HOUSTON WIRE & CABLE COMPANY,
 
as Guarantor
 
and
 
HWC WIRE & CABLE COMPANY,
 
as Borrower

   
THIRD AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
 
Dated as of September 30, 2011
 

 
$100,000,000
 
CERTAIN FINANCIAL INSTITUTIONS,
 
as Lenders
 
and
 
BANK OF AMERICA, N.A.,
 
as Agent
 
 
 

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TABLE OF CONTENTS
             
Page
       
SECTION 1.
 
DEFINITIONS; RULES OF CONSTRUCTION
1
       
1.1
 
Definitions
1
1.2
 
Accounting Terms
25
1.3
 
Uniform Commercial Code
25
1.4
 
Certain Matters of Construction
26
       
SECTION 2.
 
CREDIT FACILITIES
26
       
2.1
 
Revolver Commitment
26
2.2
 
Reserved
28
2.3
 
Letter of Credit Facility
28
       
SECTION 3.
 
INTEREST, FEES AND CHARGES
31
       
3.1
 
Interest
31
3.2
 
Fees
33
3.3
 
Computation of Interest, Fees, Yield Protection
34
3.4
 
Reimbursement Obligations
34
3.5
 
Illegality
34
3.6
 
Inability to Determine Rates
35
3.7
 
Increased Costs; Capital Adequacy
35
3.8
 
Mitigation
36
3.9
 
Funding Losses
36
3.10
 
Maximum Interest
37
       
SECTION 4.
 
LOAN ADMINISTRATION
37
       
4.1
 
Manner of Borrowing and Funding Revolver Loans
37
4.2
 
Defaulting Lender
39
4.3
 
Number and Amount of LIBOR Loans; Determination of Rate
39
4.4
 
Borrower Agent
40
4.5
 
One Obligation
40
4.6
 
Effect of Termination
40
       
SECTION 5.
 
PAYMENTS
41
       
5.1
 
General Payment Provisions
41
5.2
 
Repayment of Revolver Loans
41
5.3
 
Other Mandatory Prepayments
41
5.4
 
Payment of Other Obligations
42
5.5
 
Marshaling; Payments Set Aside
42
5.6
 
Post-Default Allocation of Payments
42
5.7
 
Application of Payments
43

 

 
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TABLE OF CONTENTS
(continued)
     
Page
       
5.8
 
Loan Account; Account Stated
43
5.9
 
Taxes
44
5.10
 
Foreign Lenders
44
5.11
 
Nature and Extent of Each Borrower’s Liability
45
       
SECTION 6.
 
CONDITIONS PRECEDENT
48
       
6.1
 
Documentation
48
6.2
 
No Default
48
6.3
 
Conditions Precedent to All Credit Extensions
48
       
SECTION 7.
 
COLLATERAL
49
       
7.1
 
Grant of Security Interest
49
7.2
 
Lien on Deposit Accounts; Cash Collateral
50
7.3
 
Other Collateral
51
7.4
 
No Assumption of Liability
51
7.5
 
Further Assurances
51
7.6
 
Foreign Subsidiary Stock
51
       
SECTION 8.
 
COLLATERAL ADMINISTRATION
52
       
8.1
 
Borrowing Base Certificates
52
8.2
 
Administration of Accounts
52
8.3
 
Administration of Inventory
53
8.4
 
Administration of Equipment
54
8.5
 
Administration of Deposit Accounts
54
8.6
 
General Provisions
55
8.7
 
Power of Attorney
56
       
SECTION 9.
 
REPRESENTATIONS AND WARRANTIES
56
       
9.1
 
General Representations and Warranties
56
9.2
 
Complete Disclosure
62
       
SECTION 10.
 
COVENANTS AND CONTINUING AGREEMENTS
63
       
10.1
 
Affirmative Covenants
63
10.2
 
Negative Covenants
66
10.3
 
Financial Covenants
70
       
SECTION 11.
 
EVENTS OF DEFAULT; REMEDIES ON DEFAULT
70
       
11.1
 
Events of Default
70

 
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TABLE OF CONTENTS
(continued)
     
Page
       
11.2
 
Remedies upon Default
72
11.3
 
License
73
11.4
 
Setoff
74
11.5
 
Remedies Cumulative; No Waiver
74
       
SECTION 12.
 
AGENT
75
       
12.1
 
Appointment, Authority and Duties of Agent
75
12.2
 
Agreements Regarding Collateral and Field Examination Reports
76
12.3
 
Reliance By Agent
77
12.4
 
Action Upon Default
77
12.5
 
Ratable Sharing
77
12.6
 
Indemnification of Agent Indemnitees
77
12.7
 
Limitation on Responsibilities of Agent
78
12.8
 
Successor Agent and Co-Agents
78
12.9
 
Due Diligence and Non-Reliance
79
12.10
 
Replacement of Certain Lenders
79
12.11
 
Remittance of Payments and Collections
80
12.12
 
Agent in its Individual Capacity
80
12.13
 
Agent Titles
81
12.14
 
No Third Party Beneficiaries
81
       
SECTION 13.
 
