10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended September 30, 2016

¨ 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: 000-33001

NATUS MEDICAL INCORPORATED

(Exact name of registrant as specified in its charter)

Delaware	77-0154833
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

6701 Koll Center Parkway, Suite 120, Pleasanton, CA 94566

(Address of principal executive offices) (Zip Code)

(925) 223-6700

(Registrant’s telephone number, including area code)

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 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  ý    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ý    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.:

Large Accelerated filer	ý	Accelerated filer	¨
Non-accelerated filer	o  (Do not check if a smaller reporting company)	Smaller reporting  company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  ý

The number of issued and outstanding shares of the registrant’s Common Stock, $0.001 par value, as of October 28, 2016 was 32,911,604.

NATUS MEDICAL INCORPORATED

TABLE OF CONTENTS

		Page No.
PART I.	FINANCIAL INFORMATION	3
Item 1.	Financial Statements	3
	Condensed Consolidated Balance Sheets as of September 30, 2016 and December 31, 2015 (unaudited)	3
	Condensed Consolidated Statements of Income and Comprehensive Income for the three and nine months ended September 30, 2016 and 2015 (unaudited)	4
	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2016 and 2015 (unaudited)	5
	Notes to Condensed Consolidated Financial Statements (unaudited)	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	26
Item 4.	Controls and Procedures	26
PART II.	OTHER INFORMATION	27
Item 1.	Legal Proceedings	27
Item 1A.	Risk Factors	27
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	27
Item 5.	Other Information	27
Item 6.	Exhibits	27
Signatures		29

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PART I.    FINANCIAL INFORMATION

Item 1.    Financial Statements

NATUS MEDICAL INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

(in thousands, except share and per share amounts)

	September 30, 2016			December 31, 2015
ASSETS
Current assets:
Cash and cash equivalents	$	81,073		$	82,469
Short-term investments	25,429			—
Accounts receivable, net of allowance for doubtful accounts of $4,706 in 2016 and $4,686 in 2015	84,870			99,080
Inventories	51,654			48,572
Prepaid expenses and other current assets	22,939			11,235
Total current assets	265,965			241,356
Property and equipment, net	18,127			16,967
Intangible assets, net	82,775			86,536
Goodwill	111,918			107,466
Deferred income tax	12,694			12,782
Other assets	19,236			14,389
Total assets	$	510,715		$	479,496
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	17,107		$	23,660
Accrued liabilities	38,711			42,137
Deferred revenue	33,334			11,311
Total current liabilities	89,152			77,108
Long-term liabilities:
Other liabilities	8,359			7,781
Deferred income tax	3,819			3,897
Total liabilities	101,330			88,786
Stockholders’ equity:
Common Stock, $0.001 par value, 120,000,000 shares authorized; shares issued and outstanding 32,888,068 in 2016 and 33,153,500 in 2015	311,058			323,745
Preferred stock, $0.001 par value; 10,000,000 shares authorized; no shares issued and outstanding in 2016 and 2015	—			—
Retained earnings	139,176			106,814
Accumulated other comprehensive loss	(40,849		)	(39,849		)
Total stockholders’ equity	409,385			390,710
Total liabilities and stockholders’ equity	$	510,715		$	479,496

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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NATUS MEDICAL INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(unaudited)

(in thousands, except per share amounts)

	Three Months Ended   September 30,						Nine Months Ended   September 30,
	2016			2015			2016			2015
Revenue	$	90,906		$	94,583		$	274,193		$	275,915
Cost of revenue	32,194			35,520			102,542			104,468
Intangibles amortization	612			683			1,818			2,048
Gross profit	58,100			58,380			169,833			169,399
Operating expenses:
Marketing and selling	19,746			22,495			61,578			65,345
Research and development	7,689			7,700			22,596			21,867
General and administrative	12,821			10,031			37,225			33,239
Intangibles amortization	2,409			2,036			6,741			5,165
Restructuring	197			42			1,315			358
Total operating expenses	42,862			42,304			129,455			125,974
Income from operations	15,238			16,076			40,378			43,425
Other income (expense), net	(893		)	7			(412		)	(1,203		)
Income before provision for income tax	14,345			16,083			39,966			42,222
Provision for income tax expense	1,032			5,151			7,605			12,842
Net income	$	13,313		$	10,932		$	32,361		$	29,380
Foreign currency translation adjustment	424			(642		)	(999		)	(4,452		)
Comprehensive income	$	13,737		$	10,290		$	31,362		$	24,928
Earnings per share:
Basic	$	0.41		$	0.34		$	1.00		$	0.91
Diluted	$	0.40		$	0.33		$	0.98		$	0.89
Weighted average shares used in the calculation of earnings per share:
Basic	32,388			32,432			32,476			32,279
Diluted	32,981			33,253			33,077			33,194

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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NATUS MEDICAL INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

(in thousands)

	Nine Months Ended   September 30,
	2016			2015
Operating activities:
Net income	$	32,361		$	29,380
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for losses on accounts receivable	940			945
Excess tax benefit on the exercise of stock options	—			(5,304		)
Depreciation and amortization	12,820			11,346
Gain on disposal of property and equipment	(21		)	—
Warranty reserve	3,273			4,771
Share-based compensation	6,957			5,382
Changes in operating assets and liabilities:
Accounts receivable	19,299			(6,681		)
Inventories	(6,353		)	(7,014		)
Prepaid expenses and other assets	(13,261		)	(1,049		)
Accounts payable	(6,062		)	3,237
Accrued liabilities	(6,488		)	(3,596		)
Deferred revenue	24,994			(2,049		)
Deferred income tax	43			5,560
Net cash provided by operating activities	68,502			34,928
Investing activities:
Acquisition of businesses, net of cash acquired	(15,849		)	(11,559		)
Purchases of property and equipment	(2,176		)	(2,990		)
Purchase of intangible assets	(210		)	(1,158		)
Purchases of short-term investments	(25,429		)	—
Net cash used in investing activities	(43,664		)	(15,707		)
Financing activities:
Proceeds from stock option exercises and Employee Stock Purchase Program purchases	2,550			6,086
Excess tax benefit on the exercise of stock options	—			5,304
Repurchase of common stock	(18,257		)	(9,352		)
Taxes paid related to net share settlement of equity awards	(3,937		)	(4,303		)
Contingent consideration	(1,284		)	(664		)
Proceeds from short-term borrowings	16,000			—
Deferred debt issuance costs	(533		)	—
Payments on borrowings	(16,000		)	—
Net cash used in financing activities	(21,461		)	(2,929		)
Exchange rate changes effect on cash and cash equivalents	(4,773		)	(649		)
Net increase in cash and cash equivalents	(1,396		)	15,643
Cash and cash equivalents, beginning of period	82,469			66,558
Cash and cash equivalents, end of period	$	81,073		$	82,201
Supplemental disclosure of cash flow information:
Cash paid for interest	$	41		$	—
Cash paid for income taxes	$	8,024		$	5,348
Non-cash investing activities:
Property and equipment included in accounts payable	$	159		$	200
Inventory transferred to property and equipment	$	1,240		$	797

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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NATUS MEDICAL INCORPORATED AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

1 - Basis of Presentation

The accompanying interim condensed consolidated financial statements of Natus Medical Incorporated (“Natus,” “we,” “us,” “our,” or the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The accounting policies followed in the preparation of the interim condensed consolidated financial statements are consistent in all material respects with those presented in Note 1 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015.

Interim financial reports are prepared in accordance with the rules and regulations of the Securities and Exchange Commission; accordingly, they do not include all of the information and notes required by GAAP for annual financial statements. The interim financial information is unaudited, and reflects all normal adjustments that are, in the opinion of management, necessary for the fair presentation of our financial position, results of operations, and cash flows for the interim periods presented. The consolidated balance sheet as of December 31, 2015 was derived from audited financial statements, but does not include all disclosures required by GAAP. The accompanying financial statements should be read in conjunction with the financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. We have made certain reclassifications to the prior period to conform to current period presentation.

Operating results for the nine months ended September 30, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016. The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606). ASU 2014-09 requires revenue recognition to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 sets forth a new revenue recognition model that requires identifying the contract, identifying the performance obligations, determining the transaction price, allocating the transaction price to performance obligations and recognizing the revenue upon satisfaction of performance obligations.

The original effective date for ASU 2014-09 would have required the Company to adopt beginning in its first quarter of 2017. In July 2015, the FASB voted to amend ASU 2014-09 by approving a one-year deferral of the effective date as well as providing the option to early adopt the standard on the original effective date. Accordingly, the Company will adopt the standard in its first quarter of 2018. The new revenue standard may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption. The Company is currently evaluating the impact of adopting the new revenue standard on its consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). This standard requires a lessee to recognize the lease assets and lease liabilities arising from operating leases in the statement of financial position. Qualitative along with specific quantitative disclosures are required by lessees and lessors to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018 including interim periods within those fiscal years. The Company is currently evaluating the impact that will result from adopting ASU 2016-02.

In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvement to Employee Share-Based Payment Accounting. The new standard contains several amendments that simplifies the accounting for employee share-based payment transactions, including the accounting for income

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taxes, forfeitures, statutory tax withholding requirements, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The changes in the new standard eliminate the accounting for excess tax benefits to be recognized in additional paid-in capital and tax deficiencies recognized either in the income tax provision or in additional paid-in capital. The Company elected early adoption of ASU 2016-09 in the first quarter of 2016 which was applied using a modified retrospective approach. For the nine months ended September 30, 2016, we recognized all excess tax benefits and tax deficiencies as income tax expense or benefit as a discrete event. An income tax benefit of approximately $1.9 million was recognized in the period ended September 30, 2016 as a result of the adoption of ASU 2016-09. There was no change to retained earnings with respect to excess tax benefits, as this is not applicable to the Company. The treatment of forfeitures has not changed as we are electing to continue our current process of estimating the number of forfeitures. As such, this has no cumulative effect on retained earnings. With the early adoption of 2016-09, we have elected to present the cash flow statement on a prospective transition method and no prior periods have been adjusted.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. This standard provides guidance for eight cash flow classification issues in current GAAP. ASU 2016-15 is effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. The Company elected early adoption of ASU 2016-15 in the first quarter of 2016 relating to Contingent Consideration Payments Made after a Business Combination. For the nine months ended September 30, 2016, the Company recognized $1.0 million as a cash outflow for investing activities on the Statement of Cash Flows. This payment was made soon after the acquisition date of a business combination to settle the contingent consideration from the Monarch acquisition.

2 - Business Combinations

RetCam

On July 6, 2016, we acquired the portfolio of RetCam Imaging Systems ("RetCam") from Clarity Medical Systems, Inc. for $10.6 million in cash. RetCam is an imaging system used to diagnose and monitor a range of ophthalmic maladies in premature infants. The purchase agreement also included a holdback of $2.0 million which is contingent upon completion of certain modifications to RetCam 3 no later than March 31, 2017. Subsequent to the acquisition, an additional $1.1 million was paid by the Company to Clarity Medical Systems as a result of a working capital adjustment. Results of operations for RetCam will be included in our consolidated financial statements from the date of acquisition. The total purchase price was allocated $7.7 million to tangible assets, $5.0 million to intangible assets with an assigned weighted average life of 5 years being amortized on the straight line method, and $1.0 million to goodwill, offset by $2.0 million to net liabilities. Purchase price allocation is considered preliminary at this time although no material adjustments are anticipated. Pro forma financial information for the RetCam acquisition is not presented as it is not considered material.

NeuroQuest

On March 2, 2016, we acquired NeuroQuest, LLC (“NeuroQuest”) through an asset purchase. NeuroQuest complements our Global Neuro-Diagnostics ("GND") and Monarch Medical Diagnostics, LLC ("Monarch") acquisitions which offer patients a convenient way to complete routine-electroencephalography ("EEG") and extended video electronencephalography ("VEEG") testing. The cash consideration for NeuroQuest was $4.6 million. The purchase agreement also included an asset consideration holdback of $0.5 million. The total purchase price was allocated to $0.5 million of tangible assets, $1.3 million of intangible assets with an assigned weighted average life of 5 years being amortized on the straight line method, and $3.5 million of goodwill, offset by $0.1 million of net liabilities. Purchase price allocation is considered preliminary at this time. Pro forma financial information for the NeuroQuest acquisition is not presented as it is not considered material.

Monarch

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We acquired Monarch Medical Diagnostics, LLC ("Monarch") through an asset purchase on November 13, 2015. Monarch's service compliments our GND acquisition which offers patients a convenient way to complete routine and extended video EEG diagnostic testing. The service also provides comprehensive reporting and support to the physician. The cash consideration for Monarch was $2.7 million. The purchase agreement also included a contingent consideration holdback of $1.0 million which we paid on January 11, 2016. The total purchase price was allocated to $1.2 million of tangible assets, $1.2 million of intangible assets with an assigned weighted average life of 5 years being amortized on the straight line method, and $2.4 million of goodwill. Pro forma financial information for the Monarch acquisition is not presented as it is not considered material.

Global Neuro-Diagnostics

We acquired GND Operating LLC, and Braincare, LLC (collectively "GND") through an equity purchase on January 23, 2015. GND's service offers patients a convenient way to complete routine and extended video EEG diagnostic testing, which can be performed at the home, hospital or physician's office. The service also provides comprehensive reporting and support to the physician. The cash consideration for GND was $11.4 million, which consists primarily of $1.5 million of tangible assets, $4.8 million of intangible assets with an assigned weighted average life of 5 years being amortized on the straight line method, and $8.9 million of goodwill, offset by $0.5 million of net liabilities. The purchase agreement also included an earn-out provision contingent upon GND achieving certain revenue milestones from 2015 to 2017. At acquisition we estimated the earn-out to be $3.2 million. Each quarter we evaluate expected future revenue and adjust our estimate accordingly. We currently estimate this earn-out to be $0.5 million, which was a reduction of $2.8 million in the current quarter, as we expect lower revenues for 2016 and 2017 than anticipated. Pro forma financial information for the GND acquisition is not presented as it is not considered material.

NicView

On January 2, 2015, we purchased the assets of Health Observation Systems, LLC ("NicView") for cash consideration of $1.1 million, of which $0.3 million was allocated to tangible assets and $2.7 million to goodwill, offset by $0.6 million allocated to net liabilities. NicView provides streaming video for families with babies in the neonatal intensive care unit. The asset purchase agreement included an earn-out condition of $1.3 million that was contingent upon orders received and installed by February 28, 2016. The earn-out was paid on March 28, 2016. Pro forma financial information for the NicView acquisition is not presented as it is not considered material.

3 - Earnings Per Share

The components of basic and diluted EPS are as follows (in thousands, except per share amounts):

	Three Months Ended   September 30,				Nine Months Ended   September 30,
	2016		2015		2016		2015
Net income	$	13,313	$	10,932	$	32,361	$	29,380
Weighted average common shares	32,388		32,432		32,476		32,279
Dilutive effect of stock based awards	593		821		601		915
Diluted Shares	32,981		33,253		33,077		33,194
Basic earnings per share	$	0.41	$	0.34	$	1.00	$	0.91
Diluted earnings per share	$	0.40	$	0.33	$	0.98	$	0.89
Shares excluded from calculation of diluted EPS	—		—		138		—

4 - Cash, Cash Equivalents, and Short-Term Investments

The Company has invested its excess cash in highly liquid marketable securities such as corporate debt instruments, U.S. government agency securities and asset-backed securities. Investments with maturities greater

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than one year are classified as current because management considers all investments to be available for current operations.

The Company's investments are designed to provide liquidity, preserve capital and maximize total return on invested assets with a focus on high credit-quality securities.

The Company's investments have been classified and accounted for as available-for-sale. Such investments are recorded at fair value and unrealized holding gains and losses are reported as a separate component of accumulated other comprehensive income (loss) in the stockholders' equity until realized. Realized gains and losses on sales of investments, if any, are determined on the specific identification method and are reclassified from accumulated other comprehensive income (loss) to results of operations as other income (expense).

The Company, to date, has not determined that any of the unrealized losses on its investments are considered to be other-than-temporary. The Company reviews its investment portfolio to determine if any security is other-than-temporarily impaired, which would require the Company to record an impairment charge in the period any such determination is made. In making this judgment, the Company evaluates, among other things: the duration and extent to which the fair value of a security is less than its cost; the financial condition of the issuer and any changes thereto; and the Company's intent and ability to hold its investment for a period of time sufficient to allow for any anticipated recovery in market value, or whether the Company will more likely than not be required to sell the security before recovery of its aggregated cost basis. The Company has evaluated its investments as of September 30, 2016 and has determined that no investments with unrealized losses are other-than-temporarily impaired. No investments have been in a continuous loss position greater than one year.     

Cash, cash equivalents and short-term investments consisted of the following (in thousands):

	September 30, 2016	December 31, 2015
Cash and cash equivalents:
Cash	74,072	82,469
U.S. Treasury Bills	7,001	—
Total cash and cash equivalents	81,073	82,469
Short-term investments:
U.S. investment grade bonds	16,865	—
Developed investment grade bonds	8,564	—
Total short-term investments	25,429	—
Total cash, cash equivalents and short-term investments	106,502	82,469

Short-term Investments by investment type are as follows (in thousands):

	September 30, 2016									December 31, 2015
	Aggregated Cost Basis		Gross Unrealized Gains		Gross Unrealized Losses			Aggregated Fair Value		Aggregated Cost Basis		Gross Unrealized Gains		Gross Unrealized Losses		Aggregated Fair Value
U.S. investment grade bonds	16,890		1		(26		)	16,865		—		—		—		—
Developed investment grade bonds	8,579		—		(15		)	8,564		—		—		—		—
Total short-term investments	$	25,469	$	1	$	(41	)	$	25,429	$	—	$	—	$	—	$	—

Short-term investments by contractual maturity are as follows (in thousands):

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	September 30, 2016		December 31, 2015
	Investments		Investments
Due in one year or less	$	7,342	$	—
Due after one year through five years	18,087		—
Total short-term investment	$	25,429	$	—

5 - Inventories

Inventories consist of the following (in thousands):

	September 30, 2016			December 31, 2015
Raw materials and subassemblies	$	26,944		$	19,041
Work in process	2,030			1,343
Finished goods	35,895			36,149
Total inventories	64,869			56,533
Less: Non-current inventories	(13,215		)	(7,961		)
Inventories, current	$	51,654		$	48,572

At September 30, 2016 and December 31, 2015, we have classified $13.2 million and $8.0 million, respectively, of inventories as other assets. We expect that we will not use this inventory within the next twelve months. This inventory consists primarily of last time buy items from our suppliers, service components used to repair products pursuant to warranty obligations and extended service contracts, including service components for products we are not currently selling and inventory that we purchased in bulk quantities. Management believes that these inventories will be utilized for their intended purpose.

6 – Intangible Assets

The following table summarizes the components of gross and net intangible asset balances (in thousands):

	September 30, 2016										December 31, 2015
	Gross Carrying Amount		Accumulated Impairment			Accumulated Amortization			Net Book Value		Gross Carrying Amount		Accumulated Impairment			Accumulated Amortization			Net Book Value
Intangible assets with definite lives:
Technology	$	63,264	$	—		$	(34,140	)	$	29,124	$	63,668	$	—		$	(31,600	)	$	32,068
Customer related	37,283		—			(16,863		)	20,420		35,529		—			(14,352		)	21,177
Trade names	34,478		(3,379		)	(6,232		)	24,867		31,837		(3,340		)	(3,052		)	25,445
Internally developed software	17,722		—			(9,769		)	7,953		15,513		—			(8,155		)	7,358
Patents	2,694		—			(2,283		)	411		2,663		—			(2,175		)	488
Definite-lived intangible assets	$	155,441	$	(3,379	)	$	(69,287	)	$	82,775	$	149,210	$	(3,340	)	$	(59,334	)	$	86,536

Finite-lived intangible assets are amortized over their useful lives, which are 5 to 20 years for technology, 4 to 16 years for customer related intangibles, 4 to 10 years for internally developed software, 5 to 7 years for trade names, and 10 to 15 years for patents.

Internally developed software consists of $15.5 million relating to costs incurred for development of internal use computer software and $2.2 million for development of software to be sold.

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Amortization expense related to intangible assets with definite lives was as follows (in thousands):

	Three Months Ended   September 30,				Nine Months Ended   September 30,
	2016		2015		2016		2015
Technology	$	863	$	934	$	2,571	$	2,854
Customer related	848		689		2,495		2,092
Trade names	1,139		1,024		3,176		2,048
Internally developed software	602		434		1,618		1,142
Patents	28		28		84		84
Total amortization	$	3,480	$	3,109	$	9,944	$	8,220

Expected amortization expense related to amortizable intangible assets is as follows (in thousands):

Three months ending December 31, 2016	$	3,390
2017	13,557
2018	13,333
2019	12,173
2020	9,974
2021	8,522
Thereafter	21,826
Total expected amortization expense	$	82,775

7 – Goodwill

The carrying amount of goodwill and the changes in the balance are as follows (in thousands):

December 31, 2015	$	107,466
Acquisitions	4,485
Foreign currency translation	(33		)
September 30, 2016	$	111,918

8 - Property and Equipment, net

Property and equipment, net consist of the following (in thousands):

	September 30, 2016			December 31, 2015
Land	$	2,865		$	2,918
Buildings	5,335			5,662
Leasehold improvements	2,400			2,345
Office furniture and equipment	14,513			13,866
Computer software and hardware	12,654			10,488
Demonstration and loaned equipment	11,838			11,216
	49,605			46,495
Accumulated depreciation	(31,478		)	(29,528		)
Total	$	18,127		$	16,967

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Depreciation expense of property and equipment was approximately $0.9 million and $2.9 million for the three and nine months ended September 30, 2016, respectively, and approximately $1.0 million and $3.1 million for the three and nine months ended September 30, 2015, respectively.

9 - Reserve for Product Warranties

We provide a warranty with our products that is generally one year in length, but in some cases regulations may require us to provide repair or remediation beyond our typical warranty period. If any of our products contain defects, we may be required to incur additional repair and remediation costs. Service for domestic customers is provided by Company-owned service centers that perform all service, repair, and calibration services. Service for international customers is provided by a combination of Company-owned facilities and vendors on a contract basis.

A warranty reserve is included in accrued liabilities for the expected future costs of servicing products. Additions to the reserve are based on management’s best estimate of probable liability. We consider a combination of factors including material and labor costs, regulatory requirements, and other judgments in determining the amount of the reserve. The reserve is reduced as costs are incurred to honor existing warranty and regulatory obligations.

As of September 30, 2016 we had accrued $6.5 million of estimated costs to bring certain NeoBLUE® phototherapy products into U.S. regulatory compliance. Our estimate of these costs is primarily based upon the number of units outstanding that may require repair and costs associated with shipping and repairing the product. We expect that costs associated with bringing the products back into compliance will not be incurred until the first quarter of 2017. Additional costs could be incurred in future periods to bring products into regulatory compliance, but such costs cannot currently be reasonably estimated.

The details of activity in the warranty reserve are as follows (in thousands):

	Three Months Ended   September 30,						Nine Months Ended   September 30,
	2016			2015			2016			2015
Balance, beginning of period	$	10,858		$	4,408		$	10,386		$	2,753
Additions charged to expense	960			1,617			3,273			4,770
Reductions	(819		)	(813		)	(2,660		)	(2,311		)
Balance, end of period	$	10,999		$	5,212		$	10,999		$	5,212

The estimates we use in projecting future product warranty costs may prove to be incorrect. Any future determination that our product warranty reserves are understated could result in increases to our cost of sales and reductions in our operating profits and results of operations.

10 - Share-Based Compensation

As of September 30, 2016, we have two active share-based compensation plans, the 2011 Stock Awards Plan and the 2011 Employee Stock Purchase Plan. The terms of awards granted during the nine months ended September 30, 2016 and our methods for determining grant-date fair value of the awards are consistent with those described in the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2015.

Details of share-based compensation expense are as follows (in thousands):

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	Three Months Ended   September 30,				Nine Months Ended   September 30,
	2016		2015		2016		2015
Cost of revenue	$	50	$	29	$	169	$	116
Marketing and selling	169		287		622		972
Research and development	320		249		1,185		644
General and administrative	1,415		1,326		4,981		3,650
Total	$	1,954	$	1,891	$	6,957	$	5,382

As of September 30, 2016, unrecognized compensation expense related to the unvested portion of our stock options and other stock awards was approximately $11.6 million, which is expected to be recognized over a weighted average period of 1.8 years.

11 - Other Income (Expense), net

Other income (expense), net consists of (in thousands):

	Three Months Ended   September 30,						Nine Months Ended   September 30,
	2016			2015			2016			2015
Interest income	$	76		$	13		$	94		$	28
Interest expense	(223		)	—			(351		)	—
Foreign currency loss	(783		)	(80		)	(282		)	(1,571		)
Other	37			74			127			340
Total other income (expense), net	$	(893	)	$	7		$	(412	)	$	(1,203	)

12 - Income Taxes

Provision for Income Tax Expense

We recorded provisions for income tax of $1.0 million and $7.6 million for the three and nine months ended September 30, 2016, respectively. Our effective tax rate was 7.2% and 19.0% for the three and nine months ended September 30, 2016, respectively. We recorded provisions for income tax of $5.2 million and $12.8 million for the three and nine months ended September 30, 2015, respectively. Our effective tax rate was 32.0% and 30.4% for the three and nine months ended September 30, 2015, respectively.

Our effective tax rate for the three and nine months ended September 30, 2016 differed from the federal statutory tax rate primarily because of profits in foreign jurisdictions with lower tax rates than the federal statutory rate. The decrease in the effective tax rate for the three and nine months ended September 30, 2016 compared with the three and nine months ended September 30, 2015 is primarily attributable to shifts in the geographical mix of income whereby the income subject to income taxes recorded in high tax jurisdictions significantly decreased, and the income subject to income taxes recorded in low tax jurisdictions significantly increased.

Our year-to-date results reflect the projected fiscal year 2016 effective tax rate as adjusted for the impact of any quarterly discrete events. The impact of the discrete items recorded during the three months ended September 30, 2016 decreased the quarterly tax rate by 11.8%. The tax impacts from material discrete items include the adoption of ASU 2016-09, Compensation - Stock Compensation (Topic 718) Improvements to Employee Share-Based Payment Accounting, tax true-up adjustments relating to the filing of 2015 tax returns and adjustment of certain earn-out liabilities. The impacts from adoption of ASU 2016-09 decreased our quarterly effective tax rate by 3.8%; the tax true-up adjustments recorded in this quarter related to the filing of 2015 tax returns increased our quarterly tax rate by 1.5% and the accounting income recognized in the adjustment of earn-out liabilities, which is not subject to income taxes, decreased our quarterly effective tax rate by 7.5%. The impact of the discrete items

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recorded during the three months ended September 30, 2015 decreased the quarterly tax rate by 0.1%. Excluding the impact of discrete items, the decrease in our quarterly effective tax rate for the three months ended September 30, 2016, compared with the three months ended September 30, 2015, is primarily attributable to forecasted shifts in the geographical mix of income.

We recorded $0.3 million net tax expense of unrecognized tax benefits for the nine months ended September 30, 2016. Within the next twelve months, it is possible our uncertain tax benefit may change within a range of approximately zero to $1.0 million. Our tax returns remain open to examinations as follows: U.S. Federal, 2013 through 2015; U.S. States, 2011 through 2015; and significant foreign jurisdictions, 2013 through 2015.

13 - Restructuring Reserves

Historically, the Company has completed multiple acquisitions of other companies and businesses. Following an acquisition the Company will, as it determines appropriate, initiate restructuring events to eliminate redundant costs to maintain a competitive cost structure. Restructuring expenses are related to permanent reductions in workforce and redundant facility closures.

The balance of the restructuring reserve is included in accrued liabilities on the accompanying condensed consolidated balance sheets. Employee termination benefits are included as a part of restructuring expenses.

Activity in the restructuring reserves for the nine months ended September 30, 2016 is as follows (in thousands):

	Personnel Related			Facility Related			Total
Balance at December 31, 2015	$	1,676		$	—		$	1,676
Additions	617			1,205			1,822
Reversals	(425		)	—			(425		)
Payments	(1,853		)	(688		)	(2,541		)
Balance at September 30, 2016	$	15		$	517		$	532

14 - Debt and Credit Arrangements

The Company has a Credit Agreement with JP Morgan Chase Bank ("JP Morgan") and Citibank, NA (“Citibank”). The Credit Agreement provides for an aggregate $150.0 million of secured revolving credit facility. The Credit Agreement contains covenants, including covenants relating to maintenance of books and records, financial reporting and notification, compliance with laws, maintenance of properties and insurance, and limitations on guaranties, investments, issuance of debt, lease obligations and capital expenditures, and is secured by virtually all of the Company's assets. The Credit Agreement provides for events of default, including failure to pay any principal or interest when due, failure to perform or observe covenants, bankruptcy or insolvency events and the occurrence of a material adverse effect. The Company has no other significant credit facilities. As of September 30, 2016 no amounts were outstanding under the Credit Agreement. The Company expects to finance a portion of an acquisition announced in September 2016 with borrowings under the revolving credit facility, as well as existing cash.

Pursuant to the terms of the Credit Agreement, the outstanding principal balance will bear interest at either (a) a fluctuating rate per annum equal to the Applicable Rate, as defined in the Credit Agreement, depending on our leverage ratio plus the higher of (i) the federal funds rate plus one-half of one percent per annum; (ii) the prime rate in effect on such a day; and (iii) the LIBOR rate plus one percent, or (b) a fluctuating rate per annum of LIBOR Rate plus the Applicable Rate. The Credit Agreement matures on September 23, 2021, at which time all principal amounts outstanding under the Credit Agreement will be due and payable.

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Due to the execution of the Credit Agreement mentioned above, the Company terminated a previously existing credit agreement between the Company and Citibank. Under this agreement, the Company borrowed and repaid a total of $16.0 million during the nine months ended September 30, 2016.

15 - Segment, Customer and Geographic Information

We operate in one reportable segment in which we provide healthcare products and services used for the screening, detection, treatment, monitoring and tracking of common medical ailments.

Our end-user customer base includes hospitals, clinics, laboratories, physicians, nurses, audiologists, and governmental agencies. Most of our international sales are to distributors who resell our products to end users or sub-distributors.

Revenue and long-lived asset information are as follows (in thousands):

	Three Months Ended   September 30,				Nine Months Ended   September 30,
	2016		2015		2016		2015
Consolidated Revenue:
United States	$	62,515	$	62,601	$	186,933	$	177,862
Foreign countries	28,391		31,982		87,260		98,053
Totals	$	90,906	$	94,583	$	274,193	$	275,915

	Three Months Ended   September 30,				Nine Months Ended   September 30,
	2016		2015		2016		2015
Revenue by End Market:
Neurology Products
Devices and Systems	$	39,240	$	42,040	$	121,461	$	123,135
Supplies	14,381		15,239		44,482		45,556
Services	3,131		2,125		8,794		5,614
Total Neurology Revenue	56,752		59,404		174,737		174,305
Newborn Care Products
Devices and Systems	16,263		17,598		46,455		53,706
Supplies	11,792		12,584		35,677		37,233
Services	6,099		4,997		17,324		10,671
Total Newborn Care Revenue	34,154		35,179		99,456		101,610
Total Revenue	$	90,906	$	94,583	$	274,193	$	275,915

	September 30, 2016		December 31, 2015
Property and equipment, net:
United States	$	7,663	$	6,664
Canada	4,956		5,165
Argentina	2,000		2,361
Ireland	2,176		1,651
Other foreign countries	1,332		1,126
Totals	$	18,127	$	16,967

During the three and nine months ended September 30, 2016 and 2015, no single customer or foreign country contributed to more than 10% of revenue.

16 - Fair Value Measurements

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ASC 820 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Fair value is defined under ASC 820 as the exit price associated with the sale of an asset or transfer of a liability in an orderly transaction between market participants at the measurement date. ASC 820 establishes the following three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value:

Level 1 - Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.

Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets and liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 - Unobservable inputs that are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.

The Company does not have any financial assets or liabilities measured at fair value on a recurring basis.

The following financial instruments are not measured at fair value on the Company’s consolidated balance sheet as of September 30, 2016 and December 31, 2015, but require disclosure of their fair values: cash and cash equivalents, accounts receivable, and accounts payable. The carrying value of these financial instruments approximates fair values because of their relatively short maturity.

In the third quarter of 2014, the Company listed its facility in Mundelein, Illinois for sale. This asset was measured at fair value less cost to sell as of September 30, 2014 based on market price and is classified as a Level 2 asset. The book value of this asset on June 30, 2014 was $3.6 million. We expensed $2.2 million during the third quarter of 2014 for this impairment. As of September 30, 2016 we are carrying the asset as held for sale in other current assets on the accompanying condensed consolidated balance sheet at a value of $1.4 million.

The Company also has contingent consideration associated with earn-outs from acquisitions. Contingent consideration liabilities are classified as Level 3 liabilities, as the Company uses unobservable inputs to value them, which is a probability-based income approach. Contingent considerations are classified as accrued liabilities on our condensed consolidated balance sheet. Subsequent changes in the fair value of contingent consideration liabilities are recorded within the Company's income statement as an operating expense.

	December 31, 2015		Additions		Payments			Adjustments			September 30, 2016
Liabilities:
Contingent consideration	$	6,209	$	2,500	$	(2,284	)	$	(3,401	)	$	3,024

The significant unobservable inputs used in the fair value measurement of contingent consideration related to the acquisitions are annualized revenue forecasts developed by the Company’s management and the probability of achievement of those revenue forecasts. Significant increases (decreases) in these unobservable inputs in isolation would result in a significantly lower (higher) fair value measurement.

The Company's Level 2 securities are valued using third-party pricing sources. The pricing services utilize industry standard valuation models, including both income and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. These inputs include reported trades of and broker/dealer quotes on the same or similar securities, issuer credit spread, benchmark securities, prepayment/default projections based on historical data and other observable inputs. The Company validates the prices provided by its third-party pricing services by understanding the models used, obtaining market values from other pricing sources, analyzing pricing data in certain instances and confirming those securities traded in active markets. See Note 4 to these Condensed Consolidated Financial Statements for further information regarding the Company's financials instruments.

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	September 30, 2016
	Level I	Level II	Level III	Total
U.S. Treasury Bills	—	7,001	—	7,001
Short term investments
U.S. investment grade bonds	—	16,865	—	16,865
Developed investment grade bonds	—	8,564	—	8,564
Total short term investments	—	25,429	—	25,429

ITEM 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) supplements the MD&A in the Annual Report on Form 10-K for the year ended December 31, 2015 of Natus Medical Incorporated. MD&A should be read in conjunction with our condensed consolidated financial statements and accompanying footnotes, the risk factors referred to in Part II, Item 1A of this report, our Annual Report filed on Form 10-K for the year ended December 31, 2015 and the cautionary information regarding forward-looking statements at the end of this section.

Our Business

Natus is a leading provider of healthcare products used for the screening, detection, treatment, monitoring, and tracking of common medical ailments in newborn care, hearing impairment, neurological dysfunction, epilepsy, sleep disorders, and balance and mobility disorders.

We have completed a number of acquisitions since 2003, consisting of either the purchase of a company, substantially all of the assets of a company, or individual products or product lines. In 2015 and 2016, we completed acquisitions of NicView, GND, Monarch, NeuroQuest, and RetCam. We expect to continue to pursue opportunities to acquire other businesses in the future. In September 2016, we entered into a definitive Purchase Agreement with GN Store Nord A/S ("GN") for our purchase from GN of its GN Otometrics ("Otometrics") business in an all cash transaction for $145 million. It is expected that this purchase will be completed in January 2017.

End Markets

Our products address two primary end markets:

• Neurology - Includes products and services for diagnostic electroencephalography and long term monitoring, Intensive Care Unit monitoring, electromyography, sleep analysis or polysomnography, intra-operative monitoring, and diagnostic and monitoring transcranial doppler ultrasound technology.

• Newborn Care - Includes products and services for newborn care including video streaming, hearing screening, brain injury, thermoregulation, jaundice management, retinopathy of prematurity, and various disposable products, as well as products for diagnostic hearing assessment for children through adult populations, and products to diagnose and assist in treating balance and mobility disorders.

Segment and Geographic Information

We operate in one reportable segment, which we have presented as the aggregation of our neurology and newborn care product families. Within this reportable segment we are organized on the basis of the healthcare products and services we provide which are used for the screening, detection, treatment, monitoring, and tracking of common medical ailments in newborn care, hearing impairment, neurological dysfunction, epilepsy, and sleep disorders.

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Our end-user customer base includes hospitals, clinics, laboratories, physicians, nurses, audiologists, and governmental agencies. Most of our international sales are to distributors, who in turn resell our products to end users or sub-distributors.

Information regarding our sales and long-lived assets in the U.S. and in countries outside the U.S. is contained in Note 15 – Segment, Customer and Geographic Information of our condensed consolidated financial statements included in this report and is incorporated in this section by reference.

Revenue by Product Category

We generate our revenue from sales of Devices and Systems, which are generally non-recurring, and from related Supplies and Services, which are generally recurring. The products that are attributable to these categories are described in our Annual Report on Form 10-K for the year ended December 31, 2015. Revenue from Devices and Systems, Supplies, and Services, as a percent of total revenue for the three and nine months ended September 30, 2016 and 2015, is as follows:

	Three Months Ended   September 30,				Nine Months Ended   September 30,
	2016		2015		2016		2015
Devices and Systems	61	%	63	%	61	%	64	%
Supplies	29	%	29	%	29	%	30	%
Services	10	%	8	%	10	%	6	%
Total	100	%	100	%	100	%	100	%

During the three and nine months ended September 30, 2016 and 2015, no single customer or foreign country contributed to more than 10% of revenue.

2016Third Quarter Overview

Our business and operating results are driven in part by worldwide economic conditions. Our sales are significantly dependent on both capital spending by hospitals in the United States and healthcare spending by ministries of health outside the United States.

Our consolidated revenue decreased $3.7 million in the third quarter ended September 30, 2016 to $90.9 million compared to $94.6 million in the third quarter of the previous year. Our revenue decrease was driven by a decline in sales in domestic and international markets for Neurology Devices and Systems and voluntary product shipping holds for certain of our Newborn Care Devices and Systems, partially offset by growth in services businesses in both the Neurology and Newborn Care units.

Net income was $13.3 million or $0.40 per diluted share in the three months ended September 30, 2016, compared with net income of $10.9 million or $0.33 per diluted share in the same period in 2015. The increase in net income was a result of lower income taxes and an adjustment for the GND earn-out recorded in marketing and selling expenses, offset by higher G&A expenses.

Application of Critical Accounting Policies

We prepare our financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”). In so doing, we must often make estimates and use assumptions that can be subjective, and, consequently, our actual results could differ from those estimates. For any given individual estimate or assumption we make, there may also be other estimates or assumptions that are reasonable.

We believe that the following critical accounting policies require the use of significant estimates, assumptions, and judgments:

• Revenue recognition

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• Inventory carried at the lower of cost or market value

• Carrying value of intangible assets and goodwill

• Liability for product warranties

• Share-based compensation

The use of different estimates, assumptions, or judgments could have a material effect on the reported amounts of assets, liabilities, revenue, expenses, and related disclosures as of the date of the financial statements and during the reporting period. These critical accounting policies are described in more detail in our Annual Report on Form 10-K for the year ended December 31, 2015, under Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Results of Operations

The following table sets forth selected consolidated statement of operations data as a percentage of total revenue for the periods indicated:

	Three Months Ended   September 30,				Nine Months Ended   September 30,
	2016		2015		2016		2015
Revenue	100.0	%	100.0	%	100.0	%	100.0	%
Cost of revenue	35.4	%	37.6	%	37.4	%	37.9	%
Intangibles amortization	0.7	%	0.7	%	0.7	%	0.7	%
Gross profit	63.9	%	61.7	%	61.9	%	61.4	%
Operating expenses:
Marketing and selling	21.7	%	23.8	%	22.5	%	23.7	%
Research and development	8.5	%	8.1	%	8.2	%	7.9	%
General and administrative	14.1	%	10.6	%	13.6	%	12.0	%
Intangibles Amortization	2.6	%	2.2	%	2.5	%	1.9	%
Restructuring	0.2	%	—	%	0.5	%	0.1	%
Total operating expenses	47.1	%	44.7	%	47.3	%	45.6	%
Income from operations	16.8	%	17.0	%	14.6	%	15.8	%
Other expense, net	(1.0	)%	—	%	(0.2	)%	(0.4	)%
Income before provision for income tax	15.8	%	17.0	%	14.4	%	15.4	%
Provision for income tax expense	1.1	%	5.4	%	2.8	%	4.7	%
Net income	14.7	%	11.6	%	11.6	%	10.7	%

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Revenues

The following table shows revenue by products during the three and nine months ended September 30, 2016 and September 30, 2015 (in thousands):

	Three Months Ended   September 30,						Nine Months Ended September 30,
	2016		2015		Change		2016		2015		Change
Neurology Products
Devices and Systems	$	39,240	$	42,040	(7	)%	$	121,461	$	123,135	(1	)%
Supplies	14,381		15,239		(6	)%	44,482		45,556		(2	)%
Services	3,131		2,125		47	%	8,794		5,614		57	%
Total Neurology Revenue	56,752		59,404		(4	)%	174,737		174,305		—	%
Newborn Care Products
Devices and Systems	16,263		17,598		(8	)%	46,455		53,706		(14	)%
Supplies	11,792		12,584		(6	)%	35,677		37,233		(4	)%
Services	6,099		4,997		22	%	17,324		10,671		62	%
Total Newborn Care Revenue	34,154		35,179		(3	)%	99,456		101,610		(2	)%
Total Revenue	$	90,906	$	94,583	(4	)%	$	274,193	$	275,915	(1	)%

For the three months ended September 30, 2016, Neurology revenue decreased by 4% compared to the same quarter last year. Declines in both our domestic market due to timing of orders and international markets due to ongoing weakness of European and Canadian markets was partially offset by growth in our Services business. Revenues from sales of Neurology Devices and Systems decreased by 7%, driven mainly by timing of orders in the domestic market and continued weakness in the international markets. Revenue from Supplies decreased by 6%, mainly due to decreased revenue in our domestic market. The growth in Services revenue is primarily the result of our January 2015 acquisition of Global Neuro-Diagnostics, our November 2015 acquisition of Monarch Diagnostics and our March 2016 acquisition of NeuroQuest.

For the three months ended September 30, 2016, Newborn Care revenue decreased by 3% compared to the same quarter last year. Geographically, the decrease was primarily in our international markets due to non-recurring tenders received last year in Latin America and registration delays in the Asia Pacific region. Revenue from Newborn Care Devices and Systems decreased by 8% compared to the same period last year. The decrease was primarily in hearing and balance & mobility, offset by increases in services, video streaming and vision products. We believe the decrease in Newborn Care Devices and Systems revenue is due in part to certain voluntary product shipping holds, non-recurring tenders received last year in Latin America, registration delays in the Asia Pacific region, and some cannibalization of hearing products due to the growth of Peloton, our hearing screening service. The decrease in Newborn Care Devices and Systems was partially offset by the growth in sales of our video streaming product, NicView, and the vision products resulting from the July 2016 RetCam acquisition. Revenue from RetCam contributed $3.2 million to Devices and Systems revenue and $0.2 million to Services revenue. Revenue from Supplies decreased by 6% compared to the same period last year. This decrease is mainly due to cannibalization from increased Peloton service revenue since Peloton provides the equipment and hearing screening supplies as part of the service. Revenue from Services increased 22% compared to the same period last year. This increase was due to the growth of Peloton.

For the nine months ended September 30, 2016, Neurology revenue was flat compared to the same period last year. Growth in our domestic market was offset by a decline in revenue from international markets, due mainly to ongoing weakness of European and Canadian markets. Revenues from sales of Neurology Devices and Systems decreased by 1%, driven mainly by declines in international revenue, partially offset by growth in our domestic market. Revenue from Supplies decreased by 2%, mainly due to decreased revenue in our domestic market. The growth in Services revenue is the result of our acquisitions of Global Neuro-Diagnostics, Monarch Diagnostics, and NeuroQuest.

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For the nine months ended September 30, 2016, Newborn Care revenue decreased by 2% compared to the same period last year. Geographically, the decrease was in both our domestic and international markets primarily due to voluntary product shipping holds, non-recurring tenders received last year in Latin America, and registration delays in the Asia Pacific region. Revenue from Devices and Systems decreased by 14% compared to the same period last year. The decrease was experienced across most devices, although we experienced an increase in our video streaming and phototherapy products due to the temporary release of our voluntary shipping hold in the second quarter of 2016, and from vision products resulting from the RetCam acquisition. We believe the decrease in Newborn Care Devices and Systems is due in part to our voluntary shipping holds, international non-recurring tenders received last year, registration delays, and some cannibalization due to the growth of Peloton services. Revenue from Supplies decreased by 4% compared to the same period last year. This decrease is mainly due to cannibalization from increased Peloton service revenue. Revenue from Services increased 62% compared to the same period last year. This increase was due to the growth of Peloton and the growth of our Neometrics Data Management services which provides Hearing Screening Coordination and Reporting to the State of California.

No single customer or foreign country accounted for more than 10% of our revenue in the nine months ended September 30, 2016 or September 30, 2015. Revenue from domestic sales was relatively flat and decreased to $62.5 million for the three months ended September 30, 2016 compared to $62.6 million in the three months ended September 30, 2015. Revenue from international sales decreased11% to $28.4 million for the three months ended September 30, 2016 compared to $32.0 million in the third quarter of 2015. We believe the decrease in international revenue was driven by weak international economies.

Cost of Revenue and Gross Profit

Cost of revenue and gross profit consists of (in thousands):

	Three Months Ended   September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Revenue	$	90,906		$	94,583		$	274,193		$	275,915
Cost of revenue	32,194			35,520			102,542			104,468
Intangibles amortization	612			683			1,818			2,048
Gross profit	58,100			58,380			169,833			169,399
Gross profit percentage	63.9		%	61.7		%	61.9		%	61.4		%

For the three and nine months ended September 30, 2016, gross profit as a percentage of revenue increased 2.2% and 0.5%, respectively, compared to the same periods in the prior year. This increase in gross profit as a percentage of revenue was mainly attributable to the increase in higher margin domestic revenue as a percent of total revenue for Neurology and Newborn Care as compared to the same periods last year.

Operating Costs

Operating costs consist of (in thousands):

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	Three Months Ended   September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Marketing and selling	$	19,746		$	22,495		$	61,578		$	65,345
Percentage of revenue	21.7		%	23.8		%	22.5		%	23.7		%
Research and development	$	7,689		$	7,700		$	22,596		$	21,867
Percentage of revenue	8.5		%	8.1		%	8.2		%	7.9		%
General and administrative	$	12,821		$	10,031		$	37,225		$	33,239
Percentage of revenue	14.1		%	10.6		%	13.6		%	12.0		%
Intangibles amortization	$	2,409		$	2,036		$	6,741		$	5,165
Percentage of revenue	2.6		%	2.2		%	2.5		%	1.9		%
Restructuring	$	197		$	42		$	1,315		$	358
Percentage of revenue	0.2		%	—		%	0.5		%	0.1		%

Marketing and Selling

Marketing and selling expenses decreased in both an absolute sense and as a percentage of revenue for the three and nine months ended September 30, 2016 compared to the same periods in 2015. This was primarily due to a $2.8 million adjustment in the estimated GND earn-out decreasing overall expenses from the same period last year.

Research and Development

Research and development expenses decreased during the three months ended September 30, 2016 and increased during the nine months ended September 30, 2016 compared to the same periods in 2015. The increase during the nine months ended September 30, 2016 relates to new hires and engagement of more consultants as well as the RetCam acquisition.

General and Administrative

General and administrative expense increased during the three and nine months ended September 30, 2016 as compared to the same periods in 2015. This increase is attributable to the RetCam and NeuroQuest acquisitions, growth in GND as well as overall higher salaries, travel expenses and bank fees.

Intangibles Amortization

Intangibles amortization increased during the three and nine months ended September 30, 2016 as compared to the same periods in 2015. The increase was due to the acquisition of NeuroQuest and RetCam and to assigning finite lives to our trade names beginning in the second quarter of 2015. At that time we initiated a strategy to increase the brand strength of Natus by replacing acquired product trade names with Natus branded products over time. The implementation of this strategy places definite expected future lives on our acquired trade names which previously had indefinite lives. We assigned these trade names lives of seven years based on the timeline of our branding strategy. We will continue to assess the lives of these assets based on the timing and execution of this strategy. Amortization expense for trade names is recorded as a component of operating expense.

Restructuring

Restructuring expenses increased during the three and nine months ended September 30, 2016 compared to the same periods in 2015. The increase was due to facility abandonment costs for offices located in Munich, Germany and Austin, Texas compared to the same periods in the prior year.

Other Income (Expense), net

Other income (expense), net consists of investment income, interest expense, net currency exchange gains and losses, and other miscellaneous income and expense. For the three months ended September 30, 2016 we reported

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$0.9 million of other expense compared to other income of $0.0 million for the same period in 2015. This increase in expense was attributable to net currency exchange fluctuations. For the nine months ended September 30, 2016 we reported other expense of $0.4 million compared to other expense of $1.2 million for the same period in 2015. This decrease in expense was attributable to an increase in net currency exchange gains.

Provision for Income Tax

We recorded provisions for income tax of $1.0 million and $7.6 million for the three and nine months ended September 30, 2016, respectively. Our effective tax rate was 7.2% and 19.0% for the three and nine months ended September 30, 2016, respectively. We recorded provisions for income tax of $5.2 million and $12.8 million for the three and nine months ended September 30, 2015, respectively. Our effective tax rate was 32.0% and 30.4% for the three and nine months ended September 30, 2015, respectively.

Our effective tax rate for the three and nine months ended September 30, 2016 differed from the federal statutory tax rate primarily because of profits in foreign jurisdictions with lower tax rates than the federal statutory rate. The decrease in the effective tax rate for the three and nine months ended September 30, 2016 compared with the three and nine months ended September 30, 2015 is primarily attributable to shifts in the geographical mix of income whereby the income subject to income taxes recorded in high tax jurisdictions significantly decreased, and the income subject to income taxes recorded in low tax jurisdictions significantly increased.

Our year-to-date results reflect the projected fiscal year 2016 effective tax rate as adjusted for the impact of any quarterly discrete events. The impact of the discrete items recorded during the three months ended September 30, 2016 decreased the quarterly tax rate by 11.8%. The tax impacts from material discrete items include the adoption of ASU 2016-09, Compensation - Stock Compensation (Topic 718) Improvements to Employee Share-Based Payment Accounting, tax true-ups adjustments relating to the filing of 2015 tax returns and adjustment of certain earn-out liabilities. The impacts from adoption of ASU 2016-09 decreased our quarterly effective tax rate by 3.8%; the tax true-ups adjustment recorded in this quarter related to the filing of 2015 tax returns increased our quarterly tax rate by 1.5% and the accounting income recognized in the adjustment of earn-out liabilities, which is not subject to income taxes, decreased our quarterly effective tax rate by 7.5%. The impact of the discrete items recorded during the three months ended September 30, 2015 decreased the quarterly tax rate by 0.1%. Excluding the impact of discrete items, the decrease in our quarterly effective tax rate for the three months ended September 30, 2016, compared with the three months ended September 30, 2015, is primarily attributable to forecasted shifts in the geographical mix of income.

We recorded $0.3 million net tax expense of unrecognized tax benefits for the nine months ended September 30, 2016. Within the next twelve months, it is possible our uncertain tax benefit may change within a range of approximately zero to $1.0 million. Our tax returns remain open to examinations as follows: U.S. Federal, 2013 through 2015, U.S. States 2011 through 2015 and significant foreign jurisdictions 2013 through 2015.

Liquidity and Capital Resources

Liquidity and capital resources consist of (in thousands):

	September 30, 2016		December 31, 2015
Cash, cash equivalents, and investments	$	106,502	$	82,469
Working capital	176,813		164,248

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	Nine Months Ended   September 30,
	2016			2015
Net cash provided by operating activities	$	68,502		$	34,928
Net cash used in investing activities	(43,664		)	(15,707		)
Net cash used in financing activities	(21,461		)	(2,929		)

We believe that our current cash and cash equivalents and any cash generated from operations will be sufficient to meet our ongoing operating requirements for the foreseeable future.

As of September 30, 2016, we had cash and cash equivalents outside the U.S. in certain of our foreign subsidiaries of $63.3 million. We intend to permanently reinvest the cash held by our foreign subsidiaries. If, however, a portion of these funds were needed for and distributed to our operations in the United States, we would be subject to additional U.S. income taxes and foreign withholding taxes. The amount of taxes due would depend on the amount and manner of repatriation, as well as the country from which the funds were repatriated.

On September 23, 2016, we entered into a Credit Agreement with JP Morgan Chase Bank ("JP Morgan") and Citibank, NA (“Citibank”). The Credit Agreement provides for an aggregate $150.0 million of secured revolving credit facility. The Credit Agreement contains covenants, including covenants relating to maintenance of books and records, financial reporting and notification, compliance with laws, maintenance of properties and insurance, and limitations on guaranties, investments, issuance of debt, lease obligations and capital expenditures. The Credit Agreement provides for events of default, including failure to pay any principal or interest when due, failure to perform or observe covenants, bankruptcy or insolvency events and the occurrence of a material adverse effect. The Company has no other significant credit facilities. As of September 30, 2016 we had nothing outstanding under the Credit Facility.

In September 2016 we entered into a definitive Purchase Agreement with GN to purchase its Otometrics business in an all cash transaction for $145 million. It is expected that this purchase will be completed in January 2017. We intend to finance this purchase with cash on hand and borrowings under the new revolving credit facility.

During the nine months ended September 30, 2016 cash provided by operating activities of $68.5 million was the result of $32.4 million of net income, non-cash adjustments to net income of $24.0 million, and net cash inflows of $12.2 million from changes in operating assets and liabilities. The change in operating assets and liabilities was driven primarily by a decrease in accounts receivable following increased collections efforts, an increase in deferred revenue following receipt of payment from the Ministry of Health of Venezuela, and an increase in prepaids related to prepayments made to our Venezuelan distribution partner. Cash used in investing activities during the period was $43.7 million and consisted primarily of purchases of short-term investments of $34.9 million, as well as cash used in the acquisitions of RetCam of $9.7 million and NeuroQuest of $4.6 million, in each case net of cash acquired. Cash used to acquire other property and equipment was $2.2 million. Cash used in financing activities during the nine months ended September 30, 2016 was $21.5 million and consisted of $18.3 million for repurchases of common stock under our share repurchase program, $3.9 million for taxes paid related to net share settlement of equity awards, and $1.3 million for a contingent consideration payment to NicView, which we acquired in 2015, offset by proceeds from stock option exercises of $2.6 million. Under the prior credit facility that was terminated in connection with our entry into the new Credit Agreement, the Company borrowed and repaid a total of $16.0 million as of September 30, 2016.

During the nine months ended September 30, 2015 cash provided by operating activities of $34.9 million was the result of $29.4 million of net income, non-cash adjustments to net income of $17.1 million, and net cash outflows of $11.6 million from changes in operating assets and liabilities. Cash used in investing activities during the period was $15.7 million, and consisted of cash used to acquire GND of $11.4 million and cash used to acquire other property and equipment of $3.0 million. Cash used in financing activities during the nine months ended September 30, 2015 was $2.9 million and consisted primarily of proceeds from stock options exercises and Employee Stock Purchase Program purchases and their related tax benefits of $11.4 million, offset by $9.4 million

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for repurchases of common stock under our share repurchase program, and $4.3 million for taxes paid related to net share settlement of equity awards.

Our future liquidity and capital requirements will depend on numerous factors, including the:

• Extent to which we make acquisitions;

• Amount and timing of revenue;

• Extent to which our existing and new products gain market acceptance;

• Cost and timing of product development efforts and the success of these development efforts;

• Cost and timing of marketing and selling activities; and

• Availability of borrowings under line of credit arrangements and the availability of other means of financing.

Commitments and Contingencies

In the normal course of business we enter into obligations and commitments that require future contractual payments. The commitments result primarily from firm, non-cancellable purchase orders placed with contract vendors that manufacture some of the components used in our medical devices and related disposable supply products, as well as commitments for leased office, manufacturing, and warehouse facilities.

There are no material changes to the table of contractual obligations presented in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of our Annual Report on Form 10-K for the year ended December 31, 2015.

Off Balance Sheet Arrangements

Under our bylaws, we have agreed to indemnify our officers and directors for certain events or occurrences arising as a result of the officer or director serving in such capacity. We have a directors and officers’ liability insurance policy that limits our exposure and enables us to recover a portion of any future amounts paid resulting from the indemnification of our officers and directors. In addition, we enter into indemnification agreements with other parties in the ordinary course of business. In some cases we have obtained liability insurance providing coverage that limits our exposure for these other indemnified matters. We have not incurred material costs to defend lawsuits or settle claims related to these indemnification agreements. We believe the estimated fair value of these indemnification agreements is minimal and have not recorded a liability for these agreements. During the nine months ended September 30, 2016, we had no other off-balance sheet arrangements that had, or are reasonably likely to have, a material effect on our consolidated financial condition, results of operations, or liquidity.

Recent Accounting Pronouncements

See Note 1 to our Condensed Consolidated Financial Statements for a discussion of new accounting pronouncements that affect us.

Cautionary Information Regarding Forward Looking Statements

This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 about Natus Medical Incorporated. These statements include, among other things, statements concerning our expectations, beliefs, plans, intentions, future operations, financial condition and prospects, and business strategies. The words “may,” “will,” “continue,” “estimate,” “project,” “intend,” “believe,” “expect,” “anticipate,” and other similar expressions generally identify forward-looking statements. Forward-looking statements in this Item 2 include, but are not limited to, statements regarding

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the following: our expectation regarding expansion of our international operations, our expectations regarding our new products, the sufficiency of our current cash, cash equivalents, and short-term investment balances, and any cash generated from operations to meet our ongoing operating and capital requirements for the foreseeable future, the use of debt to fund acquisitions, our expectations of earn-out arrangements related to acquisitions, and our intent to acquire additional technologies, products, or businesses.

Forward-looking statements are not guarantees of future performance and are subject to substantial risks and uncertainties that could cause the actual results predicted in the forward-looking statements as well as our future financial condition and results of operations to differ materially from our historical results or currently anticipated results. Investors should carefully review the information contained under the caption “Risk Factors” contained in Part II, Item 1A of this report for a description of risks and uncertainties. All forward-looking statements are based on information available to us on the date hereof, and we assume no obligation to update forward-looking statements.

ITEM 3.    Quantitative and Qualitative Disclosures about Market Risk

Our exposure to market risk for changes in interest rates relates primarily to our investment portfolio. We place our investments with highly rated credit issuers and limit the amount of credit exposure to any one issuer. We also seek to improve the safety and likelihood of preservation of our invested funds by limiting default risk and market risk. We mitigate default risk by investing in high credit quality securities and by positioning our portfolio to respond appropriately to a significant reduction in a credit rating of any investment issuer or guarantor. The portfolio includes only marketable securities with active secondary or resale markets to ensure portfolio liquidity.

During the nine months ended September 30, 2016, there were no other significant changes to our quantitative and qualitative disclosures about market risk. Please refer to Part II, Item 7A. Quantitative and Qualitative Disclosures About Market Risk included in our Annual Report on Form 10-K for the year ended December 31, 2015 for a more complete discussion on the market risks we encounter.

ITEM 4.    Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Under the rules of the Securities and Exchange Commission, “disclosure controls and procedures” are controls and other procedures that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in our reports that we file or submit under the Securities Exchange Act of 1934 is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Our management, including our chief executive officer and chief financial officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud due to inherent limitations of internal controls. Because of such limitations, there is a risk that material misstatements will not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.

Our management, with the participation of our chief executive officer and our chief financial officer, has evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, our management, including our chief executive officer and chief financial officer, has concluded that our disclosure controls and procedures were effective at a reasonable assurance level as of September 30, 2016.

Changes in Internal Control over Financial Reporting

There were no changes in the Company's internal control over financial reporting during the third quarter of 2016, which were identified in connection with management's evaluation required by paragraph (d) of Rules 13a-15

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and 15d-15 under the Exchange Act, that have materially affected, or are reasonable likely to materially affect, the Company's internal control over financial reporting.

PART II.    OTHER INFORMATION

ITEM 1.    Legal Proceedings

We may from time to time become a party to various legal proceedings or claims that arise in the ordinary course of business. Our management reviews these matters if and when they arise and believes that the resolution of any such matters currently known will not have a material effect on our results of operations or financial position.

ITEM 1A.    Risk Factors

A description of the risks associated with our business, financial condition and results of operations is set forth in Part 1, Item 1A “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2015. There have been no material changes in our risks from such description.

ITEM 2.    Unregistered Sales of Equity Securities and Use of Proceeds

The following table provides information regarding repurchases by the Company of its common stock for the three months ended September 30, 2016.

Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
July 1, 2016 - July 31, 2016	11,536	$	39.21	11,536	$	16,665,843
August 1, 2016 - August 31, 2016	14,500	$	38.73	14,500	$	16,104,233
September 1, 2016 - September 30, 2016	11,700	$	41.67	11,700	$	15,616,647
Total	37,736	$	39.79	37,736	$	15,616,647

In June 2014, the Board of Directors authorized the repurchase of up to $10 million of common stock pursuant to a stock repurchase program. In June 2015, the program was expanded to include up to an additional $20 million of our common stock. In June 2016, the program was again expanded to include an additional $20 million of our common stock, for an aggregate repurchase amount of $50 million. The expiration date for the program is set for June 1, 2017.

ITEM 5.    Other Information

In a Form 8-K filed on September 22, 2016, the Company announced the appointment of Barbara R. Paul, M.D. as a member of its Board of Directors. Dr. Paul will receive annual cash compensation of $50,000 pursuant to the Company's board compensation plan.

ITEM 6.    Exhibits

(a) Exhibits

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		Incorporated By Reference
Exhibit No.	Exhibit	Filing	Exhibit No.	File Date	Filed Herewith
10.1	Credit Agreement, dated September 23, 2016, between the Company, JP Morgan Chase Bank, N.A. and Citibank, N.A.				X
10.2	Amendment to Agreement For the Acquisition of Medical Devices between Medix ICSA and the Ministry of Health of the Republic of Venezuela dated October 15, 2016				X
10.3	Master Purchase Agreement, dated September 25, 2016, between GN Hearing A/S, GN Nord A/S and the Company.				X
31.1	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002				X
31.2	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002				X
32.1	Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002				X
101	The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2016, formatted in XBRL (Extensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations and Comprehensive Income, (iii) Condensed Consolidated Statements of Cash Flows, and (iv) Notes to Condensed Consolidated Financial Statements.				X

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SIGNATURES

Pursuant to the requirements 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.

