exist any Indebtedness other than (without duplication):

(i) Indebtedness of the Credit Parties in favor of the Administrative Agent and the Lenders incurred under this Agreement and the other Credit Documents;

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(ii) accrued expenses (including salaries, accrued vacation and other compensation), current trade or other accounts payable and other current liabilities arising in the ordinary course of business and not incurred through the borrowing of money, in each case above to the extent constituting Indebtedness;

(iii) purchase money Indebtedness of the Borrower and its Subsidiaries incurred solely to finance the payment of all or part of the purchase price of any equipment, real property or other fixed assets acquired in the ordinary course of business, including Indebtedness in respect of Capital Lease obligations, and any renewals, refinancings or replacements thereof, provided that all such purchase money Indebtedness shall not exceed (A) at any time on or before the last day of fiscal year 2004, $15,000,000 in aggregate principal amount outstanding, and (B) at any time thereafter, $20,000,000 in aggregate principal amount outstanding;

(iv) unsecured loans and advances (A) by the Borrower or any Subsidiary to any Domestic Subsidiary Guarantor, (B) by any Subsidiary to the Borrower, or (C) by the Borrower or any Subsidiary to any Subsidiary that is not a Domestic Subsidiary Guarantor, provided that any such loan or advance is subordinated in right and time of payment to the Obligations and is evidenced by a promissory note, in form and substance reasonably satisfactory to the Administrative Agent, pledged to the Administrative Agent pursuant to the Security Documents, and provided further that all such loans and advances made pursuant to clause (C) above to Subsidiaries (including Foreign Subsidiaries) that are not Domestic Subsidiary Guarantors shall be subject to the limitations on Investments set forth in Section 8.5 (including, without limitation, the limitations on Investments in Foreign Subsidiaries set forth in Section 8.5(xi));

(v) Indebtedness of the Borrower under Hedge Agreements entered into in the ordinary course of business and not for speculative purposes;

(vi) Indebtedness existing on the Closing Date and described in Schedule 8.2 and any renewals, refinancings or extensions of any such Indebtedness, so long as the principal amount thereof is not increased to an amount exceeding the principal amount thereof outstanding as of the date of such renewal, refinancing or extension and the terms thereof, taken as a whole, are not made materially less favorable to the respective obligors;

(vii) Indebtedness consisting of Guaranty Obligations of the Borrower or any of its Subsidiaries incurred in the ordinary course of business for the benefit of another Credit Party, provided that the primary obligation being guaranteed is expressly permitted by this Agreement, and provided that this clause (vii) shall not permit any guarantee by the Borrower or any Domestic Subsidiary of the Foreign Working Capital Facility or any other Indebtedness of any Foreign Subsidiary;

(viii) unsecured Indebtedness issued after the Closing Date by the Borrower or any of its Subsidiaries to sellers in connection with Permitted Acquisitions (excluding Indebtedness consisting of Contingent Purchase Price Obligations), in an aggregate principal amount not exceeding $15,000,000 outstanding at any time, provided that such

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Indebtedness (A) shall not mature or require any scheduled payment of principal at any time prior to the first anniversary of the later of the Term Loan Maturity Date or Revolving Credit Maturity Date, (B) is fully subordinated in right and time of payment to the Obligations on terms and conditions acceptable to the Administrative Agent, (C) shall have covenants and undertakings that, taken as a whole, are materially less restrictive than those contained herein and shall not be cross-defaulted to this Agreement (but may be cross-accelerated) and (D) is otherwise on terms and conditions acceptable to, and in a form approved in writing by, the Administrative Agent, and provided further that no Indebtedness (excluding Indebtedness consisting of Contingent Purchase Price Obligations) to sellers in connection with Permitted Acquisitions shall be incurred except on the terms described in this paragraph (the Indebtedness described in this paragraph, “Seller Subordinated Indebtedness”);

(ix) Indebtedness that may be deemed to exist pursuant to any performance bond, surety, statutory appeal or similar obligation entered into or incurred by the Borrower or any of its Subsidiaries in the ordinary course of business;

(x) Indebtedness of the Borrower and its Subsidiaries consisting of deposit overdraft lines of credit, not exceeding $500,000 in aggregate principal amount outstanding at any time;

(xi) Indebtedness of the Borrower and its Subsidiaries arising under agreements providing for indemnification, adjustment of purchase price or similar obligations in connection with Permitted Acquisitions or Asset Dispositions permitted hereunder;

(xii) unsecured Indebtedness consisting of Contingent Purchase Price Obligations of the Borrower and its Subsidiaries (including Contingent Purchase Price Obligations set forth on Schedule 8.2) to the extent that the aggregate Contingent Purchase Price Reserve Amounts do not exceed $10,000,000 at any one time;

(xiii) Indebtedness incurred or assumed after the Closing Date by the Borrower or any of its Subsidiaries pursuant to a Permitted Acquisition, which Indebtedness (a) is unsecured or, if secured, is secured only by property, plant and equipment of the acquired business or Person in existence at the time of such Permitted Acquisition (and in any event, shall not be owing to or secured in favor of any seller in such Permitted Acquisition), (b) was in existence at the time of such Permitted Acquisition and was not incurred in contemplation or anticipation of such Permitted Acquisition, and (c) does not exceed $5,000,000 in aggregate principal amount outstanding at any time;

(xiv) Guaranty Obligations in the form of Investments permitted under Section 8.5;

(xv) a Foreign Working Capital Facility not exceeding £8,000,000 (or, in the event of a conversion of Pounds Sterling to Euro, an equivalent amount in Euro determined as of the date of conversion) in aggregate principal amount outstanding at any time (and in no event to exceed the equivalent of US $24,000,000 in aggregate principal

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amount outstanding at any time, based on the spot rate of exchange as determined by the Administrative Agent in accordance with customary market practice), and any Guaranty Obligations of Foreign Subsidiaries of Mettis in respect thereof; and

(xvi) other unsecured Indebtedness of the Borrower and its Subsidiaries not exceeding $10,000,000 in aggregate principal amount outstanding at any time; provided that the aggregate principal amount of Indebtedness of Foreign Subsidiaries incurred pursuant to this Section 8.2(xvi) outstanding at any time shall not exceed $5,000,000.

8.3 Liens. The Borrower will not, and will not permit or cause any of its Subsidiaries to, directly or indirectly, make, create, incur, assume or suffer to exist, any Lien upon or with respect to any part of its property or assets, whether now owned or hereafter acquired, or file or permit the filing of, or permit to remain in effect, any financing statement or other similar notice of any Lien with respect to any such property, asset, income or profits under the Uniform Commercial Code of any state or under any similar recording or notice statute, or agree to do any of the foregoing, other than the following (collectively, “Permitted Liens”):

(i) Liens in favor of the Administrative Agent and the Lenders created by or otherwise existing under or in connection with this Agreement and the other Credit Documents;

(ii) Liens in existence on the Closing Date and set forth on Schedule 8.3;

(iii) Liens imposed by law, such as Liens of carriers, warehousemen, mechanics, materialmen and landlords, and other similar Liens imposed by law or incurred pursuant to customary reservations or retentions of title (including contractual Liens in favor of sellers and suppliers of goods) incurred in the ordinary course of business for sums not constituting borrowed money that are not overdue for a period of more than sixty (60) days or that are being contested in good faith by appropriate proceedings and for which adequate reserves have been established in accordance with GAAP (if so required);

(iv) Liens (other than any Lien imposed by ERISA, the creation or incurrence of which would result in an Event of Default under Section 9.1(j)) incurred in the ordinary course of business in connection with worker’s compensation, unemployment insurance or other forms of governmental insurance or benefits, or to secure the performance of letters of credit, bids, tenders, statutory obligations, surety and appeal bonds, leases, public or statutory obligations, government contracts, contractual or warranty requirements, and other similar obligations (other than obligations for borrowed money) entered into in the ordinary course of business, including obligations under insurance or self-insurance arrangements;

(v) Liens for taxes, assessments or other governmental charges or statutory obligations that are not delinquent or remain payable without any penalty or that are being contested in good faith by appropriate proceedings and for which adequate reserves have been established in accordance with GAAP (if so required);

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(vi) any attachment or judgment Lien not constituting an Event of Default under Section 9.1(h) that is being contested in good faith by appropriate proceedings and for which adequate reserves have been established in accordance with GAAP;

(vii) Liens (I) securing the Indebtedness permitted under Section 8.2(iii), provided that (a) any such Lien shall attach to the property acquired with such Indebtedness concurrently with or within ninety (90) days after the acquisition or the refinancing thereof by the Borrower or such Subsidiary, (b) the amount of the Indebtedness secured by such Lien shall not exceed the lesser of (y) the fair market value of the property acquired with such Indebtedness at the time of such acquisition and (z) the cost thereof to the Borrower or such Subsidiary and (c) any such Lien shall not encumber any other property of the Borrower or any of its Subsidiaries, and (II) on property, plant and equipment of an acquired business or Person securing Indebtedness permitted under, and on the terms set forth in, Section 8.2(xiii);

(viii) customary security deposits under operating leases entered into by the Borrower and its Subsidiaries in the ordinary course of business;

(ix) customary rights of set-off, revocation, refund or chargeback under deposit agreements or under the Uniform Commercial Code of banks or other financial institutions where the Borrower or any of its Subsidiaries maintains deposits (other than deposits intended as cash collateral) in the ordinary course of business;

(x) Liens arising from the filing, for notice purposes only, of UCC-1 financing statements (or equivalent filings, registrations or agreements in foreign jurisdictions) in respect of true leases otherwise permitted hereunder;

(xi) with respect to any Realty occupied by the Borrower or any of its Subsidiaries, (a) all easements (including, without limitation, reciprocal easement agreements and utility agreements), rights of way, covenants, consents, reservations, licenses, encroachments, variations and similar restrictions, charges and encumbrances on title (including Liens in the nature of municipal ordinances, zoning, entitlement, land use and environmental regulations) that do not materially impair the use of such property for its intended purposes or the value thereof, and (b) any other Lien or exception to coverage described in mortgagee policies of title insurance issued in favor of and accepted by the Administrative Agent;

(xii) Liens in favor of customs and revenue authorities arising as a matter of law to secure nondelinquent customs duties in connection with the importation of goods;

(xiii) Liens that arise in favor of banks under Article 4 of the Uniform Commercial Code on items in collection and the documents relating thereto and proceeds thereof;

(xiv) Liens with respect to cash deposits held in escrow in connection with Permitted Acquisitions;

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(xv) Liens deemed to exist in connection with investments in repurchase agreements meeting the requirements of Cash Equivalents;

(xvi) any leases, subleases, licenses or sublicenses granted by the Borrower or any of its Subsidiaries to third parties in the ordinary course of business and not interfering in any material respect with the business of the Borrower and its Subsidiaries, and any interest or title of a lessor, sublessor, licensor or sublicensor under any lease or license permitted under this Agreement;

(xvii) Liens consisting of contractual obligations of any Credit Party to sell or otherwise dispose of assets (provided that such sale or disposition is permitted under Section 8.4);

(xviii) other Liens securing obligations not exceeding $2,500,000 in aggregate principal amount outstanding at any time;

(xix) Liens securing Indebtedness of Mettis and any of its Foreign Subsidiaries permitted under the Foreign Working Capital Facility (which Liens shall encumber only assets of Mettis and such Foreign Subsidiaries); and

(xx) any extension, renewal or replacement (or successive extensions, renewals or replacements), in whole or in part, of any Lien referred to in the foregoing clauses; provided that any such extension, renewal or replacement Lien shall be limited to all or a part of the property that secured the Lien so extended, renewed or replaced (plus any improvements on such property).

8.4 Disposition of Assets. The Borrower will not, and will not permit or cause any of its Subsidiaries to, sell, assign, lease, convey, transfer or otherwise dispose of (whether in one or a series of transactions) all or any portion of its assets, business or properties (including, without limitation, any Capital Stock of any of its Subsidiaries), or agree to do any of the foregoing, except for:

(i) sales, transfers, leases, licenses or other dispositions of inventory, materials and other property and assets (including intellectual property), in each case in the ordinary course of business;

(ii) the sale, exchange or other disposition of Cash Equivalents in the ordinary course of business;

(iii) the sale, lease or other disposition of assets by the Borrower or any Subsidiary of the Borrower to the Borrower or to a Domestic Subsidiary Guarantor (or by any Foreign Subsidiary to another Foreign Subsidiary, provided that no Foreign Subsidiary that is a Subsidiary Guarantor may sell, lease or otherwise dispose of any assets to a Foreign Subsidiary that is not a Subsidiary Guarantor pursuant to this clause (iii)), in each case so long as no Event of Default shall have occurred and be continuing or would result therefrom;

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(iv) the sale, exchange or other disposition in the ordinary course of business of equipment or other capital assets no longer used or useful in the business of the Borrower and its Subsidiaries;

(v) the sale or disposition of assets (other than the Capital Stock of Subsidiaries) outside the ordinary course of business for fair value and for cash, provided that (x) the aggregate amount of Net Cash Proceeds from all such sales or dispositions that are consummated during any Reference Period shall not exceed $2,000,000 (and the aggregate amount of Net Cash Proceeds from all such sales or dispositions that are consummated by Foreign Subsidiaries during any Reference Period shall not exceed $1,000,000), (y) if such sale or disposition shall be an “Asset Disposition” hereunder, such Net Cash Proceeds shall be reinvested or applied to the prepayment of the Loans in accordance with the provisions of Section 2.6(f), and (z) no Default or Event of Default shall have occurred and be continuing or would result therefrom; and

(vi) any merger, consolidation or other transaction expressly permitted under Section 8.1.

8.5 Investment. The Borrower will not, and will not permit or cause any of its Subsidiaries to, directly or indirectly, purchase, own, invest in or otherwise acquire any Capital Stock, evidence of indebtedness or other obligation or security or any interest whatsoever in any other Person, or make or permit to exist any loans, advances or extensions of credit to, or any investment in cash or by delivery of property in, any other Person, or purchase or otherwise acquire (whether in one or a series of related transactions) any portion of the assets, business or properties of another Person (including pursuant to an Acquisition), or create or acquire any Subsidiary, or become a partner or joint venturer in any partnership or joint venture (collectively, “Investments”), or make a commitment or otherwise agree to do any of the foregoing, other than:

(i) Investments consisting of cash and Cash Equivalents;

(ii) Investments consisting of the creation of accounts receivable, purchases and acquisitions of inventory, supplies, materials and equipment or licenses or leases of intellectual property and other assets, in each case in the ordinary course of business,

(iii) Investments consisting of (w) loans and advances to employees of the Borrower and its Subsidiaries for reasonable travel, relocation and business expenses in the ordinary course of business not exceeding $750,000 at any time outstanding, (x) cash loans and advances to employees of the Borrower and its Subsidiaries for the purchase of Capital Stock of the Borrower not exceeding $750,000 at any time outstanding, (y) accounts receivable of the Borrower and its Subsidiaries created or acquired in the ordinary course of business, and (z) prepaid expenses of the Borrower and its Subsidiaries incurred in the ordinary course of business;

(iv) Investments (including debt obligations) of the Borrower and its Subsidiaries received in connection with the bankruptcy or reorganization of suppliers and customers and in good faith settlement of delinquent obligations of, and other disputes with, customers and suppliers arising in the ordinary course of business;

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(v) without duplication, Investments consisting of intercompany Indebtedness permitted under Section 8.2(iv);

(vi) Investments existing as of the Closing Date and described in Schedule 8.5;

(vii) Investments of the Borrower under Hedge Agreements entered into in the ordinary course of business and not for speculative purposes;

(viii) Investments in Domestic Subsidiaries, which Domestic Subsidiaries are Subsidiary Guarantors;

(ix) Investments made prior to the date hereof in Foreign Subsidiaries existing as of the date hereof, provided that nothing in this paragraph shall permit any Investments made after the date hereof in such Foreign Subsidiaries;

(x) Investments consisting of the making of capital contributions or the purchase of Capital Stock (y) by the Borrower or any Subsidiary in any other newly created or acquired Wholly Owned Subsidiary that is (or immediately after giving effect to such Investment will be) a Domestic Subsidiary Guarantor; provided that the Borrower complies with the provisions of Section 6.9, and (z) by any Subsidiary in the Borrower;

(xi) Investments in Foreign Subsidiaries (including, without limitation (but without duplication), capital contributions made to any Foreign Subsidiary, loans made to any Foreign Subsidiary (including loans and advances to Foreign Subsidiaries made pursuant to Section 8.2(iv)), and Guaranty Obligations with respect to obligations of any such Foreign Subsidiary) made after the date hereof in an aggregate amount, as valued at the time each such Investment is made, not exceeding $10,000,000 for all such Investments from and after the Closing Date; provided that:

(A) the aggregate permitted amount for all such Investments shall increase to $15,000,000 upon delivery pursuant to Section 6.2(a) of Compliance Certificates indicating a Total Leverage Ratio of less than 1.75 to 1.0 as of the last day of two consecutive four-quarter Reference Periods (but provided further that in the event the Total Leverage Ratio should equal or exceed 1.75 to 1.0 as of the last day of any fiscal period at any time thereafter, the aggregate permitted amount for all such Investments pursuant to this Section 8.5(xi) shall automatically be reduced to $10,000,000 (plus any such Investments pursuant to this Section 8.5(xi) outstanding at the time of reduction to the extent in excess of $10,000,000, but only to the extent of such excess));

(B) the aggregate permitted amount for all such Investments shall increase to $20,000,000 upon delivery pursuant to Section 6.2(a) of Compliance Certificates indicating a Total Leverage Ratio of less than 1.5 to 1.0 as of the last day of two consecutive four-quarter Reference Periods (but provided further that in the event the Total Leverage Ratio should equal or exceed 1.5 to 1.0 or 1.75 to 1.0 as of the last day of any fiscal period at any time thereafter, the aggregate permitted amount for all such Investments pursuant to this Section 8.5(xi) shall

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automatically be reduced to $15,000,000 or $10,000,000, respectively (plus any such Investments pursuant to this Section 8.5(xi) outstanding at the time of reduction to the extent in excess of $15,000,000 or $10,000,000, respectively, but only to the extent of such excess));

(C) the aggregate permitted amount for all such Investments shall increase to $25,000,000 upon delivery pursuant to Section 6.2(a) of Compliance Certificates indicating a Total Leverage Ratio of less than 1.0 to 1.0 as of the last day of two consecutive four-quarter Reference Periods (but provided further that in the event the Total Leverage Ratio should equal or exceed 1.0 to 1.0, 1.5 to 1.0 or 1.75 to 1.0 as of the last day of any fiscal period at any time thereafter, the aggregate permitted amount for all such Investments pursuant to this Section 8.5(xi) shall automatically be reduced to $20,000,000, $15,000,000 or $10,000,000, respectively (plus any such Investments pursuant to this Section 8.5(xi) outstanding at the time of reduction to the extent in excess of $20,000,000, $15,000,000 or $10,000,000, respectively, but only to the extent of such excess)); and

(D) notwithstanding the foregoing, no Investments may be made under this Section 8.5(xi) if a Default or Event of Default has occurred and is continuing or would result therefrom;

(xii) the Transactions;

(xiii) Permitted Acquisitions; and

(xiv) other Investments not otherwise permitted under this Section 8.5 (including joint ventures, but excluding Investments in Foreign Subsidiaries) in an aggregate amount, as valued at the time each such Investment is made, not exceeding $2,000,000 for all such Investments from and after the Closing Date.

8.6 Restricted Payments.

(a) The Borrower will not, and will not permit or cause any of its Subsidiaries to, directly or indirectly, declare or make any dividend payment, or make any other distribution of cash, property or assets, in respect of any of its Capital Stock or any warrants, rights or options to acquire its Capital Stock, or purchase, redeem, retire or otherwise acquire for value any shares of its Capital Stock or any warrants, rights or options to acquire its Capital Stock (collectively, “Restricted Payments”), or set aside funds for any of the foregoing, except that:

(i) the Borrower and any of its Subsidiaries may declare and make dividend payments or other distributions payable solely in its Common Stock;

(ii) each Subsidiary of the Borrower may declare and make dividend payments or other distributions to the Borrower or to a Wholly Owned Subsidiary of the Borrower that is a Subsidiary Guarantor, or (if such declaring Subsidiary is a Foreign Subsidiary) to another Wholly Owned Foreign Subsidiary, in each case to the extent not prohibited under applicable Requirements of Law;

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(iii) so long as no Default or Event of Default shall have occurred and be continuing or would result therefrom, the Borrower may purchase, redeem, retire or otherwise acquire warrants to acquire shares of its Capital Stock, in an aggregate cash amount not exceeding $1,000,000 for all such purchases, redemptions, retirements and acquisitions during any fiscal year; and

(iv) the Borrower may make any Restricted Payment in an amount that, taken together with the aggregate of all other Restricted Payments made by the Borrower and its Subsidiaries (other than Restricted Payments permitted under Sections 8.6(a)(i) and 8.6(a)(ii), but including Restricted Payments permitted under Section 8.6(a)(iii)) from and after the Closing Date, is less than 50% of Consolidated Net Income for the period (taken as one accounting period) from the beginning of the first fiscal quarter commencing after the Closing Date to the end of the Borrower’s most recently ended fiscal quarter for which the Borrower has delivered financial statements as required by Sections 6.1(a) or 6.1(b), as the case may be, and the Compliance Certificate as required by Section 6.2(a), provided that:

(A) no Default or Event of Default shall have occurred and be continuing or would result from such Restricted Payment;

(B) after giving effect to such Restricted Payment, the Borrower shall be in compliance with the Fixed Charge Coverage Ratio set forth in Section 7.3, such compliance determined with regard to calculations made on a pro forma basis for the Reference Period most recently ended, calculated in accordance with GAAP as if such Restricted Payment had been made at the beginning of such Reference Period; and

(C) after giving effect to such Restricted Payment, the Total Leverage Ratio (calculated on a pro forma basis as set forth above after giving effect to such Restricted Payment) shall not exceed 1.5 to 1.0.