BENEFIT OF AGREEMENT; ASSIGNMENTS AND PARTICIPATIONS
81
       
13.1
 
Successors and Assigns
81
13.2
 
Participations
81
13.3
 
Assignments
82
       
SECTION 14.
 
MISCELLANEOUS
83
       
14.1
 
Consents, Amendments and Waivers
83
14.2
 
Indemnity
85
14.3
 
Notices and Communications
85
14.4
 
Performance of Borrowers’ Obligations
86
14.5
 
Credit Inquiries
86
14.6
 
Severability
86
14.7
 
Cumulative Effect; Conflict of Terms
86
14.8
 
Counterparts; Facsimile Signatures
86
14.9
 
Entire Agreement
86
14.10
 
No Control; No Advisory or Fiduciary Responsibility
87
14.11
 
Obligations of Lenders
87
14.12
 
No Advisory or Fiduciary Responsibility
87

 
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TABLE OF CONTENTS
(continued)
     
Page
       
14.13
 
Confidentiality
88
14.14
 
GOVERNING LAW
88
14.15
 
Consent to Forum
89
14.16
 
Waivers by Borrowers
89
14.17
 
Patriot Act Notice
90
14.18
 
No Novation
90

LIST OF EXHIBITS  AND SCHEDULES
 
Exhibit A
Revolver Note
Exhibit B
Reserved
Exhibit C
Assignment and Acceptance
Exhibit D
Assignment Notice
   
Schedule 1.1
Commitments of Lenders
Schedule 6.1
Schedule of Documents
Schedule 8.5
Deposit Accounts
Schedule 8.6.1
Business Locations
Schedule 9.1.4
Names and Capital Structure
Schedule 9.1.8
Surety Obligations
Schedule 9.1.11
Patents, Trademarks, Copyrights and Licenses
Schedule 9.1.14
Environmental Matters
Schedule 9.1.15
Restrictive Agreements
Schedule 9.1.16
Litigation
Schedule 9.1.18
Pension Plan Disclosures
Schedule 10.2.2
Existing Liens
Schedule 10.2.17
Existing Affiliate Transactions

 
 
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THIRD AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
 
THIS THIRD AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (“Agreement”) is
dated as of September 30, 2011, among HWC WIRE & CABLE COMPANY, a Delaware
corporation (“Borrower Agent”) with its chief executive office and principal
place of business at 10201 North Loop East, Houston, Texas 77029, each of the
Domestic Subsidiaries of Borrower Agent that are or become borrower parties
thereto (individually a “Borrower” and collectively, “Borrowers”), the financial
institutions party to this Agreement from time to time as lenders (collectively,
“Lenders”), and BANK OF AMERICA, N.A., a national banking association, as agent
for the Lenders (“Agent”).
 
RECITALS:
 
WHEREAS, Borrower Agent, the lender signatories thereto and Bank of America,
N.A. as agent for such lenders, entered into a certain Second Amended and
Restated Loan and Security Agreement dated as of September 21, 2009 (said Second
Amended and Restated Loan and Security Agreement as amended from time to time,
the “2009 Loan Agreement”); and
 
WHEREAS, Borrower Agent, Lenders and Agent desire to amend and restate the 2009
Loan Agreement pursuant to the terms and conditions hereof.
 
NOW, THEREFORE, for valuable consideration hereby acknowledged, the parties
agree as follows:
 
SECTION 1.  DEFINITIONS; RULES OF CONSTRUCTION
 
 1.1       Definitions.  As used herein, the following terms have the meanings
set forth below:
 
Account:  as defined in the UCC, including all rights to payment for goods sold
or leased, or for services rendered.
 
Account Debtor:  a Person who is obligated under an Account, Chattel Paper or
General Intangible.
 
Accounts Formula Amount:  85% of the Value of Eligible Accounts.
 
Affiliate:  with respect to any 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.  “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.  “Controlling” and
“Controlled” have correlative meanings.
 
Agent Indemnitees:  Agent and its officers, directors, employees, Affiliates,
agents and attorneys.
 
 
 

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Agent Professionals:  attorneys, accountants, appraisers, auditors, business
valuation experts, environmental engineers or consultants, turnaround
consultants, and other professionals and experts retained by Agent.
 
Allocable Amount:  as defined in Section 5.11.3.
 
Anti-Terrorism Laws:  any laws relating to terrorism or money laundering,
including the Patriot Act.
 