		NATUS MEDICAL INCORPORATED
Dated:	November 3, 2016	By:	/s/ James B. Hawkins
			James B. Hawkins President and Chief Executive Officer (Principal Executive Officer)
Dated:	November 3, 2016	By:	/s/ Jonathan A. Kennedy
			Jonathan A. Kennedy Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)

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EX-10.1

Exhibit 10.1

EXECUTION COPY

CREDIT AGREEMENT

dated as of September 23, 2016 among

NATUS MEDICAL INCORPORATED

The Lenders Party Hereto and

JPMORGAN CHASE BANK, N.A.

as Administrative Agent and

CITIBANK, N.A.

as Syndication Agent

____________________________________________

JPMORGAN CHASE BANK, N.A. and CITIGROUP GLOBAL MARKETS INC.

as Joint Bookrunners and Joint Lead Arrangers

US-DOCS\70661074.7

Table of Contents
		Page
ARTICLE I	Definitions	1
SECTION 1.01.	Defined Terms	1
SECTION 1.02.	Classification of Loans and Borrowings	26
SECTION 1.03.	Terms Generally	27
SECTION 1.04.	Accounting Terms; GAAP; Pro Forma Calculations	27
SECTION 1.05.	Status of Obligations	28
ARTICLE II	The Credits	28
SECTION 2.01.	Commitments	28
SECTION 2.02.	Loans and Borrowings	28
SECTION 2.03.	Requests for Revolving Borrowings	29
SECTION 2.04.	Intentionally Omitted	30
SECTION 2.05.	Swingline Loans	30
SECTION 2.06.	Letters of Credit	31
SECTION 2.07.	Funding of Borrowings	35
SECTION 2.08.	Interest Elections	36
SECTION 2.09.	Termination and Reduction of Commitments	37
SECTION 2.10.	Repayment of Loans; Evidence of Debt.	37
SECTION 2.11.	Prepayment of Loans	38
SECTION 2.12.	Fees	39
SECTION 2.13.	Interest	39
SECTION 2.14.	Alternate Rate of Interest	40
SECTION 2.15.	Increased Costs	40
SECTION 2.16.	Break Funding Payments	41
SECTION 2.17.	Taxes	42
SECTION 2.18.	Payments Generally; Allocations of Proceeds; Pro Rata Treatment; Sharing of
	Set-offs	45
SECTION 2.19.	Mitigation Obligations; Replacement of Lenders	47
SECTION 2.20.	Expansion Option	48
SECTION 2.21.	Defaulting Lenders	49
ARTICLE III	Representations and Warranties	51
SECTION 3.01.	Organization; Powers; Subsidiaries	51
SECTION 3.02.	Authorization; Enforceability	51
SECTION 3.03.	Governmental Approvals; No Conflicts	51
SECTION 3.04.	Financial Condition; No Material Adverse Change	51
SECTION 3.05.	Properties	52
SECTION 3.06.	Litigation, Environmental and Labor Matters	52
SECTION 3.07.	Compliance with Laws and Agreements	52
SECTION 3.08.	Investment Company Status	53
SECTION 3.09.	Taxes	53
SECTION 3.10.	ERISA	53
SECTION 3.11.	Disclosure	53
SECTION 3.12.	Federal Reserve Regulations	53
SECTION 3.13.	Liens	53
SECTION 3.14.	No Default	53
SECTION 3.15.	No Burdensome Restrictions	53

i

Table of Contents
(continued)
		Page
SECTION 3.16.	Solvency	53
SECTION 3.17.	Insurance	54
SECTION 3.18.	Security Interest in Collateral	54
SECTION 3.19.	Anti-Corruption Laws and Sanctions	54
SECTION 3.20.	EEA Financial Institutions	54
SECTION 3.21.	Healthcare and FDA Matters	55
ARTICLE IV	Conditions	56
SECTION 4.01.	Effective Date	56
SECTION 4.02.	Each Credit Event	57
ARTICLE V	Affirmative Covenants	57
SECTION 5.01.	Financial Statements and Other Information	57
SECTION 5.02.	Notices of Material Events	59
SECTION 5.03.	Existence; Conduct of Business	59
SECTION 5.04.	Payment of Obligations	59
SECTION 5.05.	Maintenance of Properties; Insurance	59
SECTION 5.06.	Books and Records; Inspection Rights	60
SECTION 5.07.	Compliance with Laws and Material Contractual Obligations	60
SECTION 5.08.	Use of Proceeds	60
SECTION 5.09.	Subsidiary Guarantors; Pledges; Additional Collateral; Further Assurances	61
SECTION 5.10.	Health Care Matters	62
ARTICLE VI	Negative Covenants	63
SECTION 6.01.	Indebtedness	63
SECTION 6.02.	Liens	64
SECTION 6.03.	Fundamental Changes and Asset Sales	66
SECTION 6.04.	Investments, Loans, Advances, Guarantees and Acquisitions	68
SECTION 6.05.	Swap Agreements	69
SECTION 6.06.	Transactions with Affiliates	69
SECTION 6.07.	Restricted Payments	69
SECTION 6.08.	Restrictive Agreements	70
SECTION 6.09.	Subordinated Indebtedness and Amendments to Subordinated Indebtedness Documents	70
SECTION 6.10.	Sale and Leaseback Transactions	71
SECTION 6.11.	Financial Covenants	71
ARTICLE VII	Events of Default	72
ARTICLE VIII	The Administrative Agent	74
ARTICLE IX	Miscellaneous	79
SECTION 9.01.	Notices	79
SECTION 9.02.	Waivers; Amendments	81
SECTION 9.03.	Expenses; Indemnity; Damage Waiver	83
SECTION 9.04.	Successors and Assigns	84

ii

Table of Contents
(continued)
		Page
SECTION 9.05.	Survival	88
SECTION 9.06.	Counterparts; Integration; Effectiveness; Electronic Execution	88
SECTION 9.07.	Severability	89
SECTION 9.08.	Right of Setoff	89
SECTION 9.09.	Governing Law; Jurisdiction; Consent to Service of Process	89
SECTION 9.10.	WAIVER OF JURY TRIAL; CALIFORNIA JUDICIAL REFERENCE	89
SECTION 9.11.	Headings	91
SECTION 9.12.	Confidentiality	91
SECTION 9.13.	USA PATRIOT Act	92
SECTION 9.14.	Appointment for Perfection	92
SECTION 9.15.	Releases of Subsidiary Guarantors	93
SECTION 9.16.	Interest Rate Limitation	93
SECTION 9.17.	No Advisory or Fiduciary Responsibility	93
SECTION 9.18.	Acknowledgement and Consent to Bail-In of EEA Financial Institutions	94
ARTICLE X	Borrower Guarantee	94
SECTION 10.01.	Guarantee	94
SECTION 10.02.	California Waivers	96

iii

CREDIT AGREEMENT (this “Agreement”) dated as of September 23, 2016 among NATUS MEDICAL INCORPORATED, the LENDERS from time to time party hereto and JPMORGAN CHASE BANK, N.A., as Administrative Agent and CITIBANK, N.A., as Syndication Agent.

The parties hereto agree as follows:

ARTICLE I

Definitions

SECTION 1.01. Defined Terms. As used in this Agreement, the following terms have the meanings specified below:

“ABR” when used in reference to any Loan or Borrowing, refers to such Loan, or the Loans comprising such Borrowing, bearing interest at a rate determined by reference to the Alternate Base Rate.

“Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest Period, an interest rate per annum (rounded upwards, if necessary, to the next 1/100 of 1%) equal to

(a) the LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate.

“Administrative Agent” means JPMorgan Chase Bank, N.A., in its capacity as administrative agent for the Lenders hereunder.

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

“Affiliate” means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.

“Agent Party” has the meaning assigned to such term in Section 9.01(d).

“Aggregate Commitment” means the aggregate of the Commitments of all of the Lenders, as reduced or increased from time to time pursuant to the terms and conditions hereof. As of the Effective Date, the Aggregate Commitment is $150,000,000.

“Alternate Base Rate” means, for any day, a rate per annum equal to the greatest of

(a) the Prime Rate in effect on such day, (b) the NYFRB Rate in effect on such day plus ½ of 1% and

(c)    the Adjusted LIBO Rate for a one month Interest Period in Dollars on such day (or if such day is not a Business Day, the immediately preceding Business Day) plus 1%, providedthat the Adjusted LIBO Rate for any day shall be based on the LIBO Rate at approximately 11:00 a.m. London time on such day. Any change in the Alternate Base Rate due to a change in the Prime Rate, the NYFRB Rate or the Adjusted LIBO Rate shall be effective from and including the effective date of such change in the Prime Rate, the NYFRB Rate or the Adjusted LIBO Rate, respectively.

“Anti-Corruption Laws” means all laws, rules, and regulations of any jurisdiction applicable to the Borrower or any of its Subsidiaries from time to time concerning or relating to bribery or corruption.

iv

“Applicable Percentage” means, with respect to any Lender, the percentage of the Aggregate Commitment represented by such Lender’s Commitment; providedthat, in the case of Section 2.21 when a Defaulting Lender shall exist, “Applicable Percentage” shall mean the percentage of the Aggregate Commitment (disregarding any Defaulting Lender’s Commitment) represented by such Lender’s Commitment. If the Commitments have terminated or expired, the Applicable Percentages shall be determined based upon the Commitments most recently in effect, giving effect to any assignments and to any Lender’s status as a Defaulting Lender at the time of determination.

“Applicable Pledge Percentage” means 100% but 65% in the case of a pledge by the Borrower or any Domestic Subsidiary of its Equity Interests in a Foreign Subsidiary.

“Applicable Rate” means, for any day, with respect to any Eurodollar Loan or any ABR Loan or with respect to the commitment fees payable hereunder, as the case may be, the applicable rate per annum set forth below under the caption “Eurodollar Spread”, “ABR Spread” or “Commitment Fee Rate”, as the case may be, based upon the Leverage Ratio applicable on such date:

	Leverage Ratio:	Eurodollar Spread	ABR Spread	Commitment Fee Rate
Category 1:	< 1.00 to 1.00	1.75%	0.75%	0.25%
Category 2:	≥ 1.00 to 1.00 but < 1.50 to 1.00	2.00%	1.00%	0.30%
Category 3:	≥ 1.50 to 1.00 but < 2.00 to 1.00	2.25%	1.25%	0.35%
Category 4:	≥ 2.00 to 1.00 but < 2.50 to 1.00	2.50%	1.50%	0.40%
Category 5:	≥ 2.50 to 1.00	2.75%	1.75%	0.45%

For purposes of the foregoing,

(i)    if at any time the Borrower fails to deliver the Financials on or before the date the Financials are due pursuant to Section 5.01, Category 5 shall be deemed applicable for the period commencing three (3) Business Days after the required date of delivery and ending on the date which is three (3) Business Days after the Financials are actually delivered, after which the Category shall be determined in accordance with the table above as applicable;

(ii) adjustments, if any, to the Category then in effect shall be effective three

(3) Business Days after the Administrative Agent has received the applicable Financials (it being understood and agreed that each change in Category shall apply during the period commencing on the effective date of such change and ending on the date immediately preceding the effective date of the next such change); and

(iii)    notwithstanding the foregoing, Category 1 shall be deemed to be applicable until the Administrative Agent’s receipt of the applicable Financials for the Borrower’s first fiscal quarter ending after the Effective Date (unless such Financials demonstrate that Category 2, 3, 4 or 5 should have been applicable during such period, in which case such other Category shall be deemed to be applicable during such period) and adjustments to the Category then in effect shall thereafter be effected in accordance with the preceding paragraphs.

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“Approved Fund” has the meaning assigned to such term in Section 9.04(b).

“Assignment and Assumption” means an assignment and assumption agreement entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 9.04), and accepted by the Administrative Agent, in the form of Exhibit Aor any other form approved by the Administrative Agent.

“Augmenting Lender” has the meaning assigned to such term in Section 2.20.

“Availability Period” means the period from and including the Effective Date to but excluding the earlier of the Maturity Date and the date of termination of the Commitments.

“Available Amount” means, at any time (the “Available Amount Reference Time”), an amount (which shall not be less than zero) equal to the sum of:

(a) $25,000,000; plus

(b)    the aggregate cumulative sum of Excess Cash Flow of the Borrower and the Subsidiaries for each fiscal quarter of the Borrower ended prior to the Available Amount Reference Time, commencing with the fiscal quarter ending September 30, 2016; plus

(c)    the amount of any capital contributions or Net Cash Proceeds from the sale or issuance of any Equity Interests received by or made to the Borrower (or any direct or indirect parent thereof and contributed by such parent to the Borrower) during the period from and including the Business Day immediately following the Effective Date through and including the Available Amount Reference Time; minus

(d)    the aggregate amount of Restricted Payments made using the Available Amount pursuant to Section 6.07(d) during the period from and including the Business Day immediately following the Effective Date through and including the Available Amount Reference Time (without taking account of the intended usage of the Available Amount at the Available Amount Reference Time for which such determination is being made).

“Available Amount Reference Time” has the meaning assigned to such term in the definition of “Available Amount”.

“Available Revolving Commitment” means, at any time with respect to any Lender, the Commitment of such Lender then in effect minus the Revolving Credit Exposure of such Lender at such time; it being understood and agreed that any Lender’s Swingline Exposure shall not be deemed to be a component of the Revolving Credit Exposure for purposes of calculating the commitment fee under Section 2.12(a).

“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.

“Bail-In Legislation” means, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.

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“Banking Services” means each and any of the following bank services provided to the Borrower or any Subsidiary by any Lender or any of its Affiliates: (a) credit cards for commercial customers (including, without limitation, commercial credit cards and purchasing cards), (b) stored value cards, (c) merchant processing services and (d) treasury management services (including, without limitation, controlled disbursement, automated clearinghouse transactions, return items, any direct debit scheme or arrangement, overdrafts and interstate depository network services).

“Banking Services Agreement” means any agreement entered into by the Borrower or any Subsidiary in connection with Banking Services.

“Banking Services Obligations” means any and all obligations of the Borrower or any Subsidiary, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor) in connection with Banking Services.

“Bankruptcy Code” means Title 11 of the United States Code entitled “Bankruptcy”, as now and hereafter in effect, or any successor statute.

“Bankruptcy Event” means, with respect to any Person, such Person becomes the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, administrator, custodian, assignee for the benefit of creditors or similar Person charged with the reorganization or liquidation of its business appointed for it, or, in the good faith determination of the Administrative Agent, has taken any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any such proceeding or appointment, provided that a Bankruptcy Event shall not result solely by virtue of any ownership interest, or the acquisition of any ownership interest, in such Person by a Governmental Authority or instrumentality thereof, unless such ownership interest results in or provides such Person with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permits such Person (or such Governmental Authority or instrumentality) to reject, repudiate, disavow or disaffirm any contracts or agreements made by such Person.

“Board” means the Board of Governors of the Federal Reserve System of the United States of America.

“Borrower” means Natus Medical Incorporated, a Delaware corporation.

“Borrowing” means (a) Revolving Loans of the same Type, made, converted or continued on the same date and, in the case of Eurodollar Loans, as to which a single Interest Period is in effect or (b) a Swingline Loan.

“Borrowing Request” means a request by the Borrower for a Revolving Borrowing in accordance with Section 2.03 in the form attached hereto as Exhibit G-1.

“Burdensome Restrictions” means any consensual encumbrance or restriction of the type described in clause (a) or (b) of Section 6.08.

“Business Day” means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to remain closed; providedthat, when used in connection with a Eurodollar Loan, the term “Business Day” shall also exclude any day on which banks are not open for dealings in Dollars in the London interbank market.

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“Capital Lease Obligations” of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital lease obligations on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP; provided, however, that, for the avoidance of doubt, any obligations relating to a lease that was accounted for by such Person as an operating lease as of the Effective Date and any similar lease entered into after the Effective Date by such Person shall be accounted for as obligations relating to an operating lease and not as Capital Lease Obligations.

“Change in Control” means (a) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group (within the meaning of the Securities Exchange Act of 1934 and the rules of the SEC thereunder as in effect on the date hereof), of Equity Interests representing more than 40% of the aggregate ordinary voting power represented by the issued and outstanding Equity Interests of the Borrower; (b) occupation at any time of a majority of the seats (other than vacant seats) on the board of directors of the Borrower by Persons who were not (i) directors of the Borrower on the date of this Agreement, (ii) nominated or appointed by the board of directors of the Borrower or (iii) approved by the board of directors of the Borrower as director candidates prior to their election; or (c) the occurrence of a change in control, or other similar provision, as defined in any agreement or instrument evidencing any Material Indebtedness (triggering a default or mandatory prepayment, which default or mandatory prepayment has not been waived in writing).

“Change in Law” means the occurrence, after the date of this Agreement (or with respect to any Lender, if later, the date on which such Lender becomes a Lender), of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority, or (c) the making or issuance of any request, rules, guideline, requirement or directive (whether or not having the force of law) by any Governmental Authority; provided however, that notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines, requirements and directives thereunder, issued in connection therewith or in implementation thereof, and (ii) all requests, rules, guidelines, requirements and directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law” regardless of the date enacted, adopted, issued or implemented.

“Class”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans or Swingline Loans.

“Code” means the Internal Revenue Code of 1986, as amended.

“Collateral” means any and all property owned, leased or operated by a Person covered by the Collateral Documents and any and all other property of any Loan Party, now existing or hereafter acquired, that may at any time be or become subject to a security interest or Lien in favor of the Administrative Agent, on behalf of itself and the Secured Parties, to secure the Secured Obligations; providedthat the Collateral shall exclude Excluded Assets.

“Collateral Documents” means, collectively, the Security Agreement and all other agreements, instruments and documents executed in connection with this Agreement that are intended to create, perfect or evidence Liens to secure the Secured Obligations, including, without limitation, all other security agreements, pledge agreements, loan agreements, notes, guarantees, subordination agreements,

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pledges, powers of attorney, consents, assignments, financing statements and all other written matter whether heretofore, now, or hereafter executed by the Borrower or any of its Subsidiaries and delivered to the Administrative Agent to secure the Secured Obligations.

“Commitment” means, with respect to each Lender, the commitment of such Lender to make Revolving Loans and to acquire participations in Letters of Credit and Swingline Loans hereunder, expressed as an amount representing the maximum aggregate amount of such Lender’s Revolving Credit Exposure hereunder, as such commitment may be (a) reduced or terminated from time to time pursuant to Section 2.09, (b) increased from time to time pursuant to Section 2.20 and (c) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 9.04. The initial amount of each Lender’s Commitment is set forth on Schedule 2.01A, or in the Assignment and Assumption or other documentation contemplated hereby pursuant to which such Lender shall have assumed its Commitment, as applicable.

“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.

“Communications” has the meaning assigned to such term in Section 9.01(d).

“Connection Income Taxes” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.

“Consolidated Capital Expenditures” means, without duplication, any expenditures for any purchase or other acquisition of any asset which would be classified as a fixed or capital asset on a consolidated balance sheet of the Borrower and its Subsidiaries prepared in accordance with GAAP.

“Consolidated EBITDA” means, with reference to any period, Consolidated Net Income plus, without duplication and to the extent deducted from revenues in determining Consolidated Net Income, (i) Consolidated Interest Expense, (ii) expense for income taxes paid or accrued,

(iii) depreciation, (iv) amortization, (v) extraordinary or non-recurring non-cash expenses or losses,

(vi) non-cash expenses related to stock based compensation minus, to the extent included in Consolidated Net Income, (1) interest income, (2) income tax credits and refunds (to the extent not netted from tax expense), (3) any cash payments made during such period in respect of items described in clauses (v) or

(vi) above subsequent to the fiscal quarter in which the relevant non-cash expenses or losses were incurred and (4) extraordinary, unusual or non-recurring income or gains realized other than in the ordinary course of business, all calculated for the Borrower and its Subsidiaries in accordance with GAAP on a consolidated basis. For the purposes of calculating Consolidated EBITDA for any period of four consecutive fiscal quarters (each such period, a “Reference Period”), (i) if at any time during such Reference Period the Borrower or any Subsidiary shall have made any Material Disposition, the Consolidated EBITDA for such Reference Period shall be reduced by an amount equal to the Consolidated EBITDA (if positive) attributable to the property that is the subject of such Material Disposition for such Reference Period or increased by an amount equal to the Consolidated EBITDA (if negative) attributable thereto for such Reference Period, and (ii) if during such Reference Period the Borrower or any Subsidiary shall have made a Material Acquisition, Consolidated EBITDA for such Reference Period shall be calculated after giving effect thereto on a pro forma basis as if such Material Acquisition occurred on the first day of such Reference Period. As used in this definition, “Material Acquisition” means any acquisition of property or series of related acquisitions of property that

(a) constitutes (i) assets comprising all or substantially all or any significant portion of a business or operating unit of a business, or (ii) all or substantially all of the common stock or other Equity Interests of a Person, and (b) involves the payment of consideration by the Borrower and its Subsidiaries in excess of

$20,000,000; and “Material Disposition” means any sale, transfer or disposition of property or series of

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related sales, transfers, or dispositions of property that yields gross proceeds to the Borrower or any of its Subsidiaries in excess of $20,000,000.

“Consolidated Fixed Charges” means, for any period, without duplication, (i) Consolidated Interest Expense, plus(ii) scheduled principal payments on the current portion of long-term Indebtedness, all calculated for the Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP.

“Consolidated Interest Expense” means, with reference to any period, the interest expense (including without limitation interest expense under Capital Lease Obligations that is treated as interest in accordance with GAAP) of the Borrower and its Subsidiaries calculated on a consolidated basis for such period with respect to all outstanding Indebtedness of the Borrower and its Subsidiaries allocable to such period in accordance with GAAP (including, without limitation, all commissions, discounts and other fees and charges owed with respect to letters of credit and bankers acceptance financing and net costs under interest rate Swap Agreements to the extent such net costs are allocable to such period in accordance with GAAP). In the event that the Borrower or any Subsidiary shall have completed a Material Acquisition or a Material Disposition since the beginning of the relevant period, Consolidated Interest Expense shall be determined for such period on a pro forma basis as if such acquisition or disposition, and any related incurrence or repayment of Indebtedness, had occurred at the beginning of such period.

“Consolidated Net Income” means, with reference to any period, the net income (or loss) of the Borrower and its Subsidiaries calculated in accordance with GAAP on a consolidated basis (without duplication) for such period; providedthat there shall be excluded any income (or loss) of any Person other than the Borrower or a Subsidiary, but any such income so excluded may be included in such period or any later period to the extent of any cash dividends or distributions actually paid in the relevant period to the Borrower or any wholly-owned Subsidiary of the Borrower.

“Consolidated Total Assets” means, as of the date of any determination thereof, total assets of the Borrower and its Subsidiaries calculated in accordance with GAAP on a consolidated basis as of such date.

“Consolidated Total Indebtedness” means at any date the sum, without duplication, of

(a) the aggregate Indebtedness of the Borrower and its Subsidiaries calculated on a consolidated basis as of such date in accordance with GAAP, (b) the aggregate amount of Indebtedness of the Borrower and its Subsidiaries relating to the maximum drawing amount of all letters of credit outstanding and bankers acceptances and (c) Indebtedness of the type referred to in clauses (a) or (b) hereof of another Person guaranteed by the Borrower or any of its Subsidiaries.

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

“Credit Event” means a Borrowing, the issuance, amendment, renewal or extension of a Letter of Credit, an LC Disbursement or any of the foregoing.

“Credit Party” means the Administrative Agent, any Issuing Bank, the Swingline Lender or any other Lender.

“Default” means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.

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“Defaulting Lender” means any Lender that (a) has failed, within two (2) Business Days of the date required to be funded or paid, to (i) fund any portion of its Loans, (ii) fund any portion of its participations in Letters of Credit or Swingline Loans or (iii) pay over to any Credit Party any other amount required to be paid by it hereunder, unless, in the case of clause (i) above, such Lender notifies the Administrative Agent in writing that such failure is the result of such Lender’s good faith determination that a condition precedent to funding (specifically identified and including the particular default, if any) has not been satisfied, (b) has notified the Borrower or any Credit Party in writing, or has made a public statement to the effect, that it does not intend or expect to comply with any of its funding obligations under this Agreement (unless such writing or public statement indicates that such position is based on such Lender’s good faith determination that a condition precedent (specifically identified and including the particular default, if any) to funding a Loan under this Agreement cannot be satisfied) or generally under other agreements in which it commits to extend credit, (c) has failed, within three

(3) Business Days after request by a Credit Party, acting in good faith, to provide a certification in writing from an authorized officer of such Lender that it will comply with its obligations (and is financially able to meet such obligations) to fund prospective Loans and participations in then outstanding Letters of Credit and Swingline Loans under this Agreement, provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon such Credit Party’s receipt of such certification in form and substance satisfactory to it and the Administrative Agent, or (d) has become the subject of (A) a Bankruptcy Event or (B) a Bail-In Action.

“Dollars” or “$” refers to lawful money of the United States of America.

“Domestic Subsidiary” means a Subsidiary organized under the laws of a jurisdiction located in the United States of America, excluding (x) any such Subsidiary that owns no material assets other than Equity Interests in one or more Subsidiaries that are “controlled foreign corporations” within the meeting of Section 957 of the Code and (y) any such Subsidiary that is owned (directly or indirectly) by a Subsidiary that is a “controlled foreign corporation” within the meaning of Section 957 of the Code.

“ECP” means an “eligible contract participant” as defined in Section 1(a)(18) of the Commodity Exchange Act or any regulations promulgated thereunder and the applicable rules issued by the Commodity Futures Trading Commission and/or the SEC.

“EEA Financial Institution” means (a) any institution established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or

(c) any institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.

“EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.

“EEA Resolution Authority” means any public administrative authority or any Person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.

“Effective Date” means the date on which the conditions specified in Section 4.01 are satisfied (or waived in accordance with Section 9.02).

“Electronic Signature” means an electronic sound, symbol, or process attached to, or associated with, a contract or other record and adopted by a Person with the intent to sign, authenticate or accept such contract or record.

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“Electronic System” means any electronic system, including e-mail, e-fax, Intralinks®, ClearPar®, Debt Domain, Syndtrak and any other Internet or extranet-based site, whether such electronic system is owned, operated or hosted by the Administrative Agent and any of its respective Related Parties or any other Person, providing for access to data protected by passcodes or other security system.

“Environmental Laws” means all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to the environment, preservation or reclamation of natural resources, the management, release or threatened release of any Hazardous Material or to health and safety matters.

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

“Equity Interests” means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any of the foregoing.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time.

“ERISA Affiliate” means any trade or business (whether or not incorporated) that, together with the Borrower, is treated as a single employer under Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code.

“ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of ERISA or the regulations issued thereunder with respect to a Plan (other than an event for which the 30-day notice period is waived); (b) the failure to satisfy the “minimum funding standard” (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the filing pursuant to Section 412(c) of the Code or Section 302(c) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (d) the incurrence by the Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan; (e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the Borrower or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal of the Borrower or any of its ERISA Affiliates from any Plan or Multiemployer Plan; or (g) the receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice, concerning the imposition upon the Borrower or any of its ERISA Affiliates of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA.

“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor Person), as in effect from time to time.

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“Eurodollar” when used in reference to any Loan or Borrowing, means that such Loan, or the Loans comprising such Borrowing, bears interest at a rate determined by reference to the Adjusted LIBO Rate.

“Event of Default” has the meaning assigned to such term in Article VII.

“Excess Cash Flow” means, for any period, the excess, if any, of (a) the sum, without duplication, of (i) Consolidated Net Income for such period, (ii) the amount of all non-cash charges (including depreciation and amortization) deducted in determining such Consolidated Net Income, and

(iii) the aggregate net amount of non-cash loss on the disposition of property by the Borrower and its Subsidiaries during such period (other than sales of inventory in the ordinary course of business), to the extent deducted in arriving at such Consolidated Net Income, minus(b) the sum, without duplication, of

(i)    the amount of all non-cash credits included in determining such Consolidated Net Income, (ii) the aggregate amount paid by the Borrower and its Subsidiaries during such period on account of Consolidated Capital Expenditures, excluding any amount funded with proceeds from the issuance of Funded Indebtedness (other than Revolving Loans or intercompany loans), (iii) the aggregate amount of all principal payments of Indebtedness of the Borrower and its Subsidiaries (including the principal component of Capital Lease Obligations, but excluding (x) any such Indebtedness to the extent refinanced with, converted into or exchanged for, Funded Indebtedness (other than Revolving Loans or intercompany loans) and/or Equity Interests of the Borrower, (y) all prepayments of Revolving Loans made during such period and (z) all prepayments under any other revolving credit facility, except in the case of this clause (z), to the extent there is not an equivalent permanent reduction in commitments thereunder) made during such period, except to the extent financed with the proceeds of an incurrence or issuance of other Indebtedness (other than Revolving Loans) of the Borrower or its Subsidiaries and (iv) the aggregate net amount of non-cash gain on the disposition of property by the Borrower and its Subsidiaries during such period (other than sales of inventory in the ordinary course of business), to the extent included in determining such Consolidated Net Income.

“Excluded Assets” means:

(a)    any real property (including any leasehold interests therein);

(b)    assets subject to certificates of title (other than motor vehicles subject to certificates of title; provided that perfection of security interests in such motor vehicles shall be limited to the filing of UCC financing statements);

(c)    assets in respect of which pledges and security interests are prohibited by applicable law, rule or regulation or agreements with any Governmental Authority (other than to the extent that such prohibition would be rendered ineffective pursuant to Section 9-406, 9-407, 9-408, 9-409 or other applicable provisions of the UCC of any relevant jurisdiction or any other applicable law); providedthat, immediately upon the ineffectiveness, lapse or termination of any such prohibitions, such assets shall automatically cease to constitute “Excluded Assets”;

(d)    Equity Interests in any Person other than wholly-owned Subsidiaries to the extent not permitted by customary terms in such Person’s organizational or joint venture documents (unless any such restriction would be rendered ineffective pursuant to Section 9-406, 9-407, 9-408, 9-409 or other applicable provisions of the UCC of any relevant jurisdiction or any other applicable law);

(e)    any lease, license or other agreement or any property subject to a purchase money security interest, similar arrangement or other contractual restriction, to the extent that a grant of a security interest therein would violate or invalidate such lease, license or agreement, purchase money or

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other arrangement or contractual restriction or creates a right of termination in favor of any other party thereto (other than a Credit Party) (other than (i) proceeds and receivables thereof, the assignment of which is expressly deemed effective under the UCC notwithstanding such prohibition, (ii) to the extent that any such term has been waived or (iii) to the extent any such term would be rendered ineffective pursuant to Section 9-406, 9-407, 9-408, 9-409 or other applicable provisions of the UCC of any relevant jurisdiction or any other applicable law); providedthat, immediately upon the ineffectiveness, lapse or termination of any such express term, such assets shall automatically cease to constitute “Excluded Assets”;

(f)    (i) escrow accounts and trust accounts, (ii) payroll accounts, (iii) accounts used for payroll taxes and/or withheld income taxes, (iv) accounts used for employee wage and benefit payments,

(v) accounts pledged to secure performance (including to secure letters of credit and bank guarantees) to the extent constituting Liens permitted by Section 6.02, (vi) custodial accounts, (vii) accounts that are swept to a zero balance on a daily basis to a deposit account that is subject to a control agreement and

(viii) other similar deposit or securities accounts;

(g)    any “intent-to-use” application for registration of a trademark filed pursuant to Section 1(b) of the Lanham Act, 15 U.S.C. § 1051, prior to the filing of a “Statement of Use” pursuant to Section 1(d) of the Lanham Act of an “Amendment to Allege Use” pursuant to Section 1(c) of the Lanham Act with respect thereto, solely to the extent, if any, that and solely during the period, if any, in which, the grant of a security interest therein would impair the validity or enforceability of any registration that issues from such intent-to-use application under applicable federal law;

(h) Margin Stock;

(i) all commercial tort claims (as defined in the UCC) below $500,000;

(j)    foreign assets (other than pledges of the Equity Interests in any First Tier Foreign Subsidiary which is a Material Foreign Subsidiary as contemplated by this Agreement); and

(k)    any other assets where the cost of obtaining or perfecting a security interest in such assets exceeds the practical benefit to the Lenders afforded thereby as reasonably determined by the Administrative Agent in writing (in consultation with the Borrower);

providedthat, “Excluded Assets” shall not include any proceeds, products, substitutions or replacements of Excluded Assets (unless such proceeds, products, substitutions or replacements would otherwise constitute Excluded Assets).

“Excluded Swap Obligation” means, with respect to any Loan Party, any Specified Swap Obligation if, and to the extent that, all or a portion of the Guarantee of such Loan Party of, or the grant by such Loan Party of a security interest to secure, such Specified Swap Obligation (or any Guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Loan Party’s failure for any reason to constitute an ECP at the time the Guarantee of such Loan Party or the grant of such security interest becomes or would become effective with respect to such Specified Swap Obligation. If a Specified Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Specified Swap Obligation that is attributable to swaps for which such Guarantee or security interest is or becomes illegal.

“Excluded Taxes” means any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient, (a) Taxes imposed on or

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measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case,

(i) imposed by the jurisdiction (or any political subdivision thereof) in which such Recipient is organized or in which its principal office is located, or, in the case of any Lender its applicable lending office is located or (ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. Federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan, Letter of Credit or Commitment pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Loan, Letter of Credit or Commitment (other than pursuant to an assignment request by the Borrower under Section 2.19(b)) or (ii) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 2.17, amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender acquired the applicable interest in a Loan, Letter of Credit or Commitment or to such Lender immediately before it changed its lending office, (c) Taxes attributable to such Recipient’s failure to comply with Section 2.17(f) and (d) any U.S. Federal withholding Taxes imposed under FATCA.

“Existing Credit Agreement” means that certain Credit Agreement, dated as of October 9, 2015, among the Borrower, certain Subsidiaries of the Borrower from time to time party thereto and Citibank, N.A.

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof and any agreement entered into pursuant to Section 1471(b)(1) of the Code or any published intergovernmental agreement between the United States and a non-U.S. jurisdiction and any fiscal or regulatory legislation, rules or official practices adopted pursuant to any published intergovernmental agreement entered into in connection with the implementation of such Sections of the Code.

“FDA” has the meaning assigned to such term in Section 3.21(a).

“FDA Warning Letter” has the meaning assigned to such term in Section 3.21(a).

“Federal Funds Effective Rate” means, for any day, the rate calculated by the NYFRB based on such day’s federal funds transactions by depositary institutions (as determined in such manner as the NYFRB shall set forth on its public website from time to time) and published on the next succeeding Business Day by the NYFRB as the federal funds effective rate.

“Federal Health Care Program” means the government programs set forth in 42 U.S.C. §

1320a-7b(f).

“Financial Officer” means the chief financial officer, principal accounting officer, treasurer or controller of the Borrower.

“Financials” means the annual or quarterly financial statements, and accompanying certificates and other documents, of the Borrower and its Subsidiaries required to be delivered pursuant to Section 5.01(a) or 5.01(b).

“First Tier Foreign Subsidiary” means each Foreign Subsidiary with respect to which any one or more of the Borrower and its Domestic Subsidiaries directly owns or Controls more than 50% of such Foreign Subsidiary’s issued and outstanding Equity Interests.

“Fixed Charge Coverage Ratio” means, for any period of four (4) consecutive fiscal quarters, the ratio of (a) (i) Consolidated EBITDA minus(ii) Consolidated Capital Expenditures, minus

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(iii) expense for Taxes paid in cash minus(iv) Restricted Payments to (b) Consolidated Fixed Charges, all calculated for the Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP.

“Foreign Lender” means (a) if the Borrower is a U.S. Person, a Lender that is not a U.S. Person, and (b) if the Borrower is not a U.S. Person, a Lender that is resident or organized under the laws of a jurisdiction other than that in which the Borrower is resident for tax purposes.

“Foreign Subsidiary” means any Subsidiary which is not a Domestic Subsidiary.

“Funded Indebtedness” means, with respect to any Person, all Indebtedness of such Person that by its terms matures more than one year after the date of determination or incurrence or matures within one year from such date but is renewable or extendible, at the option of such Person, to a date more than one year after such date or arises under a revolving credit or similar agreement that obligates the lender or lenders to extend credit during a period of more than one year after such date, including, without limitation, all amounts of Funded Indebtedness of such Person required to be paid or prepaid within one year after the date of its creation.

“GAAP” means generally accepted accounting principles in the United States of

America.

“Governmental Authority” means the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

“Guarantee” of or by any Person (the “guarantor”) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation; provided, that the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of business. The amount of any Guarantee shall be deemed to be an amount equal to the lesser of (a) the stated or determinable amount of the primary payment obligation in respect of which such Guarantee is made and

(b)    the maximum amount for which the guaranteeing Person may be liable pursuant to the terms of the instrument embodying such Guarantee, unless such primary payment obligation and the maximum amount for which such guaranteeing Person may be liable are not stated or determinable, in which case the amount of the Guarantee shall be such guaranteeing Person’s maximum reasonably possible liability in respect thereof as reasonably determined by the Borrower in good faith.

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

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“Health Care Laws” means (a) all Laws related to (i) fraud and abuse, including the Federal Antikickback Law (42 U.S.C. § 1320a-7b), the Stark Law (42 U.S.C. § 1395nn), the Federal False Claims Act (31 U.S.C. §§ 3729, et seq.), the Federal Civil Monetary Penalties Law (42 U.S.C. § 1320a−7a), the Federal Program Fraud Civil Remedies Act (31 U.S.C. § 3801 et seq.), the Federal Health Care Fraud law (18 U.S.C. § 1347), the criminal false claims statutes (e.g., 18 U.S.C. §§ 287 and 1001), the Physician Payment Sunshine Act (42 U.S.C. § 1320a−7h), the Federal Health Care Program Overpayment Statute (42 U.S.C. § 1320a-7k(d)), the Medicare Secondary Payor Statute (42 U.S.C. § 1395y(b)) and any similar state Laws, any government payment program or any Law governing the licensure of or regulating healthcare providers, professionals, facilities or payors or otherwise governing or regulating the provision of, or payment for, medical services, or the sale of medical supplies, the U.S. Federal Food, Drug and Cosmetic Act (21 U.S.C. § 301 et seq.), the Public Health Service Act (42 U.S.C.

§ 201 et seq.), the Food and Drugs Act, R.S. 1985, c. F-27 and Food and Drug Relations, C.R.C., ch. 870; and (ii) coding, coverage, reimbursement, claims submission, billing and collections; and (b) the Patient Protection and Affordable Care Act (Pub. L. 111−148) as amended by the Health Care and Education Reconciliation Act of 2010 (Pub. L. 111−152) and the regulations adopted thereunder.

“Health Care Permits” has the meaning assigned to such term in Section 3.21(b).

“Hostile Acquisition” means (a) the acquisition of the Equity Interests of a Person through a tender offer or similar solicitation of the owners of such Equity Interests which has not been approved (prior to such acquisition) by the board of directors (or any other applicable governing body) of such Person or by similar action if such Person is not a corporation and (b) any such acquisition as to which such approval has been withdrawn.

“Impacted Interest Period” has the meaning assigned to such term in the definition of

“LIBO Rate”.

“Increasing Lender” has the meaning assigned to such term in Section 2.20.

“Incremental Term Loan” has the meaning assigned to such term in Section 2.20.

“Incremental Term Loan Amendment” has the meaning assigned to such term in

Section 2.20.

“Indebtedness” of any Person means, without duplication, (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (d) all obligations of such Person in respect of the deferred purchase price of property or services (excluding current accounts payable incurred in the ordinary course of business), (e) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed; providedthat, if such Person has not assumed or otherwise become liable in respect of such Indebtedness, such obligations shall be deemed to be in an amount equal to the lesser of (1) the unpaid amount of such Indebtedness and (2) fair market value of such property at the time of determination (in the Borrower’s good faith estimate), (f) all Guarantees by such Person of Indebtedness of others, (g) all Capital Lease Obligations of such Person, (h) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty, (i) all obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances and (j) all obligations of such Person under Sale and Leaseback Transactions. The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is

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liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor.

“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of any Loan Party under any Loan Document and (b) to the extent not otherwise described in clause (a) hereof, Other Taxes.

“Ineligible Institution” has the meaning assigned to such term in Section 9.04(b).

“Interest Election Request” means a request by the Borrower to convert or continue a Revolving Borrowing in accordance with Section 2.08 in the form attached hereto as Exhibit G-2.

“Interest Payment Date” means (a) with respect to any ABR Loan (other than a Swingline Loan), the last day of each March, June, September and December and the Maturity Date, (b) with respect to any Eurodollar Loan, the last day of the Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of a Eurodollar Borrowing with an Interest Period of more than three months’ duration, each day prior to the last day of such Interest Period that occurs at intervals of three months’ duration after the first day of such Interest Period and the Maturity Date and (c) with respect to any Swingline Loan, the day that such Loan is required to be repaid and the Maturity Date.

“Interest Period” means with respect to any Eurodollar Borrowing, the period commencing on the date of such Borrowing and ending on the numerically corresponding day in the calendar month that is one, two, three or six months thereafter, as the Borrower may elect; provided, that

(i)    if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day and (ii) any Interest Period pertaining to a Eurodollar Borrowing that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period. For purposes hereof, the date of a Borrowing initially shall be the date on which such Borrowing is made and thereafter shall be the effective date of the most recent conversion or continuation of such Borrowing.

“Interpolated Rate” means, at any time, for any Interest Period, the rate per annum determined by the Administrative Agent (which determination shall be conclusive and binding absent manifest error) to be equal to the rate that results from interpolating on a linear basis between: (a) the LIBOR Screen Rate for the longest period (for which the LIBOR Screen Rate is available for the applicable currency) that is shorter than the Impacted Interest Period and (b) the LIBOR Screen Rate for the shortest period (for which the LIBOR Screen Rate is available for the applicable currency) that exceeds the Impacted Interest Period, in each case, at such time.

“Investment” has the meaning assigned to such term in Section 6.04.

“IRS” means the United States Internal Revenue Service.

“Issuing Bank” means each of JPMorgan Chase Bank, N.A., Citibank, N.A. and each other Lender designated by the Borrower as an “Issuing Bank” hereunder that has agreed to such designation (and is reasonably acceptable to the Administrative Agent), each in its capacity as the issuer of Letters of Credit hereunder, and its successors in such capacity as provided in Section 2.06(i). Each Issuing Bank may, in its discretion, arrange for one or more Letters of Credit to be issued by Affiliates of

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such Issuing Bank, in which case the term “Issuing Bank” shall include any such Affiliate with respect to Letters of Credit issued by such Affiliate.

“Laws” means, collectively, all statutes (including all Health Care Laws), treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities of any Governmental Authority, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, consent decrees, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority.

“LC Collateral Account” has the meaning assigned to such term in Section 2.06(j).

“LC Disbursement” means a payment made by an Issuing Bank pursuant to a Letter of

Credit.

“LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of all outstanding Letters of Credit at such time plus (b) the aggregate amount of all LC Disbursements that have not yet been reimbursed by or on behalf of the Borrower at such time. The LC Exposure of any Lender at any time shall be its Applicable Percentage of the total LC Exposure at such time.

“Lender Parent” means, with respect to any Lender, any Person as to which such Lender is, directly or indirectly, a subsidiary.

“Lenders” means the Persons listed on Schedule 2.01Aand any other Person that shall have become a Lender hereunder pursuant to Section 2.20 or pursuant to an Assignment and Assumption or other documentation contemplated hereby, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption or other documentation contemplated hereby. Unless the context otherwise requires, the term “Lenders” includes the Swingline Lender and the Issuing Banks.

“Letter of Credit” means any letter of credit issued pursuant to this Agreement.

“Letter of Credit Commitment” means, with respect to each Issuing Bank, the commitment of such Issuing Bank to issue Letters of Credit hereunder. The initial amount of each Issuing Bank’s Letter of Credit Commitment is set forth on Schedule 2.01B, or if an Issuing Bank has entered into an Assignment and Assumption, the amount set forth for such Issuing Bank as its Letter of Credit Commitment in the Register maintained by the Administrative Agent.

“Leverage Ratio” has the meaning assigned to such term in Section 6.11(a).

“LIBO Rate” means, with respect to any Eurodollar Borrowing for any applicable Interest Period, the London interbank offered rate as administered by ICE Benchmark Administration (or any other Person that takes over the administration of such rate) for Dollars for a period equal in length to such Interest Period as displayed on pages LIBOR01 or LIBOR02 of the Reuters screen or, in the event such rate does not appear on either of such Reuters pages, on any successor or substitute page on such screen that displays such rate, or on the appropriate page of such other information service that publishes such rate as shall be selected by the Administrative Agent from time to time in its reasonable discretion (in each case the “LIBOR Screen Rate”) at approximately 11:00 a.m., London time, two (2) Business Days prior to the commencement of such Interest Period; providedthat, if the LIBOR Screen Rate shall be less than zero, such rate shall be deemed to be zero for the purposes of this Agreement; provided, further, that if a LIBOR Screen Rate shall not be available at such time for such Interest Period (the “Impacted Interest Period”), then the LIBO Rate for such Interest Period shall be the Interpolated Rate;

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provided, that, if any Interpolated Rate shall be less than zero, such rate shall be deemed to be zero for the purposes of this Agreement. It is understood and agreed that all of the terms and conditions of this definition of “LIBO Rate” shall be subject to Section 2.14.

“LIBOR Screen Rate” has the meaning assigned to such term in the definition of “LIBO

Rate”.

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

“Loan Documents” means this Agreement, any promissory notes issued pursuant to Section 2.10(e), any Letter of Credit applications and any agreements between the Borrower and an Issuing Bank regarding such Issuing Bank’s Letter of Credit Commitment or the respective rights and obligations between the Borrower and such Issuing Bank in connection with the issuance of Letters of Credit, the Collateral Documents, the Subsidiary Guaranty, and all other agreements, instruments, documents and certificates identified in Section 4.01 executed and delivered to, or in favor of, the Administrative Agent or any Lenders and including all other pledges, powers of attorney, consents, assignments, contracts, notices, letter of credit agreements and all other written matter whether heretofore, now or hereafter executed by or on behalf of any Loan Party and delivered to the Administrative Agent or any Lender in connection with this Agreement or the transactions contemplated hereby. Any reference in this Agreement or any other Loan Document to a Loan Document shall include all appendices, exhibits or schedules thereto, and all amendments, restatements, supplements or other modifications thereto, and shall refer to this Agreement or such Loan Document as the same may be in effect at any and all times such reference becomes operative.

“Loan Parties” means, collectively, the Borrower and the Subsidiary Guarantors.

“Loans” means the loans made by the Lenders to the Borrower pursuant to this

Agreement.

“Margin Stock” means “margin stock” as such term is defined in Regulation U of the

Board.

“Material Acquisition” has the meaning assigned to such term in the definition of “Consolidated EBITDA”.

“Material Adverse Effect” means a material adverse effect on (a) the business, assets, operations or financial condition of the Borrower and the Subsidiaries taken as a whole, (b) the ability of the Borrower to perform any of its obligations under this Agreement or any other Loan Document or

(c)    the validity or enforceability of this Agreement or any and all other Loan Documents or the rights or remedies of the Administrative Agent and the Lenders thereunder.

“Material Disposition” has the meaning assigned to such term in the definition of “Consolidated EBITDA”.

“Material Domestic Subsidiary” means each Domestic Subsidiary (i) which, as of the most recent fiscal quarter of the Borrower, for the period of four consecutive fiscal quarters then ended,

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for which financial statements have been delivered pursuant to Section 5.01(a) or (b) (or, if prior to the date of the delivery of the first financial statements to be delivered pursuant to Section 5.01(a) or (b), the most recent financial statements referred to in Section 3.04(a)), contributed greater than five percent (5%) of Consolidated EBITDA for such period or (ii) which contributed greater than five percent (5%) of Consolidated Total Assets as of such date; providedthat, if at any time the aggregate amount of Consolidated EBITDA or Consolidated Total Assets attributable to all Domestic Subsidiaries that are not Material Domestic Subsidiaries exceeds ten percent (10%) of Consolidated EBITDA for any such period or ten percent (10%) of Consolidated Total Assets as of the end of any such fiscal quarter, the Borrower (or, in the event the Borrower has failed to do so within ten (10) days, the Administrative Agent) shall designate sufficient Domestic Subsidiaries as “Material Domestic Subsidiaries” to eliminate such excess, and such designated Subsidiaries shall for all purposes of this Agreement constitute Material Domestic Subsidiaries.

“Material Foreign Subsidiary” means each Foreign Subsidiary (i) which, as of the most recent fiscal quarter of the Borrower, for the period of four consecutive fiscal quarters then ended, for which financial statements have been delivered pursuant to Section 5.01(a) or (b) (or, if prior to the date of the delivery of the first financial statements to be delivered pursuant to Section 5.01(a) or (b), the most recent financial statements referred to in Section 3.04(a)), contributed greater than five percent (5%) of Consolidated EBITDA for such period or (ii) which contributed greater than five percent (5%) of Consolidated Total Assets as of such date.

“Material Indebtedness” means Indebtedness (other than the Loans and Letters of Credit), or obligations in respect of one or more Swap Agreements, of any one or more of the Borrower and its Subsidiaries in an aggregate principal amount exceeding $10,000,000. For purposes of determining Material Indebtedness, the “principal amount” of the obligations of the Borrower or any Subsidiary in respect of any Swap Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that the Borrower or such Subsidiary would be required to pay if such Swap Agreement were terminated at such time.

“Maturity Date” means September 23, 2021.

“Moody’s” means Moody’s Investors Service, Inc.

“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3) of

ERISA.

“Net Cash Proceeds” means, with respect to any event, (a) the cash proceeds received in respect of such event including any cash received in respect of any non-cash proceeds, but only as and when received, minus(b) the sum of (i) all reasonable fees and out-of-pocket expenses paid to third parties (other than Affiliates) in connection with such event, (ii) in the case of a sale, transfer or other disposition of an asset, the amount of all mandatory prepayments required to be made as a result of such event and (iii) the amount of all taxes paid (or reasonably estimated to be payable) and the amount of any reserves established to fund contingent liabilities reasonably estimated to be payable, in each case during the year that such event occurred or the next succeeding year and that are directly attributable to such event (as determined reasonably and in good faith by a Financial Officer of the Borrower).

“NYFRB” means the Federal Reserve Bank of New York.

“NYFRB Rate” means, for any day, the greater of (a) the Federal Funds Effective Rate in effect on such day and (b) the Overnight Bank Funding Rate in effect on such day (or for any day that is not a Business Day, for the immediately preceding Business Day); providedthat if none of such rates are

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published for any day that is a Business Day, the term “NYFRB Rate” means the rate for a federal funds transaction quoted at 11:00 a.m., New York City time, on such day received by the Administrative Agent from a Federal funds broker of recognized standing selected by it; provided, further, that if any of the aforesaid rates shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.

“Obligations” means all unpaid principal of and accrued and unpaid interest on the Loans, all LC Exposure, all accrued and unpaid fees and all expenses, reimbursements, indemnities and other obligations and indebtedness (including interest and fees accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), obligations and liabilities of any of the Borrower and its Subsidiaries to any of the Lenders, the Administrative Agent, any Issuing Bank or any indemnified party, individually or collectively, existing on the Effective Date or arising thereafter, direct or indirect, joint or several, absolute or contingent, matured or unmatured, liquidated or unliquidated, secured or unsecured, arising by contract, operation of law or otherwise, arising or incurred under this Agreement or any of the other Loan Documents or in respect of any of the Loans made or reimbursement or other obligations incurred or any of the Letters of Credit or other instruments at any time evidencing any thereof.

“OFAC” means the Office of Foreign Assets Control of the U.S. Department of the

Treasury.

“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising solely from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan, Letter of Credit or Loan Document).

“Other Taxes” means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 2.19).

“Overnight Bank Funding Rate” means, for any day, the rate comprised of both overnight federal funds and overnight eurodollar borrowings by U.S.-managed banking offices of depository institutions (as such composite rate shall be determined by the NYFRB as set forth on its public website from time to time) and published on the next succeeding Business Day by the NYFRB as an overnight bank funding rate (from and after such date as the NYFRB shall commence to publish such composite rate).

“Participant” has the meaning assigned to such term in Section 9.04(c).

“Participant Register” has the meaning assigned to such term in Section 9.04(c).

“Patriot Act” means the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)).

“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions.

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“Permitted Acquisition” means any acquisition (whether by purchase, merger, consolidation or otherwise but excluding in any event a Hostile Acquisition) or series of related acquisitions by the Borrower or any Subsidiary of (i) all or substantially all the assets of or (ii) all or substantially all the Equity Interests in, a Person or division or line of business of a Person, if, at the time of and immediately after giving effect thereto, (a) no Default has occurred and is continuing or would arise after giving effect (including giving effect on a pro forma basis) thereto, (b) such Person or division or line of business is engaged in the same or a similar line of business as the Borrower and the Subsidiaries or business reasonably related or ancillary thereto, (c) all actions required to be taken with respect to such acquired or newly formed Subsidiary under Section 5.09 shall have been or will be taken within the time periods specified therein (subject to extensions as agreed by the Administrative Agent in its reasonable discretion), (d) the Borrower and the Subsidiaries are in compliance, on a pro forma basis, with the covenants contained in Section 6.11 recomputed as of the last day of the most recently ended fiscal quarter of the Borrower for which financial statements are available, as if such acquisition (and any related incurrence or repayment of Indebtedness, with any new Indebtedness being deemed to be amortized over the applicable testing period in accordance with its terms) had occurred on the first day of each relevant period for testing such compliance and, if the aggregate consideration paid in respect of such acquisition exceeds $50,000,000, the Borrower shall have delivered to the Administrative Agent a certificate of a Financial Officer of the Borrower to such effect, together with all relevant financial information, statements and projections requested by the Administrative Agent and (e) in the case of an acquisition, merger or consolidation involving the Borrower, the Borrower is the surviving entity of such merger and/or consolidation.

“Permitted Debt” means Indebtedness for borrowed money incurred by the Borrower or any Subsidiary Guarantor; provided that (i) any such Permitted Debt, if guaranteed, shall not be guaranteed by any Subsidiary other than a Subsidiary Guarantor and, if secured (as permitted by Sections

6.1    and 6.02), shall be secured solely by all or some portion of the Collateral pursuant to security documents no more favorable to the secured party or party, taken as a whole (as determined by the Borrower in good faith), than the Collateral Documents, (ii) any such Permitted Debt, if secured, shall be subject to a customary intercreditor agreement in form and substance reasonably satisfactory to the Borrower and the Administrative Agent, (iii) such Permitted Debt matures after, and does not require any scheduled amortization or other scheduled payments of principal prior to, the date that is 91 days after the Maturity Date (it being understood that any provision requiring an offer to purchase such Indebtedness as a result of a change of control or asset sale provision shall not violate the foregoing restriction) and (iv) the covenants applicable to such Permitted Debt are not more onerous or more restrictive in any material respect (taken as a whole), as determined in good faith by the board of directors of the Borrower, than the applicable covenants set forth in this Agreement.

“Permitted Encumbrances” means:

(a)    Liens imposed by law for Taxes that are not yet due or are being contested in compliance with Section 5.04;

(b)    carriers’, warehousemen’s, landlords’, mechanics’, materialmen’s, repairmen’s and other like Liens imposed by law, arising in the ordinary course of business and securing obligations that are not overdue by more than sixty (60) days or are being contested in compliance with Section 5.04;

(c)    pledges and deposits made in the ordinary course of business in compliance with workers’ compensation, unemployment insurance and other social security laws or regulations;

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(d)    deposits to secure the performance of bids, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business;

(e)    judgment Liens in respect of judgments that do not constitute an Event of Default under clause (k) of Article VII;

(f)    easements, zoning restrictions, rights-of-way and similar encumbrances on real property imposed by law or arising in the ordinary course of business that do not secure any monetary obligations and do not materially detract from the value of the affected property or interfere with the ordinary conduct of business of the Borrower or any Subsidiary;

(g)    Liens in favor of a banking or other financial institution arising as a matter of law or in the ordinary course of business under customary general terms and conditions encumbering deposits or other funds maintained with a financial institution (including the right of set-off) and that are within the general parameters customary in the banking industry or arising pursuant to such banking institution’s general terms and conditions;

(h)    Liens on specific items of inventory or other goods and proceeds thereof of any Person securing such Person’s obligations in respect of bankers’ acceptances or letters of credit issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods in the ordinary course of business; and

(i)    Liens encumbering reasonable customary initial deposits and margin deposits and similar Liens attaching to commodity trading accounts or other brokerage accounts incurred in the ordinary course of business and not for speculative purposes;

providedthat the term “Permitted Encumbrances” shall not include any Lien securing Indebtedness.

“Permitted Investments” means:

(a)    direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States of America), in each case maturing within one year from the date of acquisition thereof;

(b)    investments in commercial paper maturing within 270 days from the date of acquisition thereof and having, at such date of acquisition, the highest credit rating obtainable from S&P or from Moody’s;

(c)    investments in certificates of deposit, banker’s acceptances and time deposits maturing within 180 days from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any domestic office of any commercial bank organized under the laws of the United States of America or any State thereof which has a combined capital and surplus and undivided profits of not less than $500,000,000;

(d) fully collateralized repurchase agreements with a term of not more than thirty

(30) days for securities described in clause (a) above and entered into with a financial institution satisfying the criteria described in clause (c) above;

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(e)    money market funds that (i) comply with the criteria set forth in SEC Rule 2a-7 under the Investment Company Act of 1940, (ii) are rated AAA by S&P and Aaa by Moody’s and

(iii) have portfolio assets of at least $5,000,000,000;

(f)    investments with average maturities of 12 months or less from the date of acquisition in money market funds rated AAA- (or the equivalent thereof) or better by S&P or Aaa3 (or the equivalent thereof) or better by Moody’s (or, if at any time neither Moody’s nor S&P shall be rating such obligations, an equivalent rating from another nationally recognized statistical rating agency);

(g)    investment funds investing substantially all of their assets in securities of the types described in clauses (a) through (f) above; and

(h)    investments made in accordance with the investment policy adopted by the Borrower’s Board of Directors (or committee thereof) as in effect on the date hereof, a copy of which has been furnished to the Administrative Agent, and as the same may be amended, supplemented or modified after the date hereof with the consent of the Administrative Agent (such consent not to be unreasonably withheld or delayed).

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

“Plan” means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

“Platform” means Debt Domain, Intralinks, Syndtrak or a substantially similar electronic transmission system.

“Pledge Subsidiary” means (i) each Domestic Subsidiary and (ii) each First Tier Foreign Subsidiary which is a Material Foreign Subsidiary.

“Prime Rate” means the rate of interest per annum publicly announced from time to time by JPMorgan Chase Bank, N.A. as its prime rate in effect at its principal office in New York City; each change in the Prime Rate shall be effective from and including the date such change is publicly announced as being effective.

“Recipient” means (a) the Administrative Agent, (b) any Lender and (c) any Issuing Bank, as applicable.

“Register” has the meaning assigned to such term in Section 9.04(b).

“Related Parties” means, with respect to any specified Person, such Person’s Affiliates and the respective directors, officers, employees, agents, advisors and representatives of such Person and such Person’s Affiliates.

“Required Lenders” means, subject to Section 2.21, at any time, Lenders having Revolving Credit Exposures and unused Commitments representing more than 662/3% of the sum of the total Revolving Credit Exposures and unused Commitments at such time; providedthat, as long as there are only two Lenders, Required Lenders shall mean both Lenders.

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“Restricted Payment” means any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interests in the Borrower or any Subsidiary, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such Equity Interests in the Borrower or any Subsidiary or any option, warrant or other right to acquire any such Equity Interests in the Borrower or any Subsidiary.

“Revolving Credit Exposure” means, with respect to any Lender at any time, the sum of the outstanding principal amount of such Lender’s Revolving Loans, its LC Exposure and its Swingline Exposure at such time.

“Revolving Loan” means a Loan made pursuant to Section 2.01.

“S&P” means Standard & Poor’s Ratings Services, a Standard & Poor’s Financial Services LLC business.

“Sale and Leaseback Transaction” means any sale or other transfer of any property or asset by any Person with the intent to lease such property or asset as lessee.

“Sanctioned Country” means, at any time, a country, region or territory which is itself the subject or target of any Sanctions (at the time of this Agreement, Crimea, Cuba, Iran, North Korea, Sudan and Syria).

“Sanctioned Person” means, at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained by OFAC, the U.S. Department of State, the United Nations Security Council, the European Union, any European Union member state, Her Majesty’s Treasury of the United Kingdom or other relevant sanctions authority, (b) any Person operating, organized or resident in a Sanctioned Country or (c) any Person owned or controlled by any such Person or Persons described in the foregoing clauses (a) or (b).

“Sanctions” means all economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) the U.S. government, including those administered by OFAC or the U.S. Department of State or (b) the United Nations Security Council, the European Union, any European Union member state, Her Majesty’s Treasury of the United Kingdom or other relevant sanctions authority.

“SEC” means the United States Securities and Exchange Commission.

“Secured Obligations” means all Obligations, together with all Swap Obligations and Banking Services Obligations owing to one or more Lenders or their respective Affiliates; providedthat the definition of “Secured Obligations” shall not create or include any guarantee by any Loan Party of (or grant of security interest by any Loan Party to support, as applicable) any Excluded Swap Obligations of such Loan Party for purposes of determining any obligations of any Loan Party.

“Secured Parties” means the holders of the Secured Obligations from time to time and shall include (i) each Lender and each Issuing Bank in respect of its Loans and LC Exposure respectively,

(ii)    the Administrative Agent, the Issuing Banks and the Lenders in respect of all other present and future obligations and liabilities of the Borrower and each Subsidiary of every type and description arising under or in connection with this Agreement or any other Loan Document, (iii) each Lender and Affiliate of such Lender in respect of Swap Agreements and Banking Services Agreements entered into with such Person by the Borrower or any Subsidiary, (iv) each indemnified party under Section 9.03 in respect of the

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obligations and liabilities of the Borrower to such Person hereunder and under the other Loan Documents, and (v) their respective successors and (in the case of a Lender, permitted) transferees and assigns.

“Securities Act” means the United States Securities Act of 1933.

“Security Agreement” means that certain Pledge and Security Agreement (including any and all supplements thereto), dated as of the Effective Date, between the Loan Parties and the Administrative Agent, for the benefit of the Administrative Agent and the other Secured Parties, and any other pledge or security agreement entered into after the date of this Agreement by any other Loan Party (as required by this Agreement or any other Loan Document), or any other Person, as the same may be amended, restated or otherwise modified from time to time.

“Solvent” means, in reference to any Person, (i) the fair value of the assets of such Person, at a fair valuation, will exceed its debts and liabilities, subordinated, contingent or otherwise;

(ii) the present fair saleable value of the property of such Person will be greater than the amount that will be required to pay the probable liability of its debts and other liabilities, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured; (iii) such Person will be able to pay its debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured; and (iv) such Person will not have unreasonably small capital with which to conduct the business in which it is engaged as such business is now conducted and is proposed to be conducted after the Effective Date.

“Specified Ancillary Obligations” means all obligations and liabilities (including interest and fees accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding) of any of the Subsidiaries, existing on the Effective Date or arising thereafter, direct or indirect, joint or several, absolute or contingent, matured or unmatured, liquidated or unliquidated, secured or unsecured, arising by contract, operation of law or otherwise, to the Lenders or any of their Affiliates under any Swap Agreement or any Banking Services Agreement; providedthat the definition of “Specified Ancillary Obligations” shall not create or include any guarantee by any Loan Party of (or grant of security interest by any Loan Party to support, as applicable) any Excluded Swap Obligations of such Loan Party for purposes of determining any obligations of any Loan Party.

“Specified Swap Obligation” means, with respect to any Loan Party, any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of Section 1a(47) of the Commodity Exchange Act or any rules or regulations promulgated thereunder.

“Statutory Reserve Rate” means a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of the maximum reserve percentages (including any marginal, special, emergency or supplemental reserves) expressed as a decimal established by the Board to which the Administrative Agent is subject for eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of the Board). Such reserve percentages shall include those imposed pursuant to such Regulation D of the Board. Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under such Regulation D of the Board or any comparable regulation. The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any reserve percentage.

“Subordinated Indebtedness” means any Indebtedness of the Borrower or any Subsidiary the payment of which is subordinated to payment of the obligations under the Loan Documents.

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“Subordinated Indebtedness Documents” means any document, agreement or instrument evidencing any Subordinated Indebtedness or entered into in connection with any Subordinated Indebtedness.

“subsidiary” means, with respect to any Person (the “parent”) at any date, any corporation, limited liability company, partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, association or other entity (a) of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, Controlled or held, or (b) that is, as of such date, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent.

“Subsidiary” means any subsidiary of the Borrower.

“Subsidiary Guarantor” means each Material Domestic Subsidiary that is a party to the Subsidiary Guaranty. The Subsidiary Guarantors on the Effective Date are identified as such in Schedule 3.01hereto.

“Subsidiary Guaranty” means that certain Guaranty dated as of the Effective Date (including any and all supplements thereto) and executed by each Subsidiary Guarantor, as amended, restated, supplemented or otherwise modified from time to time.

“Swap Agreement” means any agreement with respect to any swap, forward, future or derivative transaction or option or similar agreement involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions; providedthat no phantom stock or similar plan providing for payments only on account of services provided by current or former directors, officers, employees or consultants of the Borrower or the Subsidiaries shall be a Swap Agreement.

“Swap Obligations” means any and all obligations of the Borrower or any Subsidiary, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor), under (a) any and all Swap Agreements permitted hereunder with a Lender or an Affiliate of a Lender, and (b) any and all cancellations, buy backs, reversals, terminations or assignments of any such Swap Agreement transaction.

“Swingline Commitment” means $10,000,000.

“Swingline Exposure” means, at any time, the aggregate principal amount of all Swingline Loans outstanding at such time. The Swingline Exposure of any Lender at any time shall be the sum of (a) its Applicable Percentage of the total Swingline Exposure at such time other than with respect to any Swingline Loans made by such Lender in its capacity as a Swingline Lender and (b) the aggregate principal amount of all Swingline Loans made by such Lender as a Swingline Lender outstanding at such time (less the amount of participations funded by the other Lenders in such Swingline Loans).

“Swingline Lender” means JPMorgan Chase Bank, N.A., in its capacity as lender of Swingline Loans hereunder.

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“Swingline Loan” means a Loan made pursuant to Section 2.05.

“Syndication Agent” means Citibank, N.A. in its capacity as syndication agent for the credit facility evidenced by this Agreement.

“Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), value added taxes, or any other goods and services, use or sales taxes, assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

“Total Revolving Credit Exposure” means, at any time, the sum of the outstanding principal amount of all Lenders’ Revolving Loans, their LC Exposure and their Swingline Exposure at such time; provided, that clause (a) of the definition of Swingline Exposure shall only be applicable to the extent Lenders shall have funded their respective participations in the outstanding Swingline Loans.

“Transactions” means the execution, delivery and performance by the Loan Parties of this Agreement and the other Loan Documents, the borrowing of Loans and other credit extensions, the use of the proceeds thereof and the issuance of Letters of Credit hereunder.

“Type”, when used in reference to any Loan or Borrowing, refers to whether the rate of interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate Base Rate.

“UCC” means the Uniform Commercial Code as in effect from time to time in the State of New York or any other state the laws of which are required to be applied in connection with the issue of perfection of security interests.

“Unliquidated Obligations” means, at any time, any Secured Obligations (or portion thereof) that are contingent in nature or unliquidated at such time, including any Secured Obligation that is: (i) an obligation to reimburse a bank for drawings not yet made under a letter of credit issued by it;

(ii) any other obligation (including any guarantee) that is contingent in nature at such time; or (iii) an obligation to provide collateral to secure any of the foregoing types of obligations.

“U.S. Person” means a “United States person” within the meaning of Section 7701(a)(30)

of the Code.

“U.S. Tax Compliance Certificate” has the meaning assigned to such term in Section 2.17(f)(ii)(B)(3).

“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.

“Write-Down and Conversion Powers” means, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.

SECTION 1.02. Classification of Loans and Borrowings. For purposes of this Agreement, Loans may be classified and referred to by Class (e.g., a “Revolving Loan”) or by Type (e.g., a “Eurodollar Loan”) or by Class and Type (e.g., a “Eurodollar Revolving Loan”). Borrowings also may

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be classified and referred to by Class (e.g., a “Revolving Borrowing”) or by Type (e.g., a “Eurodollar Borrowing”) or by Class and Type (e.g., a “Eurodollar Revolving Borrowing”).