(b) The Borrower will not, and will not permit or cause any of its Subsidiaries to, make (or give any notice in respect of) any payment or prepayment of principal on, or interest, fees or premium (if any) with respect to any Subordinated Indebtedness, or directly or indirectly make any redemption (including pursuant to any change of control or asset disposition provision), retirement, defeasance or other acquisition for value of any Subordinated Indebtedness, or make any deposit or otherwise set aside funds for any of the foregoing purposes; provided, however, that, subject to the provisions of Section 8.6(c), the Borrower and its Subsidiaries may make required principal and interest payments on any Seller Subordinated Indebtedness incurred or issued pursuant to (and in accordance with the terms of) Section 8.2(viii) and any Subordinated Indebtedness existing on the Closing Date and described in Schedule 8.2, in each case in accordance with the terms of such Indebtedness (including any subordination provisions thereof).

(c) The Borrower will not, and will not permit any of its Subsidiaries to, make any payment in respect of any Contingent Purchase Price Obligations (whether or not such Contingent Purchase Price Obligations constitute Indebtedness) or Seller Subordinated

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Indebtedness unless, immediately after giving effect to such payment, the Borrower shall be in compliance with the financial covenants contained in Article VII, such compliance determined with regard to calculations made on a pro forma basis for the Reference Period most recently ended, calculated in accordance with GAAP as if such payment had been made on the last day of such Reference Period, and the Administrative Agent has received a certificate on behalf of the Borrower of a Financial Officer of the Borrower to such effect.

8.7 Transactions with Affiliates. The Borrower will not, and will not permit or cause any of its Subsidiaries to, enter into any transaction (including, without limitation, any purchase, sale, lease or exchange of property or the rendering of any service) with any officer, director, stockholder or other Affiliate of the Borrower or any of its Subsidiaries, except in the ordinary course of its business and upon fair and reasonable terms that are no less favorable to it than it would obtain in a comparable arm’s length transaction with a Person other than an Affiliate of the Borrower or any of its Subsidiaries; provided, however, that nothing contained in this Section 8.7 shall prohibit:

(i) transactions described on Schedule 8.7 or otherwise expressly permitted under this Agreement;

(ii) transactions among the Borrower and its Wholly Owned Subsidiaries (provided that such transactions shall remain subject to any other applicable limitations and restrictions set forth in this Agreement); and

(iii) the payment by the Borrower of reasonable and customary fees to members of its boards of directors (such fees not to exceed, in any event, $500,000 during any fiscal year) and the payment and provision of compensation and benefits to its directors and officers relating to their employment.

8.8 Lines of Business. The Borrower will not, and will not permit or cause any of its Subsidiaries to, engage in any lines of business other than the businesses engaged in by it and its Subsidiaries on the Closing Date and businesses and activities reasonably related thereto. All references in this Agreement and the other Credit Documents to “in the ordinary course of business” shall mean only in the ordinary course of those businesses permitted by this Section 8.8.

8.9 Sale-Leaseback Transactions. Except for transactions otherwise expressly permitted under this Agreement, and except as permitted by Section 8.2(iii), the Borrower will not, and will not permit or cause any of its Subsidiaries to, directly or indirectly, become or remain liable as lessee or as guarantor or other surety with respect to any lease, whether an operating lease or a Capital Lease, of any property (whether real, personal or mixed, and whether now owned or hereafter acquired) (i) that any Credit Party has sold or transferred (or is to sell or transfer) to a Person that is not a Credit Party or (ii) that any Credit Party intends to use for substantially the same purpose as any other property that, in connection with such lease, has been sold or transferred (or is to be sold or transferred) by a Credit Party to another Person that is not a Credit Party.

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8.10 Certain Amendments. The Borrower will not, and will not permit or cause any of its Subsidiaries to, (i) amend, modify or waive, or permit the amendment, modification or waiver of, any provision of any Subordinated Indebtedness, the effect of which would be (a) to increase the principal amount due thereunder or provide for any mandatory prepayments not already provided for by the terms thereof, (b) to shorten or accelerate the time of payment of any amount due thereunder (to the extent such modification would cause any such Subordinated Indebtedness to become due within one year after the due date for repayment of any of the Obligations), (c) to increase the applicable interest rate (to the extent payable in cash) or amount of any fees or costs due thereunder, (d) to amend any of the subordination provisions thereunder (including any of the definitions relating thereto), (e) to make any covenant or event of default therein more restrictive or add any new covenant or event of default, (f) to grant any security or collateral to secure payment thereof, or (g) to effect any change in the rights or obligations of the Credit Parties thereunder or of the holders thereof that, in the reasonable determination of the Administrative Agent, would be adverse in any material respect to the rights or interests of the Lenders, (ii) breach or otherwise violate any of the subordination provisions applicable to any Subordinated Indebtedness, including, without limitation, restrictions against payment of principal and interest thereon, or (iii) amend, modify or change any provision of its articles or certificate of incorporation or formation, bylaws, partnership agreement, operating agreement or other applicable formation or organizational documents, as applicable, the terms of any class or series of its Capital Stock other than in a manner that could not reasonably be expected to adversely affect the Lenders in any material respect (provided that the Borrower shall give the Administrative Agent and the Lenders notice of any such amendment, modification or change that is material, together with copies thereof).

8.11 Limitation on Certain Restrictions. The Borrower will not, and will not permit or cause any of its Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any restriction or encumbrance on (a) the ability of Borrower and any such Subsidiaries to perform and comply with their respective obligations under the Credit Documents or (b) the ability of any Subsidiary of the Borrower to make any dividend payment or other distribution in respect of its Capital Stock, to repay Indebtedness owed to the Borrower or any other Subsidiary, to make loans or advances to the Borrower or any other Subsidiary, or to transfer any of its assets or properties to the Borrower or any other Subsidiary, in each case other than such restrictions or encumbrances existing under or by reason of (i) this Agreement and the other Credit Documents, (ii) applicable Requirements of Law, (iii) customary non-assignment provisions in operating leases and licenses of real or personal property (including intellectual property) entered into by the Borrower or any of its Subsidiaries as lessee or licensee in the ordinary course of business, and (iv) as to clause (b) above only, the Foreign Working Capital Facility (but only with respect to the Foreign Subsidiary obligors thereunder, and then only to the extent that any such restrictions could not reasonably be expected to materially impair the ability of the Borrower to perform its obligations under this Agreement).

8.12 No Other Negative Pledges. The Borrower will not, and will not permit or cause any of its Subsidiaries to, enter into or suffer to exist any agreement or restriction that, directly or indirectly, prohibits or conditions the creation, incurrence or assumption of any Lien upon or with respect to any part of its property or assets, whether now owned or hereafter acquired, or agree to do any of the foregoing, other than as set forth in (i) this Agreement and the other Credit Documents, (ii) any agreement or instrument creating a Permitted Lien, including the Foreign

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Working Capital Facility (but only to the extent such agreement or restriction applies to the assets subject to such Permitted Lien), and (iii) operating leases and licenses of real or personal property entered into by the Borrower or any of its Subsidiaries as lessee or licensee in the ordinary course of business.

8.13 Fiscal Year. The Borrower will not, and will not permit or cause any of its Subsidiaries to, change the ending date of its fiscal year to a date other than the Saturday closest to December 31.

8.14 Accounting Changes. Other than as permitted pursuant to Section 1.2, the Borrower will not, and will not permit or cause any of its Subsidiaries to, make or permit any material change in its accounting policies or reporting practices, except (i) as may be required by GAAP (or, in the case of Foreign Subsidiaries, generally accepted accounting principles in the jurisdiction of its organization) or (ii) as the Borrower’s independent auditor may recommend and as reasonably consented to by the Required Lenders.

8.15 Ownership of Subsidiaries. The Borrower will not, and will not permit or cause any of its Subsidiaries to, have any Subsidiaries of the Borrower other than Wholly Owned Subsidiaries.

ARTICLE IX

EVENTS OF DEFAULT

9.1 Events of Default. The occurrence of any one or more of the following events shall constitute an “Event of Default”:

(a) The Borrower shall fail to pay when due (i) any principal of any Loan or any Reimbursement Obligation, or (ii) any interest on any Loan, any fee payable under this Agreement or any other Credit Document, or (except as provided in clause (i) above) any other Obligation (other than any Obligation under a Hedge Agreement), and (in the case of this clause (ii) only) such failure shall continue for a period of three (3) Business Days;

(b) The Borrower or any other Credit Party shall fail to observe, perform or comply with any condition, covenant or agreement contained in any of Sections 2.14, 6.1, 6.2(e)(i), 6.3(i), 6.8 or 6.9 or in Articles VII or VIII;

(c) The Borrower or any other Credit Party shall fail to observe, perform or comply with any condition, covenant or agreement contained in this Agreement or any of the other Credit Documents other than those enumerated in Sections 9.1(a) and 9.1(b), or any default or event of default shall occur under any Hedge Agreement to which the Borrower and any Lender or Affiliate of any Lender are parties, and such failure (i) by the express terms of the relevant Credit Document, constitutes an Event of Default, or (ii) shall continue unremedied for any grace period specifically applicable thereto or, if no such grace period is applicable, for a period of thirty (30) days after the earlier of (y) the date on which a Responsible Officer of the Borrower acquires knowledge thereof and (z) the date on which written notice thereof is delivered by the Administrative Agent or any Lender to the Borrower;

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(d) Any representation or warranty made or deemed made by or on behalf of the Borrower or any other Credit Party in this Agreement, any of the other Credit Documents or in any certificate, instrument, report or other document furnished at any time in connection herewith or therewith shall prove to have been incorrect, false or misleading in any material respect as of the time made, deemed made or furnished;

(e) The Borrower or any other Credit Party shall (i) fail to pay when due (whether by scheduled maturity, acceleration or otherwise and after giving effect to any applicable grace period or notice provisions) (y) any principal of or interest on any Indebtedness (other than the Indebtedness incurred pursuant to this Agreement or a Hedge Agreement) having an aggregate principal amount of at least $2,000,000 or (z) any termination or other payment under any Hedge Agreement covering a notional amount of Indebtedness of at least $2,000,000 or (ii) fail to observe, perform or comply with any condition, covenant or agreement contained in any agreement or instrument evidencing or relating to any such Indebtedness, or any other event shall occur or condition exist in respect thereof, and the effect of such failure, event or condition is to cause, or permit the holder or holders of such Indebtedness (or a trustee or agent on its or their behalf) to cause (with or without the giving of notice, lapse of time, or both), without regard to any subordination terms with respect thereto, such Indebtedness to become due, or to be prepaid, redeemed, purchased or defeased, prior to its stated maturity;

(f) The Borrower or any other Credit Party shall (i) file a voluntary petition or commence a voluntary case seeking liquidation, winding-up, reorganization, dissolution, arrangement, readjustment of debts or any other relief under the Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to controvert in a timely and appropriate manner, any petition or case of the type described in Section 9.1(g), (iii) apply for or consent to the appointment of or taking possession by a custodian, trustee, receiver or similar official for or of itself or all or a substantial part of its properties or assets, (iv) fail generally, or admit in writing its inability, to pay its debts generally as they become due, (v) make a general assignment for the benefit of creditors or (vi) take any corporate action to authorize or approve any of the foregoing;

(g) Any involuntary petition or case shall be filed or commenced against the Borrower or any other Credit Party seeking liquidation, winding-up, reorganization, dissolution, arrangement, readjustment of debts, the appointment of a custodian, trustee, receiver or similar official for it or all or a substantial part of its properties or any other relief under the Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar law now or hereafter in effect, and such petition or case shall continue undismissed and unstayed for a period of sixty (60) days; or an order, judgment or decree approving or ordering any of the foregoing shall be entered in any such proceeding;

(h) Any one or more money judgments, writs or warrants of attachment, executions or similar processes involving an aggregate amount (to the extent not paid when due, exclusive of amounts fully bonded or covered by insurance or for which the Borrower or any other Credit Party is indemnified in a manner reasonably satisfactory to the Administrative Agent) in excess of $1,000,000 shall be entered or filed against the Borrower or any other Credit Party or any of their respective properties and the same shall not be paid, dismissed, bonded, vacated, stayed or

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discharged within a period of thirty (30) days or in any event later than five (5) days prior to the date of any proposed sale of such property thereunder;

(i) Any Security Document to which the Borrower or any other Credit Party is now or hereafter a party shall for any reason cease to be in full force and effect or cease to be effective to give the Administrative Agent a valid and perfected security interest in and Lien upon the Collateral purported to be covered thereby, subject to no Liens other than Permitted Liens, in each case unless any such cessation occurs in accordance with the terms thereof or is due to any act or failure to act on the part of the Administrative Agent or any Lender, or the Borrower or any other Credit Party shall assert any of the foregoing; or the Subsidiary Guaranty shall for any reason cease to be in full force and effect as to any Subsidiary Guarantor, or any Subsidiary Guarantor or any Person acting on its behalf shall deny or disaffirm such Subsidiary Guarantor’s obligations thereunder;

(j) Any ERISA Event or any other event or condition shall occur or exist with respect to any Plan or Multiemployer Plan and, as a result thereof, together with all other ERISA Events and other events or conditions then existing, any Credit Party and its ERISA Affiliates have incurred, or would be reasonably likely to incur liability to any one or more Plans or Multiemployer Plans or to the PBGC (or to any combination thereof) in excess of $2,000,000;

(k) Any one or more licenses, permits, accreditations or authorizations of the Borrower or any other Credit Party shall be suspended, limited or terminated or shall not be renewed, or any other action shall be taken, by any Governmental Authority in response to any alleged failure by the Borrower or any other Credit Party to be in compliance with applicable Requirements of Law, and such action, individually or in the aggregate, would be reasonably likely to have a Material Adverse Effect;

(l) Any one or more Environmental Claims shall have been asserted against the Borrower or any other Credit Party (or a reasonable basis shall exist therefor) or the Borrower or any other Credit Party shall have incurred or would be reasonably likely to incur liability, interruption of operations or other adverse effects as a result thereof, and such Environmental Claims, liability or other effect, individually or in the aggregate, has or would be reasonably likely to have a Material Adverse Effect; or

(m) (A) any Person or group of Persons acting in concert as a partnership or other group (other than the Sponsor) shall have become, as a result of a tender or exchange offer, open market purchases, privately negotiated purchases or otherwise, the beneficial owner of outstanding Capital Stock of the Borrower having 35% or more of the Total Voting Power of the Borrower and, at such time or at any time thereafter at which such Person or group of Persons beneficially owns, directly or indirectly, Capital Stock of the Borrower having 35% or more of the Total Voting Power of the Borrower, the Sponsor beneficially owns, directly or indirectly, Capital Stock of the Borrower having less than a majority of the Total Voting Power of the Borrower, or (B) during any period of up to twelve (12) consecutive months, individuals on the Board of Directors of the Borrower (together with any new directors whose election by such Board of Directors or whose nomination for election by the Sponsor, as the case may be, was approved by a vote of either (1) 66-2/3% of the directors then still in office who were either directors at the beginning of such period or whose election or nomination for election was

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previously so approved or (2) the Sponsor) shall cease to consist of a majority of the individuals who constituted the Board of Directors at the beginning of such period.

9.2 Remedies: Termination of Commitments, Acceleration, etc. Upon and at any time after the occurrence and during the continuance of any Event of Default, the Administrative Agent shall at the direction, or may with the consent, of the Required Lenders, take any or all of the following actions at the same or different times:

(a) Declare the Commitments, the Swingline Commitment, and the Issuing Lender’s obligation to issue Letters of Credit, to be terminated, whereupon the same shall terminate; provided that, upon the occurrence of a Bankruptcy Event, the Commitments, the Swingline Commitment and the Issuing Lender’s obligation to issue Letters of Credit shall automatically be terminated;

(b) Declare all or any part of the outstanding principal amount of the Loans to be immediately due and payable, whereupon the principal amount so declared to be immediately due and payable, together with all interest accrued thereon and all other amounts payable under this Agreement, the Notes and the other Credit Documents (but excluding any amounts owing under any Hedge Agreement), shall become immediately due and payable without presentment, demand, protest, notice of intent to accelerate or other notice or legal process of any kind, all of which are hereby knowingly and expressly waived by the Borrower; provided that, upon the occurrence of a Bankruptcy Event, all of the outstanding principal amount of the Loans and all other amounts described in this Section 9.2(b) shall automatically become immediately due and payable without presentment, demand, protest, notice of intent to accelerate or other notice or legal process of any kind, all of which are hereby knowingly and expressly waived by the Borrower;

(c) Direct the Borrower to deposit (and the Borrower hereby agrees, forthwith upon receipt of notice of such direction from the Administrative Agent, to deposit) with the Administrative Agent from time to time such additional amount of cash as is equal to the aggregate Stated Amount of all Letters of Credit then outstanding (whether or not any beneficiary under any Letter of Credit shall have drawn or be entitled at such time to draw thereunder), such amount to be held by the Administrative Agent in the Cash Collateral Account as security for the Letter of Credit Exposure as described in Section 3.8;

(d) Appoint or direct the appointment of a receiver for the properties and assets of the Credit Parties, both to operate and to sell such properties and assets, and the Borrower, for itself and on behalf of its Subsidiaries, hereby consents to such right and such appointment and hereby waives any objection the Borrower or any Subsidiary may have thereto or the right to have a bond or other security posted by the Administrative Agent on behalf of the Lenders, in connection therewith; and

(e) Exercise all rights and remedies available to it under this Agreement, the other Credit Documents and applicable law.

9.3 Remedies: Set-Off. In addition to all other rights and remedies available under the Credit Documents or applicable law or otherwise, upon and at any time after the occurrence

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and during the continuance of any Event of Default, each Lender may, and each is hereby authorized by the Borrower, at any such time and from time to time, to the fullest extent permitted by applicable law, without presentment, demand, protest or other notice of any kind, all of which are hereby knowingly and expressly waived by the Borrower (on behalf of itself and the other Credit Parties) to set off and to apply any and all deposits (general or special, time or demand, provisional or final) and any other property at any time held (including at any branches or agencies, wherever located), and any other indebtedness at any time owing, by such Lender to or for the credit or the account of the Borrower or any other Credit Party against any or all of the Obligations to such Lender now or hereafter existing, whether or not such Obligations may be contingent or unmatured, the Borrower (on behalf of itself and the other Credit Parties) hereby granting to each Lender a continuing security interest in and Lien upon all such deposits and other property as security for such Obligations. Each Lender agrees promptly to notify the Borrower and the Administrative Agent after any such set-off and application; provided, however, that the failure to give such notice shall not affect the validity of such set-off and application.

ARTICLE X

THE ADMINISTRATIVE AGENT

10.1 Appointment. Each Lender hereby irrevocably appoints and authorizes Wachovia to act as Administrative Agent hereunder and under the other Credit Documents and to take such actions as agent on its behalf hereunder and under the other Credit Documents, and to exercise such powers and to perform such duties, as are specifically delegated to the Administrative Agent by the terms hereof or thereof, together with such other powers and duties as are reasonably incidental thereto.

10.2 Nature of Duties.

(a) The Administrative Agent shall have no duties or responsibilities other than those expressly set forth in this Agreement and the other Credit Documents. The Administrative Agent shall not have, by reason of this Agreement or any other Credit Document, a fiduciary relationship in respect of any Lender or any other Person; and nothing in this Agreement or any other Credit Document, express or implied, is intended to or shall be so construed as to impose upon the Administrative Agent any obligations or liabilities in respect of this Agreement or any other Credit Document except as expressly set forth herein or therein. The Administrative Agent may execute any of its duties under this Agreement or any other Credit Document by or through agents or attorneys-in-fact and shall not be responsible for the negligence or misconduct of any agents or attorneys-in-fact that it selects with reasonable care. The Administrative Agent shall be entitled to consult with legal counsel, independent public accountants and other experts selected by it with respect to all matters pertaining to this Agreement and the other Credit Documents and its duties hereunder and thereunder and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts. The Lenders hereby acknowledge that the Administrative Agent shall not be under any duty to take any discretionary action permitted to be taken by it pursuant to the provisions of this Agreement or any other Credit Document unless it shall be requested in writing to do so by

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the Required Lenders (or, where a higher percentage of the Lenders is expressly required hereunder, such Lenders).

(b) The Borrower hereby designates the Administrative Agent to serve as the Borrower’s agent, solely for purposes of this Section 10.2(b), to maintain the Register pursuant to the terms of Section 11.7(b).