Applicable Law:  all laws, rules, regulations and governmental guidelines
applicable to the Person, conduct, transaction, agreement or matter in question,
including all applicable statutory law, common law and equitable principles, and
all provisions of constitutions, treaties, statutes, rules, regulations, orders
and decrees of Governmental Authorities.
 
Applicable Margin:  with respect to any Type of Loan, the margin set forth
below, as determined by average Availability for the most recently ended Fiscal
Quarter:
 
Level
 
Availability
 
Base Rate Revolver
Loans
   
LIBOR Revolver
Loans
   I  
> $50,000,000
    0.00 %     1.25 %                      
II
 
< $50,000,000, but > $35,000,000
    0.00 %     1.50 %                      
III
 
< $35,000,000, but > $20,000,000
    0.00 %     1.75 %                      
IV
 
< $20,000,000
    0.25 %     2.00 %

Until January 1, 2012, margins shall be determined as if Level III were
applicable.  Thereafter, the margins shall be subject to increase or decrease
upon the first day of each Fiscal Quarter.
 
Approved Fund:  any Person (other than a natural person) that is engaged in
making, purchasing, holding or otherwise investing in commercial loans and
similar extensions of credit in its ordinary course of activities, and is
administered or managed by a Lender, an entity that administers or manages a
Lender, or an Affiliate of either.
 
Asset Disposition:  a sale, lease, license, consignment, transfer or other
disposition of Property of an Obligor, including a disposition of Property in
connection with a sale-leaseback transaction or synthetic lease.
 
Assignment and Acceptance:  an assignment agreement between a Lender and
Eligible Assignee, in the form of Exhibit C.
 
 
2

--------------------------------------------------------------------------------

 
 
Availability:  the Borrowing Base minus the principal balance of all Revolver
Loans.
 
Availability Reserve:  the sum (without duplication) of (a) the Inventory
Reserve; (b) the Rent and Charges Reserve; (c) the LC Reserve; (d) the Bank
Product Reserve; (e) the aggregate amount of liabilities secured by Liens upon
Collateral that are senior to Agent’s Liens (but imposition of any such reserve
shall not waive an Event of Default arising therefrom) and (f) such additional
reserves, in such amounts and with respect to such matters, as Agent in its
reasonable credit judgment may elect to impose from time to time.
 
Bank of America:  Bank of America, N.A., a national banking association, and its
successors and assigns.
 
Bank of America Indemnitees:  Bank of America and its officers, directors,
employees, Affiliates, agents and attorneys.
 
Bank Product:  any of the following products, services or facilities extended to
any Borrower or Subsidiary by any Lender or any of its Affiliates:  (a) Cash
Management Services; (b) products under Hedging Agreements; (c) commercial
credit card and merchant card services; and (d) leases and other banking
products or services as may be requested by any Borrower or Subsidiary, other
than Letters of Credit; provided, however, that for any of the foregoing to be
included as an “Obligation” for purposes of a distribution under Section 5.6.1,
the applicable Secured Party and Obligor must have previously provided written
notice to Agent of (i) the existence of such Bank Product, (ii) the maximum
dollar amount of obligations arising thereunder to be included as a Bank Product
Reserve (“Bank Product Amount”), and (iii) the methodology to be used by such
parties in determining the Bank Product Debt owing from time to time.  The Bank
Product Amount may be changed from time to time upon written notice to Agent by
the Secured Party and Obligor.  No Bank Product Amount may be established or
increased at any time that a Default or Event of Default exists, or if a reserve
in such amount would cause an Overadvance.
 
Bank Product Amount:  as defined in the definition of Bank Product.
 
Bank Product Debt:  Debt and other obligations of an Obligor relating to Bank
Products.
 
Bank Product Reserve:  the aggregate amount of reserves established by Agent
from time to time in its reasonable discretion in respect of Bank Product Debt,
which shall be at least equal to the sum of all Bank Product Amounts.
 
Bankruptcy Code:  Title 11 of the United States Code.
 
Base Rate:  for any day, a per annum rate equal to the greater of (a) the Prime
Rate for such day; (b) the Federal Funds Rate for such day, plus 0.50%; or
(c) LIBOR for a 30 day interest period as determined on such day, plus 1.50%.
 
 
3

--------------------------------------------------------------------------------

 
 
Base Rate Revolver Loan:  a Revolver Loan that bears interest based on the Base
Rate.
 
Board of Governors:  the Board of Governors of the Federal Reserve System.
 
Borrowed Money:  with respect to any Obligor, without duplication, its (a) Debt
that (i) arises from the lending of money by any Person to such Obligor, (ii) is
evidenced by notes, drafts, bonds, debentures, credit documents or similar
instruments, (iii) accrues interest or is a type upon which interest charges are
customarily paid (excluding trade payables owing in the Ordinary Course of
Business), or (iv) was issued or assumed as full or partial payment for
Property; (b) Capital Leases; (c) reimbursement obligations with respect to
letters of credit; and (d) guaranties of any Debt of the foregoing types owing
by another Person.
 