SECTION 1.03. Terms Generally. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The word “will” shall be construed to have the same meaning and effect as the word “shall”. The word “law” shall be construed as referring to all statutes, rules, regulations, codes and other laws (including official rulings and interpretations thereunder having the force of law or with which affected Persons customarily comply), and all judgments, orders and decrees, of all Governmental Authorities. Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, restated, supplemented or otherwise modified (subject to any restrictions on such amendments, restatements, supplements or modifications set forth herein), (b) any definition of or reference to any statute, rule or regulation shall be construed as referring thereto as from time to time amended, supplemented or otherwise modified (including by succession of comparable successor laws), (c) any reference herein to any Person shall be construed to include such Person’s successors and assigns (subject to any restrictions on assignment set forth herein) and, in the case of any Governmental Authority, any other Governmental Authority that shall have succeeded to any or all functions thereof, (d) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (e) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement and (f) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

SECTION 1.04. Accounting Terms; GAAP; Pro Forma Calculations. (a) Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time; providedthat, if the Borrower notifies the Administrative Agent that the Borrower requests an amendment to any provision hereof to eliminate the effect of any change occurring after the date hereof in GAAP or in the application thereof on the operation of such provision (or if the Administrative Agent notifies the Borrower that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith. Notwithstanding any other provision contained herein, all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to herein shall be made (i) without giving effect to any election under Accounting Standards Codification 825-10-25 (or any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect) to value any Indebtedness or other liabilities of the Borrower or any Subsidiary at “fair value”, as defined therein and (ii) without giving effect to any treatment of Indebtedness in respect of convertible debt instruments under Accounting Standards Codification 470-20 (or any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect) to value any such Indebtedness in a reduced or bifurcated manner as described therein, and such Indebtedness shall at all times be valued at the full stated principal amount thereof.

(b) All pro forma computations required to be made hereunder giving effect to any acquisition or disposition, or issuance, incurrence or assumption of Indebtedness, or other transaction shall in each case be calculated giving pro forma effect thereto (and, in the case of any pro forma

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computation made hereunder to determine whether such acquisition or disposition, or issuance, incurrence or assumption of Indebtedness, or other transaction is permitted to be consummated hereunder, to any other such transaction consummated since the first day of the period covered by any component of such pro forma computation and on or prior to the date of such computation) as if such transaction had occurred on the first day of the period of four consecutive fiscal quarters ending with the most recent fiscal quarter for which financial statements shall have been delivered pursuant to Section 5.01(a) or 5.01(b) (or, prior to the delivery of any such financial statements, ending with the last fiscal quarter included in the financial statements referred to in Section 3.04(a)), and, to the extent applicable, to the historical earnings and cash flows associated with the assets acquired or disposed of (but without giving effect to any synergies or cost savings) and any related incurrence or reduction of Indebtedness, all in accordance with Article 11 of Regulation S-X under the Securities Act. If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the date of determination had been the applicable rate for the entire period (taking into account any Swap Agreement applicable to such Indebtedness).

SECTION 1.05. Status of Obligations. In the event that the Borrower or any other Loan Party shall at any time issue or have outstanding any Subordinated Indebtedness, the Borrower shall take or cause such other Loan Party to take all such actions as shall be necessary to cause the Secured Obligations to constitute senior indebtedness (however denominated) in respect of such Subordinated Indebtedness and to enable the Administrative Agent and the Lenders to have and exercise any payment blockage or other remedies available or potentially available to holders of senior indebtedness under the terms of such Subordinated Indebtedness. Without limiting the foregoing, the Secured Obligations are hereby designated as “senior indebtedness” and as “designated senior indebtedness” and words of similar import under and in respect of any indenture or other agreement or instrument under which such Subordinated Indebtedness is outstanding and are further given all such other designations as shall be required under the terms of any such Subordinated Indebtedness in order that the Lenders may have and exercise any payment blockage or other remedies available or potentially available to holders of senior indebtedness under the terms of such Subordinated Indebtedness.

ARTICLE II

The Credits

SECTION 2.01. Commitments. Subject to the terms and conditions set forth herein, each Lender (severally and not jointly) agrees to make Revolving Loans to the Borrower in Dollars from time to time during the Availability Period in an aggregate principal amount that will not result in (a) such Lender’s Revolving Credit Exposure exceeding such Lender’s Commitment or (b) the Total Revolving Credit Exposures exceeding the Aggregate Commitment. Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrower may borrow, prepay and reborrow Revolving Loans.

SECTION 2.02. Loans and Borrowings. (a) Each Revolving Loan (other than a Swingline Loan) shall be made as part of a Borrowing consisting of Revolving Loans made by the Lenders ratably in accordance with their respective Commitments. The failure of any Lender to make any Loan required to be made by it shall not relieve any other Lender of its obligations hereunder; providedthat the Commitments of the Lenders are several and no Lender shall be responsible for any other Lender’s failure to make Loans as required. Any Swingline Loan shall be made in accordance with the procedures set forth in Section 2.05.

(b)    Subject to Section 2.14, each Revolving Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans as the Borrower may request in accordance herewith. Each Swingline Loan shall be an ABR Loan. Each Lender at its option may make any Loan by causing any domestic or

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foreign branch or Affiliate of such Lender to make such Loan (and in the case of an Affiliate, the provisions of Sections 2.14, 2.15, 2.16 and 2.17 shall apply to such Affiliate to the same extent as to such Lender); providedthat any exercise of such option shall not affect the obligation of the Borrower to repay such Loan in accordance with the terms of this Agreement.

(c)    At the commencement of each Interest Period for any Eurodollar Revolving Borrowing, such Borrowing shall be in an aggregate amount that is an integral multiple of $500,000 and not less than $1,000,000. At the time that each ABR Revolving Borrowing is made, such Borrowing shall be in an aggregate amount that is an integral multiple of $100,000 and not less than $300,000; providedthat an ABR Revolving Borrowing may be in an aggregate amount that is equal to the entire unused balance of the Aggregate Commitment or that is required to finance the reimbursement of an LC Disbursement as contemplated by Section 2.06(e). Each Swingline Loan shall be in an amount that is an integral multiple of $100,000 and not less than $100,000. Borrowings of more than one Type and Class may be outstanding at the same time; providedthat there shall not at any time be more than a total of ten

(10) Eurodollar Borrowings outstanding.

(d)    Notwithstanding any other provision of this Agreement, the Borrower shall not be entitled to request, or to elect to convert or continue, any Borrowing if the Interest Period requested with respect thereto would end after the Maturity Date.

SECTION 2.03. Requests for Revolving Borrowings. To request a Revolving Borrowing, the Borrower shall notify the Administrative Agent of such request by telephone (a) in the case of a Eurodollar Borrowing, not later than 11:00 a.m., New York City time, three (3) Business Days before the date of the proposed Borrowing or (b) in the case of an ABR Borrowing, not later than 11:00 a.m., New York City time, on the date of the proposed Borrowing; providedthat any such notice of an ABR Revolving Borrowing to finance the reimbursement of an LC Disbursement as contemplated by Section 2.06(e) may be given not later than 10:00 a.m., New York City time, on the date of the proposed Borrowing. Each such telephonic Borrowing Request shall be irrevocable and shall be confirmed promptly by hand delivery or telecopy to the Administrative Agent of a written Borrowing Request signed by the Borrower. Each such telephonic and written Borrowing Request shall specify the following information in compliance with Section 2.02:

(i)    the aggregate principal amount of the requested Borrowing;

(ii) the date of such Borrowing, which shall be a Business Day;

(iii) whether such Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing;

(iv)    in the case of a Eurodollar Borrowing, the initial Interest Period to be applicable thereto, which shall be a period contemplated by the definition of the term “Interest Period”; and

(v)    the location and number of the Borrower’s account to which funds are to be disbursed, which shall comply with the requirements of Section 2.07.

If no election as to the Type of Revolving Borrowing is specified, then the requested Revolving Borrowing shall be an ABR Borrowing. If no Interest Period is specified with respect to any requested Eurodollar Revolving Borrowing, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration. Promptly following receipt of a Borrowing Request in accordance with this Section, the Administrative Agent shall advise each Lender of the details thereof and of the amount of such Lender’s Loan to be made as part of the requested Borrowing.

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SECTION 2.04.    Intentionally Omitted.

SECTION 2.05. Swingline Loans. (a) Subject to the terms and conditions set forth herein, the Swingline Lender may in its sole discretion make Swingline Loans in Dollars to the Borrower from time to time during the Availability Period, in an aggregate principal amount at any time outstanding that will not result in (i) the aggregate principal amount of outstanding Swingline Loans exceeding the Swingline Commitment, (ii) the Swingline Lender’s Revolving Credit Exposure exceeding its Commitment or (iii) the Total Revolving Credit Exposures exceeding the Aggregate Commitment; providedthat the Swingline Lender shall not be required to make a Swingline Loan to refinance an outstanding Swingline Loan. Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrower may borrow, prepay and reborrow Swingline Loans.

(b)    To request a Swingline Loan, the Borrower shall notify the Administrative Agent of such request by telephone (confirmed by telecopy), not later than 12:00 noon, New York City time, on the day of a proposed Swingline Loan. Each such notice shall be irrevocable and shall specify the requested date (which shall be a Business Day) and amount of the requested Swingline Loan. The Administrative Agent will promptly advise the Swingline Lender of any such notice received from the Borrower. The Swingline Lender shall make each Swingline Loan available to the Borrower by means of a credit to the general deposit account of the Borrower with the Swingline Lender (or, in the case of a Swingline Loan made to finance the reimbursement of an LC Disbursement as provided in Section 2.06(e), by remittance to the relevant Issuing Bank) by 3:00 p.m., New York City time, on the requested date of such Swingline Loan.

(c)    The Swingline Lender may by written notice given to the Administrative Agent require the Lenders to acquire participations in all or a portion of the Swingline Loans outstanding. Such notice shall specify the aggregate amount of Swingline Loans in which Lenders will participate. Promptly upon receipt of such notice, the Administrative Agent will give notice thereof to each Lender, specifying in such notice such Lender’s Applicable Percentage of such Swingline Loan or Loans. Each Lender hereby absolutely and unconditionally agrees, promptly upon receipt of such notice from the Administrative Agent (and in any event, if such notice is received by 12:00 noon, New York City time, on a Business Day, no later than 5:00 p.m., New York City time, on such Business Day and if received after 12:00 noon, New York City time, on a Business Day, no later than 10:00 a.m., New York City time, on the immediately succeeding Business Day), to pay to the Administrative Agent, for the account of the Swingline Lender, such Lender’s Applicable Percentage of such Swingline Loan or Loans. Each Lender acknowledges and agrees that its obligation to acquire participations in Swingline Loans pursuant to this paragraph is absolute and unconditional and shall not be affected by any circumstance whatsoever, including the occurrence and continuance of a Default or reduction or termination of the Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever. Each Lender shall comply with its obligation under this paragraph by wire transfer of immediately available funds, in the same manner as provided in Section 2.07 with respect to Loans made by such Lender (and Section 2.07 shall apply, mutatis mutandis, to the payment obligations of the Lenders), and the Administrative Agent shall promptly pay to the Swingline Lender the amounts so received by it from the Lenders. The Administrative Agent shall notify the Borrower of any participations in any Swingline Loan acquired pursuant to this paragraph, and thereafter payments in respect of such Swingline Loan shall be made to the Administrative Agent and not to the Swingline Lender. Any amounts received by the Swingline Lender from the Borrower (or other party on behalf of the Borrower) in respect of a Swingline Loan after receipt by the Swingline Lender of the proceeds of a sale of participations therein shall be promptly remitted to the Administrative Agent; any such amounts received by the Administrative Agent shall be promptly remitted by the Administrative Agent to the Lenders that shall have made their payments pursuant to this paragraph and to the Swingline Lender, as their interests may appear; providedthat any such payment so remitted shall be repaid to the Swingline

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Lender or to the Administrative Agent, as applicable, if and to the extent such payment is required to be refunded to the Borrower for any reason. The purchase of participations in a Swingline Loan pursuant to this paragraph shall not relieve the Borrower of any default in the payment thereof.

(d)    The Swingline Lender may be replaced at any time by written agreement among the Borrower, the Administrative Agent, the replaced Swingline Lender and the successor Swingline Lender. The Administrative Agent shall notify the Lenders of any such replacement of the Swingline Lender. At the time any such replacement shall become effective, the Borrower shall pay all unpaid interest accrued for the account of the replaced Swingline Lender pursuant to Section 2.13(a). From and after the effective date of any such replacement, (i) the successor Swingline Lender shall have all the rights and obligations of the replaced Swingline Lender under this Agreement with respect to Swingline Loans made thereafter and (ii) references herein to the term “Swingline Lender” shall be deemed to refer to such successor or to any previous Swingline Lender, or to such successor and all previous Swingline Lenders, as the context shall require. After the replacement of a Swingline Lender hereunder, the replaced Swingline Lender shall remain a party hereto and shall continue to have all the rights and obligations of a Swingline Lender under this Agreement with respect to Swingline Loans made by it prior to its replacement, but shall not be required to make additional Swingline Loans.

(e)    Subject to the appointment and acceptance of a successor Swingline Lender, the Swingline Lender may resign as a Swingline Lender at any time upon thirty (30) days’ prior written notice to the Administrative Agent, the Borrower and the Lenders, in which case, such Swingline Lender shall be replaced in accordance with Section 2.05(d) above.

SECTION 2.06. Letters of Credit. (a) General. Subject to the terms and conditions set forth herein, the Borrower may request the issuance of Letters of Credit denominated in Dollars as the applicant thereof for the support of its or its Subsidiaries’ obligations, in a form reasonably acceptable to the Administrative Agent and the relevant Issuing Bank, at any time and from time to time during the Availability Period. In the event of any inconsistency between the terms and conditions of this Agreement and the terms and conditions of any form of letter of credit application or other agreement submitted by the Borrower to, or entered into by the Borrower with, the relevant Issuing Bank relating to any Letter of Credit, the terms and conditions of this Agreement shall control. Notwithstanding anything herein to the contrary, no Issuing Bank shall have any obligation hereunder to issue, and shall not issue, any Letter of Credit the proceeds of which would be made available to any Person (i) to fund any activity or business of or with any Sanctioned Person, or in any country or territory that, at the time of such funding, is the subject of any Sanctions or (ii) in any manner that would result in a violation of any Sanctions by any party to this Agreement. The Borrower unconditionally and irrevocably agrees that, in connection with any Letter of Credit issued for the support of any Subsidiary’s obligations as provided in the first sentence of this paragraph, the Borrower will be fully responsible for the reimbursement of LC Disbursements in accordance with the terms hereof, the payment of interest thereon and the payment of fees due under Section 2.12(b) to the same extent as if it were the sole account party in respect of such Letter of Credit (the Borrower hereby irrevocably waiving any defenses that might otherwise be available to it as a guarantor or surety of the obligations of such a Subsidiary that is an account party in respect of any such Letter of Credit).

(b)    Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions. To request the issuance of a Letter of Credit (or the amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall hand deliver or telecopy (or transmit by electronic communication, if arrangements for doing so have been approved by the relevant Issuing Bank) to the relevant Issuing Bank and the Administrative Agent (reasonably in advance of the requested date of issuance, amendment, renewal or extension, but in any event no less than three (3) Business Days) a notice requesting the issuance of a Letter of Credit, or identifying the Letter of Credit to be amended, renewed or extended, and

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specifying the date of issuance, amendment, renewal or extension (which shall be a Business Day), the date on which such Letter of Credit is to expire (which shall comply with paragraph (c) of this Section), the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. If requested by an Issuing Bank, the Borrower also shall submit a letter of credit application on such Issuing Bank’s standard form in connection with any request for a Letter of Credit. A Letter of Credit shall be issued, amended, renewed or extended only if (and upon issuance, amendment, renewal or extension of each Letter of Credit the Borrower shall be deemed to represent and warrant that), after giving effect to such issuance, amendment, renewal or extension (i) the amount of the LC Exposure shall not exceed

$10,000,000, (ii) the sum of (x) the aggregate undrawn amount of all outstanding Letters of Credit issued by any Issuing Bank at such time plus(y) the aggregate amount of all LC Disbursements made by such Issuing Bank that have not yet been reimbursed by or on behalf of the Borrower at such time shall not exceed such Issuing Bank’s Letter of Credit Commitment, (iii) the Total Revolving Credit Exposures shall not exceed the Aggregate Commitment and (iv) each Lender’s Revolving Credit Exposure shall not exceed such Lender’s Commitment. The Borrower may, at any time and from time to time, reduce the Letter of Credit Commitment of any Issuing Bank with the consent of such Issuing Bank; providedthat the Borrower shall not reduce the Letter of Credit Commitment of any Issuing Bank if, after giving effect of such reduction, the conditions set forth in the immediately preceding clauses (i) through (iv) shall not be satisfied.

(c)    Expiration Date. Each Letter of Credit shall expire (or be subject to termination by notice from the relevant Issuing Bank to the beneficiary thereof) at or prior to the close of business on the earlier of (i) the date one year after the date of the issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension) and (ii) the date that is five

(5) Business Days prior to the Maturity Date; providedthat any Letter of Credit with a one-year tenor may contain customary automatic renewal provisions agreed upon by the Borrower and the relevant Issuing Bank that provide for the renewal thereof for additional one-year periods (which shall in no event extend beyond the date referenced in clause (ii) above), subject to a right on the part of such Issuing Bank to prevent any such renewal from occurring by giving notice to the beneficiary in advance of any such renewal.

(d)    Participations. By the issuance of a Letter of Credit (or an amendment to a Letter of Credit increasing the amount thereof) and without any further action on the part of the relevant Issuing Bank or the Lenders, the relevant Issuing Bank hereby grants to each Lender, and each Lender hereby acquires from the relevant Issuing Bank, a participation in such Letter of Credit equal to such Lender’s Applicable Percentage of the aggregate amount available to be drawn under such Letter of Credit. In consideration and in furtherance of the foregoing, each Lender hereby absolutely and unconditionally agrees to pay to the Administrative Agent, for the account of the relevant Issuing Bank, such Lender’s Applicable Percentage of each LC Disbursement made by such Issuing Bank and not reimbursed by the Borrower on the date due as provided in paragraph (e) of this Section, or of any reimbursement payment required to be refunded to the Borrower for any reason. Each Lender acknowledges and agrees that its obligation to acquire participations pursuant to this paragraph in respect of Letters of Credit is absolute and unconditional and shall not be affected by any circumstance whatsoever, including any amendment, renewal or extension of any Letter of Credit or the occurrence and continuance of a Default or reduction or termination of the Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever.

(e)    Reimbursement. If the relevant Issuing Bank shall make any LC Disbursement in respect of a Letter of Credit, the Borrower shall reimburse such LC Disbursement by paying to the Administrative Agent in Dollars the amount equal to such LC Disbursement, calculated as of the date such Issuing Bank made such LC Disbursement not later than 12:00 noon, New York City time, on the

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date that such LC Disbursement is made, if the Borrower shall have received notice of such LC Disbursement prior to 10:00 a.m., New York City time, on such date, or, if such notice has not been received by the Borrower prior to such time on such date, then not later than 12:00 noon, New York City time, on the Business Day immediately following the day that the Borrower receives such notice, if such notice is not received prior to such time on the day of receipt; providedthat, if such LC Disbursement is not less than $1,000,000, the Borrower may, subject to the conditions to borrowing set forth herein, request in accordance with Section 2.03 or 2.05 that such payment be financed with an ABR Revolving Borrowing or Swingline Loan in an equivalent amount of such LC Disbursement and, to the extent so financed, the Borrower’s obligation to make such payment shall be discharged and replaced by the resulting ABR Revolving Borrowing or Swingline Loan. If the Borrower fails to make such payment when due, the Administrative Agent shall notify each Lender of the applicable LC Disbursement, the payment then due from the Borrower in respect thereof and such Lender’s Applicable Percentage thereof. Promptly following receipt of such notice, each Lender shall pay to the Administrative Agent its Applicable Percentage of the payment then due from the Borrower, in the same manner as provided in Section 2.07 with respect to Loans made by such Lender (and Section 2.07 shall apply, mutatis mutandis, to the payment obligations of the Lenders), and the Administrative Agent shall promptly pay to the relevant Issuing Bank the amounts so received by it from the Lenders. Promptly following receipt by the Administrative Agent of any payment from the Borrower pursuant to this paragraph, the Administrative Agent shall distribute such payment to the relevant Issuing Bank or, to the extent that Lenders have made payments pursuant to this paragraph to reimburse such Issuing Bank, then to such Lenders and such Issuing Bank as their interests may appear. Any payment made by a Lender pursuant to this paragraph to reimburse the relevant Issuing Bank for any LC Disbursement (other than the funding of Revolving Loans or a Swingline Loan as contemplated above) shall not constitute a Loan and shall not relieve the Borrower of its obligation to reimburse such LC Disbursement.

(f)    Obligations Absolute. The Borrower’s obligation to reimburse LC Disbursements as provided in paragraph (e) of this Section shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoever and irrespective of (i) any lack of validity or enforceability of any Letter of Credit or this Agreement, or any term or provision therein or herein, (ii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect, (iii) any payment by the relevant Issuing Bank under a Letter of Credit against presentation of a draft or other document that does not comply with the terms of such Letter of Credit, or (iv) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of setoff against, the Borrower’s obligations hereunder. Neither the Administrative Agent, the Lenders nor the Issuing Banks, nor any of their Related Parties, shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to in the preceding sentence), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the relevant Issuing Bank; providedthat the foregoing shall not be construed to excuse the relevant Issuing Bank from liability to the Borrower to the extent of any direct damages (as opposed to special, indirect, consequential or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by such Issuing Bank’s failure to exercise care when determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the relevant Issuing Bank (as finally determined by a court of competent jurisdiction), such Issuing Bank shall be deemed to have exercised care in each such determination. In

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furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented which appear on their face to be in substantial compliance with the terms of a Letter of Credit, each Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit.

(g)    Disbursement Procedures. Each Issuing Bank shall, promptly following its receipt thereof, examine all documents purporting to represent a demand for payment under a Letter of Credit. The relevant Issuing Bank shall promptly notify the Administrative Agent and the Borrower by telephone (confirmed by telecopy) of such demand for payment and whether such Issuing Bank has made or will make an LC Disbursement thereunder; providedthat any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse such Issuing Bank and the Lenders with respect to any such LC Disbursement.

(h)    Interim Interest. If any Issuing Bank shall make any LC Disbursement, then, unless the Borrower shall reimburse such LC Disbursement in full on the date such LC Disbursement is made, the unpaid amount thereof shall bear interest, for each day from and including the date such LC Disbursement is made to but excluding the date that the reimbursement is due and payable, at the rate per annum then applicable to ABR Revolving Loans and such interest shall be due and payable on the date when such reimbursement is payable; providedthat, if the Borrower fails to reimburse such LC Disbursement when due pursuant to paragraph (e) of this Section, then Section 2.13(c) shall apply. Interest accrued pursuant to this paragraph shall be for the account of the relevant Issuing Bank, except that interest accrued on and after the date of payment by any Lender pursuant to paragraph (e) of this Section to reimburse the Issuing Bank shall be for the account of such Lender to the extent of such payment.

(i)    Replacement of Issuing Bank. (A) Any Issuing Bank may be replaced at any time by written agreement among the Borrower, the Administrative Agent, the replaced Issuing Bank and the successor Issuing Bank. The Administrative Agent shall notify the Lenders of any such replacement of any Issuing Bank. At the time any such replacement shall become effective, the Borrower shall pay all unpaid fees accrued for the account of the replaced Issuing Bank pursuant to Section 2.12(b). From and after the effective date of any such replacement, (i) the successor Issuing Bank shall have all the rights and obligations of an Issuing Bank under this Agreement with respect to Letters of Credit to be issued thereafter and (ii) references herein to the term “Issuing Bank” shall be deemed to refer to such successor or to any previous Issuing Bank, or to such successor and all previous Issuing Banks, as the context shall require. After the replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall remain a party hereto and shall continue to have all the rights and obligations of an Issuing Bank under this Agreement with respect to Letters of Credit then outstanding and issued by it prior to such replacement, but shall not be required to issue additional Letters of Credit.

(B) Subject to the appointment and acceptance of a successor Issuing Bank, any Issuing Bank may resign as an Issuing Bank at any time upon thirty days’ prior written notice to the Administrative Agent, the Borrower and the Lenders, in which case, such Issuing Bank shall be replaced in accordance with Section 2.06(i)(A) above.

(j)    Cash Collateralization. If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders (or, if the maturity of the Loans has been accelerated, Lenders with LC Exposure representing at least 662/3% of the total LC Exposure) demanding the deposit of cash collateral pursuant to this paragraph, the Borrower shall deposit in an account with the Administrative Agent, in the name of the

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Administrative Agent and for the benefit of the Lenders (the “LC Collateral Account”), an amount in cash equal to 105% of the amount of the LC Exposure as of such date plus any accrued and unpaid interest thereon; providedthat the obligation to deposit such cash collateral shall become effective immediately, and such deposit shall become immediately due and payable, without demand or other notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in clause (h) or (i) of Article VII. Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the Secured Obligations. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account and the Borrower hereby grants the Administrative Agent a security interest in the LC Collateral Account. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest or profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the relevant Issuing Bank for LC Disbursements for which it has not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated (but subject to the consent of Lenders with LC Exposure representing greater than 50% of the total LC Exposure), be applied to satisfy other Secured Obligations. If the Borrower is required to provide an amount of cash collateral hereunder as a result of the occurrence 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.

(k)    LC Exposure Determination. For all purposes of this Agreement, the amount of a Letter of Credit that, by its terms or the terms of any document related thereto, provides for one or more automatic increases in the stated amount thereof shall be deemed to be the maximum stated amount of such Letter of Credit after giving effect to all such increases, whether or not such maximum stated amount is in effect at the time of determination.

(l)    Issuing Bank Agreements. Each Issuing Bank agrees that, unless otherwise requested by the Administrative Agent, such Issuing Bank shall report in writing to the Administrative Agent (i) on or prior to each Business Day on which such Issuing Bank expects to issue, amend, renew or extend any Letter of Credit, the date of such issuance, amendment, renewal or extension, and the aggregate face amount of the Letters of Credit to be issued, amended, renewed or extended by it and outstanding after giving effect to such issuance, amendment, renewal or extension occurred (and whether the amount thereof changed), it being understood that such Issuing Bank shall not permit any issuance, renewal, extension or amendment resulting in an increase in the amount of any Letter of Credit to occur without first obtaining written confirmation from the Administrative Agent that it is then permitted under this Agreement, (ii) on each Business Day on which such Issuing Bank pays any amount in respect of one or more drawings under Letters of Credit, the date of such payment(s) and the amount of such payment(s), (iii) on any Business Day on which the Borrower fails to reimburse any amount required to be reimbursed to such Issuing Bank on such day, the date of such failure and the amount and currency of such payment in respect of Letters of Credit and (iv) on any other Business Day, such other information as the Administrative Agent shall reasonably request.

SECTION 2.07. Funding of Borrowings. (a) Each Lender shall make each Loan to be made by it hereunder on the proposed date thereof solely by wire transfer of immediately available funds by 12:00 noon, New York City time, to the account of the Administrative Agent most recently designated by it for such purpose by notice to the Lenders; providedthat Swingline Loans shall be made as provided in Section 2.05. Except in respect of the provisions of this Agreement covering the reimbursement of Letters of Credit, the Administrative Agent will make such Loans available to the Borrower by promptly crediting the funds so received in the aforesaid account of the Administrative Agent to an account of the Borrower maintained with the Administrative Agent in New York City or Chicago and designated by the

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Borrower in the applicable Borrowing Request; providedthat ABR Revolving Loans made to finance the reimbursement of an LC Disbursement as provided in Section 2.06(e) shall be remitted by the Administrative Agent to the relevant Issuing Bank.

(b) Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing (or in the case of an ABR Borrowing, prior to 12:00 noon, New York City time, on the date of such Borrowing) that such Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with paragraph (a) of this Section and may, in reliance upon such assumption, make available to the Borrower a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Administrative Agent, at (i) in the case of such Lender, the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation or (ii) in the case of the Borrower, the interest rate applicable to ABR Loans. If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lender’s Loan included in such Borrowing.

SECTION 2.08. Interest Elections. (a) Each Revolving Borrowing initially shall be of the Type specified in the applicable Borrowing Request and, in the case of a Eurodollar Revolving Borrowing, shall have an initial Interest Period as specified in such Borrowing Request. Thereafter, the Borrower may elect to convert such Borrowing to a different Type or to continue such Borrowing and, in the case of a Eurodollar Revolving Borrowing, may elect Interest Periods therefor, all as provided in this Section. The Borrower may elect different options with respect to different portions of the affected Borrowing, in which case each such portion shall be allocated ratably among the Lenders holding the Loans comprising such Borrowing, and the Loans comprising each such portion shall be considered a separate Borrowing. This Section shall not apply to Swingline Borrowings, which may not be converted or continued.

(b)    To make an election pursuant to this Section, the Borrower shall notify the Administrative Agent of such election by telephone by the time that a Borrowing Request would be required under Section 2.03 if the Borrower were requesting a Revolving Borrowing of the Type resulting from such election to be made on the effective date of such election. Each such telephonic Interest Election Request shall be irrevocable and shall be confirmed promptly by hand delivery or telecopy to the Administrative Agent of a written Interest Election Request signed by the Borrower. Notwithstanding any contrary provision herein, this Section shall not be construed to permit the Borrower to elect an Interest Period for Eurodollar Loans that does not comply with Section 2.02(d).

(c)    Each telephonic and written Interest Election Request shall specify the following information in compliance with Section 2.02:

(i)    the Borrowing to which such Interest Election Request applies and, if different options are being elected with respect to different portions thereof, the portions thereof to be allocated to each resulting Borrowing (in which case the information to be specified pursuant to clauses (iii) and (iv) below shall be specified for each resulting Borrowing);

(ii)    the effective date of the election made pursuant to such Interest Election Request, which shall be a Business Day;

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(iii)    whether the resulting Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing; and

(iv)    if the resulting Borrowing is a Eurodollar Borrowing, the Interest Period to be applicable thereto after giving effect to such election, which Interest Period shall be a period contemplated by the definition of the term “Interest Period”.

If any such Interest Election Request requests a Eurodollar Borrowing but does not specify an Interest Period, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration.

(d)    Promptly following receipt of an Interest Election Request, the Administrative Agent shall advise each Lender of the details thereof and of such Lender’s portion of each resulting Borrowing.

(e)    If the Borrower fails to deliver a timely Interest Election Request with respect to a Eurodollar Revolving Borrowing prior to the end of the Interest Period applicable thereto, then, unless such Borrowing is repaid as provided herein, at the end of such Interest Period such Borrowing shall be converted to an ABR Borrowing. Notwithstanding any contrary provision hereof, if an Event of Default has occurred and is continuing and the Administrative Agent, at the request of the Required Lenders, so notifies the Borrower, then, so long as an Event of Default is continuing (i) no outstanding Revolving Borrowing may be converted to or continued as a Eurodollar Borrowing and (ii) unless repaid, each Eurodollar Revolving Borrowing shall be converted to an ABR Borrowing at the end of the Interest Period applicable thereto.

SECTION 2.09. Termination and Reduction of Commitments. (a) Unless previously terminated, the Commitments shall terminate on the Maturity Date.

(b)    The Borrower may at any time terminate, or from time to time reduce, the Commitments; providedthat (i) each reduction of the Commitments shall be in an amount that is an integral multiple of $1,000,000 and not less than $5,000,000 and (ii) the Borrower shall not terminate or reduce the Commitments if, after giving effect to any concurrent prepayment of the Loans in accordance with Section 2.11, the Total Revolving Credit Exposures would exceed the Aggregate Commitment.

(c)    The Borrower shall notify the Administrative Agent of any election to terminate or reduce the Commitments under paragraph (b) of this Section at least three (3) Business Days prior to the effective date of such termination or reduction, specifying such election and the effective date thereof. Promptly following receipt of any notice, the Administrative Agent shall advise the Lenders of the contents thereof. Each notice delivered by the Borrower pursuant to this Section shall be irrevocable; providedthat a notice of termination of the Commitments delivered by the Borrower may state that such notice is conditioned upon the effectiveness of other credit facilities or other transactions specified therein, in which case such notice may be revoked by the Borrower (by notice to the Administrative Agent on or prior to the specified effective date) if such condition is not satisfied. Any termination or reduction of the Commitments shall be permanent. Each reduction of the Commitments shall be made ratably among the Lenders in accordance with their respective Commitments.

SECTION 2.10. Repayment of Loans; Evidence of Debt. (a) The Borrower hereby unconditionally promises to pay (i) to the Administrative Agent for the account of each Lender the then unpaid principal amount of each Revolving Loan on the Maturity Date and (ii) to the Swingline Lender the then unpaid principal amount of each Swingline Loan on the earlier of the Maturity Date and the fifth (5th) Business Day after such Swingline Loan is made; providedthat on each date that a Revolving Borrowing is made, the Borrower shall repay all Swingline Loans then outstanding and the proceeds of

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any such Borrowing shall be applied by the Administrative Agent to repay any Swingline Loans outstanding.

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

(c)    The Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Loan made hereunder, the Class and Type thereof 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 and (iii) the amount of any sum received by the Administrative Agent hereunder for the account of the Lenders and each Lender’s share thereof.

(d)    The entries made in the accounts maintained pursuant to paragraph (b) or (c) of this Section shall be prima facieevidence of the existence and amounts of the obligations recorded therein; providedthat the failure of any Lender or the Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the Obligations.

(e)    Any Lender may request that Loans made by it be evidenced by a promissory note. In such event, the Borrower shall prepare, execute and deliver to such Lender a promissory note payable to such Lender (or, if requested by such Lender, to such Lender and its registered assigns) and in the form attached hereto as Exhibit H. Thereafter, the Loans evidenced by such promissory note and interest thereon shall at all times (including after assignment pursuant to Section 9.04) be represented by one or more promissory notes in such form.

SECTION 2.11. Prepayment of Loans. The Borrower shall have the right at any time and from time to time to prepay any Borrowing in whole or in part, subject to prior notice in accordance with the provisions of this Section 2.11. The Borrower shall notify the Administrative Agent (and, in the case of prepayment of a Swingline Loan, the Swingline Lender) by written notice (promptly followed by telephonic confirmation of such request) of any prepayment hereunder (i) in the case of prepayment of a Eurodollar Revolving Borrowing, not later than 11:00 a.m., New York City time, three (3) Business Days before the date of prepayment, (ii) in the case of prepayment of an ABR Revolving Borrowing, not later than 11:00 a.m., New York City time, one (1) Business Day before the date of prepayment or (iii) in the case of prepayment of a Swingline Loan, not later than 12:00 noon, New York City time, on the date of prepayment. Each such notice shall be irrevocable and shall specify the prepayment date and the principal amount of each Borrowing or portion thereof to be prepaid; providedthat, if a notice of prepayment is given in connection with a conditional notice of termination of the Commitments as contemplated by Section 2.09, then such notice of prepayment may be revoked if such notice of termination is revoked in accordance with Section 2.09. Promptly following receipt of any such notice relating to a Revolving Borrowing, the Administrative Agent shall advise the Lenders of the contents thereof. Each partial prepayment of any Revolving Borrowing shall be in an amount that would be permitted in the case of an advance of a Revolving Borrowing of the same Type as provided in Section 2.02. Each prepayment of a Revolving Borrowing shall be applied ratably to the Loans included in the prepaid Borrowing. Prepayments shall be accompanied by (i) accrued interest to the extent required by Section 2.13 and (ii) break funding payments pursuant to Section 2.16. If at any time the Total Revolving Credit Exposures exceed the Aggregate Commitment, the Borrower shall immediately repay Borrowings or cash collateralize LC Exposure in an account with the Administrative Agent pursuant to Section 2.06(j), as applicable, in an aggregate principal amount sufficient to cause the aggregate principal amount of the Total Revolving Credit Exposures to be less than or equal to the Aggregate Commitment.

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SECTION 2.12. Fees. (a) The Borrower agrees to pay to the Administrative Agent for the account of each Lender a commitment fee, which shall accrue at the Applicable Rate on the daily average amount of the Available Revolving Commitment of such Lender during the period from and including the Effective Date to but excluding the date on which such Commitment terminates. Accrued commitment fees shall be payable in arrears on the last day of March, June, September and December of each year and on the date on which the Commitments terminate, commencing on the first such date to occur after the date hereof. All commitment fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).

(b)    The Borrower agrees to pay (i) to the Administrative Agent for the account of each Lender a participation fee with respect to its participations in Letters of Credit, which shall accrue at the same Applicable Rate used to determine the interest rate applicable to Eurodollar Revolving Loans on the average daily amount of such Lender’s LC Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements) during the period from and including the Effective Date to but excluding the later of the date on which such Lender’s Commitment terminates and the date on which such Lender ceases to have any LC Exposure and (ii) to the relevant Issuing Bank for its own account a fronting fee, which shall accrue at the rate of 0.125% per annum on the average daily amount of the LC Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements) attributable to Letters of Credit issued by such Issuing Bank during the period from and including the Effective Date to but excluding the later of the date of termination of the Commitments and the date on which there ceases to be any LC Exposure, as well as such Issuing Bank’s standard fees and commissions with respect to the issuance, amendment, cancellation, negotiation, transfer, presentment, renewal or extension of any Letter of Credit or processing of drawings thereunder. Participation fees and fronting fees accrued through and including the last day of March, June, September and December of each year shall be payable on the third (3rd) Business Day following such last day, commencing on the first such date to occur after the Effective Date; providedthat all such fees shall be payable on the date on which the Commitments terminate and any such fees accruing after the date on which the Commitments terminate shall be payable on demand. Any other fees payable to any Issuing Bank pursuant to this paragraph shall be payable within ten

(10) days after demand. All participation fees and fronting fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).

(c)    The Borrower agrees to pay to the Administrative Agent, for its own account, fees payable in the amounts and at the times separately agreed upon between the Borrower and the Administrative Agent.

(d)    All fees payable hereunder shall be paid on the dates due, in immediately available funds, to the Administrative Agent (or to the relevant Issuing Bank, in the case of fees payable to it) for distribution, in the case of commitment fees and participation fees, to the Lenders. Fees paid shall not be refundable under any circumstances.

SECTION 2.13. Interest. (a) The Loans comprising each ABR Borrowing (including each Swingline Loan) shall bear interest at the Alternate Base Rate plus the Applicable Rate.

(b)    The Loans comprising each Eurodollar Borrowing shall bear interest at the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus the Applicable Rate.

(c)    Notwithstanding the foregoing, if any principal of or interest on any Loan or any fee or other amount payable by the Borrower hereunder is not paid when due, whether at stated maturity, upon acceleration or otherwise, such overdue amount shall bear interest, after as well as before judgment, at a rate per annum equal to (i) in the case of overdue principal of any Loan, 2% plus the rate otherwise

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applicable to such Loan as provided in the preceding paragraphs of this Section or (ii) in the case of any other amount, 2% plus the rate applicable to ABR Loans as provided in paragraph (a) of this Section.

(d)    Accrued interest on each Loan shall be payable in arrears on each Interest Payment Date for such Loan and upon termination of the Commitments; providedthat (i) interest accrued pursuant to paragraph (c) of this Section shall be payable on demand, (ii) in the event of any repayment or prepayment of any Loan (other than a prepayment of an ABR Revolving Loan prior to the end of the Availability Period), accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment and (iii) in the event of any conversion of any Eurodollar Revolving Loan prior to the end of the current Interest Period therefor, accrued interest on such Loan shall be payable on the effective date of such conversion.

(e)    All interest hereunder shall be computed on the basis of a year of 360 days, except that interest computed by reference to the Alternate Base Rate at times when the Alternate Base Rate is based on the Prime Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap year), and in each case shall be payable for the actual number of days elapsed (including the first day but excluding the last day). The applicable Alternate Base Rate, Adjusted LIBO Rate or LIBO Rate shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error.

SECTION 2.14. Alternate Rate of Interest. If prior to the commencement of any Interest Period for a Eurodollar Borrowing:

(a)    the Administrative Agent determines (which determination shall be conclusive and binding absent manifest error) that adequate and reasonable means do not exist for ascertaining the Adjusted LIBO Rate or the LIBO Rate, as applicable, for such Interest Period; or

(b)    the Administrative Agent is advised by the Required Lenders that the Adjusted LIBO Rate or the LIBO Rate, as applicable, for such Interest Period will not adequately and fairly reflect the cost to such Lenders of making or maintaining their Loans included in such Borrowing for such Interest Period;

then the Administrative Agent shall give notice thereof to the Borrower and the Lenders by telephone or telecopy as promptly as practicable thereafter and, until the Administrative Agent notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer exist, (i) any Interest Election Request that requests the conversion of any Borrowing to, or continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective and any such Eurodollar Borrowing shall be repaid on the last day of the then current Interest Period applicable thereto and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such Borrowing shall be made as an ABR Borrowing.

SECTION 2.15.    Increased Costs. (a) If any Change in Law shall:

(i)    impose, modify or deem applicable any reserve, special deposit, liquidity or similar requirement (including any compulsory loan requirement, insurance charge or other assessment) against assets of, deposits with or for the account of, or credit extended by, any Lender (except any such reserve requirement reflected in the Adjusted LIBO Rate) or any Issuing Bank;

(ii)    impose on any Lender or any Issuing Bank or the London interbank market any other condition, cost or expense (other than Taxes) affecting this Agreement or Loans made by such Lender or any Letter of Credit or participation therein; or

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(iii)    subject any Recipient to any Taxes (other than (A) Indemnified Taxes, (B) Taxes described in clauses (b) through (d) of the definition of Excluded Taxes and (C) Connection Income Taxes) on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto;

and the result of any of the foregoing shall be to increase the cost to such Lender or such other Recipient of making, continuing, converting into or maintaining any Loan or of maintaining its obligation to make any such Loan or to increase the cost to such Lender, such Issuing Bank or such other Recipient of participating in, issuing or maintaining any Letter of Credit or to reduce the amount of any sum received or receivable by such Lender, such Issuing Bank or such other Recipient hereunder, whether of principal, interest or otherwise, then the Borrower will pay to such Lender, such Issuing Bank or such other Recipient, as the case may be, such additional amount or amounts as will compensate such Lender, such Issuing Bank or such other Recipient, as the case may be, for such additional costs incurred or reduction suffered.

(b)    If any Lender or any Issuing Bank determines that any Change in Law regarding capital or liquidity requirements has or would have the effect of reducing the rate of return on such Lender’s or such Issuing Bank’s capital or on the capital of such Lender’s or such Issuing Bank’s holding company, if any, as a consequence of this Agreement or the Loans made by, or participations in Letters of Credit held by, such Lender, or the Letters of Credit issued by such Issuing Bank, to a level below that which such Lender or such Issuing Bank or such Lender’s or such Issuing Bank’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s or such Issuing Bank’s policies and the policies of such Lender’s or such Issuing Bank’s holding company with respect to capital adequacy and liquidity), then from time to time the Borrower will pay to such Lender or such Issuing Bank, as the case may be, such additional amount or amounts as will compensate such Lender or such Issuing Bank or such Lender’s or such Issuing Bank’s holding company for any such reduction suffered.

(c)    A certificate of a Lender or an Issuing Bank setting forth the amount or amounts necessary to compensate such Lender or such Issuing Bank or its holding company, as the case may be, as specified in paragraph (a) or (b) of this Section shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay such Lender or such Issuing Bank, as the case may be, the amount shown as due on any such certificate within ten (10) days after receipt thereof.

(d)    Failure or delay on the part of any Lender or any Issuing Bank to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s or such Issuing Bank’s right to demand such compensation; providedthat the Borrower shall not be required to compensate a Lender or an Issuing Bank pursuant to this Section for any increased costs or reductions incurred more than 270 days prior to the date that such Lender or such Issuing Bank, as the case may be, notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender’s or such Issuing Bank’s intention to claim compensation therefor; provided furtherthat, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the 270-day period referred to above shall be extended to include the period of retroactive effect thereof.

SECTION 2.16. Break Funding Payments. In the event of (a) the payment of any principal of any Eurodollar Loan other than on the last day of an Interest Period applicable thereto (including as a result of an Event of Default or as a result of any prepayment pursuant to Section 2.11),

(b)    the conversion of any Eurodollar Loan other than on the last day of the Interest Period applicable thereto, (c) the failure to borrow, convert, continue or prepay any Eurodollar Loan on the date specified in any notice delivered pursuant hereto (regardless of whether such notice may be revoked under Section 2.11 and is revoked in accordance therewith) or (d) the assignment of any Eurodollar Loan other

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than on the last day of the Interest Period applicable thereto as a result of a request by the Borrower pursuant to Section 2.19, then, in any such event, the Borrower shall compensate each Lender for the loss, cost and expense attributable to such event (other than loss of anticipated profits). Such loss, cost or expense to any Lender shall be deemed to include an amount reasonably determined by such Lender to be the excess, if any, of (i) the amount of interest which would have accrued on the principal amount of such Loan had such event not occurred, at the Adjusted LIBO Rate that would have been applicable to such Loan, for the period from the date of such event to the last day of the then current Interest Period therefor (or, in the case of a failure to borrow, convert or continue, for the period that would have been the Interest Period for such Loan), over (ii) the amount of interest which would accrue on such principal amount for such period at the interest rate which such Lender would bid were it to bid, at the commencement of such period, for deposits in Dollars of a comparable amount and period from other banks in the eurodollar market. A written certificate of any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this Section and describing in writing the basis therefor in a reasonably detailed fashion shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay such Lender the amount shown as due on any such written certificate within fifteen

(15) Business Days after receipt thereof.

SECTION 2.17. Taxes. (a) Payments Free of Taxes. Any and all payments by or on account of any obligation of any Loan Party under any Loan Document shall be made without deduction or withholding for any Taxes, except as required by applicable law. If any applicable law (as determined in the good faith discretion of an applicable withholding agent) requires the deduction or withholding of any Tax from any such payment by a withholding agent, then the applicable withholding agent shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law and, if such Tax is an Indemnified Tax, then the sum payable by the applicable Loan Party shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this Section 2.17) the applicable Recipient receives an amount equal to the sum it would have received had no such deduction or withholding been made.

(b)    Payment of Other Taxes by the Borrower. The Borrower shall timely pay to the relevant Governmental Authority in accordance with applicable law, or at the option of the Administrative Agent timely reimburse it for, Other Taxes.

(c)    Evidence of Payments. As soon as practicable after any payment of Taxes by any Loan Party to a Governmental Authority pursuant to this Section 2.17, such Loan Party shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.

(d)    Indemnification by the Loan Parties. The Loan Parties shall indemnify each Recipient, within fifteen (15) Business Days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section) payable or paid by such Recipient or required to be withheld or deducted from a payment to such Recipient and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error. No Loan Party shall be required to pay any amount under this Section 2.14(d) with respect to any Other Taxes paid or reimbursed by a Loan Party pursuant to Section 2.14(b).

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(e)    Indemnification by the Lenders. Each Lender shall severally indemnify the Administrative Agent, within 10 days after demand therefor, for (i) any Indemnified Taxes attributable to such Lender (but only to the extent that any Loan Party has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Loan Parties to do so), (ii) any Taxes attributable to such Lender’s failure to comply with the provisions of Section 9.04(c) relating to the maintenance of a Participant Register and (iii) any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by the Administrative Agent in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error. Each Lender hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender under any Loan Document or otherwise payable by the Administrative Agent to the Lender from any other source against any amount due to the Administrative Agent under this paragraph (e).

(f)    Status of Lenders. (i) Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document shall deliver to the Borrower and the Administrative Agent, at the time or times reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation reasonably requested by the Borrower or the Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Lender, if reasonably requested by the Borrower or the Administrative Agent, shall 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. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Section 2.17(f)(ii)(A), (ii)(B) and (ii)(D) below) shall not be required if in the Lender’s reasonable judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.

(ii)    Without limiting the generality of the foregoing, in the event that the Borrower is a U.S. Person:

(A)    any Lender that is a U.S. Person shall deliver to the Borrower and the Administrative Agent on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), an executed IRS Form W-9 certifying that such Lender is exempt from U.S. Federal backup withholding tax;

(B)    any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), whichever of the following is applicable:

(1)    in the case of a Foreign Lender claiming the benefits of an income tax treaty to which the United States is a party (x) with respect to payments of interest under any Loan Document, an executed IRS Form W-8BEN or IRS Form W- 8BEN-E establishing an exemption from, or reduction of, U.S. Federal

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withholding Tax pursuant to the “interest” article of such tax treaty and (y) with respect to any other applicable payments under any Loan Document, IRS Form W-8BEN or IRS Form W-8BEN-E establishing an exemption from, or reduction of, U.S. Federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;

(2)    in the case of a Foreign Lender claiming that its extension of credit will generate U.S. effectively connected income, an executed IRS Form W-8ECI;

(3)    in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate substantially in the form of Exhibit F-1to the effect that such Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”) and (y) an executed IRS Form W-8BEN or IRS Form W-8BEN-E; or

(4)    to the extent a Foreign Lender is not the beneficial owner, an executed IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN or IRS Form W-8BEN-E, a U.S. Tax Compliance Certificate substantially in the form of Exhibit F-2or Exhibit F-3, IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable; providedthat if the Foreign Lender is a partnership and one or more direct or indirect partners of such Foreign Lender are claiming the portfolio interest exemption, such Foreign Lender may provide a

U.S. Tax Compliance Certificate substantially in the form of Exhibit F-4on behalf of each such direct and indirect partner;

(C)    any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed originals of any other form prescribed by applicable law as a basis for claiming exemption from or a reduction in U.S. Federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by applicable law to permit the Borrower or the Administrative Agent to determine the withholding or deduction required to be made; and

(D)    if a payment made to a Lender under any Loan Document would be subject to U.S. Federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower and the Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or the Administrative Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely

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for purposes of this clause (D), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

Each Lender agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Borrower and the Administrative Agent in writing of its legal inability to do so.

(g)    Treatment of Certain Refunds. If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section 2.17 (including by the payment of additional amounts pursuant to this Section 2.17), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section 2.17 with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this paragraph (g) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this paragraph (g), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this paragraph (g) the payment of which would place the indemnified party in a less favorable net after- Tax position than the indemnified party would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid. This paragraph shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.

(h)    Survival.Each party’s obligations under this Section 2.17 shall survive the resignation or replacement of the Administrative Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all obligations under any Loan Document.

(i)    Defined Terms. For purposes of this Section 2.17, the term “Lender” includes each Issuing Bank and the term “applicable law” includes FATCA.

SECTION 2.18. Payments Generally; Allocations of Proceeds; Pro Rata Treatment; Sharing of Set-offs.

(a)    The Borrower shall make each payment required to be made by it hereunder (whether of principal, interest, fees or reimbursement of LC Disbursements, or of amounts payable under Section 2.15, 2.16 or 2.17, or otherwise) prior to 2:00 p.m., New York City time on the date when due, in immediately available funds, without set-off or counterclaim. Any amounts received after such time on any date may, in the discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon. All such payments shall be made to the Administrative Agent at its offices at 10 South Dearborn Street, Chicago, Illinois 60603, except payments to be made directly to any Issuing Bank or the Swingline Lender as expressly provided herein and except that payments pursuant to Sections 2.15, 2.16, 2.17 and 9.03 shall be made directly to the Persons entitled thereto. The Administrative Agent shall distribute any such payments received by it for the account of any other Person to the appropriate recipient promptly following receipt thereof. If any payment hereunder shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case of any payment accruing interest, interest

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thereon shall be payable for the period of such extension. All payments hereunder shall be made in Dollars.

(b)    Any proceeds of Collateral received by the Administrative Agent (i) not constituting a specific payment of principal, interest, fees or other sum payable under the Loan Documents (which shall be applied as specified by the Borrower) or (ii) after an Event of Default has occurred and is continuing and the Administrative Agent so elects or the Required Lenders so direct, such funds shall be applied ratably first, to pay any fees, indemnities, or expense reimbursements including amounts then due to the Administrative Agent and the Issuing Banks from the Borrower, second, to pay any fees or expense reimbursements then due to the Lenders from the Borrower, third, to pay interest then due and payable on the Loans ratably, fourth, to prepay principal on the Loans and unreimbursed LC Disbursements and any other amounts owing with respect to Banking Services Obligations and Swap Obligations ratably, fifth, to pay an amount to the Administrative Agent equal to one hundred five percent (105%) of the aggregate undrawn face amount of all outstanding Letters of Credit and the aggregate amount of any unpaid LC Disbursements, to be held as cash collateral for such Obligations, and sixth, to the payment of any other Secured Obligation due to the Administrative Agent or any Lender by the Borrower. Notwithstanding the foregoing, amounts received from any Loan Party shall not be applied to any Excluded Swap Obligation of such Loan Party. Notwithstanding anything to the contrary contained in this Agreement, unless so directed by the Borrower, or unless a Default is in existence, none of the Administrative Agent or any Lender shall apply any payment which it receives to any Eurodollar Loan of a Class, except (a) on the expiration date of the Interest Period applicable to any such Eurodollar Loan or

(b)    in the event, and only to the extent, that there are no outstanding ABR Loans of the same Class and, in any event, the Borrower shall pay the break funding payment required in accordance with Section 2.16. The Administrative Agent and the Lenders shall have the continuing and exclusive right to apply and reverse and reapply any and all such proceeds and payments to any portion of the Secured Obligations.

(c)    At the election of the Administrative Agent, all payments of principal, interest, LC Disbursements, fees, premiums, reimbursable expenses (including, without limitation, all reimbursement for fees and expenses pursuant to Section 9.03), and other sums payable under the Loan Documents, may be paid from the proceeds of Borrowings made hereunder whether made following a request by the Borrower pursuant to Section 2.03 or a deemed request as provided in this Section or may be deducted from any deposit account of the Borrower maintained with the Administrative Agent. The Borrower hereby irrevocably authorizes (i) the Administrative Agent to make a Borrowing for the purpose of paying each payment of principal, interest and fees as it becomes due hereunder or any other amount due under the Loan Documents and agrees that all such amounts charged shall constitute Loans (including Swingline Loans) and that all such Borrowings shall be deemed to have been requested pursuant to Sections 2.03 or 2.05, as applicable and (ii) the Administrative Agent to charge any deposit account of the Borrower maintained with the Administrative Agent for each payment of principal, interest and fees as it becomes due hereunder or any other amount due under the Loan Documents.

(d)    If any Lender shall, by exercising any right of set-off or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Revolving Loans or participations in LC Disbursements or Swingline Loans resulting in such Lender receiving payment of a greater proportion of the aggregate amount of its Revolving Loans and participations in LC Disbursements and Swingline Loans and accrued interest thereon than the proportion received by any other Lender, then the Lender receiving such greater proportion shall purchase (for cash at face value) participations in the Revolving Loans and participations in LC Disbursements and Swingline Loans of other Lenders to the extent necessary so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Revolving Loans and participations in LC Disbursements and Swingline Loans; providedthat

(i) if any such participations are purchased and all or any portion of the payment giving rise thereto is

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recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest, and (ii) the provisions of this paragraph shall not be construed to apply to any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement or any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or participations in LC Disbursements and Swingline Loans to any assignee or participant, other than to the Borrower or any Subsidiary or Affiliate thereof (as to which the provisions of this paragraph shall apply). The Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrower rights of set-off and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Borrower in the amount of such participation.

(e)    Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders or the relevant Issuing Bank hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or the relevant Issuing Bank, as the case may be, the amount due. In such event, if the Borrower has not in fact made such payment, then each of the Lenders or the relevant Issuing Bank, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender or such Issuing Bank with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.

(f)    If any Lender shall fail to make any payment required to be made by it pursuant to Section 2.05(c), 2.06(d) or (e), 2.07(b), 2.18(e) or 9.03(c), then the Administrative Agent may, in its discretion (notwithstanding any contrary provision hereof), (i) apply any amounts thereafter received by the Administrative Agent for the account of such Lender and for the benefit of the Administrative Agent, the Swingline Lender or the Issuing Banks to satisfy such Lender’s obligations to it under such Section until all such unsatisfied obligations are fully paid and/or (ii) hold any such amounts in a segregated account over which the Administrative Agent shall have exclusive control as cash collateral for, and application to, any future funding obligations of such Lender under any such Section; in the case of each of clauses (i) and (ii) above, in any order as determined by the Administrative Agent in its discretion.

SECTION 2.19. Mitigation Obligations; Replacement of Lenders. (a) If any Lender requests compensation under Section 2.15, or the Borrower is required to pay any Indemnified Taxes or additional amounts to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.17, then such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or Affiliates, if, in the judgment of such Lender, such designation or assignment

(i) would eliminate or reduce amounts payable pursuant to Section 2.15 or 2.17, as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.

(b) If (i) any Lender requests compensation under Section 2.15, (ii) the Borrower is required to pay any Indemnified Taxes or additional amounts to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.17 or (iii) any Lender becomes a Defaulting Lender, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with

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and subject to the restrictions contained in Section 9.04), all its interests, rights (other than its existing rights to payments pursuant to Sections 2.15 or 2.17) and obligations under the Loan Documents to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); providedthat (i) the Borrower shall have received the prior written consent of the Administrative Agent (and if a Commitment is being assigned, the Issuing Banks and the Swingline Lender), which consent shall not unreasonably be withheld, conditioned or delayed, (ii) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans and participations in LC Disbursements and Swingline Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts) and (iii) in the case of any such assignment resulting from a claim for compensation under Section 2.15 or payments required to be made pursuant to Section 2.17, such assignment will result in a reduction in such compensation or payments. A Lender shall not be required to make any such assignment and delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.

SECTION 2.20. Expansion Option. The Borrower may from time to time elect to increase the Commitments or enter into one or more tranches of term loans (each an “Incremental Term Loan”), in each case in minimum increments of $5,000,000 so long as, after giving effect thereto, the aggregate amount of such increases and all such Incremental Term Loans does not exceed $75,000,000. The Borrower may arrange for any such increase or tranche to be provided by one or more Lenders (each Lender so agreeing to an increase in its Commitment, or to participate in such Incremental Term Loans, an “Increasing Lender”), or by one or more new banks, financial institutions or other entities (each such new bank, financial institution or other entity, an “Augmenting Lender”; providedthat no Ineligible Institution may be an Augmenting Lender), which agree to increase their existing Commitments, or to participate in such Incremental Term Loans, or provide new Commitments, as the case may be; providedthat (i) each Augmenting Lender, shall be subject to the approval of the Borrower and the Administrative Agent and (ii) (x) in the case of an Increasing Lender, the Borrower and such Increasing Lender execute an agreement substantially in the form of Exhibit Chereto, and (y) in the case of an Augmenting Lender, the Borrower and such Augmenting Lender execute an agreement substantially in the form of Exhibit Dhereto. No consent of any Lender (other than the Lenders participating in the increase or any Incremental Term Loan) shall be required for any increase in Commitments or Incremental Term Loan pursuant to this Section 2.20. Increases and new Commitments and Incremental Term Loans created pursuant to this Section 2.20 shall become effective on the date agreed by the Borrower, the Administrative Agent and the relevant Increasing Lenders or Augmenting Lenders, and the Administrative Agent shall notify each Lender thereof. Notwithstanding the foregoing, no increase in the Commitments (or in the Commitment of any Lender) or tranche of Incremental Term Loans shall become effective under this paragraph unless,

(i) on the proposed date of the effectiveness of such increase or Incremental Term Loans, (A) the conditions set forth in paragraphs (a) and (b) of Section 4.02 shall be satisfied or waived by the Required Lenders and the Administrative Agent shall have received a certificate to that effect dated such date and executed by a Financial Officer of the Borrower and (B) the Borrower shall be in compliance (on a pro forma basis) with the covenants contained in Section 6.11 and (ii) the Administrative Agent shall have received documents and opinions consistent with those delivered on the Effective Date as to the organizational power and authority of the Borrower to borrow hereunder after giving effect to such increase. On the effective date of any increase in the Commitments or any Incremental Term Loans being made, (i) each relevant Increasing Lender and Augmenting Lender shall make available to the Administrative Agent such amounts in immediately available funds as the Administrative Agent shall determine, for the benefit of the other Lenders, as being required in order to cause, after giving effect to such increase and the use of such amounts to make payments to such other Lenders, each Lender’s portion of the outstanding Revolving Loans of all the Lenders to equal its Applicable Percentage of such outstanding Revolving Loans, and (ii) the Borrower shall be deemed to have repaid and reborrowed all

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outstanding Revolving Loans as of the date of any increase in the Commitments (with such reborrowing to consist of the Types of Revolving Loans, with related Interest Periods if applicable, specified in a notice delivered by the Borrower, in accordance with the requirements of Section 2.03). The deemed payments made pursuant to clause (ii) of the immediately preceding sentence shall be accompanied by payment of all accrued interest on the amount prepaid and, in respect of each Eurodollar Loan, shall be subject to indemnification by the Borrower pursuant to the provisions of Section 2.16 if the deemed payment occurs other than on the last day of the related Interest Periods. The Incremental Term Loans

(a)    shall rank pari passu in right of payment with the Revolving Loans, (b) shall not mature earlier than the Maturity Date (but may have amortization prior to such date) and (c) shall be treated substantially the same as (and in any event no more favorably than) the Revolving Loans; provided that (i) the terms and conditions applicable to any tranche of Incremental Term Loans maturing after the Maturity Date may provide for material additional or different financial or other covenants or prepayment requirements applicable only during periods after the Maturity Date and (ii) the Incremental Term Loans may be priced differently than the Revolving Loans. Incremental Term Loans may be made hereunder pursuant to an amendment or restatement (an “Incremental Term Loan Amendment”) of this Agreement and, as appropriate, the other Loan Documents, executed by the Borrower, each Increasing Lender participating in such tranche, each Augmenting Lender participating in such tranche, if any, and the Administrative Agent. The Incremental Term Loan Amendment may, without the consent of any other Lenders, effect such amendments to this Agreement and the other Loan Documents as may be necessary or appropriate, in the reasonable opinion of the Administrative Agent, to effect the provisions of this Section 2.20. Nothing contained in this Section 2.20 shall constitute, or otherwise be deemed to be, a commitment on the part of any Lender to increase its Commitment hereunder, or provide Incremental Term Loans, at any time.

SECTION 2.21. Defaulting Lenders. Notwithstanding any provision of this Agreement to the contrary, if any Lender becomes a Defaulting Lender, then the following provisions shall apply for so long as such Lender is a Defaulting Lender:

(a)    fees shall cease to accrue on the unfunded portion of the Commitment of such Defaulting Lender pursuant to Section 2.12(a);

(b)    the Commitment and Revolving Credit Exposure of such Defaulting Lender shall not be included in determining whether the Required Lenders have taken or may take any action hereunder (including any consent to any amendment, waiver or other modification pursuant to Section 9.02);

(c)    if any Swingline Exposure or LC Exposure exists at the time such Lender becomes a Defaulting Lender then:

(i)    all or any part of the Swingline Exposure and LC Exposure of such Defaulting Lender shall be reallocated among the non-Defaulting Lenders in accordance with their respective Applicable Percentages but only to the extent that the sum of all non-Defaulting Lenders’ Revolving Credit Exposures plus such Defaulting Lender’s Swingline Exposure and LC Exposure does not exceed the total of all non-Defaulting Lenders’ Commitments;

(ii)    if the reallocation described in clause (i) above cannot, or can only partially, be effected, the Borrower shall within one (1) Business Day following notice by the Administrative Agent (x) first, prepay such Swingline Exposure and (y) second, cash collateralize for the benefit of each Issuing Bank only the Borrower’s obligations corresponding to such Defaulting Lender’s LC Exposure (after giving effect to any partial reallocation pursuant to clause (i) above) in

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accordance with the procedures set forth in Section 2.06(j) for so long as such LC Exposure is outstanding;

(iii)    if the Borrower cash collateralizes any portion of such Defaulting Lender’s LC Exposure pursuant to clause (ii) above, the Borrower shall not be required to pay any fees to such Defaulting Lender pursuant to Section 2.12(b) with respect to such Defaulting Lender’s LC Exposure during the period such Defaulting Lender’s LC Exposure is cash collateralized;

(iv)    if the LC Exposure of the non-Defaulting Lenders is reallocated pursuant to clause (i) above, then the fees payable to the Lenders pursuant to Section 2.12(a) and Section 2.12(b) shall be adjusted in accordance with such non-Defaulting Lenders’ Applicable Percentages; and

(v)    if all or any portion of such Defaulting Lender’s LC Exposure is neither reallocated nor cash collateralized pursuant to clause (i) or (ii) above, then, without prejudice to any rights or remedies of any Issuing Bank or any other Lender hereunder, all letter of credit fees payable under Section 2.12(b) with respect to such Defaulting Lender’s LC Exposure shall be payable to the relevant Issuing Bank until and to the extent that such LC Exposure is reallocated and/or cash collateralized; and

(d)    so long as such Lender is a Defaulting Lender, the Swingline Lender shall not be required to fund any Swingline Loan and no Issuing Bank shall be required to issue, amend or increase any Letter of Credit, unless it is satisfied that the related exposure and the Defaulting Lender’s then outstanding LC Exposure will be 100% covered by the Commitments of the non-Defaulting Lenders and/or cash collateral will be provided by the Borrower in accordance with Section 2.21(c), and participating interests in any such newly made Swingline Loan or any newly issued or increased Letter of Credit shall be allocated among non-Defaulting Lenders in a manner consistent with Section 2.21(c)(i) (and such Defaulting Lender shall not participate therein).