10.3 Exculpatory Provisions. Neither the Administrative Agent nor any of its officers, directors, employees, agents, attorneys-in-fact or Affiliates shall be (i) liable for any action taken or omitted to be taken by it or such Person under or in connection with the Credit Documents, except for its or such Person’s own gross negligence, bad faith or willful misconduct, (ii) responsible in any manner to any Lender or any other Person for any recitals, statements, information, representations or warranties herein or in any other Credit Document or in any document, instrument, certificate, report or other writing delivered in connection herewith or therewith, for the execution, effectiveness, genuineness, validity, enforceability or sufficiency of this Agreement or any other Credit Document, or for the financial condition of the Borrower, any other Credit Party or any other Person, or (iii) required to ascertain or make any inquiry concerning the performance or observance of any of the terms, provisions or conditions (other than delivery of the documents specified in Section 4.1) of this Agreement or any other Credit Document or the existence or possible existence of any Default or Event of Default, or to inspect the properties, books or records of the Borrower or any other Credit Party.

10.4 Reliance by Administrative Agent. The Administrative Agent shall be entitled to rely, and shall be fully protected in relying, upon any notice, statement, consent or other communication (including, without limitation, any thereof by telephone, telecopy, telex, telegram or cable) believed by it in good faith to be genuine and correct and to have been signed, sent or made by the proper Person or Persons. The Administrative Agent may deem and treat each Lender as the owner of its interest hereunder for all purposes hereof unless and until a written notice of the assignment, negotiation or transfer thereof shall have been given to the Administrative Agent in accordance with the provisions of this Agreement. The Administrative Agent shall be entitled to refrain from taking or omitting to take any action in connection with this Agreement or any other Credit Document (i) if such action or omission would, in the reasonable opinion of the Administrative Agent, violate any applicable law or any provision of this Agreement or any other Credit Document or (ii) unless and until it shall have received such advice or concurrence of the Required Lenders (or, where a higher percentage of the Lenders is expressly required hereunder, such Lenders) as it deems appropriate, if it so requests, or it shall first have been indemnified to its satisfaction by the Lenders against any and all liability and expense (other than liability and expense arising from its own gross negligence or willful misconduct) that may be incurred by it by reason of taking, continuing to take or omitting to take any such action. Without limiting the foregoing, no Lender shall have any right of action whatsoever against the Administrative Agent as a result of the Administrative Agent’s acting or refraining from acting hereunder or under any other Credit Document in accordance with the instructions of the Required Lenders (or, where a higher percentage of the Lenders is expressly required hereunder, such Lenders), and such instructions and any action taken or failure to act pursuant thereto shall be binding upon all of the Lenders (including all subsequent Lenders).

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10.5 Non-Reliance on Administrative Agent and Other Lenders. Each Lender expressly acknowledges that neither the Administrative Agent nor any of its officers, directors, employees, agents, attorneys-in-fact or Affiliates has made any representation or warranty to it and that no act by the Administrative Agent or any such Person hereinafter taken, including any review of the affairs of the Borrower and the other Credit Parties, shall be deemed to constitute any representation or warranty by the Administrative Agent to any Lender. Each Lender represents to the Administrative Agent that (i) it has, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, prospects, operations, properties, financial and other condition and creditworthiness of the Borrower and the other Credit Parties and made its own decision to enter into this Agreement and extend credit to the Borrower hereunder, and (ii) it will, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action hereunder and under the other Credit Documents and to make such investigation as it deems necessary to inform itself as to the business, prospects, operations, properties, financial and other condition and creditworthiness of the Borrower and the other Credit Parties. Except as expressly provided in this Agreement and the other Credit Documents, the Administrative Agent shall have no duty or responsibility, either initially or on a continuing basis, to provide any Lender with any credit or other information concerning the business, prospects, operations, properties, financial or other condition or creditworthiness of the Borrower, the other Credit Parties or any other Person that may at any time come into the possession of the Administrative Agent or any of its officers, directors, employees, agents, attorneys-in-fact or Affiliates.

10.6 Notice of Default. The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default, unless (i) a Default or Event of Default in the payment of principal, interest or fees hereunder required to be paid to the Administrative Agent shall have occurred or (ii) the Administrative Agent shall have received written notice from the Borrower or a Lender referring to this Agreement, describing such Default or Event of Default and stating that such notice is a “notice of default.” In the event that any such payment Default or Event of Default occurs or the Administrative Agent receives such a notice, the Administrative Agent will give notice thereof to the Lenders as soon as reasonably practicable; provided, however, that if any such notice has also been furnished to the Lenders, the Administrative Agent shall have no obligation to notify the Lenders with respect thereto. The Administrative Agent shall (subject to Sections 10.4 and 11.6) take such action with respect to such Default or Event of Default as shall reasonably be directed by the Required Lenders; provided that, unless and until the Administrative Agent shall have received such directions, the Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable in the best interests of the Lenders except to the extent that this Agreement expressly requires that such action be taken, or not be taken, only with the consent or upon the authorization of the Required Lenders or all of the Lenders.

10.7 Indemnification. To the extent the Administrative Agent is not reimbursed by or on behalf of the Borrower, and without limiting the obligation of the Borrower to do so, the Lenders agree (i) to indemnify the Administrative Agent and its officers, directors, employees,

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agents, attorneys-in-fact and Affiliates, ratably in proportion to their respective percentages as used in determining the Required Lenders as of the date of determination, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses (including, without limitation, reasonable attorneys’ fees and expenses) or disbursements of any kind or nature whatsoever that may at any time (including, without limitation, at any time following the repayment in full of the Loans and the termination of the Letters of Credit and the Commitments) be imposed on, incurred by or asserted against the Administrative Agent in any way relating to or arising out of this Agreement or any other Credit Document or any documents contemplated by or referred to herein or the transactions contemplated hereby or thereby or any action taken or omitted by the Administrative Agent under or in connection with any of the foregoing, and (ii) to reimburse the Administrative Agent upon demand, ratably in proportion to their respective percentages as used in determining the Required Lenders as of the date of determination, for any reasonable expenses incurred by the Administrative Agent in connection with the preparation, negotiation, execution, delivery, administration, amendment, modification, waiver or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement or any of the other Credit Documents (including, without limitation, reasonable attorneys’ fees and expenses and compensation of agents and employees paid for services rendered on behalf of the Administrative Agent hereunder and/or the Lenders); provided, however, that no Lender shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements to the extent resulting from the gross negligence, bad faith or willful misconduct of the party to be indemnified or from a material breach of such indemnified party’s obligations or duties hereunder or under any other Credit Document.

10.8 The Administrative Agent in its Individual Capacity. With respect to its Commitments, the Loans made by it, the Letters of Credit issued or participated in by it and the Note or Notes issued to it, the Administrative Agent in its individual capacity and not as Administrative Agent shall have the same rights and powers under the Credit Documents as any other Lender and may exercise the same as though it were not performing the agency duties specified herein; and the terms “Lenders,” “Required Lenders,” “holders of Notes” and any similar terms shall, unless the context clearly otherwise indicates, include the Administrative Agent in its individual capacity. The Administrative Agent and its Affiliates may accept deposits from, lend money to, make investments in, and generally engage in any kind of banking, trust, financial advisory or other business with the Borrower, any of its Subsidiaries or any of their respective Affiliates as if the Administrative Agent were not performing the agency duties specified herein, and may accept fees and other consideration from any of them for services in connection with this Agreement and otherwise without having to account for the same to the Lenders.

10.9 Successor Administrative Agent. The Administrative Agent may resign at any time by giving thirty (30) days’ prior written notice to the Borrower and the Lenders. Upon any such notice of resignation, the Required Lenders shall, with the prior written consent of the Borrower (which consent shall not be unreasonably withheld), have the right to appoint a successor to the Administrative Agent (provided that the Borrower’s consent shall not be required in the event a Default or Event of Default shall have occurred and be continuing). If no successor to the Administrative Agent shall have been so appointed by the Required Lenders and

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shall have accepted such appointment within such thirty-day period, then the retiring Administrative Agent may, on behalf of the Lenders and after consulting with the Lenders and the Borrower, appoint a successor Administrative Agent, which shall be a financial institution having a rating of not less than “A” or its equivalent by Standard & Poor’s Ratings Services or any of the Lenders. Upon the acceptance of any appointment as Administrative Agent by a successor Administrative Agent, such successor Administrative Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Credit Documents. After any retiring Administrative Agent’s resignation as Administrative Agent, the provisions of this Article X shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent. If no successor to the Administrative Agent has accepted appointment as Administrative Agent by the thirtieth (30th) day following a retiring Administrative Agent’s notice of resignation, the retiring Administrative Agent’s resignation shall nevertheless thereupon become effective, and the Lenders shall thereafter perform all of the duties of the Administrative Agent hereunder and under the other Credit Documents until such time, if any, as the Required Lenders appoint a successor Administrative Agent as provided for hereinabove.

10.10 Collateral Matters.

(a) The Administrative Agent is hereby authorized on behalf of the Lenders, without the necessity of any notice to or further consent from the Lenders, from time to time (but without any obligation) to take any action with respect to the Collateral and the Security Documents that may be deemed by the Administrative Agent in its discretion to be necessary or advisable to perfect and maintain perfected the Liens upon the Collateral granted pursuant to the Security Documents.

(b) The Lenders hereby authorize the Administrative Agent, at its option and in its discretion, to release any Lien granted to or held by the Administrative Agent upon any Collateral (i) upon termination of the Commitments, termination, expiration or cash collateralization of all outstanding Letters of Credit and payment in full of all of the Obligations then due and payable, (ii) constituting property sold or to be sold or disposed of as part of or in connection with any disposition expressly permitted hereunder or under any other Credit Document or to which the Required Lenders have consented or (iii) otherwise pursuant to and in accordance with the provisions of any applicable Credit Document. Upon request by the Administrative Agent at any time, the Lenders will confirm in writing the Administrative Agent’s authority to release Collateral pursuant to this Section 10.10(b).

10.11 Issuing Lender and Swingline Lender. The provisions of this Article X (other than Sections 10.9 and 10.10) shall apply to the Issuing Lender and the Swingline Lender mutatis mutandis to the same extent as such provisions apply to the Administrative Agent.

10.12 Other Agents, Managers. Notwithstanding any other provision of this Agreement or any of the other Credit Documents, any Lenders identified on the cover page of this Agreement or elsewhere herein as a “Syndication Agent,” “Documentation Agent,” “Co-Agent,” “Lead Manager” or in any similar capacity are named as such for recognition purposes only, and in their respective capacities as such shall have no powers, rights, duties, responsibilities or

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liabilities with respect to this Agreement and the other Credit Documents and the transactions contemplated hereby and thereby. Without limitation of the foregoing, none of the Lenders so identified shall have, by reason of this Agreement or any other Credit Document, a fiduciary relationship in respect of any Lender or any other Person. Each Lender hereby makes the same acknowledgments with respect to any Lenders so identified as it makes in Section 10.5 with respect to the Administrative Agent.

ARTICLE XI

MISCELLANEOUS

11.1 Fees and Expenses. The Borrower agrees (i) whether or not the transactions contemplated by this Agreement shall be consummated, to pay upon demand all reasonable out-of-pocket costs and expenses of the Administrative Agent and the Arranger (including, without limitation, the reasonable fees and out-of-pocket expenses of counsel to the Administrative Agent and the Arranger) in connection with (w) the preparation, negotiation, execution, delivery and syndication of the Commitment Letter, this Agreement and the other Credit Documents and (if requested by the Borrower) any amendment, modification or waiver hereof or thereof or consent with respect hereto or thereto, (x) the engagement of appraisers, consultants, auditors or similar Persons by the Administrative Agent at any time after the Closing Date to render opinions concerning the Credit Parties’ financial condition and the value of the Collateral (provided that only two such engagements per year shall be at the Borrower’s expense, unless an Event of Default shall have occurred and be continuing, in which case all such engagements during the continuance of such Event of Default shall be at the Borrower’s expense), (y) after the occurrence and during the continuance of an Event of Default, any attempt to inspect, verify, protect, collect, sell, liquidate or otherwise dispose of any Collateral and (z) the creation, perfection and maintenance of the perfection of the Administrative Agent’s Liens upon the Collateral, including, without limitation, Lien search, filing and recording fees, (ii) after the occurrence and during the continuance of an Event of Default, to pay upon demand all out-of-pocket costs and expenses of the Administrative Agent and each Lender (including, without limitation, reasonable attorneys’ fees and out-of-pocket expenses) in connection with (y) any refinancing or restructuring of the credit arrangements provided under this Agreement, whether in the nature of a “work-out,” in any insolvency or bankruptcy proceeding or otherwise and whether or not consummated, and (z) the enforcement, attempted enforcement or preservation of any rights or remedies under this Agreement or any of the other Credit Documents, whether in any action, suit or proceeding (including any bankruptcy or insolvency proceeding) or otherwise, and (iii) to pay and hold the Administrative Agent, the Arranger and each Lender harmless from and against all liability for any intangibles, documentary, stamp or other similar taxes, fees and excises, if any, including any interest and penalties, and any finder’s or brokerage fees, commissions and expenses (other than any fees, commissions or expenses of finders or brokers engaged by the Administrative Agent or any Lender), that may be payable in connection with the transactions contemplated by this Agreement and the other Credit Documents. Notwithstanding the foregoing or any other provision of this Agreement or any other Credit Documents, so long as the Sponsor is an Affiliate of the Borrower, the Sponsor in its capacity as a Lender shall not be entitled to be paid or reimbursed any out-of-pocket costs and expenses by any Credit Party pursuant to this Section 11.1 or any corresponding expense reimbursement provision of any other Credit Document.

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11.2 Indemnification. The Borrower agrees, whether or not the transactions contemplated by this Agreement shall be consummated, to indemnify and hold the Administrative Agent, the Arranger and each Lender and each of their respective directors, officers, employees, agents and Affiliates (each, an “Indemnified Person”) harmless from and against any and all claims, losses, damages, obligations, liabilities, penalties, costs and expenses (including, without limitation, reasonable attorneys’ fees and out-of-pocket expenses) (collectively, “Indemnified Costs”), that may at any time be imposed on, incurred by or asserted against any such Indemnified Person as a result of, arising from or in any way relating to the preparation, execution, performance, enforcement of or preservation of rights under this Agreement or any of the other Credit Documents, any of the transactions contemplated herein or therein or any transaction financed or to be financed in whole or in part, directly or indirectly, with the proceeds of any Loans or Letters of Credit (including, without limitation, in connection (i) with the actual or alleged generation, presence, storage, treatment, disposal, transport, discharge or release of any Hazardous Substances by any Credit Party on, in, to or from any real property at any time owned, operated or leased by any Credit Party, (ii) any other Environmental Claims and (iii) any violation of or liability under any Environmental Law), or any action, suit or proceeding (including any inquiry or investigation) by any Person, whether threatened or initiated, related to any of the foregoing, and in any case whether or not such Indemnified Person is a party to any such action, proceeding or suit or a subject of any such inquiry or investigation; provided, however, that (I) no Indemnified Person shall have the right to be indemnified hereunder for any Indemnified Costs to the extent such Indemnified Costs result from (a) the gross negligence, bad faith or willful misconduct of such Indemnified Person, its Affiliates, agents or representatives, or from a material breach of such Indemnified Person’s obligations or duties hereunder or (b) any claim or claims solely among the Administrative Agent and the Lenders, or any of them, that do not arise out of or relate to a Default or Event of Default hereunder, (II) the obligation of the Borrower to pay or reimburse attorneys’ fees and expenses under this Section is subject to any otherwise applicable provision contained in Section 11.1 or elsewhere in the Credit Documents relating to the payment or reimbursement of attorneys’ fees and expenses, and (III) notwithstanding the foregoing or any other provision of this Agreement or any other Credit Documents, so long as the Sponsor is an Affiliate of the Borrower, the Sponsor in its capacity as a Lender hereunder shall be entitled to indemnification pursuant to this Section or any corresponding provision of any other Credit Document only to the extent that Indemnified Costs are incurred by or asserted against the Sponsor in its capacity as a Lender hereunder. All of the foregoing Indemnified Costs of any Indemnified Person shall be paid or reimbursed by the Borrower, as and when incurred and upon demand. To the extent permitted by applicable law, the Borrower shall not assert, and hereby waives, any claim against any Indemnified Person, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement or any of the other Credit Documents, any of the transactions contemplated herein or therein or any transaction financed or to be financed in whole or in part, directly or indirectly, with the proceeds of any Loans or Letters of Credit.

11.3 Governing Law; Consent to Jurisdiction. THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS SHALL (EXCEPT AS MAY BE EXPRESSLY OTHERWISE PROVIDED IN ANY CREDIT DOCUMENT) BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK

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GENERAL OBLIGATIONS LAW, BUT EXCLUDING ALL OTHER CHOICE OF LAW AND CONFLICTS OF LAW RULES); PROVIDED THAT EACH LETTER OF CREDIT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OR RULES DESIGNATED IN SUCH LETTER OF CREDIT OR APPLICATION THEREFOR OR, IF NO SUCH LAWS OR RULES ARE DESIGNATED, THE INTERNATIONAL STANDBY PRACTICES OF THE INTERNATIONAL CHAMBER OF COMMERCE, AS IN EFFECT FROM TIME TO TIME (THE “ISP”), AND, AS TO MATTERS NOT GOVERNED BY THE ISP, THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, BUT EXCLUDING ALL OTHER CHOICE OF LAW AND CONFLICTS OF LAW RULES). THE BORROWER HEREBY CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF ANY STATE COURT WITHIN MECKLENBURG COUNTY, NORTH CAROLINA, OR ANY FEDERAL COURT LOCATED WITHIN THE WESTERN DISTRICT OF THE STATE OF NORTH CAROLINA FOR ANY PROCEEDING INSTITUTED HEREUNDER OR UNDER ANY OF THE OTHER CREDIT DOCUMENTS, OR ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS, OR ANY PROCEEDING TO WHICH THE ADMINISTRATIVE AGENT, THE ARRANGER OR ANY LENDER, OR THE BORROWER IS A PARTY, INCLUDING ANY ACTIONS BASED UPON, ARISING OUT OF, OR IN CONNECTION WITH ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE ADMINISTRATIVE AGENT, THE ARRANGER OR ANY LENDER, OR THE BORROWER. THE BORROWER IRREVOCABLY AGREES TO BE BOUND (SUBJECT TO ANY AVAILABLE RIGHT OF APPEAL) BY ANY JUDGMENT RENDERED OR RELIEF GRANTED THEREBY AND FURTHER WAIVES ANY OBJECTION THAT IT MAY HAVE BASED ON LACK OF JURISDICTION OR IMPROPER VENUE OR FORUM NON CONVENIENS TO THE CONDUCT OF ANY SUCH PROCEEDING. THE BORROWER CONSENTS THAT ALL SERVICE OF PROCESS BE MADE BY REGISTERED OR CERTIFIED MAIL DIRECTED TO IT AT THE ADDRESS SET FORTH IN SECTION 11.5, AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED UPON THE EARLIER OF ACTUAL RECEIPT THEREOF OR THREE (3) DAYS AFTER DEPOSIT IN THE UNITED STATES MAILS, PROPER POSTAGE PREPAID AND PROPERLY ADDRESSED. NOTHING IN THIS SECTION 11.3 SHALL AFFECT THE RIGHT TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT, THE ARRANGER OR ANY LENDER TO BRING ANY ACTION OR PROCEEDING AGAINST THE BORROWER IN THE COURTS OF ANY OTHER JURISDICTION.

11.4 Waiver of Jury Trial. EACH OF THE PARTIES TO THIS AGREEMENT HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ITS RESPECTIVE RIGHTS TO TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS TO WHICH IT IS A PARTY.

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11.5 Notices.

(a) All notices, directions, consents and other communications provided for hereunder shall be in writing (including telegraphic, telex, facsimile transmission or cable communication) and mailed, telegraphed, telexed, telecopied, cabled or delivered to the party to be notified at the following addresses:

(i) if to the Borrower, to Symmetry Medical, Inc., 220 West Market Street, Warsaw, Indiana 46580, Attention: Fred Hite, Telecopy No. (260) 267-4551, Internet address www.symmetrymedical.com, with copies to Olympus Growth Fund III, L.P., Metro Center, One Station Place, Stamford, Connecticut 06902, Attention: James Conroy, Telecopy No. (203) 353-5910, and to Kirkland & Ellis, 200 Randolph Drive, Chicago, Illinois 60601, Attention: Francesco Penati, Telecopy No. (312) 861-2200;

(ii) if to the Administrative Agent, to Wachovia Bank, National Association, Charlotte Plaza Building CP-23, 201 South College Street, Charlotte, North Carolina 28288-0680, Attention: Syndication Agency Services, Telephone No. (704) 383-3721, Telecopy No. (704) 383-0288; and

(iii) if to any Lender, to it at the address set forth on Schedule 1.1(a) (or if to any Lender not a party hereto as of the date hereof, at the address set forth in its Assignment and Acceptance);

or in each case, to such other address as any party may designate for itself by like notice to all other parties hereto. All such notices and communications shall be deemed to have been given (i) if mailed as provided above by any method other than overnight delivery service, on the third (3^rd) Business Day after deposit in the mails, (ii) if mailed by overnight delivery service, telegraphed, telexed, telecopied or cabled, when delivered for overnight delivery, delivered to the telegraph company, confirmed by telex answerback, transmitted by telecopier or delivered to the cable company, respectively, or (iii) if delivered by hand, upon delivery; provided that notices and communications to the Administrative Agent shall not be effective until received by the Administrative Agent.

(b) Notices and communications to the Lenders hereunder may be delivered or furnished by electronic communication (including e-mail and internet or intranet websites) pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply to notices to any Lender pursuant to Article II if such Lender has notified the Administrative Agent that it is incapable of receiving notices thereunder by electronic communication. The Administrative Agent or the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communication pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications. Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed to have been given upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), and (ii) notices or other communications posted to an internet or intranet website shall be deemed to have been given upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor.