Borrower Agent:  as defined in Section 4.4.
 
Borrowing:  a group of Loans of one Type that are made on the same day or are
converted into Loans of one Type on the same day.
 
Borrowing Base:  on any date of determination, an amount equal to the lesser of
(a) the aggregate amount of Revolver Commitments, minus the LC Reserve; or
(b) the sum of the Accounts Formula Amount, plus the Inventory Formula Amount,
minus the Availability Reserve.
 
Borrowing Base Certificate:  a certificate, in form and substance satisfactory
to Agent, by which Borrowers certify calculation of the Borrowing Base.
 
Business Day:  any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the laws of, or are in fact
closed in, North Carolina and Illinois, and if such day relates to a LIBOR Loan,
any such day on which dealings in Dollar deposits are conducted between banks in
the London interbank Eurodollar market.
 
Capital Expenditures:  all liabilities incurred or expenditures made by a
Borrower or Subsidiary for the acquisition of fixed assets, or any improvements,
replacements, substitutions or additions thereto with a useful life of more than
one year.
 
Capital Lease:  any lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP.
 
Cash Collateral:  cash, and any interest or other income earned thereon, that is
delivered to Agent to Cash Collateralize any Obligations.
 
Cash Collateral Account:  a demand deposit, money market or other account
established by Agent at such financial institution as Agent may select in its
reasonable discretion, which account shall be subject to Agent’s Liens for the
benefit of Secured Parties.
 
 
4

--------------------------------------------------------------------------------

 
 
Cash Collateralize:  the delivery of cash to Agent, as security for the payment
of Obligations, in an amount equal to (a) with respect to LC Obligations, 105%
of the aggregate LC Obligations, and (b) with respect to any inchoate,
contingent or other Obligations (including Obligations arising under Bank
Products), Agent’s good faith estimate of the amount due or to become due,
including all fees and other amounts relating to such Obligations.  “Cash
Collateralization” has a correlative meaning.
 
Cash Equivalents:  (a) marketable obligations issued or unconditionally
guaranteed by, and backed by the full faith and credit of, the United States
government, maturing within 12 months of the date of acquisition;
(b) certificates of deposit, time deposits and bankers’ acceptances maturing
within 12 months of the date of acquisition, and overnight bank deposits, in
each case which are issued by a commercial bank organized under the laws of the
United States or any state or district thereof, rated A-1 (or better) by S&P or
P-1 (or better) by Moody’s at the time of acquisition, and (unless issued by a
Lender) not subject to offset rights; (c) repurchase obligations with a term of
not more than 30 days for underlying investments of the types described in
clauses (a) and (b) entered into with any bank meeting the qualifications
specified in clause (b); (d) commercial paper rated A-1 (or better) by S&P or
P-1 (or better) by Moody’s, and maturing within nine months of the date of
acquisition; and (e) shares of any money market fund that has substantially all
of its assets invested continuously in the types of investments referred to
above, has net assets of at least $500,000,000 and has the highest rating
obtainable from either Moody’s or S&P.
 
Cash Management Services:  any services provided from time to time by any Lender
or any of its Affiliates to any Borrower or Subsidiary in connection with
operating, collections, payroll, trust, or other depository or disbursement
accounts, including automated clearinghouse, e-payable, electronic funds
transfer, wire transfer, controlled disbursement, overdraft, depository,
information reporting, lockbox and stop payment services.
 
CERCLA:  the Comprehensive Environmental Response Compensation and Liability Act
(42 U.S.C. § 9601 et seq.).
 
Change in Law:  the occurrence, after the date hereof, of (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 or
application thereof by any Governmental Authority; or (c) the making or issuance
of any request, guideline or directive (whether or not having the force of law)
by any Governmental Authority.
 
Change of Control:  an event or series of events by which:
 
(a)           any “person” or “group” (as such terms are used in Sections 13(d)
and 14(d) of the Exchange Act), other than any such “person” or “group” existing
as of the Closing Date, becomes the “beneficial owner” (as defined in Rules
13d-3 and 13d-5 under the Exchange Act, provided that a person shall be deemed
to have “beneficial ownership” of all Securities that such person has the right
to acquire, whether such right is exercisable immediately or only after the
passage of time), directly or indirectly, of forty percent (40%) or more of the
combined voting power of Guarantor’s outstanding Equity Interests ordinarily
having the right to vote at an election of directors; or
 
 
5

--------------------------------------------------------------------------------

 
 
(b)           the majority of the board of directors (or comparable governing
body) of Guarantor fails to consist of Continuing Directors or other substitutes
therefor reasonably acceptable to Agent.
 