If (i) a Bankruptcy Event or a Bail-In Action with respect to a Lender Parent shall occur following the date hereof and for so long as such event shall continue or (ii) the Swingline Lender or any Issuing Bank has a good faith belief that any Lender has defaulted in fulfilling its obligations under one or more other agreements in which such Lender commits to extend credit, the Swingline Lender shall not be required to fund any Swingline Loan and no Issuing Bank shall be required to issue, amend or increase any Letter of Credit, unless the Swingline Lender or the relevant Issuing Bank, as the case may be, shall have entered into arrangements with the Borrower or such Lender, satisfactory to the Swingline Lender or such Issuing Bank, as the case may be, to defease any risk to it in respect of such Lender hereunder.

In the event that the Administrative Agent, the Borrower, the Swingline Lender and each Issuing Bank each agrees that a Defaulting Lender has adequately remedied all matters that caused such Lender to be a Defaulting Lender, then the Swingline Exposure and LC Exposure of the Lenders shall be readjusted to reflect the inclusion of such Lender’s Commitment and on such date such Lender shall purchase at par such of the Loans of the other Lenders (other than Swingline Loans) as the Administrative Agent shall determine may be necessary in order for such Lender to hold such Loans in accordance with its Applicable Percentage.

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ARTICLE III

Representations and Warranties

The Borrower represents and warrants to the Lenders that:

SECTION 3.01. Organization; Powers; Subsidiaries. Each of the Borrower and its Subsidiaries is duly organized, validly existing and (to the extent the concept is applicable in such jurisdiction) in good standing under the laws of the jurisdiction of its organization, has all requisite power and authority to carry on its business as now conducted and, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, is qualified to do business in, and (to the extent the concept is applicable in such jurisdiction) is in good standing in, every jurisdiction where the failure to be so qualified could reasonably be expected to result in a Material Adverse Effect. Schedule 3.01hereto identifies each Subsidiary, noting whether such Subsidiary is a Material Domestic Subsidiary, the jurisdiction of its incorporation or organization, as the case may be, the percentage of issued and outstanding shares of each class of its capital stock or other equity interests owned by the Borrower and the other Subsidiaries and, if such percentage is not 100% (excluding directors’ qualifying shares as required by law), a description of each class issued and outstanding. All of the outstanding shares of capital stock and other equity interests of each Subsidiary are validly issued and outstanding and fully paid and nonassessable and all such shares and other equity interests indicated on Schedule 3.01as owned by the Borrower or another Subsidiary are owned, beneficially and of record, by the Borrower or any Subsidiary free and clear of all Liens, other than Liens created under the Loan Documents and Liens permitted by Section 6.02. There are no outstanding commitments or other obligations of the Borrower or any Subsidiary to issue, and no options, warrants or other rights of any Person to acquire, any shares of any class of capital stock or other equity interests of the Borrower or any Subsidiary.

SECTION 3.02. Authorization; Enforceability. The Transactions are within each Loan Party’s organizational powers and have been duly authorized by all necessary organizational actions and, if required, actions by equity holders. The Loan Documents to which each Loan Party is a party have been duly executed and delivered by such Loan Party and constitute a legal, valid and binding obligation of such Loan Party, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

SECTION 3.03. Governmental Approvals; No Conflicts. The Transactions (a) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except such as have been obtained or made and are in full force and effect and except for filings necessary to perfect Liens created pursuant to the Loan Documents, (b) will not violate any applicable law or regulation or the charter, by-laws or other organizational documents of the Borrower or any of its Subsidiaries or any order of any Governmental Authority, (c) will not violate or result in a default under any indenture, agreement or other instrument binding upon the Borrower or any of its Subsidiaries or its assets, or give rise to a right thereunder to require any payment to be made by the Borrower or any of its Subsidiaries (except, in the case of this clause (c), for any such violations, defaults or rights that could not reasonably be expected to result in a Material Adverse Effect), and (d) will not result in the creation or imposition of any Lien on any asset of the Borrower or any of its Subsidiaries, other than Liens created under the Loan Documents.

SECTION 3.04. Financial Condition; No Material Adverse Change. (a) The Borrower has heretofore furnished to the Lenders its consolidated balance sheet and statements of income, stockholders equity and cash flows (i) as of and for the fiscal year ended December 31, 2015

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reported on by Deloitte & Touche LLP, independent public accountants, and (ii) as of and for the fiscal quarter and the portion of the fiscal year ended March 31, 2016 and June 30, 2016, certified by its chief financial officer. Such financial statements present fairly, in all material respects, the financial position and results of operations and cash flows of the Borrower and its consolidated Subsidiaries as of such dates and for such periods in accordance with GAAP, subject to year-end audit adjustments and the absence of footnotes in the case of the statements referred to in clause (ii) above.

(b) Since December 31, 2015, there has been no material adverse change in the business, assets, operations or financial condition of the Borrower and its Subsidiaries, taken as a whole.

SECTION 3.05. Properties. (a) Each of the Borrower and its Subsidiaries has good title to, or valid leasehold interests in, all its real and personal property material to its business, except for minor defects in title that do not interfere with its ability to conduct its business as currently conducted or to utilize such properties for their intended purposes.

(b) Each of the Borrower and its Subsidiaries owns, or is licensed to use, all trademarks, tradenames, copyrights, patents and other intellectual property material to its business, and the use thereof by the Borrower and its Subsidiaries does not infringe upon the rights of any other Person, except for any such infringements that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

SECTION 3.06. Litigation, Environmental and Labor Matters. (a) There are no actions, suits, proceedings or investigations by or before any arbitrator or Governmental Authority pending against or, to the knowledge of the Borrower, threatened against or affecting the Borrower or any of its Subsidiaries (i) that could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect or (ii) that involve this Agreement or the Transactions.

(b)    Except with respect to any matters that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, neither the Borrower nor any of its Subsidiaries (i) has failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, (ii) has become subject to any Environmental Liability, (iii) has received notice of any claim against Borrower or any of its Subsidiaries with respect to any Environmental Liability or (iv) knows of any basis for any Environmental Liability.

(c)    There are no strikes, lockouts or slowdowns against the Borrower or any of its Subsidiaries pending or, to their knowledge, threatened that have resulted in, or could reasonably be expected to result in, a Material Adverse Effect. The hours worked by and payments made to employees of the Borrower and its Subsidiaries have not been in violation of the Fair Labor Standards Act or any other applicable Federal, state, local or foreign law relating to such matters that has resulted in, or could reasonably be expected to result in, a Material Adverse Effect. All material payments due from the Borrower or any of its Subsidiaries, or for which any claim may be made against the Borrower or any of its Subsidiaries, on account of wages and employee health and welfare insurance and other benefits, have been paid or accrued as liabilities on the books of the Borrower or such Subsidiary, except to the extent that the failure to do so has not resulted in, and could not reasonably be expected to result in, a Material Adverse Effect. The consummation of the Transactions will not give rise to any right of termination or right of renegotiation on the part of any union under any collective bargaining agreement under which the Borrower or any of its Subsidiaries is bound.

SECTION 3.07. Compliance with Laws and Agreements. Each of the Borrower and its Subsidiaries is in compliance with all laws, regulations and orders of any Governmental Authority

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applicable to it or its property and all indentures, agreements and other instruments binding upon it or its property, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

SECTION 3.08. Investment Company Status. Neither the Borrower nor any of its Subsidiaries is an “investment company” as defined in, or subject to regulation under, the Investment Company Act of 1940.

SECTION 3.09. Taxes. Each of the Borrower and its Subsidiaries has timely filed or caused to be filed all Tax returns and reports required to have been filed and has paid or caused to be paid all Taxes required to have been paid by it, except (a) Taxes that are being contested in good faith by appropriate proceedings and for which the Borrower or such Subsidiary, as applicable, has set aside on its books adequate reserves or (b) to the extent that the failure to do so could not reasonably be expected to result in a Material Adverse Effect.

SECTION 3.10. ERISA. No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events for which liability is reasonably expected to occur, could reasonably be expected to result in a Material Adverse Effect.

SECTION 3.11. Disclosure. The Borrower has disclosed to the Lenders all agreements, instruments and corporate or other restrictions to which it or any of its Subsidiaries is subject, and all other matters known to it, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. None of the reports, financial statements, certificates or other information furnished by or on behalf of the Borrower or any Subsidiary to the Administrative Agent or any Lender in connection with the negotiation of this Agreement or delivered hereunder (taken as a whole and as modified or supplemented by other information so furnished and other than projections, budgets, forecasts, estimates and other forward looking information or information of a general economic or industry specific nature) contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; providedthat, with respect to projected financial information, the Borrower represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time.

SECTION 3.12. Federal Reserve Regulations. No part of the proceeds of any Loan have been used or will be used, whether directly or indirectly, for any purpose that entails a violation of any of the Regulations of the Board, including Regulations T, U and X.

SECTION 3.13. Liens. There are no Liens on any of the real or personal properties of the Borrower or any Subsidiary except for Liens permitted by Section 6.02.

SECTION 3.14.    No Default. No Default or Event of Default has occurred and is

continuing.

SECTION 3.15.    No Burdensome Restrictions. The Borrower is not subject to any Burdensome Restrictions except Burdensome Restrictions permitted under Section 6.08.

SECTION 3.16.    Solvency.

(a)    Immediately after the consummation of the Transactions to occur on the Effective Date, the Borrower and its Subsidiaries, taken as a whole, are and will be Solvent.

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(b)    The Borrower does not intend to, nor will it permit any of its Subsidiaries to, and the Borrower does not believe that it or any of its Subsidiaries will, incur debts beyond its ability to pay such debts as they mature, taking into account the timing of and amounts of cash to be received by it or any such Subsidiary and the timing of the amounts of cash to be payable on or in respect of its Indebtedness or the Indebtedness of any such Subsidiary.

SECTION 3.17. Insurance. The Borrower maintains, and has caused each Subsidiary to maintain, with financially sound and reputable insurance companies, insurance on all their real and personal property in such amounts, subject to such deductibles and self-insurance retentions and covering such properties and risks as are adequate and customarily maintained by companies engaged in the same or similar businesses operating in the same or similar locations.

SECTION 3.18. Security Interest in Collateral. To the extent the Security Agreement has been executed and delivered by the parties thereto and is then in effect, the Security Agreement will create legal and valid Liens on all the Collateral in favor of the Administrative Agent, for the benefit of the Secured Parties, and (i) when the Collateral consisting of certificated securities in registered form (as defined in the UCC) is delivered to the Administrative Agent in the State of New York of such original certificates, together with instruments of, transfer duly endorsed in blank and assuming that Borrower does not have notice of any “adverse claim” (as defined in Section 8-102(a)(1) of the UCC) to any of such Collateral consisting of certificated securities in registered form, the Liens under the Security Agreement will constitute a fully perfected security interest in all right, title and interest of the pledgors thereunder in such Collateral, prior and superior in right to any other Person, (ii) when a copyright security agreement is executed and delivered to the Administrative Agent and filed with the U.S. Copyright Office the Liens under the Security Agreement will constitute a fully perfected security interest in all right, title and interest of the pledgors thereunder in the copyrights listed thereto, (iii) when a trademark security agreement or a patent security agreement is executed and delivered to the Administrative Agent and filed with the U.S. Patent and Trademark Office the Liens under the Security Agreement will constitute a fully perfected security interest in all right, title and interest of the pledgors thereunder in the patents and trademarks listed thereto, and (iv) when financing statements in appropriate form are filed in the applicable filing offices, the security interest created under the Security Agreement will constitute a fully perfected security interest in all right, title and interest of the Loan Parties in the remaining Collateral covered by the Security Agreement to the extent perfection can be obtained by filing UCC financing statements, enforceable against the applicable Loan Party and all third parties, and having priority over all other Liens on the Collateral except in the case of (a) liens permitted by Section 6.02 and (b) certain items of Collateral located in or otherwise subject to foreign law where the grant of a Lien or priority and perfection thereof in accordance with the UCC may not be recognized or enforceable.

SECTION 3.19. Anti-Corruption Laws and Sanctions. The Borrower has implemented and maintains in effect policies and procedures designed to ensure compliance by the Borrower, its Subsidiaries and their respective directors, officers, employees and agents with Anti- Corruption Laws and applicable Sanctions, and the Borrower, its Subsidiaries and their respective officers and directors and to the knowledge of the Borrower its employees and agents, are in compliance with Anti-Corruption Laws and applicable Sanctions in all material respects. None of (a) the Borrower, any Subsidiary or to the knowledge of the Borrower or such Subsidiary any of their respective directors, officers or employees, or (b) to the knowledge of the Borrower, any agent of the Borrower or any Subsidiary that will act in any capacity in connection with or benefit from the credit facility established hereby, is a Sanctioned Person. No Borrowing or Letter of Credit, use of proceeds or other Transactions will violate any Anti-Corruption Law or applicable Sanctions.

SECTION 3.20.    EEA Financial Institutions.    No Loan Party is an EEA Financial

Institution.

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SECTION 3.21.    Healthcare and FDA Matters.    Except, in each case, as may be disclosed on Schedule 3.21:

(a)    The Borrower and each of its Subsidiaries, and each of their respective employees and contractors solely with respect to the exercise of their respective duties on behalf of the Borrower or its Subsidiaries, are in compliance in all material respects with all applicable Health Care Laws. Neither the Borrower nor any of the Subsidiaries have received written notice of any pending or, to the Borrower’s or any Subsidiaries’ knowledge, threatened claim, suit, proceeding, hearing, enforcement, audit, inspection, investigation, seizure, shutdown, field action, recall, untitled letter, warning letter (other than that certain Warning Letter, dated April 10, 2015, from the U.S. Food and Drug Administration (the “FDA”) to the Borrower (the “FDA Warning Letter”)), with respect to non-compliance, arbitration or other action from any applicable Governmental Authority or applicable foreign regulatory agency, alleging that any operation or activity of the Borrower or any Subsidiary is in material violation of any applicable Health Care Law.

(b)    The Borrower and each of its Subsidiaries owns, holds or possesses all licenses, franchises, permits, privileges, variances, immunities, approvals, clearances and other authorizations from Governmental Authorities that are necessary to entitle it to own or lease, operate and use its properties and assets and to carry on and conduct its business substantially as conducted, except for such incidental licenses, permits and other authorizations which would be readily obtainable by any qualified applicant without undue burden in the event of any lapse, termination, cancellation or forfeiture thereof (collectively, the “Health Care Permits”), and all such Health Care Permits are in full force and effect.

(c)    None of the Borrower, its Subsidiaries, or their respective officers, directors, holders of five percent (5%) or more of the Equity Interests of the Borrower and/or any of its Subsidiaries, employees, agents or contractors is currently, or has in the past been, excluded from participation in any Federal Health Care Program pursuant to any applicable Health Care Laws, including, without limitation, 42 U.S.C. § 1320a-7.

(d)    Neither the Borrower nor any Subsidiary has knowingly and willfully offered, paid, solicited or received any remuneration (including any kickback, bribe or rebate), directly or indirectly, overtly or covertly, in cash or in kind in return for, or to induce, the purchase, lease or order, or the arranging for or recommending of the purchase, lease or order, of any good, facility, item, or service for which payment may be made in whole or in part under any Federal Health Care Program.

(e)    There are no pending or, to the knowledge of the Borrower or any Subsidiary, threatened material inquiries, inspections, audits, overpayments, qui tam actions, appeals, investigations or claims or other actions which relate to a material violation of any Health Care Laws or which, if resolved in a manner adverse to the Borrower or its Subsidiaries, would result in the imposition of any material penalties, restrict their ability to conduct the business as currently conducted in any material respect, or their exclusion from participation in any Federal Health Care Program, and none of the Borrower or its Subsidiaries is currently a party to a corporate integrity agreement, deferred prosecution agreement, consent decree, settlement, agreement or similar agreements or orders mandating or prohibiting future or past activities, or has any reporting obligations pursuant to a settlement agreement, plan or correction or other remedial measure entered into with any Governmental Authority.

(f)    Neither the Borrower nor any of its Subsidiaries has received any warning or untitled letter (other than the FDA Warning Letter) from the FDA or equivalent action from any comparable non-United States Governmental Authority. Neither the Borrower nor any of its Subsidiaries has received any communication from any regulatory agency or been notified that any product approval or clearance granted to it is withdrawn or modified or that such an action is under consideration. Without

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limiting the foregoing, the Borrower and each of its Subsidiaries is in compliance, in all material respects, with all current applicable statutes, rules, regulations, or orders administered or issued by the FDA, including the Federal Food, Drug, and Cosmetic Act and Public Health Service Act. There have been no recalls, detentions, withdrawals, seizures, or termination or suspension of manufacturing voluntarily undertaken, requested or threatened relating to any of the Borrower’s or any of its Subsidiaries’ products.

ARTICLE IV

Conditions

SECTION 4.01. Effective Date. The obligations of the Lenders to make Loans and of the Issuing Banks to issue Letters of Credit hereunder shall not become effective until the date on which each of the following conditions is satisfied (or waived in accordance with Section 9.02):

(a)    The Administrative Agent (or its counsel) shall have received (i) from each party hereto either (A) a counterpart of this Agreement signed on behalf of such party or (B) written evidence satisfactory to the Administrative Agent (which may include telecopy or electronic transmission of a signed signature page of this Agreement) that such party has signed a counterpart of this Agreement and (ii) duly executed copies of the Loan Documents and such other legal opinions, certificates, documents, instruments and agreements as the Administrative Agent shall reasonably request in connection with the Transactions, all in form and substance satisfactory to the Administrative Agent and its counsel and as further described in the list of closing documents attached as Exhibit E.

(b)    The Administrative Agent shall have received a favorable written opinion (addressed to the Administrative Agent and the Lenders and dated the Effective Date) of Fenwick & West LLP, counsel for the Loan Parties, substantially in the form of Exhibit B, and covering such other matters relating to the Loan Parties, the Loan Documents or the Transactions as the Administrative Agent shall reasonably request. The Borrower hereby requests such counsel to deliver such opinion.

(c)    The Administrative Agent shall have received such documents and certificates as the Administrative Agent or its counsel may reasonably request relating to the organization, existence and good standing of the initial Loan Parties, the authorization of the Transactions and any other legal matters relating to such Loan Parties, the Loan Documents or the Transactions, all in form and substance satisfactory to the Administrative Agent and its counsel and as further described in the list of closing documents attached as Exhibit E.

(d)    The Administrative Agent shall have received a certificate, dated the Effective Date and signed by the President, a Vice President or a Financial Officer of the Borrower, certifying (i) that the representations and warranties contained in Article IIIare true and correct in all material respects (or, in the case of any representation or warranty qualified by materiality or Material Adverse Effect, in all respects) as of the Effective Date except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct in all material respects (or, in the case of any representation or warranty qualified by materiality or Material Adverse Effect, in all respects) as of such earlier date and (ii) that no Default or Event of Default has occurred and is continuing as of such date.

(e)    The Administrative Agent shall have received evidence satisfactory to it that the credit facility evidenced by the Existing Credit Agreement shall have been terminated and cancelled and all indebtedness thereunder shall have been fully repaid (except to the extent being

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so repaid with the initial Revolving Loans) and any and all liens thereunder shall have been terminated.

(f)    The Administrative Agent shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder.

The Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding.

SECTION 4.02. Each Credit Event. The obligation of each Lender to make a Loan on the occasion of any Borrowing (other than a conversion or continuation of any Loans), and of the Issuing Banks to issue, amend, renew or extend any Letter of Credit, is subject to the satisfaction of the following conditions:

(a)    The representations and warranties of the Borrower set forth in this Agreement shall be true and correct in all material respects (or, if qualified by materiality or “Material Adverse Effect”, in all respects) on and as of the date of such Borrowing or the date of issuance, amendment, renewal or extension of such Letter of Credit, as applicable, except in the case of any such representation and warranty that expressly relates to an earlier date, in which case such representation and warranty shall be true and correct in all material respects (or, if qualified by materiality or “Material Adverse Effect”, in all respects) as of such earlier date.

(b)    At the time of and immediately after giving effect to such Borrowing or the issuance, amendment, renewal or extension of such Letter of Credit, as applicable, no Default or Event of Default shall have occurred and be continuing.

Each Borrowing and each issuance, amendment, renewal or extension of a Letter of Credit shall be deemed to constitute a representation and warranty by the Borrower on the date thereof as to the matters specified in paragraphs (a) and (b) of this Section.

ARTICLE V

Affirmative Covenants

Until the Commitments have expired or been terminated and the principal of and interest on each Loan and all fees payable hereunder shall have been paid in full (other than Obligations expressly stated to survive such payment and termination) and all Letters of Credit shall have expired or terminated, in each case, without any pending draw (or shall have been cash collateralized or backstopped pursuant to arrangements reasonably satisfactory to the Administrative Agent), and all LC Disbursements shall have been reimbursed, the Borrower covenants and agrees with the Lenders that:

SECTION 5.01. Financial Statements and Other Information. The Borrower will furnish to the Administrative Agent and each Lender:

(a)    within ninety (90) days after the end of each fiscal year of the Borrower, its audited consolidated balance sheet and related statements of operations, stockholders’ equity and cash flows as of the end of and for such year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on by Deloitte & Touche LLP or other independent public accountants of recognized national standing (without a “going concern” or

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like qualification, commentary or exception and without any qualification or exception as to the scope of such audit) to the effect that such consolidated financial statements present fairly in all material respects the financial condition and results of operations of the Borrower and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied;

(b)    within forty-five (45) days after the end of each of the first three fiscal quarters of each fiscal year of the Borrower, its consolidated balance sheet and related statements of operations, stockholders’ equity and cash flows as of the end of and for such fiscal quarter and the then elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal year, all certified by one of its Financial Officers as presenting fairly in all material respects the financial condition and results of operations of the Borrower and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes;

(c) concurrently with any delivery of financial statements under clause (a) or

(b)    above, a certificate of a Financial Officer of the Borrower (i) certifying as to whether a Default has occurred and, if a Default has occurred, specifying the details thereof and any action taken or proposed to be taken with respect thereto, (ii) setting forth reasonably detailed calculations demonstrating compliance with Section 6.11, (iii) stating whether any change in GAAP or in the application thereof has occurred since the date of the audited financial statements referred to in Section 3.04 and, if any such change has occurred, specifying the effect of such change on the financial statements accompanying such certificate and (iv) setting forth reasonably detailed calculations of the Available Amount;

(d)    as soon as available, but in any event not later than the end of, and no earlier than thirty (30) days prior to the end of, each fiscal year of the Borrower, a copy of the plan and forecast (including a projected consolidated and consolidating balance sheet, income statement and funds flow statement) of the Borrower for each fiscal quarter of the upcoming fiscal year in form reasonably satisfactory to the Administrative Agent;

(e)    promptly after the same become publicly available, copies of all periodic and other reports, proxy statements and other materials filed by the Borrower or any Subsidiary with the SEC, or any Governmental Authority succeeding to any or all of the functions of said Commission, or with any national securities exchange, or distributed by the Borrower to its shareholders generally, as the case may be; and

(f)    promptly following any request therefor, such other information regarding the operations, business affairs and financial condition of the Borrower or any Subsidiary, or compliance with the terms of this Agreement, as the Administrative Agent or any Lender may reasonably request.

Documents required to be delivered pursuant to clauses (a), (b) and (e) of this Section 5.01 may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date on which such documents are filed for public availability on the SEC’s Electronic Data Gathering and Retrieval System; providedthat the Borrower shall notify (which may be by facsimile or electronic mail) the Administrative Agent of the filing of any such documents and provide to the Administrative Agent by electronic mail electronic versions (i.e., soft copies) of such documents. Notwithstanding anything contained herein, in every instance the Borrower shall be required to provide promptly paper copies of the compliance certificates required by clause (c) of this Section 5.01 to the Administrative Agent.

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SECTION 5.02. Notices of Material Events. The Borrower will furnish to the Administrative Agent and each Lender prompt written notice of the following after the Borrower becomes aware of the occurrence thereof:

(a)    the occurrence of any Default;

(b)    the filing or commencement of any action, suit or proceeding by or before any arbitrator or Governmental Authority against or affecting the Borrower or any Subsidiary thereof that could reasonably be expected to result in a Material Adverse Effect;

(c)    the occurrence of any ERISA Event that, alone or together with any other ERISA Events that have occurred, could reasonably be expected to result in a Material Adverse Effect; and

(d)    any other development that results in, or could reasonably be expected to result in, a Material Adverse Effect.

Each notice delivered under this Section shall be accompanied by a statement of a Financial Officer or other executive officer of the Borrower setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto. Information required to be delivered pursuant to clause (b) of this Section 5.02 shall be deemed to have been delivered if such information, or one or more annual or quarterly or other periodic reports containing such information, shall have been posted by the Administrative Agent on an IntraLinks or similar site to which the Lenders have been granted access or shall be available on the website of the SEC at http://www.sec.gov. Information required to be delivered pursuant to this Section 5.02 may also be delivered by electronic communications pursuant to procedures approved by the Administrative Agent.

SECTION 5.03. Existence; Conduct of Business. The Borrower will, and will cause each of its Subsidiaries to, do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence and the rights, qualifications, licenses, permits, privileges, franchises, governmental authorizations and intellectual property rights material to the conduct of its business, and maintain all requisite authority to conduct its business in each jurisdiction in which its business is conducted; providedthat the foregoing shall not prohibit any merger, consolidation, liquidation or dissolution permitted under Section 6.03.

SECTION 5.04. Payment of Obligations. The Borrower will, and will cause each of its Subsidiaries to, pay its obligations, including Tax liabilities, that, if not paid, could reasonably be expected to result in a Material Adverse Effect before the same shall become delinquent or in default, except where (a) the validity or amount thereof is being contested in good faith by appropriate proceedings, (b) the Borrower or such Subsidiary has set aside on its books adequate reserves with respect thereto in accordance with GAAP and (c) the failure to make payment pending such contest could not reasonably be expected to result in a Material Adverse Effect.

SECTION 5.05. Maintenance of Properties; Insurance. The Borrower will, and will cause each of its Subsidiaries to, (a) keep and maintain all property material to the conduct of its business in good working order and condition, ordinary wear and tear excepted, and (b) maintain with financially sound and reputable carriers (i) insurance in such amounts (with no greater risk retention) and against such risks (including loss or damage by fire and loss in transit; theft, burglary, pilferage (excluding mysterious disappearance); business interruption; and general liability) and such other hazards, as is customarily maintained by companies of established repute engaged in the same or similar businesses operating in the same or similar locations and (ii) all insurance required pursuant to the Collateral

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Documents. The Borrower will furnish to the Lenders, upon request of the Administrative Agent, information in reasonable detail as to the insurance so maintained. The Borrower shall deliver to the Administrative Agent endorsements (x) to all physical damage insurance policies on all of the tangible personal property and assets of the Borrower and the Subsidiary Guarantors naming the Administrative Agent as lender loss payee, and (y) to all general liability and other liability policies of the Borrower and the Subsidiary Guarantors naming the Administrative Agent an additional insured. In the event the Borrower or any of its Subsidiaries at any time or times hereafter shall fail to obtain or maintain any of the policies or insurance required herein or to pay any premium in whole or in part relating thereto, then the Administrative Agent, without waiving or releasing any obligations or resulting Default hereunder, may at any time or times thereafter (but shall be under no obligation to do so) obtain and maintain such policies of insurance and pay such premiums and take any other action with respect thereto which the Administrative Agent deems advisable. All sums so disbursed by the Administrative Agent shall constitute part of the Obligations, payable as provided in this Agreement. The Borrower will furnish to the Administrative Agent and the Lenders prompt written notice of any casualty or other insured damage to any material portion of the Collateral or the commencement of any action or proceeding for the taking of any material portion of the Collateral or interest therein under power of eminent domain or by condemnation or similar proceeding.

SECTION 5.06. Books and Records; Inspection Rights. The Borrower will, and will cause each of its Subsidiaries to, keep proper books of record and account in which full, true and correct entries in conformity with GAAP and applicable law are made of all material financial dealings and transactions in relation to its business and activities. The Borrower will, and will cause each of its Subsidiaries to, permit any representatives designated by the Administrative Agent, at reasonable times, upon reasonable prior notice (but not more than once annually if no Event of Default shall exist), to visit and inspect its properties, to examine and make extracts from its books and records, including environmental assessment reports and Phase I or Phase II studies which shall be carried out in compliance with leases covering the real property in question including notice, and to discuss its affairs, finances and condition with its officers and independent accountants, all at such reasonable times and as often as reasonably requested. The Borrower acknowledges that the Administrative Agent, after exercising its rights of inspection, may prepare and distribute to the Lenders certain reports pertaining to the Borrower and its Subsidiaries’ assets for internal use by the Administrative Agent and the Lenders. Notwithstanding anything to the contrary in this Section 5.06, neither the Borrower nor any of its Subsidiaries will be required to disclose, permit the inspection, examination or making of extracts, or discussion of, any documents, information or other matter that (i) constitutes non-financial trade secrets or non-financial proprietary information, (ii) in respect of which disclosure to the Administrative Agent (or any designated representative) is then prohibited by law, rule or regulation or any agreement binding on the Company or any of its Subsidiaries or (iii) is subject to attorney-client or similar privilege or constitutes attorney work-product.

SECTION 5.07. Compliance with Laws and Material Contractual Obligations. The Borrower will, and will cause each of its Subsidiaries to, (i) comply with all laws, rules, regulations and orders of any Governmental Authority applicable to it or its property (including without limitation Health Care Laws and Environmental Laws) and (ii) perform in all material respects its obligations under material agreements to which it is a party, in each case except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. The Borrower will maintain in effect and enforce policies and procedures designed to ensure compliance by the Borrower, its Subsidiaries and their respective directors, officers, employees and agents with Anti- Corruption Laws and applicable Sanctions.

SECTION 5.08. Use of Proceeds. The proceeds of the Loans will be used only to repay the Indebtedness outstanding under the credit facility evidenced by the Existing Credit Agreement

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on the Effective Date, to finance the working capital needs, and for general corporate purposes, of the Borrower and its Subsidiaries (including, without limitation, for the financing of acquisitions permitted hereunder (including transaction fees and expenses in connection therewith) to the extent permitted by the terms of this Agreement). No part of the proceeds of any Loan will be used, whether directly or indirectly, for any purpose that entails a violation of any of the Regulations of the Board, including Regulations T, U and X. The Borrower will not request any Borrowing or Letter of Credit, and the Borrower shall not use, and shall procure that its Subsidiaries and its or their respective directors, officers, employees and agents shall not use, the proceeds of any Borrowing or Letter of Credit (i) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any Anti-Corruption Laws, (ii) for the purpose of funding, financing or facilitating any activities, business or transaction of or with any Sanctioned Person, or in any Sanctioned Country, to the extent such activities, business or transaction would be prohibited by Sanctions if conducted by a corporation incorporated in the United States or in a European Union member state or (iii) in any manner that would result in the violation of any Sanctions applicable to any party hereto.

SECTION 5.09.    Subsidiary Guarantors; Pledges; Additional Collateral; Further

Assurances.

(a)    As promptly as possible but in any event within forty-five (45) days (or such later date as may be agreed upon by the Administrative Agent) after any Person becomes a Subsidiary or any Subsidiary qualifies independently as, or is designated by the Borrower or the Administrative Agent as, a Material Domestic Subsidiary pursuant to the definition of “Material Domestic Subsidiary”, the Borrower shall provide the Administrative Agent with written notice thereof setting forth information in reasonable detail describing the material assets of such Person and shall cause each such Subsidiary which also qualifies as a Material Domestic Subsidiary to deliver to the Administrative Agent a joinder to the Subsidiary Guaranty and the Security Agreement (in each case in the form contemplated thereby) pursuant to which such Subsidiary agrees to be bound by the terms and provisions thereof, such Subsidiary Guaranty and the Security Agreement to be accompanied by appropriate corporate resolutions, other corporate documentation and legal opinions as may be reasonably requested by, and in form and substance reasonably satisfactory to, the Administrative Agent and its counsel.

(b)    The Borrower will cause, and will cause each other Loan Party to cause, all of its owned property (whether personal, tangible, intangible, or mixed, but excluding the Excluded Assets) to be subject at all times to first priority, perfected Liens in favor of the Administrative Agent for the benefit of the Secured Parties to secure the Secured Obligations in accordance with, and to the extent required by, the terms and conditions of the Collateral Documents, subject in any case to Liens permitted by Section 6.02. Without limiting the generality of the foregoing, the Borrower will cause the Applicable Pledge Percentage of the issued and outstanding Equity Interests of each Pledge Subsidiary (other than the Excluded Assets) directly owned by the Borrower or any other Loan Party to be subject at all times to a first priority, perfected Lien in favor of the Administrative Agent to secure the Secured Obligations in accordance with the terms and conditions of the Collateral Documents or such other pledge and security documents as the Administrative Agent shall reasonably request. Notwithstanding the foregoing, no such pledge agreement in respect of the Equity Interests of a Foreign Subsidiary shall be required hereunder

(A)    until the date that is ninety (90) days after the Effective Date or such later date as the Administrative Agent may agree in the exercise of its reasonable discretion with respect thereto, and (B) to the extent the Administrative Agent or its counsel determines that such pledge would not provide material credit support for the benefit of the Secured Parties pursuant to legally valid, binding and enforceable pledge agreements.

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(c)    Without limiting the foregoing, the Borrower will, and will cause each applicable Subsidiary to, execute and deliver, or cause to be executed and delivered, to the Administrative Agent such documents, agreements and instruments, and will take or cause to be taken such further actions (including the filing and recording of financing statements and other documents and such other actions or deliveries of the type required by Section 4.01, as applicable), which may be required by law or which the Administrative Agent may, from time to time, reasonably request to carry out the terms and conditions of this Agreement and the other Loan Documents and to ensure perfection and priority of the Liens created or intended to be created by the Collateral Documents, all at the expense of the Borrower.

(d)    If any assets are acquired by a Loan Party after the Effective Date (other than Excluded Assets and assets constituting Collateral under the Security Agreement that become subject to the Lien under the Security Agreement upon acquisition thereof), the Borrower will notify the Administrative Agent thereof in accordance with the terms of the Collateral Documents, and, if requested by the Administrative Agent, the Borrower will cause such assets to be subjected to a Lien securing the Secured Obligations and will take, and cause the other Loan Parties to take, such actions as shall be necessary or reasonably requested by the Administrative Agent to grant and perfect such Liens, including actions described in paragraph (c) of this Section, all at the expense of the Borrower.

(e)    Notwithstanding anything to the contrary herein or in any other Loan Document, no Loan Party shall have any obligation to (i) perfect any security interest or lien in any intellectual property included in the Collateral in any jurisdiction other than in the United States, (ii) to obtain any landlord waivers, estoppels or collateral access letters, (iii) perfect a security interest in any letter of credit rights, other than the filing of a UCC financing statement or (iv) pledge Equity Interests of any partnership, joint venture or non-wholly owned Subsidiary which are not permitted to be pledged pursuant to the terms of such partnership’s, joint venture’s or non-wholly owned Subsidiary’s organizational, joint venture or equivalent documents (after giving effect to the applicable anti- assignment provisions of the UCC or other applicable law).

SECTION 5.10.    Health Care Matters. The Borrower will, and will cause each of its

Subsidiaries to:

(a)    operate and conduct their business in material compliance with all applicable Health Care Laws;

(b)    take all such actions as are necessary and appropriate so that no material liability with respect to the Health Care Laws may arise which could reasonably be expected to result in a Material Adverse Effect;

(c)    promptly, and in no case more than five (5) Business Days after any executive or financial officer of the Borrower or any Subsidiary thereof obtains knowledge of the existence of (x) any notice which alleges, asserts or is related to any material noncompliance with any Health Care Law or exclusion or potential exclusion from any Federal Health Care Program, or (y) any requests or requirements of a Governmental Authority, notify the Administrative Agent and each Lender and provide copies upon receipt of all such written claims, complaints, notices or inquiries regarding compliance with, or liability pursuant to, the Health Care Laws, accompanied by an explanation of the anticipated effect thereof and any response thereto; and

(d)    provide such information and certifications which the Administrative Agent or any Lender may reasonably request from time to time to evidence compliance with this Section 5.10.

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SECTION 5.11. Post-Closing Matters. The Borrower shall provide to the Administrative Agent within fourteen (14) days (or such later date as may be agreed upon by the Administrative Agent) following the Effective Date: (i) a legal opinion from a Texas-qualified law firm in respect of the initial Subsidiary Guarantors (Braincare, LLC and GND Operating, LLC) and in form and substance reasonably acceptable to the Administrative Agent and (ii) separate lender loss payable endorsements with respect to the property casualty insurance policies of the Borrower and the Subsidiary Guarantors and separate additional insured endorsements with respect to the liability insurance policies of the Borrower and the Subsidiary Guarantors.

ARTICLE VI

Negative Covenants

Until the Commitments have expired or terminated and the principal of and interest on each Loan and all fees payable hereunder have been paid in full (other than Obligations expressly stated to survive such payment and termination) and all Letters of Credit have expired or terminated, in each case, without any pending draw (or shall have been cash collateralized or backstopped pursuant to arrangements reasonably satisfactory to the Administrative Agent), and all LC Disbursements shall have been reimbursed, the Borrower covenants and agrees with the Lenders that:

SECTION 6.01. Indebtedness. The Borrower will not, and will not permit any Subsidiary to, create, incur, assume or permit to exist any Indebtedness, except:

(a)    the Secured Obligations;

(b)    Indebtedness existing on the date hereof and set forth in Schedule 6.01and extensions, renewals and replacements of any such Indebtedness with Indebtedness of a similar type that does not increase the outstanding principal amount thereof;

(c)    Indebtedness of the Borrower to any Subsidiary and of any Subsidiary to the Borrower or any other Subsidiary; providedthat Indebtedness of any Subsidiary that is not a Loan Party to any Loan Party shall be subject to the limitations set forth in Section 6.04(d);

(d)    Guarantees by the Borrower of Indebtedness of any Subsidiary and by any Subsidiary of Indebtedness of the Borrower or any other Subsidiary;

(e)    Indebtedness of the Borrower or any Subsidiary incurred to finance the acquisition, construction, repair, replacement, lease or improvement of any fixed or capital assets, including Capital Lease Obligations and any Indebtedness assumed in connection with the acquisition of any such assets or secured by a Lien on any such assets prior to the acquisition thereof, and extensions, renewals and replacements of any such Indebtedness that do not increase the outstanding principal amount thereof; providedthat (i) such Indebtedness is incurred prior to or within 270 days after such acquisition or the completion of such construction, repair, replacement, lease or improvement and (ii) the aggregate principal amount of Indebtedness permitted by this clause (e) shall not exceed $20,000,000 at any time outstanding;

(f)    Indebtedness of the Borrower or any Subsidiary as an account party in respect of trade letters of credit;

(g)    Permitted Debt so long as at the time of and immediately after giving effect (including pro forma effect) to the incurrence of such Permitted Debt, (i) the Leverage Ratio is

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less than or equal to 2.50 to 1.00 and (ii) no Default or Event of Default shall have occurred and be continuing or shall result therefrom;

(h)    Indebtedness under bid bonds, performance bonds, surety bonds and similar obligations, in each case, incurred by the Borrower or any of its Subsidiaries in the ordinary course of business, including guarantees or obligations with respect to letters of credit supporting such bid bonds, performance bonds, surety bonds and similar obligations;

(i)    Indebtedness arising from agreements providing for indemnification, adjustment of purchase price or similar obligations, or from guaranties, surety bonds or performance bonds securing the performance of the Borrower or any of its Subsidiaries pursuant to such agreements, in connection with Permitted Acquisitions, other Investments or acquisitions permitted hereunder or dispositions permitted by Section 6.03;

(j)    Indebtedness representing installment insurance premiums owing in the ordinary course of business; and

(k)    unsecured Indebtedness arising out of judgments not constituting an Event of Default under clause (k) of Article VII.

SECTION 6.02. Liens. The Borrower will not, and will not permit any Subsidiary to, create, incur, assume or permit to exist any Lien on any property or asset now owned or hereafter acquired by it, except:

(a)    Liens created pursuant to any Loan Document;

(b) Permitted Encumbrances;

(c)    any Lien on any property or asset of the Borrower or any Subsidiary existing on the date hereof and set forth in Schedule 6.02; providedthat (i) such Lien shall not apply to any other property or asset of the Borrower or any Subsidiary and (ii) such Lien shall secure only those obligations which it secures on the date hereof and extensions, renewals and replacements thereof that do not increase the outstanding principal amount thereof;

(d)    any Lien existing on any property or asset prior to the acquisition thereof by the Borrower or any Subsidiary or existing on any property or asset of any Person that becomes a Subsidiary after the date hereof prior to the time such Person becomes a Subsidiary; providedthat

(i)    such Lien is not created in contemplation of or in connection with such acquisition or such Person becoming a Subsidiary, as the case may be, (ii) such Lien shall not apply to any other property or assets of the Borrower or any Subsidiary and (iii) such Lien shall secure only those obligations which it secures on the date of such acquisition or the date such Person becomes a Subsidiary, as the case may be, and extensions, renewals and replacements thereof that do not increase the outstanding principal amount thereof;

(e)    Liens on fixed or capital assets acquired, constructed or improved by the Borrower or any Subsidiary; providedthat (i) such security interests secure Indebtedness permitted by clause (e) of Section 6.01, (ii) the Indebtedness secured thereby does not exceed the cost of acquiring, constructing or improving such fixed or capital assets and (iii) such security interests shall not apply to any other property or assets of the Borrower or any Subsidiary;

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(f)    Liens with respect to property or assets of the Borrower or any Subsidiary securing Permitted Debt; provided that (i) such Liens secure only Permitted Debt permitted by clause (g) of Section 6.01 and (ii) such Permitted Debt shall be secured only by a Lien on the Collateral and on a pari passu or subordinated basis with the Secured Obligations and shall be subject to a customary intercreditor agreement in form and substance reasonably satisfactory to the Borrower and the Administrative Agent;

(g)    (i) dispositions of assets not prohibited by Section 6.03 and in connection therewith, customary rights and restrictions contained in agreements relating to such dispositions pending the completion thereof, or in the case of a license, during the term thereof and (ii) any option or other agreement to dispose of any asset not prohibited by Section 6.03;

(h)    in the case of (i) any Subsidiary that is not a wholly owned Subsidiary or (ii) the Equity Interests in any Person that is not a Subsidiary, any encumbrance or restriction, including any put and call arrangements, related to Equity Interests in such Subsidiary or such other Person set forth in the organization documents of such Subsidiary or such other Person or any related joint venture, shareholders’ or similar agreement;

(i)    Liens on earnest money deposits of cash or cash equivalents made, or escrow or similar arrangements entered into, in connection with any Permitted Acquisition or other Investment permitted pursuant to Section 6.04;

(j)    Liens in the nature of the right of setoff in favor of counterparties to contractual agreements with Borrower or any Subsidiary in the ordinary course of business;

(k)    Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale of goods entered into by the Borrower or any Subsidiary in the ordinary course of business;

(l)    Liens (i) in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods in the ordinary course of business and (ii) on specific items of inventory or other goods and proceeds thereof of any Person securing such Person’s obligations in respect of bankers’ acceptances or letters of credit issued or created for the account of such person to facilitate the purchase, shipment or storage of such inventory or such other goods in the ordinary course of business;

(m)    Liens on insurance policies and the proceeds thereof securing Indebtedness permitted by Section 6.01(j);

(n)    Liens (i) of a collection bank arising under Section 4-210 of the UCC (or other applicable Law) on the items in the course of collection, and (ii) attaching to commodity trading accounts or other commodities brokerage accounts incurred in the ordinary course of business and not for speculative purposes, including Liens encumbering reasonable customary initial deposits and margin deposits;

(o)    Liens on securities that are the subject of repurchase agreements permitted hereunder;

(p)    Liens on cash, Permitted Investments or other property arising in connection with the defeasance, discharge or redemption of Indebtedness;

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(q)    Liens (i) consisting of deposits or advances made by the Borrower or any of its Subsidiaries in connection with any letter of intent or purchase agreement in respect of any Permitted Acquisition or Investment permitted under Section 6.04 or (ii) consisting of an option or agreement to dispose of any property permitted to be sold pursuant to Section 6.03;

(r)    Liens to secure contractual payments (contingent or otherwise) payable by the Borrower or its Subsidiaries to a seller after the consummation of an acquisition of a product, business, license or other assets;

(s)    Liens on any assets held by a trustee (i) under any indenture or other debt instrument where the proceeds thereof of the securities issued thereunder are held in escrow pursuant to customary escrow arrangements pending the release thereof, and (ii) under any indenture pursuant to customary discharge, redemption or defeasance provisions; and

(t)    Liens on assets (not constituting Collateral) of the Borrower and its Subsidiaries not otherwise permitted above so long as the aggregate amount of obligations subject to such Liens does not at any time exceed $10,000,000.

SECTION 6.03. Fundamental Changes and Asset Sales. (a) The Borrower will not, and will not permit any Subsidiary to, merge into or consolidate with any other Person, or permit any other Person to merge into or consolidate with it, or sell, transfer, lease or otherwise dispose of (in one transaction or in a series of transactions) any of its assets (including pursuant to a Sale and Leaseback Transaction), or any of the Equity Interests of any of its Subsidiaries (in each case, whether now owned or hereafter acquired), or liquidate or dissolve, except that, if at the time thereof and immediately after giving effect thereto no Default shall have occurred and be continuing:

(i)    any Person may merge into or consolidate with the Borrower in a transaction in which the Borrower is the surviving corporation;

(ii)    any Person (other than the Borrower) may merge into a Loan Party in a transaction in which the surviving entity is such Loan Party (provided that any such merger involving the Borrower must result in the Borrower as the surviving entity) and any Person that is not a Loan Party may merge into any Subsidiary that is not a Loan Party;

(iii)    the Borrower may sell, transfer, lease or otherwise dispose of its assets (including the Equity Interests of any of its Subsidiaries) to a Loan Party or any Subsidiary (provided that not more than an aggregate amount of $100,000,000 in fair market value of assets may be sold, transferred, leased or otherwise disposed of by Loan Parties to Subsidiaries that are not Loan Parties), any Subsidiary may sell, transfer, lease or otherwise dispose of its assets to a Loan Party and any Subsidiary that is not a Loan Party may sell, transfer, lease or otherwise dispose of its assets (including the Equity Interests of any of its Subsidiaries) to any other Subsidiary that is not a Loan Party;

(iv)    the Borrower and its Subsidiaries may (A) sell inventory in the ordinary course of business, (B) effect sales, trade-ins or dispositions of used equipment for value in the ordinary course of business, (C) enter into licenses of technology in the ordinary course of business,

(D) enter into licenses of technology to an Affiliate in the ordinary course of business, and (E) make any other sales, transfers, leases or dispositions of assets, the book value of which, together with the book value of all other assets of the Borrower and its Subsidiaries previously sold, transferred, leased or disposed of in reliance upon this clause (E) during any fiscal year of the Borrower, does not exceed $100,000,000 (provided that dispositions pursuant to this clause (E)

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shall be for fair market value and at least 75% of the proceeds of such dispositions shall consist of cash or Permitted Investments);

(v)    any Subsidiary that is not a Loan Party may liquidate or dissolve if the Borrower determines in good faith that such liquidation or dissolution is in the best interests of the Borrower and is not materially disadvantageous to the Lenders;

(vi)    the discount or sale, in each case without recourse and in the ordinary course of business, of past due receivables arising in the ordinary course of business, but only in connection with the compromise or collection thereof consistent with customary industry practice (and not as part of any bulk sale or financing of receivables);

(vii) Liens permitted by Section 6.02;

(viii) Investments permitted by Section 6.04;

(ix)    dispositions of property as a result of a casualty event involving such property or any disposition of real property to a Governmental Authority as a result of a condemnation of such real property;

(x)    dispositions of investments in joint ventures, to the extent required by, or made pursuant to buy/sell arrangements between the joint venture parties set forth in joint venture arrangements and similar binding arrangements;

(xi) disposition of cash and Permitted Investments in the ordinary course of business;

(xii) settlement or termination of Swap Agreements;

(xiii)    the surrender, waiver or settlement of contractual rights in the ordinary course of business, or the surrender, waiver or settlement of claims and litigation claims (whether or not in the ordinary course of business); and

(xiv)    dispositions of Equity Interests in any Subsidiary acquired in connection with any a Permitted Acquisition prior to the time of such Subsidiary becoming a wholly owned subsidiary, in each case pursuant to any stock appreciation rights, plans, equity incentive or achievement plans or any similar plans or the exercise of warrants, options or other securities convertible into or exchangeable for the Equity Interests of such Subsidiary, so long as such rights, plans, warrants, options or other securities were not entered into or issued in connection with or in contemplation of such person becoming a Subsidiary;

providedthat any such merger or consolidation involving a Person that is not a wholly-owned Subsidiary immediately prior to such merger or consolidation shall not be permitted unless it is also permitted by Section 6.04.

(b)    The Borrower will not, and will not permit any of its Subsidiaries to, engage to any material extent in any business other than businesses of the type conducted by the Borrower and its Subsidiaries on the date of execution of this Agreement and businesses reasonably related or ancillary thereto or similar or complementary thereto or reasonable extensions thereof.

(c)    The Borrower will not, nor will it permit any of its Subsidiaries to, change its fiscal year from the basis in effect on the Effective Date.

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SECTION 6.04. Investments, Loans, Advances, Guarantees and Acquisitions. The Borrower will not, and will not permit any of its Subsidiaries to, (i) purchase, hold or acquire (including pursuant to any merger or consolidation with any Person that was not a wholly owned Subsidiary prior to such merger or consolidation) any capital stock, evidences of indebtedness or other securities (including any option, warrant or other right to acquire any of the foregoing) of, make or permit to exist any loans or advances to, Guarantee any obligations of, or make or permit to exist any investment or any other interest in, any other Person, or (ii) purchase or otherwise acquire (in one transaction or a series of transactions) any Person or any assets of any other Person constituting a business unit, division or line of business of a Person (each of the foregoing transactions described in the foregoing clauses (i) and (ii), an “Investment”), except:

(a)    cash and Permitted Investments;

(b) Permitted Acquisitions;

(c)    Investments by the Borrower and its Subsidiaries existing on the date hereof in the capital stock of its Subsidiaries;

(d)    Investments made by the Borrower in or to any Subsidiary and made by any Subsidiary in or to the Borrower or any other Subsidiary (provided that not more than an aggregate amount of $100,000,000 in Investments may be made and remain outstanding, at any time, by Loan Parties to Subsidiaries which are not Loan Parties and such Investments to Subsidiaries that are not Loan Parties shall only be permitted so long as, at the time any such Investment is made and immediately after giving effect (including pro forma effect) thereto, no Default or Event of Default shall have occurred and is continuing);

(e) Guarantees constituting Indebtedness permitted by Section 6.01;

(f)    any other Investment (other than acquisitions) so long as the aggregate outstanding amount of all such Investments, loans and advances under this clause (f) does not exceed the greater of (i) $50,000,000 and (ii) 10% of Consolidated Total Assets (determined as of the last day of the most recent fiscal quarter for which financial statements shall have been delivered pursuant to Section 5.01(a) or Section 5.01(b) (or, prior to the delivery of any such financial statements, the last day of the last fiscal quarter included in the financial statements referred to in Section 3.04(a));

(g)    Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with, customers and suppliers, in each case in the ordinary course of business;

(h)    Investments made as a result of the receipt of non-cash consideration from a disposition of any asset in compliance with Section 6.03;

(i)    payroll, travel and similar advances to directors, officers and employees of the Borrower or any Subsidiary that are made in the ordinary course of business;

(j) extensions of trade credit in the ordinary course of business;

(k)    Investments of any Person in existence at the time such Person becomes a Subsidiary; providedthat such Investment was not made in connection with or anticipation of such Person becoming a Subsidiary and any modification, replacement, renewal or extension thereof; and

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(l)    Investments consisting of Liens permitted by Section 6.02, Investments in the ordinary course of business consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Article 4 customary trade arrangements with customers.

For purposes of covenant compliance with this Section 6.04, the amount of any Investment shall be the consideration in respect of an acquisition or the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment or accrued and unpaid interest or dividends thereon, less any amount paid, repaid, returned, distributed or otherwise received in cash in respect of such Investment.

SECTION 6.05. Swap Agreements. The Borrower will not, and will not permit any of its Subsidiaries to, enter into any Swap Agreement, except (a) Swap Agreements entered into to hedge or mitigate risks to which the Borrower or any Subsidiary has actual exposure (other than those in respect of Equity Interests of the Borrower or any of its Subsidiaries), and (b) Swap Agreements entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Borrower or any Subsidiary.

SECTION 6.06. Transactions with Affiliates. The Borrower will not, and will not permit any of its Subsidiaries to, sell, lease or otherwise transfer any property or assets to, or purchase, lease or otherwise acquire any property or assets from, or otherwise engage in any other transactions with, any of its Affiliates, except (a) in the ordinary course of business at prices and on terms and conditions not less favorable to the Borrower or such Subsidiary than could be obtained on an arm’s-length basis from unrelated third parties, (b) transactions between or among the Borrower and its wholly owned Subsidiaries not involving any other Affiliate, (c) any Restricted Payment permitted by Section 6.07, (d) customary fees paid and indemnifications provided to directors of the Borrower and its Subsidiaries, (e) compensation and indemnification of, and other employment agreements and arrangements, employee benefit plans, and stock incentive plans with, directors, officers and employees of the Borrower or any Subsidiary entered in the ordinary course of business, (f) transfers permitted by Section 6.03, (g) Investments permitted by Section 6.04, (h) leases or subleases of property in the ordinary course of business not materially interfering with the business of the Borrower and the Subsidiaries taken as a whole, (i) transactions between or among the Borrower and/or any Subsidiary and any entity that becomes a Subsidiary as a result of such transaction, (j) the payment of fees, expenses and indemnities and other payments pursuant to, and the transactions pursuant to, the agreements in effect on the Effective Date, and

(k)    the granting of registration and other customary rights in connection with the issuance of Equity Interests by the Borrower not otherwise prohibited by the Loan Documents.

SECTION 6.07. Restricted Payments. The Borrower will not, and will not permit any of its Subsidiaries to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, except (a) the Borrower may declare and pay dividends with respect to its Equity Interests payable solely in additional shares of its common stock, (b) Subsidiaries may declare and pay dividends ratably with respect to their Equity Interests, (c) the Borrower may make Restricted Payments pursuant to and in accordance with stock option plans or other benefit plans for management or employees of the Borrower and its Subsidiaries, (d) so long as, at the time any such Restricted Payment is made and immediately after giving effect (including pro forma effect) thereto (and to the incurrence of any Indebtedness in connection therewith) no Default or Event of Default shall have occurred and is continuing, the Borrower and its Subsidiaries may make Restricted Payments in an aggregate amount equal to a portion of the Available Amount on the date of such election that the Borrower elects to apply to this Section 6.07(d), which election shall be set forth in a written notice to the Administrative Agent from a Financial Officer of the Borrower and such notice shall set forth calculations in reasonable detail of the Available Amount immediately prior to such election and the amount thereof elected to be so

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applied and (e) so long as, at the time any such Restricted Payment is made and immediately after giving effect (including pro forma effect) thereto (and to the incurrence of any Indebtedness in connection therewith) (i) no Default or Event of Default shall have occurred and is continuing and (ii) the Leverage Ratio is not greater than 2.00 to 1.00, the Borrower and its Subsidiaries may make other Restricted Payments.

SECTION 6.08. Restrictive Agreements. The Borrower will not, and will not permit any of its Subsidiaries to, directly or indirectly, enter into, incur or permit to exist any agreement or other arrangement that prohibits, restricts or imposes any condition upon (a) the ability of the Borrower or any Subsidiary to create, incur or permit to exist any Lien upon any of its property or assets, or (b) the ability of any Subsidiary to pay dividends or other distributions with respect to holders of its Equity Interests or to make or repay loans or advances to the Borrower or any other Subsidiary or to Guarantee Indebtedness of the Borrower or any other Subsidiary; provided that (i) the foregoing shall not apply to restrictions and conditions imposed by law or by any Loan Document, (ii) the foregoing shall not apply to customary restrictions and conditions contained in agreements relating to the sale of a Subsidiary pending such sale, provided such restrictions and conditions apply only to the Subsidiary (or the Equity Interests thereof) that is to be sold and such sale is permitted hereunder, (iii) clause (a) of the foregoing shall not apply to restrictions or conditions imposed by any agreement relating to secured Indebtedness permitted by this Agreement if such restrictions or conditions apply only to the property or assets securing such Indebtedness, (iv) clause (a) of the foregoing shall not apply to customary provisions in leases and other contracts restricting the assignment thereof, (v) the foregoing shall not apply to any restriction arising under or in connection with any agreement or instrument governing Equity Interests of any joint venture that is formed or acquired after the Effective Date, (vi) the foregoing shall not apply to customary restrictions and conditions contained in any agreement relating to the disposition of any property permitted by Section 6.03 pending the consummation of such disposition, (vii) the foregoing shall not apply to customary provisions restricting the transfer or encumbrance of the specific property subject to a Lien permitted by Section 6.02, (viii) the foregoing shall not apply to restrictions or conditions set forth in any agreement governing Indebtedness permitted by Section 6.01 (including any refinancings thereof); providedthat such restrictions and conditions are customary for such Indebtedness and are no more restrictive, taken as a whole, than the comparable restrictions and conditions set forth in this Agreement as determined in the good faith judgment of the Board of Directors of the Borrower, (ix) the foregoing shall not apply to customary provisions restricting assignment of any agreement entered into in the ordinary course of business and (x) the foregoing shall not apply to restrictions on cash or other deposits (including escrowed funds) or net worth imposed under contracts entered into in the ordinary course of business.

SECTION 6.09. Subordinated Indebtedness and Amendments to Subordinated Indebtedness Documents. Excluding the Indebtedness owed by Medix I. C.S.A. to the Borrower, the Borrower will not, and will not permit any Subsidiary to, directly or indirectly voluntarily prepay, defease or in substance defease, purchase, redeem, retire or otherwise acquire, any Subordinated Indebtedness or any Indebtedness from time to time outstanding under the Subordinated Indebtedness Documents. Furthermore, the Borrower will not, and will not permit any Subsidiary to, amend the Subordinated Indebtedness Documents or any document, agreement or instrument evidencing any Indebtedness incurred pursuant to the Subordinated Indebtedness Documents (or any replacements, substitutions, extensions or renewals thereof) or pursuant to which such Indebtedness is issued where such amendment, modification or supplement provides for the following or which has any of the following effects:

(a)    increases the overall principal amount of any such Indebtedness or increases the amount of any single scheduled installment of principal or interest;

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(b)    shortens or accelerates the date upon which any installment of principal or interest becomes due or adds any additional mandatory redemption provisions;

(c)    shortens the final maturity date of such Indebtedness or otherwise accelerates the amortization schedule with respect to such Indebtedness;

(d) increases the rate of interest accruing on such Indebtedness;

(e) provides for the payment of additional fees or increases existing fees;

(f)    amends or modifies any financial or negative covenant (or covenant which prohibits or restricts the Borrower or any Subsidiary from taking certain actions) in a manner which is more onerous or more restrictive in any material respect to the Borrower or such Subsidiary or which is otherwise materially adverse to the Borrower, any Subsidiary and/or the Lenders or, in the case of any such covenant, which places material additional restrictions on the Borrower or such Subsidiary or which requires the Borrower or such Subsidiary to comply with more restrictive financial ratios or which requires the Borrower to better its financial performance, in each case from that set forth in the existing applicable covenants in the Subordinated Indebtedness Documents or the applicable covenants in this Agreement; or

(g)    amends, modifies or adds any affirmative covenant in a manner which (i) when taken as a whole, is materially adverse to the Borrower, any Subsidiary and/or the Lenders or

(ii)    is more onerous than the existing applicable covenant in the Subordinated Indebtedness Documents or the applicable covenant in this Agreement.

SECTION 6.10. Sale and Leaseback Transactions. The Borrower will not, nor will it permit any Subsidiary to, enter into any Sale and Leaseback Transaction, other than Sale and Leaseback Transactions in respect of which the net cash proceeds received in connection therewith does not exceed

$15,000,000 in the aggregate during any fiscal year of the Borrower, determined on a consolidated basis for the Borrower and its Subsidiaries.

SECTION 6.11.    Financial Covenants.

(a)    Maximum Leverage Ratio. The Borrower will not permit the ratio (the “Leverage Ratio”), determined as of the end of each of its fiscal quarters ending on and after September 30, 2016, of (i) Consolidated Total Indebtedness to (ii) Consolidated EBITDA for the period of four

(4)    consecutive fiscal quarters ending with the end of such fiscal quarter, all calculated for the Borrower and its Subsidiaries on a consolidated basis, to be greater than 2.75 to 1.00.

(b)    Minimum Fixed Charge Coverage Ratio. The Borrower will not permit the Fixed Charge Coverage Ratio, determined as of the end of each of its fiscal quarters ending on and after September 30, 2016, to be less than 1.75 to 1.00.

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ARTICLE VII

Events of Default

If any of the following events (“Events of Default”) shall occur:

(a)    the Borrower shall fail to pay any principal of any Loan or any reimbursement obligation in respect of any LC Disbursement when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or otherwise;

(b)    the Borrower shall fail to pay any interest on any Loan or any fee or any other amount (other than an amount referred to in clause (a) of this Article) payable under this Agreement or any other Loan Document, when and as the same shall become due and payable, and such failure shall continue unremedied for a period of three (3) Business Days;

(c)    any representation or warranty made or deemed made by or on behalf of the Borrower or any Subsidiary in or in connection with this Agreement or any other Loan Document or any amendment or modification hereof or thereof or waiver hereunder or thereunder, or in any report, certificate, financial statement or other document furnished pursuant to or in connection with this Agreement or any other Loan Document or any amendment or modification thereof or waiver thereunder, shall prove to have been incorrect in any material respect when made or deemed made;

(d)    the Borrower shall fail to observe or perform any covenant, condition or agreement contained in Section 5.02, 5.03 (with respect to the Borrower’s existence), 5.08, 5.09, 5.10 or 5.11, in Article VIor in Article X;

(e)    the Borrower or any Subsidiary Guarantor, as applicable, shall fail to observe or perform any covenant, condition or agreement contained in this Agreement (other than those specified in clause (a), (b) or (d) of this Article) or any other Loan Document, and such failure shall continue unremedied for a period of thirty (30) days after notice thereof from the Administrative Agent to the Borrower (which notice will be given at the request of any Lender);

(f)    the Borrower or any Subsidiary shall fail to make any payment (whether of principal or interest and regardless of amount) in respect of any Material Indebtedness, when and as the same shall become due and payable after giving effect to any applicable cure or grace period provided in the applicable agreement or instrument under which such Indebtedness was created;

(g)    any event or condition occurs that results in any Material Indebtedness becoming due prior to its scheduled maturity or that enables or permits after the expiration of any applicable cure or grace period provided in the applicable agreement or instrument under which such Indebtedness was created, the holder or holders of any Material Indebtedness or any trustee or agent on its or their behalf to cause any Material Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity; providedthat this clause (g) shall not apply to secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness;

(h)    an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of the Borrower or any Subsidiary or its debts, or of a substantial part of its assets, under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower or any Subsidiary or for a

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substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for sixty (60) days or an order or decree approving or ordering any of the foregoing shall be entered;

(i)    the Borrower or any Subsidiary shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (h) of this Article, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower or any Subsidiary or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any action for the purpose of effecting any of the foregoing;

(j)    the Borrower or any Subsidiary shall become unable, admit in writing its inability or fail generally to pay its debts as they become due;

(k)    one or more judgments for the payment of money in an aggregate amount in excess of $10,000,000 shall be rendered against the Borrower, any Subsidiary or any combination thereof and the same shall remain undischarged for a period of sixty (60) consecutive days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to attach or levy upon any assets of the Borrower or any Subsidiary to enforce any such judgment; providedthat any such amount shall be calculated after deducting from the sum so payable any amount of such judgment or order that is covered by a valid and binding policy of insurance issued by an unaffiliated insurer in favor of the Borrower or such Subsidiary (but only if the applicable insurer shall have been advised of such judgment and of the intent of the Borrower or such Subsidiary to make a claim in respect of any amount payable by it in connection therewith and such insurer shall not have disputed coverage);

(l)    an ERISA Event shall have occurred that, when taken together with all other ERISA Events that have occurred, could reasonably be expected to result in a Material Adverse Effect;

(m) a Change in Control shall occur;

(n)    any material provision of any Loan Document for any reason ceases to be valid, binding and enforceable in accordance with its terms (or the Borrower or any Subsidiary shall challenge the enforceability of any Loan Document or shall assert in writing that any provision of any of the Loan Documents has ceased to be or otherwise is not valid, binding and enforceable in accordance with its terms); or

(o)    any Collateral Document shall for any reason fail to create a valid and perfected first priority security interest in any portion of the Collateral purported to be covered thereby, except as permitted by the terms of any Loan Document;

then, and in every such event (other than an event with respect to the Borrower described in clause (h) or

(i)    of this Article), and at any time thereafter during the continuance of such event, the Administrative Agent may, and at the request of the Required Lenders shall, by notice to the Borrower, take either or both of the following actions, at the same or different times: (i) terminate the Commitments (and the Letter of Credit Commitments), and thereupon the Commitments (and the Letter of Credit Commitments) shall terminate immediately, (ii) declare the Loans then outstanding to be due and payable in whole (or in part, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable), and thereupon the principal of the Loans so declared to be due and payable, together with accrued interest thereon and all fees and other Secured Obligations of the Borrower accrued

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hereunder and under the other Loan Documents, shall become due and payable immediately, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower, and (iii) require cash collateral for the LC Exposure in accordance with Section 2.06(j); and in case of any event with respect to the Borrower described in clause (h) or (i) of this Article, the Commitments (and the Letter of Credit Commitments) shall automatically terminate and the principal of the Loans then outstanding and cash collateral for the LC Exposure, together with accrued interest thereon and all fees and other Secured Obligations accrued hereunder and under the other Loan Documents, shall automatically become due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower. Upon the occurrence and during the continuance of an Event of Default, the Administrative Agent may, and at the request of the Required Lenders shall, exercise any rights and remedies provided to the Administrative Agent under the Loan Documents or at law or equity, including all remedies provided under the UCC.