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11.6 Amendments, Waivers, etc. No amendment, modification, waiver or discharge or termination of, or consent to any departure by any Credit Party from, any provision of this Agreement or any other Credit Document shall be effective unless in a writing signed by the Required Lenders (or by the Administrative Agent at the direction or with the consent of the Required Lenders), and then the same shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no such amendment, modification, waiver, discharge, termination or consent shall:

(a) unless agreed to by each Lender directly affected thereby, (i) reduce or forgive the principal amount of any Loan or Reimbursement Obligation, reduce the rate of or forgive any interest thereon, or reduce or forgive any fees or other Obligations (other than fees payable to the Administrative Agent, the Arranger or the Issuing Lender for its own account), (ii) extend the Term Loan Maturity Date, the Revolving Credit Maturity Date or any other scheduled date for the payment of any principal of or interest on any Loan (other than in connection with a mandatory prepayment of the Loans pursuant to Sections 2.6(d) through 2.6(f)) or reduction or termination of the Revolving Credit Commitments in connection therewith), extend the time of payment of any Reimbursement Obligation or any interest thereon or extend the time of payment of any fees hereunder (other than fees payable to the Administrative Agent, the Arranger or the Issuing Lender for its own account), or (iii) modify the amortization schedule set forth in Section 2.6(a);

(b) unless agreed to by all of the Lenders, (i) increase or extend any Commitment of any Lender (it being understood that a waiver of any Event of Default, if agreed to by the Required Lenders or all Lenders (as may be required hereunder with respect to such Event of Default), shall not constitute such an increase), (ii) change the percentage of the aggregate Commitments or of the aggregate unpaid principal amount of the Loans, or the number or percentage of Lenders, that shall be required for the Lenders or any of them to take or approve, or direct the Administrative Agent to take, any action hereunder or under any other Credit Document (including as set forth in the definition of “Required Lenders”), (iii) except as may be otherwise specifically provided in this Agreement or in any other Credit Document, release all or substantially all of the Collateral or release any Subsidiary Guarantor from its obligations under the Subsidiary Guaranty, (iv) change any other provision of this Agreement or any of the other Credit Documents requiring, by its terms, the consent or approval of all the Lenders for such amendment, modification, waiver, discharge, termination or consent, (v) change or waive any provision of Section 2.15, any other provision of this Agreement or any other Credit Document requiring pro rata treatment of any Lenders, or this Section 11.6, or (vi) change or waive Section 2.10 to permit any Interest Period of greater than six months’ duration unless such Interest Period is subject to the agreement of all of the Lenders;

(c) unless agreed to by (i) all of the Revolving Credit Lenders, (y) extend the expiry date of any Letter of Credit beyond the Letter of Credit Maturity Date or (z) change the percentage set forth in the definition of “Required Revolving Credit Lenders” (it being understood that no consent of any other Lender or the Administrative Agent is required), or (ii) the Required Revolving Credit Lenders, (y) change any other provision of Article III or any other terms or provisions of, or any other terms or provisions of any Credit Document relating to, any Letter of Credit, or (z) amend, modify or waive any condition precedent to any Borrowing of

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Revolving Loans or issuance of a Letter of Credit set forth in Section 4.2 (including in connection with any waiver of an existing Default or Event of Default); and

(d) unless agreed to by the Issuing Lender, the Swingline Lender or the Administrative Agent in addition to the Lenders required as provided hereinabove to take such action, affect the respective rights or obligations of the Issuing Lender, the Swingline Lender or the Administrative Agent, as applicable, hereunder or under any of the other Credit Documents;

and provided further that (i) if any amendment, modification, waiver or consent would adversely affect the holders of Loans of a particular Class (the “affected Class”) relative to holders of Loans of another Class (including, without limitation, by way of reducing the relative proportion of any payments, prepayments or Commitment reductions to be applied for the benefit of holders of Loans of the affected Class under Sections 2.6(d) through 2.6(f), then such amendment, modification, waiver or consent shall require the consent of Lenders holding at least a majority of the aggregate outstanding principal amount of all Loans (and unutilized Commitments, if any) of the affected Class, (ii) the Fee Letter may only be amended or modified, and any rights thereunder waived, in a writing signed by the parties thereto, and (iii) the Administrative Agent may, without the consent of any Lender, amend or modify any provision of this Agreement or any other Credit Document if the effect of such amendment or modification is strictly technical or correctional in nature and does not affect any substantive rights of any other party hereto or thereto.

11.7 Assignments, Participations.

(a) Each Lender may assign to one or more other Eligible Assignees (each, an “Assignee”) all or a portion of its rights and obligations under this Agreement (including, without limitation, all or a portion of its Commitments, the outstanding Loans made by it and its participations in Letters of Credit); provided, however, that:

(i) each such assignment by a Lender of any of its interests relating to Loans of a particular Class shall be made in such manner so that the same portion of its Commitment, Loans and other interests under and with respect to such Class is assigned to the relevant Assignee (but assignments need not be pro rata as among Classes of Loans);

(ii) except in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund with respect to a Lender, without the written consent (to be evidenced by its counter execution of the relevant Assignment and Acceptance and not to be unreasonably withheld or delayed) of each of the Administrative Agent and, so long as no Default or Event of Default has occurred and is continuing, the Borrower, no such assignment shall be in an aggregate principal amount (determined as of the date of the Assignment and Acceptance with respect to such assignment) less than (x) in the case of Term Loans, $2,500,000 (or, if less, the full amount of the assigning Lender’s outstanding Term Loans); provided that, for purposes of this clause (x), a series of assignments by any Lender, its Affiliates and its Approved Funds on or about the same day to several Assignees that are Affiliates of one another or are related as Approved Funds shall be deemed to be a single assignment, and all Term Loans held by the

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Affiliates and Approved Funds of an assigning Lender shall be deemed to be held by such Lender, (y) in the case of Revolving Credit Commitments, $2,500,000 (or, if less, the entire Revolving Credit Commitment of the assigning Lender), or (z) in the case of Swingline Loans, the entire Swingline Commitment and the full amount of the outstanding Swingline Loans; and

(iii) the parties to each such assignment will execute and deliver to the Administrative Agent, for its acceptance and recording in the Register, an Assignment and Acceptance and will pay a nonrefundable processing fee of $3,500 to the Administrative Agent for its own account.

Upon such execution, delivery, acceptance and recording of the Assignment and Acceptance, from and after the effective date specified therein, (A) the Assignee thereunder shall be a party hereto and, to the extent that rights and obligations hereunder have been assigned to it pursuant to such Assignment and Acceptance, shall have the rights and obligations of the assigning Lender hereunder with respect thereto and (B) the assigning Lender shall, to the extent that rights and obligations hereunder have been assigned by it pursuant to such Assignment and Acceptance, relinquish its rights (other than rights under the provisions of this Agreement and the other Credit Documents relating to indemnification or payment of fees, costs and expenses, to the extent such rights relate to the time prior to the effective date of such Assignment and Acceptance) and be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all or the remaining portion of such assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto, except that such assigning Lender shall continue to be entitled to the protections of Sections 2.16(a), 2.16(b), 2.17, 11.1 and 11.2 for matters arising during the periods while it was a Lender hereunder). The terms and provisions of each Assignment and Acceptance shall, upon the effectiveness thereof, be incorporated into and made a part of this Agreement, and the covenants, agreements and obligations of each Lender set forth therein shall be deemed made to and for the benefit of the Administrative Agent and the other parties hereto as if set forth at length herein.

(b) The Administrative Agent, acting solely for this purpose as an agent of the Borrower, will maintain at its address for notices referred to in Section 11.5(a)(ii) a copy of each Assignment and Acceptance delivered to and accepted by it and a register for the recordation of the names and addresses of the Lenders and the Commitments of, and principal amount of the Loans owing to, each Lender from time to time (the “Register”). The entries in the Register shall be conclusive and binding for all purposes, absent manifest error, and the Borrower, the Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Borrower and each Lender at any reasonable time and from time to time upon reasonable prior notice.

(c) Upon its receipt of a duly completed Assignment and Acceptance executed by an assigning Lender and an Assignee and, if required, counterexecuted by the Borrower and the Issuing Lender, together with the processing fee referred to in Section 11.7(a), the Administrative Agent will (i) accept such Assignment and Acceptance, (ii) on or as of the effective date thereof, record the information contained therein in the Register and (iii) give notice thereof to the Borrower. If requested by or on behalf of the Assignee, the Borrower, at its

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own expense, will execute and deliver to the Administrative Agent, in exchange for the surrendered Note or Notes, a new Note or Notes to the order of the Assignee (and, if the assigning Lender has retained any portion of its rights and obligations hereunder, to the order of the assigning Lender), prepared in accordance with the applicable provisions of Section 2.4 as necessary to reflect, after giving effect to the assignment, the Commitments and/or outstanding Loans, as the case may be, of the Assignee and (to the extent of any retained interests) the assigning Lender, in substantially the form of Exhibits A-1, A-2, and/or A-3, as applicable. The Administrative Agent will return canceled Notes to the Borrower. At the time of each assignment pursuant to this Section 11.7 to a Person that is a Non-U.S. Lender and is not already a Lender hereunder, the assignee Lender shall provide to the Borrower and the Administrative Agent the appropriate Internal Revenue Service forms described in Section 2.17.

(d) Each Lender may, without the consent of the Borrower, the Administrative Agent or any other Lender, sell to one or more other Persons (each, a “Participant”) participations in all or a portion of its rights and obligations under this Agreement (including, without limitation, all or a portion of its Commitments, the outstanding Loans made by it and its participations in Letters of Credit); provided, however, that (i) such Lender’s obligations under this Agreement shall remain unchanged and such Lender shall remain solely responsible for the performance of such obligations, (ii) the Borrower, the Administrative Agent and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement, and no Lender shall permit any Participant to have any voting rights or any right to control the vote of such Lender with respect to any amendment, modification, waiver, consent or other action hereunder or under any other Credit Document (except as to actions that would (A) reduce or forgive the principal amount of any Loan, reduce the rate of or forgive any interest thereon, or reduce or forgive any fees or other Obligations, (B) extend the Term Loan Maturity Date, the Revolving Credit Maturity Date or any other date fixed for the payment of any principal of or interest on any Loan (other than in connection with a mandatory prepayment of the Loans pursuant to Sections 2.6(d) through 2.6(f)), any fees or any other Obligations, (C) increase or extend any Commitment of the Lender selling the participation, (D) release all or substantially all the Collateral, or (E) consent to the assignment or transfer by the Borrower of its rights and obligations under this Agreement), and (iv) no Participant shall have any rights under this Agreement or any of the other Credit Documents, each Participant’s rights against the granting Lender in respect of any participation to be those set forth in the participation agreement, and all amounts payable by the Borrower hereunder shall be determined as if such Lender had not granted such participation. Notwithstanding the foregoing, each Participant shall have the rights of a Lender for purposes of Sections 2.16(a), 2.16(b), 2.17, 2.18 and 9.3, and shall be entitled to the benefits thereto, to the extent that the Lender granting such participation would be entitled to such benefits if the participation had not been made; provided that no Participant shall be entitled to receive any greater amount pursuant to any of such Sections than the Lender granting such participation would have been entitled to receive in respect of the amount of the participation made by such Lender to such Participant had such participation not been made.

(e) Nothing in this Agreement shall be construed to prohibit any Lender from pledging or assigning all or any portion of its rights and interest hereunder as security for borrowings or other obligations, including any pledge or assignment to secure obligations to a Federal Reserve Bank or, in the case of any Lender that is an Fund, to the trustee under any

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indenture to which such Fund is a party in support of its obligations to the trustee for the benefit of the applicable trust beneficiaries; provided, however, that no such pledge or assignment shall release a Lender from any of its obligations hereunder; and provided further that any foreclosure or similar action by any such trustee shall be subject to the provisions of this Section 11.7 concerning assignments and no such trustee shall have any voting rights hereunder solely on account of such pledge.

(f) Any Lender or participant may, in connection with any assignment, participation, pledge or proposed assignment, participation or pledge pursuant to this Section 11.7, disclose to the Assignee, Participant or pledgee or proposed Assignee, Participant or pledgee any information relating to the Borrower and its Subsidiaries furnished to it by or on behalf of any other party hereto; provided that such Assignee, Participant or pledgee or proposed Assignee, Participant or pledgee agrees in writing to keep such information confidential to the same extent required of the Lenders under Section 11.13.

(g) Notwithstanding anything to the contrary contained herein, if Wachovia assigns all of its Revolving Credit Commitments and Revolving Loans in accordance with this Section 11.7, Wachovia may resign as Issuing Lender upon written notice to the Borrower and the Lenders. Upon any such notice of resignation, the Borrower shall have the right to appoint from among the Lenders a successor Issuing Lender; provided that no failure by the Borrower to make such appointment shall affect the resignation of Wachovia as Issuing Lender. Wachovia shall retain all of the rights and obligations of the Issuing Lender hereunder with respect to all Letters of Credit issued by it and outstanding as of the effective date of its resignation and all obligations of the Borrower and the Revolving Credit Lenders with respect thereto (including the right to require the Revolving Credit Lenders to make Revolving Loans or fund participation interests pursuant to Article III).

(h) Subject to the provisions of this Section 11.7(h), the Sponsor may become a Lender hereunder pursuant to assignments made in accordance with this Section 11.7, provided that, notwithstanding anything in this Agreement or any other Credit Document to the contrary, for so long as the Sponsor is an Affiliate of the Borrower:

(i) the Sponsor may hold or own only Term Loans;

(ii) the aggregate principal outstanding amount of Term Loans held or owned at any time by the Sponsor shall not exceed 10% of the aggregate principal amount of Term Loans outstanding at such time; and

(iii) the Sponsor shall not have any right to vote as a Lender hereunder or under any of the other Credit Documents for purposes of granting consents or waivers, for purposes of agreeing to amendments or other modifications to this Agreement or any of the other Credit Documents, for purposes of making requests to the Administrative Agent pursuant to Section 9.2, or for any other purpose whatsoever, and the determination of the Required Lenders (or, where a higher percentage of the Lenders is expressly required hereunder, the determination of such Lenders, or the determination of any other group of Lenders entitled to take any vote or give any approval hereunder) shall for all purposes of this Agreement and the other Credit Documents be made without

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regard to the Sponsor’s interest in any of the Commitments, Loans or other Obligations. If any Lender sells a participating interest in any of its rights and obligations hereunder to a participant, and such participant is the Borrower or an Affiliate of the Borrower, then such transferor Lender shall promptly notify the Administrative Agent of the sale of such participation. Any such transferor Lender shall have no right to vote as a Lender hereunder or under any of the other Credit Documents for purposes of granting consents or waivers or for purposes of agreeing to amendments or modifications to this Agreement or any of the other Credit Documents or for purposes of making requests to the Administrative Agent pursuant to Section 9.2 to the extent that such participation is beneficially owned by the Borrower or any Affiliate of the Borrower, and the determination of the Required Lenders (or, where a higher percentage of the Lenders is expressly required hereunder, the determination of such Lenders, or the determination of any other group of Lenders entitled to take any vote or give any approval hereunder) shall for all purposes of this Agreement and the other Credit Documents be made without regard to the interest of such transferor Lender in any of the Loans or other Obligations to the extent of such participation. Nothing in this subsection shall affect any right the Sponsor may have under the Bankruptcy Code to vote as a Lender on any bankruptcy reorganization plan that affects the Loans.

11.8 No Waiver. The rights and remedies of the Administrative Agent and the Lenders expressly set forth in this Agreement and the other Credit Documents are cumulative and in addition to, and not exclusive of, all other rights and remedies available at law, in equity or otherwise. No failure or delay on the part of the Administrative Agent or any Lender in exercising any right, power or privilege shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or privilege preclude other or further exercise thereof or the exercise of any other right, power or privilege or be construed to be a waiver of any Default or Event of Default. No course of dealing between any Credit Party, the Administrative Agent or the Lenders or their agents or employees shall be effective to amend, modify or discharge any provision of this Agreement or any other Credit Document or to constitute a waiver of any Default or Event of Default. No notice to or demand upon any Credit Party in any case shall entitle any Credit Party to any other or further notice or demand in similar or other circumstances or constitute a waiver of the right of the Administrative Agent or any Lender to exercise any right or remedy or take any other or further action in any circumstances without notice or demand.

11.9 Successors and Assigns. This Agreement shall be binding upon, inure to the benefit of and be enforceable by the respective successors and assigns of the parties hereto, and all references herein to any party shall be deemed to include its successors and assigns; provided, however, that neither (i) the Borrower nor any other Credit Party shall sell, assign or transfer any of its rights, interests, duties or obligations under this Agreement without the prior written consent of all of the Lenders and (ii) Assignees and Participants shall have such rights and obligations with respect to this Agreement and the other Credit Documents as are provided for under and pursuant to the provisions of Section 11.7.

11.10 Survival. All representations, warranties and agreements made by or on behalf of the Borrower or any other Credit Party in this Agreement and in the other Credit Documents shall survive the execution and delivery hereof or thereof, the making and repayment of the

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Loans and the issuance and repayment of the Letters of Credit. In addition, notwithstanding anything herein or under applicable law to the contrary, the provisions of this Agreement and the other Credit Documents relating to indemnification or payment of costs and expenses, including, without limitation, the provisions of Sections 2.16(a), 2.16(b), 2.17, 2.18, 10.7, 11.1 and 11.2, shall survive the payment in full of all Loans and Letters of Credit, the termination of the Commitments and all Letters of Credit, and any termination of this Agreement or any of the other Credit Documents.

11.11 Severability. To the extent any provision of this Agreement is prohibited by or invalid under the applicable law of any jurisdiction, such provision shall be ineffective only to the extent of such prohibition or invalidity and only in such jurisdiction, without prohibiting or invalidating such provision in any other jurisdiction or the remaining provisions of this Agreement in any jurisdiction.

11.12 Construction. The headings of the various articles, sections and subsections of this Agreement and the table of contents have been inserted for convenience only and shall not in any way affect the meaning or construction of any of the provisions hereof. Except as otherwise expressly provided herein and in the other Credit Documents, in the event of any inconsistency or conflict between any provision of this Agreement and any provision of any of the other Credit Documents, the provision of this Agreement shall control.

11.13 Confidentiality. Each of the Administrative Agent and each Lender agrees to keep confidential, pursuant to its customary procedures for handling confidential information of a similar nature and in accordance with safe and sound banking practices, all nonpublic information provided to it by or on behalf of the Borrower or any other Credit Party in connection with this Agreement or any other Credit Document; provided, however, that each of the Administrative Agent and each Lender may disclose such information (i) to its Affiliates, and to its and its Affiliates’ respective directors, employees and agents and to its auditors, counsel and other professional advisors so long such parties are notified of the confidential nature of such information (provided that such parties shall be subject to the provisions of this Section 11.13 to the same extent as such Lender), (ii) at the demand or request of any bank regulatory authority, court or other Governmental Authority having or asserting jurisdiction over the Administrative Agent or such Lender or any of their respective Affiliates, as may be required pursuant to subpoena or other legal process, or otherwise in order to comply with any applicable Requirement of Law, provided that the Administrative Agent or such Lender shall, if practicable (and if not prohibited from so doing by any applicable Requirement of Law or court or administrative order), provide the Borrower with prior notice of such disclosure, (iii) in connection with any proceeding to enforce its rights hereunder, under any other Credit Document or under any Hedge Agreement or in any other litigation or proceeding in connection with the Credit Documents or any Hedge Agreement or to which it is a party, (iv) to the Administrative Agent, the Arranger or any other Lender, (v) to the extent the same has become publicly available other than as a result of a breach of this Agreement, and (vi) pursuant to and in accordance with the provisions of Section 11.7(f).

11.14 Counterparts; Effectiveness. This Agreement may be executed in any number of counterparts and by different parties hereto on separate counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the

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same instrument. This Agreement shall become effective upon the execution of a counterpart hereof by each of the parties hereto and receipt by the Administrative Agent and the Borrower of written or telephonic notification of such execution and authorization of delivery thereof.

11.15 Disclosure of Information. The Borrower agrees and consents to the Administrative Agent’s and the Arranger’s disclosure of information relating to this transaction to Gold Sheets and other similar bank trade publications. Such information will consist of deal terms and other information customarily found in such publications.

11.16 USA PATRIOT Act Notice. Each Lender that is subject to the PATRIOT Act and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies the Borrower that pursuant to the requirements of the PATRIOT Act, it is required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of the Borrower and other information that will allow such Lender or the Administrative Agent, as applicable, to identify the Borrower in accordance with the PATRIOT Act.

11.17 Entire Agreement. THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS (A) EMBODY THE ENTIRE AGREEMENT AND UNDERSTANDING BETWEEN THE PARTIES HERETO AND THERETO RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF, (B) SUPERSEDE ANY AND ALL PRIOR AGREEMENTS AND UNDERSTANDINGS OF SUCH PERSONS, ORAL OR WRITTEN, RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF, INCLUDING, WITHOUT LIMITATION, THE COMMITMENT LETTER (AND ALL OBLIGATIONS OF THE PARTIES THEREUNDER SHALL BE TERMINATED AS OF THE DATE HEREOF), BUT SPECIFICALLY EXCLUDING THE FEE LETTER, AND (C) MAY NOT BE AMENDED, SUPPLEMENTED, CONTRADICTED OR OTHERWISE MODIFIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized officers as of the date first above written.