Claims:  all liabilities, obligations, losses, damages, penalties, judgments,
proceedings, interest, costs and expenses of any kind (including remedial
response costs, reasonable attorneys’ fees and Extraordinary Expenses) at any
time (including after Full Payment of the Obligations, resignation or
replacement of Agent, or replacement of any Lender) incurred by or asserted
against any Indemnitee in any way relating to (a) any Loans, Letters of Credit,
Loan Documents, or the use thereof or transactions relating thereto, (b) any
action taken or omitted to be taken by any Indemnitee in connection with any
Loan Documents, (c) the existence or perfection of any Liens, or realization
upon any Collateral, (d) the exercise of any rights or remedies under any Loan
Documents or Applicable Law, or (e) the failure by any Obligor to perform or
observe any terms of any Loan Document, in each case including all costs and
expenses relating to any investigation, litigation, arbitration or other
proceeding (including an Insolvency Proceeding or appellate proceedings),
whether or not the applicable Indemnitee is a party thereto.
 
Closing Date:  as defined in Section 6.
 
Code:  the Internal Revenue Code of 1986.
 
Collateral:  all Property described in Section 7.1, all Property described in
any Security Documents as security for any Obligations, and all other Property
that now or hereafter secures (or is intended to secure) any Obligations.
 
Commitment: for any Lender, the aggregate amount of such Lender’s Revolver
Commitment. “Commitments” means the aggregate amount of all Revolver
Commitments.
 
Commitment Termination Date:  the earliest to occur of (a) the Revolver
Termination Date; (b) the date on which Borrowers terminate the Revolver
Commitments pursuant to Section 2.1.6; or (c) the date on which the Revolver
Commitments are terminated pursuant to Section 11.2.
 
Compliance Certificate:  a certificate, in form and substance satisfactory to
Agent, by which Borrowers certify compliance with Section 10.2.3 and calculate
the applicable Level for the Applicable Margin.
 
 
6

--------------------------------------------------------------------------------

 

Consolidated Net Income:  with respect to any fiscal period of Guarantor
determined in accordance with GAAP on a consolidated basis; provided, however,
Consolidated Net Income shall not include (a) the income (or loss) of any Person
(other than a subsidiary of Guarantor) in which Guarantor or any of its
wholly-owned subsidiaries had an ownership interest unless received in a cash
distribution or requiring the payment of cash; (b) the income (or loss) of any
Person accrued prior to the date it became a subsidiary of Guarantor or is
merged into or consolidated with Guarantor; (c) all amounts included in
determining net income (or loss) in respect of the write-up of assets on or
after the Closing Date, including the subsequent amortization or expensing of
the written-up portion of the assets; (d) extraordinary gains as defined under
GAAP and extraordinary non-cash losses and (e) gains (or losses) from asset
dispositions (other than sales of inventory).
 
Contingent Obligation:  any obligation of a Person arising from a guaranty,
indemnity or other assurance of payment or performance of any Debt, lease,
dividend or other obligation (“primary obligation”) of another obligor (“primary
obligor”) in any manner, whether directly or indirectly, including any
obligation of such Person under any (a) guaranty, endorsement, co-making or sale
with recourse of an obligation of a primary obligor; (b) obligation to make
take-or-pay or similar payments regardless of nonperformance by any other party
to an agreement; and (c) arrangement (i) to purchase any primary obligation or
security therefor, (ii) to supply funds for the purchase or payment of any
primary obligation, (iii) to maintain or assure working capital, equity capital,
net worth or solvency of the primary obligor, (iv) to purchase Property or
services for the purpose of assuring the ability of the primary obligor to
perform a primary obligation, or (v) otherwise to assure or hold harmless the
holder of any primary obligation against loss in respect thereof.  The amount of
any Contingent Obligation shall be deemed to be the stated or determinable
amount of the primary obligation (or, if less, the maximum amount for which such
Person may be liable under the instrument evidencing the Contingent Obligation)
or, if not stated or determinable, the maximum reasonably anticipated liability
with respect thereto.
 
Continuing Director:  with respect to any Person as of any date of
determination, any member of the board of directors of such Person, who (a) was
a member of such board of directors on the date of this Agreement, or (b) was
nominated for election or elected to such board of directors with the
recommendation or approval of a majority of the Continuing Directors who were
members of such board at the time of such nomination or election.
 
CWA:  the Clean Water Act (33 U.S.C. §§ 1251 et seq.).
 
Debt:  as applied to any Person, without duplication, (a) all items that would
be included as liabilities on a balance sheet in accordance with GAAP, including
Capital Leases, but excluding trade payables incurred and being paid in the
Ordinary Course of Business; (b) all Contingent Obligations; (c) all
reimbursement obligations in connection with letters of credit issued for the
account of such Person; and (d) in the case of a Borrower, the Obligations.  The
Debt of a Person shall include any recourse Debt of any partnership in which
such Person is a general partner or joint venturer.
 