ARTICLE VIII

The Administrative Agent

Each of the Lenders, on behalf of itself and any of its Affiliates that are Secured Parties, and each of the Issuing Banks hereby irrevocably appoints the Administrative Agent as its agent and authorizes the Administrative Agent to take such actions on its behalf, including execution of the other Loan Documents, and to exercise such powers as are delegated to the Administrative Agent by the terms of the Loan Documents, together with such actions and powers as are reasonably incidental thereto. In addition, to the extent required under the laws of any jurisdiction other than the United States of America, each of the Lenders, on behalf of itself and any of its Affiliates that are Secured Parties, and each of the Issuing Banks hereby grants to the Administrative Agent any required powers of attorney to execute any Collateral Document governed by the laws of such jurisdiction on such Lender’s or Issuing Bank’s behalf. The provisions of this Article are solely for the benefit of the Administrative Agent and the Lenders (including the Swingline Lender and the Issuing Banks), and neither the Borrower nor any other Loan Party shall have rights as a third party beneficiary of any of such provisions. It is understood and agreed that the use of the term “agent” as used herein or in any other Loan Documents (or any similar term) with reference to the Administrative Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable law. Instead, such term is used as a matter of market custom, and is intended to create or reflect only an administrative relationship between independent contracting parties.

The bank serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent, and such bank and its Affiliates may accept deposits from, lend money to and generally engage in any kind of business with the Borrower or any Subsidiary or other Affiliate thereof as if it were not the Administrative Agent hereunder.

The Administrative Agent shall not have any duties or obligations except those expressly set forth in the Loan Documents. Without limiting the generality of the foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing, (b) the Administrative Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated by the Loan Documents that the Administrative Agent is required to exercise in writing as directed by the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 9.02), and (c) except as expressly set forth in the Loan Documents, the Administrative Agent shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower or any of its Subsidiaries that is

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communicated to or obtained by the bank serving as Administrative Agent or any of its Affiliates in any capacity. The Administrative Agent shall not be liable for any action taken or not taken by it with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 9.02) or in the absence of its own gross negligence or willful misconduct as determined by a final nonappealable judgment of a court of competent jurisdiction. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until written notice thereof is given to the Administrative Agent by the Borrower or a Lender, and the Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into

(i)    any statement, warranty or representation made in or in connection with any Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or in connection with any Loan Document, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth in any Loan Document, (iv) the validity, enforceability, effectiveness or genuineness of any Loan Document or any other agreement, instrument or document, (v) the creation, perfection or priority of Liens on the Collateral or the existence of the Collateral or (vi) the satisfaction of any condition set forth in Article IVor elsewhere in any Loan Document, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.

The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing believed by it to be genuine and to have been signed or sent by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to be made by the proper Person, and shall not incur any liability for relying thereon. The Administrative Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

The Administrative Agent may perform any and all its duties and exercise its rights and powers by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any and all its duties and exercise its rights and powers through their respective Related Parties. The exculpatory provisions of the preceding paragraphs shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent.

Subject to the appointment and acceptance of a successor Administrative Agent as provided in this paragraph, the Administrative Agent may resign at any time by notifying the Lenders, the Issuing Banks and the Borrower. Upon any such resignation, the Required Lenders shall have the right (with the consent of the Borrower (such consent not to be unreasonably withheld or delayed); provided that no consent of the Borrower shall be required if an Event of Default under clause (a), (b), (h), (i) or (j) of Article VII has occurred and is continuing) to appoint a successor. If no successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within thirty (30) days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may, on behalf of the Lenders and the Issuing Banks, appoint a successor Administrative Agent which shall be a bank with an office in New York, New York, or an Affiliate of any such bank. Upon the acceptance of its appointment as Administrative Agent hereunder by a successor, such successor shall 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. The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After the Administrative Agent’s resignation hereunder, the provisions of this Article and Section 9.03 shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agents

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and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while it was acting as Administrative Agent.

Each Lender acknowledges and agrees that the extensions of credit made hereunder are commercial loans and letters of credit and not investments in a business enterprise or securities. Each Lender further represents that it is engaged in making, acquiring or holding commercial loans in the ordinary course of its business and 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 credit analysis and decision to enter into this Agreement as a Lender, and to make, acquire or hold Loans hereunder. Each Lender shall, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information (which may contain material, non-public information within the meaning of the United States securities laws concerning the Borrower and its Affiliates) as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any related agreement or any document furnished hereunder or thereunder and in deciding whether or to the extent to which it will continue as a Lender or assign or otherwise transfer its rights, interests and obligations hereunder.

None of the Lenders, if any, identified in this Agreement as a syndication agent or documentation agent shall have any right, power, obligation, liability, responsibility or duty under this Agreement other than those applicable to all Lenders as such. Without limiting the foregoing, none of such Lenders shall have or be deemed to have a fiduciary relationship with any Lender. Each Lender hereby makes the same acknowledgments with respect to the relevant Lenders in their respective capacities as syndication agent or documentation agent, as applicable, as it makes with respect to the Administrative Agent in the preceding paragraph.

The Lenders are not partners or co-venturers, and no Lender shall be liable for the acts or omissions of, or (except as otherwise set forth herein in case of the Administrative Agent) authorized to act for, any other Lender. The Administrative Agent shall have the exclusive right on behalf of the Lenders to enforce the payment of the principal of and interest on any Loan after the date such principal or interest has become due and payable pursuant to the terms of this Agreement.

In its capacity, the Administrative Agent is a “representative” of the Secured Parties within the meaning of the term “secured party” as defined in the New York Uniform Commercial Code. Each Lender authorizes the Administrative Agent to enter into each of the Collateral Documents to which it is a party and to take all action contemplated by such documents. Each Lender agrees that no Secured Party (other than the Administrative Agent) shall have the right individually to seek to realize upon the security granted by any Collateral Document, it being understood and agreed that such rights and remedies may be exercised solely by the Administrative Agent for the benefit of the Secured Parties upon the terms of the Collateral Documents. In the event that any Collateral is hereafter pledged by any Person as collateral security for the Secured Obligations, the Administrative Agent is hereby authorized, and hereby granted a power of attorney, to execute and deliver on behalf of the Secured Parties any Loan Documents necessary or appropriate to grant and perfect a Lien on such Collateral in favor of the Administrative Agent on behalf of the Secured Parties. The Lenders hereby authorize the Administrative Agent, at its option and in its discretion, to release or, as applicable, subordinate any Lien granted to or held by the Administrative Agent upon any Collateral (i) as described in Section 9.02(d); (ii) as permitted by, but only in accordance with, the terms of the applicable Loan Document; or (iii) if approved, authorized or ratified in writing by the Required Lenders, unless such release is required to be approved by all of the Lenders hereunder. Upon request by the Administrative Agent at any time, the Lenders will confirm in writing the Administrative Agent’s authority to release particular types or items of Collateral pursuant hereto. Upon any sale or transfer of assets constituting Collateral which is permitted pursuant to the terms of any Loan Document, or consented to in writing by the Required Lenders or all of the

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Lenders, as applicable, and upon at least five (5) Business Days’ (or such shorter period as is acceptable to the Administrative Agent) prior written request by the Borrower to the Administrative Agent, the Administrative Agent shall (and is hereby irrevocably authorized by the Lenders to) execute such documents as may be necessary to evidence the release of the Liens granted to the Administrative Agent for the benefit of the Secured Parties herein or pursuant hereto upon the Collateral that was sold or transferred; provided, however, that (i) the Administrative Agent shall not be required to execute any such document on terms which, in the Administrative Agent’s opinion, would expose the Administrative Agent to liability or create any obligation or entail any consequence other than the release of such Liens without recourse or warranty, and (ii) such release shall not in any manner discharge, affect or impair the Secured Obligations or any Liens upon (or obligations of the Borrower or any Subsidiary in respect of) all interests retained by the Borrower or any Subsidiary, including (without limitation) the proceeds of the sale, all of which shall continue to constitute part of the Collateral. Any execution and delivery by the Administrative Agent of documents in connection with any such release shall be without recourse to or warranty by the Administrative Agent.

In case of the pendency of any proceeding with respect to any Loan Party under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, the Administrative Agent (irrespective of whether the principal of any Loan or any LC Disbursement shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Borrower) shall be entitled and empowered (but not obligated) by intervention in such proceeding or otherwise:

(a)    to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans, LC Exposure and all other Secured Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders, the Issuing Banks and the Administrative Agent (including any claim under Sections 2.12, 2.13, 2.15, 2.16, 2.17 and 9.03) allowed in such judicial proceeding; and

(b)    to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such proceeding is hereby authorized by each Lender, each Issuing Bank and each other Secured Party to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders, the Issuing Banks or the other Secured Parties, to pay to the Administrative Agent any amount due to it, in its capacity as the Administrative Agent, under the Loan Documents (including under Section 9.03).

The Secured Parties hereby irrevocably authorize the Administrative Agent, at the direction of the Required Lenders, to credit bid all or any portion of the Secured Obligations (including by accepting some or all of the Collateral in satisfaction of some or all of the Secured Obligations pursuant to a deed in lieu of foreclosure or otherwise) and in such manner purchase (either directly or through one or more acquisition vehicles) all or any portion of the Collateral (a) at any sale thereof conducted under the provisions of the Bankruptcy Code, including under Sections 363, 1123 or 1129 of the Bankruptcy Code, or any similar laws in any other jurisdictions to which a Credit Party is subject, or (b) at any other sale, foreclosure or acceptance of collateral in lieu of debt conducted by (or with the consent or at the direction of) the Administrative Agent (whether by judicial action or otherwise) in accordance with any applicable law. In connection with any such credit bid and purchase, the Secured Obligations owed to the Secured Parties shall be entitled to be, and shall be, credit bid by the Administrative Agent at the direction of the Required Lenders on a ratable basis (with Secured Obligations with respect to contingent or unliquidated

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claims receiving contingent interests in the acquired assets on a ratable basis that shall vest upon the liquidation of such claims in an amount proportional to the liquidated portion of the contingent claim amount used in allocating the contingent interests) for the asset or assets so purchased (or for the equity interests or debt instruments of the acquisition vehicle or vehicles that are issued in connection with such purchase). In connection with any such bid (i) the Administrative Agent shall be authorized to form one or more acquisition vehicles and to assign any successful credit bid to such acquisition vehicle or vehicles, (ii) each of the Secured Parties’ ratable interests in the Secured Obligations which were credit bid shall be deemed without any further action under this Agreement to be assigned to such vehicle or vehicles for the purpose of closing such sale, (iii) the Administrative Agent shall be authorized to adopt documents providing for the governance of the acquisition vehicle or vehicles (providedthat any actions by the Administrative Agent with respect to such acquisition vehicle or vehicles, including any disposition of the assets or equity interests thereof, shall be governed, directly or indirectly, by, and the governing documents shall provide for, control by the vote of the Required Lenders or their permitted assignees under the terms of this Agreement or the governing documents of the applicable acquisition vehicle or vehicles, as the case may be, irrespective of the termination of this Agreement and without giving effect to the limitations on actions by the Required Lenders contained in Section 9.02 of this Agreement), (iv) the Administrative Agent on behalf of such acquisition vehicle or vehicles shall be authorized to issue to each of the Secured Parties, ratably on account of the relevant Secured Obligations which were credit bid, interests, whether as equity, partnership, limited partnership interests or membership interests, in any such acquisition vehicle and/or debt instruments issued by such acquisition vehicle, all without the need for any Secured Party or acquisition vehicle to take any further action, and

(v)    to the extent that Secured Obligations that are assigned to an acquisition vehicle are not used to acquire Collateral for any reason (as a result of another bid being higher or better, because the amount of Secured Obligations assigned to the acquisition vehicle exceeds the amount of Secured Obligations credit bid by the acquisition vehicle or otherwise), such Secured Obligations shall automatically be reassigned to the Secured Parties pro rata and the equity interests and/or debt instruments issued by any acquisition vehicle on account of such Secured Obligations shall automatically be cancelled, without the need for any Secured Party or any acquisition vehicle to take any further action. Notwithstanding that the ratable portion of the Secured Obligations of each Secured Party are deemed assigned to the acquisition vehicle or vehicles as set forth in clause (ii) above, each Secured Party shall execute such documents and provide such information regarding the Secured Party (and/or any designee of the Secured Party which will receive interests in or debt instruments issued by such acquisition vehicle) as the Administrative Agent may reasonably request in connection with the formation of any acquisition vehicle, the formulation or submission of any credit bid or the consummation of the transactions contemplated by such credit bid.

The Borrower, on its behalf and on behalf of its Subsidiaries, and each Lender, on its behalf and on the behalf of its affiliated Secured Parties, hereby irrevocably constitute the Administrative Agent as the holder of an irrevocable power of attorney (fondé de pouvoir within the meaning of Article 2692 of the Civil Code of Québec) in order to hold hypothecs and security granted by the Borrower or any Subsidiary on property pursuant to the laws of the Province of Québec to secure obligations of the Borrower or any Subsidiary under any bond, debenture or similar title of indebtedness issued by the Borrower or any Subsidiary in connection with this Agreement, and agree that the Administrative Agent may act as the bondholder and mandatary with respect to any bond, debenture or similar title of indebtedness that may be issued by the Borrower or any Subsidiary and pledged in favor of the Secured Parties in connection with this Agreement. Notwithstanding the provisions of Section 32 of the An Act respecting the special powers of legal persons (Québec), JPMorgan Chase Bank, N.A. as Administrative Agent may acquire and be the holder of any bond issued by the Borrower or any Subsidiary in connection with this Agreement (i.e., the fondé de pouvoir may acquire and hold the first bond issued under any deed of hypothec by the Borrower or any Subsidiary).

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The Administrative Agent is hereby authorized to execute and deliver any documents necessary or appropriate to create and perfect the rights of pledge for the benefit of the Secured Parties including a right of pledge with respect to the entitlements to profits, the balance left after winding up and the voting rights of the Borrower as ultimate parent of any subsidiary of the Borrower which is organized under the laws of the Netherlands and the Equity Interests of which are pledged in connection herewith (a “Dutch Pledge”). Without prejudice to the provisions of this Agreement and the other Loan Documents, the parties hereto acknowledge and agree with the creation of parallel debt obligations of the Borrower or any relevant Subsidiary as will be described in any Dutch Pledge (the “Parallel Debt”), including that any payment received by the Administrative Agent in respect of the Parallel Debt will – conditionally upon such payment not subsequently being avoided or reduced by virtue of any provisions or enactments relating to bankruptcy, insolvency, preference, liquidation or similar laws of general application – be deemed a satisfaction of a pro rata portion of the corresponding amounts of the Secured Obligations, and any payment to the Secured Parties in satisfaction of the Secured Obligations shall – conditionally upon such payment not subsequently being avoided or reduced by virtue of any provisions or enactments relating to bankruptcy, insolvency, preference, liquidation or similar laws of general application – be deemed as satisfaction of the corresponding amount of the Parallel Debt. The parties hereto acknowledge and agree that, for purposes of a Dutch Pledge, any resignation by the Administrative Agent is not effective until its rights under the Parallel Debt are assigned to the successor Administrative Agent.

The parties hereto acknowledge and agree for the purposes of taking and ensuring the continuing validity of German law governed pledges (Pfandrechte) with the creation of parallel debt obligations of the Borrower and its Subsidiaries as will be further described in a separate German law governed parallel debt undertaking. The Administrative Agent shall (i) hold such parallel debt undertaking as fiduciary agent (Treuhaender) and (ii) administer and hold as fiduciary agent (Treuhaender) any pledge created under a German law governed Collateral Document which is created in favor of any Secured Party or transferred to any Secured Party due to its accessory nature (Akzessorietaet), in each case of (i) and (ii) in its own name and for the account of the Secured Parties. Each Lender, on its own behalf and on behalf of its affiliated Secured Parties, hereby authorizes the Administrative Agent to enter as its agent (Vertreter) in its name and on its behalf into any German law governed Collateral Document, to accept as its agent in its name and on its behalf any pledge under such Collateral Document and to agree to and execute as agent in its name and on its behalf any amendments, supplements and other alterations to any such Collateral Document and to release any such Collateral Document and any pledge created under any such Collateral Document in accordance with the provisions herein and/or the provisions in any such Collateral Document.

ARTICLE IX

Miscellaneous

SECTION 9.01. Notices. (a) Except in the case of notices and other communications expressly permitted to be given by telephone (and subject to paragraph (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopy, as follows:

(i)    if to the Borrower, to it at 6701 Koll Center Parkway, Suite 120, Pleasanton, California 94566, Attention of Jonathan A. Kennedy (Telecopy No. (321) 406-1064; Telephone No. (925) 223-6700);

(ii)    if to the Administrative Agent, to JPMorgan Chase Bank, N.A., 10 South Dearborn, L2S Floor, Chicago, Illinois 60603, Attention of April Yebd (Telecopy No. (844) 490-

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5663),with a copy to JPMorgan Chase Bank, N.A., 560 Mission Street, 19th Floor, San Francisco, California 94105, Attention of Alex Rogin (Telecopy No. (415) 315-5722);

(iii)    if to JPMorgan Chase Bank, N.A., in its capacity as an Issuing Bank, to it at JPMorgan    Chase    Bank,    N.A.,    Attention    of    LC    Team, Chicago.LC.Agency.Activity.Team@JPMChase.com (Telecopy No. (214) 307-6874);

(iv)    if to the Swingline Lender, to it at JPMorgan Chase Bank, N.A., 10 South Dearborn, L2S Floor, Chicago, Illinois 60603, Attention of April Yebd (Telecopy No. (844) 490- 5663); and

(v)    if to any other Lender or Issuing Bank, to it at its address (or telecopy number) set forth in its Administrative Questionnaire.

Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices sent by facsimile shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next business day for the recipient). Notices delivered through Electronic Systems, to the extent provided in paragraph (b) below, shall be effective as provided in said paragraph (b).

(b)    Notices and other communications to the Lenders and the Issuing Banks hereunder may be delivered or furnished by using Electronic Systems pursuant to procedures approved by the Administrative Agent; providedthat the foregoing shall not apply to notices pursuant to Article IIunless otherwise agreed by the Administrative Agent and the applicable Lender. The Administrative Agent or the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; providedthat 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 received 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 communications posted to an Internet or intranet website shall be deemed received 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; providedthat, for both clauses

(i) and (ii) above, if such notice, email or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient.

(c)    Any party hereto may change its address or telecopy number for notices and other communications hereunder by notice to the other parties hereto.

(d) Electronic Systems.

(i)    The Borrower agrees that the Administrative Agent may, but shall not be obligated to, make Communications (as defined below) available to the Issuing Banks and the other Lenders by posting the Communications on Debt Domain, Intralinks, Syndtrak, ClearPar or a substantially similar Electronic System.

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(ii)    Any Electronic System used by the Administrative Agent is provided “as is” and “as available.” The Agent Parties (as defined below) do not warrant the adequacy of such Electronic Systems and expressly disclaim liability for errors or omissions in the Communications. No warranty of any kind, express, implied or statutory, including any warranty of merchantability, fitness for a particular purpose, non-infringement of third-party rights or freedom from viruses or other code defects, is made by any Agent Party in connection with the Communications or any Electronic System. In no event shall the Administrative Agent or any of its Related Parties (collectively, the “Agent Parties”) have any liability to any Loan Party, any Lender, any Issuing Bank or any other Person or entity for damages of any kind, including direct or indirect, special, incidental or consequential damages, losses or expenses (whether in tort, contract or otherwise) arising out of any Loan Party’s or the Administrative Agent’s transmission of Communications through an Electronic System. “Communications” means, collectively, any notice, demand, communication, information, document or other material provided by or on behalf of any Loan Party pursuant to any Loan Document or the transactions contemplated therein which is distributed by the Administrative Agent, any Lender or any Issuing Bank by means of electronic communications pursuant to this Section, including through an Electronic System.

SECTION 9.02. Waivers; Amendments. (a) No failure or delay by the Administrative Agent, any Issuing Bank or any Lender in exercising any right or power hereunder or under any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Administrative Agent, the Issuing Banks and the Lenders hereunder and under the other Loan Documents are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of this Agreement or consent to any departure by the Borrower therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, the making of a Loan or issuance of a Letter of Credit shall not be construed as a waiver of any Default, regardless of whether the Administrative Agent, any Lender or any Issuing Bank may have had notice or knowledge of such Default at the time.

(b)    Except as provided in Section 2.20 with respect to an Incremental Term Loan Amendment, neither this Agreement nor any provision hereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Borrower and the Required Lenders or by the Borrower and the Administrative Agent with the consent of the Required Lenders; providedthat no such agreement shall (i) increase the Commitment of any Lender without the written consent of such Lender, (ii) reduce the principal amount of any Loan or LC Disbursement or reduce the rate of interest thereon, or reduce any fees payable hereunder, without the written consent of each Lender directly affected thereby (except that (x) any amendment or modification of the financial covenants in this Agreement (or defined terms used in the financial covenants in this Agreement and (y) only the consent of the Required Lenders shall be necessary to reduce or waive any obligation of the Borrower to pay interest or fees at the applicable default rate set forth in Section 2.13(c)) shall not constitute a reduction in the rate of interest or fees for purposes of this clause (ii)), (iii) postpone the scheduled date of payment of the principal amount of any Loan or LC Disbursement, or any interest thereon, or any fees payable hereunder, or reduce the amount of, waive or excuse any such payment, or postpone the scheduled date of expiration of any Commitment, without the written consent of each Lender directly affected thereby,

(iv) change Section 2.18(b) or (d) in a manner that would alter the pro rata sharing of payments required thereby, without the written consent of each Lender, (v) change any of the provisions of this Section or the definition of “Required Lenders” or any other provision hereof specifying the number or percentage

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of Lenders required to waive, amend or modify any rights hereunder or make any determination or grant any consent hereunder, without the written consent of each Lender (it being understood that, solely with the consent of the parties prescribed by Section 2.20 to be parties to an Incremental Term Loan Amendment, Incremental Term Loans may be included in the determination of Required Lenders on substantially the same basis as the Commitments and the Revolving Loans are included on the Effective Date), (vi) (x) release the Borrower from its obligations under Article Xor (y) release all or substantially all of the Subsidiary Guarantors from their obligations under the Subsidiary Guaranty, in each case, without the written consent of each Lender, or (vii) except as provided in clause (d) of this Section or in any Collateral Document, release all or substantially all of the Collateral, without the written consent of each Lender; provided furtherthat no such agreement shall amend, modify or otherwise affect the rights or duties of the Administrative Agent, any Issuing Bank or the Swingline Lender hereunder without the prior written consent of the Administrative Agent, such Issuing Bank or the Swingline Lender, as the case may be (it being understood that any change to Section 2.21 shall require the consent of the Administrative Agent, the Issuing Banks and the Swingline Lender). Notwithstanding the foregoing, no consent with respect to any amendment, waiver or other modification of this Agreement shall be required of any Defaulting Lender, except with respect to any amendment, waiver or other modification referred to in clause (i), (ii) or (iii) of the first proviso of this paragraph and then only in the event such Defaulting Lender shall be directly affected by such amendment, waiver or other modification.

(c)    Notwithstanding the foregoing, this Agreement and any other Loan Document may be amended (or amended and restated) with the written consent of the Required Lenders, the Administrative Agent and the Borrower (x) to add one or more credit facilities (in addition to the Incremental Term Loans pursuant to an Incremental Term Loan Amendment) to this Agreement and to permit extensions of credit from time to time outstanding thereunder and the accrued interest and fees in respect thereof to share ratably in the benefits of this Agreement and the other Loan Documents with the Revolving Loans, Incremental Term Loans and the accrued interest and fees in respect thereof and (y) to include appropriately the Lenders holding such credit facilities in any determination of the Required Lenders and Lenders.

(d)    The Lenders hereby irrevocably authorize the Administrative Agent, at its option and in its sole discretion, to release any Liens granted to the Administrative Agent by the Loan Parties on any Collateral (i) upon the termination of all the Commitments, payment and satisfaction in full in cash of all Secured Obligations (other than Unliquidated Obligations), and the cash collateralization of all Unliquidated Obligations in a manner satisfactory to the Administrative Agent, (ii) constituting property being sold or disposed of if the Borrower certifies to the Administrative Agent that the sale or disposition is made in compliance with the terms of this Agreement (and the Administrative Agent may rely conclusively on any such certificate, without further inquiry), (iii) constituting property leased to the Borrower or any Subsidiary under a lease which has expired or been terminated in a transaction permitted under this Agreement, or (iv) as required to effect any sale or other disposition of such Collateral in connection with any exercise of remedies of the Administrative Agent and the Lenders pursuant to Article VII. Any such release shall not in any manner discharge, affect, or impair the Obligations or any Liens (other than those expressly being released) upon (or obligations of the Loan Parties in respect of) all interests retained by the Loan Parties, including the proceeds of any sale, all of which shall continue to constitute part of the Collateral. In addition, each of the Lenders, on behalf of itself and any of its Affiliates that are Secured Parties, irrevocably authorizes the Administrative Agent, at its option and in its discretion, (i) to subordinate any Lien on any assets granted to or held by the Administrative Agent under any Loan Document to the holder of any Lien on such property that is permitted by Section 6.02(e) or (ii) in the event that the Borrower shall have advised the Administrative Agent that, notwithstanding the use by the Borrower of commercially reasonable efforts to obtain the consent of such holder (but without the requirement to pay any sums to obtain such consent) to permit the Administrative Agent to retain its liens (on a subordinated basis as contemplated by clause (i) above), the holder of such other Indebtedness

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requires, as a condition to the extension of such credit, that the Liens on such assets granted to or held by the Administrative Agent under any Loan Document be released, to release the Administrative Agent’s Liens on such assets.

(e)    If, in connection with any proposed amendment, waiver or consent requiring the consent of “each Lender” or “each Lender directly affected thereby,” the consent of the Required Lenders is obtained, but the consent of other necessary Lenders is not obtained (any such Lender whose consent is necessary but not obtained being referred to herein as a “Non-Consenting Lender”), then the Borrower may elect to replace a Non-Consenting Lender as a Lender party to this Agreement, provided that, concurrently with such replacement, (i) another bank or other entity which is reasonably satisfactory to the Borrower and the Administrative Agent shall agree, as of such date, to purchase for cash the Loans and other Obligations due to the Non-Consenting Lender pursuant to an Assignment and Assumption and to become a Lender for all purposes under this Agreement and to assume all obligations of the Non-Consenting Lender to be terminated as of such date and to comply with the requirements of clause (b) of Section 9.04, and (ii) the Borrower shall pay to such Non-Consenting Lender in same day funds on the day of such replacement (1) the outstanding principal amount of its Loans and participations in LC Disbursements and all interest, fees and other amounts then accrued but unpaid to such Non-Consenting Lender by the Borrower hereunder to and including the date of termination, including without limitation payments due to such Non-Consenting Lender under Sections 2.15 and 2.17, and (2) an amount, if any, equal to the payment which would have been due to such Lender on the day of such replacement under Section 2.16 had the Loans of such Non-Consenting Lender been prepaid on such date rather than sold to the replacement Lender.

(f)    Notwithstanding anything to the contrary herein the Administrative Agent may, with the consent of the Borrower only, amend, modify or supplement this Agreement or any of the other Loan Documents to cure any ambiguity, omission, mistake, defect or inconsistency.

SECTION 9.03.    Expenses; Indemnity; Damage Waiver. (a) The Borrower shall pay

(i) all reasonable and documented out-of-pocket expenses incurred by the Administrative Agent and its Affiliates, including the reasonable fees, charges and disbursements of counsel for the Administrative Agent, in connection with the syndication and distribution (including, without limitation, via the internet or through a service such as Intralinks) of the credit facilities provided for herein, the preparation and administration of this Agreement and the other Loan Documents or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable and documented out-of-pocket expenses incurred by the Issuing Banks in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and (iii) all out-of-pocket expenses incurred by the Administrative Agent, any Issuing Bank or any Lender, including the fees, charges and disbursements of any counsel for the Administrative Agent, any Issuing Bank or any Lender, in connection with the enforcement or protection of its rights in connection with this Agreement and any other Loan Document, including its rights under this Section, or in connection with the Loans made or Letters of Credit issued hereunder, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of Credit.

(b)    The Borrower shall indemnify the Administrative Agent, each Issuing Bank and each Lender, and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses, including the fees, charges and disbursements of any counsel for any Indemnitee, incurred by or asserted against any Indemnitee arising out of, in connection with, or as a result of (i) the execution or delivery of any Loan Document or any agreement or instrument contemplated thereby, the performance by the parties hereto of their respective obligations thereunder or

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the consummation of the Transactions or any other transactions contemplated hereby, (ii) any Loan or Letter of Credit or the use of the proceeds therefrom (including any refusal by any Issuing Bank to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or release of Hazardous Materials on or from any property owned or operated by the Borrower or any of its Subsidiaries, or any Environmental Liability related in any way to the Borrower or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether or not such claim, litigation, investigation or proceeding is brought by the Borrower or any other Loan Party or its or their respective equity holders, Affiliates, creditors or any other third Person and whether based on contract, tort or any other theory and regardless of whether any Indemnitee is a party thereto; providedthat such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from (x) the gross negligence or willful misconduct of such Indemnitee or (y) a breach in bad faith by such Indemnitee of its material obligations under the applicable Loan Documents pursuant to a claim initiated by the Borrower. This Section 9.03(b) shall not apply with respect to Taxes other than any Taxes that represent losses, claims or damages arising from any non-Tax claim.

(c)    To the extent that the Borrower fails to pay any amount required to be paid by it to the Administrative Agent, any Issuing Bank or the Swingline Lender under paragraph (a) or (b) of this Section, each Lender severally agrees to pay to the Administrative Agent, such Issuing Bank or the Swingline Lender, as the case may be, such Lender’s Applicable Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount (it being understood that the Borrower’s failure to pay any such amount shall not relieve the Borrower of any default in the payment thereof); providedthat the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent, such Issuing Bank or the Swingline Lender in its capacity as such.

(d)    To the extent permitted by applicable law, the Borrower shall not assert, and hereby waives, any claim against any Indemnitee (i) for any damages arising from the use by others of information or other materials obtained through telecommunications, electronic or other information transmission systems (including the Internet) other than actual or direct damages that are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee or any of its Related Parties, or (ii) 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, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the Transactions, any Loan or Letter of Credit or the use of the proceeds thereof.

(e) All amounts due under this Section shall be payable not later than fifteen

(15) days after written demand therefor.

SECTION 9.04. Successors and Assigns. (a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby (including any Affiliate of any Issuing Bank that issues any Letter of Credit), except that

(i)    the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by the Borrower without such consent shall be null and void) and (ii) no Lender may assign or otherwise transfer its rights or obligations hereunder except in accordance with this Section. Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby (including any Affiliate of any Issuing Bank that issues any

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Letter of Credit), Participants (to the extent provided in paragraph (c) of this Section) and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent, the Issuing Banks and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

(b)    (i) Subject to the conditions set forth in paragraph (b)(ii) below, any Lender may assign to one or more Persons (other than an Ineligible Institution) all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it) with the prior written consent (such consent not to be unreasonably withheld) of:

(A)    the Borrower (provided that the Borrower shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the Administrative Agent within five (5) Business Days after having received notice thereof); provided, further, that no consent of the Borrower shall be required for an assignment to a Lender, an Affiliate of a Lender, an Approved Fund or, if an Event of Default under clause (a), (b), (h), (i) or (j) of Article VII has occurred and is continuing, any other assignee;

(B) the Administrative Agent;

(C) the Issuing Banks; and

(D) the Swingline Lender.

(ii) Assignments shall be subject to the following additional conditions:

(A)    except in the case of an assignment to a Lender or an Affiliate of a Lender or an Approved Fund or an assignment of the entire remaining amount of the assigning Lender’s Commitment or Loans of any Class, the amount of the Commitment or Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent) shall not be less than $5,000,000 unless each of the Borrower and the Administrative Agent otherwise consent, providedthat no such consent of the Borrower shall be required if an Event of Default has occurred and is continuing;

(B)    each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement, provided that this clause shall not be construed to prohibit the assignment of a proportionate part of all the assigning Lender’s rights and obligations in respect of one Class of Commitments or Loans;

(C)    the parties to each assignment shall execute and deliver to the Administrative Agent (x) an Assignment and Assumption or (y) to the extent applicable, an agreement incorporating an Assignment and Assumption by reference pursuant to a Platform as to which the Administrative Agent and the parties to the Assignment and Assumption are participants, together with a processing and recordation fee of $3,500, such fee to be paid by either the assigning Lender or the assignee Lender or shared between such Lenders; and

(D)    the assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire in which the assignee designates

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one or more credit contacts to whom all syndicate-level information (which may contain material non-public information about the Borrower and its Affiliates and their Related Parties or their respective securities) will be made available and who may receive such information in accordance with the assignee’s compliance procedures and applicable laws, including Federal and state securities laws.

For the purposes of this Section 9.04(b), the terms “Approved Fund” and “Ineligible Institution” have the following meanings:

“Approved Fund” means any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in bank loans and similar extensions of credit in the ordinary course of its business and that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or

(c) an entity or an Affiliate of an entity that administers or manages a Lender.

“Ineligible Institution” means (a) a natural person, (b) a Defaulting Lender or its Lender Parent, (c) the Borrower, any of its Subsidiaries or any of its Affiliates, or (d) a company, investment vehicle or trust for, or owned and operated for the primary benefit of, a natural person or relative(s) thereof.

(iii)    Subject to acceptance and recording thereof pursuant to paragraph (b)(iv) of this Section, from and after the effective date specified in each Assignment and Assumption the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 2.15, 2.16, 2.17 and 9.03). Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section 9.04 shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (c) of this Section.

(iv)    The Administrative Agent, acting for this purpose as a non-fiduciary agent of the Borrower, shall maintain at one of its offices a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitment of, and principal amount (and stated interest) of the Loans and LC Disbursements owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive, and the Borrower, the Administrative Agent, the Issuing Banks and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof 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, any Issuing Bank and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

(v)    Upon its receipt of (x) a duly completed Assignment and Assumption executed by an assigning Lender and an assignee or (y) to the extent applicable, an agreement incorporating an Assignment and Assumption by reference pursuant to a Platform as to which the Administrative Agent and the parties to the Assignment and Assumption are participants, the assignee’s completed Administrative Questionnaire (unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to in paragraph (b) of this Section and any written consent to such assignment required by paragraph (b) of this Section, the Administrative

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Agent shall accept such Assignment and Assumption and record the information contained therein in the Register; providedthat if either the assigning Lender or the assignee shall have failed to make any payment required to be made by it pursuant to Section 2.05(c), 2.06(d) or (e), 2.07(b), 2.18(e) or 9.03(c), the Administrative Agent shall have no obligation to accept such Assignment and Assumption and record the information therein in the Register unless and until such payment shall have been made in full, together with all accrued interest thereon. No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph.

(c)    Any Lender may, without the consent of the Borrower, the Administrative Agent, the Issuing Banks or the Swingline Lender, sell participations to one or more banks or other entities (a “Participant”), other than an Ineligible Institution, in all or a portion of such Lender’s rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans owing to it); providedthat (A) such Lender’s obligations under this Agreement shall remain unchanged; (B) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations; and (C) the Borrower, the Administrative Agent, the Issuing Banks 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. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in the first proviso to Section 9.02(b) that affects such Participant. The Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.15,

2.16 and 2.17 (subject to the requirements and limitations therein, including the requirements under Section 2.17(f) (it being understood that the documentation required under Section 2.17(f) shall be delivered to the participating Lender)) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section; provided that such Participant (A) agrees to be subject to the provisions of Sections 2.18 and 2.19 as if it were an assignee under paragraph (b) of this Section; and (B) shall not be entitled to receive any greater payment under Sections 2.15 or 2.17, with respect to any participation, than its participating Lender would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from a Change in Law that occurs after the Participant acquired the applicable participation. Each Lender that sells a participation agrees, at the Borrower’s request and expense, to use reasonable efforts to cooperate with the Borrower to effectuate the provisions of Section 2.19(b) with respect to any Participant. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 9.08 as though it were a Lender, provided such Participant agrees to be subject to Section 2.18(d) as though it were a Lender. Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under the Loan Documents (the “Participant Register”); providedthat no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s interest in any Commitments, Loans, Letters of Credit or its other obligations under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such Commitment, Loan, Letter of Credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.

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(d)    Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank or other central banking authority having jurisdiction over such Lender, and this Section shall not apply to any such pledge or assignment of a security interest; providedthat no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

SECTION 9.05. Survival. All covenants, agreements, representations and warranties made by the Loan Parties in the Loan Documents and in the certificates or other instruments delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of the Loan Documents and the making of any Loans and issuance of any Letters of Credit, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Administrative Agent, any Issuing Bank or any Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any fee or any other amount payable under this Agreement or any other Loan Document is outstanding and unpaid or any Letter of Credit is outstanding (other than Unliquidated Obligations) and so long as the Commitments have not expired or terminated. The provisions of Sections 2.15, 2.16, 2.17 and 9.03 and Article VIIIshall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the Letters of Credit and the Commitments or the termination of this Agreement or any other Loan Document or any provision hereof or thereof.

SECTION 9.06. Counterparts; Integration; Effectiveness; Electronic Execution. This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement, the other Loan Documents and any separate letter agreements with respect to

(i)    fees payable to the Administrative Agent and (ii) the reductions of the Letter of Credit Commitment of any Issuing Bank constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Section 4.01, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof which, when taken together, bear the signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. Delivery of an executed counterpart of a signature page of this Agreement by telecopy, e-mailed.pdf or any other electronic means that reproduces an image of the actual executed signature page shall be effective as delivery of a manually executed counterpart of this Agreement. The words “execution,” “signed,” “signature,” “delivery,” and words of like import in or relating to any document to be signed in connection with this Agreement and the transactions contemplated hereby shall be deemed to include Electronic Signatures, deliveries or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act; providedthat nothing herein shall require the Administrative Agent to accept electronic signatures in any form or format without its prior written consent.

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SECTION 9.07. Severability. Any provision of any Loan Document held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions thereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

SECTION 9.08. Right of Setoff. If an Event of Default shall have occurred and be continuing, each Lender and each of its Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final and in whatever currency denominated) at any time held and other obligations at any time owing by such Lender or Affiliate to or for the credit or the account of the Borrower or any Subsidiary Guarantor against any of and all of the Secured Obligations held by such Lender, irrespective of whether or not such Lender shall have made any demand under the Loan Documents and although such obligations may be unmatured. The rights of each Lender under this Section are in addition to other rights and remedies (including other rights of setoff) which such Lender may have.

SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process. (a) This Agreement shall be construed in accordance with and governed by the law of the State of New York.

(b)    The Borrower hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of the Supreme Court of the State of New York sitting in the Borough of Manhattan, and of the United States District Court for the Southern District of New York sitting in the Borough of Manhattan, and any appellate court from any thereof, in any action or proceeding arising out of or relating to any Loan Document, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or, to the extent permitted by law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement or any other Loan Document shall affect any right that the Administrative Agent, any Issuing Bank or any Lender may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document against any Loan Party or its properties in the courts of any jurisdiction.

(c)    The Borrower hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or any other Loan Document in any court referred to in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

(d)    Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 9.01. Nothing in this Agreement or any other Loan Document will affect the right of any party to this Agreement to serve process in any other manner permitted by law.

SECTION 9.10. WAIVER OF JURY TRIAL; CALIFORNIA JUDICIAL REFERENCE. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY

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OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

IN THE EVENT ANY LEGAL PROCEEDING IS FILED IN A COURT OF THE STATE OF CALIFORNIA (THE “COURT”) BY OR AGAINST THE BORROWER OR THE LENDERS IN CONNECTION WITH ANY CONTROVERSY, DISPUTE OR CLAIM DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY) (EACH, A “CLAIM”) AND THE WAIVER SET FORTH IN THE PRECEDING PARAGRAPH IS NOT ENFORCEABLE IN SUCH ACTION OR PROCEEDING, THE BORROWER AND THE LENDERS (BY ITS ACCEPTANCE HEREOF) AGREE AS FOLLOWS:

(1)    WITH THE EXCEPTION OF THE MATTERS SPECIFIED IN PARAGRAPH (2) BELOW, ANY CLAIM WILL BE DETERMINED BY A GENERAL REFERENCE PROCEEDING IN ACCORDANCE WITH THE PROVISIONS OF CALIFORNIA CODE OF CIVIL PROCEDURE SECTIONS 638 THROUGH 645.2, INCLUDING ANY REVISION OR REPLACEMENT OF SUCH STATUTES OR RULES HEREAFTER ENACTED. THE BORROWER AND THE LENDERS INTEND THIS GENERAL REFERENCE AGREEMENT TO BE SPECIFICALLY ENFORCEABLE IN ACCORDANCE WITH CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 638, INCLUDING ANY REVISION OR REPLACEMENT OF SUCH STATUTE OR RULE HEREAFTER ENACTED. EXCEPT AS OTHERWISE PROVIDED IN THIS AND THE OTHER RELATED DOCUMENTS, VENUE FOR THE REFERENCE PROCEEDING WILL BE IN THE STATE OR FEDERAL COURT IN THE COUNTY OR DISTRICT WHERE VENUE IS OTHERWISE APPROPRIATE UNDER APPLICABLE LAW.

(2)    THE FOLLOWING MATTERS SHALL NOT BE SUBJECT TO A GENERAL REFERENCE PROCEEDING: (A) NON-JUDICIAL FORECLOSURE OF ANY SECURITY INTERESTS IN REAL OR PERSONAL PROPERTY; (B) EXERCISE OF SELF-HELP REMEDIES (INCLUDING, WITHOUT LIMITATION, SET-OFF); (C) APPOINTMENT OF A RECEIVER; AND (D) TEMPORARY, PROVISIONAL OR ANCILLARY REMEDIES (INCLUDING, WITHOUT LIMITATION, WRITS OF ATTACHMENT, WRITS OF POSSESSION, TEMPORARY RESTRAINING ORDERS OR PRELIMINARY INJUNCTIONS). THIS AGREEMENT DOES NOT LIMIT THE RIGHT OF THE BORROWER OR THE LENDERS TO EXERCISE OR OPPOSE ANY OF THE RIGHTS AND REMEDIES DESCRIBED IN CLAUSES (A) – (D) AND ANY SUCH EXERCISE OR OPPOSITION DOES NOT WAIVE THE RIGHT OF THE BORROWER OR THE LENDERS TO A REFERENCE PROCEEDING PURSUANT TO THIS AGREEMENT.

(3)    UPON THE WRITTEN REQUEST OF THE BORROWER OR THE LENDERS, THE BORROWER AND THE LENDERS SHALL SELECT A SINGLE REFEREE, WHO SHALL BE A RETIRED JUDGE OR JUSTICE. IF THE BORROWER AND THE LENDERS DO NOT AGREE UPON A REFEREE WITHIN TEN (10) DAYS OF SUCH WRITTEN REQUEST THEN THE BORROWER OR THE LENDERS MAY REQUEST THE COURT TO APPOINT A REFEREE PURSUANT TO CALIFORNIA CODE OF CIVIL PROCEDURE SECTION

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640(B), INCLUDING ANY REVISION OR REPLACEMENT OF SUCH STATUTE OR RULE HEREAFTER ENACTED.

(4)    ALL PROCEEDINGS AND HEARINGS CONDUCTED BEFORE THE REFEREE, EXCEPT FOR TRIAL, SHALL BE CONDUCTED WITHOUT A COURT REPORTER, EXCEPT WHEN THE BORROWER OR THE LENDERS SO REQUESTS, A COURT REPORTER WILL BE USED AND THE REFEREE WILL BE PROVIDED A COURTESY COPY OF THE TRANSCRIPT. THE PARTY MAKING SUCH REQUEST SHALL HAVE THE OBLIGATION TO ARRANGE FOR AND PAY COSTS OF THE COURT REPORTER, PROVIDED THAT SUCH COSTS, ALONG WITH THE REFEREE’S FEES, SHALL ULTIMATELY BE BORNE BY THE PARTY WHO DOES NOT PREVAIL, AS DETERMINED BY THE REFEREE.

(5)    THE REFEREE MAY REQUIRE ONE OR MORE PREHEARING CONFERENCES. THE BORROWER AND THE LENDERS SHALL BE ENTITLED TO DISCOVERY, AND THE REFEREE SHALL OVERSEE DISCOVERY IN ACCORDANCE WITH THE RULES OF DISCOVERY, AND MAY ENFORCE ALL DISCOVERY ORDERS IN THE SAME MANNER AS ANY TRIAL COURT JUDGE IN PROCEEDINGS AT LAW IN THE STATE OF CALIFORNIA. THE REFEREE SHALL APPLY THE RULES OF EVIDENCE APPLICABLE TO PROCEEDINGS AT LAW IN THE STATE OF CALIFORNIA AND SHALL DETERMINE ALL ISSUES IN ACCORDANCE WITH APPLICABLE STATE AND FEDERAL LAW. THE REFEREE SHALL BE EMPOWERED TO ENTER EQUITABLE AS WELL AS LEGAL RELIEF AND RULE ON ANY MOTION WHICH WOULD BE AUTHORIZED IN A TRIAL, INCLUDING, WITHOUT LIMITATION, MOTIONS FOR DEFAULT JUDGMENT OR SUMMARY JUDGMENT. THE REFEREE SHALL REPORT THE REFEREE’S DECISION, WHICH REPORT SHALL ALSO INCLUDE FINDINGS OF FACT AND CONCLUSIONS OF LAW.

(6)    THE BORROWER AND THE LENDERS RECOGNIZE AND AGREE THAT ALL CLAIMS RESOLVED IN A GENERAL REFERENCE PROCEEDING PURSUANT HERETO WILL BE DECIDED BY A REFEREE AND NOT BY A JURY.

SECTION 9.11. Headings. Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.

SECTION 9.12. Confidentiality. Each of the Administrative Agent, the Issuing Banks and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates’ directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any Governmental Authority (including any self-regulatory authority, such as the National Association of Insurance Commissioners), (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (d) to any other party to this Agreement, (e) in connection with the exercise of any remedies under this Agreement or any other Loan Document or any suit, action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to (1) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or (2) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Borrower and its obligations, (g) on a confidential basis to

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(1)    any rating agency in connection with rating the Borrower or its Subsidiaries or the credit facilities provided for herein or (2) the CUSIP Service Bureau or any similar agency in connection with the issuance and monitoring of CUSIP numbers with respect to the credit facilities provided for herein, (h) with the consent of the Borrower or (i) to the extent such Information (1) becomes publicly available other than as a result of a breach of this Section or (2) becomes available to the Administrative Agent, any Issuing Bank or any Lender on a nonconfidential basis from a source other than the Borrower. For the purposes of this Section, “Information” means all information received from the Borrower relating to the Borrower or its business, other than any such information that is available to the Administrative Agent, any Issuing Bank or any Lender on a nonconfidential basis prior to disclosure by the Borrower and other than information pertaining to this Agreement routinely provided by arrangers to data service providers, including league table providers, that serve the lending industry; providedthat, in the case of information received from the Borrower after the date hereof, such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

EACH LENDER ACKNOWLEDGES THAT INFORMATION AS DEFINED IN THE IMMEDIATELY PRECEDING PARAGRAPH FURNISHED TO IT PURSUANT TO THIS AGREEMENT MAY INCLUDE MATERIAL NON-PUBLIC INFORMATION CONCERNING THE BORROWER AND ITS RELATED PARTIES OR THEIR RESPECTIVE SECURITIES, AND CONFIRMS THAT IT HAS DEVELOPED COMPLIANCE PROCEDURES REGARDING THE USE OF MATERIAL NON-PUBLIC INFORMATION AND THAT IT WILL HANDLE SUCH MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH THOSE PROCEDURES AND APPLICABLE LAW, INCLUDING FEDERAL AND STATE SECURITIES LAWS.

ALL INFORMATION, INCLUDING REQUESTS FOR WAIVERS AND AMENDMENTS, FURNISHED BY THE BORROWER OR THE ADMINISTRATIVE AGENT PURSUANT TO, OR IN THE COURSE OF ADMINISTERING, THIS AGREEMENT WILL BE SYNDICATE-LEVEL INFORMATION, WHICH MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION ABOUT THE BORROWER, THE OTHER LOAN PARTIES AND THEIR RELATED PARTIES OR THEIR RESPECTIVE SECURITIES. ACCORDINGLY, EACH LENDER REPRESENTS TO THE BORROWER AND THE ADMINISTRATIVE AGENT THAT IT HAS IDENTIFIED IN ITS ADMINISTRATIVE QUESTIONNAIRE A CREDIT CONTACT WHO MAY RECEIVE INFORMATION THAT MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH ITS COMPLIANCE PROCEDURES AND APPLICABLE LAW.

SECTION 9.13. USA PATRIOT Act. Each Lender that is subject to the requirements of the Patriot Act hereby notifies each Loan Party that pursuant to the requirements of the Patriot Act, it is required to obtain, verify and record information that identifies such Loan Party, which information includes the name and address of such Loan Party and other information that will allow such Lender to identify such Loan Party in accordance with the Patriot Act.

SECTION 9.14. Appointment for Perfection. Each Lender hereby appoints each other Lender as its agent for the purpose of perfecting Liens, for the benefit of the Administrative Agent and the Secured Parties, in assets which, in accordance with Article 9 of the UCC or any other applicable law can be perfected only by possession or control. Should any Lender (other than the Administrative Agent) obtain possession or control of any such Collateral, such Lender shall notify the Administrative Agent thereof, and, promptly upon the Administrative Agent’s request therefor shall deliver such

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Collateral to the Administrative Agent or otherwise deal with such Collateral in accordance with the Administrative Agent’s instructions.

SECTION 9.15.    Releases of Subsidiary Guarantors.

(a)    A Subsidiary Guarantor shall automatically be released from its obligations under the Subsidiary Guaranty and any other Loan Documents upon the consummation of any transaction permitted by this Agreement as a result of which such Subsidiary Guarantor ceases to be a Subsidiary; providedthat, if so required by this Agreement, the Required Lenders shall have consented to such transaction and the terms of such consent shall not have provided otherwise. In connection with any termination or release pursuant to this Section, the Administrative Agent shall (and is hereby irrevocably authorized by each Lender to) execute and deliver to any Loan Party, at such Loan Party’s expense, all documents that such Loan Party shall reasonably request to evidence such termination or release. Any execution and delivery of documents pursuant to this Section shall be without recourse to or warranty by the Administrative Agent.

(b)    Further, the Administrative Agent may (and is hereby irrevocably authorized by each Lender to), upon the request of the Borrower, release any Subsidiary Guarantor from its obligations under the Subsidiary Guaranty if such Subsidiary Guarantor is no longer a Material Domestic Subsidiary.

(c)    At such time as the principal and interest on the Loans, all LC Disbursements, the fees, expenses and other amounts payable under the Loan Documents and the other Secured Obligations (other than Banking Services Obligations not due and payable, Swap Obligations not due and payable, and other Obligations expressly stated to survive such payment and termination) shall have been paid in full in cash, the Commitments shall have been terminated and no Letters of Credit shall be outstanding, the Subsidiary Guaranty and all obligations (other than those expressly stated to survive such termination) of each Subsidiary Guarantor thereunder shall automatically terminate, all without delivery of any instrument or performance of any act by any Person.

SECTION 9.16. Interest Rate Limitation. Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to any Loan, together with all fees, charges and other amounts which are treated as interest on such Loan under applicable law (collectively the “Charges”), shall exceed the maximum lawful rate (the “Maximum Rate”) which may be contracted for, charged, taken, received or reserved by the Lender holding such Loan in accordance with applicable law, the rate of interest payable in respect of such Loan hereunder, together with all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and Charges that would have been payable in respect of such Loan but were not payable as a result of the operation of this Section shall be cumulated and the interest and Charges payable to such Lender in respect of other Loans or periods shall be increased (but not above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the Federal Funds Effective Rate to the date of repayment, shall have been received by such Lender.

SECTION 9.17. No Advisory or Fiduciary Responsibility. In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document), the Borrower acknowledges and agrees that:

(i)    (A) the arranging and other services regarding this Agreement provided by the Lenders are arm’s- length commercial transactions between the Borrower and its Affiliates, on the one hand, and the Lenders and their Affiliates, on the other hand, (B) the Borrower has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate, and (C) the Borrower is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents; (ii) (A) each of the Lenders and their Affiliates is and has been

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acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for the Borrower or any of its Affiliates, or any other Person and (B) no Lender or any of its Affiliates has any obligation to the Borrower or any of its Affiliates with respect to the transactions contemplated hereby except, in the case of a Lender, those obligations expressly set forth herein and in the other Loan Documents; and (iii) each of the Lenders and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Borrower and its Affiliates, and no Lender or any of its Affiliates has any obligation to disclose any of such interests to the Borrower or its Affiliates. To the fullest extent permitted by law, the Borrower hereby waives and releases any claims that it may have against each of the Lenders and their Affiliates with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby.

SECTION 9.18. Acknowledgement and Consent to Bail-In of EEA Financial Institutions. Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any EEA Financial Institution arising under any Loan Document may be subject to the write-down and conversion powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:

(a)    the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an EEA Financial Institution; and

(b) the effects of any Bail-In Action on any such liability, including, if applicable:

(i)    a reduction in full or in part or cancellation of any such liability;

(ii)    a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent entity, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or

(iii)    the variation of the terms of such liability in connection with the exercise of the write-down and conversion powers of any EEA Resolution Authority.

ARTICLE X

BorrowerSECTION 10.01.    Guarantee.

(a)    In order to induce the Lenders to extend credit to the Borrower hereunder and for

other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the Borrower hereby absolutely and irrevocably and unconditionally guarantees, as a primary obligor and not merely as a surety, the payment when and as due of the Specified Ancillary Obligations of the Subsidiaries. The Borrower further agrees that the due and punctual payment of such Specified Ancillary Obligations may be extended or renewed, in whole or in part, without notice to or further assent from it, and that it will remain bound upon its guarantee hereunder notwithstanding any such extension or renewal of any such Specified Ancillary Obligation.

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(b)    The Borrower waives presentment to, demand of payment from and protest to any Subsidiary of any of the Specified Ancillary Obligations, and also waives notice of acceptance of its obligations and notice of protest for nonpayment. The obligations of the Borrower hereunder shall not be affected by (a) the failure of any applicable Lender (or any of its Affiliates) to assert any claim or demand or to enforce any right or remedy against any Subsidiary under the provisions of any Banking Services Agreement, any Swap Agreement or otherwise; (b) any extension or renewal of any of the Specified Ancillary Obligations; (c) any rescission, waiver, amendment or modification of, or release from, any of the terms or provisions of this Agreement, any other Loan Document, any Banking Services Agreement, any Swap Agreement or other agreement; (d) any default, failure or delay, willful or otherwise, in the performance of any of the Specified Ancillary Obligations; (e) the failure of any applicable Lender (or any of its Affiliates) to take any steps to perfect and maintain any security interest in, or to preserve any rights to, any security or collateral for the Specified Ancillary Obligations, if any; (f) any change in the corporate, partnership or other existence, structure or ownership of any Subsidiary or any other guarantor of any of the Specified Ancillary Obligations; (g) the enforceability or validity of the Specified Ancillary Obligations or any part thereof or the genuineness, enforceability or validity of any agreement relating thereto or with respect to any collateral securing the Specified Ancillary Obligations or any part thereof, or any other invalidity or unenforceability relating to or against any Subsidiary or any other guarantor of any of the Specified Ancillary Obligations, for any reason related to this Agreement, any other Loan Document, any Banking Services Agreement, any Swap Agreement, or any provision of applicable law, decree, order or regulation of any jurisdiction purporting to prohibit the payment by such Subsidiary or any other guarantor of the Specified Ancillary Obligations, of any of the Specified Ancillary Obligations or otherwise affecting any term of any of the Specified Ancillary Obligations; or (h) any other act, omission or delay to do any other act which may or might in any manner or to any extent vary the risk of the Borrower or otherwise operate as a discharge of a guarantor as a matter of law or equity or which would impair or eliminate any right of the Borrower to subrogation.

(c)    The Borrower further agrees that its agreement hereunder constitutes a guarantee of payment when due (whether or not any bankruptcy or similar proceeding shall have stayed the accrual or collection of any of the Specified Ancillary Obligations or operated as a discharge thereof) and not merely of collection, and waives any right to require that any resort be had by any applicable Lender (or any of its Affiliates) to any balance of any deposit account or credit on the books of the Administrative Agent, any Issuing Bank or any Lender in favor of any Subsidiary or any other Person.

(d)    The obligations of the Borrower hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason, and shall not be subject to any defense or set-off, counterclaim, recoupment or termination whatsoever, by reason of the invalidity, illegality or unenforceability of any of the Specified Ancillary Obligations, any impossibility in the performance of any of the Specified Ancillary Obligations or otherwise.

(e)    The Borrower further agrees that its obligations hereunder shall constitute a continuing and irrevocable guarantee of all Specified Ancillary Obligations now or hereafter existing and shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of any Specified Ancillary Obligation (including a payment effected through exercise of a right of setoff) is rescinded, or is or must otherwise be restored or returned by any applicable Lender (or any of its Affiliates) upon the insolvency, bankruptcy or reorganization of any Subsidiary or otherwise (including pursuant to any settlement entered into by a holder of Specified Ancillary Obligations in its discretion).

(f)    In furtherance of the foregoing and not in limitation of any other right which any applicable Lender (or any of its Affiliates) may have at law or in equity against the Borrower by virtue hereof, upon the failure of any Subsidiary to pay any Specified Ancillary Obligation when and as the same shall become due, whether at maturity, by acceleration, after notice of prepayment or otherwise, the

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Borrower hereby promises to and will, upon receipt of written demand by any applicable Lender (or any of its Affiliates), forthwith pay, or cause to be paid, to such applicable Lender (or any of its Affiliates) in cash an amount equal to the unpaid principal amount of such Specified Ancillary Obligations then due, together with accrued and unpaid interest thereon. The Borrower further agrees that if payment in respect of any Specified Ancillary Obligation shall be due in a currency other than Dollars and/or at a place of payment other than New York, Chicago or any other office, branch, affiliate or correspondent bank of the applicable Lender for such currency and if, by reason of any Change in Law, disruption of currency or foreign exchange markets, war or civil disturbance or other event, payment of such Specified Ancillary Obligation in such currency or at such place of payment shall be impossible or, in the reasonable judgment of any applicable Lender (or any of its Affiliates), disadvantageous to such applicable Lender (or any of its Affiliates) in any material respect, then, at the election of such applicable Lender, the Borrower shall make payment of such Specified Ancillary Obligation in Dollars (based upon the applicable equivalent amount in effect on the date of payment) and/or in New York, Chicago or such other payment office as is designated by such applicable Lender (or its Affiliate) and, as a separate and independent obligation, shall indemnify such applicable Lender (and any of its Affiliates) against any losses or reasonable out-of-pocket expenses that it shall sustain as a result of such alternative payment.

(g)    Upon payment by the Borrower of any sums as provided above, all rights of the Borrower against any Subsidiary arising as a result thereof by way of right of subrogation or otherwise shall in all respects be subordinated and junior in right of payment to the prior indefeasible payment in full in cash of all the Specified Ancillary Obligations owed by such Subsidiary to the applicable Lender (or its applicable Affiliates).

(h)    The Borrower hereby absolutely, unconditionally and irrevocably undertakes to provide such funds or other support as may be needed from time to time by each Subsidiary Guarantor to honor all of its obligations under the Subsidiary Guaranty in respect of Specified Swap Obligations (provided, however, that the Borrower shall only be liable under this paragraph for the maximum amount of such liability that can be hereby incurred without rendering its obligations under this paragraph or otherwise under this Article Xvoidable under applicable law relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount). The Borrower intends that this paragraph constitute, and this paragraph shall be deemed to constitute, a “keepwell, support, or other agreement” for the benefit of each Subsidiary Guarantor for all purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

(i)    Nothing shall discharge or satisfy the liability of the Borrower hereunder except the full performance and payment in cash of the Secured Obligations.

SECTION 10.02. California Waivers. To the extent California law applies, in addition to and not in lieu of any other provisions of this Article X, the Borrower represents, warrants, covenants and agrees as follows:

(a)    The obligations of the Borrower under this Article Xshall be performed without demand by any Secured Party and shall be unconditional irrespective of the genuineness, validity, regularity or enforceability of any of the Loan Documents, Swap Agreements or Banking Services Agreements, and without regard to any other circumstance which might otherwise constitute a legal or equitable discharge of a surety or a guarantor. The Borrower hereby waives any and all benefits and defenses under California Civil Code Section 2810 and agrees that by doing so the Borrower shall be liable even if the relevant Subsidiary had no liability at the time of execution of the applicable Loan Documents, Swap Agreements or Banking Services Agreements, or thereafter ceases to be liable. The Borrower hereby waives any and all benefits and defenses under California Civil Code Section 2809 and agrees that by doing so the Borrower’s liability may be larger in amount and more burdensome than that

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of the Subsidiaries. The Borrower hereby waives the benefit of all principles or provisions of law, statutory or otherwise, which are or might be in conflict with the terms of this Article Xand agrees that the Borrower’s obligations shall not be affected by any circumstances, whether or not referred to in this Article Xwhich might otherwise constitute a legal or equitable discharge of a surety or a guarantor. The Borrower hereby waives the benefits of any right of discharge under any and all statutes or other laws relating to guarantors or sureties and any other rights of sureties and guarantors thereunder.

(b)    In accordance with Section 2856 of the California Civil Code, the Borrower hereby waives all rights and defenses arising out of an election of remedies by any Secured Party even though that election of remedies, such as a nonjudicial foreclosure with respect to security for the Secured Obligations, has destroyed or otherwise impaired the Borrower’s rights of subrogation and reimbursement against the principal by the operation of Section 580d of the California Code of Civil Procedure or otherwise. The Borrower hereby authorizes and empowers the Secured Parties to exercise, in their sole and absolute discretion, any right or remedy, or any combination thereof, which may then be available, since it is the intent and purpose of the Borrower that its obligations under this Article Xshall be absolute, independent and unconditional under any and all circumstances. Specifically, and without in any way limiting the foregoing, the Borrower hereby waives any rights of subrogation, indemnification, contribution or reimbursement arising under Sections 2846, 2847, 2848 and 2849 of the California Civil Code or any other right of recourse to or with respect to any Subsidiary, any constituent of any Subsidiary, any other Person, or the assets or property of any of the foregoing or to any collateral for the Secured Obligations until (i) all of the Secured Obligations (other than Unliquidated Obligations) have been paid and satisfied in full in cash or cash collateralized pursuant to arrangements reasonably satisfactory to the Administrative Agent, as the case may be, and the Commitments have terminated or expired, (ii) all obligations (other than Unliquidated Obligations) owed to the Secured Parties under the Loan Documents, the Swap Agreements and the Banking Services Agreements have been fully performed, (iii) the Secured Parties have released, transferred or disposed of all their right, title and interest in such collateral or any other security for the Secured Obligations (other than Unliquidated Obligations) and (iv) there has expired the maximum possible period thereafter during which any payment made by the Borrower, any Subsidiary Guarantor or others to any Secured Party with respect to the Secured Obligations or any other obligations owed to the Secured Parties under the Loan Documents, the Swap Agreements and the Banking Services Agreements could be deemed a preference under the Bankruptcy Code of the United States. In connection with the foregoing, the Borrower expressly waives any and all rights of subrogation against any Subsidiary, and the Borrower hereby waives any rights to enforce any remedy which any Secured Party may have against any Subsidiary and any right to participate in any collateral for the Secured Obligations. The Borrower recognizes that, pursuant to Section 580d of the California Code of Civil Procedure, the Secured Parties’ realization through nonjudicial foreclosure upon any real property constituting security for the Secured Obligations could terminate any right of the Secured Parties to recover a deficiency judgment against any Subsidiary, thereby terminating subrogation rights which other parties might otherwise have against such Subsidiary. In the absence of an adequate waiver, such a termination of subrogation rights could create a defense to enforcement of this Article Xagainst such parties. The Borrower’s hereby unconditionally and irrevocably waives any such defense.