SYMMETRY MEDICAL INC.

By:

Title: 

(signatures continued)

S-1

WACHOVIA BANK, NATIONAL ASSOCIATION, as Administrative Agent, Issuing Lender, Swingline Lender and as a Lender
By:
Name:	Glenn F. Edwards
Title:	Managing Director

S-2

ANTARES CAPITAL CORPORATION, as

Syndication Agent and as a Lender

By:

Title: 

S-3

GENERAL ELECTRIC CAPITAL

CORPORATION, as Syndication Agent and as a

Lender

By:

Title: 

S-4

CIT LENDING SERVICES CORPORATION,

as Documentation Agent and as a Lender

By:

Title: 

S-5

THE ROYAL BANK OF SCOTLAND plc, as

Documentation Agent and as a Lender

By:

Title: 

S-6

PB CAPITAL CORPORATION

By:

Title: 

By:

Title: 

S-7

Schedule 1.1(a)

Commitments and

Notice Addresses

Lender	Term Loan Commitment		Revolving Credit Commitment
Wachovia Bank, National Association	$	6,066,666.66	$	6,933,333.35
Antares Capital Corporation	$	6,066,666.67	$	6,933,333.33
General Electric Capital Corporation	$	6,066,666.67	$	6,933,333.33
The Royal Bank of Scotland plc	$	6,066,666.67	$	6,933,333.33
CIT Lending Services Corporation	$	6,066,666.67	$	6,933,333.33
PB Capital Corporation	$	4,666,666.66	$	5,333,333.33
Total	$	35,000,000.00	$	40,000,000.00

Notice Addresses

Lender

Address

Wachovia Bank, National Association

Instructions for wire transfers to the Administrative Agent: Wachovia Bank, National Association ABA Routing No. 053000219 Charlotte, North Carolina Account Number: 5000000024476 Account Name: Symmetry Medical, Inc. Attention: Syndication Agency Services Address for notices as a Lender: Wachovia Bank, National Association One Wachovia Center, 6th Floor 301 South College Street Charlotte, North Carolina 28288-0760 Attention: Glenn Edwards Telephone: (704) 383-3810 Telecopy: (704) 374-4793 Lending Office: Wachovia Bank, National Association Charlotte Plaza Building, CP-23 201 South College Street Charlotte, North Carolina 28288-0680 Attention : Syndication Agency Services Telephone: (704) 383-3721 Telecopy: (704) 383-0288

Antares Capital Corporation Address for notices as a Lender: Antares Capital Corporation 311 South Wacker Drive, Suite 4400 Chicago, Illinois 60606 Attention: Grant Haggard Telephone: (312) 697-3988 Telecopy: (312) 697-3998 Lending Office: Antares Capital Corporation 311 South Wacker Drive, Suite 4400 Chicago, Illinois 60606 Attention: Grant Haggard Telephone: (312) 697-3988 Telecopy: (312) 697-3998

General Electric Capital Corporation Address for notices as a Lender: General Electric Capital Corporation 500 W. Monroe St. Chicago, Illinois 60661 Attention: Matthew Nels Telephone: (312) 441-7697 Telecopy: (312) 441-7598 Lending Office: General Electric Capital Corporation 500 W. Monroe St. Chicago, Illinois 60661 Attention: Matthew Nels Telephone: (312) 441-7697 Telecopy: (312) 441-7598

The Royal Bank of Scotland plc Address for notices as a Lender: The Royal Bank of Scotland 101 Park Avenue, 10th Floor New York, New York 10178 Attention: Curt Lueker Telephone: (212) 401-1372 Telecopy: (212) 401-1396 Lending Office: The Royal Bank of Scotland 101 Park Avenue, 10th Floor New York, New York 10178 Attention: Curt Lueker Telephone: (212) 401-1372 Telecopy: (212) 401-1396

CIT Lending Services Corporation Address for notices as a Lender: c/o CIT Group Inc. Business Credit/Corporate Finance Group 1 CIT Drive, 3rd Floor Livingston, New Jersey 07039 Attention: Maria Levy Telecopier No.: (973) 740-5721 Telephone No.: (973) 422-6668 with a copy to: c/o CIT Group Inc. Corporate Legal Department 1 CIT Drive, 3^rd Floor Livingston, New Jersey 07039 Attention: John P. Sirico, II, Vice President & Assistant Chief Counsel Telecopier No.: (973) 422-5822 or (973) 740-5841 Telephone No.: (973) 422-5858 Lending Office: c/o CIT Group Inc. Business Credit/Corporate Finance Group 1 CIT Drive, 3rd Floor Livingston, New Jersey 07039 Attention: Maria Levy Telecopier No.: (973) 740-5721 Telephone No.: (973) 422-6668

PB Capital Corporation Address for notices as a Lender: PB Capital Corporation 590 Madison Avenue, 30th Floor New York, New York 10022-2540 Attention: Steven Alexander, VP Telephone: (212) 756-5530 Telecopy: (212) 756-5536 Lending Office: PB Capital Corporation 590 Madison Avenue, 30th Floor New York, New York 10022-2540 Attention: Steven Alexander, VP Telephone: (212) 756-5530 Telecopy: (212) 756-5536

EX-10.7

Exhibit 10.7

AMENDMENT TO STOCKHOLDERS AGREEMENT

THIS AMENDMENT TO STOCKHOLDERS AGREEMENT (this “Amendment”) is made as of August 3, 2004, by and between Symmetry Medical Inc., a Delaware corporation (the “Company”), Olympus/Symmetry Holdings LLC, a Delaware limited liability company (“Investor”), and those certain other parties executing the signature pages hereto.

WHEREAS, the Company, Investor and certain other Persons are a party to that certain Stockholders Agreement, dated as of October 18, 2000, as amended or modified from time to time (the “Stockholders Agreement”). Capitalized terms used but not defined herein shall have the meaning given to them in the Stockholder Agreement.

WHEREAS, pursuant to the provisions of Section 18 of the Stockholders Agreement, the parties hereto desire to amend certain provisions of the Stockholders Agreement.

NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1. Definitions. The defined term “Common Stock” in Section 16 of the Stockholder’s Agreement is hereby amended by replacing the period at the end of the sentence with a comma and adding the following phrase:

“and any other shares into which such shares may be changed by reason of any amendment, reorganization, reclassification or any other change to the capital stock of the Company.”

2. Obligations Under Section 6. Section 6 of the Stockholders Agreement is hereby amended by adding the following sentence to the end of Section 6:

“(d) The provisions of this Section 6 shall terminate upon a Qualified Public Offering.”

3. Effect of Amendment. The Stockholders Agreement, as amended pursuant to the terms of this Amendment, shall continue in full force and effect after the date of this Amendment.

*         *         *         *         *

IN WITNESS WHEREOF, the undersigned has executed and delivered this Amendment as of the date first written above.

SYMMETRY MEDICAL INC.

By:

Name: 

Its:

OLYMPUS/SYMMETRY HOLDINGS LLC

By:

Name: 

Its:

(Continuation of Signature Page to Amendment to Stockholders Agreement)

WINDJAMMER MEZZANINE & EQUITY FUND II, L.P.
By:	Windjammer Capital Investors, LLC
Its:	General Partner
By:
Name:
Its:
METTIS GROUP LIMITED
By:
Name:
Its:

EX-10.12

Exhibit 10.12

SYMMETRY MEDICAL INC.

AMENDED AND RESTATED

2004 EQUITY INCENTIVE PLAN

1. Purpose.

This plan shall be known as the Symmetry Medical Inc. Amended and Restated 2004 Equity Incentive Plan (the “Plan”). The purpose of the Plan shall be to promote the long-term growth and profitability of Symmetry Medical Inc. (the “Company”) and its Subsidiaries by (i) providing certain directors, officers and employees of, and certain other individuals who perform services for, or to whom an offer of employment has been extended by, the Company and its Subsidiaries with incentives to maximize stockholder value and otherwise contribute to the success of the Company and (ii) enabling the Company to attract, retain and reward the best available persons for positions of responsibility. Grants of incentive or non-qualified stock options, stock appreciation rights (“SARs”), restricted stock units, restricted stock, performance awards or any combination of the foregoing may be made under the Plan.

2. Definitions.

(a) “Board of Directors” and “Board” mean the board of directors of the Company.

(b) “Cause” shall, with respect to any participant, have the equivalent meaning as the term “cause” or “for cause” in any employment, consulting, or independent contractor’s agreement between the participant and the Company or any Subsidiary, or in the absence of such an agreement that contains such a defined term, shall mean the occurrence of one or more of the following events:

(i) Conviction of any felony or any crime or offense lesser than a felony involving the property of the Company or a Subsidiary; or

(ii) Deliberate or reckless conduct that has caused demonstrable and serious injury to the Company or a Subsidiary, monetary or otherwise, or any other serious misconduct of such a nature that the participant’s continued relationship with the Company or a Subsidiary may reasonably be expected to adversely affect the business or properties of the Company or any Subsidiary; or

(iii) Willful refusal to perform or reckless disregard of duties properly assigned, as determined by the Company; or

(iv) Breach of duty of loyalty to the Company or a Subsidiary or other act of fraud or dishonesty with respect to the Company or a Subsidiary.

For purposes of this Section 2(b), any good faith determination of “Cause” made by the Committee shall be binding and conclusive on all interested parties.

(c) “Change in Control” means the occurrence of one of the following events:

(i) if any “person” or “group” as those terms are used in Sections 13(d) and 14(d) of the Exchange Act or any successors thereto, other than an Exempt Person, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act or any successor thereto), directly or indirectly, of securities of the Company representing more than 50% of either the then outstanding shares or the combined voting power of the then outstanding securities of the Company; or

(ii) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board and any new directors whose election by the Board or nomination for election by the Company’s stockholders was approved by at least two-thirds of the directors then still in office who either were directors at the beginning of the period or whose election was previously so approved, cease for any reason to constitute a majority thereof; or

(iii) the consummation of a merger or consolidation of the Company with any other corporation or other entity, other than a merger or consolidation which would result in all or a portion of the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 50% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation; or

(iv) the consummation of a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all the Company’s assets, other than a sale to an Exempt Person.

(d) “Code” means the Internal Revenue Code of 1986, as amended.

(e) “Committee” means the Compensation Committee of the Board, or a subcommittee thereof, which shall consist solely of two or more members of the Board, and each member of the Committee may be, but is not required to be, (i) a “non-employee director” within the meaning of Rule 16b-3 under the Exchange Act, unless administration of the Plan by “non-employee directors” is not then required in order for exemptions under Rule 16b-3 to apply to transactions under the Plan, (ii) an “outside director” within the meaning of Section 162(m) of the Code, unless administration of the Plan by “outside directors” is not then required in order to qualify for tax deductibility under Section 162(m) of the Code, and (iii) independent, as defined by the rules of the New York Stock Exchange or any national securities exchange on which any securities of the Company are listed for trading, and if not listed for trading, by the rules of the New York Stock Exchange.

(f) “Common Stock” means the Common Stock, par value $0.0001 per share, of the Company, after giving effect to the Company’s common stock split (the “Common Stock Split”) in connection with the planned initial public offering of the Company’s Common Stock, and any other shares into which such stock may be changed by reason of a recapitalization, reorganization, merger, consolidation or any other change in the corporate structure or capital

2

stock of the Company that occurs after the completion (the closing and funding) of the planned initial public offering of the Company’s Common Stock. All Common Stock share numbers set forth in this Plan refer to numbers of shares of Common Stock after giving effect to the Common Stock Split.

(g) “Competition” is deemed to occur if a person whose employment with the Company or its Subsidiaries has terminated obtains a position as a full-time or part-time employee of, as a member of the board of directors of, or as a consultant or advisor with or to, or acquires an ownership interest in excess of 2% of, a corporation, partnership, firm or other entity that engages in any business which competes with any product or service of the Company or any Subsidiary.

(h) “Disability” means a disability that would entitle an eligible participant to payment of monthly disability payments under any Company disability plan or any agreement between the eligible participant and the Company as otherwise determined by the Committee.

(i) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

(j) “Exempt Person” means (i) Olympus/Symmetry Holdings LLC, (ii) any person, entity or group controlled by or under common control with any party included in clause (i), or (iii) any employee benefit plan of the Company or any Subsidiary, or a trustee or other administrator or fiduciary holding securities under an employee benefit plan of the Company or any Subsidiary.

(k) “Family Member” has the meaning given to such term in General Instructions A.1(a)(5) to Form S-8 under the Securities Act of 1933, as amended, and any successor thereto.

(l) “Fair Market Value” of a share of Common Stock of the Company means, as of the date in question, the officially-quoted closing selling price of the stock (or if no selling price is quoted, the bid price) on the principal securities exchange on which the Common Stock is then listed for trading (including for this purpose the Nasdaq National Market) (the “Market”) for the applicable trading day or, if the Common Stock is not then listed or quoted in the Market, the Fair Market Value shall be the fair value of the Common Stock determined in good faith by the Board; provided, however, that when shares received upon exercise of an option are immediately sold in the open market, the net sale price received may be used to determine the Fair Market Value of any shares used to pay the exercise price or applicable withholding taxes and to compute the withholding taxes.

(m) “Good Reason” shall, with respect to any participant, have the equivalent meaning as the term “good reason” or “for good reason” in any employment, consulting, or independent contractor’s agreement between the participant and the Company or any Subsidiary, or in the absence of such an agreement that contains such a defined term, shall mean (i) the assignment to the participant of any duties materially inconsistent with the participant’s duties or responsibilities as assigned by the Company (or a Subsidiary), or any other action by the Company (or a Subsidiary) which results in a material diminution in such duties or responsibilities, excluding for this purpose any isolated, insubstantial and inadvertent actions not

3

taken in bad faith and which are remedied by the Company (or a Subsidiary) promptly after receipt of notice thereof given by the participant; (ii) any material failure by the Company (or a Subsidiary) to make any payment of compensation or pay any benefits to the participant that have been agreed upon between the Company (or a Subsidiary) and the participant in writing, other than an isolated, insubstantial and inadvertent failure not occurring in bad faith and which is remedied by the Company (or a Subsidiary) promptly after receipt of notice thereof given by the participant; or (iii) the Company’s (or Subsidiary’s) requiring the participant to be based at any office or location outside of fifty miles from the location of employment or service as of the date of award, except for travel reasonably required in the performance of the participant’s responsibilities.

(n) “Incentive Stock Option” means an option conforming to the requirements of Section 422 of the Code and any successor thereto.

(o) “Non-Employee Director” has the meaning given to such term in Rule 16b-3 under the Exchange Act and any successor thereto.

(p) “Non-qualified Stock Option” means any stock option other than an Incentive Stock Option.

(q) “Other Company Securities” mean securities of the Company other than Common Stock, which may include, without limitation, unbundled stock units or components thereof, debentures, preferred stock, warrants and securities convertible into or exchangeable for Common Stock or other property.

(r) “Performance Award” means a right, granted to a participant under Section 12 hereof, to receive awards based upon performance criteria specified by the Committee.

(s) “Retirement” means retirement as defined under any Company pension plan or retirement program or termination of one’s employment on retirement with the approval of the Committee.

(t) “Share” means a share of Common Stock that may be issued pursuant to the Plan.

(u) “Subsidiary” means a corporation or other entity of which outstanding shares or ownership interests representing 50% or more of the combined voting power of such corporation or other entity entitled to elect the management thereof, or such lesser percentage as may be approved by the Committee, are owned directly or indirectly by the Company.

3. Administration.

The Plan shall be administered by the Committee; provided that the Board may, in its discretion, at any time and from time to time, resolve to administer the Plan, in which case the term “Committee” shall be deemed to mean the Board for all purposes herein. Subject to the provisions of the Plan, the Committee shall be authorized to (i) select persons to participate in the Plan, (ii) determine the form and substance of grants made under the Plan to each participant, and

4

the conditions and restrictions, if any, subject to which such grants will be made, (iii) certify that the conditions and restrictions applicable to any grant have been met, (iv) modify the terms of grants made under the Plan, (v) interpret the Plan and grants made thereunder, (vi) make any adjustments necessary or desirable in connection with grants made under the Plan to eligible participants located outside the United States and (vii) adopt, amend, or rescind such rules and regulations, and make such other determinations, for carrying out the Plan as it may deem appropriate. Decisions of the Committee on all matters relating to the Plan shall be in the Committee’s sole discretion and shall be conclusive and binding on all parties. The validity, construction, and effect of the Plan and any rules and regulations relating to the Plan shall be determined in accordance with applicable federal and state laws and rules and regulations promulgated pursuant thereto. No member of the Committee and no officer of the Company shall be liable for any action taken or omitted to be taken by such member, by any other member of the Committee or by any officer of the Company in connection with the performance of duties under the Plan, except for such person’s own willful misconduct or as expressly provided by statute.

The expenses of the Plan shall be borne by the Company. The Plan shall not be required to establish any special or separate fund or make any other segregation of assets to assume the payment of any award under the Plan, and rights to the payment of such awards shall be no greater than the rights of the Company’s general creditors.

4. Shares Available for the Plan; Limit on Awards.

Subject to adjustments as provided in Section 19, the number of Shares that may be issued pursuant to the Plan as awards shall not exceed in the aggregate 1,673,333. Such Shares may be in whole or in part authorized and unissued or held by the Company as treasury shares. If any grant under the Plan expires or terminates unexercised, becomes unexercisable or is forfeited as to any Shares, or is tendered or withheld as to any Shares in payment of the exercise price of the grant or the taxes payable with respect to the exercise, then such unpurchased, forfeited, tendered or withheld Shares shall thereafter be available for further grants under the Plan.

Without limiting the generality of the foregoing provisions of this Section 4 or the generality of the provisions of Sections 3, 6 or 21 or any other section of this Plan, the Committee may, at any time or from time to time, and on such terms and conditions (that are consistent with and not in contravention of the other provisions of this Plan) as the Committee may, in its sole discretion, determine, enter into agreements (or take other actions with respect to the options) for new options containing terms (including exercise prices) more (or less) favorable than the outstanding options.

In any one calendar year, the Committee shall not grant to any one participant awards to purchase or acquire a number of Shares in excess of fifteen percent (15%) of the total number of Shares authorized under the Plan pursuant to this Section 4.

5

5. Participation.

Participation in the Plan shall be limited to those directors (including Non-Employee Directors), officers (including non-employee officers) and employees of, and other individuals performing services for, or to whom an offer of employment has been extended by, the Company and its Subsidiaries selected by the Committee (including participants located outside the United States). Nothing in the Plan or in any grant thereunder shall confer any right on a participant to continue in the employ as a director or officer of or in the performance of services for the Company or shall interfere in any way with the right of the Company to terminate the employment or performance of services or to reduce the compensation or responsibilities of a participant at any time. By accepting any award under the Plan, each participant and each person claiming under or through him or her shall be conclusively deemed to have indicated his or her acceptance and ratification of, and consent to, any action taken under the Plan by the Company, the Board or the Committee.

Incentive Stock Options or Non-qualified Stock Options, SARs, restricted stock units, restricted stock awards, performance awards, or any combination thereof, may be granted to such persons and for such number of Shares as the Committee shall determine (such individuals to whom grants are made being sometimes herein called “optionees” or “grantees,” as the case may be). Determinations made by the Committee under the Plan need not be uniform and may be made selectively among eligible individuals under the Plan, whether or not such individuals are similarly situated. A grant of any type made hereunder in any one year to an eligible participant shall neither guarantee nor preclude a further grant of that or any other type to such participant in that year or subsequent years.

6. Incentive and Non-qualified Options and SARs.

The Committee may from time to time grant to eligible participants Incentive Stock Options, Non-qualified Stock Options, or any combination thereof; provided that the Committee may grant Incentive Stock Options only to eligible employees of the Company or its subsidiaries (as defined for this purpose in Section 424(f) of the Code or any successor thereto). The options granted shall take such form as the Committee shall determine, subject to the following terms and conditions.

It is the Company’s intent that Non-qualified Stock Options granted under the Plan not be classified as Incentive Stock Options, that Incentive Stock Options be consistent with and contain or be deemed to contain all provisions required under Section 422 of the Code and any successor thereto, and that any ambiguities in construction be interpreted in order to effectuate such intent. If an Incentive Stock Option granted under the Plan does not qualify as such for any reason, then to the extent of such non-qualification, the stock option represented thereby shall be regarded as a Non-qualified Stock Option duly granted under the Plan, provided that such stock option otherwise meets the Plan’s requirements for Non-qualified Stock Options.

(a) Price. The price per Share deliverable upon the exercise of each option (“exercise price”) shall be established by the Committee, except that the exercise price may not be less than 100% of the Fair Market Value of a share of Common Stock as of the date of grant

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of the option, and in the case of the grant of any Incentive Stock Option to an employee who, at the time of the grant, owns more than 10% of the total combined voting power of all classes of stock of the Company or any of its Subsidiaries, the exercise price may not be less than 110% of the Fair Market Value of a share of Common Stock as of the date of grant of the option, in each case unless otherwise permitted by Section 422 of the Code or any successor thereto.