Default:  an event or condition that, with the lapse of time or giving of
notice, would constitute an Event of Default.
 
 
7

--------------------------------------------------------------------------------

 
 
Default Rate:  for any Obligation (including, to the extent permitted by law,
interest not paid when due), 2% plus the interest rate otherwise applicable
thereto.
 
Defaulting Lender:  any Lender that (a) fails to make any payment or provide
funds to Agent or any Borrower as required hereunder or fails to perform its
obligations under any Loan Document, and such failure is not cured within one
Business Day, or (b) is the subject of any Insolvency Proceeding.
 
Deposit Account Control Agreements:  the Deposit Account control agreements to
be executed by each institution maintaining a Deposit Account for a Borrower, in
favor of Agent, for the benefit of Secured Parties, as security for the
Obligations.
 
Distribution:  any declaration or payment of a distribution, interest or
dividend on any Equity Interest (other than payment-in-kind); any distribution,
advance or repayment of Debt to a holder of Equity Interests; or any purchase,
redemption, or other acquisition or retirement for value of any Equity Interest.
 
Dollars:  lawful money of the United States.
 
Domestic Subsidiary:  any Subsidiary that is not a Foreign Subsidiary.
 
Dominion Account:  a special account established by Borrowers at Bank of America
or another bank reasonably acceptable to Agent, over which, during any Trigger
Period, Agent has exclusive control for withdrawal purposes.
 
EBITDA:  Consolidated Net Income for Guarantor and its Subsidiaries calculated
before interest expense, provision for income taxes, depreciation and
amortization expense (in each case, to the extent included in determining net
income).
 
Eligible Account:  an Account owing to a Borrower that arises in the Ordinary
Course of Business from the sale of goods or rendition of services, is payable
in Dollars and is deemed by Agent, in its reasonable credit judgment, to be an
Eligible Account.  Without limiting the foregoing, no Account shall be an
Eligible Account if (a) it is unpaid for more than 90 days after the original
invoice date; (b) 25% or more of the Accounts owing by the Account Debtor are
not Eligible Accounts under the foregoing clause; (c) when aggregated with other
Accounts owing by the Account Debtor, it exceeds 20% of the aggregate Eligible
Accounts (or such higher percentage as Agent may establish for the Account
Debtor from time to time); (d) it does not conform with a covenant or
representation herein; (e) it is owing by a creditor or supplier, or is
otherwise subject to a potential offset, counterclaim, dispute, deduction,
discount, recoupment, reserve, defense, chargeback, credit or allowance (but
ineligibility shall be limited to the amount thereof); (f) an Insolvency
Proceeding has been commenced by or against the Account Debtor; or the Account
Debtor has failed, has suspended or ceased doing business, is liquidating,
dissolving or winding up its affairs, or is not Solvent; or Borrowers are not
able to bring suit or enforce remedies against the Account Debtor through
judicial process; (g) the Account Debtor is organized or has its principal
offices or assets outside the United States or Canada; (h) it is owing by a
Government Authority, unless the Account Debtor is the United States or any
department, agency or instrumentality thereof and the Account has been assigned
to Agent in compliance with the Assignment of Claims Act; (i) it is not subject
to a duly perfected, first priority Lien in favor of Agent, or is subject to any
other Lien; (j) the goods giving rise to it have not been delivered to and
accepted by the Account Debtor, the services giving rise to it have not been
accepted by the Account Debtor, or it otherwise does not represent a final sale;
(k) it is evidenced by Chattel Paper or an Instrument of any kind, or has been
reduced to judgment; (l) its payment has been extended, the Account Debtor has
made a partial payment, or it arises from a sale on a cash-on-delivery basis;
(m) it arises from a sale to an Affiliate, from a sale on a bill-and-hold,
guaranteed sale, sale-or-return, sale-on-approval, consignment, or other
repurchase or return basis, or from a sale to a Person for personal, family or
household purposes; (n) it represents a progress billing or retainage, or
relates to services for which a performance, surety or completion bond or
similar assurance has been issued; or (o) it includes a billing for interest,
fees or late charges, but ineligibility shall be limited to the extent
thereof.  In calculating delinquent portions of Accounts under clauses (a) and
(b), credit balances more than 90 days old will be excluded.
 
 
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Eligible Assignee:  a Person that is (a) a Lender (other than a Defaulting
Lender), U.S.-based Affiliate of a Lender (other than a Defaulting Lender) or
Approved Fund; (b) any other financial institution approved by Agent and
Borrower Agent (which approval by Borrower Agent shall not be unreasonably
withheld or delayed, and shall be deemed given if no objection is made within
two Business Days after notice of the proposed assignment), that is organized
under the laws of the United States or any state or district thereof, has total
assets in excess of $5 billion, extends asset-based lending facilities in its
ordinary course of business and whose becoming an assignee would not constitute
a prohibited transaction under Section 4975 of the Code or any other Applicable
Law; and (c) during any Event of Default, any Person acceptable to Agent in its
discretion.
 