(c)    In addition to and without in any way limiting the foregoing, the Borrower hereby subordinates any and all Indebtedness of each Subsidiary now or hereafter owed to the Borrower to the prior payment in full in cash or cash collateralization pursuant to arrangements reasonably satisfactory to the Administrative Agent, as the case may be, of all the Secured Obligations (other than Unliquidated Obligations) owed by the Borrower or any of its Subsidiaries to the Secured Parties and the termination or expiration of the Commitments and agrees with the Secured Parties that until (i) all of the Secured Obligations (other than Unliquidated Obligations) have been paid and satisfied in full in cash or cash collateralization pursuant to arrangements reasonably satisfactory to the Administrative Agent, as the

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case may be, and the Commitments have terminated or expired, (ii) all obligations owed to the Secured Parties under the Loan Documents, the Swap Agreements and the Banking Services Agreements have been fully performed, (iii) the Secured Parties have released, transferred or disposed of all their right title and interest in such collateral or any other security for the Secured Obligations and (iv) there has expired the maximum possible period thereafter during which any payment made by the Borrower, any Subsidiary or others to the Secured Parties with respect to the Secured Obligations or any other obligations owed to the Secured Parties under the Loan Documents, the Swap Agreements or the Banking Services Agreements could be deemed a preference under the Bankruptcy Code of the United States, the Borrower shall not demand or accept any payment of principal or interest from any Subsidiary, claim any offset or other reduction of the Borrower’s obligations hereunder because of any such Indebtedness, nor take any action to obtain any of the collateral for the Secured Obligations, provided that, and not in contravention of the foregoing, so long as no Event of Default has occurred and is continuing, the Borrower may make loans and extend other intercompany Indebtedness to and receive payments with respect to such intercompany Indebtedness from each such obligor to the extent not prohibited by the terms of this Agreement. If any amount shall nevertheless be paid to the Borrower by any Subsidiary or another guarantor, such amount shall be held in trust for the benefit of the Secured Parties and shall forthwith be paid to the Secured Parties. Further, the Borrower shall have no right of recourse against the Secured Parties by reason of any action any Secured Party may take or omit to take under the provisions of this Article Xor under the provisions of any of the Loan Documents, Swap Agreements or Banking Services Agreements. Without limiting the generality of the foregoing, the Borrower hereby waives, to the fullest extent permitted by law, diligence in collecting the Secured Obligations, presentment, demand for payment, protest, all notices with respect to this Article Xor any other Loan Document, Swap Agreement or Banking Services Agreement which may be required by statute, rule of law or otherwise to preserve the Secured Parties’ rights against the Borrower under this Article X, including, but not limited to, notice of acceptance, notice of any amendment of the Loan Documents, any Swap Agreement or any Banking Services Agreement, notice of the occurrence of any default, notice of intent to accelerate, notice of acceleration, notice of dishonor, notice of foreclosure, notice of protest, and notice of the incurring by any Subsidiary of any obligation or Indebtedness.

(d)    Without limiting the foregoing, the Borrower waives (i) all rights of subrogation, reimbursement, indemnification, and contribution and any other rights and defenses that are or may become available to the Borrower by reason of California Civil Code Sections 2787 to 2855, inclusive, including any and all rights or defenses the Borrower may have by reason of protection afforded to any Subsidiary with respect to any of the obligations of the Borrower under this Article Xby reason of a nonjudicial foreclosure or pursuant to the antideficiency or other laws of the State of California limiting or discharging the Secured Obligations. Without limiting the generality of the foregoing, the Borrower hereby expressly waives any and all benefits under (i) California Code of Civil Procedure Section 580a (which Section, if the Borrower had not given this waiver, would otherwise limit the Borrower’s liability after a nonjudicial foreclosure sale to the difference between the obligations of the Borrower under this Article Xand the fair market value of the property or interests sold at such nonjudicial foreclosure sale),

(ii)    California Code of Civil Procedure Sections 580b and 580d (which Sections, if the Borrower had not given this waiver, would otherwise limit the Secured Parties’ right to recover a deficiency judgment with respect to purchase money obligations and after a nonjudicial foreclosure sale, respectively), and (iii) California Code of Civil Procedure Section 726 (which Section, if the Borrower had not given this waiver, among other things, would otherwise require the Secured Parties to exhaust all of their security before a personal judgment could be obtained for a deficiency).

(e)    Likewise, the Borrower waives (i) any and all rights and defenses available to the Borrower under California Civil Code Sections 2899 and 3433 and (ii) any rights or defenses the Borrower may have with respect to its obligations as a guarantor by reason of any election of remedies by any Secured Party.

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(f)    The Borrower further waives all rights and defenses that the Borrower may have because any Subsidiary’s debt is secured by real property. This means, among other things, that:

(i)    the Secured Parties may collect from the Borrower without first foreclosing on any real or personal property collateral pledged by the applicable Subsidiary; and

(ii) if any Secured Party forecloses on any real property collateral pledged by

a Subsidiary:

(A)    the amount of the debt may be reduced only by the price for which that collateral is sold at the foreclosure sale, even if the collateral is worth more than the sale price; and

(B)    the Secured Parties may collect from the Borrower even if the Secured Parties, by foreclosing on the real property collateral, have destroyed any rights the Borrower may have to collect from the Subsidiaries.

This is an unconditional and irrevocable waiver of any rights and defenses the Borrower may have because any Subsidiary’s debt evidenced by the Loan Documents, any Swap Agreement or any Banking Services Agreement is secured by real property. These rights and defenses include, but are not limited to, any rights or defenses based upon Section 580a, 580b, 580d, or 726 of the California Code of Civil Procedure.

(g)    Nothing herein shall be deemed to limit the right of any Secured Party to recover in accordance with California Code of Civil Procedure Section 736 (as such Section may be amended from time to time), any costs, expenses, liabilities or damages, including reasonable attorneys’ fees and costs, incurred by any Secured Party and arising from any covenant, obligation, liability, representation or warranty contained in any indemnity agreement given to any Secured Party, or any order, consent decree or settlement relating to the cleanup of Hazardous Materials or any other “environmental provision” (as defined in such Section 736) relating to any of the Collateral or any portion thereof or the right of the Secured Parties to waive, in accordance with the California Code of Civil Procedure Section 726.5 (as such Section may be amended from time to time), the security as to any parcel of any Collateral that is “environmentally impaired” or is an “affected parcel” (as such terms are defined in such Section 726.5), and as to any personal property attached to such parcel, and thereafter to exercise against the Borrower or any Subsidiary, to the extent permitted by such Section 726.5, the rights and remedies of any unsecured creditor, including reduction of the Secured Parties’ claim against the Borrower and its Subsidiaries to judgment, and any other rights and remedies permitted by law.

(h)    The provisions of this Section 10.02 shall survive any satisfaction and discharge of the Borrower and the Subsidiary Guarantors by virtue of any payment, court order or any applicable law, except the payment in full in cash or cash collateralization pursuant to arrangements reasonably satisfactory to the Administrative Agent, as the case may be, and complete satisfaction of the Secured Obligations (other than Unliquidated Obligations) and the termination or expiration of the Commitments.

[Signature Pages Follow]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their respective authorized officers as of the day and year first above written.

NATUS MEDICAL INCORPORATED,

as the Borrower

By    /s/ James B. Hawkins

Name:    James B. Hawkins

Title:    President and Chief Executive Officer

Signature Page to Credit Agreement Natus Medical Incorporated

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JPMORGAN CHASE BANK N.A.. individually as a Lender, as the Swingline Lender, as an Issuing Rank and as Administrative Agent

By /s/ Alex Rogin Name: Alex Rogin

Title; Execufoe Direernr

Signature Page to Credit Agrecmcm Natus Medical Incorporated

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CITIBANK, N.A., individually as a Lender, as an Issuing Ban    nd as Syndication Agent

By /s/ Yousuf Omar Name: Yousuf Omar Title: Director

Signature Page to Credit Agreement Notus Medical Incorporated

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EX-10.2

Bolivarian Government of Venezuela	1815-2015
Ministry of the People's Power for Health	United Patriots Know How to Triumph

Exhibit 10.2

BOLIVARIAN REPUBLIC OF VENEZUELA ADDENDUM NO. 001 TO AGREEMENT NO. 039/2015

ENTERED INTO BY AND BETWEEN THE COMPANY MEDIX INDUSTRIAL Y COMERCIAL SOCIEDAD ANÓNIMA (MEDIX I.C.S.A.) AND THE MINISTRY OF THE PEOPLE’S POWER FOR HEALTH.

By and between the Bolivarian Republic of Venezuela, through the MINISTRY OF THE PEOPLE’S POWER FOR HEALTH, represented herein by LUISANA MELO SOLÓRZANO, Venezuelan citizen, of legal age, domiciled in Venezuela, holder of Venezuelan Identity Document No. V-5.886.440, whose official appointment was recorded in Decree No. 2,181 dated January 6, 2016, published in the Bolivarian Republic of Venezuela’s Official Gazette No. 40,822 on the aforementioned date, in her capacity as Minister, with full power and authority to perform this act as set forth by Decree No. 1424 dated November 17, 2014, in Section 78, Subsection 16 of the Special Decree having the Status, Validity and Force of Law of the Public Administration, published in the Bolivarian Republic of Venezuela’s Official Gazette No. 6147 of the same date, hereinafter —and for the purposes of this Addendum— referred to as “THE MINISTRY”; and the company MEDIX INDUSTRIAL Y COMERCIAL SOCIEDAD ANÓNIMA (MEDIX I.C.S.A.), having its legal domicile at Mermoz 1750 (B1618EWC), El Talar Tigre, Buenos Aires, República Argentina, the By-Laws of which were executed as a deed on May 31, 1972, before Civil Law Notary Adolfo Schikler, under folio 926 of the Notarial Registry No. 56 under his charge, and registered with the National Court of First Instance on Commercial Registration Matters on July 14, 1972 under Entry No. 2948, Folio 185, Book 77, Volume A, represented herein by OSVALDO MARIO ASO, Argentine citizen, of legal age, holder of Argentine Passport and Argentine Identity Document No. 11,770,882, in his capacity as attorney-in-fact of the aforementioned company, with full power and authority to execute this instrument under the Special Power of Attorney filed with the Association of Civil Law Notaries of the City of Buenos Aires [Colegio de Escribanos de la Ciudad de Buenos Aires], Federal Capital of the Argentine Republic, on April 11, 2011, transcribed to folio 206 of the Notarial Registry No. 56, under Notarial Records No. N013489170, N013518151, and N013519152 and certified in the Argentine Republic under No. 150826394068/2, who shall —for all purposes arising herefrom— be referred to as “THE COMPANY”; both of whom shall be jointly referred to as “THE PARTIES”. “THE PARTIES” have agreed to amend the terms for performance of the Agreement No. 039/2015, executed on October 14, 2015, by virtue of the partial performance thereof referred to as “SERVICES PHASE 1”, consisting of:

Addendum No. 001 to Agreement No. 039/2015 Page 1 of 14

Bolivarian Government of Venezuela	1815-2015
Ministry of the People's Power for Health	United Patriots Know How to Triumph

“PROVISION OF TECHNOLOGY UPDATES FOR THE OBSTETRICS AND NEONATAL UNITS OF 52 HOSPITALS THAT PROVIDE HIGH COMPLEXITY CARE, DISTRIBUTION AND PROVISION OF THE REQUIRED CONSUMABLE SUPPLIES FOR A TERM OF THREE (3) YEARS FOR THE SERVICES SUBJECT TO TECHNOLOGY UPDATES, PREVENTIVE AND CORRECTIVE MAINTENANCE SERVICES FOR A TERM OF THREE (3) YEARS REQUIRED FOR 3768 DEVICES OF THE BASIS INSTALLED IN 87 HOSPITALS OF PHASES I AND II OF THE ARGENTINA VENEZUELA AGREEMENT (AVA), AND DISTRIBUTION AND PROVISION OF CONSUMABLE SUPPLIES REQUIRED FOR A TERM OF THREE (3) YEARS FOR 3629 DEVICES OF THE BASIS INSTALLED IN 87 HOSPITALS OF PHASES I AND II OF THE AVA” and, pursuant to the provisions of Section 19 thereof, SECTIONS 2, 3, 4, 5, 6, 8, 10, 11, 12 and 22 are hereby amended and redrafted as follows:

SECTION 2: SUBJECT MATTER

For the purposes of providing technology updates and related services, corrective and preventive maintenance services and consumable supplies —with regard to both the devices subject to technology updates and maintenance and the obstetrics and neonatal units of the Hospitals’ Network depending on the Ministry of the People’s Power for health, “THE COMPANY” shall:

a)Provide technology updates for the obstetrics and neonatal units of fifty-two (52) hospitals that provide high complexity obstetric and neonatal care, in the agreed quantities and for a term of three

(3) years, for the purposes of maintaining the operability of the existing technology, including the following related services: freight and insurance, customs brokerage, inland transportation from port or airport to company’s warehouses, unloading, storage, storage insurance, transport loading and unloading, distribution, installation and delivery, medical and paramedical staff’s training on use and operation, corrective and preventive maintenance with guaranteed supply of spare parts and labor, for a term of three (3) years, in the quantities described under the proposal that forms an integral part of this Agreement, the proposal of which has been identified as “ANNEX A”, and under the terms established in the offer letter.

b)Provide consumable supplies for the provision of the technology updates referred to in the preceding paragraph, including the following related services: freight and insurance, customs brokerage, inland transportation from port or airport to company’s warehouses, unloading, storage,

Addendum No. 001 to Agreement No. 039/2015 Page 2 of 14

Bolivarian Government of Venezuela	1815-2015
Ministry of the People's Power for Health	United Patriots Know How to Triumph

storage insurance, transport loading and unloading, distribution and delivery, for a term of three (3) years in order to ensure operability twenty-four (24) hours a day, in the quantities described under the proposal that forms an integral part of this Agreement, the proposal of which has been identified as “ANNEX B”.

c)Provide corrective and preventive maintenance for 3768 devices in 87 hospitals —the devices of which were purchased under the Agreement (Project Life – Phases I and II [Proyecto Vida Fases I y II])— for a term of three (3) years, under the terms described in the proposal that forms an integral part of this Agreement, the proposal of which has been identified as “ANNEX C”. This maintenance shall be performed only by staff of “THE COMPANY”.

d)Provide consumable supplies for 3629 devices in 87 hospitals —the devices of which were purchased under the Agreement (Project Life – Phases I and II [Proyecto Vida Fases I y II]), of the basis subject to maintenance, including the following related services: freight and insurance, customs brokerage, inland transportation from port or airport to company’s warehouses, unloading, storage, storage insurance, transport loading and unloading, distribution and delivery, for a term of three (3) years in order to ensure operability twenty-four (24) hours a day, in the quantities and under the terms established in the proposal that forms an integral part of this Agreement, the proposal of which has been identified as “ANNEX D”.

All quantities and technical specifications are described in the aforementioned Annexes, all of which form an integral part of this Agreement and are listed hereafter:

ANNEXES	TOTAL (IN USD)	TOTAL (IN BS)
Annex A: Provision of technology updates and related services for the obstetrics and neonatal units of 52 hospitals depending on the Ministry of the People’s Power for Health that provide high complexity care, for a term of three (3 years).	USD 73,486,490.00	BS 734,864,900.00
Annex B: Distribution and related services pertaining to consumable supplies required by the items subject to technology updates of the obstetrics and neonatal units of 52 hospitals depending on the Ministry of the People’s Power for Health that provide	USD 17,286,885.00	BS 172,868,850.00

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high complexity care, for a term of three (3) years.
Annex C: Provision of corrective and preventive maintenance required by 3768 devices in 87 hospitals depending on the Ministry of the People’s Power for Health, of the installed basis Phases I and II, for a term of three (3) years.	USD 20,212,890.00	BS 202,128,900.00
Annex D: Distribution and related services pertaining to 3269 devices in 87 hospitals depending on the Ministry of the People’s Power for Health, of the installed basis Phases I and II, for a term of three (3) years.	USD 9,763,521.00	BS 97,635,210.00
	USD 120,749,786.00	BS 1,207,497,860.00

PARRAGRAPH 1: “THE COMPANY” shall guarantee, under its own supervision and responsibility, training of the medical, nursing and electromedicine staff appointed by “THE MINISTRY” for the management and maintenance of all devices supplied under the technology updates modality hereunder.

SECTION 3: PRICE

The total price established for this Agreement amounts to ONE HUNDRED TWENTY MILLION SEVEN HUNDRED FORTY-NINE THOUSAND SEVEN HUNDRED EIGHTY- SIX UNITED STATES DOLLARS AND ZERO CENTS (USD 120,749,786.00) which, for reference purposes as established in Section 130 of the Central Bank of Venezuela’s Act [Ley del Banco Central de Venezuela], equals the amount of ONE THOUSAND TWO HUNDRED SEVEN MILLION FOUR HUNDRED NINETY-SEVEN THOUSAND EIGHT HUNDRED SIXTY VENEZUELAN BOLIVARS AND ZERO CENTS (BS 1,207,497,860.00) calculated at the official exchange rate fixed by the Central Bank of Venezuela, at a ratio of ten Bolivars per US Dollar (10.00 BS/USD). For all purposes until the termination of this Agreement, the currency that shall govern same shall be the US Dollar.

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The amount established for this Agreement does not include: Value Added Tax (VAT), airport charges, customs duties (Ad-valorem) or any other charge or taxes, nor does it include port or airport storage expenses, which shall be borne by “THE MINISTRY”. This amount does include all charges pertaining to the nationalization procedure, fees of the customs broker appointed by “THE COMPANY”, transportation from the port or airport to the warehouses of “THE COMPANY”, distribution to the established hospitals, insurance pertaining to transport and storage within “THE COMPANY” as well as other costs of storage within “THE COMPANY” and distribution.

PARRAGRAPH 1: The price established for this Agreement shall be allocated to the Trust Fund established by Petróleos de Venezuela S.A. (PDVSA) and Banco de Desarrollo Económico y Social de Venezuela (BANDES) on July 24, 2004 and shall be paid to “THE COMPANY” in accordance with the operating mechanism agreed under the INTEGRAL COOPERATION AGREEMENT EXECUTED BY THE BOLIVARIAN REPUBLIC OF VENEZUELA AND THE

ARGENTINE REPUBLIC, its annexes and amendments, signed by the Minister of Energy and Mines —Rafael Ramirez, Engineer—, on behalf of the Bolivarian Republic of Venezuela and the Minister of Federal Planning, Public Investment and Services —Mr. Julio de Vido—, on behalf of the Argentine Republic, on April 6, 2004.

SECTION 4: PAYMENT

“THE MINISTRY” shall pay “THE COMPANY” by means of Debt Securities (DS) denominated in US Dollars and payable in Argentine Pesos at the exchange rate effective on the actual date of payment, ordered by PDVSA to the Central Bank of Argentina in favor of “THE COMPANY” and through Banco de la Nación Argentina, and payment shall be made as follows:

1)In six (6) semi-annual installments (every six months); i.e., two (2) installments per year; a first installment amounting to TWENTY MILLION UNITED STATES DOLLARS AND ZERO CENTS (USD 20,000,000.00) which, for reference purposes as established in Section 130 of the Central Bank of Venezuela’s Act, equals TWO HUNDRED MILLION BOLIVARS AND ZERO CENTS (BS 200,000,000.00), calculated at the official exchange rate fixed by the Central Bank of Venezuela, at a ratio of ten Bolivars per US Dollar (10.00 BS/USD) and five (5) subsequent equal installments, each amounting to TWENTY MILLION ONE HUNDRED FORTY-NINE THOUSAND NINE HUNDRED FIFTY-SEVEN UNITED STATES DOLLARS AND

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TWENTY CENTS (USD 20,149,957.20) which, for reference purposes as established in Section 130 of the Central Bank of Venezuela’s Act, equals TWO HUNDRED ONE MILLION FOUR HUNDRED NINETY-NINE THOUSAND FIVE HUNDRED SIXTY-TWO BOLIVARS AND

ZERO CENTS (BS 201,499,572.00) [sic], calculated at the official exchange rate fixed by the Central Bank of Venezuela, at a ratio of ten Bolivars per US Dollar (10.00 BS/USD), for a term of thirty-six (36) months (equivalent to three (3) years), as follows:

FINANCIAL PERFORMANCE CHART
INSTALLMENT NO.	YEAR	AMOUNT (IN USD)	AMOUNT (IN BS)
1	First year	USD 20,000,000.00	BS 200,000,000.00
2		USD 20,149,957.20	BS 201,499,572.00
3	Second year	USD 20,149,957.20	BS 201,499,572.00
4		USD 20,149,957.20	BS 201,499,572.00
5	Third year	USD 20,149,957.20	BS 201,499,572.00
6		USD 20,149,957.20	BS 201,499,572.00
TOTAL:		USD 120,749,786.00	BS 1,207,497,860.00

2)Payment of these installments shall be made at the beginning of each semester upon presentation of invoice, and shall be effective for a term equal to or less than fifteen (15) days.

3)“THE MINISTRY” shall use its best efforts to adopt all steps necessary to order payments to “THE COMPANY” through the Trust Fund of the INTEGRAL COOPERATION AGREEMENT EXECUTED BETWEEN THE BOLIVARIAN REPUBLIC OF VENEZUELA AND THE ARGENTINE REPUBLIC, within the aforementioned term, in order to comply with the “Financial and Physical Performance Schedule” that forms and integral part of this Agreement, the schedule of which is listed under “ANNEXES E.1, E.2, E.3, E.4, F.1, F.2, F.3 and F.4”.

SECTION 5: PLACE AND TERM FOR PERFORMANCE

“THE COMPANY” shall provide “THE MINISTRY” with the services subject matter hereof, as follows:

a)Technology updates and related services for the obstetrics and neonatal units of fifty-two (52) hospitals of “THE MINISTRY” that provide high complexity obstetric and neonatal care, in a term of three (3) years;

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b)Distribution and related services pertaining to consumable supplies required for devices subject to the technology updates for the obstetrics and neonatal units of fifty-two (52) hospitals of “THE MINISTRY” that provide high complexity obstetric and neonatal care, in a term of three (3) years;

c)Corrective and preventive maintenance required for 3768 devices in 87 hospitals of “THE MINISTRY” of the installed basis Phases I and II, in a term of three (3) years; and

d)Distribution and related services pertaining to consumable supplies required for 3269 devices in 87 hospitals of “THE MINISTRY” of the installed basis Phases I and II, in a term of three (3) years.

The above according to the quantities established in the “Physical Performance Schedule”, “ANNEXES E.1, E.2, E.3 and E.4” and the amounts established in the “Financial Performance Schedule” included in “ANNEXES F.1, F.2, F.3 and F.4”.

All training of the medical, nursing and electromedicine staff regarding the technology updates subject matter hereof shall be provided by “THE COMPANY” and conducted at the hospitals listed under “ANNEX J” “List of 52 hospitals and their geographic location subject to technology updates”.

Additionally, “THE COMPANY” acknowledges that it knows the place and conditions where the technology updates subject matter of this Addendum will be performed, along with all circumstances related to the work, as well as the operating conditions and the maintenance required for the updates described in this Agreement; therefore, it is understood that same has been executed with absolute knowledge of all the aforementioned and of any inconvenience that may arise, thus not being entitled to any claim arising from technical difficulties, errors, omissions or any other cause that may be directly attributed to same.

SECTION 6: TERM

This Agreement shall be effective for a term of 36 months (three (3) years) counted as of execution of the Certificate of Commencement, which shall be executed after the actual payment of the first semi-annual installment established in Section 4 hereof. In any case, the effective term shall be of three (3) years and may be extended provided “THE PARTIES” agree to it in writing. For all purposes until termination of this Agreement, the currency that shall govern same shall be the US Dollar.

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SECTION 8[sic]: GENERAL TERMS AND CONDITIONS.

a)“THE COMPANY” shall organize, in the city of Caracas, in the Bolivarian Republic of Venezuela, a team consisting of staff of its own or such subcontracted personnel as may be sufficient and with the necessary expertise in rendering basic and specialized Preventive and Corrective Maintenance services, which may secure compliance with the subject matter of this Agreement, as set forth in Section 2 hereof. Furthermore, they shall be provided with offices where they may address any and all requests, requirements and reports made by “THE MINISTRY”.

b)Any devices, accessories, consumables, parts and pieces supplied by “THE COMPANY” shall be stored in a warehouse located under the custody, control, responsibility, management and disposition thereof, and "THE MINISTRY" shall be allowed access to conduct audits, from the Registration of the Initial Inventory to its final distribution.

c)“THE COMPANY” shall guarantee “THE MINISTRY”, for a term of three (3) years, all medical devices, clinical fixtures and instruments, as supplied by virtue of the Technology Updates of this Agreement, against any manufacturing defect, as of the date of arrival thereof at such warehouses as may be established by “THE COMPANY”. Throughout the guarantee period set forth above, any provision of Technology Updates shall include “Preventive Maintenance’’ coverage to be carried out every four months and “Corrective Maintenance’’ coverage to be conducted upon request of “THE MINISTRY”. The items set out below shall be excluded from maintenance: Consumables, Laryngoscopes, Blood Pressure Monitors, Stethoscopes, Bilirubinometers, Surgical Instruments, Densimeters, Manual Resuscitator and Clinical Fixtures. The removal of any defects caused by damages to the external circuits, reckless or undue use, negligence, acts of God or force majeure events, such as fire, floods, collisions and earthquakes, among others, or such as may be caused by individuals not forming part of “THE COMPANY” or by the technical representative thereof shall be excluded from the guarantee and from the maintenance works.

d)The Corrective and Preventive Maintenance carried out by “THE COMPANY” in order to comply with the services provided for in Section 2 must be performed under national security rules and ordinary installation conditions, by the personnel qualified to that effect, in order to secure the proper and efficient provision of the services and to avoid putting at risk the useful life of the devices that constitute the subject matter hereof, which are subject to the services rendered by “THE COMPANY”.

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e)“THE COMPANY” shall accept and allow the presence of any officers authorized by “THE MINISTRY for them to carry out the due monitoring and follow-up pertaining to all the corrective and preventive maintenance tasks mentioned in Section 2 of this Addendum, thus making it possible for these officers to become part of the work teams formed by qualified employees expert at maintenance works representing “THE COMPANY", not being it crucial for “THE COMPANY” to count with the presence and participation of the officers authorized by “THE MINISTRY” for the performance of the corrective and preventive maintenance works subject matter hereof. Throughout the term of performance of this Agreement, subject to no exceptions whatsoever, “THE COMPANY” shall be held liable for the provision of such maintenance; it shall not bear any expenses incurred for transfers, out-of-pocket expenses, overtime or any other salary or extra-salary item to which the officers authorized by “THE MINISTRY” accompanying the Corrective and Preventive maintenance works might be entitled, “THE MINISTRY” being solely liable for the payment of such items.

f)All the actions referred to above shall be explicit in a Work Order that shall be made a part of the “logbook”, which shall be duly endorsed by the Head of Service, the Head of Maintenance and the Hospital Director.

SECTION 10 [sic]: OBLIGATIONS OF “THE COMPANY”.

“THE COMPANY” shall have the obligations set out below, without prejudice to any other provision set forth in this Agreement and in the Annexes hereto. “THE COMPANY” does hereby undertake to:

a)Guarantee actual compliance with the subject matter set forth in this agreement, within the established term and subject to the provisions set forth to that effect.

b)Notify “THE MINISTRY”, ten (10) days in advance of the arrival of any of the devices, accessories, consumables, parts and pieces subject matter hereof, of the “Bill of Lading" including: Packing lists and the original invoice in two counterparts, being it important to highlight that one of the counterparts must read “VALID ONLY FOR CUSTOMS’ PURPOSES".

c)Deliver the devices, accessories, consumables, parts and pieces that constitute the subject matter of this Agreement on the Dates and in the Amounts set forth in the specifications contained in the “Physical Performance Schedule" identified as “ANNEXES E.1, E.2, E.3 y E.4”, at the Hospitals identified in “ANNEX J” entitled; “List of 52 Hospitals Subject to Technology Update

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and their Geographic Location”, which forms an integral part of this agreement.

d)“THE COMPANY” shall deliver such packing devices as may be suitable to guarantee preservation thereof during air or sea transport to Maiquetía International airport and/or La Guaira sea port.

e)“THE COMPANY” shall guarantee at “THE MINISTRY’s” Hospitals the transfer, installation, and start up of the devices, training provided to “THE MINISTRY’s” medical, nursing and electromedicine staff on the management and preservation of devices by the qualified technical staff at the moment of completing the installation, technical service over the guarantee period and corrective and preventive maintenance in accordance with the provisions set forth in this agreement.

f)“THE COMPANY” does hereby undertake to guarantee provision of such technical information as may be necessary for the use and maintenance of the technology updates, the operation manuals in Spanish, as well as the supply of pieces and consumables to carry out the technical service under the responsibility of “THE COMPANY’s” technical staff.

g)“THE COMPANY” shall allow “THE MINISTRY” to perform all such inspections as it may deem necessary to check on the scope of contract performance.

h)“THE COMPANY” shall appoint a Technical Representative within a term of seven (7) days following the date of execution of this Agreement, who shall act as representative in all matters pertaining to the performance hereof, thus being liable to notify “THE MINISTRY’s” Hospital Vice Minister's Office of such appointment.

i)“THE COMPANY” shall provide training to the medical, nursing and electromedicine staff of all Hospitals listed in “ANNEX I” regarding the management and preservation of the technical updates provided for in this Addendum. In the event that the operating staff qualified during the training be removed and/or substituted, “THE MINISTRY” shall notify “THE COMPANY” in order to conduct a new training course and assessment of the operating staff, at least while the guarantee period is in force.

j)“THE COMPANY” shall promptly perform the Corrective Maintenance whenever it may be necessary, upon prior written notice of any failure in the device(s) given by the Head of the Obstetrics or Neonatology Unit and the Hospital Director to the Hospital Vice Minister's Office and “THE COMPANY”.

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k)“THE COMPANY” shall be held liable for storing, preserving, distributing and providing the technology updates, consumable supplies and related services, within the territory of the Bolivarian Republic of Venezuela pursuant to the guidelines outlined by “THE MINISTRY” under this Agreement, as provided for in Section 8 (b).

l)“THE COMPANY” shall be responsible for any and all damages that may be suffered by “THE MINISTRY”, where such damages arise from any unjustified delay in the distribution of consumables and spare parts while performing the corrective and preventive maintenance. In the event that any corrective maintenance may be required in respect of any of the devices subject matter hereof, “THE COMPANY” shall provide an answer within a term not to exceed five (5) business days, over the effective term of the Maintenance Guarantee; i.e., a term of three (3) years following installation and start-up thereof.

m)“THE COMPANY” does hereby undertake to furnish the Hospital Vice Minister's Office with two (2) reports every four months as of the execution of this Agreement: 1) Regarding the delivery of technology updates and consumable related services, as well as any maintenance works carried out; and 2) Regarding the consumables and spare parts delivered and the maintenance works conducted on the installed basis under Phase I and Phase II. Both reports shall include: "Deed of Delivery", "Deed of Installation” and “Deed of Maintenance", executed by the Head of the Obstetrics or Neonatology Unit, the Head of Maintenance and the Hospital Director.

SECTION 12: SURETY BONDS AND GUARANTEES.

“THE COMPANY” shall furnish “THE MINISTRY” with the duly notarized surety bond, as stated below, which shall be posted by “THE COMPANY” and duly consigned for the moment of execution of this Addendum. The obtention and all costs pertaining to such guarantee shall be borne by “THE COMPANY”:

•STRICT COMPLIANCE SURETY: A Strict Compliance Surety Bond granted by a Banking Institution or an Insurance Company with domicile in the Bolivarian Republic of Venezuela, registered with the Insurance Superintendency, for an amount equal to TWENTY PER CENT (20

%) of the aggregate amount of this Addendum, which is equivalent to TWENTY FOUR MILLION ONE HUNDRED FORTY-NINE THOUSAND NINE HUNDRED FIFTY-SEVEN UNITED STATES DOLLARS AND TWENTY CENTS (US$ 24,149,957.20) which, for

reference purposes as established in Section 130 of the Central Bank of Venezuela’s Act, equals

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TWO HUNDRED FORTY ONE MILLION FOUR HUNDRED NINETY-NINE THOUSAND FIVE HUNDRED SEVENTY-TWO BOLIVARS AND ZERO CENTS (BS 241,499,572.00)

calculated at the official exchange rate fixed by the Central Bank of Venezuela, at a ratio of ten Bolivars per US Dollar (10.00 BS/USD), for the purposes of securing strict compliance with all the obligations arising herefrom. Such surety shall be in full force and effect as of the execution of this Addendum and shall remain effective until “THE MINISTRY" grants the final settlement of the strict compliance guarantee, which shall be expressly stated in the respective Surety Bond.

Furthermore, “THE COMPANY” does hereby accept that:

•SPECIAL MAINTENANCE GUARANTEE: “THE COMPANY” hereby guarantees “THE MINISTRY” the provision of the corrective and preventive maintenance, including the supply of spare parts for each of the Devices subject to technology updates listed in “ANNEX A” and the maintenance of the devices pertaining to “ANNEX C”. Such Guarantee shall remain in full force and effect for a term of three (3) years; and, where required, “THE PARTIES” may agree on an extension of such maintenance one hundred and eighty (180) days in advance of the expiration of this guarantee.

SECTION 22: AGREEMENT-RELATED DOCUMENTS

The documents set out below are deemed to form an integral part of this agreement.

• “ANNEX A”: Technology Updates and Related Services for the Obstetrics and Neonatal Units of 52 Hospitals depending on the Ministry of the People’s Power for Health, providing High- Complexity care.

• “ANNEX B”: Consumable Distribution and Related Services required for the items subject to Technology Updates of the Obstetrics and Neonatal Units of 52 Hospitals depending on the Ministry of the People’s Power for Health rendering High-Complexity care for three (3) years.

• “ANNEX C”: Corrective and Preventive Maintenance Services required for 3768 devices in 87 Hospitals depending on the Ministry of the People’s Power for Health of the installed basis, Phases I and II of the AVA, for three (3) years.

• “ANNEX D”: Consumable Distribution and Related Services required for 3269 devices in 87 Hospitals depending on the Ministry of the People’s Power for Health of the installed basis, Phases I and II of the AVA, for three (3) years.

• “ANNEX E.1”: Physical Performance Schedule of “ANNEX A" pertaining to Technology

Addendum No. 001 to Agreement No. 039/2015 Page 12 of 14

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Updates and Related Services for the Obstetrics and Neonatal Units of 52 Hospitals depending on the Ministry of the People’s Power for Health, providing high-complexity care.

• “ANNEX E.2”: Physical Performance Schedule of “ANNEX B” Consumable Distribution and Related Services required for the items subject to Technology Updates of the Obstetrics and Neonatal Units of 52 Hospitals depending on the Ministry of the People’s Power for Health rendering High-Complexity care for three (3) years.

• “ANNEX E.3”: Physical Performance Schedule of “ANNEX C” Corrective and Preventive Maintenance Services required for 3768 devices in 87 Hospitals depending on the Ministry of the People’s Power for Health of the installed basis, Phases I and II of the AVA, for three (3) years.

• “ANNEX E.4”: Physical Performance Schedule of “ANNEX D” Consumable Distribution and Related Services required for 3269 devices in 87 Hospitals depending on the Ministry of the People’s Power for Health of the installed basis, Phases I and II of the AVA, for three (3) years.

• “ANNEX F.1”: Financial Performance Schedule of “ANNEX A" pertaining to Technology Updates and Related Services for the Obstetrics and Neonatal Units of 52 Hospitals depending on the Ministry of the People’s Power for Health, providing high-complexity care.

• “ANNEX F.2”: Financial Performance Schedule of “ANNEX B" Consumable Distribution and Related Services required for the items subject to Technology Updates of the Obstetrics and Neonatal United of 52 Hospitals depending on the Ministry of the People’s Power for Health rendering High-Complexity care for three (3) years.

• “ANNEX F.3”: Financial Performance Schedule of “ANNEX C” Corrective and Preventive Maintenance Services required for 3768 devices in 87 Hospitals depending on the Ministry of the People’s Power for Health of the installed basis, Phases I and II of the AVA, for three (3) years.

• “ANNEX F.4”: Financial Performance Schedule of “ANNEX D” Consumable Distribution and Related Services required for 3269 devices in 87 Hospitals depending on the Ministry of the People’s Power for Health of the installed basis, Phases I and II of the AVA, for three (3) years.

• “ANNEX G”: Technical Specifications of the Technology Updates for the Obstetrics and

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Neonatal Units of 52 Hospitals of the Ministry of the People’s Power for Health providing high-complexity care, stated in “ANNEX A”.

• “ANNEX H”: List of Medical Devices located in the Obstetrics and Neonatal Units of 87 Hospitals depending on the Ministry of the People’s Power for Health, of the installed basis, Phases I and II of the AVA, subject to Corrective and Preventive Maintenance.

• “ANNEX I”: List of 52 hospitals subject to technology updates and their geographic location.

• “ANNEX J”: List of 87 Hospitals subject to corrective and preventive maintenance and their geographic location, of the installed basis Phases I and II of the AVA.

Each and all remaining Sections of the Agreement No. 039/2015 executed between “THE MINISTRY” and “THE COMPANY on October 14, 2015, shall remain in full force and effect, pursuant to the terms and conditions set forth therein.

This instrument is executed in four (4) counterparts which, taken together, shall constitute one and the same agreement. In the city of Caracas, on May 20 (twenty), 2016.

In witness whereof, the parties hereto have caused this agreement to be executed:

On behalf of “THE MINISTRY”	On behalf of “THE COMPANY”
/s/Luisana Melo Solorzano	/s/ Osvaldo Mario Aso
LUISANA MELO SOLÓRZANO	OSVALDO MARIO ASO
Minister of the People’s Power for Health	Attorney-in-fact
	MEDIX INDUSTRIAL Y COMERCIAL SOCIEDAD ANÓNIMA (MEDIX I.C.S.A)

Addendum No. 001 to Agreement No. 039/2015 Page 14 of 14

EX-10.3

Exhibit 10.3

STRICTLY CONFIDENTIAL

MASTER PURCHASE AGREEMENT

relating to the Company

Contents
Schedules		3
1.	Definitions	6
2.	Transfer of the Company	23
3.	Final Purchase Price and Closing Statement	25
4.	Signing	29
5.	Conditions precedent to Closing	29
6.	Covenants between Signing and Closing	31
7.	Conduct of Business pending Closing	34
8.	Closing	35
9.	Post-Closing Covenants	39
10.	Back-To-Back Arrangements	41
11.	Residual Closing	42
12.	Buyer’s Investigations	45
13.	Seller's Warranties	45
14.	Buyer’s Warranties	46
15.	Specific Indemnities	48
16.	Indemnification	49
17.	Claim Notice, Dispute of Claim and Third Party Claims	52
18.	Restrictive Covenants	54
19.	Transitional Services Agreement and Otoscan Development Agreement	56
20.	Joint Taxation	56
21.	Parent Guarantees	57
22.	Confidentiality and Publicity	57
23.	Governing Law and Disputes	59
24.	Miscellaneous	60

Page 2 of 64

Schedules
Schedule 1.1:	Net Interest Bearing Debt and Net Working Capital Calculation Example
Schedule 2.1.1.2:	Excluded Assets and Excluded Liabilities (to be finalized pending Closing)
Schedule 2.2.2(a):	Forms of Company Specific Share Sale Agreement
Schedule 2.2.2(b):	Forms of Company Specific Asset Sale Agreement
Schedule 2.2.2(c):	List of Company Specific Purchase Agreements
Schedule 3.2.1:	Preliminary Purchase Price Statement
Schedule 8.3(v):	Resignation letters from the members of the board of directors
Schedule 8.3(vi):	Resignation letters from the auditor
Schedule 8.3(ix):	Material Adverse Effect Statement
Schedule 12.1:	Due Diligence Documentation
Schedule 13.1:	Seller’s Warranties
Schedule 19.1.1:	Transitional Services Agreement
Schedule 19.2.1:	Otoscan Development Terms
Schedule 20.1:	Cessation of Joint Taxation for Share Sale Companies (Denmark)
Schedule 22.4:	Press releases

Page 3 of 64

MASTER PURCHASE AGREEMENT

by and between

GN Hearing A/S

Company reg. no. 55082715

Lautrupbjerg 7

DK-2750 Ballerup

Denmark

(the “Seller”)

Natus Medical Inc.

6701 Koll Center Parkway, Suite 120

Pleasanton, CA 94566

USA

(the “Buyer”)

(the Seller and the Buyer are each referred to as a “Party” and collectively the “Parties”)

regarding

the Company (as defined below).

Page 4 of 64

WHEREAS

(A) The Seller is the direct or indirect owner of the Company (as defined below).

(B) The Seller is the subsidiary of the Seller Parent (as defined below), a company with shares listed for trading on NASDAQ Copenhagen.

(C) The Buyer is a company with shares listed for trading on NASDAQ.

(D) The Company manufactures hearing assessment, fitting, screening and balance diagnostic equipment.

(E) The Buyer is professionals in the business of the Company with deep industry knowledge.

(F) The Seller wishes to sell and the Buyer wishes to buy the Company.

(G) The Transaction (as defined below) will be structured as a combination of share sales and asset sales and/or demergers, if so agreed between the Parties, of the relevant companies in the Company.

(H) The Parties have agreed that the Transaction will be structured so that the sale of the shares or assets and liabilities of the Major Jurisdiction Companies (as defined below) will be completed at Closing (as defined below), and certain Residual Jurisdiction Companies (as defined below) will be completed at Closing or as soon as possible thereafter.

(I) The acquisition of the Major Jurisdiction Companies and the Residual Jurisdiction Companies will be made by the Buyer or an Affiliate (as defined below) of the Buyer and appointed by the Buyer prior to Closing.

(J) The Company receives certain services from the Seller. The Parties have agreed that the Transaction will take place on a “share deal” basis, meaning that it is the intention of the Parties that the Buyer acquires the Company as a fully functioning going concern. To facilitate and provide for an orderly transition in connection with the transfer of the Company to the Buyer, and to facilitate the ongoing operations of the Company for a transitional period, the Parties desire to enter into a Transitional Services Agreement (as defined below) to set forth the terms and conditions pursuant to which the Seller will provide the above-mentioned services to the Company on a transitional basis following Closing.

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(K) The Parties will work together in good faith to, inter alia, (i) structure the Transaction in the most beneficial manner for the Parties with regard to e.g. Tax; (ii) work around any problems or delays affecting the Closing of the sale of either the Major Jurisdiction Companies or the Residual Jurisdiction Companies, e.g. through Back-To-Back Arrangements (as defined below); and (iii) identify and make any Wrong Pocket Transfers (as defined below) and any relevant adjustments to the Final Purchase Price as a result thereof.

1. Definitions

1.1 The following terms used in this Agreement have the following meanings:

“Adjustment Amount”            has the meaning ascribed to it in clause 3.3.13.

“Affiliate”                means, in respect of a Person, any other Person (other than the Company) that is controlled by, controls, or is under common control with the first Person. For the purposes of this definition, “control” (including, with its correlative meanings, “controlled by” and “under common control with”) means the power to exercise decisive influence over a Person’s financial and operating decisions.

“Agreement”            means this master purchase agreement and its Schedules as amended from time to time pursuant to clause 24.3.

“Asset Sale Company”            means each of GN Resound Pty. Ltd. (Australia), GN Resound Hoertechnologie GmbH (Austria), GN Resound Productos Médicos Ltda. (Brazil), GN Resound Shanghai Ltd. (China), GN ReSound China Ltd. (China), GN Hearing A/S (Denmark), GN Resound Finland Oy/Ab (Finland), GN Hearing SAS (France), GN Hearing GmbH (Germany), GN Resound India Private Limited (India), GN Hearing

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s.r.l. (Italy), GN Resound Japan K.K. (Japan), GN Hearing Benelux (Netherlands), GN Resound (NZ) Ltd. (New Zealand), GN Resound Norge AS (Norway), GN Resound LLC (Russia), GN Hearing Pte. Ltd. (Singapore), GN Hearing Care S.A. (Spain), GN Resound AB (Sweden), GN Resound AG (Switzerland), GN Resound Ltd. (United Kingdom), GN Hearing Care Corporation (United States (California)) and Audio Electronics Inc. (United States (Texas)) (collectively the “Asset Sale Companies”).

“Back-To-Back Arrangement”        has the meaning ascribed to it in clause 10.1.

“Basket”                 has the meaning ascribed to it in clause 16.3.4(ii).

“Breach”                means any failure to fulfil obligations and liabilities under this Agreement.

“Business Day”            means any day on which the banks in Denmark are generally open for over the counter transactions.

“Buyer”                 mean Natus Medical Incorporated, 6701 Koll Center Parkway, Suite 120, Pleasanton, CA 94566, United States.

“Buyer’s Bank Account”        means such bank account of the Buyer to be designated by the Buyer no later than 10 Business Days prior to Closing..

“Buyer's Group”            means any Person (other than the Company) that is controlled by, controls, or is under common control with the Buyer. For the purposes of this definition, “control” (including, with its correlative meanings, “controlled by” and “under

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common control with”) means the power to exercise decisive influence over a Person’s financial and operating decisions.

“Buyer’s Knowledge”            means the Disclosed information as well as the actual knowledge of James B. Hawkins, Ken Traverso, Jonathan Kennedy, Anthony Chan, Sharon Villaverde, Mahmoud Elaskary and Nitin Gaglani as well as knowledge such persons should have had after having made due inquiries with employees of Buyer and Buyer’s Representatives having been provided with access details to the Due Diligence Documentation, as at the Signing Date or the Closing Date, as appropriate.

“Buyer’s Warranties”            mean the Warranties given by the Buyer to the Seller as set forth in clause 14.

“Cap”                has the meaning ascribed to it in clause 16.3.5.

“Change of Control Contract”        means (a) any contract material to the business of the Company as conducted at Signing entered into by any Share Sale Company with any third party which requires the consent of such third parties to the relevant Local Buyer’s purchase of the share capital of the Share Sale Company, which grants such third parties the right to terminate such contract, or which in any other way places such third parties in a more favourable position due to the relevant Local Buyer’s purchase of the share capital of the Share Sale Company; and (b) any contract material to the business of the Company as conducted at Signing entered into by any Asset Sale Company with any third party which cannot, according to local Law or the terms

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of the contract, be assigned on Closing to the relevant Local Buyer without the consent of the contract party (collectively the “Change of Control Contracts”).

“Change of Control Permit”         means (a) any Permit of any Share Sale Company which requires the consent of any governmental or other public or non-public body or agency to the relevant Local Buyer’s purchase of the share capital of the Share Sale Company or which entitles such body or agency to terminate or revoke the Permit concerned due to the relevant Local Buyer’s purchase of the share capital of the Share Sale Company; and (b) any Permit of any Asset Sale Company which requires the consent of any governmental or other public or non-public body or agency to the relevant Local Buyer’s purchase of the Company-related assets and liabilities of the Asset Sale Company or which cannot be transferred to the Local Buyer in connection with an asset sale (collectively the “Change of Control Permits”).

“Claim”                 means any claim for a Loss raised by a Party against the other Party due to a Breach.

“Claim Notice”            has the meaning ascribed to it in clause 17.1.1.

“Closing”                means the Parties' mutual fulfilment of their obligations described in clause 8.

“Closing Date”            means the Business Day on which Closing takes place.

“Closing Memorandum”        means the minutes of the meeting at which Closing takes place.

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“Closing Statement”            has the meaning ascribed to it in clause 3.3.1.

“Combined Business”            has the meaning ascribed to it in clause 6.1.5.

“Company”                means GN Otometrics Denmark and the Subsidiaries, the other Share Sale Companies, all other Seller businesses manufacturing hearing assessment, fitting, screening and balance diagnostic equipment, and all other Company-related assets and liabilities as detailed in clause 2.1.

“Company Specific Asset

Purchase Agreement(s)”        means the agreements (with appendices) forming Schedules hereto regulating the transfer of assets and liabilities from the Local Seller to the Local Buyer for Asset Sale Companies.

“Company Specific

Purchase Agreement(s)”        means the Company Specific Asset Purchase Agreement(s) and the Company Specific Share Purchase Agreement(s).

“Company Specific Share

Purchase Agreement(s)”        means the agreements (with appendices) forming Schedules hereto regulating the transfer of shares from the Local Seller to the Local Buyer for Share Sale Companies.

“Confidential Information”        means any information disclosed prior to, on or after the date of this Agreement which a Party or its Representatives disclose to the other Party or the other Party’s Representatives in connection with the Transaction, irrespective of the medi-

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um through which such information is provided, which includes, without limitation, any electronic or web-based type of communication. Conଁdential Information includes, without limitation, (i) any kind of business, commercial or technical information and any copies or abstracts made thereof; (ii) all analyses, compilations, data, studies or other documents prepared by the receiving Party or the receiving Party’s Representatives containing or based in whole or in part on any such disclosed information (e.g. any due diligence reports); (iii) the existence of this Agreement; (iv) the fact that Conଁdential Information will be and has been exchanged; and (v) any other information regarding the Transaction.

“Corporate Documents”        mean the memorandum of incorporation, articles of association, rules of procedure for the board of directors and similar documents.

“De Minimis Threshold”            has the meaning ascribed to it in clause 16.3.4(i).

“Disclosed”            means with respect to any matter or fact relating to the Company, or to any of the Company’s activities, that such matter or fact has been disclosed to the Buyer and/or its Representatives as specified in clause 12.1 in an accurate and fair way including by way of the Due Diligence Documentation that would enable the Buyer and/or its Representatives, given the nature and context of the disclosure and the Buyer’s and its Representatives’ industry knowledge, to become aware of the possible implications on the Company of such matter or fact.

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“Due Diligence Documentation”        has the meaning ascribed to it in clause 12.1.

“Enterprise Value” has the meaning ascribed to it in clause 3.1.1.

“Estimated Net

Interest Bearing Debt” means the Seller's good faith estimate of the Net Interest Bearing Debt of the Major Jurisdiction Companies and any Residual Jurisdiction Companies for which (and to the extent) the Transaction is completed at Closing as of the Closing Date as determined in accordance with clause 3.2 as set out in the Preliminary Purchase Price Statement.

“Estimated Net Working Capital

Adjustment Amount” means the Seller's good faith estimate of the Net Working Capital Adjustment Amount for the Major Jurisdiction Companies and any Residual Jurisdiction Companies for which (and to the extent) the Transaction is completed at Closing as of the Closing Date as determined in accordance with clause 3.2 as set out in the Preliminary Purchase Price Statement.

“Estimated Purchase Price” means the Enterprise Value less the Estimated Net Interest Bearing Debt and adjusted by the Estimated Net Working Capital Adjustment Amount as determined clause 3.2 as set out in the Preliminary Purchase Price Statement.

“Excluded Asset”            means assets of Asset Sale Companies excluded from the Transaction as defined in Schedule 2.1.1.2 (collectively the “Excluded Assets”).

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“Excluded Liability”            means liabilities of Asset Sale Companies excluded from the Transaction to be defined in Schedule 2.1.1.2 (collectively the “Excluded Liabilities”), which shall include, without limitation, (i) any and all Tax liabilities of the Asset Sale Companies (except for latent Tax liabilities relating to the assets of the Company, which are assumed by the Buyer (in Danish "momsreguleringsforpligtelser")), and (ii) any and all criminal liability of the Asset Sale Companies.

“Final Net Interest Bearing Debt” means the Parties’ determination of the actual Net Interest Bearing Debt of the Major Jurisdiction Companies and any Residual Jurisdiction Companies for which (and to the extent) the Transaction is completed at Closing as of the Closing Date in accordance with clause 3.3 and in accordance with the principles set out in the Preliminary Purchase Price Statement.

“Final Net Working Capital

Adjustment Amount”            means the Parties' determination of the actual Net Working Capital Adjustment Amount for the Major Jurisdiction Companies and any Residual Jurisdiction Companies for which (and to the extent) the Transaction is completed at Closing as of the Closing Date in accordance with clause 3.3 and in accordance with the principles set out in the Preliminary Purchase Price Statement.

“Final Purchase Price”            has the meaning ascribed to it in clause 3.1.1.

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“Financing”            has the meaning ascribed to it in clause 6.3.

“Fundamental Warranties”        has the meaning ascribed to it in clause 13.2.

“GN Otometrics Denmark”        means GN Otometrics A/S, a public limited liability company 100% owned by the Seller Parent incorporated under the Laws of Denmarkwith company reg. no. 25384687, Hørskætten 9, Klovtofte, DK-2630 Taastrup, Denmark.

“Independent Accountant”        means a state-authorised public accountant, appointed by FSR – Danish Auditors (in Danish: “FSR – danske revisorer”), from a well-reputed major international auditing firm, (i) who is not the registered auditor of any Party and who has not advised any of the Parties in connection with the negotiation and consummation of the Transaction; and (ii) who is willing and able to render a statement to the Parties to this effect on behalf of the firm of the accountant.

“Intellectual Property Rights”        means any rights associated with (a) patents and patent applications; (b) registered and unregistered trademarks and service marks, company names  and trade names and domain names; (c) registered and unregistered copyrights and registered and unregistered design rights; (d) rights to trade secrets and know-how; and (e) any other intellectual property rights.

“Interest”                means 2 % per year.

“Key Employee”            means each of Kim Lehmann, Kim Rønn, Lars Henrik Jensen, Tommy Bysted,

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Christian Deichmann, Markus Mauer, Chad Boerst, Francis Zhou, Engin Aksel and Fabio Gomiero (collectively the “Key Employees”).

“Law”                means any national, state, federal, local or other law or regulation in any country or jurisdiction and the regulations and orders promulgated thereunder where the Company conducts its business as of the Signing Date.

“Local Buyer”            means any company, being the Buyer or an Affiliate of the Buyer, who is the buyer under a Company Specific Purchase Agreement.

“Local Seller”            means any company, being the Seller or an Affiliate of the Seller, who is the seller under a Company Specific Purchase Agreement.

“Loss”                means any loss suffered by a Party (or its Affiliates) or by the Company, calculated in accordance with Danish law, except the Loss shall not include indirect or consequential losses.

“Major Jurisdiction Company”        means GN Resound Pty. Ltd. (Australia), DB Special Instruments Inc. (Canada), GN Resound Shanghai Ltd. (China), GN ReSound China Ltd. (China), GN Hearing A/S (Denmark), GN Otometrics A/S (Denmark), GN Otometrics SAS (France), GN Hearing SAS (France), GN Hearing GmbH (Germany), GN Hearing s.r.l. (Italy), GN Resound Ltd. (United Kingdom), GN Hearing Care Corporation (United States (California)) and Audio Electronics Inc. (United States (Texas)) (collectively the “Major Jurisdiction Companies”).

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“Material Adverse Effect”        means a material adverse change of the financial position or financial prospects of the Company as a result of any Breach by the Seller.

“Net Interest Bearing Debt”        means the consolidated aggregate amount of the following balance sheet items for (a) the Asset Sale Companies if and to the extent the assets and liabilities below are transferred in the Transaction; and (b) the Share Sale Companies:

(i)    long and short term interest bearing debt owed to any third party, including bank loans, overdrafts, loan notes and subordinated loans, financial leases, factored receivables, and any other interest-bearing loans or credit liabilities; plus

(ii)    interest or non interest bearing intra-group balances in favour of the Seller’s group (non-Company entities) which are of a financing nature; plus

(iii)    payable corporation Tax regarding current tax year, most recent finalised tax year and previous years, but specifically excluding deferred Tax; plus

(iv)    certain other creditors, including defined benefit pension liabilities, earn-out liabilities, severance liabilities, unpaid transaction costs, liability for a compensation programme to an ASI employee and capex/R&D payables; plus

(v)    all interest accrued but unpaid thereon; less

(vi)    cash balances (whether interest bearing or not), including positive bank balances, interest bearing loans provided to third parties, as well as any other liquid funds, including any securities held; less

(vii)    interest or non interest bearing intra-group balances in favour of the Company, meaning the aggregate of receivables from the Seller’s group (non-Company entities) held by the Company which are of a financing nature; less

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(viii)    receivable corporation Tax regarding current tax year, most recent finalised tax year and previous years; less

(ix)    certain other assets, including defined benefit pension assets; and less

(x)    all interest accrued but unpaid thereon

(all as illustrated in Schedule 1.1).

“Net Working Capital”            means the consolidated aggregate amount of the following balance sheet items for (a) the Asset Sale Companies if and to the extent the assets and liabilities below are transferred in the Transaction; and (b) the Share Sale Companies:

(i)    inventory, meaning the net of inventory and the provision for obsolete inventory; plus

(ii)    trade receivables, meaning the net of outstanding payments from customers and the provision for bad and doubtful debt; plus

(iii)    trade receivables payable by the Seller’s group (non-Company entities) incurred in the ordinary course of business; plus

(iv)    pre-payments to non-affiliated parties; plus

(v)    accrued income; plus

(vi)    other operating receivables, including accruals, prepayments and other receivables (net of reservations for doubtful accounts) but specifically excluding rent deposits; less

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(vii)    trade accounts payable to third parties but specifically excluding capex/R&D payables; less

(viii)     trade accounts payable to the Seller’s group (non-Company) incurred in the ordinary course of business; less

(ix)    warranty provisions; less

(x)    liabilities in respect of prepayments from non-affiliated parties; and less

(xi)    accrued expenses and other non-interest bearing current liabilities

(all as illustrated in Schedule 1.1).

“Net Working Capital

Adjustment Amount”            means the amount by which the Net Working Capital is greater or less than the Reference Net Working Capital.

“Notice of Disagreement”        has the meaning ascribed to it in clause 3.3.3.

“Otoscan Development Terms”        has the meaning ascribed to it in clause 19.2.1.

“Party”                means any one of the Seller and the Buyer of this Agreement individually and “Parties” mean the Seller and the Buyer collectively.

“Permit”                means any permit, license, authorisation, registration, concession and approval, including approval required by applicable Law material to the business of the Company as conducted at Signing (collectively the “Permits”).

“Person”                means any individual, corporation, partnership, firm, joint venture, association, trust, organisation, governmental or regulatory body or other entity.

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“Preliminary Purchase Price

Statement”                has the meaning ascribed to it in clause 3.2.1.

“Recovery Amount”            has the meaning ascribed to it in clause 16.6.1.

“Reference Net Working Capital”        means USD 27,105,809.

“Representatives”            means directors, ofଁcers or employees of a Party or of its Affiliates involved in the Transaction, or attorneys, auditors, tax advisors, consultants or corporate finance advisors advising one Party or its Affiliates with respect to the Transaction.

“Residual Closing”            means the Parties' mutual fulfilment of their obligations described in clause 11 for the relevant Residual Jurisdiction Companies.

“Residual Closing Memorandum”        means the minutes of the meeting at which the Residual Closing takes place.

“Residual Jurisdiction Company”        means GN Resound Hoertechnologie GmbH (Austria), GN Resound Productos Médicos Ltda. (Brazil), GN Resound Finland Oy/Ab (Finland), GN Resound India Private Limited (India), GN Resound Japan K.K. (Japan), GN Hearing Benelux (Netherlands), GN Resound (NZ) Ltd. (New Zealand), GN Resound Norge AS (Norway), GN Resound LLC (Russia), GN Hearing Pte. Ltd. (Singapore), GN Hearing Care S.A. (Spain), GN Resound AB (Sweden), GN Resound AG (Switzerland) and Audiology Systems, Inc. (United States (Delaware)) (collectively the “Residual Jurisdiction Companies”).

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“Schedule”                means any and all schedules attached to this Agreement.

“Seller”                means GN Hearing A/S, a public limited liability company 100% owned by the Seller Parent incorporated under the Laws of Denmarkwith company reg. no. 55082715, Lautrupbjerg 7, DK-2750 Ballerup, Denmark.

“Seller Parent”            means GN Store Nord A/S, a public limited liability company incorporated under the Laws of Denmarkwith company reg. no. 24257843, Lautrupbjerg 7, DK-2750 Ballerup.

“Seller's Bank Account”        means the Seller's client trust account with Moalem Weitemeyer Bendtsen in Nordea Bank reg. no. 2230, account no. 5036 2524 74, IBAN DK6720 0050 3625 2474 and SWIFT NDEADKKK.

“Seller's Knowledge”            means the actual knowledge of Anders Hedegaard, Marcus Desimoni, each of the Key Employees, and each of Martin Sick Nielsen, Nicolai Storm Lund, Asif Muhammad and Morten Lyngstrand Baagø, as well as knowledge such persons should have had (i) in their positions with the Seller or the Company as applicable, but without having made any specific investigations into the specific matters as a consequence of the Seller providing the Seller's Warranties, and (ii) after having made due inquiries with attorneys Dan Moalem and Lennart Meyer Østenfjeld of Moalem Weitemeyer Bendtsen Law Firm, Lars Engskov and Elliot Grove of PwC Denmark, Corporate Finance, Ragna Ceder and Tina Flagstad of PwC Denmark, Transaction Services, and Bjarne

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Gimsing of EY Denmark, Tax, as at the Signing Date or the Closing Date, as appropriate.

“Seller's Group”            means any Person (other than the Company) that is controlled by, controls, or is under common control with the Seller. For the purposes of this definition, “control” (including, with its correlative meanings, “controlled by” and “under common control with”) means the power to exercise decisive influence over a Person’s financial and operating decisions.

“Seller's Warranties”            mean the Warranties given by the Seller to the Buyer as set forth in clause 13.

“Share Sale Company”            means each of DB Special Instruments Inc. (Canada), GN Otometrics A/S (Denmark), GN Otometrics SAS (France) and Audiology Systems, Inc. (United States (Delaware)) (collectively the “Share Sale Companies”).

“Signing Date”            means the date on which the Parties sign this Agreement.

“Subsidiaries”            mean the companies in which GN Otometrics Denmark owns 100% of the share capital, being Génie Audio Inc. (Canada), Otometrics Shanghai Co., Ltd. (China), Inmedico A/S (Denmark), and GN Otometrics GmbH (Germany) as well as GN Group Solutions GmbH (in liquidation) (unless such company prior to Closing has been finally dissolved and any proceeds distributed to GN Otometrics Denmark).

“Tax”                means all direct and indirect taxes and tax liabilities, whether actual or deferred,

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including income tax, corporation tax (including payments under the Danish joint taxation regime), capital gains tax, VAT and sales tax, withholding tax, registration fees, stamp duties, customs duties, tax deducted from income at source (in Danish: "A-skat"), labour market contributions, other social security costs, property tax and similar taxes, including interest, fees, additional tax and tax penalties.

“Third Party Claim(s)”            has the meaning ascribed to it in clause 17.3.1.

“Third Party Rights”            mean any lien, mortgage, deed of trust, deed to secure debt, pledge, charge, security interest, right of first refusal, easement, restriction and other third party right.

“Transaction”            means the transfer of the Company from the Seller to the Buyer (or its Affiliates as applicable) as described in this Agreement.

“Transfer Tax”            means any real and personal property transfer, documentary, sales use, registration, value-added, conveyance, real estate transfer and any similar taxes, together with all interest, fines, penalties and additions attributable to or imposed with respect to such amounts imposed on or with respect to the transfer of assets and assumption of the liabilities in connection with this Agreement and any Company Specific Purchase Agreements.

“Transitional Services Agreement”        has the meaning ascribed to it in clause 19.1.1.

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“USD”                means United States Dollars, being the lawful currency in theUnited States.

“Virtual Data Room”            has the meaning ascribed to it in clause 12.1.

“Warranties”            mean the representations and warranties given by the Seller in accordance with clause 13 and by the Buyer in accordance with clause 14.

“Warranty Breach”            means any Breach of the Warranties.

"Wrong Pocket Asset or Liability"        has the meaning ascribed to it in clause 9.3.1.

"Wrong Pocket Transfer"        has the meaning ascribed to it in clause 9.3.1.2.

1.2 Expressions such as “including” and similar expressions mean “including, but not limited to.”

1.3 Words in the singular include the plural and vice versa.

1.4 Any Danish legal term for any action, remedy, method of judicial proceeding, legal document, legal status, court, official or any legal concept will, in respect of any jurisdiction other than that of Denmark, be deemed to include what, in that jurisdiction, most nearly approximates to the Danish legal term.

2. Transfer of the Company

2.1 Transaction Object

2.1.1 The Buyer will purchase:

2.1.1.1 the shares of all the Share Sale Companies (and indirectly of all the Subsidiaries) and

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2.1.1.2 all of the Company-related assets and liabilities of Asset Sale Companies, including but not limited to:

(i) Intellectual Property Rights;

(ii) tangible and intangible property, including customer lists, records, goodwill and other intangible assets;

(iii) all contractual arrangements with suppliers, customers and other third parties;

(iv) all Permits;

(v) all contractual arrangements with employees; and

(vi) any other assets and/or liabilities related to or used in connection with the ordinary course of the Company upon Closing,

unless such asset or liability is specifically listed as an Excluded Asset and/or an Excluded Liability in Schedule 2.1.1.2 (Excluded Assets and Excluded Liabilities), respectively.

2.2 Transfer of the Company

2.2.1 Subject to the terms and conditions set out in this Agreement, the Seller sells the Company to the Buyer, and the Buyer acquires the Company from the Seller.

2.2.2 The transfer of the Company is completed by the Local Sellers selling the shares of the relevant Share Sale Companies and the Company-related assets and liabilities of the relevant Asset Sale Companies, as the case may be, to the relevant Local Buyer as specified in the relevant Company Specific Purchase Agreement substantially in the forms set out in Schedule 2.2.2(a) (Company Specific Share Purchase Agreement) and Schedule 2.2.2(b) (Company Specific Asset Purchase Agreeement) (subject only to local mandatory requirements). A list of the Company Specific Share Purchase Agreements and Company Specific Asset Purchase Agreements for the Major Jurisdiction Companies and the Company Specific Share Purchase Agreements and Company Specific Asset Purchase Agreements for the Residual Jurisdiction Companies is attached as Schedule 2.2.2(c).

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3. Final Purchase Price and Closing Statement

3.1 Final Purchase Price

3.1.1 The total consideration payable by the Buyer to the Seller for the Company shall be USD 145,000,000 (the“Enterprise Value”) less the Final Net Interest Bearing Debt and adjusted by the Final Net Working Capital Adjustment Amount (the “Final Purchase Price”).

3.2 Estimated Purchase Price

3.2.1 At the latest 15 (fifteen) Business Days prior to the Closing Date, the Seller shall deliver to the Buyer a statement (the “Preliminary Purchase Price Statement”) setting forth the Seller's good faith estimates of the Estimated Net Interest Bearing Debt and the Estimated Net Working Capital Adjustment Amount and the corresponding Estimated Purchase Price, in each case determined as of the Closing Date and in accordance with Schedule 3.2.1, together with any additional information reasonably requested by the Buyer.

3.2.2 The Estimated Purchase Price must be paid by the Buyer in cash to the Seller's Bank Account at Closing. Any transfers from Buyer are to be marked “DMO/LMO-Orange”.