(b) Payment. Options may be exercised, in whole or in part, upon payment of the exercise price of the Shares to be acquired. Unless otherwise determined by the Committee, payment shall be made (i) in cash (including check, bank draft, money order or wire transfer of immediately available funds), (ii) by delivery of outstanding shares of Common Stock with a Fair Market Value on the date of exercise equal to the aggregate exercise price payable with respect to the options’ exercise, (iii) by simultaneous sale through a broker reasonably acceptable to the Committee of Shares acquired on exercise, as permitted under Regulation T of the Federal Reserve Board, or (iv) by any combination of the foregoing.

In the event a grantee elects to pay the exercise price payable with respect to an option pursuant to clause (ii) above, (A) only a whole number of share(s) of Common Stock (and not fractional shares of Common Stock) may be tendered in payment, (B) such grantee must present evidence acceptable to the Company that he or she has owned any such shares of Common Stock tendered in payment of the exercise price (and that such tendered shares of Common Stock have not been subject to any substantial risk of forfeiture) for at least six months prior to the date of exercise, and (C) Common Stock must be delivered to the Company. Delivery for this purpose may, at the election of the grantee, be made either by (A) physical delivery of the certificate(s) for all such shares of Common Stock tendered in payment of the price, accompanied by duly executed instruments of transfer in a form acceptable to the Company, or (B) direction to the grantee’s broker to transfer, by book entry, such shares of Common Stock from a brokerage account of the grantee to a brokerage account specified by the Company. When payment of the exercise price is made by delivery of Common Stock, the difference, if any, between the aggregate exercise price payable with respect to the option being exercised and the Fair Market Value of the shares of Common Stock tendered in payment (plus any applicable taxes) shall be paid in cash. No grantee may tender shares of Common Stock having a Fair Market Value exceeding the aggregate exercise price payable with respect to the option being exercised (plus any applicable taxes).

(c) Terms of Options. The term during which each option may be exercised shall be determined by the Committee, but if required by the Code and except as otherwise provided herein, no option shall be exercisable in whole or in part more than ten years from the date it is granted, and no Incentive Stock Option granted to an employee who at the time of the grant owns more than 10% of the total combined voting power of all classes of stock of the Company or any of its Subsidiaries shall be exercisable more than five years from the date it is granted. All rights to purchase Shares pursuant to an option shall, unless sooner terminated, expire at the date designated by the Committee. The Committee shall determine the date on which each option shall become exercisable and may provide that an option shall become exercisable in installments. The Shares constituting each installment may be purchased in whole or in part at any time after such installment becomes exercisable, subject to such minimum exercise requirements as may be designated by the Committee. Prior to the exercise of an option and

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delivery of the Shares represented thereby, the optionee shall have no rights as a stockholder with respect to any Shares covered by such outstanding option (including any dividend or voting rights).

(d) Limitations on Grants. If required by the Code, the aggregate Fair Market Value (determined as of the grant date) of Shares for which an Incentive Stock Option is exercisable for the first time during any calendar year under all equity incentive plans of the Company and its Subsidiaries (as defined in Section 422 of the Code or any successor thereto) may not exceed $100,000.

(e) Termination.

(i) Death or Disability. Except as otherwise determined by the Committee, if a participant ceases to be a director, officer or employee of, or to perform other services for, the Company and any Subsidiary due to death or Disability, all of the participant’s options and SARs that were exercisable on the date of such cessation shall remain so for a period of 180 days from the date of such death or Disability, but in no event after the expiration date of the options or SARs; provided that the participant does not engage in Competition during such 180-day period unless he or she received written consent to do so from the Board or the Committee. Notwithstanding the foregoing, if the Disability giving rise to the termination of employment is not within the meaning of Section 22(e)(3) of the Code or any successor thereto, Incentive Stock Options not exercised by such participant within 90 days after the date of termination of employment will cease to qualify as Incentive Stock Options and will be treated as Non-qualified Stock Options under the Plan if required to be so treated under the Code.

(ii) Retirement. Except as otherwise determined by the Committee, if a participant ceases to be a director, officer or employee of, or to perform other services for, the Company or any Subsidiary upon the occurrence of his or her Retirement, (A) all of the participant’s options and SARs that were exercisable on the date of Retirement shall remain exercisable for, and shall otherwise terminate at the end of, a period of 90 days after the date of Retirement, but in no event after the expiration date of the options or SARs; provided that the participant does not engage in Competition during such 90-day period unless he or she receives written consent to do so from the Board or the Committee, and (B) all of the participant’s options and SARs that were not exercisable on the date of Retirement shall be forfeited immediately upon such Retirement; provided, however, that such options and SARs may become fully vested and exercisable in the discretion of the Committee. Notwithstanding the foregoing, Incentive Stock Options not exercised by such participant within 90 days after Retirement will cease to qualify as Incentive Stock Options and will be treated as Non-qualified Stock Options under the Plan if required to be so treated under the Code.

(iii) Discharge for Cause. Except as otherwise determined by the Committee, if a participant ceases to be a director, officer or employee of, or to perform other services for, the Company or a Subsidiary due to Cause, or if a participant does not become a director, officer or employee of, or does not begin performing other services for, the Company or a Subsidiary for any reason, all of the participant’s options and SARs shall expire and be

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forfeited immediately upon such cessation or non-commencement, whether or not then exercisable.

(iv) Other Termination. Except as otherwise determined by the Committee, if a participant ceases to be a director, officer or employee of, or to otherwise perform services for, the Company or a Subsidiary for any reason other than death, Disability, Retirement or Cause, (A) all of the participant’s options and SARs that were exercisable on the date of such cessation shall remain exercisable for, and shall otherwise terminate at the end of, a period of 90 days after the date of such cessation, but in no event after the expiration date of the options or SARs; provided that the participant does not engage in Competition during such 90-day period unless he or she receives written consent to do so from the Board or the Committee, and (B) all of the participant’s options and SARs that were not exercisable on the date of such cessation shall be forfeited immediately upon such cessation.

(f) Grant of Reload Options. The Committee may provide (either at the time of grant or exercise of an option), in its discretion, for the grant to a grantee who exercises all or any portion of an option (“Exercised Options”) and who pays all or part of such exercise price with shares of Common Stock, of an additional option (a “Reload Option”) for a number of shares of Common Stock equal to the sum (the “Reload Number”) of the number of shares of Common Stock tendered in payment of such exercise price for the Exercised Options plus, if so provided by the Committee, the number of shares of Common Stock, if any, tendered or withheld by the Company in connection with the exercise of the Exercised Options to satisfy any federal, state or local tax withholding requirements. The terms of each Reload Option, including the date of its expiration and the terms and conditions of its exercisability and transferability, shall be the same as the terms of the Exercised Option to which it relates, except that (i) the grant date for each Reload Option shall be the date of exercise of the Exercised Option to which it relates and (ii) the exercise price for each Reload Option shall be the Fair Market Value of the Common Stock on the grant date of the Reload Option.

(g) Options Exercisable for Restricted Stock. The Committee shall have the discretion to grant options which are exercisable for Shares of restricted stock. Should the participant cease to be a director, officer or employee of, or to perform other services for, the Company or any Subsidiary while holding such Shares of restricted stock, the Company shall have the right to repurchase, at the exercise price paid per share, any or all of those Shares of restricted stock. The terms upon which such repurchase right shall be exercisable (including the period and procedure for exercise and the appropriate vesting schedule for the purchased shares) shall be established by the Committee and set forth in the document evidencing such repurchase right.

7. Stock Appreciation Rights.

The Committee shall have the authority to grant SARs under this Plan. SARs shall be subject to such terms and conditions as the Committee may specify; provided that (1) the exercise price of a SAR may never be less than the fair market value of the Shares subject to the SAR on the date the right is granted, (2) the Shares are traded on an established securities market, (3) only Shares may be delivered in settlement of the right upon exercise, and (4) a SAR does not

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include any feature for the deferral of compensation other than the deferral of recognition of income until the exercise of the SAR.

No SAR may be exercised unless the Fair Market Value of a share of Common Stock of the Company on the date of exercise exceeds the exercise price of the SAR. Prior to the exercise of the SAR and delivery of the Shares represented thereby, the participant shall have no rights as a stockholder with respect to Shares covered by such outstanding SAR (including any dividend or voting rights).

Upon the exercise of an SAR, the participant shall be entitled to a distribution in an amount equal to (A) the difference between the Fair Market Value of a share of Common Stock on the date of exercise and the exercise price of the SAR multiplied by (B) the number of Shares as to which the SAR is exercised. Such distribution shall be in Shares having a Fair Market Value equal to such amount.

All SARs will be exercised automatically on the last day prior to the expiration date of the SAR so long as the Fair Market Value of a share of Common Stock on that date exceeds the exercise price of the SAR.

8. Restricted Stock.

The Committee may at any time and from time to time grant Shares of restricted stock under the Plan to such participants and in such amounts as it determines. Each grant of restricted stock shall specify the applicable restrictions on such Shares, the duration of such restrictions (which shall be at least six months except as otherwise determined by the Committee or provided in the third paragraph of this Section 8), and the time or times at which such restrictions shall lapse with respect to all or a specified number of Shares that are part of the grant.

The participant will be required to pay the Company the aggregate par value of any Shares of restricted stock (or such larger amount as the Board may determine to constitute capital under Section 154 of the Delaware General Corporation Law, as amended, or any successor thereto) within ten days of the date of grant, unless such Shares of restricted stock are treasury shares. Unless otherwise determined by the Committee, certificates representing Shares of restricted stock granted under the Plan will be held in escrow by the Company on the participant’s behalf during any period of restriction thereon and will bear an appropriate legend specifying the applicable restrictions thereon, and the participant will be required to execute a blank stock power therefor. Except as otherwise provided by the Committee, during such period of restriction the participant shall have all of the rights of a holder of Common Stock, including but not limited to the rights to receive dividends and to vote, and any stock or other securities received as a distribution with respect to such participant’s restricted stock shall be subject to the same restrictions as then in effect for the restricted stock.

At such time as a participant ceases to be a director, officer, or employee of, or to otherwise perform services for, the Company and its Subsidiaries due to death, Disability or Retirement during any period of restriction, all restrictions on Shares granted to such participant shall lapse. At such time as a participant ceases to be, or in the event a participant does not

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become, a director, officer or employee of, or otherwise performing services for, the Company or its Subsidiaries for any other reason, all Shares of restricted stock granted to such participant on which the restrictions have not lapsed shall be immediately forfeited to the Company.

9. Restricted Stock Units; Deferred Stock Units.

The Committee may at any time and from time to time grant restricted stock units under the Plan to such participants and in such amounts as it determines. Each grant of restricted stock units shall specify the applicable restrictions on such units, the duration of such restrictions (which shall be at least six months except as otherwise determined by the Committee or provided in the third paragraph of this Section 9), and the time or times at which such restrictions shall lapse with respect to all or a specified number of units that are part of the grant.

Each restricted stock unit shall be equivalent in value to one share of Common Stock and shall entitle the participant to receive one Share from the Company at the end of the vesting period (the “Vesting Period”) of the applicable restricted stock unit, unless the participant elects in a timely fashion, as provided below, to defer the receipt of such Shares with respect to the restricted stock units. The Committee may require the payment by the participant of a specified purchase price in connection with any restricted stock unit award.

Except as otherwise provided by the Committee, during the Vesting Period the participant shall not have any rights as a shareholder of the Company; provided that the participant shall have the right to receive accumulated dividends or distributions with respect to the corresponding number of shares of Common Stock underlying each restricted stock unit at the end of the Vesting Period, unless the participant elects in a timely fashion, as provided below, to defer the receipt of the Shares with respect to the restricted stock units, in which case such accumulated dividends or distributions shall be paid by the Company to the participant at such time as the payment of the Shares with respect to the deferred stock units.

Except as otherwise provided by the Committee, immediately prior to a Change in Control or at such time as a participant ceases to be a director, officer or employee of, or to otherwise perform services for, the Company and any of its Subsidiaries due to death, Disability or Retirement during any Vesting Period, all restrictions on restricted stock units granted to such participant shall lapse and the participant shall be then entitled to receive payment in Shares with respect to the applicable restricted stock units. At such time as a participant ceases to be a director, officer or employee of, or otherwise performing services for, the Company and any of its Subsidiaries for any other reason, all restricted stock units granted to such participant on which the restrictions have not lapsed shall be immediately forfeited to the Company.

A participant may elect by written notice to the Company, which notice must be made before the later of (i) the close of the tax year preceding the year in which the restricted stock units are granted or (ii) 30 days of first becoming eligible to participate in the Plan (or, if earlier, the last day of the tax year in which the participant first becomes eligible to participate in the plan) and on or prior to the date the restricted stock units are granted, to defer the receipt of all or a portion of the Shares due with respect to the vesting of such restricted stock units; provided that the Committee may impose such additional restrictions with respect to the time at

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which a participant may elect to defer receipt of Shares subject to the deferral election, and any other terms with respect to a grant of restricted stock units to the extent the Committee deems necessary to enable the participant to defer recognition of income with respect to such units until the Shares underlying such units are issued or distributed to the participant. Upon such deferral, the restricted stock units so deferred shall be converted into deferred stock units. Except as provided below, delivery of Shares with respect to deferred stock units shall be made at the end of the deferral period set forth in the participant’s deferral election notice (the “Deferral Period”). Deferral Periods shall be no less than one year after the vesting date of the applicable restricted stock units.

Except as otherwise provided by the Committee, during such Deferral Period the participant shall not have any rights as a shareholder of the Company; provided that, the participant shall have the right to receive accumulated dividends or distributions with respect to the corresponding number of shares of Common Stock underlying each deferred stock unit at the end of the Deferral Period.

Except as otherwise provided by the Committee, if a participant ceases to be a director, officer or employee of, or to otherwise perform services for, the Company or any Subsidiary due to his or her death prior to the end of the Deferral Period, the participant shall receive payment in Shares in respect of such participant’s deferred stock units which would have matured or been earned at the end of such Deferral Period as if the applicable Deferral Period had ended as of the date of such participant’s death.

Except as otherwise provided by the Committee, if a participant ceases to be a director, officer or employee of, or to otherwise perform services for, the Company or any Subsidiary upon becoming disabled (as defined under Section 409A(a)(2)(C) of the Code) or Retirement or for any other reason except termination for Cause prior to the end of the Deferral Period, the participant shall receive payment in Shares in respect of such participant’s deferred stock units at the end of the applicable Deferral Period or on such accelerated basis as the Committee may determine, to the extent permitted by regulations issued under Section 409A(a)(3) of the Code.

Except as otherwise provided by the Committee, if a participant ceases to be a director, officer or employee of, or to otherwise perform services for, the Company or any Subsidiary due to termination for Cause such participant shall immediately forfeit any deferred stock units which would have matured or been earned at the end of the applicable Deferral Period.

Except as otherwise provided by the Committee, in the event of a Change in Control that also constitutes a “change in the ownership or effective control of” the Company, or a “change in the ownership of a substantial portion of the assets” of the Company (in each case as determined under IRS Notice 2005-1, as amended or supplemented from time to time, or regulations issued pursuant to Section 409A(a)(2)(A)(v) of the Code), a participant shall receive payment in Shares in respect of such participant’s deferred stock units which would have matured or been earned at the end of the applicable Deferral Period as if such Deferral Period had ended immediately prior to the Change in Control; provided, however, that if an event that constitutes a Change in Control

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hereunder does not constitute a “change in control” under Section 409A of the Code (or the regulations promulgated thereunder), no payments with respect to the deferred stock units shall be made under this paragraph to the extent such payments would constitute an impermissible acceleration under Section 409A of the Code.

10. Dividend Equivalents.

The Committee is authorized to grant dividend equivalents to a participant entitling the participant to receive cash, Shares, other awards, or other property equal in value to dividends paid with respect to a specified number of shares of Common Stock of the Company, or other periodic payments. Dividend equivalents may be awarded on a free-standing basis or in connection with another award. The Committee may provide that dividend equivalents shall be paid or distributed when accrued or shall be deemed to have been reinvested in additional shares of Common Stock of the Company, awards, or other investment vehicles, and subject to such restrictions on transferability and risks of forfeiture, as the Committee may specify.

11. Other Stock-Based Awards.

The Committee is authorized, subject to limitations under applicable law, to grant to participants such other awards that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on, or related to, shares of Common Stock of the Company, as deemed by the Committee to be consistent with the purposes of the Plan, including, without limitation, convertible or exchangeable debt securities, other rights convertible or exchangeable into Shares, purchase rights for Shares, awards with value and payment contingent upon performance of the Company or any other factors designated by the Committee, and awards valued by reference to the book value of Shares or the value of securities of or the performance of specified Subsidiaries. The Committee shall determine the terms and conditions of such awards. Shares delivered pursuant to an award in the nature of a purchase right granted under this Section 11 shall be purchased for such consideration (including without limitation loans from the Company or a Subsidiary to the extent permissible under the Sarbanes Oxley Act of 2002 and other applicable law), paid for at such times, by such methods, and in such forms, including, without limitation, cash, Shares, other awards or other property, as the Committee shall determine. Cash awards, as an element of or supplement to any other award under the Plan, may also be granted pursuant to this Section 11.

12. Performance Awards.

The Committee is authorized to make Performance Awards payable in cash, Shares, or other awards, on terms and conditions established by the Committee, subject to the provisions of this Section 12.

The performance goals for such Performance Awards shall consist of one or more business criteria and a targeted level or levels of performance with respect to each of such criteria, or such other personal or business goals and objectives, as the Committee shall determine. The Committee may determine that such Performance Awards shall be granted, exercised and/or settled upon achievement of any one performance goal or that two or more of

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the performance goals must be achieved as a condition to grant, exercise and/or settlement of such Performance Awards. Performance goals may differ for Performance Awards granted to any one participant or to different participants.

Achievement of performance goals in respect of such Performance Awards shall be measured over any performance period determined by the Committee. During the performance period, the Committee shall have the authority to adjust the performance goals and objectives for such performance period for such reasons as it deems equitable. A performance award shall be paid no later than two and one-half months after the last day of the tax year in which a performance period is completed.

The Committee may establish a Performance Award pool, which shall be an unfunded pool, for purposes of measuring Company performance in connection with Performance Awards. The amount of such Performance Award pool shall be based upon the achievement of a performance goal or goals during the given performance period, as specified by the Committee. The Committee may specify the amount of the Performance Award pool as a percentage of any of such business criteria, a percentage thereof in excess of a threshold amount, or as another amount which need not bear a strictly mathematical relationship to such business criteria.

Settlement of Performance Awards shall be in cash, Shares, other awards or other property, in the discretion of the Committee. The Committee may, in its discretion, reduce the amount of a settlement otherwise to be made in connection with such Performance Awards. The Committee shall specify the circumstances in which such Performance Awards shall be paid or forfeited in the event of termination of the participant’s employment or service prior to the end of a performance period or settlement of Performance Awards.

13. Change in Control.

Unless otherwise determined by the Committee, if there is a Change in Control of the Company and a participant’s employment or service as a director, officer, or employee of the Company or a Subsidiary, is terminated (1) by the Company without Cause, (2) by reason of the participant’s death, Disability, or Retirement, or (3) by the participant for Good Reason, within twelve months after such Change in Control:

(i) any award carrying a right to exercise that was not previously vested and exercisable as of the time of the Change in Control, shall become immediately vested and exercisable, and shall remain so for up to 180 days after the date of termination (but in no event after the expiration date of the award), subject to applicable restrictions;

(ii) any restrictions, deferral of settlement, and forfeiture conditions applicable to any other award granted under the Plan shall lapse and such awards shall be deemed fully vested as of the time of the Change in Control, except to the extent of any waiver by the participant, and subject to applicable restrictions; and

(iii) with respect to any outstanding Performance Award, the Committee may, within its discretion, deem the performance goals and other conditions relating

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to the Performance Award as having been met as of the date of the Change in Control. Such performance award shall be paid no later than two and one-half months after the last day of the tax year in which such Change in Control occurred (or in the event that such Change in Control causes the tax year to end, no later than two and one-half months after the closing of such Change in Control).

Notwithstanding the foregoing, or any other provision of this Plan to the contrary, in connection with any transaction of the type specified by clause (iii) of the definition of a Change in Control in Section 2(c), the Committee may, in its discretion, (i) cancel any or all outstanding options under the Plan in consideration for payment to the holders thereof of an amount equal to the portion of the consideration that would have been payable to such holders pursuant to such transaction if their options had been fully exercised immediately prior to such transaction, less the aggregate exercise price that would have been payable therefor, or (ii) if the amount that would have been payable to the option holders pursuant to such transaction if their options had been fully exercised immediately prior thereto would be equal to or less than the aggregate exercise price that would have been payable therefor, cancel any or all such options for no consideration or payment of any kind. Payment of any amount payable pursuant to the preceding sentence may be made in cash or, in the event that the consideration to be received in such transaction includes securities or other property, in cash and/or securities or other property in the Committee’s discretion.

14. Withholding Taxes.

(a) Participant Election. Unless otherwise determined by the Committee, a participant may elect to deliver shares of Common Stock (or have the Company withhold shares acquired upon exercise of an option or SAR or deliverable upon grant or vesting of restricted stock, as the case may be) to satisfy, in whole or in part, the amount the Company is required to withhold for taxes in connection with the exercise of an option or SAR or the delivery of restricted stock upon grant or vesting, as the case may be. Such election must be made on or before the date the amount of tax to be withheld is determined. Once made, the election shall be irrevocable. The fair market value of the shares to be withheld or delivered will be the Fair Market Value as of the date the amount of tax to be withheld is determined. In the event a participant elects to deliver or have the Company withhold shares of Common Stock pursuant to this Section 14(a), such delivery or withholding must be made subject to the conditions and pursuant to the procedures set forth in Section 6(b) with respect to the delivery or withholding of Common Stock in payment of the exercise price of options.