Eligible In-Transit Inventory:  Inventory owned by a Borrower that would be
Eligible Inventory if it were not subject to a Document and in transit from a
foreign location to a location of the Borrower within the United States, and
that Agent, in its reasonable credit judgment, deems to be Eligible In-Transit
Inventory.  Without limiting the foregoing, no Inventory shall be Eligible
In-Transit Inventory unless it (a) is subject to a negotiable Document showing
Agent (or, with the consent of Agent, the applicable Borrower) as consignee,
which Document is in the possession of Agent or such other Person as Agent shall
approve; (b) is fully insured in a manner satisfactory to Agent; (c) has been
identified to the applicable sales contract and title has passed to the
Borrower; (d) is not sold by a vendor that has a right to reclaim, divert
shipment of, repossess, stop delivery, claim any reservation of title or
otherwise assert Lien rights against the Inventory, or with respect to whom any
Borrower is in default of any obligations; (e) is subject to purchase orders and
other sale documentation satisfactory to Agent; (f) is shipped by a common
carrier that is not affiliated with the vendor; and (g) is being handled by a
customs broker, freight-forwarder or other handler that has delivered a Lien
Waiver.
 
 
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Eligible Inventory:  Inventory owned by a Borrower that Agent, in its reasonable
credit judgment, deems to be Eligible Inventory.  Without limiting the
foregoing, no Inventory shall be Eligible Inventory unless it (a) is finished
goods or raw materials, and not work-in-process, packaging or shipping
materials, labels, samples, display items, bags, replacement parts or
manufacturing supplies; (b) is not held on consignment, nor subject to any
deposit or downpayment; (c) is in new and saleable condition and is not damaged,
defective, shopworn or otherwise unfit for sale; (d) is not slow-moving,
obsolete or unmerchantable, and does not constitute returned or repossessed
goods; (e) meets all standards imposed by any Governmental Authority, and does
not constitute hazardous materials under any Environmental Law; (f) conforms
with the covenants and representations herein; (g) is subject to Agent’s duly
perfected, first priority Lien, and no other Lien; (h) is within the continental
United States or Canada, is not in transit except between locations of
Borrowers, and is not consigned to any Person; (i) is not subject to any
warehouse receipt or negotiable Document; (j) is not subject to any License or
other arrangement that restricts such Borrower’s or Agent’s right to dispose of
such Inventory, unless Agent has received an appropriate Lien Waiver; and (k) is
not located on leased premises or in the possession of a warehouseman,
processor, repairman, mechanic, shipper, freight forwarder or other Person,
unless the lessor or such Person has delivered a Lien Waiver or an appropriate
Rent and Charges Reserve has been established.
 
Enforcement Action:  any action to enforce any Obligations or Loan Documents or
to realize upon any Collateral (whether by judicial action, self-help,
notification of Account Debtors, exercise of setoff or recoupment, or
otherwise).
 
Environmental Laws:  all Applicable Laws (including all programs, permits and
guidance promulgated by regulatory agencies), relating to public health (but
excluding occupational safety and health, to the extent regulated by OSHA) or
the protection or pollution of the environment, including CERCLA, RCRA and CWA.
 
Environmental Notice:  a notice (whether written or oral) from any Governmental
Authority or other Person of any possible noncompliance with, investigation of a
possible violation of, litigation relating to, or potential fine or liability
under any Environmental Law, or with respect to any Environmental Release,
environmental pollution or hazardous materials, including any complaint,
summons, citation, order, claim, demand or request for correction, remediation
or otherwise.
 
Environmental Release:  a release as defined in CERCLA or under any other
Environmental Law.
 
Equity Interest:  the interest of any (a) shareholder in a corporation;
(b) partner in a partnership (whether general, limited, limited liability or
joint venture); (c) member in a limited liability company; or (d) other Person
having any other form of equity security or ownership interest.
 
ERISA:  the Employee Retirement Income Security Act of 1974.
 
 
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ERISA Affiliate:  any trade or business (whether or not incorporated) under
common control with an Obligor within the meaning of Section 414(b) or (c) of
the Code (and Sections 414(m) and (o) of the Code for purposes of provisions
relating to Section 412 of the Code).
 