3.3 Closing Statement

3.3.1 Within 45 (fourty-five) Business Days after the Closing Date, the Seller shall cause the preparation of and delivery to the Buyer of the calculation of the Final Net Interest Bearing Debt and the Final Net Working Capital Adjustment Amount, and consequently the Final Purchase Price and the Adjustment Amount, in accordance with the principles of the Preliminary Purchase Price Statement (together the “Closing Statement”). The Closing Statement must be prepared on the basis of a pro forma consolidated closing balance sheet for the Company as of Closing Date, and in accordance with IFRS as applied by GN Store Nord A/S in its consolidated financial statements for 2015 (for all entities other than Audiology Systems, Inc.) or US GAAP (for Audiology Systems, Inc.). The Seller shall have unrestricted access to all books, records and other information as well as to the employees of the Company which in the reasonable opinion of the Seller is necessary or appropriate for the Seller to prepare or review the Closing Statement.

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3.3.2 Following delivery of the Closing Statement, the Seller shall provide the Buyer and the Buyer's Representatives with any supporting documentation for the Closing Statement which the Buyer reasonably requests.

3.3.3 No later than 45 (forty-five) Business Days after the Buyer's receipt of the Closing Statement, the Buyer shall notify the Seller in writing of any item(s) which the Buyer wishes to dispute on the basis that the Closing Statement was not prepared or calculated in accordance with clause 3.3.1 (the “Notice of Disagreement”). The Notice of Disagreement must:

(i) specify in reasonable detail the nature of the disagreement and provide a description in reasonable detail of the reasons for such disagreement (including appropriate supporting documentation in the possession of the Buyer); and

(ii) include a specific proposal for adjustment of each disputed item in the Closing Statement.

3.3.4 If the Buyer has not given any Notice of Disagreement, the Closing Statement as prepared by the Seller will be deemed final and binding upon the Parties, except in case of manifest error or fraud. If the Buyer has not given any objection on the basis of a manifest error within 120 (one-hundred-and-twenty) Business Days after the Buyer's receipt of the Closing Statement, the Closing Statement shall be deemed final.

3.3.5 The Buyer and the Seller shall discuss the Notice of Disagreement in good faith and, if they reach an agreement amending the Closing Statement, the Closing Statement as amended by such agreement will become final and binding upon the Buyer and the Seller except in case of manifest error or fraud.

3.3.6 If the Parties are unable to reach an agreement prior to the expiry of 30 (thirty) Business Day after such Notice of Disagreement is delivered to the Seller, either Party may within a subsequent period of 30 (thirty) Business Days refer the disputed item(s) to the Independent Accountantfor its final and binding decision. If a disputed item relates to a legal or contractual issue, including the legal interpretation of this Agreement, such dispute shall be referred to arbitration in accordance with clause 23 within the said period of 30 (thirty) Business Days.

3.3.7 If the dispute is not referred to the Independent Accountant within the period stipulated, the Closing Statement delivered to the Buyer will be final and binding upon the Parties subject only to any changes

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agreed by the Parties in writing and except in case of manifest error or fraud.

3.3.8 Unless otherwise agreed by the Parties, the Independent Accountant will establish the procedural rules in connection with its hearing of the Parties’ respective positions on the disputed item(s) and any related issues to be investigated in connection with the settling of the dispute. The decision of the Independent Accountant is final and binding upon the Parties and will not be subject to judicial or arbitrational review, except in case of manifest error or fraud.

3.3.9 The Parties shall use their best efforts to ensure that the Independent Accountant renders its decision within 60 (sixty) Business Days after the disputed matter was referred to the Independent Accountant.

3.3.10 The Parties shall make any deposit with and/or make any upfront payment to the Independent Accountant as well as sign any release letter reasonably required by the Independent Accountant in order for it to accept the task of acting as the Independent Accountant in accordance with the terms of this Agreement. Any such deposit and/or upfront payment shall be divided equally between the Parties (50/50).

3.3.11 The Independent Accountant must have reasonable access to all of the books and records of the Company, whether the relevant books and records reside with the Seller’s Group or the Buyer’s Group. Both Parties undertake to procure such access.

3.3.12 The aggregate fees and expenses finally payable to the Independent Accountant shall be borne by the Seller and the Buyer in such proportion as the Independent Accountant determines, taking into account which party has prevailed the most in its argumentation (based on the amounts claimed by each of the parties) with respect to the disputed item(s) referred to the Independent Accountant for its decision, and the Independent Accountant's decision shall include a decision on the allocation of the said fees and expenses between the parties. If the parties are equally correct in the aggregate, the fees and expenses finally charged by the Independent Accountant shall be divided equally between the Parties (50/50). If one of the Parties shall bear the fees and expenses payable to the Independent Accountant, such party shall indemnify the other party from any deposit and/or upfront payment made by the other party to the Independent Accountant.

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3.3.13 If the Final Purchase Price is:

(i) greater than the Estimated Purchase Price, the Buyer shall pay to the Seller an amount equal to such excess amount; or

(ii) lower than the Estimated Purchase Price, the Seller shall pay to the Buyer’s Bank Account an amount equal to such difference.

Any payment pursuant to this clause 3.3.13 (the “Adjustment Amount”) must be made within 5 (five) Business Days after the Closing Statement has become final as set forth in this clause 3.3. Payment of the Adjustment Amount must include Interest calculated from (but not including) the Closing Date until and including the date of payment.

3.4 Purchase Price Adjustment for the Residual Closing

3.4.1 The Parties acknowledge that due to the handling of historical (not to be transferred) and future (to be transferred) working capital effects in the Back-To-Back Arrangements as described in clauses 10.2 and 10.3, no Purchase Price adjustment will be required for working capital relating to the Residual Closing.

3.4.2 In the event that any assets or liabilities referenced in the definition of Net Working Capital or Net Interest Bearing Debt are transferred after the Closing Date, and are unaccounted for in the Closing Statement, an additional USD-for-USD adjustment shall be completed between the Parties, as required. For the avoidance of doubt, if the Transaction is completed in respect of Audiology Systems, Inc. at the Residual Closing, a USD-for-USD adjustment shall be completed between the Parties in respect of all Net Interest Bearing Debt and all Net Working Capital of Audiology Systems, Inc. transferred as part of the Transaction pursuant to this clause 3.4.2.

3.5 Allocation of the Final Purchase Price

3.5.1 The Estimated Purchase Price must be allocated between the Share Sale Companies and the Asset Sale Companies as set out in Schedule 2.2.2. The allocation of the Enterprise Value on the individual assets of the Asset Sale Companies is set out in sub-schedules to the individual Company Specific Asset Purchase Agreements.

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3.5.2 The allocation of the Final Purchase Price must be agreed between the Parties prior to Closing and if requested by a Party verified by an independent third party appointed jointly by the Parties.

3.5.3 If there is an adjustment to the Estimated Purchase Price according to this clause 3.5, the adjustment must be made pro rata among the individual purchase prices for all Share Sale Companies and Asset Sale Companies.

3.6 Payment with discharging effect

3.6.1 The Buyer's payment of the Estimated Purchase Price and any Adjustment Amount to the Seller will be made with discharging effect. The Seller shall be responsible for transferring any part of the Estimated Purchase Purchase Price and any Adjustment amount paid by the Buyer to the Local Sellers in accordance with the allocation set out in Schedule 2.2.2.

4. Signing

4.1 When signing this Agreement the Seller has delivered to the Buyer:

4.1.1 Documentary evidence from the board of directors of the Seller irrevocably authorising the signing of this Agreement and the Seller's consummation of the transactions contemplated by this Agreement (including without limitation any and all of its Closing deliveries as set out in clause 8.3).

4.2 When signing this Agreement the Buyer has delivered to the Seller:

4.2.1 Documentary evidence from the board of directors of the Buyer irrevocably authorising the signing of this Agreement and the Buyer's consummation of the transactions contemplated by this Agreement (including without limitation any and all of its Closing deliveries set out in clause 8.4).

4.2.2 Evidence of the Buyer's ability to pay the Estimated Purchase Price at Closing.

5. Conditions precedent to Closing

5.1 Conditions precedent to the Buyer’s Obligations

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5.1.1 The Buyer is not obliged to perform its obligations to consummate the Transaction at Closing as set forth in clause 8 unless the following conditions precedent are fulfilled or are waived by the Buyer on or prior to Closing:

(i) the required merger clearances have been obtained, see clause 6.1;

(ii) no Law makes it illegal for the Buyer to consummate the Transaction, and no order, decree or judgment prevents the Seller from consummating the Transaction;

(iii) no suit, action, investigation, or other proceeding is pending or threatened before any court or governmental agency against the Buyer seeking to restrain, prohibit, or obtain damages or other relief, in connection with the consummation of the Transaction; and

(iv) no Material Adverse Effect has occurred.

5.2 Conditions precedent to the Seller's obligations

5.2.1 The Seller is not obliged to perform its obligations to consummate the Transaction at Closing as set forth in clause 8 unless the following conditions precedent are fulfilled or are waived by the Seller on or prior to Closing:

(i) the required merger clearances have been obtained, see clause 6.1 below;

(ii) no Law makes it illegal for the Seller to consummate the Transaction, and no order, decree or judgment prevents the Buyer from consummating the Transaction;

(iii) no suit, action, investigation, or other proceeding is pending or threatened before any court or governmental agency against the Seller seeking to restrain, prohibit, or obtain damages or other relief, in connection with the consummation of the Transaction; and

(iv) no Material Adverse Effect has occurred.

5.3 Each of the Parties undertakes in good faith to use best efforts to ensure that the conditions precedent set out above in clauses 5.1.1 and 5.2.1 are fulfilled as soon as possible after the Signing Date.

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5.4 Each of the Parties undertakes as soon as reasonably practicable to disclose in writing to the other Party any circumstances that will or are reasonably likely to prevent any of the conditions precedent from being satisfied upon becoming aware of such circumstances. Moreover, each of the Parties undertakes to inform the other Party in writing as soon as reasonably practicable when such Party has become aware that a condition precedent has been satisfied.

6. Covenants between Signing and Closing

6.1 Filing for Merger Clearances

6.1.1 As soon as practically possible after the Signing Date, the Buyer shall file all required notifications to the relevant competition authorities and submit documents and information requested or required by such authorities to grant the merger clearances required for consummation of the transactions contemplated by this Agreement.

6.1.2 All communication with the relevant competition authorities with respect to the filings made must promptly be notified to the Seller who must also be provided with a copy of all such communication. Where permissible, the Seller and its Representatives have the right to participate in any meetings with the relevant competition authorities.

6.1.3 Each of the Parties shall, at the request of the other Party and as permitted by Law, furnish the other, in a timely manner, with all reasonable information concerning itself as may be necessary or advisable with a view to obtaining the merger clearances.

6.1.4 In case applicable antitrust regulation prohibits the exchange of certain information between the Parties, and it is necessary or advisable to exchange such information in order to obtain the merger clearances, the information is to be exchanged between the Parties’ respective legal counsels on a counsel-to-counsel basis without any direct disclosure to the other Party.

6.1.5 The Buyer shall undertake (or cause to be undertaken) any and all reasonable steps necessary to avoid or eliminate impediments for the antitrust clearances that may be asserted by any antitrust authority so as to enable the Buyer and the Seller to close the transactions as contemplated under this Agreement (subject to all conditions and requirements for Closing set out in this Agreement being fulfilled or waived, as applicable). This shall include the obligation of the Buyer to commit to reasonable

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divestments or reasonable behavioral remedies as are necessary to avoid the effect of materially delaying or preventing the consummation of the transactions contemplated under this Agreement, however, provided that the Buyer shall not be obliged to agree to or to offer:

(i) divestments or behavioral remedies which are outside the scope of the Buyer's hearing screening and balance assessment equipment as conducted by the Buyer Parent and its subsidiaries and/or the Seller and its Affiliates (herein collectively “Combined Business”); and

(ii) divestitures from the Combined Business which, individually or in the aggregate, are reasonably expected to result in an equivalent reduction of 15 (fifteen) percent or more of the EBITDA compared to the Company's EBITDA in the fiscal year ending 31 December 2015 (it being understood that EBITDA for the purpose of this clause 6.1.5 shall be based on marginal impact on a consolidated basis).

(iii) In the event that divestitures exceeding the threshold set forth in item (ii) above are required by any antitrust authority to secure a clearance decision, the Buyer and the Seller shall negotiate in good faith with a view to finding a mutually satisfactory solution.

6.2 Change of Control Contracts and Change of Control Permits for Major Jurisdiction Companies

6.2.1 The Parties shall take all reasonable steps to obtain the consents between Signing and Closing under any Change of Control Contracts and any Change of Control Permits for Major Jurisdiction Companies, and any Residual Jurisdiction Companies for which (and to the extent) the Transaction is completed at Closing.

6.2.2 If any consent required in connection with the assignment by the Local Seller to the Local Buyer or the sale of the shares in the Share Sale Company, as the case may be, of any of the Change of Control Contracts or Change of Control Permits for Major Jurisdiction Companies, and any Residual Jurisdiction Companies for which the Transaction is completed at Closing, has not been obtained prior to Closing, the Seller and the Buyer must, until such consents are obtained by the Buyer, cooperate to ensure that (i) the Parties enter into a Back-To-Back Arrangement relating to such Change of Control Contracts and/or Change of Control Permits to ensure that the net economic benefit (i.e. less any

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related costs incurred by the Seller which would have been incurred by the Buyer had the assets and/or liabilities been acquired by the Buyer at Closing, including, without limitation, any Tax) and net cash flow of the relevant Change of Control Contracts and/or Change of Control Permits is transferred to the Buyer; and (ii) if so desired by the Buyer (a) such Change of Control Contract or Change of Control Permit are terminated and/or (b) any rights of the Seller or Local Seller arising from such Change of Control Contract or Change of Control Permit are enforced. To the extent that the Buyer receives the benefits under any such Change of Control Contracts or Change of Control Permits as contemplated by this clause 6.2, the Buyer shall fully and timely perform all of the obligations of the Seller under such Change of Control Contracts or Change of Control Permits and indemnify, defend and hold harmless the Seller from all such obligations, and any actions taken by the contracting counterparty or any other party in connection therewith, but only to the extent that such action is predominantly based upon or arises out of the performance (including for the sake of clarity omissions) by the Buyer of such obligations of the Seller after the Closing Date.

6.3 Financing Assistance

6.3.1 The Seller shall, and shall cause the Company to, use best efforts to provide all cooperation reasonably requested to assist the Buyer in the arrangement of debt financing of the Final Purchase Price, including any refinancing of debt (the “Financing”).

6.3.2 Nothing herein may require such cooperation to the extent it would (a) unreasonably disrupt the operations of the Seller's Group or (b) require the Seller's Group to incur any liability which is not promptly reimbursed by the Buyer. The Buyer shall promptly reimburse the Company or the Seller (as the case may be) for all reasonable costs in connection with the Financing.

6.4 Filing of Tax returns

6.4.1 The Seller shall procure that pending Closing, the Company files all such Tax returns or other notices to any Tax authority, for any period up until Closing which are required to be filed in any jurisdiction, including, without limitation, the United States.

6.4.2 The Seller shall further (i) procure that the Company pays or (ii) provide for the payment of any and all Taxes for any period prior to Closing, which are due and payable in any jurisdiction, including, without limitation, the United States.

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7. Conduct of Business pending Closing

7.1 Between Signing and Closing, or the Residual Closing, as the case may be, the Seller must operate the Company, or the remaining Residual Jurisdiction Companies or assets and liabilities of the Residual Jurisdiction Companies, as the case may be, in the ordinary course of business and in line with past practices, and specifically the Seller will not with regard to the Company – except (i) in accordance with pre-existing obligations or agreements Disclosed to the Buyer or (ii) as agreed with the Buyer from time to time:

(i) divest, or allow any Third Party Rights over, the shares of any Share Sale Company or any Subsidiary, or introduce any new Third Party Rights over the material assets of any Share Sale Company or Asset Sale Company;

(ii) change the share capital of any Share Sale Company or Subsidiary, including issuance of equity related instruments; amend the articles of association of any Share Sale Company; or liquidate, merge, demerge or otherwise restructure any Share Sale Company;

(iii) enter into any agreements or commitments involving capital expenditure without having consulted with the Buyer in advance and considering the Buyer’s input thereon for an amount in excess of DKK 5,000,000 in any transaction or related series of transactions or DKK 20,000,000 in the aggregate;

(iv) let any Share Sale Company acquire or incur any indebtedness or make any loan to any Person;

(v) let any Share Sale Company enter into or engage in any hedging, securitization, derivative, factoring or swap transaction;

(vi) let the Company (i) increase the compensation, including bonuses, pensions and other benefits, to any Key Employee; (ii) terminate or materially amend the employment terms of any Key Employee; or (iii) establish or amend any compensation or benefit plan or collective bargaining agreement;

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(vii) initiate or settle any litigation which is material to the Company;

(viii) terminate or amend the terms of any contract which is material to the Company;

(ix) accelerate any payment of trade receivables, changing payment terms, or delay any payment of trade payables;

(x) let any Share Sale Company (i) change any method of Tax accounting or other election in respect of Tax; or (ii) settle any audit, investigation, or other proceeding in respect of Tax; or (iii) enter into any agreement with, or request any Tax ruling from, any Tax authority, if any such action could result in a material increase in a liability for Tax of any Share Sale Company; or

(xi) agree, conditionally or otherwise, to do any of the foregoing.

7.2 Upon receipt of merger clearance the Seller shall provide such information on the Company and its business as is reasonably required by the Buyer as well as to provide reasonable access to the Company's employees.

8. Closing

8.1 Subject to the terms and conditions of this Agreement, Closing will take place at the offices of Moalem Weitemeyer Bendtsen, Amaliegade 3-5, DK-1256 Copenhagen, Denmark, at 09:00 am (CET) a) on the first Business Day of a the month (provided that such Business Day is also a banking day in Ireland and USA) following the month, where all of the conditions precedent referred to in clause 5 have been satisfied or waived or are capable of being satisfied in connection with Closing, however, no earlier than on 1 January 2017 and provided that at least 10 (ten) Business Days shall have passed since the satisfaction or waiver, as applicable, of such conditions precedents or b) at such other date agreed between the Parties. Closing shall in each case be deemed to take effect as of the last day of the calendar month immediately preceeding the Closing Date.

8.2 Closing will comprise the completion of the Transaction regarding (a) the Major Jurisdiction Companies and (b) any Residual Jurisdiction Companies agreed between the Parties prior to Closing.

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8.3 At Closing, the Seller must take the following actions and deliver to the Buyer or procure the following:

(i) The Company Specific Share Purchase Agreements relating to the Major Jurisdiction Companies (and any relevant Residual Jurisdiction Companies) signed by the relevant local Sellers.

(ii) The Company Specific Asset Purchase Agreements relating to the Major Jurisdiction Companies (and any relevant Residual Jurisdiction Companies) signed by the relevant Local Sellers.

(iii) The register of shareholders of each Share Sale Company being transferred at Closing and any certificates(s) in respect of the shares substantiating that the Buyer is registered as owner of the shares of each Share Sale Company being transferred at Closing free from any Third Party Rights.

(iv) The registers of shareholders of each of the Subsidiaries and certificates in respect of all issued shares in the Subsidiaries substantiating that GN Otometrics Denmark is registered as owner of all of the shares and equity-related rights issued in each Subsidiary free from any Third Party Rights.

(v) Letters of resignation from the members of the board of directors of each Share Sale Company being transferred at Closing, which are elected by the general meeting (i.e. not employee representatives) attached as Schedule 8.3(v), stating that they will resign at Closing, and that they do not have any claims against the Company.

(vi) Letters of resignation from the auditor of eachShare Sale Company being transferred at Closing attached as Schedule 8.3(vi) waiving any claims against the Company other than for fees for services rendered to the Company in the ordinary course of business prior to Closing. The fees are to be paid by the relevant Share Sale Company, and the Buyer shall procure that such payment is made no later than on its due date, if the fees have not been settled on the Closing Date at the latest.

(vii) The corporate books and records for each Share Sale Company being transferred at Closing (or confirmation that such materials are kept at such Share Sale Company’s offices).

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(viii) The appropriate documentation that the transfer of the assets and liabilities has taken place in accordance with each Company Specific Asset Purchase Agreement relating to a Major Jurisdiction Company (and any relevant Residual Jurisdiction Company being transferred at Closing).

(ix) Confirmation by the Seller substantially in the form as attached as Schedule 8.3(ix) stating whether any Material Adverse Effect has occurred between the Signing Date and the Closing Date.

(x) 2 (two) copies of a USB stick containing a copy of the Due Diligence Documentation as of the Signing Date and the Closing Date, respectively.

(xi) Transcript from the Danish Business Authority evidencing the power of the persons signing this Agreement on behalf of the Seller to bind the Seller with their signatures.

(xii) The Transitional Services Agreement signed by the Seller.

(xiii) A properly executed statement stating that interests in the Company do not constitute “United States real property interests” under Section 897(c) of the Internal Revenue Code of 1986, as amended, for purposes of satisfying Buyer’s obligations under U.S. Treasury Regulation Section 1.1445-2(c)(3).  In addition, simultaneously with delivery of such statement, the Seller provide to Buyer, as agent for the Seller, a form of notice to the Internal Revenue Service in accordance with the requirements of U.S. Treasury Regulation Section 1.897-2(h)(2) along with written authorization for the Buyer to deliver such notice form to the Internal Revenue Service on behalf of the Seller upon the consummation of the Transaction.

(xiv) The appropriate documentation that the Seller has complied with its obligations in clause 6.4.

8.4 At Closing, the Buyer must take the following actions and deliver to the Seller or procure the following:

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(i) The Company Specific Share Purchase Agreements relating to the Major Jurisdiction Companies (and any relevant Residual Jurisdiction Companies) signed by the relevant Local Buyers.

(ii) The Company Specific Asset Purchase Agreements relating to the Major Jurisdiction Companies (and any relevant Residual Jurisdiction Companies) signed by the relevant Local Buyers.

(iii) Documentary evidence that the Estimated Purchase Price has been transferred to the Seller's Bank Account in cash with the Closing Date as value date.

(iv) Certified copies of (i) a Secretary's Certificate (under U.S. law), together with (ii) a third party confirmation or validation, evidencing that the Buyer has full corporate power and all necessary authority to consummate this Agreement, and which are required to evidence the authority of the individuals having executed this Agreement on behalf of the Buyer and any document executed and/or delivered by the Buyer at Closing.

(v) The Transitional Services Agreement signed by the Buyer.

8.5 The Closing actions must be documented in a Closing Memorandum. The Seller shall, no later than 10 (ten) Business Days before the contemplated Closing Date, deliver a draft Closing Memorandum to the Buyer.

8.6 The actions taken under clauses 8.3 and 8.4 are to be deemed to have occurred simultaneously, and none of the actions taken by one Party are to be considered performed until and unless all the actions to be performed by the other Party have been performed or explicitly waived by the recipient Party. At Closing, the Parties must approve and sign the Closing Memorandum.

8.7 Each Party is entitled to waive fulfilment by the other Party of any of the other Party’s obligations at Closing, in whole or in part.

8.8 If a Party’s obligations under clauses 8.3, items (i)-(iv), (viii)-(ix), (xi) and (xii), and 8.4, items (i)-(v), are not complied with by the Closing Date, the Parties may agree to:

(i) defer Closing (so that the provisions of this clause 8 will apply to the deferred Closing); or

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(ii) proceed to Closing as far as practicable without limiting its rights under this Agreement as a consequence thereof.

8.9 If a Party’s obligations under clause 8.3, items (v)-(vii), (x), (xiii) or (xiv) are not complied with by the Closing Date, the Parties agree to proceed to Closing as far as practicable without limiting its rights under this Agreement as a consequence thereof.

8.10 If Closing has not occurred on or before 23:59 CET on 30 June 2017, this Agreement may be terminated by either Party by giving written notice of immediate termination of the Agreement to the other Party.

8.11 If a Party terminates this Agreement pursuant to clauses 8.8 or 8.9, all obligations of the Parties under this Agreement will end immediately, except for those expressly stated to continue without limitation in time and those set out in clauses 22 to 23. However, for the avoidance of doubt, all rights and liabilities of the Parties which have accrued before termination or as a consequence of termination will continue to exist.

9. Post-Closing Covenants

9.1 Residual Closing

9.1.1 After Closing, the Parties shall work jointly and loyally to finalise any Company Specific Purchase Agreements relating to Residual Jurisdiction Companies for which, and to the extent, the Transaction is not completed at Closing and to complete the Residual Closing.

9.2 Change of Control Contracts and Change of Control Permits for Residual Jurisdiction Companies

9.2.1 The Parties shall take all reasonable steps to obtain the consents prior to the Residual Closing under any Change of Control Contracts and any Change of Control Permits for Residual Jurisdiction Companies.

9.2.2 If any consent required in connection with the assignment by the Local Seller to the Local Buyer or the sale of the shares in the Share Sale Company, as the case may be, of any of the Change of Control Contracts or Change of Control Permits for Residual Jurisdiction Companies has not been obtained prior to the Residual Closing then, until such consents are obtained by the Buyer, the Seller and the

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Buyer must co-operate to ensure that (i) the Buyer receives the benefit (less any related costs incurred by the Seller which would have been incurred by the Buyer had such Change of Control Contract or Change of Control Permit been assigned to the Buyer, including, without limitation, any Tax) of any rights of the Seller or the Company under such Change of Control Contract or Change of Control Permit; (ii) a transitional arrangement (Back-To-Back Arrangement) designed to provide such benefits to the Buyer is implemented; and (iii) if so desired by the Buyer; (a) such Change of Control Contract or Change of Control Permit are terminated; and/or (b) any rights of the Seller or Local Seller arising from such Change of Control Contract or Change of Control Permit are enforced. To the extent the Buyer receives the benefits under any such Change of Control Contracts or Change of Control Permits as contemplated by this clause 9.2, the Buyer shall fully and timely perform all of the obligations of the Seller under such Change of Control Contracts or Change of Control Permits and indemnify, defend and hold harmless the Seller from all such obligations, and any actions taken by the contracting counterparty or any other party in connection therewith, but only to the extent that such action is predominantly based upon or arises out of the performance (including for the sake of clarity omissions) by the Buyer of such obligations of the Seller after the Residual Closing.

9.3 Wrong Pocket Transfer

9.3.1 If, after Closing, or the relevant Residual Closing, and for a period ending 150 (one-hundred-and-fifty) Business Days after the relevant date, it is found that any payment from any third party, right, title or interest in any asset or a liability which does not form part of the Company that has been transferred from the Seller or if, after Closing and for a period ending 150 (one-hundred-and-fifty) Business Days hereafter, it is found that any Intellectual Property Rights, tangible or intangible property, contractual arrangement, Permit, employee or any other asset or liability which either (a) should have been transferred to the Buyer as part of the Transaction, but has not been transferred; or (b) has been transferred to the Buyer as part of the Transaction, but should not have been transferred, then:

9.3.1.1 either Party shall notify the other in writing as soon as practicable after such matters come to its knowledge;

9.3.1.2 at the expiry of the above-mentioned period, the Parties shall procure that:

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(i) each Wrong Pocket Asset or Liability is transferred to the other Party for no consideration and subject to no costs, fees etc. (“Wrong Pocket Transfer”); and

(ii) the Party in question, as the case may be, shall perform all such additional acts and deeds and shall execute such documents in a form reasonably satisfactory to the other Party as may be necessary to validly effect the Wrong Pocket Transfer; and

(iii) each Party shall hold the Wrong Pocket Asset or Liability in trust for the other Party until such time as the Wrong Pocket Transfer is validly effected and registered, as the case may be.

9.3.2 Each of the Parties shall ensure that their respective Affiliates and Representatives deliver, or cause to be delivered, the necessary documents as well as perform the necessary actions of a procedure as set out above.

9.3.3 For the avoidance of doubt, the limitations set forth in clause 16 are not applicable.

9.3.4 In connection with any Wrong Pocket Transfer, the Parties must determine whether the Wrong Pocket Transfer would have had an influence on the Adjustment Amount had the Wrong Pocket Transfer been completed at Closing or the Residual Closing, as applicable. If and to the extent that the Wrong Pocket Transfer would have had an influence on the Adjustment Amount, the Parties must adjust the Final Purchase Price as if the Wrong Pocket Transfer had been completed at Closing or the Residual Closing, as applicable, and the Party in whose favour the Adjustment Amount was calculated erroneously shall pay the difference to the other Party without undue delay.

10. Back-To-Back Arrangements

10.1 For any assets and/or liabilities are not wholly or partially transferred at Closing, the Seller shall, and shall procure that the Local Sellers, transfer the net economic benefit (i.e. less any related costs incurred by the Seller which would have been incurred by the Buyer had the assets and/or liabilities been acquired by the Buyer at Closing, including, without limitation, any Tax) and net cash flow of the relevant non-transferred assets and/or liabilities to the relevant Local Buyer (or from the relevant Local Buyer to the relevant Local Seller in case of a negative net economic benefit or negative net

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cash flow) as if the Local Buyer had acquired the asset as of Closing (each a “Back-To-Back Arrangement”).

10.2 Under each Back-To-Back Arrangement, the historical working capital related to the relevant assets and/or liabilities (e.g. trade debtor, trade receivables or inventory) prior to and at Closing is for the benefit or liability, as the case may be, of the Seller until it is offset, and any new working capital established after Closing relating to the relevant assets and/or liabilities is for the benefit or liability, as the case may be, of the Buyer.

10.3 For the avoidance of doubt, the Back-To-Back Arrangements will continue after the Residual Closing if and to the extent required to give effect to the working capital transfer described above.

11. Residual Closing

11.1 The Residual Closing will take place at the offices of Moalem Weitemeyer Bendtsen, Amaliegade 3-5, DK-1256 Copenhagen, Denmark, within 15 (fifteen) Business Days after the latter of (i) the relevant Company Specific Purchase Agreement for the Residual Jurisdiction Company having been finalised; and (ii) any required steps to transfer the assets and liabilities or shares, as relevant, of the relevant Residual Jurisdiction Company, having been completed.

11.2 The Parties agree that the Residual Closing is not subject to any conditions precedent, and the failure to fulfil steps in connection with the transfer of assets, including obtaining consents to transfer Change of Control Clauses and/or Change of Control Permits, must, to the extent possible, not prevent the Residual Closing. If specific steps cannot be completed, the Residual Closing must take place at a time agreed between the Parties and must be completed to the extent possible.

11.3 At the Residual Closing, the Seller must take the following actions and deliver to the Buyer or procure the following:

(i) The Company Specific Share Purchase Agreements relating to the relevant Residual Jurisdiction Companies signed by the relevant Local Sellers.

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(ii) The Company Specific Asset Purchase Agreements relating to the relevant Residual Jurisdiction Companies signed by the relevant Local Sellers.

(iii) The register of shareholders of each Share Sale Company being transferred at the Residual Closing and any certificates(s) in respect of the shares substantiating that the Buyer is registered as owner of the shares of each Share Sale Company being transferred at the Residual Closing free from any Third Party Rights.

(iv) Letters of resignation from the auditor of eachShare Sale Company being transferred at the Residual Closing attached as Schedule 8.3(v) waiving any claims against the Company other than for fees for services rendered to the Company in the ordinary course of business prior to Closing. The fees are to be paid by the relevant Share Sale Company, and the Buyer shall procure that such payment is made no later than on its due date, if the fees have not been settled on the Closing Date at the latest.

(v) The corporate books and records for each Share Sale Company being transferred at the Residual Closing (or confirmation that such materials are kept at such Share Sale Company’s offices).

(vi) The appropriate documentation that the transfer of the assets and liabilities has taken place in accordance with each Company Specific Asset Purchase Agreement relating to a relevant Residual Jurisdiction Company.

11.4 At the Residual Closing, the Buyer must take the following actions and deliver to the Seller or procure the following:

(i) The Company Specific Share Purchase Agreements relating to the relevant Residual Jurisdiction Companies signed by the relevant Local Buyers.

(ii) The Company Specific Asset Purchase Agreements relating to the relevant Residual Jurisdiction Companies signed by the relevant Local Buyers.

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11.5 The Residual Closing actions are documented in a Residual Closing Memorandum. The Seller shall, no later than 5 (five) Business Days before the Residual Closing, deliver a draft Residual Closing Memorandum to the Buyer.

11.6 The actions taken under clauses 11.3 and 11.4 are to be deemed to have occurred simultaneously, and none of the actions taken by one Party are to be considered performed until and unless all the actions to be performed by the other Party have been performed or explicitly waived by the recipient Party. At the Residual Closing, the Parties must approve and sign the Residual Closing Memorandum.

11.7 Each Party is entitled to waive fulfilment by the other Party of any of the other Party’s obligations at the Residual Closing, in whole or in part.

11.8 If a Party’s obligations under clauses 11.3, items (i)-(iii) and (vi), to 11.4, items (i)-(ii), are not complied with by the date of the Residual Closing, then the other Party may:

(i) Defer the Residual Closing (so that the provisions of this clause 11 will apply to the deferred Residual Closing);

(ii) proceed to the Residual Closing as far as practicable without limiting its rights under this Agreement as a consequence thereof; or

(iii) notify the other Party that the Residual Closing must be completed as a Back-To-Back Arrangement in accordance with clause 9 above.

11.9 If a Party’s obligations under clause 8.3, items (iv)-(v) are not complied with by the Closing Date, the Parties agree to proceed to Closing as far as practicable without limiting its rights under this Agreement as a consequence thereof.

11.10 The Residual Closing shall take place at the latest 36 (thirty-six) months after the Closing Date. To the extent any Residual Closing has fully or partially not been completed at this date, the Back-To-Back Arrangement(s) for the relevant assets and liabilities will continue until such time as the assets or liabilities are no longer relevant to the Company.

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12. Buyer’s Investigations

12.1 Prior to the Signing Date, the Buyer and the Buyer's Representatives have been provided with access to a virtual data room (the “Virtual Data Room”) prepared by the Seller containing the documentation in relation to the Company listed in Schedule 12.1 (the “Due Diligence Documentation”). Further, the Company’s management has made presentations of the Company and its activities to the Buyer and its Representatives who have been permitted to ask questions to the Company’s management and Representatives, minutes of such sessions forming part of the Due Diligence Documentation.

13. Seller's Warranties

13.1 As of Signing, the Seller makes the representations and warranties set out in Schedule 13.1 to and for the benefit of the Buyer subject to and qualified by all matters, facts or information (i) Disclosed; (ii) mentioned in this Agreement; or (iii) within the Buyer’s Knowledge. The Seller's Warranties are repeated by the Seller on and as of the Closing Date, except for the Seller's Warranties out in clauses 5.2 (Key Employee resignation), 5.4 (claims from former employees), 6.1 (no insurance claims), 6.2 (cancellation of insurance policies), 7.2 (termination of lease), 8.4 (compliance with environmental Laws), 9.3 (termination of contracts), 11.3-11.5 (IPR infringement), 11.9 (breach of IPR agreement), 15.2 (compliance with Law), 15.4-15.7 (compliance with certain Laws), and 16.1-16.2 (pending and threatened judgments) of Schedule 13.1, which shall be deemed given only as of Signing. The Buyer cannot rely on any assumptions, warranties or declarations not explicitly stated in this Agreement. The Seller gives no Seller’s Warranties in respect of information on prospects concerning the future, including as set out in any presentations, budgets and forecasts, regardless of whether such information is included in the Due Diligence Documentation or has otherwise been communicated to the Buyer.

13.2 For the avoidance of doubt, the Seller issues no representation or warranty and undertake no liability with respect to budgets, financial forecasts or any other information relating to the future development of the Company.

13.3 Notwithstanding the above, Warranties given under clauses 1 (Authority), 2 (Title) and 4 (Tax) of Schedule 13.1 (“Fundamental Warranties”), are not subject to any qualifications, including the qualifications above.

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14. Buyer’s Warranties

The Buyer represents and warrants to the Seller as follows:

14.1 Capacity of the Buyer

14.1.1 The Buyer is duly incorporated and validly existing under the Laws of the Republic of Ireland.

14.1.2 The Buyer has full corporate power and authority to execute this Agreement and to consummate and perform or cause to be performed its obligations under this Agreement.

14.1.3 The Buyer has taken all actions required to authorise the execution of this Agreement and the consummation of the transactions contemplated hereby.

14.1.4 This Agreement has been duly executed by the Buyer and is a valid and binding obligation on the Buyer enforceable in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency or other similar Laws which affect the enforcement of creditors’ rights in general.

14.1.5 The Buyer is not required to have this Agreement and the fulfilment of its obligations under this Agreement approved by any shareholder, creditor or other Person or to file or register this Agreement with any public authority, except that the Buyer is required to file this Agreement with the U.S. Securities and Exchange Commission.

14.1.6 There are no actions, claims or other proceedings or investigations pending or, to the Buyer's Knowledge, threatened against or involving the Buyer, which, individually or in the aggregate, may prevent the Buyer from consummating the transactions contemplated in this Agreement or affect the validity or enforceability of this Agreement.

14.2 No Breach

14.2.1 The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby will not:

(i) violate any provision of the Corporate Documents of the Buyer;

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(ii) violate any material order, judgement, injunction, award or decree of any court, arbitrator or governmental or regulatory body against, or binding upon the Buyer; and/or

(iii) violate any Law applicable to the Buyer.

14.3 Capacity of the Local Buyers

14.3.1 Each Local Buyer is duly incorporated and validly existing under the Laws of its jurisdiction of incorporation.

14.3.2 Each Local Buyer has full corporate power and authority to execute the relevant Company Specific Purchase Agreement and to consummate and perform or cause to be performed its obligations under the relevant Company Specific Purchase Agreement.

14.3.3 Each Local Buyer has taken all actions required to authorise the execution of the relevant Company Specific Purchase Agreement and the consummation of the transactions contemplated thereby.

14.3.4 This Agreement has been duly executed by the Buyer and is a valid and binding obligation of the Buyer enforceable in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency or other similar Laws which affect the enforcement of creditors’ rights in general.

14.3.5 No Local Buyer is required to have the relevant Company Specific Purchase Agreement and the fulfilment of its obligations under the relevant Company Specific Purchase Agreement approved by any shareholder, creditor or other Person or to file or register this Agreement with any public authority.

14.3.6 There are no actions, claims or other proceedings or investigations pending or, to the Buyer's Knowledge, threatened against or involving any Local Buyer, which, individually or in the aggregate, may prevent any Local Buyer from consummating the transactions contemplated in the relevant Company Specific Purchase Agreement or affect the validity or enforceability of the relevant Company Specific Purchase Agreement.

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14.4 No Breach

14.4.1 The execution, delivery and performance of the Company Specific Purchase Agreement and the consummation of the transactions contemplated thereby will not:

(i) violate any provision of the Corporate Documents of any Local Buyer;

(ii) violate any material order, judgement, injunction, award or decree of any court, arbitrator or governmental or regulatory body against, or binding upon any Local Buyer; and/or

(iii) violate any Law applicable to any Local Buyer.

14.5 No Breach of Seller's Warranties

14.5.1 To the Buyer’s Knowledge, no matters or facts exist which render, or are likely to render, any of the Seller's Warranties untrue or incorrect as of the Signing Date, and where appropriate, the Closing Date, of which the Seller is not aware.

15. Specific Indemnities

15.1 Disputes

15.1.1 The Seller shall use best efforts to settle the following disputes:

(i) The lawsuit by e3 Diagnostics, Inc. against four employees of Audiology Systems, Inc. for alledged violation of competition clauses covering sales activities in the State of Florida, United States; and

(ii) The lawsuit by former employee Anne Martel against Genie Audio, Inc. for alledged breach of Anne Martel’s employment contract.

15.1.2 To the extent that the Seller is not able to settle the above-mentioned lawsuits before Closing, the Seller agrees to indemnify on a USD-for-USD basis (without such indemnification being subject to (a) any of the limitations set forth in clause 16 of this Agreement; or (b) the contents of the Due Diligence Documentation) the Buyer against any damages which may be awarded against the Buyer as well as any reasonable attorneys' costs incurred by the Buyer (but for the avoidance of doubt not

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other costs or Loss, including Loss as the result of an injunction), provided the Buyer gives the Seller full control of the defence of the claims. The Seller shall keep the Buyer duly informed of any progress of any of the above-mentioned lawsuits.

15.2 US tax claims

15.2.1 The Seller shall indemnify and hold harmless the Buyer against any Loss (disregarding the limitations and restrictions set out in clause 16) up to a maximum of USD 5,000,000 incurred by the Buyer as a result of the Buyer's IRS Section 338(g) election as specified in clause 20.2 below. For the avoidance of doubt, if the Buyer does not fully utilize Audiology Systems, Inc.'s tax attributes and this is primarily due to the Buyer’s own acts or omissions, the Seller shall not be obliged to indemnify and hold the Buyer harmless for this.

15.2.2 The Seller shall indemnify and hold harmless the Buyer against any Loss – which does not fall within the specific indemnity in clause 15.2.1 – incurred by the Buyer (disregarding the limitations and restrictions set out in Clause 16) as a result of (i) Audiology Systems, Inc.'s failure to accurately report the amount of its tax net operating losses, tax basis in its assets, tax credits, or other tax attributes on its U.S. federal income tax returns, and (ii) the Company’s failure to pay or provide for the payment of Taxes for any period prior to Closing as set out in clause 6.4.2 above, including without limitation Tax payments, penalties and interest. For the avoidance of doubt, the specific indemnity in clause 15.2.2 shall not be subject to any amount limitation, except that the Seller shall not be liable for the Buyer’s Loss relating to external advisor costs in excess of USD 250,000. The Buyer shall not take any action or make any omission designed to or likely to increase or accellerate any potential Loss as described in this clause 15.2.2 and the Seller shall not be liable for Loss resulting from such actions or omissions – except where the Buyer is obligated to take or omit such actions under mandatory provisions of Law.

16. Indemnification

16.1 Obligation of the Buyer to Indemnify

16.1.1 The Buyer agrees to indemnify, defend and hold harmless the Seller from and against all Losses suffered or based upon any Breach of any of the Buyer’s Warranties or any obligation of the Buyer contained in this Agreement. The Loss must be calculated in accordance with the general rules of Danish Law.

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16.1.2 If a Warranty Breach may be remedied, the Buyer is entitled to remedy such Warranty Breach at its own cost within 10 (ten) Business Days after the Buyer’s receipt of the Seller’s notice of a Claim. The Claim will cease to exist to the extent that the Buyer remedies such Warranty Breach, but this clause 16.1.2 does not limit the Buyer’s obligation to indemnify the Seller for any Loss arising from such Warranty Breach to the extent that the Seller has not been reimbursed for such Loss by the Buyer’s remediation of that Warranty Breach.

16.2 Obligation of the Seller to Indemnify

16.2.1 Subject to the limitations contained in this clause 16, the Seller agrees to indemnify, defend and hold harmless the Buyer (with any payment to the Buyer being considered a reduction of the Final Purchase Price) from and against all Losses suffered or based upon any breach of any of the Seller's Warranties or any obligation of the Seller contained in this Agreement. For the avoidance of doubt, the Specific Indemnities in clause 15 will not be subject to the limitations set out in this clause 16.

16.2.2 If a Warranty Breach may be remedied, the Seller is entitled to remedy such Warranty Breach at its own cost within 10 (ten) Business Days after the Seller's receipt of the Buyer's notice of the Claim. The Claim will cease to exist to the extent that the Seller remedies such Warranty Breach and its effects, but this clause 16.2.2 will not limit the Seller's obligation to indemnify the Buyer for any Loss arising from such Warranty Breach to the extent that the Buyer has not been reimbursed for such Loss by the Seller's remediation of that Warranty Breach.

16.3 Limitations

16.3.1 The Seller is not liable to pay indemnification against any Loss caused by a change in legislation after Closing, or the Residual Closing, as the case may be, which has retrospective effect, or by voluntary actions taken or omissions made by the Buyer or the Company after Closing, or the Residual Closing, as the case may be, other than actions taken in the ordinary course of business or pursuant to a legally binding commitment created on or before Closing, or the Residual Closing, as the case may be, by the Seller or the Company or other than to comply with mandatory Law or an obligation on the Company.

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16.3.2 The Seller is not liable to pay indemnification against any Loss to the extent that a specific and identifiable provision has been made for that Loss in the Closing Statement.

16.3.3 The Seller is not to pay indemnification for any indirect or consequential Loss.

16.3.4 The Seller is not liable for the Buyer's Loss unless:

(i) each Loss exceeds USD 500,000 (the “De Minimis Threshold”), and in that case, the Seller is liable for the full amount; and

(ii) the total amount of the Buyer's Losses, each exceeding the De Minimis Threshold, amounts to at least USD 4,000,000 (the “Basket”), and in that case, the Seller is liable for the whole amount of such Losses and not merely for the amount in excess of the Basket (tipping basket).

16.3.5 The Seller's maximum aggregate liability for Claims in respect of any Loss is USD 15,000,000 (the “Cap”).

16.3.6 The De Minimis Threshold, the Basket and the Cap shall not apply to any breach of the Fundamental Warranties.

16.3.7 The Seller is not liable for the Buyer’s Loss if the Buyer fails to provide a Claim Notice to the Seller no later than the first Business Day after 18 (eighteen) months after the Closing Date.

16.3.8 Notwithstanding clause 16.3.7, the Seller's obligation to pay any amounts of indemnification under clauses 1 (Title) and 2 (Authority) will not expire until 3 (three) months after the expiry of the applicable statute of limitation and the Seller's obligation to pay any amounts of indemnification under clause 4 (Tax) of Schedule 13.1 will not expire until 3 (three) months after the expiry of the statute of limitation under which claims of competent Tax authorities may be raised against the Company.

16.3.9 The Buyer cannot raise Claims against the Seller’s Representatives and/or of any Representatives of the Share Sale Company or Asset Sale Company as a result of a Breach by the Seller.

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16.4 Exclusion of Limitations and other Remedies

16.4.1 The Buyer is not entitled to terminate this Agreement or demand a proportionate reduction of the Final Purchase Price (in Danish: “forholdsmæssigt afslag”).

16.5 Calculation of Loss

16.5.1 The Seller must pay indemnification on a USD-for-USD basis by cash payment to the Buyer. Any Loss must be calculated without taking into account any multiple used for the calculation of the Enterprise Value.

16.5.2 The Loss must be calculated in accordance with the general rules of Danish Law, however, subject to the limitations of this clause 16.

16.5.3 When calculating a Loss, any amount or benefit that the Buyer and/or the Company has received or was eligible to receive from a third party which is directly referable to the Warranty Breach must be set off against the Buyer’s Claim against the Seller, including:

(i) any Tax savings that the Buyer and/or the Company has received or was eligible to receive; and

(ii) any insurance benefit that the Buyer and/or the Company has received or was eligible to receive.

16.5.4 When calculating Losses sustained in foreign currencies, including whether or not such Losses exceed the De Minimis Threshold and the Basket, such Loss must be converted into USD at the official foreign exchange rate of the United States Federal Reserve Bank at the time when the Claim is notified to the Seller.

16.5.5 The Buyer shall use all reasonable efforts to mitigate any Loss for which a Claim is notified to the Seller and the Buyer shall cause that the Company does the same in accordance with the general rules of Danish Law.

16.6 Recovery Amount

16.6.1 If the Buyer and/or the Company subsequently receives any amount or benefit (a “Recovery Amount”) from any third party in respect of a Loss against which the Seller has already indemnified the Buyer, the Buyer must repay to the Seller an amount equal to the Recovery Amount (less all reasonable

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documented costs, charges and expenses incurred in making such recovery) with the addition of Interest from the date on which the Recovery Amount was received from such third party.

16.7 Fraud and wilful misconduct

16.7.1 The limitations of the Seller's obligation to indemnify the Buyer set out in this clause 16 do not apply if the relevant breach is caused by the Seller's fraud or wilful misconduct.

17. Claim Notice, Dispute of Claim and Third Party Claims

17.1 Notice of Claim

17.1.1 Each Claim must be notified in writing (a “Claim Notice”) by the Buyer to the Seller no later than 30 (thirty) Business Days after the Buyer has become aware or reasonably ought to have become aware of the Claim.

17.1.2 Any Claim Notice must include a reasonably detailed description of the Claim (insofar as such details are known), its actual and legal basis and a calculation of the Loss or the estimated Loss accompanied by all documentation necessary to reasonably support the Claim.

17.1.3 The Buyer’s failure to give notice pursuant to clause 17.1.1 will result in the Claim being forfeited by the Buyer but only if and to the extent such failure has caused an increase in the Loss in respect of the relevant matter. Notwithstanding the above, if the Buyer has not issued the Claim Notice within 120 (one-hundred-and-twenty) Business Days after the Buyer has become aware or ought to have become aware of the Claim, the Claim will be forfeited by the Buyer.

17.2 Dispute of Claim

17.2.1 If the Seller disputes a Claim notified by the Buyer, in full or in part, the Seller must give the Buyer notice no later than 20 (twenty) Business Days after receipt of the Claim Notice. The Seller's dispute notice to the Buyer must in reasonable detail describe the actual and legal basis for the dispute.

17.2.2 The Buyer may hereafter submit its written complaint (in Danish: “klageskrift”) in accordance with clause 23 against the Seller within 60 (sixty) Business Days after the Buyer has received notice that

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the Seller disputes the Claim. The written complaint must include the Buyer’s statement of its Claim, arguments and documents supporting the Claim. This clause 17.2.2 shall only apply if the Buyer's Loss is in excess of the Basket.

17.3 Third Party Claims

17.3.1 If the grounds for a Claim in relation to the Seller's Warranties is a claim or potential claim by a third party (a “Third Party Claim”), the Buyer must give notice to the Seller, and the Buyer may not approve, reject or compromise such Third Party Claim without the Seller's prior written approval. The Seller may choose to approve, reject or compromise at its own expense and by its own counsel, any Third Party Claim subject to accepting to indemnify the Buyer for any Loss incurred by the Buyer resulting from the Third Party Claim.

17.3.2 If the Seller intends to approve, reject or compromise any Third Party Claim, the Seller must notify the Buyer thereof no later than 20 (twenty) Business Days after receipt of the Buyer's notice under clause 17.3.1. The Buyer undertakes to ensure that any books, records, other documents and employees of the Company, which, in the Seller's opinion, are necessary or desirable for such defence, are made available to the Seller and the Seller's counsel. The Buyer shall, as reasonably requested by the Seller and at the Seller’s expense, cooperate to approve, reject or compromise such Third Party Claim. The Seller undertakes to keep the Buyer informed of the status of any proceedings.

17.3.3 If the Seller chooses not to approve, reject or compromise a Third Party Claim, the Buyer must keep the Seller informed on an on-going basis of any significant developments in the matter.

18. Restrictive Covenants

18.1 Non-Compete and Non-Solicitation

18.1.1 The Seller undertakes to refrain from, and procure that its Affiliates, directly or indirectly, refrain from:

(i) for a period until 36 (thirty-six) months after the Closing Date, be engaged in any business (whether as holder of participating interests, as investor or in any other way) which provides goods or services of a nature identical or similar to the Company if such business is in

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direct competition with the business conducted by the Company at Signing – and for the avoidance of doubt excluding any actions in accordance with this Agreement, e.g. Back-To-Back Arrangements;

(ii) for a period of 36 (thirty-six) months after the Closing Date soliciting or enticing away or attempting to solicit or enticing away from the Buyer any customer or supplier of the Company, or causing or seeking to cause to be terminated or adversely affected, any agreement or arrangement of any kind, including any contract or agreement pertaining to the Company’s business or from which the Company’s business benefits; and

(iii) for a period of 6 (six) months after the Closing Date solicit, engaging or enticing away or attempting to solicit, engage or entice away, any of the employees of the Company as long as such employees are employed with the Company, it being understood that this covenant shall not prevent any current or former employee from making any unsolicited application to or responding to any public employment offer from the Seller or prevent the Seller from hiring such employees.

18.1.2 The obligations in this clause 18.1 apply to actions carried out by the Seller in any capacity (including as shareholder, partner, director, principal, consultant, officer, agent or otherwise) and whether directly or indirectly, on the Seller's own behalf or on behalf of, or jointly with, any other person.

18.1.3 Each of the undertakings in this clause 18.1 is considered fair and reasonable by the Parties and is a separate undertaking enforceable separately and independently of any person’s right to enforce any one or more of the other undertakings in this clause 18.1.

18.1.4 In case of the Seller's breach of its obligations under clause 18.1.1, and in case such breach has not been remedied by the Seller within 10 (ten) Business Days from having received written notice from the Buyer alleging that a breach has occurred, the Seller shall pay the Buyer an agreed penalty of USD 250,000 for each violation. For the purposes of calculating such penalty, each week during which a violation continues to exist shall be considered one separate violation. The payment of any penalty shall not cure the breach by the Seller or its Affiliates of clause 18.1.1, nor shall it prevent the Buyer or its Affiliates from initiating, or limit their rights to initiate, legal action in respect of any Loss

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incurred by the Buyer or its Affiliates in excess of the penalty paid. The Buyer and its Affiliates will further be entitled to apply for an injunction against any such breach without provision of security.

18.2 Bookkeeping

18.2.1 The Buyer must ensure that the Company stores its bookkeeping records as required by the Danish Bookkeeping Act (in Danish: “Bogføringsloven”) (for Danish Company entities after Closing) or similar relevant local Law (for non-Danish Company entities after Closing), and that the Seller and the Seller's Representatives will be able to gain access (having requested such access by giving the Buyer reasonable advance notice) to such records as the Seller may reasonably request.

19. Transitional Services Agreement and Otoscan Development Agreement

19.1 Transitional Services Agreement

19.1.1 The Parties have agreed that the terms of a transitional services agreement attached hereto as Schedule 19.1.1 (the “Transitional Services Agreement”) will be executed at Closing and come into effect as of Closing for the Major Jurisdiction Companies (and the Residual Jurisdiction Companies for which the Transaction will be completed at Closing, if any). The Parties agree that the service descriptions in the schedules to the Transitional Services Agreement shall be further detailed between Signing and Closing.

19.2 Otoscan Development

19.2.1 The Parties have agreed to the terms for the joint development of “Otoscan” following Closing attached hereto as Schedule 19.2.1 (the “Otoscan Development Terms”).

20. Joint Taxation

20.1 Denmark

The following Share Sale Companies will cease to be jointly taxed with the Seller from the Closing Date, as specified in Schedule 20.1:

GN Otometrics Denmark and Inmedico A/S.

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20.2 United States

20.2.1 The Buyer may make an election regarding Audiology Systems, Inc. under IRS Section 338(g) and similar applicable state law. The Buyer will in relation hereto: a) forward the draft documents for the election to the Seller for review at least 15 Business Days prior to filing, and b) forward the draft tax return for Audiology Systems, Inc. covering the period for which the Section 338(g) election will be effective to the Seller for review at least 15 Business Days prior to filing.

20.2.2 The Seller shall have the right to request any reasonable changes made to the tax return to the extent that this may reduce any potential liability or risk for the Seller and will not materially increase any potential liability or risk for the Buyer and/or the Company.

20.2.3 The Buyer shall immediately inform the Seller in case that the IRS announces tax audits or takes any other action that may lead to a claim from the Buyer under Seller’s indemnification for Buyer’s Section 338(g) election. The Seller shall have full insight into relevant correspondence with the IRS to the extent permitted under applicable law, and Buyer will not agree to any adjustment, decision or ruling from the IRS that will or may lead to a claim from Buyer under Seller’s indemnification for Buyer’s Section 338(g) election. Seller is entitled to, for his own expense, to take over any actual or threatening dispute between the IRS and Buyer if such dispute may lead to a claim from Buyer under Seller’s indemnification for Buyer’s Section 338(g) election.

21. Parent Guarantees

21.1 Buyer hereby guarantees on a joint and several basis (i) the performance by any Affiliate to which the Buyer assigns its righs and obligations under this Agreement, including its Schedules, and (ii) the performance by the Local Buyers of all of their obligations and liabilities under the relevant Company Specific Purchase Agreements.

21.2 Seller's Parent hereby guarantees on a joint and several basis the performance by the Seller of all of its obligations and liabilities under this Agreement, including its Schedules, and the performance by the Local Sellers of all of their obligations and liabilities under the relevant Company Specific Purchase Agreements.

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22. Confidentiality and Publicity

22.1 Each Party is obligated to ensure that, except as set out in this Agreement, any Confidential information:

(i) must under no circumstance be used in violation of applicable securities laws;

(ii) must not be distributed or disclosed in any way or form by the receiving Party to anyone except to those Representatives who reasonably need to know such Confidential Information and who are informed of the confidential nature of the disclosed information and bound to confidentiality themselves to an extent no less stringent than the receiving Party under this Agreement;

(iii) must be kept confidential by the receiving Party with the same degree of care as is used with respect to the receiving Party’s own confidential information of similar nature to avoid disclosure to any third party, theft, damage, loss or unauthorized access, but at least with reasonable care (including, but not limited to, organisations and technical measures); and

(iv) must not in any way be used to the detriment of the other Party or to benefit the receiving Party at the expense of the other Party.

22.2 Notwithstanding clause 22.1, each Party is entitled to disclose Confidential Information to relevant third parties if such Confidential Information:

(i) was, as evidenced by written records, in the receiving Party’s possession without confidentiality obligation prior to receipt from the disclosing Party;

(ii) is at the time of disclosure already in the public domain or subsequently becomes available to the public other than by breach of this Agreement by the receiving Party or by breach of the corresponding obligations of its Affiliates or Representatives;

(iii) is lawfully obtained by the receiving Party from a third party, provided that such third party is, to the receiving Party’s knowledge, not in breach of any conଁdentiality agreement;

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(iv) is developed by the receiving Party independently from and without the beneଁt or use of any Conଁdential Information;

(v) is required to be disclosed by any decree or order of a governmental authority, stock exchange, by court or by an arbitration tribunal or by mandatory law, provided that (a) written notice of such requirement, if and to the extent permissible by mandatory law, is given without undue delay, and in advance of such disclosure, to the disclosing Party so as to give the disclosing Party an opportunity to intervene; (b) the receiving Party uses its best efforts to obtain assurance that the Confidential Information will be treated as conଁdential by such authority, by marking Conଁdential Information as “Confidential" or with similar legend; (c) any disclosure compelled under such decree, order or tear is limited to the minimum requested disclosure; and (d) the Parties must to the extent permissible by law and practically possible seek to agree on the content of such required disclosure; or

(vi) has been approved for release in writing by the disclosing Party.

22.3 Furthermore, nothing in clause 22.1 restricts:

(i) the Buyer from informing customers or suppliers of the acquisition of the Company by the Buyer after Closing; and

(ii) any Party from making any disclosure to any of its Representatives who are required to receive such disclosure to carry out their duties (conditional upon any such Person being informed of the confidential nature of the Confidential Information and agreeing to keep such Confidential Information confidential for as long as the disclosing Party is obliged to do so in accordance with this clause).

22.4 Publicity

Immediately after the Signing Date, the Parties will issue a press release which is attached as Schedule 22.4.

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23. Governing Law and Disputes

23.1 This Agreement is governed and construed in accordance with the Laws of Denmark to the exclusion of any rules on choice of Law or jurisdiction that would refer the subject matter to another governing Law or jurisdiction.

23.2 Any dispute arising out of or in connection with this Agreement, including any disputes regarding the existence, validity or termination thereof, must be settled by arbitration administrated by The Danish Institute of Arbitration in accordance with the rules of arbitration procedure adopted by The Danish Institute of Arbitration and in force at the time when such proceedings are commenced.

23.3 The dispute is to be decided by a panel of three arbitrators. Each Party will appoint one arbitrator. The third arbitrator, who must be the President of the Arbitral Tribunal, must be appointed jointly by the Parties.

23.4 If a Party fails to appoint an arbitrator within 30 (thirty) Business Days of submitting an application for arbitration or of receiving notice of arbitration, the Danish Institute of Arbitration will appoint the arbitrator.

23.5 The arbitration proceedings will take place in Copenhagen, Denmark, and the language of the proceedings will be English unless the Parties agree otherwise.

23.6 The Parties are not entitled to disclose any confidential information relating to the arbitration proceedings to any third party, including all information on any decision or arbitration award, unless the other Party has consented in writing to such disclosure. However, either Party is entitled to disclose information relating to the arbitration proceedings to a third party if such disclosure is made to protect its interests in relation to the other Party or to comply with current legislation or public authority decisions, or if such disclosure is required under any listing agreements.

24. Miscellaneous

24.1 Notices

24.1.1 Any notice to be given or other communication required or permitted under this Agreement must be in writing and in the English language and be delivered by email to the individuals listed below:

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(a) If to the Buyer:

Natus Medical Incorporated

Attn.: James B. Hawkins

6701 Koll Center Parkway, Suite 120

CA 94566, Pleasanton

United States

Email: Jim.Hawkins@natus.com

with a copy to:

Attorney-at-Law Bent Kemplar

Kromann Reumert Law Firm

Sundkrogsgade 5

DK-2100 Copenhagen

Denmark

Email: bek@kromannreumert.com

(a) If to the Seller:

GN Hearing A/S

Attn.: Jesper Green Schou

Lautrupbjerg 7

DK-2750 Ballerup

Denmark

Email: JGreenSchou@gn.com

with a copy to:

Attorney-at-Law Dan Moalem

Moalem Weitemeyer Bendtsen Law Firm

Amaliegade 3, 4th floor

DK-1256 Copenhagen

Denmark

Email: dmo@mwblaw.dk

24.1.2 Notices will be deemed to have been made on the date of the receipt thereof by the recipient as indicated on the return receipt or the transmission report, as applicable.

Page 61 of 64

24.2 Entire Agreement

24.2.1 This Agreement (incl. the Company Specific Purchase Agreements and any other Schedules) and any other agreements executed in connection with the consummation of the transactions contemplated herein contain the entire agreement between the Parties with respect to the purchase of the Company and the related transactions and supersede all prior agreements, written or oral, relating to the subject matter hereof.

24.3 Waivers and Amendments

24.3.1 This Agreement may only be amended, superseded, cancelled, renewed or extended, and the terms hereof may only be waived, by way of a written instrument signed by both Parties or, in the case of a waiver, by the Party waiving its rights under this Agreement.

24.3.2 No waiver of any particular Breach of the provisions of this Agreement may operate as a waiver of any repetition of such Breach.

24.4 No Assignment

24.4.1 Except as otherwise specifically set forth in this Agreement, rights and obligations set out in this Agreement may not be assigned, in full or in part, by any Party without the prior written consent of the other Party, provided however that the Buyer shall be entitled to assign its rights and obligations under this Agreement (save as set out in Clause 21.1) to an Affiliate of the Buyer.

24.4.2 Notwithstanding the above, any Local Seller or Local Buyer may assign the rights and obligations to any Affiliate of such Local Seller or Local Buyer, respectively, provided that the replacement Local Seller or Local Buyer, as the case may be, gives effect to the relevant Company Specific Purchase Agreement on materially the same terms and with no material negative effects for the other Party (e.g. if the Seller carries out a demerger of the Local Seller prior to the completion of the Company Specific Purchase Agreement).

24.5 Schedules

24.5.1 The Schedules are to be regarded as an integrated part of this Agreement. All references herein to clauses, sub-clauses and Schedules are to be deemed references to such parts of this Agreement, unless the context requires otherwise. In the event of any discrepancy between the Agreement and a Schedule,

Page 62 of 64

the Agreement supersedes.

24.6 Costs and Expenses

24.6.1 Unless otherwise explicitly stated in this Agreement, each Party shall pay its own costs relating to the negotiation, preparation and execution of this Agreement, including the costs and expenses of its own legal, financial and other advisors and Representatives.

24.6.2 50 % of the amount of any non-refundable Transfer Taxes paid by a Party shall promptly upon notice to the other Party, including sufficient documentation for the nature, amount and due payment of the Transfer Taxes, be refunded by the other Party. To the extent permitted by applicable law, the Buyer and the Seller shall cooperate with each other to obtain exemptions from or reductions of any Transfer Taxes. To the extent any interest, fines, penalties and additions attributable to or imposed with respect to Transfer Taxes is caused by the acts or omissions of a Party, such interest, fine, penalty or addition shall be borne by the Party by whoms acts or omissions the relevant interest, fine, penalty or addition was caused.

24.7 Interpretation

24.7.1 This Agreement is the result of the Parties' negotiations and it must not be interpreted against a Party as a consequence of such Party having drafted one or more of the provisions of this Agreement.

24.7.2 The headings of this Agreement are for guidance only and have no legal effect on the understanding or interpretation of the provisions of this Agreement.

_______

Page 63 of 64

This Agreement has been executed in two original copies, of which the Seller and the Buyer each receives one copy.

Date: 25 September 2016

For and on behalf of GN Hearing A/S:

_/s/Anders Hedegaard     ___        _/s/Marcus Desimioni___________

Anders Hedegaard, CEO             Marcus Desimioni, CFO

Date: 25 September 2016

With regard to clause 21, for and on behalf of GN Store Nord A/S:

__/s/Anders Hedegaard_________        _/s/Marcus Desimioni___________

Anders Hedegaard, CEO             Marcus Desimioni, CFO

Date: 25 September 2016

For and on behalf of Natus Medical Incorporated:

___/s/James B. Hawkins_______

James B. Hawkins

Page 64 of 64

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, James B. Hawkins, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Natus Medical Incorporated;

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 registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) 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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant 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 registrant, 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) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’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

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’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 registrant’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 registrant’s internal control over financial reporting.

Date:	November 3, 2016
		/s/ James B. Hawkins
		James B. Hawkins
		President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Jonathan Kennedy, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Natus Medical Incorporated;

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 registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) 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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant 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 registrant, 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) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’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

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’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 registrant’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 registrant’s internal control over financial reporting.