(b) Company Requirement. The Company may require, as a condition to any grant or exercise under the Plan or to the delivery of certificates for Shares issued hereunder, that the grantee make provision for the payment to the Company, either pursuant to Section 14(a) or this Section 14(b), of federal, state or local taxes of any kind required by law to be withheld with respect to any grant or delivery of Shares. The Company, to the extent permitted or required by law, shall have the right to deduct from any payment of any kind (including salary or bonus) otherwise due to a grantee, an amount equal to any federal, state or local taxes of any kind required by law to be withheld with respect to any grant or delivery of Shares under the Plan.

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15. Written Agreement; Vesting.

Each employee to whom a grant is made under the Plan shall enter into a written agreement with the Company that shall contain such provisions, including without limitation vesting requirements, consistent with the provisions of the Plan, as may be approved by the Committee. Unless the Committee determines otherwise and except as otherwise provided in Sections 6, 7, and 8 in connection with a Change in Control or certain occurrences of termination, no grant under this Plan may be exercised, and no restrictions relating thereto may lapse, within six months of the date such grant is made.

16. Transferability.

Unless the Committee determines otherwise, no award granted under the Plan shall be transferable by a participant other than by will or the laws of descent and distribution or to a participant’s Family Member by gift or a qualified domestic relations order as defined by the Code. Unless the Committee determines otherwise, an option, SAR or performance award may be exercised only by the optionee or grantee thereof; by his or her Family Member if such person has acquired the option, SAR or performance award by gift or qualified domestic relations order; by the executor or administrator of the estate of any of the foregoing or any person to whom the Option is transferred by will or the laws of descent and distribution; or by the guardian or legal representative of any of the foregoing; provided that Incentive Stock Options may be exercised by any Family Member, guardian or legal representative only if permitted by the Code and any regulations thereunder. All provisions of this Plan shall in any event continue to apply to any option, SAR, performance award or restricted stock granted under the Plan and transferred as permitted by this Section 16, and any transferee of any such option, SAR, performance award or restricted stock shall be bound by all provisions of this Plan as and to the same extent as the applicable original grantee.

17. Listing, Registration and Qualification.

If the Committee determines that the listing, registration or qualification upon any securities exchange or under any law of Shares subject to any option, SAR, performance award, restricted stock unit, or restricted stock grant is necessary or desirable as a condition of, or in connection with, the granting of same or the issue or purchase of Shares thereunder, no such option or SAR may be exercised in whole or in part, no such performance award may be paid out, and no Shares may be issued, unless such listing, registration or qualification is effected free of any conditions not acceptable to the Committee.

18. Transfers Between Company and Subsidiaries.

The transfer of an employee, consultant or independent contractor from the Company to a Subsidiary, from a Subsidiary to the Company, or from one Subsidiary to another shall not be considered a termination of employment or services; nor shall it be considered a termination of employment if an employee is placed on military or sick leave or such other leave of absence which is considered by the Committee as continuing intact the employment relationship.

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19. Adjustments.

In the event of a reorganization, recapitalization, stock split, stock dividend, combination of shares, merger, consolidation, distribution of assets, or any other change in the corporate structure or shares of the Company, the Committee shall make such adjustment as it deems appropriate in the number and kind of Shares or other property available for issuance under the Plan (including, without limitation, the total number of Shares available for issuance under the Plan pursuant to Section 4), in the number and kind of options, SARs, Shares or other property covered by grants previously made under the Plan, and in the exercise price of outstanding options and SARs; provided, however, that the Committee shall not be required to make any adjustment that would (i) require the inclusion of any compensation deferred pursuant to provisions of the Plan (or an award thereunder) in a participant’s gross income pursuant to Section 409A of the Code and the regulations issued thereunder from time to time and/or (ii) cause any award made pursuant to the Plan to be treated as providing for the deferral of compensation pursuant to such Code section and regulations. Any such adjustment shall be final, conclusive and binding for all purposes of the Plan. In the event of any merger, consolidation or other reorganization in which the Company is not the surviving or continuing corporation or in which a Change in Control is to occur, all of the Company’s obligations regarding awards that were granted hereunder and that are outstanding on the date of such event shall, on such terms as may be approved by the Committee prior to such event, be (a) canceled in exchange for cash or other property (but, with respect to vested deferred stock units, only if such merger, consolidation, other reorganization, or Change in Control constitutes a “change in ownership or control” of the Company or a “change in the ownership of a substantial portion of the assets” of the Company, as determined pursuant to regulations issued under Section 409A(a)(2)(A)(v) of the Code) or (b) assumed by the surviving or continuing corporation.

20. Amendment and Termination of the Plan.

The Board of Directors or the Committee, without approval of the stockholders, may amend or terminate the Plan, except that no amendment shall become effective without prior approval of the stockholders of the Company if stockholder approval would be required by applicable law or regulations, including if required for continued compliance with the performance-based compensation exception of Section 162(m) of the Code or any successor thereto, under the provisions of Section 422 of the Code or any successor thereto, or by any listing requirement of the principal stock exchange on which the Common Stock is then listed.

Notwithstanding any other provisions of the Plan, and in addition to the powers of amendment set forth in this Section 20 and Section 21 hereof or otherwise, the provisions hereof and the provisions of any award made hereunder may be amended unilaterally by the Committee from time to time to the extent necessary (and only to the extent necessary) to prevent the implementation, application or existence (as the case may be) of any such provision from (i) requiring the inclusion of any compensation deferred pursuant to the provisions of the Plan (or an award thereunder) in a participant’s gross income pursuant to Section 409A of the Code, and the regulations issued thereunder from time to time and/or (ii) inadvertently causing any award hereunder to be treated as providing for the deferral of compensation pursuant to such Code section and regulations.

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21. Amendment or Substitution of Awards under the Plan.

The terms of any outstanding award under the Plan may be amended from time to time by the Committee in its discretion in any manner that it deems appropriate, including, but not limited to, any reduction in the exercise price of any options or SARs awarded under the Plan or any acceleration of the date of exercise of any award and/or payments thereunder or of the date of lapse of restrictions on Shares (but only to the extent permitted by regulations issued under Section 409A(a)(3) of the Code); provided that, except as otherwise provided in Section 16, no such amendment shall adversely affect in a material manner any right of a participant under the award without his or her written consent. The Committee may, in its discretion, permit holders of awards under the Plan to surrender outstanding awards in order to exercise or realize rights under other awards, or in exchange for the grant of new awards, or require holders of awards to surrender outstanding awards as a condition precedent to the grant of new awards under the Plan, but only if such surrender, exercise, realization, exchange, or grant (a) would not constitute a distribution of deferred compensation for purposes of Section 409A(a)(3) of the Code or (b) constitutes a distribution of deferred compensation that is permitted under regulations issued pursuant to Section 409A(a)(3) of the Code.

22. Commencement Date; Termination Date.

The date of commencement of the Plan shall be the date of the completion (the closing and funding) of the Company’s initial public offering of its Common Stock. If required by the Code, the Plan will also be subject to reapproval by the shareholders of the Company prior to the fifth anniversary of such commencement date.

Unless previously terminated upon the adoption of a resolution of the Board terminating the Plan, the Plan shall terminate at the close of business on the tenth anniversary of the date of commencement. No termination of the Plan shall materially and adversely affect any of the rights or obligations of any person, without his or her written consent, under any grant of options or other incentives theretofore granted under the Plan.

23. Severability.

Whenever possible, each provision of the Plan shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of the Plan is held to be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of the Plan.

24. Governing Law.

The Plan shall be governed by the corporate laws of the State of Delaware, without giving effect to any choice of law provisions that might otherwise refer construction or interpretation of the Plan to the substantive law of another jurisdiction.

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EX-10.13

Exhibit 10.13

SYMMETRY MEDICAL INC.

AMENDED AND RESTATED

2004 EMPLOYEE STOCK PURCHASE PLAN

Table of Contents

		Page
1.	Purpose	1
2.	Definitions	1
3.	Eligibility	3
4.	Exercise Periods	3
	(a)    In General	3
	(b)    Changes by Committee	3
5.	Participation	3
6.	Plan Contributions	3
	(a)    Contribution by Payroll Deduction	3
	(b)    Payroll Deduction Election on Enrollment Agreement	3
	(c)    Commencement of Payroll Deductions	4
	(d)    Automatic Continuation of Payroll Deductions	4
	(e)    Change of Payroll Deduction Election	4
	(f)     Automatic Changes in Payroll Deduction	4
7.	Grant of Option	4
	(a)    Shares of Common Stock Subject to Option	4
	(b)    Exercise Price	5
	(c)    Fair Market Value	5
	(d)    Limitation on Option that may be Granted	5
	(e)    No Rights as Shareholder	5
8.	Exercise of Options	5
	(a)    Automatic Exercise	5
	(b)    Carryover of Excess Contributions	6
9.	Issuance of Shares	6
	(a)    Delivery of Shares	6
	(b)    Registration of Shares	6
	(c)    Compliance with Applicable Laws	6
	(d)    Withholding	6
10.	Participant Accounts	7
	(a)    Bookkeeping Accounts Maintained	7
	(b)    Participant Account Statements	7
	(c)    Withdrawal of Account Balance Following Exercise Date	7
11.	Designation of Beneficiary	7
	(a)    Designation	7

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	(b)    Change of Designation	7
12.	Transferability	7
13.	Withdrawal; Termination of Employment	8
.	(a)    Withdrawal	8
	(b)    Effect of Withdrawal on Subsequent Participation	8
	(c)    Termination of Employment	8
14.	Common Stock Available under the Plan	8
	(a)    Number of Shares	8
	(b)    Adjustments Upon Changes in Capitalization; Corporate Transactions.	8
15.	Administration	9
	(a)    Committee	9
	(b)    Requirements of Exchange Act	10
16.	Amendment, Suspension, and Termination of the Plan	10
	(a)    Amendment of the Plan	10
	(b)    Suspension of the Plan	10
	(c)    Termination of the Plan	10
17.	Notices	11
18.	Expenses of the Plan	11
19.	No Employment Rights	11
20.	Applicable Law	11
21.	Additional Restrictions of Rule 16b–3	11
22.	Effective Date	11

ii

SYMMETRY MEDICAL INC.

AMENDED AND RESTATED

2004 EMPLOYEE STOCK PURCHASE PLAN

1. Purpose. The purpose of the Plan is to provide incentive for present and future employees of the Company and any Designated Subsidiary to acquire a proprietary interest (or increase an existing proprietary interest) in the Company through the purchase of Common Stock. It is the Company’s intention that the Plan qualify as an “employee stock purchase plan” under Section 423 of the Code. Accordingly, the provisions of the Plan shall be administered, interpreted and construed in a manner consistent with the requirements of that section of the Code.

2. Definitions.

(a) “Applicable Percentage” means the percentage specified in Section 7(b), subject to adjustment by the Committee as provided in Section 7(b).

(b) “Board” means the Board of Directors of the Company.

(c) “Code” means the Internal Revenue Code of 1986, as amended, and any successor thereto.

(d) “Committee” means the committee appointed by the Board to administer the Plan as described in Section 15 of the Plan or, if no such Committee is appointed, the Board.

(e) “Common Stock” means the Company’s common stock, par value $0.0001 per share, after giving effect to the Company’s common stock split in connection with the Company’s planned Initial Public Offering (the “Common Stock Split”). All Common Stock share numbers set forth in this Plan refer to numbers of shares of Common Stock after giving effect to the Common Stock Split.

(f) “Company” means Symmetry Medical Inc., a Delaware corporation.

(g) “Compensation” means, with respect to each Participant for each pay period, the full base salary and overtime paid to such Participant by the Company or a Designated Subsidiary. Except as otherwise determined by the Committee, “Compensation” does not include: (i) bonuses or commissions, (ii) any amounts contributed by the Company or a Designated Subsidiary to any pension plan, (iii) any automobile or relocation allowances (or reimbursement for any such expenses), (iv) any amounts paid as a starting bonus or finder’s fee, (v) any amounts realized from the exercise of any stock options or incentive awards, (vi) any amounts paid by the Company or a Designated Subsidiary for other fringe benefits, such as health and welfare, hospitalization and group life insurance benefits, or perquisites, or paid in lieu of such benefits, or (vii) other similar forms of extraordinary compensation.

(h) “Continuous Status as an Employee” means the absence of any interruption or termination of service as an Employee. Continuous Status as an Employee shall not be considered interrupted in the case of a leave of absence agreed to in writing by the Company or the Designated Subsidiary that employs the Employee, provided that such leave is

for a period of not more than 90 days or reemployment upon the expiration of such leave is guaranteed by contract or statute.

(i) “Designated Subsidiaries” means the Subsidiaries that have been designated by the Board from time to time in its sole discretion as eligible to participate in the Plan.

(j) “Employee” means any person, including an Officer, whose customary employment with the Company or one of its Designated Subsidiaries is at least thirty (30) hours per week and more than ten (10) months in any calendar year.

(k) “Entry Date” means the first Trading Day of each Exercise Period.

(l) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

(m) “Exercise Date” means the last Trading Day of each Exercise Period.

(n) “Exercise Period” means, subject to adjustment as provided in Section 4(b), the approximately six (6) month period beginning on each January 1 and ending the last Trading Day on or before June 30 of such year, or beginning on each July 1 and ending the last Trading Day on or before December 31 of such year.

(o) “Exercise Price” means the price per share of Common Stock offered in a given Exercise Period determined as provided in Section 7(b).

(p) “Fair Market Value” means, with respect to a share of Common Stock, the Fair Market Value as determined under Section 7(c).

(q) “Offering Date” means the first Trading Day of each Exercise Period.

(r) “Officer” means a person who is an officer of the Company within the meaning of Section 16 under the Exchange Act and the rules and regulations promulgated thereunder.

(s) “Participant” means an Employee who has elected to participate in the Plan by filing an enrollment agreement with the Company as provided in Section 5 hereof.

(t) “Plan” means the Symmetry Medical Inc. 2004 Employee Stock Purchase Plan, as in effect from time to time.

(u) “Plan Contributions” means, with respect to each Participant, the lump sum cash transfers, if any, made by the Participant to the Plan pursuant to Section 6(a) hereof, plus the after-tax payroll deductions, if any, withheld from the Compensation of the Participant and contributed to the Plan for the Participant as provided in Section 6 hereof, and any other amounts contributed to the Plan for the Participant in accordance with the terms of the Plan.

(v) “Subsidiary” means any corporation, domestic or foreign, of which the Company owns, directly or indirectly, 50% or more of the total combined voting power of all

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classes of stock, and that otherwise qualifies as a “subsidiary corporation” within the meaning of Section 424(f) of the Code.

(w) “Trading Day” means a day on which the New York Stock Exchange is open for trading.

3. Eligibility. Any individual who was an Employee as of December 8, 2004 and has not withdrawn from the Plan (and is not treated as having withdrawn under the Plan) shall remain a Participant until they withdraw from the Plan (or are treated as having withdrawn under the Plan), or any individual who has completed at least three (3) months of employment with the Company or any Subsidiary and who is an Employee as of the Offering Date of a given Exercise Period shall be eligible to become a Participant as of the Entry Date of such Exercise Period.

4. Exercise Periods.

(a) In General. The Plan shall generally be implemented by a series of Exercise Periods, each of which last approximately six (6) months.

(b) Changes by Committee. The Committee shall have the power to make changes to the duration and/or the frequency of Exercise Periods with respect to future offerings if such change is announced at least five (5) days prior to the scheduled beginning of the first Exercise Period to be affected.

5. Participation. Employees meeting the eligibility requirements of Section 3 hereof may elect to participate in the Plan commencing on any Entry Date by completing an enrollment agreement on the form provided by the Company and filing the enrollment agreement with the Company on or prior to such Entry Date, unless a later time for filing the enrollment agreement is set by the Committee for all eligible Employees with respect to a given offering.

6. Plan Contributions.

(a) Contribution by Payroll Deduction. Except as otherwise authorized by the Committee, all contributions to the Plan shall be made only by payroll deductions. The Committee may, but need not, permit Participants to make after-tax contributions to the Plan at such times and subject to such terms and conditions as the Committee may in its discretion determine. All such additional contributions shall be made in a manner consistent with the provisions of Section 423 of the Code or any successor thereto, and shall be treated in the same manner as payroll deductions contributed to the Plan as provided herein.

(b) Payroll Deduction Election on Enrollment Agreement. At the time a Participant files the enrollment agreement with respect to an Exercise Period, the Participant may authorize payroll deductions to be made on each payroll date during the portion of the Exercise Period that he or she is a Participant in an amount not less than 1% and not more than 10% of the Participant’s Compensation on each payroll date during the portion of the Exercise Period that he or she is a Participant. The amount of payroll deductions must be a whole percentage (e.g., 1%, 2%, 3%, etc.) of the Participant’s Compensation.

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(c) Commencement of Payroll Deductions. Except as otherwise determined by the Committee under rules applicable to all Participants, payroll deductions shall commence with the earliest administratively practicable payroll period that begins on or after the Entry Date with respect to which the Participant files an enrollment agreement in accordance with Section 5.

(d) Automatic Continuation of Payroll Deductions. Unless a Participant elects otherwise prior to the Exercise Date of an Exercise Period, including the Exercise Date prior to termination in the case of an Exercise Period terminated under Section 4(b) hereof, such Participant shall be deemed (i) to have elected to participate in the immediately succeeding Exercise Period (and, for purposes of such Exercise Period the Participant’s “Entry Date” shall be deemed to be the first day of such Exercise Period) and (ii) to have authorized the same payroll deduction for the immediately succeeding Exercise Period as was in effect for the Participant immediately prior to the commencement of the succeeding Exercise Period.

(e) Change of Payroll Deduction Election. A Participant may decrease or increase the rate or amount of his or her payroll deductions during an Exercise Period (within the limitations of Section 6(b) above) by completing and filing with the Company a new enrollment agreement authorizing a change in the rate or amount of payroll deductions; provided, that a Participant may not change the rate or amount of his or her payroll deductions more than once in any Exercise Period. Except as otherwise determined by the Committee under rules applicable to all Participants, the change in rate or amount shall be effective as of the earliest administratively practicable payroll period that begins on or after the date the Committee receives the new enrollment agreement. Additionally, a Participant may discontinue his or her participation in the Plan as provided in Section 13(a).

(f) Automatic Changes in Payroll Deduction. Notwithstanding the foregoing, to the extent necessary to comply with Section 423(b)(8) of the Code, Section 7(d) hereof, or any other applicable law, a Participant’s payroll deductions for any calendar year may be decreased, including to 0%, at such time during such calendar year that the aggregate of all payroll deductions accumulated during such calendar year are equal to the product of $25,000 multiplied by the Applicable Percentage for the calendar year. Payroll deductions shall recommence at the rate provided in the Participant’s enrollment agreement at the beginning of the first Exercise Period beginning in the following calendar year, unless the Participant terminates participation as provided in Section 13(a).

7. Grant of Option.

(a) Shares of Common Stock Subject to Option. On a Participant’s Entry Date, subject to the limitations set forth in Section 7(d) and this Section 7(a), the Participant shall be granted an option to purchase on the subsequent Exercise Date (at the Exercise Price determined as provided in Section 7(b) below) up to a number of shares of Common Stock determined by dividing such Participant’s Plan Contributions accumulated prior to such Exercise Date and retained in the Participant’s account as of such Exercise Date by the Exercise Price; provided, that the maximum number of shares a Participant may purchase during any Exercise Period shall be 750.

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(b) Exercise Price. The Exercise Price per share of Common Stock offered to each Participant in a given Exercise Period shall be the Applicable Percentage of the Fair Market Value of a share of Common Stock on the Exercise Date. The Applicable Percentage with respect to each Exercise Period shall be 95%, unless and until such Applicable Percentage is increased by the Committee, in its sole discretion, provided that any such increase in the Applicable Percentage with respect to a given Exercise Period must be established not less than fifteen (15) days prior to the Offering Date thereof.

(c) Fair Market Value. The Fair Market Value of a share of Common Stock on a given date shall be determined by the Committee in its discretion; provided, that if there is a public market for the Common Stock, the Fair Market Value per share shall be either (i) if the Common Stock is listed on a stock exchange, the closing price of the Common Stock on such exchange on such date (or, in the event that the Common Stock is not traded on such date, on the immediately preceding trading date), as reported in The Wall Street Journal, (ii) in the event the Common Stock is not traded on a stock exchange, the closing price of the Common Stock on such date (or, in the event that the Common Stock is not traded on such date, on the immediately preceding trading date), as reported by the National Association of Securities Dealers Automated Quotation (Nasdaq) National Market System, (iii) if such price is not reported, the average of the bid and asked prices for the Common Stock on such date (or, in the event that the Common Stock is not traded on such date, on the immediately preceding trading date), as reported by Nasdaq, or (iv) if no such quotations are available for a date within a reasonable time prior to the valuation date, the value of the Common Stock as determined by the Committee using any reasonable means.