Date:	November 3, 2016
		/s/ Jonathan A. Kennedy
		Jonathan A. Kennedy
		Executive Vice President
		and Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATIONS OF PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER

PURSUANT TO TITLE 18, UNITED STATES CODE, SECTION 1350, AS ADOPTED

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Natus Medical Incorporated (the “Company”) on Form 10-Q for the quarter ended September 30, 2016 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, James B. Hawkins, President and Chief Executive Officer of the Company, certify, pursuant to Title 18, United States Code, Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to 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 Company.

/s/ James B. Hawkins
Print Name: James B. Hawkins
Title: President and Chief Executive Officer
Date:	November 3, 2016

In connection with the Quarterly Report of Natus Medical Incorporated (the “Company”) on Form 10-Q for the quarter ended September 30, 2016 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jonathan Kennedy, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to Title 18, United States Code, Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to 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 Company.

/s/ Jonathan A. Kennedy
Print Name: Jonathan A. Kennedy
Title: Executive Vice President and Chief Financial Officer
Date:	November 3, 2016

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2016	Oct. 28, 2016
Document and Entity Information [Abstract]
Entity Registrant Name	NATUS MEDICAL INC
Entity Central Index Key	0000878526
Document Type	10-Q
Document Period End Date	Sep. 30, 2016
Amendment Flag	false
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q3
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		32,911,604

XML

Condensed Consolidated Balance Sheets (unaudited) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 81,073	$ 82,469
Short-term investments	25,429	0
Accounts receivable, net of allowance for doubtful accounts of $4,706 in 2016 and $4,686 in 2015	84,870	99,080
Inventories	51,654	48,572
Prepaid expenses and other current assets	22,939	11,235
Total current assets	265,965	241,356
Property and equipment, net	18,127	16,967
Intangible assets, net	82,775	86,536
Goodwill	111,918	107,466
Deferred income tax	12,694	12,782
Other assets	19,236	14,389
Total assets	510,715	479,496
Current liabilities:
Accounts payable	17,107	23,660
Accrued liabilities	38,711	42,137
Deferred revenue	33,334	11,311
Total current liabilities	89,152	77,108
Long-term liabilities:
Other liabilities	8,359	7,781
Deferred income tax	3,819	3,897
Total liabilities	101,330	88,786
Stockholders’ equity:
Common Stock, $0.001 par value, 120,000,000 shares authorized; shares issued and outstanding 32,888,068 in 2016 and 33,153,500 in 2015	311,058	323,745
Preferred stock, $0.001 par value; 10,000,000 shares authorized; no shares issued and outstanding in 2016 and 2015	0	0
Retained earnings	139,176	106,814
Accumulated other comprehensive loss	(40,849)	(39,849)
Total stockholders’ equity	409,385	390,710
Total liabilities and stockholders’ equity	$ 510,715	$ 479,496

XML

Consolidated Balance Sheets (unaudited) (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Statement of Financial Position [Abstract]
Allowance for doubtful accounts	$ 4,706	$ 4,686
Common Stock, par value (dollars per share)	$ 0.001	$ 0.001
Common Stock, shares authorized (in shares)	120,000,000	120,000,000
Common Stock, shares issued (in shares)	32,888,068	33,153,500
Common Stock, shares outstanding (in shares)	32,888,068	33,153,500
Preferred Stock, par value (dollars per share)	$ 0.001	$ 0.001
Preferred Stock, shares authorized (in shares)	10,000,000	10,000,000
Preferred Stock, shares issued (in shares)	0	0
Preferred Stock, shares outstanding (in shares)	0	0

XML

Condensed Consolidated Statements of Income and Comprehensive Income (unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Income Statement [Abstract]
Revenue	$ 90,906	$ 94,583	$ 274,193	$ 275,915
Cost of revenue	32,194	35,520	102,542	104,468
Intangibles amortization	612	683	1,818	2,048
Gross profit	58,100	58,380	169,833	169,399
Operating expenses:
Marketing and selling	19,746	22,495	61,578	65,345
Research and development	7,689	7,700	22,596	21,867
General and administrative	12,821	10,031	37,225	33,239
Intangibles amortization	2,409	2,036	6,741	5,165
Restructuring	197	42	1,315	358
Total operating expenses	42,862	42,304	129,455	125,974
Income from operations	15,238	16,076	40,378	43,425
Other income (expense), net	(893)	7	(412)	(1,203)
Income before provision for income tax	14,345	16,083	39,966	42,222
Provision for income tax expense	1,032	5,151	7,605	12,842
Net income	13,313	10,932	32,361	29,380
Foreign currency translation adjustment	424	(642)	(999)	(4,452)
Comprehensive income	$ 13,737	$ 10,290	$ 31,362	$ 24,928
Earnings per share:
Basic (dollars per share)	$ 0.41	$ 0.34	$ 1.00	$ 0.91
Diluted (dollars per share)	$ 0.40	$ 0.33	$ 0.98	$ 0.89
Weighted average shares used in the calculation of earnings per share:
Basic (in shares)	32,388	32,432	32,476	32,279
Diluted (in shares)	32,981	33,253	33,077	33,194

XML

Condensed Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Operating activities:
Net income	$ 32,361	$ 29,380
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for losses on accounts receivable	940	945
Excess tax benefit on the exercise of stock options	0	(5,304)
Depreciation and amortization	12,820	11,346
Gain on disposal of property and equipment	(21)	0
Warranty reserve	3,273	4,771
Share-based compensation	6,957	5,382
Changes in operating assets and liabilities:
Accounts receivable	19,299	(6,681)
Inventories	(6,353)	(7,014)
Prepaid expenses and other assets	(13,261)	(1,049)
Accounts payable	(6,062)	3,237
Accrued liabilities	(6,488)	(3,596)
Deferred revenue	24,994	(2,049)
Deferred income tax	43	5,560
Net cash provided by operating activities	68,502	34,928
Investing activities:
Acquisition of businesses, net of cash acquired	(15,849)	(11,559)
Purchases of property and equipment	(2,176)	(2,990)
Purchase of intangible assets	(210)	(1,158)
Purchases of short-term investments	(25,429)	0
Net cash used in investing activities	(43,664)	(15,707)
Financing activities:
Proceeds from stock option exercises and Employee Stock Purchase Program purchases	2,550	6,086
Excess tax benefit on the exercise of stock options	0	5,304
Repurchase of common stock	(18,257)	(9,352)
Taxes paid related to net share settlement of equity awards	(3,937)	(4,303)
Contingent consideration	(1,284)	(664)
Proceeds from short-term borrowings	16,000	0
Deferred debt issuance costs	(533)	0
Payments on borrowings	(16,000)	0
Net cash used in financing activities	(21,461)	(2,929)
Exchange rate changes effect on cash and cash equivalents	(4,773)	(649)
Net increase in cash and cash equivalents	(1,396)	15,643
Cash and cash equivalents, beginning of period	82,469	66,558
Cash and cash equivalents, end of period	81,073	82,201
Supplemental disclosure of cash flow information:
Cash paid for interest	41	0
Cash paid for income taxes	8,024	5,348
Non-cash investing activities:
Property and equipment included in accounts payable	159	200
Inventory transferred to property and equipment	$ 1,240	$ 797

XML

Basis of Presentation

9 Months Ended

Sep. 30, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying interim condensed consolidated financial statements of Natus Medical Incorporated (“Natus,” “we,” “us,” “our,” or the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The accounting policies followed in the preparation of the interim condensed consolidated financial statements are consistent in all material respects with those presented in Note 1 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015.

Interim financial reports are prepared in accordance with the rules and regulations of the Securities and Exchange Commission; accordingly, they do not include all of the information and notes required by GAAP for annual financial statements. The interim financial information is unaudited, and reflects all normal adjustments that are, in the opinion of management, necessary for the fair presentation of our financial position, results of operations, and cash flows for the interim periods presented. The consolidated balance sheet as of December 31, 2015 was derived from audited financial statements, but does not include all disclosures required by GAAP. The accompanying financial statements should be read in conjunction with the financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. We have made certain reclassifications to the prior period to conform to current period presentation.

Operating results for the nine months ended September 30, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016. The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606). ASU 2014-09 requires revenue recognition to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 sets forth a new revenue recognition model that requires identifying the contract, identifying the performance obligations, determining the transaction price, allocating the transaction price to performance obligations and recognizing the revenue upon satisfaction of performance obligations.

The original effective date for ASU 2014-09 would have required the Company to adopt beginning in its first quarter of 2017. In July 2015, the FASB voted to amend ASU 2014-09 by approving a one-year deferral of the effective date as well as providing the option to early adopt the standard on the original effective date. Accordingly, the Company will adopt the standard in its first quarter of 2018. The new revenue standard may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption. The Company is currently evaluating the impact of adopting the new revenue standard on its consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). This standard requires a lessee to recognize the lease assets and lease liabilities arising from operating leases in the statement of financial position. Qualitative along with specific quantitative disclosures are required by lessees and lessors to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018 including interim periods within those fiscal years. The Company is currently evaluating the impact that will result from adopting ASU 2016-02.

In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvement to Employee Share-Based Payment Accounting. The new standard contains several amendments that simplifies the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, statutory tax withholding requirements, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The changes in the new standard eliminate the accounting for excess tax benefits to be recognized in additional paid-in capital and tax deficiencies recognized either in the income tax provision or in additional paid-in capital. The Company elected early adoption of ASU 2016-09 in the first quarter of 2016 which was applied using a modified retrospective approach. For the nine months ended September 30, 2016, we recognized all excess tax benefits and tax deficiencies as income tax expense or benefit as a discrete event. An income tax benefit of approximately $1.9 million was recognized in the period ended September 30, 2016 as a result of the adoption of ASU 2016-09. There was no change to retained earnings with respect to excess tax benefits, as this is not applicable to the Company. The treatment of forfeitures has not changed as we are electing to continue our current process of estimating the number of forfeitures. As such, this has no cumulative effect on retained earnings. With the early adoption of 2016-09, we have elected to present the cash flow statement on a prospective transition method and no prior periods have been adjusted.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. This standard provides guidance for eight cash flow classification issues in current GAAP. ASU 2016-15 is effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. The Company elected early adoption of ASU 2016-15 in the first quarter of 2016 relating to Contingent Consideration Payments Made after a Business Combination. For the nine months ended September 30, 2016, the Company recognized $1.0 million as a cash outflow for investing activities on the Statement of Cash Flows. This payment was made soon after the acquisition date of a business combination to settle the contingent consideration from the Monarch acquisition.

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Business Combinations

9 Months Ended

Sep. 30, 2016

Business Combinations [Abstract]

Business Combinations

Business Combinations

RetCam

On July 6, 2016, we acquired the portfolio of RetCam Imaging Systems ("RetCam") from Clarity Medical Systems, Inc. for $10.6 million in cash. RetCam is an imaging system used to diagnose and monitor a range of ophthalmic maladies in premature infants. The purchase agreement also included a holdback of $2.0 million which is contingent upon completion of certain modifications to RetCam 3 no later than March 31, 2017. Subsequent to the acquisition, an additional $1.1 million was paid by the Company to Clarity Medical Systems as a result of a working capital adjustment. Results of operations for RetCam will be included in our consolidated financial statements from the date of acquisition. The total purchase price was allocated $7.7 million to tangible assets, $5.0 million to intangible assets with an assigned weighted average life of 5 years being amortized on the straight line method, and $1.0 million to goodwill, offset by $2.0 million to net liabilities. Purchase price allocation is considered preliminary at this time although no material adjustments are anticipated. Pro forma financial information for the RetCam acquisition is not presented as it is not considered material.

NeuroQuest

On March 2, 2016, we acquired NeuroQuest, LLC (“NeuroQuest”) through an asset purchase. NeuroQuest complements our Global Neuro-Diagnostics ("GND") and Monarch Medical Diagnostics, LLC ("Monarch") acquisitions which offer patients a convenient way to complete routine-electroencephalography ("EEG") and extended video electronencephalography ("VEEG") testing. The cash consideration for NeuroQuest was $4.6 million. The purchase agreement also included an asset consideration holdback of $0.5 million. The total purchase price was allocated to $0.5 million of tangible assets, $1.3 million of intangible assets with an assigned weighted average life of 5 years being amortized on the straight line method, and $3.5 million of goodwill, offset by $0.1 million of net liabilities. Purchase price allocation is considered preliminary at this time. Pro forma financial information for the NeuroQuest acquisition is not presented as it is not considered material.

Monarch

We acquired Monarch Medical Diagnostics, LLC ("Monarch") through an asset purchase on November 13, 2015. Monarch's service compliments our GND acquisition which offers patients a convenient way to complete routine and extended video EEG diagnostic testing. The service also provides comprehensive reporting and support to the physician. The cash consideration for Monarch was $2.7 million. The purchase agreement also included a contingent consideration holdback of $1.0 million which we paid on January 11, 2016. The total purchase price was allocated to $1.2 million of tangible assets, $1.2 million of intangible assets with an assigned weighted average life of 5 years being amortized on the straight line method, and $2.4 million of goodwill. Pro forma financial information for the Monarch acquisition is not presented as it is not considered material.

Global Neuro-Diagnostics

We acquired GND Operating LLC, and Braincare, LLC (collectively "GND") through an equity purchase on January 23, 2015. GND's service offers patients a convenient way to complete routine and extended video EEG diagnostic testing, which can be performed at the home, hospital or physician's office. The service also provides comprehensive reporting and support to the physician. The cash consideration for GND was $11.4 million, which consists primarily of $1.5 million of tangible assets, $4.8 million of intangible assets with an assigned weighted average life of 5 years being amortized on the straight line method, and $8.9 million of goodwill, offset by $0.5 million of net liabilities. The purchase agreement also included an earn-out provision contingent upon GND achieving certain revenue milestones from 2015 to 2017. At acquisition we estimated the earn-out to be $3.2 million. Each quarter we evaluate expected future revenue and adjust our estimate accordingly. We currently estimate this earn-out to be $0.5 million, which was a reduction of $2.8 million in the current quarter, as we expect lower revenues for 2016 and 2017 than anticipated. Pro forma financial information for the GND acquisition is not presented as it is not considered material.

NicView

On January 2, 2015, we purchased the assets of Health Observation Systems, LLC ("NicView") for cash consideration of $1.1 million, of which $0.3 million was allocated to tangible assets and $2.7 million to goodwill, offset by $0.6 million allocated to net liabilities. NicView provides streaming video for families with babies in the neonatal intensive care unit. The asset purchase agreement included an earn-out condition of $1.3 million that was contingent upon orders received and installed by February 28, 2016. The earn-out was paid on March 28, 2016. Pro forma financial information for the NicView acquisition is not presented as it is not considered material.

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Earnings Per Share

9 Months Ended

Sep. 30, 2016

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

The components of basic and diluted EPS are as follows (in thousands, except per share amounts):

	Three Months Ended   September 30,				Nine Months Ended   September 30,
	2016		2015		2016		2015
Net income	$	13,313	$	10,932	$	32,361	$	29,380
Weighted average common shares	32,388		32,432		32,476		32,279
Dilutive effect of stock based awards	593		821		601		915
Diluted Shares	32,981		33,253		33,077		33,194
Basic earnings per share	$	0.41	$	0.34	$	1.00	$	0.91
Diluted earnings per share	$	0.40	$	0.33	$	0.98	$	0.89
Shares excluded from calculation of diluted EPS	—		—		138		—

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Cash, Cash Equivalents, and Short-Term Investments

9 Months Ended

Sep. 30, 2016

Investments, Debt and Equity Securities [Abstract]

Cash, Cash Equivalents, and Short-Term Investments

nvestments

The Company has invested its excess cash in highly liquid marketable securities such as corporate debt instruments, U.S. government agency securities and asset-backed securities. Investments with maturities greater than one year are classified as current because management considers all investments to be available for current operations.

The Company's investments are designed to provide liquidity, preserve capital and maximize total return on invested assets with a focus on high credit-quality securities.

The Company's investments have been classified and accounted for as available-for-sale. Such investments are recorded at fair value and unrealized holding gains and losses are reported as a separate component of accumulated other comprehensive income (loss) in the stockholders' equity until realized. Realized gains and losses on sales of investments, if any, are determined on the specific identification method and are reclassified from accumulated other comprehensive income (loss) to results of operations as other income (expense).

The Company, to date, has not determined that any of the unrealized losses on its investments are considered to be other-than-temporary. The Company reviews its investment portfolio to determine if any security is other-than-temporarily impaired, which would require the Company to record an impairment charge in the period any such determination is made. In making this judgment, the Company evaluates, among other things: the duration and extent to which the fair value of a security is less than its cost; the financial condition of the issuer and any changes thereto; and the Company's intent and ability to hold its investment for a period of time sufficient to allow for any anticipated recovery in market value, or whether the Company will more likely than not be required to sell the security before recovery of its aggregated cost basis. The Company has evaluated its investments as of September 30, 2016 and has determined that no investments with unrealized losses are other-than-temporarily impaired. No investments have been in a continuous loss position greater than one year.     

Cash, cash equivalents and short-term investments consisted of the following (in thousands):

	September 30, 2016	December 31, 2015
Cash and cash equivalents:
Cash	74,072	82,469
U.S. Treasury Bills	7,001	—
Total cash and cash equivalents	81,073	82,469
Short-term investments:
U.S. investment grade bonds	16,865	—
Developed investment grade bonds	8,564	—
Total short-term investments	25,429	—
Total cash, cash equivalents and short-term investments	106,502	82,469

Short-term Investments by investment type are as follows (in thousands):

	September 30, 2016									December 31, 2015
	Aggregated Cost Basis		Gross Unrealized Gains		Gross Unrealized Losses			Aggregated Fair Value		Aggregated Cost Basis		Gross Unrealized Gains		Gross Unrealized Losses		Aggregated Fair Value
U.S. investment grade bonds	16,890		1		(26		)	16,865		—		—		—		—
Developed investment grade bonds	8,579		—		(15		)	8,564		—		—		—		—
Total short-term investments	$	25,469	$	1	$	(41	)	$	25,429	$	—	$	—	$	—	$	—

Short-term investments by contractual maturity are as follows (in thousands):

	September 30, 2016		December 31, 2015
	Investments		Investments
Due in one year or less	$	7,342	$	—
Due after one year through five years	18,087		—
Total short-term investment	$	25,429	$	—

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Inventories

9 Months Ended

Sep. 30, 2016

Inventory Disclosure [Abstract]

Inventories

Inventories

Inventories consist of the following (in thousands):

	September 30, 2016			December 31, 2015
Raw materials and subassemblies	$	26,944		$	19,041
Work in process	2,030			1,343
Finished goods	35,895			36,149
Total inventories	64,869			56,533
Less: Non-current inventories	(13,215		)	(7,961		)
Inventories, current	$	51,654		$	48,572

At September 30, 2016 and December 31, 2015, we have classified $13.2 million and $8.0 million, respectively, of inventories as other assets. We expect that we will not use this inventory within the next twelve months. This inventory consists primarily of last time buy items from our suppliers, service components used to repair products pursuant to warranty obligations and extended service contracts, including service components for products we are not currently selling and inventory that we purchased in bulk quantities. Management believes that these inventories will be utilized for their intended purpose.

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Intangible Assets

9 Months Ended

Sep. 30, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

Intangible Assets

The following table summarizes the components of gross and net intangible asset balances (in thousands):

	September 30, 2016										December 31, 2015
	Gross Carrying Amount		Accumulated Impairment			Accumulated Amortization			Net Book Value		Gross Carrying Amount		Accumulated Impairment			Accumulated Amortization			Net Book Value
Intangible assets with definite lives:
Technology	$	63,264	$	—		$	(34,140	)	$	29,124	$	63,668	$	—		$	(31,600	)	$	32,068
Customer related	37,283		—			(16,863		)	20,420		35,529		—			(14,352		)	21,177
Trade names	34,478		(3,379		)	(6,232		)	24,867		31,837		(3,340		)	(3,052		)	25,445
Internally developed software	17,722		—			(9,769		)	7,953		15,513		—			(8,155		)	7,358
Patents	2,694		—			(2,283		)	411		2,663		—			(2,175		)	488
Definite-lived intangible assets	$	155,441	$	(3,379	)	$	(69,287	)	$	82,775	$	149,210	$	(3,340	)	$	(59,334	)	$	86,536

Finite-lived intangible assets are amortized over their useful lives, which are 5 to 20 years for technology, 4 to 16 years for customer related intangibles, 4 to 10 years for internally developed software, 5 to 7 years for trade names, and 10 to 15 years for patents.

Internally developed software consists of $15.5 million relating to costs incurred for development of internal use computer software and $2.2 million for development of software to be sold.

Amortization expense related to intangible assets with definite lives was as follows (in thousands):

	Three Months Ended   September 30,				Nine Months Ended   September 30,
	2016		2015		2016		2015
Technology	$	863	$	934	$	2,571	$	2,854
Customer related	848		689		2,495		2,092
Trade names	1,139		1,024		3,176		2,048
Internally developed software	602		434		1,618		1,142
Patents	28		28		84		84
Total amortization	$	3,480	$	3,109	$	9,944	$	8,220

Expected amortization expense related to amortizable intangible assets is as follows (in thousands):

Three months ending December 31, 2016	$	3,390
2017	13,557
2018	13,333
2019	12,173
2020	9,974
2021	8,522
Thereafter	21,826
Total expected amortization expense	$	82,775

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Goodwill

9 Months Ended

Sep. 30, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

Goodwill

The carrying amount of goodwill and the changes in the balance are as follows (in thousands):

December 31, 2015	$	107,466
Acquisitions	4,485
Foreign currency translation	(33		)
September 30, 2016	$	111,918

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Property and Equipment, net

9 Months Ended

Sep. 30, 2016

Property, Plant and Equipment [Abstract]

Property and Equipment, net

Property and Equipment, net

Property and equipment, net consist of the following (in thousands):

	September 30, 2016			December 31, 2015
Land	$	2,865		$	2,918
Buildings	5,335			5,662
Leasehold improvements	2,400			2,345
Office furniture and equipment	14,513			13,866
Computer software and hardware	12,654			10,488
Demonstration and loaned equipment	11,838			11,216
	49,605			46,495
Accumulated depreciation	(31,478		)	(29,528		)
Total	$	18,127		$	16,967

Depreciation expense of property and equipment was approximately $0.9 million and $2.9 million for the three and nine months ended September 30, 2016, respectively, and approximately $1.0 million and $3.1 million for the three and nine months ended September 30, 2015, respectively.

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Reserve for Product Warranties

9 Months Ended

Sep. 30, 2016

Product Warranties Disclosures [Abstract]

Reserve for Product Warranties

Reserve for Product Warranties

We provide a warranty with our products that is generally one year in length, but in some cases regulations may require us to provide repair or remediation beyond our typical warranty period. If any of our products contain defects, we may be required to incur additional repair and remediation costs. Service for domestic customers is provided by Company-owned service centers that perform all service, repair, and calibration services. Service for international customers is provided by a combination of Company-owned facilities and vendors on a contract basis.

A warranty reserve is included in accrued liabilities for the expected future costs of servicing products. Additions to the reserve are based on management’s best estimate of probable liability. We consider a combination of factors including material and labor costs, regulatory requirements, and other judgments in determining the amount of the reserve. The reserve is reduced as costs are incurred to honor existing warranty and regulatory obligations.

As of September 30, 2016 we had accrued $6.5 million of estimated costs to bring certain NeoBLUE® phototherapy products into U.S. regulatory compliance. Our estimate of these costs is primarily based upon the number of units outstanding that may require repair and costs associated with shipping and repairing the product. We expect that costs associated with bringing the products back into compliance will not be incurred until the first quarter of 2017. Additional costs could be incurred in future periods to bring products into regulatory compliance, but such costs cannot currently be reasonably estimated.

The details of activity in the warranty reserve are as follows (in thousands):

	Three Months Ended   September 30,						Nine Months Ended   September 30,
	2016			2015			2016			2015
Balance, beginning of period	$	10,858		$	4,408		$	10,386		$	2,753
Additions charged to expense	960			1,617			3,273			4,770
Reductions	(819		)	(813		)	(2,660		)	(2,311		)
Balance, end of period	$	10,999		$	5,212		$	10,999		$	5,212

The estimates we use in projecting future product warranty costs may prove to be incorrect. Any future determination that our product warranty reserves are understated could result in increases to our cost of sales and reductions in our operating profits and results of operations.

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Share-Based Compensation

9 Months Ended

Sep. 30, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-Based Compensation

Share-Based Compensation

As of September 30, 2016, we have two active share-based compensation plans, the 2011 Stock Awards Plan and the 2011 Employee Stock Purchase Plan. The terms of awards granted during the nine months ended September 30, 2016 and our methods for determining grant-date fair value of the awards are consistent with those described in the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2015.

Details of share-based compensation expense are as follows (in thousands):

	Three Months Ended   September 30,				Nine Months Ended   September 30,
	2016		2015		2016		2015
Cost of revenue	$	50	$	29	$	169	$	116
Marketing and selling	169		287		622		972
Research and development	320		249		1,185		644
General and administrative	1,415		1,326		4,981		3,650
Total	$	1,954	$	1,891	$	6,957	$	5,382

As of September 30, 2016, unrecognized compensation expense related to the unvested portion of our stock options and other stock awards was approximately $11.6 million, which is expected to be recognized over a weighted average period of 1.8 years.

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Other Income (Expense), net

9 Months Ended

Sep. 30, 2016

Other Income and Expenses [Abstract]

Other Income (Expense), net

Other Income (Expense), net

Other income (expense), net consists of (in thousands):

	Three Months Ended   September 30,						Nine Months Ended   September 30,
	2016			2015			2016			2015
Interest income	$	76		$	13		$	94		$	28
Interest expense	(223		)	—			(351		)	—
Foreign currency loss	(783		)	(80		)	(282		)	(1,571		)
Other	37			74			127			340
Total other income (expense), net	$	(893	)	$	7		$	(412	)	$	(1,203	)

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Income Taxes

9 Months Ended

Sep. 30, 2016

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Provision for Income Tax Expense

We recorded provisions for income tax of $1.0 million and $7.6 million for the three and nine months ended September 30, 2016, respectively. Our effective tax rate was 7.2% and 19.0% for the three and nine months ended September 30, 2016, respectively. We recorded provisions for income tax of $5.2 million and $12.8 million for the three and nine months ended September 30, 2015, respectively. Our effective tax rate was 32.0% and 30.4% for the three and nine months ended September 30, 2015, respectively.

Our effective tax rate for the three and nine months ended September 30, 2016 differed from the federal statutory tax rate primarily because of profits in foreign jurisdictions with lower tax rates than the federal statutory rate. The decrease in the effective tax rate for the three and nine months ended September 30, 2016 compared with the three and nine months ended September 30, 2015 is primarily attributable to shifts in the geographical mix of income whereby the income subject to income taxes recorded in high tax jurisdictions significantly decreased, and the income subject to income taxes recorded in low tax jurisdictions significantly increased.

Our year-to-date results reflect the projected fiscal year 2016 effective tax rate as adjusted for the impact of any quarterly discrete events. The impact of the discrete items recorded during the three months ended September 30, 2016 decreased the quarterly tax rate by 11.8%. The tax impacts from material discrete items include the adoption of ASU 2016-09, Compensation - Stock Compensation (Topic 718) Improvements to Employee Share-Based Payment Accounting, tax true-up adjustments relating to the filing of 2015 tax returns and adjustment of certain earn-out liabilities. The impacts from adoption of ASU 2016-09 decreased our quarterly effective tax rate by 3.8%; the tax true-up adjustments recorded in this quarter related to the filing of 2015 tax returns increased our quarterly tax rate by 1.5% and the accounting income recognized in the adjustment of earn-out liabilities, which is not subject to income taxes, decreased our quarterly effective tax rate by 7.5%. The impact of the discrete items recorded during the three months ended September 30, 2015 decreased the quarterly tax rate by 0.1%. Excluding the impact of discrete items, the decrease in our quarterly effective tax rate for the three months ended September 30, 2016, compared with the three months ended September 30, 2015, is primarily attributable to forecasted shifts in the geographical mix of income.

We recorded $0.3 million net tax expense of unrecognized tax benefits for the nine months ended September 30, 2016. Within the next twelve months, it is possible our uncertain tax benefit may change within a range of approximately zero to $1.0 million. Our tax returns remain open to examinations as follows: U.S. Federal, 2013 through 2015; U.S. States, 2011 through 2015; and significant foreign jurisdictions, 2013 through 2015.

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Restructuring Reserves

9 Months Ended

Sep. 30, 2016

Restructuring and Related Activities [Abstract]

Restructuring Reserves

Restructuring Reserves

Historically, the Company has completed multiple acquisitions of other companies and businesses. Following an acquisition the Company will, as it determines appropriate, initiate restructuring events to eliminate redundant costs to maintain a competitive cost structure. Restructuring expenses are related to permanent reductions in workforce and redundant facility closures.

The balance of the restructuring reserve is included in accrued liabilities on the accompanying condensed consolidated balance sheets. Employee termination benefits are included as a part of restructuring expenses.

Activity in the restructuring reserves for the nine months ended September 30, 2016 is as follows (in thousands):

	Personnel Related			Facility Related			Total
Balance at December 31, 2015	$	1,676		$	—		$	1,676
Additions	617			1,205			1,822
Reversals	(425		)	—			(425		)
Payments	(1,853		)	(688		)	(2,541		)
Balance at September 30, 2016	$	15		$	517		$	532

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Debt and Credit Arrangements (Notes)

9 Months Ended

Sep. 30, 2016

Debt Disclosure [Abstract]

Debt and Credit Arrangements

Debt and Credit Arrangements

The Company has a Credit Agreement with JP Morgan Chase Bank ("JP Morgan") and Citibank, NA (“Citibank”). The Credit Agreement provides for an aggregate $150.0 million of secured revolving credit facility. The Credit Agreement contains covenants, including covenants relating to maintenance of books and records, financial reporting and notification, compliance with laws, maintenance of properties and insurance, and limitations on guaranties, investments, issuance of debt, lease obligations and capital expenditures, and is secured by virtually all of the Company's assets. The Credit Agreement provides for events of default, including failure to pay any principal or interest when due, failure to perform or observe covenants, bankruptcy or insolvency events and the occurrence of a material adverse effect. The Company has no other significant credit facilities. As of September 30, 2016 no amounts were outstanding under the Credit Agreement. The Company expects to finance a portion of an acquisition announced in September 2016 with borrowings under the revolving credit facility, as well as existing cash.

Pursuant to the terms of the Credit Agreement, the outstanding principal balance will bear interest at either (a) a fluctuating rate per annum equal to the Applicable Rate, as defined in the Credit Agreement, depending on our leverage ratio plus the higher of (i) the federal funds rate plus one-half of one percent per annum; (ii) the prime rate in effect on such a day; and (iii) the LIBOR rate plus one percent, or (b) a fluctuating rate per annum of LIBOR Rate plus the Applicable Rate. The Credit Agreement matures on September 23, 2021, at which time all principal amounts outstanding under the Credit Agreement will be due and payable.

Due to the execution of the Credit Agreement mentioned above, the Company terminated a previously existing credit agreement between the Company and Citibank. Under this agreement, the Company borrowed and repaid a total of $16.0 million during the nine months ended September 30, 2016.

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Segment, Customer and Geographic Information

9 Months Ended

Sep. 30, 2016

Segment Reporting [Abstract]

Segment, Customer and Geographic Information

Segment, Customer and Geographic Information

We operate in one reportable segment in which we provide healthcare products and services used for the screening, detection, treatment, monitoring and tracking of common medical ailments.

Our end-user customer base includes hospitals, clinics, laboratories, physicians, nurses, audiologists, and governmental agencies. Most of our international sales are to distributors who resell our products to end users or sub-distributors.

Revenue and long-lived asset information are as follows (in thousands):

	Three Months Ended   September 30,				Nine Months Ended   September 30,
	2016		2015		2016		2015
Consolidated Revenue:
United States	$	62,515	$	62,601	$	186,933	$	177,862
Foreign countries	28,391		31,982		87,260		98,053
Totals	$	90,906	$	94,583	$	274,193	$	275,915

	Three Months Ended   September 30,				Nine Months Ended   September 30,
	2016		2015		2016		2015
Revenue by End Market:
Neurology Products
Devices and Systems	$	39,240	$	42,040	$	121,461	$	123,135
Supplies	14,381		15,239		44,482		45,556
Services	3,131		2,125		8,794		5,614
Total Neurology Revenue	56,752		59,404		174,737		174,305
Newborn Care Products
Devices and Systems	16,263		17,598		46,455		53,706
Supplies	11,792		12,584		35,677		37,233
Services	6,099		4,997		17,324		10,671
Total Newborn Care Revenue	34,154		35,179		99,456		101,610
Total Revenue	$	90,906	$	94,583	$	274,193	$	275,915

	September 30, 2016		December 31, 2015
Property and equipment, net:
United States	$	7,663	$	6,664
Canada	4,956		5,165
Argentina	2,000		2,361
Ireland	2,176		1,651
Other foreign countries	1,332		1,126
Totals	$	18,127	$	16,967

During the three and nine months ended September 30, 2016 and 2015, no single customer or foreign country contributed to more than 10% of revenue.

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Fair Value Measurements

9 Months Ended

Sep. 30, 2016

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

ASC 820 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Fair value is defined under ASC 820 as the exit price associated with the sale of an asset or transfer of a liability in an orderly transaction between market participants at the measurement date. ASC 820 establishes the following three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value:

Level 1 - Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.

Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets and liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 - Unobservable inputs that are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.

The Company does not have any financial assets or liabilities measured at fair value on a recurring basis.

The following financial instruments are not measured at fair value on the Company’s consolidated balance sheet as of September 30, 2016 and December 31, 2015, but require disclosure of their fair values: cash and cash equivalents, accounts receivable, and accounts payable. The carrying value of these financial instruments approximates fair values because of their relatively short maturity.

In the third quarter of 2014, the Company listed its facility in Mundelein, Illinois for sale. This asset was measured at fair value less cost to sell as of September 30, 2014 based on market price and is classified as a Level 2 asset. The book value of this asset on June 30, 2014 was $3.6 million. We expensed $2.2 million during the third quarter of 2014 for this impairment. As of September 30, 2016 we are carrying the asset as held for sale in other current assets on the accompanying condensed consolidated balance sheet at a value of $1.4 million.

The Company also has contingent consideration associated with earn-outs from acquisitions. Contingent consideration liabilities are classified as Level 3 liabilities, as the Company uses unobservable inputs to value them, which is a probability-based income approach. Contingent considerations are classified as accrued liabilities on our condensed consolidated balance sheet. Subsequent changes in the fair value of contingent consideration liabilities are recorded within the Company's income statement as an operating expense.

	December 31, 2015		Additions		Payments			Adjustments			September 30, 2016
Liabilities:
Contingent consideration	$	6,209	$	2,500	$	(2,284	)	$	(3,401	)	$	3,024

The significant unobservable inputs used in the fair value measurement of contingent consideration related to the acquisitions are annualized revenue forecasts developed by the Company’s management and the probability of achievement of those revenue forecasts. Significant increases (decreases) in these unobservable inputs in isolation would result in a significantly lower (higher) fair value measurement.

The Company's Level 2 securities are valued using third-party pricing sources. The pricing services utilize industry standard valuation models, including both income and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. These inputs include reported trades of and broker/dealer quotes on the same or similar securities, issuer credit spread, benchmark securities, prepayment/default projections based on historical data and other observable inputs. The Company validates the prices provided by its third-party pricing services by understanding the models used, obtaining market values from other pricing sources, analyzing pricing data in certain instances and confirming those securities traded in active markets. See Note 4 to these Condensed Consolidated Financial Statements for further information regarding the Company's financials instruments.

	September 30, 2016
	Level I	Level II	Level III	Total
U.S. Treasury Bills	—	7,001	—	7,001
Short term investments
U.S. investment grade bonds	—	16,865	—	16,865
Developed investment grade bonds	—	8,564	—	8,564
Total short term investments	—	25,429	—	25,429

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Basis Of Presentation (Policies)

9 Months Ended

Sep. 30, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606). ASU 2014-09 requires revenue recognition to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 sets forth a new revenue recognition model that requires identifying the contract, identifying the performance obligations, determining the transaction price, allocating the transaction price to performance obligations and recognizing the revenue upon satisfaction of performance obligations.

The original effective date for ASU 2014-09 would have required the Company to adopt beginning in its first quarter of 2017. In July 2015, the FASB voted to amend ASU 2014-09 by approving a one-year deferral of the effective date as well as providing the option to early adopt the standard on the original effective date. Accordingly, the Company will adopt the standard in its first quarter of 2018. The new revenue standard may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption. The Company is currently evaluating the impact of adopting the new revenue standard on its consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). This standard requires a lessee to recognize the lease assets and lease liabilities arising from operating leases in the statement of financial position. Qualitative along with specific quantitative disclosures are required by lessees and lessors to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018 including interim periods within those fiscal years. The Company is currently evaluating the impact that will result from adopting ASU 2016-02.

In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvement to Employee Share-Based Payment Accounting. The new standard contains several amendments that simplifies the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, statutory tax withholding requirements, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The changes in the new standard eliminate the accounting for excess tax benefits to be recognized in additional paid-in capital and tax deficiencies recognized either in the income tax provision or in additional paid-in capital. The Company elected early adoption of ASU 2016-09 in the first quarter of 2016 which was applied using a modified retrospective approach. For the nine months ended September 30, 2016, we recognized all excess tax benefits and tax deficiencies as income tax expense or benefit as a discrete event. An income tax benefit of approximately $1.9 million was recognized in the period ended September 30, 2016 as a result of the adoption of ASU 2016-09. There was no change to retained earnings with respect to excess tax benefits, as this is not applicable to the Company. The treatment of forfeitures has not changed as we are electing to continue our current process of estimating the number of forfeitures. As such, this has no cumulative effect on retained earnings. With the early adoption of 2016-09, we have elected to present the cash flow statement on a prospective transition method and no prior periods have been adjusted.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. This standard provides guidance for eight cash flow classification issues in current GAAP. ASU 2016-15 is effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. The Company elected early adoption of ASU 2016-15 in the first quarter of 2016 relating to Contingent Consideration Payments Made after a Business Combination. For the nine months ended September 30, 2016, the Company recognized $1.0 million as a cash outflow for investing activities on the Statement of Cash Flows. This payment was made soon after the acquisition date of a business combination to settle the contingent consideration from the Monarch acquisition.

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Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2016

Earnings Per Share [Abstract]

Earnings Per Share

The components of basic and diluted EPS are as follows (in thousands, except per share amounts):

	Three Months Ended   September 30,				Nine Months Ended   September 30,
	2016		2015		2016		2015
Net income	$	13,313	$	10,932	$	32,361	$	29,380
Weighted average common shares	32,388		32,432		32,476		32,279
Dilutive effect of stock based awards	593		821		601		915
Diluted Shares	32,981		33,253		33,077		33,194
Basic earnings per share	$	0.41	$	0.34	$	1.00	$	0.91
Diluted earnings per share	$	0.40	$	0.33	$	0.98	$	0.89
Shares excluded from calculation of diluted EPS	—		—		138		—

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Cash, Cash Equivalents, and Short-Term Investments (Tables)

9 Months Ended

Sep. 30, 2016

Investments, Debt and Equity Securities [Abstract]

Cash, Cash Equivalents and Investments

Cash, cash equivalents and short-term investments consisted of the following (in thousands):

	September 30, 2016	December 31, 2015
Cash and cash equivalents:
Cash	74,072	82,469
U.S. Treasury Bills	7,001	—
Total cash and cash equivalents	81,073	82,469
Short-term investments:
U.S. investment grade bonds	16,865	—
Developed investment grade bonds	8,564	—
Total short-term investments	25,429	—
Total cash, cash equivalents and short-term investments	106,502	82,469

Investments by Investment Type

nvestments by investment type are as follows (in thousands):

	September 30, 2016									December 31, 2015
	Aggregated Cost Basis		Gross Unrealized Gains		Gross Unrealized Losses			Aggregated Fair Value		Aggregated Cost Basis		Gross Unrealized Gains		Gross Unrealized Losses		Aggregated Fair Value
U.S. investment grade bonds	16,890		1		(26		)	16,865		—		—		—		—
Developed investment grade bonds	8,579		—		(15		)	8,564		—		—		—		—
Total short-term investments	$	25,469	$	1	$	(41	)	$	25,429	$	—	$	—	$	—	$	—

Investments by Contractual Maturity

nvestments by contractual maturity are as follows (in thousands):

	September 30, 2016		December 31, 2015
	Investments		Investments
Due in one year or less	$	7,342	$	—
Due after one year through five years	18,087		—
Total short-term investment	$	25,429	$	—

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Inventories (Tables)

9 Months Ended

Sep. 30, 2016

Inventory Disclosure [Abstract]

Summary of Inventories

Inventories consist of the following (in thousands):

	September 30, 2016			December 31, 2015
Raw materials and subassemblies	$	26,944		$	19,041
Work in process	2,030			1,343
Finished goods	35,895			36,149
Total inventories	64,869			56,533
Less: Non-current inventories	(13,215		)	(7,961		)
Inventories, current	$	51,654		$	48,572

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Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Amortization expense related to intangible assets with definite lives

The following table summarizes the components of gross and net intangible asset balances (in thousands):

	September 30, 2016										December 31, 2015
	Gross Carrying Amount		Accumulated Impairment			Accumulated Amortization			Net Book Value		Gross Carrying Amount		Accumulated Impairment			Accumulated Amortization			Net Book Value
Intangible assets with definite lives:
Technology	$	63,264	$	—		$	(34,140	)	$	29,124	$	63,668	$	—		$	(31,600	)	$	32,068
Customer related	37,283		—			(16,863		)	20,420		35,529		—			(14,352		)	21,177
Trade names	34,478		(3,379		)	(6,232		)	24,867		31,837		(3,340		)	(3,052		)	25,445
Internally developed software	17,722		—			(9,769		)	7,953		15,513		—			(8,155		)	7,358
Patents	2,694		—			(2,283		)	411		2,663		—			(2,175		)	488
Definite-lived intangible assets	$	155,441	$	(3,379	)	$	(69,287	)	$	82,775	$	149,210	$	(3,340	)	$	(59,334	)	$	86,536

Amortization expense related to intangible assets with definite lives was as follows (in thousands):

	Three Months Ended   September 30,				Nine Months Ended   September 30,
	2016		2015		2016		2015
Technology	$	863	$	934	$	2,571	$	2,854
Customer related	848		689		2,495		2,092
Trade names	1,139		1,024		3,176		2,048
Internally developed software	602		434		1,618		1,142
Patents	28		28		84		84
Total amortization	$	3,480	$	3,109	$	9,944	$	8,220

Expected amortization expense related to amortizable intangible assets

Expected amortization expense related to amortizable intangible assets is as follows (in thousands):

Three months ending December 31, 2016	$	3,390
2017	13,557
2018	13,333
2019	12,173
2020	9,974
2021	8,522
Thereafter	21,826
Total expected amortization expense	$	82,775

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Goodwill (Tables)

9 Months Ended

Sep. 30, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Carrying amount of Goodwill

The carrying amount of goodwill and the changes in the balance are as follows (in thousands):

December 31, 2015	$	107,466
Acquisitions	4,485
Foreign currency translation	(33		)
September 30, 2016	$	111,918

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Property and Equipment, net (Tables)

9 Months Ended

Sep. 30, 2016

Property, Plant and Equipment [Abstract]

Property and Equipment net

Property and equipment, net consist of the following (in thousands):

	September 30, 2016			December 31, 2015
Land	$	2,865		$	2,918
Buildings	5,335			5,662
Leasehold improvements	2,400			2,345
Office furniture and equipment	14,513			13,866
Computer software and hardware	12,654			10,488
Demonstration and loaned equipment	11,838			11,216
	49,605			46,495
Accumulated depreciation	(31,478		)	(29,528		)
Total	$	18,127		$	16,967

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Reserve for Product Warranties (Tables)

9 Months Ended

Sep. 30, 2016

Product Warranties Disclosures [Abstract]

Reserve for Product Warranties

The details of activity in the warranty reserve are as follows (in thousands):

	Three Months Ended   September 30,						Nine Months Ended   September 30,
	2016			2015			2016			2015
Balance, beginning of period	$	10,858		$	4,408		$	10,386		$	2,753
Additions charged to expense	960			1,617			3,273			4,770
Reductions	(819		)	(813		)	(2,660		)	(2,311		)
Balance, end of period	$	10,999		$	5,212		$	10,999		$	5,212

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Share-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-Based Compensation Expense

Details of share-based compensation expense are as follows (in thousands):

	Three Months Ended   September 30,				Nine Months Ended   September 30,
	2016		2015		2016		2015
Cost of revenue	$	50	$	29	$	169	$	116
Marketing and selling	169		287		622		972
Research and development	320		249		1,185		644
General and administrative	1,415		1,326		4,981		3,650
Total	$	1,954	$	1,891	$	6,957	$	5,382

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Other Income (Expense), net (Tables)

9 Months Ended

Sep. 30, 2016

Other Income and Expenses [Abstract]

Other Income (Expense), net

Other income (expense), net consists of (in thousands):

	Three Months Ended   September 30,						Nine Months Ended   September 30,
	2016			2015			2016			2015
Interest income	$	76		$	13		$	94		$	28
Interest expense	(223		)	—			(351		)	—
Foreign currency loss	(783		)	(80		)	(282		)	(1,571		)
Other	37			74			127			340
Total other income (expense), net	$	(893	)	$	7		$	(412	)	$	(1,203	)

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Restructuring Reserves (Tables)

9 Months Ended

Sep. 30, 2016

Restructuring and Related Activities [Abstract]

Detail of Activity in the Restructuring Reserve

Activity in the restructuring reserves for the nine months ended September 30, 2016 is as follows (in thousands):

	Personnel Related			Facility Related			Total
Balance at December 31, 2015	$	1,676		$	—		$	1,676
Additions	617			1,205			1,822
Reversals	(425		)	—			(425		)
Payments	(1,853		)	(688		)	(2,541		)
Balance at September 30, 2016	$	15		$	517		$	532

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Segment, Customer and Geographic Information (Tables)

9 Months Ended

Sep. 30, 2016

Segment Reporting [Abstract]

Revenue and Long-lived Asset Information by Geographic Region

Revenue and long-lived asset information are as follows (in thousands):

	Three Months Ended   September 30,				Nine Months Ended   September 30,
	2016		2015		2016		2015
Consolidated Revenue:
United States	$	62,515	$	62,601	$	186,933	$	177,862
Foreign countries	28,391		31,982		87,260		98,053
Totals	$	90,906	$	94,583	$	274,193	$	275,915

	Three Months Ended   September 30,				Nine Months Ended   September 30,
	2016		2015		2016		2015
Revenue by End Market:
Neurology Products
Devices and Systems	$	39,240	$	42,040	$	121,461	$	123,135
Supplies	14,381		15,239		44,482		45,556
Services	3,131		2,125		8,794		5,614
Total Neurology Revenue	56,752		59,404		174,737		174,305
Newborn Care Products
Devices and Systems	16,263		17,598		46,455		53,706
Supplies	11,792		12,584		35,677		37,233
Services	6,099		4,997		17,324		10,671
Total Newborn Care Revenue	34,154		35,179		99,456		101,610
Total Revenue	$	90,906	$	94,583	$	274,193	$	275,915

	September 30, 2016		December 31, 2015
Property and equipment, net:
United States	$	7,663	$	6,664
Canada	4,956		5,165
Argentina	2,000		2,361
Ireland	2,176		1,651
Other foreign countries	1,332		1,126
Totals	$	18,127	$	16,967

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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2016

Fair Value Disclosures [Abstract]

Changes in fair value of contingent consideration

Subsequent changes in the fair value of contingent consideration liabilities are recorded within the Company's income statement as an operating expense.

	December 31, 2015		Additions		Payments			Adjustments			September 30, 2016
Liabilities:
Contingent consideration	$	6,209	$	2,500	$	(2,284	)	$	(3,401	)	$	3,024

Fair value level classification of investments

The Company's Level 2 securities are valued using third-party pricing sources. The pricing services utilize industry standard valuation models, including both income and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. These inputs include reported trades of and broker/dealer quotes on the same or similar securities, issuer credit spread, benchmark securities, prepayment/default projections based on historical data and other observable inputs. The Company validates the prices provided by its third-party pricing services by understanding the models used, obtaining market values from other pricing sources, analyzing pricing data in certain instances and confirming those securities traded in active markets. See Note 4 to these Condensed Consolidated Financial Statements for further information regarding the Company's financials instruments.

	September 30, 2016
	Level I	Level II	Level III	Total
U.S. Treasury Bills	—	7,001	—	7,001
Short term investments
U.S. investment grade bonds	—	16,865	—	16,865
Developed investment grade bonds	—	8,564	—	8,564
Total short term investments	—	25,429	—	25,429

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Basis of Presentation Accounting Policies (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Deferred income tax	$ 12,694	$ 12,782
Adjustments for New Accounting Principle, Early Adoption [Member] | ASU 2016-09 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Deferred income tax	1,900
Adjustments for New Accounting Principle, Early Adoption [Member] | ASU 2016-15 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Contingent consideration earn-out	$ 1,000

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Business Combinations (Details Textual) - USD ($) $ in Thousands							3 Months Ended
	Jul. 06, 2016	Mar. 02, 2016	Jan. 11, 2016	Nov. 13, 2015	Jan. 23, 2015	Jan. 02, 2015	Sep. 30, 2016	Sep. 30, 2016	Dec. 31, 2015
Business Acquisition [Line Items]
Goodwill							$ 111,918	$ 111,918	$ 107,466
RetCam [Member]
Business Acquisition [Line Items]
Purchase price paid in cash to acquire entity	$ 10,600
Contingent consideration earn-out	2,000
Additional consideration paid								1,100
Tangible assets	7,700
Intangible assets	$ 5,000
Weighted average life of intangible assets	5 years
Goodwill	$ 1,000
Net liabilities	$ 2,000
NeuroQuest [Member]
Business Acquisition [Line Items]
Purchase price paid in cash to acquire entity		$ 4,600
Contingent consideration earn-out		500
Tangible assets		500
Intangible assets		$ 1,300
Weighted average life of intangible assets		5 years
Goodwill		$ 3,500
Net liabilities		$ 100
Monarch [Member]
Business Acquisition [Line Items]
Purchase price paid in cash to acquire entity				$ 2,700
Contingent consideration earn-out				$ 1,000
Tangible assets			$ 1,200
Intangible assets			$ 1,200
Weighted average life of intangible assets			5 years
Goodwill			$ 2,400
Global Neuro-Diagnostics [Member]
Business Acquisition [Line Items]
Purchase price paid in cash to acquire entity					$ 11,400
Contingent consideration earn-out					3,200		500	$ 500
Tangible assets					1,500
Intangible assets					$ 4,800
Weighted average life of intangible assets					5 years
Goodwill					$ 8,900
Business Combination, Consideration Transferred, Liabilities Incurred					$ 500
Reduction of contingent consideration earn-out							$ 2,800
NicView [Member]
Business Acquisition [Line Items]
Purchase price paid in cash to acquire entity						$ 1,100
Contingent consideration earn-out						1,300
Tangible assets						300
Goodwill						2,700
Business Combination, Consideration Transferred, Liabilities Incurred						$ 600

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Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Earnings Per Share [Abstract]
Net income	$ 13,313	$ 10,932	$ 32,361	$ 29,380
Weighted average common shares (in shares)	32,388	32,432	32,476	32,279
Dilutive effect of stock based awards (in shares)	593	821	601	915
Diluted Shares (in shares)	32,981	33,253	33,077	33,194
Basic earnings per share (dollars per share)	$ 0.41	$ 0.34	$ 1.00	$ 0.91
Diluted earnings per share (dollars per share)	$ 0.40	$ 0.33	$ 0.98	$ 0.89
Diluted earnings per share (in shares)	0	0	138	0

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Cash, Cash Equivalents, and Short-Term Investments (Details Textual)	Sep. 30, 2016
Investments, Debt and Equity Securities [Abstract]
Investment grade rating (percent)	92.00%

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Cash, Cash Equivalents, and Short-Term Investments Cash, Cash Equivalents, and Short-Term Investments (Details 1) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015	Sep. 30, 2015	Dec. 31, 2014
Cash and Cash Equivalents [Line Items]
Total cash and cash equivalents	$ 81,073	$ 82,469	$ 82,201	$ 66,558
Schedule of Available-for-sale Securities [Line Items]
Short-term investments	25,429	0
Total cash, cash equivalents and short-term investments	106,502	82,469
US investment grade bonds [Member]
Schedule of Available-for-sale Securities [Line Items]
Short-term investments	16,865	0
Developed investment grade bonds [Member]
Schedule of Available-for-sale Securities [Line Items]
Short-term investments	8,564	0
Cash [Member]
Cash and Cash Equivalents [Line Items]
Total cash and cash equivalents	74,072	82,469
U.S. Treasury Bills [Member]
Cash and Cash Equivalents [Line Items]
Total cash and cash equivalents	$ 7,001	$ 0

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Cash, Cash Equivalents, and Short-Term Investments (Details 2) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Schedule of Available-for-sale Securities [Line Items]
Aggregated Cost Basis	$ 25,469	$ 0
Gross Unrealized Gains	1	0
Gross Unrealized Losses	(41)	0
Aggregated Fair Value	25,429	0
US investment grade bonds [Member]
Schedule of Available-for-sale Securities [Line Items]
Aggregated Cost Basis	16,890	0
Gross Unrealized Gains	1	0
Gross Unrealized Losses	(26)	0
Aggregated Fair Value	16,865	0
Developed investment grade bonds [Member]
Schedule of Available-for-sale Securities [Line Items]
Aggregated Cost Basis	8,579	0
Gross Unrealized Gains	0	0
Gross Unrealized Losses	(15)	0
Aggregated Fair Value	$ 8,564	$ 0

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Cash, Cash Equivalents, and Short-Term Investments (Details 3) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Investments, Debt and Equity Securities [Abstract]
Due in one year or less	$ 7,342	$ 0
Due after one year through five years	18,087	0
Total short-term investment	$ 25,429	$ 0

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Inventories (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Summary of Inventories
Raw materials and subassemblies	$ 26,944	$ 19,041
Work in process	2,030	1,343
Finished goods	35,895	36,149
Total inventories	64,869	56,533
Less: Non-current inventories	(13,215)	(7,961)
Inventories, current	$ 51,654	$ 48,572

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Intangible Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 155,441	$ 149,210
Accumulated Impairment	(3,379)	(3,340)
Accumulated Amortization	(69,287)	(59,334)
Net Book Value	82,775	86,536
Technology [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	63,264	63,668
Accumulated Amortization	(34,140)	(31,600)
Net Book Value	29,124	32,068
Customer related [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	37,283	35,529
Accumulated Amortization	(16,863)	(14,352)
Net Book Value	20,420	21,177
Trade Names [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	34,478	31,837
Accumulated Impairment	(3,379)	(3,340)
Accumulated Amortization	(6,232)	(3,052)
Net Book Value	24,867	25,445
Internally developed software [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	17,722	15,513
Accumulated Amortization	(9,769)	(8,155)
Net Book Value	7,953	7,358
Patents [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	2,694	2,663
Accumulated Amortization	(2,283)	(2,175)
Net Book Value	$ 411	$ 488

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Intangible Assets (Details Textual) $ in Millions	9 Months Ended
	Sep. 30, 2016 USD ($)
Internally developed software [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Costs incurred for development of internal use computer software	$ 15.5
Costs incurred for development of software to be sold	$ 2.2
Minimum [Member] | Developed Technology Rights [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Useful life (in years)	5 years
Minimum [Member] | Customer related [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Useful life (in years)	4 years
Minimum [Member] | Internally developed software [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Useful life (in years)	4 years
Minimum [Member] | Trade Names [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Useful life (in years)	5 years
Minimum [Member] | Patents [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Useful life (in years)	10 years
Maximum [Member] | Developed Technology Rights [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Useful life (in years)	20 years
Maximum [Member] | Customer related [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Useful life (in years)	16 years
Maximum [Member] | Internally developed software [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Useful life (in years)	10 years
Maximum [Member] | Trade Names [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Useful life (in years)	7 years
Maximum [Member] | Patents [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Useful life (in years)	15 years

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Intangible Assets (Details 1) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Finite-Lived Intangible Assets [Line Items]
Total amortization	$ 3,480	$ 3,109	$ 9,944	$ 8,220
Technology [Member]
Finite-Lived Intangible Assets [Line Items]
Total amortization	863	934	2,571	2,854
Customer related [Member]
Finite-Lived Intangible Assets [Line Items]
Total amortization	848	689	2,495	2,092
Trade Names [Member]
Finite-Lived Intangible Assets [Line Items]
Total amortization	1,139	1,024	3,176	2,048
Internally developed software [Member]
Finite-Lived Intangible Assets [Line Items]
Total amortization	602	434	1,618	1,142
Patents [Member]
Finite-Lived Intangible Assets [Line Items]
Total amortization	$ 28	$ 28	$ 84	$ 84

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Intangible Assets (Details 2) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Expected annual amortization expense related to amortizable intangible assets
Three months ending December 31, 2016	$ 3,390
2017	13,557
2018	13,333
2019	12,173
2020	9,974
2021	8,522
Thereafter	21,826
Net Book Value	$ 82,775	$ 86,536

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Goodwill (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2016 USD ($)
Carrying amount of goodwill
December 31, 2015	$ 107,466
Acquisitions	4,485
Foreign currency translation	(33)
September 30, 2016	$ 111,918

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Property and Equipment, Net (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 49,605	$ 46,495
Accumulated depreciation	(31,478)	(29,528)
Total	18,127	16,967
Land [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	2,865	2,918
Buildings [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	5,335	5,662
Leasehold improvements [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	2,400	2,345
Office furniture and equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	14,513	13,866
Computer software and hardware [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	12,654	10,488
Demonstration and loaned equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 11,838	$ 11,216

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Property and Equipment, Net (Details Textual) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Property, Plant and Equipment [Abstract]
Depreciation expense of property and equipment	$ 0.9	$ 1.0	$ 2.9	$ 3.1

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Reserve for Product Warranties (Details Textual) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Jun. 30, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Dec. 31, 2014
Product Warranties Disclosures [Abstract]
Product warranty period (in years)	1 year
Product Warranty Liability [Line Items]
Accrual of estimated costs	$ 10,999	$ 10,858	$ 10,386	$ 5,212	$ 4,408	$ 2,753
Certain NeoBLUE Phototherapy Products [Member]
Product Warranty Liability [Line Items]
Accrual of estimated costs	$ 6,500

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Reserve for Product Warranties (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Reserve for Product Warranties
Balance, beginning of period	$ 10,858	$ 4,408	$ 10,386	$ 2,753
Additions charged to expense	960	1,617	3,273	4,770
Reductions	(819)	(813)	(2,660)	(2,311)
Balance, end of period	$ 10,999	$ 5,212	$ 10,999	$ 5,212

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Share-Based Compensation (Details Textual) $ in Millions	9 Months Ended
	Sep. 30, 2016 USD ($) plan
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Number of active share based compensation plans | plan	2
Unrecognized compensation expense related to unvested portion of stock options | $	$ 11.6
Weighted average period of recognition of unrecognized compensation expense	1 year 10 months

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Share-Based Compensation (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	$ 1,954	$ 1,891	$ 6,957	$ 5,382
Cost of revenue [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	50	29	169	116
Marketing and selling [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	169	287	622	972
Research and development [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	320	249	1,185	644
General and administrative [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	$ 1,415	$ 1,326	$ 4,981	$ 3,650

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Other Income (Expense), net (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Other expense, net
Interest income	$ 76	$ 13	$ 94	$ 28
Interest expense	(223)	0	(351)	0
Foreign currency loss	(783)	(80)	(282)	(1,571)
Other	37	74	127	340
Total other income (expense), net	$ (893)	$ 7	$ (412)	$ (1,203)

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Income Taxes (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Income Tax Contingency [Line Items]
Provision for income tax	$ 1,000,000	$ 5,200,000	$ 7,600,000	$ 12,800,000
Effective tax rate (percent)	7.20%	32.00%	19.00%	30.40%
Discrete tax increase (decrease) (percent)	11.80%	0.10%
Change in enacted tax rate (percent)	1.50%
Decrease in quarterly effective tax rate (percent)	7.50%
Unrecognized tax expense	$ 300,000		$ 300,000
Minimum [Member]
Income Tax Contingency [Line Items]
Tax positions for which it is reasonably possible that the total amount could change	0		0
Maximum [Member]
Income Tax Contingency [Line Items]
Tax positions for which it is reasonably possible that the total amount could change	$ 1,000,000		$ 1,000,000
Impacts from adoption of ASU 2016-09 [Member]
Income Tax Contingency [Line Items]
Change in enacted tax rate (percent)	3.80%

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Restructuring Reserves (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2016 USD ($)
Detail of activity in the restructuring reserve
Beginning balance	$ 1,676
Additions	1,822
Reversals	(425)
Payments	(2,541)
Ending balance	532
Personnel Related [Member]
Detail of activity in the restructuring reserve
Beginning balance	1,676
Additions	617
Reversals	(425)
Payments	(1,853)
Ending balance	15
Facility Related [Member]
Detail of activity in the restructuring reserve
Beginning balance	0
Additions	1,205
Reversals	0
Payments	(688)
Ending balance	$ 517

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Debt and Credit Arrangements (Details) - Credit Agreement [Member] - Citibank, National Association [Member]	9 Months Ended
	Sep. 30, 2016 USD ($)
Line of Credit Facility [Line Items]
Aggregate secured revolving credit facility	$ 150,000,000.0
Borrowings	16,000,000
Repayments	$ 16,000,000
Federal Funds Rate
Line of Credit Facility [Line Items]
Interest rate	0.50%
LIBOR rate
Line of Credit Facility [Line Items]
Interest rate	1.00%

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Segment, Customer and Geographic Information (Details Textual)	9 Months Ended
	Sep. 30, 2016 segment
Segment Reporting [Abstract]
Number of reportable segments (segments)	1

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Segment, Customer and Geographic Information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Consolidated Revenue:
Revenue	$ 90,906	$ 94,583	$ 274,193	$ 275,915
Revenue by End Market:
Total Revenue	90,906	94,583	274,193	275,915
Property and equipment, net:
Property and equipment, net	18,127		18,127		$ 16,967
Neurology Products [Member]
Revenue by End Market:
Total Revenue	56,752	59,404	174,737	174,305
Neurology Products [Member] | Devices and Systems [Member]
Revenue by End Market:
Total Revenue	39,240	42,040	121,461	123,135
Neurology Products [Member] | Supplies [Member]
Revenue by End Market:
Total Revenue	14,381	15,239	44,482	45,556
Neurology Products [Member] | Services [Member]
Revenue by End Market:
Total Revenue	3,131	2,125	8,794	5,614
Newborn Care Products [Member]
Revenue by End Market:
Total Revenue	34,154	35,179	99,456	101,610
Newborn Care Products [Member] | Devices and Systems [Member]
Revenue by End Market:
Total Revenue	16,263	17,598	46,455	53,706
Newborn Care Products [Member] | Supplies [Member]
Revenue by End Market:
Total Revenue	11,792	12,584	35,677	37,233
Newborn Care Products [Member] | Services [Member]
Revenue by End Market:
Total Revenue	6,099	4,997	17,324	10,671
United States [Member]
Consolidated Revenue:
Revenue	62,515	62,601	186,933	177,862
Property and equipment, net:
Property and equipment, net	7,663		7,663		6,664
Foreign Countries [Member]
Consolidated Revenue:
Revenue	28,391	$ 31,982	87,260	$ 98,053
Property and equipment, net:
Property and equipment, net	1,332		1,332		1,126
Canada [Member]
Property and equipment, net:
Property and equipment, net	4,956		4,956		5,165
Argentina [Member]
Property and equipment, net:
Property and equipment, net	2,000		2,000		2,361
Ireland [Member]
Property and equipment, net:
Property and equipment, net	$ 2,176		$ 2,176		$ 1,651

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Fair Value Measurements (Details Textual) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2016	Sep. 30, 2015	Jun. 30, 2014
Long Lived Assets Held-for-sale [Line Items]
Loss on disposal of property and equipment		$ 21	$ 0
Mundelein Facility [Member] | Level II [Member]
Long Lived Assets Held-for-sale [Line Items]
Asset held-for-sale book value				$ 3,600
Loss on disposal of property and equipment	$ 2,200
Asset held-for-sale at fair value		$ 1,400

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Fair Value Measurements (Details) - Level III [Member] - Contingent Consideration [Member] $ in Thousands	9 Months Ended
	Sep. 30, 2016 USD ($)
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Contingent consideration, beginning balance	$ 6,209
Additions	2,500
Payments	(2,284)
Adjustments	(3,401)
Contingent consideration, ending balance	$ 3,024

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Fair Value Measurements (Details 2) - Fair value measured on a recurring basis [Member] $ in Thousands	Sep. 30, 2016 USD ($)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value	$ 25,429
Level I [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value	0
Level II [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value	25,429
Level III [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value	0
U.S. Treasury Bills [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value	7,001
U.S. Treasury Bills [Member] | Level I [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value	0
U.S. Treasury Bills [Member] | Level II [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value	7,001
U.S. Treasury Bills [Member] | Level III [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value	0
US investment grade bonds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value	16,865
US investment grade bonds [Member] | Level I [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value	0
US investment grade bonds [Member] | Level II [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value	16,865
US investment grade bonds [Member] | Level III [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value	0
Developed investment grade bonds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value	8,564
Developed investment grade bonds [Member] | Level I [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value	0
Developed investment grade bonds [Member] | Level II [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value	8,564
Developed investment grade bonds [Member] | Level III [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value	$ 0