(d) Limitation on Option that may be Granted. Notwithstanding any provision of the Plan to the contrary, no Participant shall be granted an option under the Plan (i) to the extent that if, immediately after the grant, such Employee (including any stock which is attributed to such Employee pursuant to Section 424(d) of the Code) would own stock and/or hold outstanding options to purchase stock possessing, in the aggregate, 5% or more of the total combined voting power or value of all classes of stock of the Company or of any Subsidiary of the Company as computed under Section 423(b)(3) of the Code and the Treasury Regulations thereunder, or (ii) to the extent that his or her rights to purchase stock under all employee stock purchase plans of the Company and its Subsidiaries intended to qualify under Section 423 of the Code accrue at a rate which exceeds $25,000 of Fair Market Value of stock (determined at the time such option is granted) for each calendar year in which such option is outstanding at any time, as determined in accordance with section 423(b)(8) of the Code and the Treasury Regulations thereunder.

(e) No Rights as Shareholder. A Participant will have no interest or voting right in shares covered by his option until such option has been exercised.

8. Exercise of Options.

(a) Automatic Exercise. A Participant’s option for the purchase of shares will be exercised automatically on each Exercise Date, and the maximum number of full shares subject to the option shall be purchased for the Participant at the applicable Exercise Price with the accumulated Plan Contributions then credited to the Participant’s account under the Plan.

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During a Participant’s lifetime, a Participant’s option to purchase shares hereunder is exercisable only by the Participant.

(b) Carryover of Excess Contributions. Any amount remaining to the credit of a Participant’s account after the purchase of shares by the Participant on an Exercise Date, or which is insufficient to purchase a full share of Common Stock, shall remain in the Participant’s account, and be carried over to the next Exercise Period, unless the Participant withdraws from participation in the Plan or elects to withdraw his or her account balance in accordance with Section 10(c).

9. Issuance of Shares.

(a) Delivery of Shares. The Company will hold in book-entry the shares of Common Stock purchased by each Participant under the Plan. Upon receipt of written request from or on behalf of a Participant, the Company shall, as promptly as practicable, arrange for the delivery to such Participant (or the Participant’s beneficiary), as appropriate, or to a custodial account for the benefit of such Participant (or the Participant’s beneficiary) as appropriate, of a certificate representing the shares purchased under the Plan, and the Company shall assume, for tax purposes, such Participant’s disposition of the underlying shares (unless such Participant clearly advises the Company otherwise in writing). In the event that a Participant provides a written statement of his intention not to sell or otherwise dispose of such shares as set forth in the foregoing sentence, such Participant shall be required to report to the Company any subsequent disposition of such shares prior to the expiration of the holding periods specified by Section 422(a)(1) of the Code. If and to the extent that such disposition imposes upon the Company federal, state, local or other withholding tax requirements, or any such withholding is required to secure for the Company an otherwise available tax deduction, the Participant must remit to the Company an amount sufficient to satisfy those requirements.

(b) Registration of Shares. Shares to be delivered to a Participant under the Plan will be registered in the name of the Participant or in the name of the Participant and his or her spouse, as requested by the Participant.

(c) Compliance with Applicable Laws. The Plan, the grant and exercise of options to purchase shares under the Plan, and the Company’s obligation to sell and deliver shares upon the exercise of options to purchase shares shall be subject to compliance with all applicable federal, state and foreign laws, rules and regulations and the requirements of any stock exchange on which the shares may then be listed.

(d) Withholding. The Company may make such provisions as it deems appropriate for withholding by the Company pursuant to federal or state tax laws of such amounts as the Company determines it is required to withhold in connection with the purchase or sale by a Participant of any Common Stock acquired pursuant to the Plan. The Company may require a Participant to satisfy any relevant tax requirements before authorizing any issuance of Common Stock to such Participant.

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10. Participant Accounts.

(a) Bookkeeping Accounts Maintained. Individual bookkeeping accounts will be maintained for each Participant in the Plan to account for the balance of his Plan Contributions, options issued, and shares purchased under the Plan. However, all Plan Contributions made for a Participant shall be deposited in the Company’s general corporate accounts, and no interest shall accrue or be credited with respect to a Participant’s Plan Contributions. All Plan Contributions received or held by the Company may be used by the Company for any corporate purpose, and the Company shall not be obligated to segregate or otherwise set apart such Plan Contributions from any other corporate funds.

(b) Participant Account Statements. Statements of account will be given to Participants quarterly, which statements will set forth the amounts of payroll deductions, the per share purchase price and the number of shares purchased.

(c) Withdrawal of Account Balance Following Exercise Date. A Participant may elect at any time within the first thirty (30) days following any Exercise Period, or at such other time as the Committee may from time to time prescribe, to receive in cash any amounts carried-over in accordance with Section 8(b). An election under this Section 10(c) shall not be treated as a withdrawal from participation in the Plan under Section 13(a).

11. Designation of Beneficiary.

(a) Designation. A Participant may file a written designation of a beneficiary who is to receive any shares and cash, if any, from the Participant’s account under the Plan in the event of the Participant’s death subsequent to an Exercise Date on which the Participant’s option hereunder is exercised but prior to delivery to the Participant of such shares and cash. In addition, a Participant may file a written designation of a beneficiary who is to receive any cash from the Participant’s account under the Plan in the event of the Participant’s death prior to the exercise of the option.

(b) Change of Designation. A Participant’s beneficiary designation may be changed by the Participant at any time by written notice. In the event of the death of a Participant and in the absence of a beneficiary validly designated under the Plan who is living at the time of such Participant’s death, the Company shall deliver such shares and/or cash to the executor or administrator of the estate of the Participant, or if no such executor or administrator has been appointed (to the knowledge of the Company), the Company, in its discretion, may deliver such shares and/or cash to the spouse or to any one or more dependents or relatives of the Participant, or if no spouse, dependent or relative is known to the Company, then to such other person as the Company may designate.

12. Transferability. Neither Plan Contributions credited to a Participant’s account nor any rights to exercise any option or receive shares of Common Stock under the Plan may be assigned, transferred, pledged or otherwise disposed of in any way (other than by will or the laws of descent and distribution, or as provided in Section 11). Any attempted assignment, transfer, pledge or other distribution shall be without effect, except that the Company may treat such act as an election to withdraw in accordance with Section 13(a).

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13. Withdrawal; Termination of Employment.

(a) Withdrawal. A Participant may withdraw from the Plan at any time by giving written notice to the Company. Payroll deductions, if any have been authorized, shall cease as soon as administratively practicable after receipt of the Participant’s notice of withdrawal, and, subject to administrative practicability, no further purchases shall be made for the Participant’s account. All Plan Contributions credited to the Participant’s account, if any, and not yet invested in Common Stock, will be paid to the Participant as soon as administratively practicable after receipt of the Participant’s notice of withdrawal. The Participant’s unexercised options to purchase shares pursuant to the Plan automatically will be terminated. Payroll deductions will not resume on behalf of a Participant who has withdrawn from the Plan (a “Former Participant”) unless the Former Participant enrolls in a subsequent Exercise Period in accordance with Section 5 and subject to the restriction provided in Section 13(b), below.

(b) Effect of Withdrawal on Subsequent Participation. A Former Participant who has withdrawn from the Plan pursuant to this Section 13(b) shall not again be eligible to participate in the Plan prior to the beginning of the Exercise Period that commences at least 12 months from the date the Former Participant withdrew, and the Former Participant must submit a new enrollment agreement in order to again become a Participant as of that date.

(c) Termination of Employment. Upon termination of a Participant’s Continuous Status as an Employee prior to any Exercise Date for any reason, including retirement or death, the Plan Contributions credited to the Participant’s account and not yet invested in Common Stock will be returned to the Participant or, in the case of death, to the Participant’s beneficiary as determined pursuant to Section 11, and the Participant’s option to purchase shares under the Plan will automatically terminate.

14. Common Stock Available under the Plan.

(a) Number of Shares. Subject to adjustment as provided in Section 14(b) below, the maximum number of shares of the Company’s Common Stock that shall be made available for sale under the Plan shall be 600,000 shares, plus an automatic annual increase on the first day of each of the Company’s fiscal years beginning in 2006 and ending in 2014 equal to the lesser of (i) 100,000 shares, (ii) 1% of all shares of Common Stock outstanding on the last day of the immediately preceding fiscal year, or (iii) a lesser amount determined by the Board. Shares of Common Stock subject to the Plan may be newly issued shares or shares reacquired in private transactions or open market purchases. If and to the extent that any right to purchase reserved shares shall not be exercised by any Participant for any reason or if such right to purchase shall terminate as provided herein, shares that have not been so purchased hereunder shall again become available for the purpose of the Plan unless the Plan shall have been terminated, but all shares sold under the Plan, regardless of source, shall be counted against the limitation set forth above.

(b) Adjustments Upon Changes in Capitalization; Corporate Transactions.

(i) If the outstanding shares of Common Stock are increased or decreased, or are changed into or are exchanged for a different number or kind of shares, as a

8

result of one or more reorganizations, restructurings, recapitalizations, reclassifications, stock splits, reverse stock splits, stock dividends or the like, upon authorization of the Committee, appropriate adjustments shall be made in the number and/or kind of shares, and the per-share option price thereof, which may be issued in the aggregate and to any Participant upon exercise of options granted under the Plan.

(ii) In the event of the proposed dissolution or liquidation of the Company, the Exercise Period will terminate immediately prior to the consummation of such proposed action, unless otherwise provided by the Committee.

(iii) In the event of a proposed sale of all or substantially all of the Company’s assets, or the merger of the Company with or into another corporation (each, a “Sale Transaction”), each option under the Plan shall be assumed or an equivalent option shall be substituted by such successor corporation or a parent or subsidiary of such successor corporation, unless the Committee determines, in the exercise of its sole discretion and in lieu of such assumption or substitution, to shorten the Exercise Period then in progress by setting a new Exercise Date (the “New Exercise Date”). If the Committee shortens the Exercise Period then in progress in lieu of assumption or substitution in the event of a Sale Transaction, the Committee shall notify each Participant in writing, at least ten (10) days prior to the New Exercise Date, that the exercise date for such Participant’s option has been changed to the New Exercise Date and that such Participant’s option will be exercised automatically on the New Exercise Date, unless prior to such date the Participant has withdrawn from the Plan as provided in Section 13(a). For purposes of this Section 14(b), an option granted under the Plan shall be deemed to have been assumed if, following the Sale Transaction, the option confers the right to purchase, for each share of option stock subject to the option immediately prior to the Sale Transaction, the consideration (whether stock, cash or other securities or property) received in the Sale Transaction by holders of Common Stock for each share of Common Stock held on the effective date of the Sale Transaction (and if such holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding shares of Common Stock); provided, that if the consideration received in the Sale Transaction was not solely common stock of the successor corporation or its parent (as defined in Section 424(e) of the Code), the Committee may, with the consent of the successor corporation and the Participant, provide for the consideration to be received upon exercise of the option to be solely common stock of the successor corporation or its parent equal in fair market value to the per share consideration received by the holders of Common Stock in the Sale Transaction.

(iv) In all cases, the Committee shall have sole discretion to exercise any of the powers and authority provided under this Section 14, and the Committee’s actions hereunder shall be final and binding on all Participants. No fractional shares of stock shall be issued under the Plan pursuant to any adjustment authorized under the provisions of this Section 14.

15. Administration.

(a) Committee. The Plan shall be administered by the Committee. The Committee shall have the authority to interpret the Plan, to prescribe, amend and rescind rules and regulations relating to the Plan, and to make all other determinations necessary or advisable

9

for the administration of the Plan. The administration, interpretation, or application of the Plan by the Committee shall be final, conclusive and binding upon all persons.

(b) Requirements of Exchange Act. Notwithstanding the provisions of Section 15(a) above, in the event that Rule 16b-3 promulgated under the Exchange Act or any successor provision thereto (“Rule 16b-3”) provides specific requirements for the administrators of plans of this type, the Plan shall only be administered by such body and in such a manner as shall comply with the applicable requirements of Rule 16b-3.

16. Amendment, Suspension, and Termination of the Plan.

(a) Amendment of the Plan. The Board or the Committee may at any time, or from time to time, amend the Plan in any respect; provided, that (i) except as otherwise provided in Section 4(b) hereof, no such amendment may make any change in any option theretofore granted which adversely affects the rights of any Participant and (ii) the Plan may not be amended in any way that will cause rights issued under the Plan to fail to meet the requirements for employee stock purchase plans as defined in Section 423 of the Code or any successor thereto. To the extent necessary to comply with Rule 16b-3 under the Exchange Act, Section 423 of the Code, or any other applicable law or regulation), the Company shall obtain shareholder approval of any such amendment.

(b) Suspension of the Plan. The Board or the Committee may, as of the close of any Exercise Date, suspend the Plan; provided, that the Board or Committee provides notice to the Participants at least five (5) business days prior to the suspension. The Board or Committee may resume the normal operation of the Plan as of any Exercise Date; provided further, that the Board or Committee provides notice to the Participants at least twenty (20) business days prior to the date of termination of the suspension period. A Participant shall remain a Participant in the Plan during any suspension period (unless he or she withdraws pursuant to Section 13(a)), however no options shall be granted or exercised, and no payroll deductions shall be made in respect of any Participant during the suspension period. Participants shall have the right to withdraw carryover funds provided in Section 10(c) throughout any suspension period. The Plan shall resume its normal operation upon termination of a suspension period.

(c) Termination of the Plan. The Plan and all rights of Employees hereunder shall terminate on the earliest of:

(i) the Exercise Date that Participants become entitled to purchase a number of shares greater than the number of reserved shares remaining available for purchase under the Plan;

(ii) such date as is determined by the Board in its discretion; or

(iii) the last Exercise Date immediately preceding the tenth (10th) anniversary of the Plan’s effective date.

In the event that the Plan terminates under circumstances described in Section 16(c)(i) above, reserved shares remaining as of the termination date shall be sold to Participants on a pro rata

10

basis, based on the relative value of their cash account balances in the Plan as of the termination date.

17. Notices. All notices or other communications by a Participant to the Company under or in connection with the Plan shall be deemed to have been duly given when received in the form specified by the Company at the location, or by the person, designated by the Company for the receipt thereof.

18. Expenses of the Plan. All costs and expenses incurred in administering the Plan shall be paid by the Company, except that any stamp duties or transfer taxes applicable to participation in the Plan may be charged to the account of such Participant by the Company.

19. No Employment Rights. The Plan does not, directly or indirectly, create any right for the benefit of any employee or class of employees to purchase any shares under the Plan, or create in any employee or class of employees any right with respect to continuation of employment by the Company or any Subsidiary, and it shall not be deemed to interfere in any way with the right of the Company or any Subsidiary to terminate, or otherwise modify, an employee’s employment at any time.

20. Applicable Law. The internal laws of the State of Delaware shall govern all matters relating to this Plan except to the extent (if any) superseded by the laws of the United States.

21. Additional Restrictions of Rule 16b-3. The terms and conditions of options granted hereunder to, and the purchase of shares by, persons subject to Section 16 of the Exchange Act shall comply with the applicable provisions of Rule 16b-3. This Plan shall be deemed to contain, and such options shall contain, and the shares issued upon exercise thereof shall be subject to, such additional conditions and restrictions as may be required by Rule 16b-3 to qualify for the maximum exemption from Section 16 of the Exchange Act with respect to Plan transactions.

22. Effective Date. The Plan became effective on December 8, 2004 and is hereby amended and restated effective as of July 1, 2005.

11

EX-10.14

Exhibit 10.14

Amendment to Symmetry Medical Inc.

2004 Employee Stock Purchase Plan

This AMENDMENT TO SYMMETRY MEDICAL INC. 2004 EMPLOYEE STOCK PURCHASE PLAN is effective as of March 21, 2005. All capitalized terms used herein and not defined shall have the meanings given to them in the Symmetry Medical Inc. 2004 Employee Stock Purchase Plan (the “Plan”).

WHEREAS, the Board of Directors of Symmetry Medical Inc. (the “Board”) approved the Plan on December 2, 2004;

WHEREAS, the Board desires to amend and restate certain provisions of the Plan;

NOW, THEREFORE, the Plan is hereby amended as follows:

1. Section 9(a) of the Plan is hereby amended and restated in its entirety as follows:

Delivery of Shares. The Company will hold in book-entry the shares of Common Stock purchased by each Participant under the Plan. Upon receipt of written request from or on behalf of a Participant, the Company shall, as promptly as practicable, arrange for the delivery to such Participant (or the Participant’s beneficiary), as appropriate, or to a custodial account for the benefit of such Participant (or the Participant’s beneficiary) as appropriate, of a certificate representing the shares purchased under the Plan, and the Company shall assume, for tax purposes, such Participant’s disposition of the underlying shares (unless such Participant clearly advises the Company otherwise in writing). In the event that a Participant provides a written statement of his intention not to sell or otherwise dispose of such shares as set forth in the foregoing sentence, such Participant shall be required to report to the Company any subsequent disposition of such shares prior to the expiration of the holding periods specified by Section 422(a)(1) of the Code. If and to the extent that such disposition imposes upon the Company federal, state, local or other withholding tax requirements, or any such withholding is required to secure for the Company an otherwise available tax deduction, the Participant must remit to the Company an amount sufficient to satisfy those requirements.

2. Section 15(b) of the Plan is hereby amended and restated in its entirety as follows:

Requirements of Exchange Act. Notwithstanding the provisions of Section 15(a) above, in the event that Rule 16b-3 promulgated under the Exchange Act or any successor provision thereto (“Rule 16b-3”) provides specific requirements for the administrators of plans of this type, the Plan shall only be administered by such body and in such a manner as shall comply with the applicable requirements of Rule 16b-3.

EX-21

EXHIBIT 21

SUBSIDIARIES

The companies listed below are the primary subsidiaries of the Corporation. The financial data for these subsidiaries comprised the Corporation’s consolidated financial statements.

Name of Company	Organized Under Laws of
Domestic:
Symmetry Medical USA Inc.	Delaware
Symmetry Medical International Inc.	Delaware
Mettis Group Inc.	Delaware
Ultrexx, Inc. (a)	Indiana
Jet Engineering, Inc. (a)	Michigan
International:
Othy Limited	England
Poly-Vac France S.A.R.L.	France
Poly-Vac S.A.	France
Mettis (UK) Limited (a)	England
Thornton Precision Components Limited (a)	England
Medicast Limited	England
Arthur Robinson & Sons (Willenhall) Limited	England

(a) Accounts for material revenues.

EX-24

EXHIBIT 24

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose name appears below constitutes and appoints Brian Moore and Fred Hite and each of them, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for and in his or her name, place and stead, in any and all capacities, to sign the Annual Report on Form 10-K for the year ending January 1, 2005, of Symmetry Medical Inc. and any or all amendments thereto, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their or his substitutes, may lawfully do or cause to be done by virtue hereof.

This power of attorney has been signed as of the 24^th day of March, 2005, by the following persons:

/s/    BRIAN MOORE	/s/    FRANK TURNER
Brian Moore,	Frank Turner,
Director, Chief Executive Officer and President	Director
/s/    ROBERT S. MORRIS	/s/    STEPHEN B. ORESMAN
Robert S. Morris,	Stephen B. Oresman,
Director	Director
/s/    JAMES A. CONROY	/s/    FRANCIS T. NUSSPICKEL
James A. Conroy,	Francis T. Nusspickel,
Director	Director
/s/    MANU BETTEGOWDA
Manu Bettegowda,
Director

EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

I, Brian Moore, certify that:

1. I have reviewed this annual report on Form 10-K of Symmetry Medical Inc. (the “Corporation”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Corporation as of, and for, the periods presented in this report;

4. The Corporation’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Corporation and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Corporation, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Evaluated the effectiveness of the Corporation’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c) Disclosed in this report any change in the Corporation’s internal control over financial reporting that occurred during the Corporation’s most recent fiscal quarter (the Corporation’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Corporation’s internal control over financial reporting; and

5. The Corporation’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Corporation’s auditors and the audit committee of the Corporation’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Corporation’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Corporation’s internal controls over financial reporting.

March 25, 2005	/s/    BRIAN MOORE
	Brian Moore
	Chief Executive Officer and President

EX-31.2

EXHIBIT 31.2

CERTIFICATIONS

I, Fred Hite, certify that:

1. I have reviewed this annual report on Form 10-K of Symmetry Medical Inc. (the “Corporation”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Corporation as of, and for, the periods presented in this report;

4. The Corporation’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Corporation and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Corporation, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Evaluated the effectiveness of the Corporation’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c) Disclosed in this report any change in the Corporation’s internal control over financial reporting that occurred during the Corporation’s most recent fiscal quarter (the Corporation’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Corporation’s internal control over financial reporting; and

5. The Corporation’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Corporation’s auditors and the audit committee of the Corporation’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Corporation’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Corporation’s internal controls over financial reporting.

March 25, 2005	/s/    FRED HITE
	Fred Hite
	Senior Vice President, Chief Financial Officer and Secretary

EX-32.1

EXHIBIT 32.1

SECTION 1350 CERTIFICATIONS

In connection with the Annual Report of Symmetry Medical Inc. (the “Corporation”) on Form 10-K, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Brian Moore, Chief Executive Officer and President of the Corporation, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation.

March 25, 2005	/s/    BRIAN MOORE
	Brian Moore
	Chief Executive Officer and President

EX-32.2

EXHIBIT 32.2

SECTION 1350 CERTIFICATIONS

In connection with the Annual Report of Symmetry Medical Inc. (the “Corporation”) on Form 10-K, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Fred Hite, Senior Vice President, Chief Financial Officer and Secretary of the Corporation, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation.

March 25, 2005	/s/    FRED HITE
	Fred Hite
	Senior Vice President, Chief Financial Officer and Secretary