ERISA Event:  (a) a Reportable Event with respect to a Pension Plan; (b) a
withdrawal by any Obligor or ERISA Affiliate from a Pension Plan subject to
Section 4063 of ERISA during a plan year in which it was a substantial employer
(as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is
treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or
partial withdrawal by any Obligor or ERISA Affiliate from a Multiemployer Plan
or notification that a Multiemployer Plan is in reorganization; (d) the filing
of a notice of intent to terminate, the treatment of a Plan amendment as a
termination under Section 4041 or 4041A of ERISA, or the commencement of
proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan;
(e) any Obligor or ERISA Affiliate fails to meet any funding obligations with
respect to any Pension Plan or Multiemployer Plan, or requests a minimum funding
waiver; (f) an event or condition which constitutes grounds under Section 4042
of ERISA for the termination of, or the appointment of a trustee to administer,
any Pension Plan or Multiemployer Plan; or (g) the imposition of any liability
under Title IV of ERISA, other than for PBGC premiums due but not delinquent
under Section 4007 of ERISA, upon any Obligor or ERISA Affiliate.
 
Event of Default:  as defined in Section 11.1.
 
Exchange Act:  the Securities and Exchange Act of 1934, as amended from time to
time.
 
Excluded Tax:  with respect to Agent or any Lender or any other recipient of a
payment to be made by or on account of any Obligation, (a) taxes imposed on or
measured by its overall net income (however denominated), and franchise taxes
imposed on it (in lieu of net income taxes), by the jurisdiction (or any
political subdivision thereof) under the laws of which such recipient is
organized or in which its principal office is located or, in the case of a
Lender, in which its applicable lending office is located; or (b) any branch
profits taxes imposed by the United States or any similar tax imposed by any
other jurisdiction in which any Borrower is located.
 
Extraordinary Expenses:  all costs, expenses or advances that Agent may incur
during a Default or Event of Default, or during the pendency of an Insolvency
Proceeding of an Obligor, including those relating to (a) any audit, inspection,
repossession, storage, repair, appraisal, insurance, manufacture, preparation or
advertising for sale, sale, collection, or other preservation of or realization
upon any Collateral; (b) any action, arbitration or other proceeding (whether
instituted by or against Agent, any Lender, any Obligor, any representative of
creditors of an Obligor or any other Person) in any way relating to any
Collateral (including the validity, perfection, priority or avoidability of
Agent’s Liens with respect to any Collateral), Loan Documents, Letters of Credit
or Obligations, including any lender liability or other Claims; (c) the
exercise, protection or enforcement of any rights or remedies of Agent in, or
the monitoring of, any Insolvency Proceeding; (d) settlement or satisfaction of
any taxes, charges or Liens with respect to any Collateral; (e) any Enforcement
Action; (f) negotiation and documentation of any modification, waiver, workout,
restructuring or forbearance with respect to any Loan Documents or Obligations;
and (g) Protective Advances.  Such costs, expenses and advances include transfer
fees, Other Taxes, storage fees, insurance costs, permit fees, utility
reservation and standby fees, legal fees, appraisal fees, brokers’ fees and
commissions, auctioneers’ fees and commissions, accountants’ fees, environmental
study fees, wages and salaries paid to employees of any Obligor or independent
contractors in liquidating any Collateral, and travel expenses.
 
 
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Federal Funds Rate:  (a) the weighted average of interest rates on overnight
federal funds transactions with members of the Federal Reserve System arranged
by federal funds brokers on the applicable Business Day (or on the preceding
Business Day, if the applicable day is not a Business Day), as published by the
Federal Reserve Bank of New York on the next Business Day; or (b) if no such
rate is published on the next Business Day, the average rate (rounded up, if
necessary, to the nearest 1/8 of 1%) charged to Agent on the applicable day on
such transactions, as determined by Agent.
 
Fee Letter:  the fee letter agreement between Agent and Borrower Agent.
 
Fiscal Quarter:  each period of three months, commencing on the first day of a
Fiscal Year.
 
Fiscal Year:  the fiscal year of Borrowers and Subsidiaries for accounting and
tax purposes, ending on December 31 of each year.
 
Fixed Charge Coverage Ratio:   with respect to any period of determination, the
ratio of (a) the remainder of EBITDA for such period less cash taxes paid within
such period, less non-financed Capital Expenditures to (b) Fixed Charges.
 
Fixed Charges:  for any period of determination, the sum of (a) scheduled
principal payments on Borrowed Money (including the principal portion of
scheduled payments of Capital Lease Obligations), (b) Interest Expense included
in the determination of Consolidated Net Income, but excluding any interest paid
in kind, with respect to Borrowed Money and (c) Distributions paid in cash
within such period.
 
FLSA:  the Fair Labor Standards Act of 1938.
 
Foreign Lender:  any Lender that is organized under the laws of a jurisdiction
other than the laws of the United States, or any state or district thereof.
 
Foreign Plan:  any employee benefit plan or arrangement (a) maintained or
contributed to by any Obligor or Subsidiary that is not subject to the laws of
the United States; or (b) mandated by a government other than the United States
for employees of any Obligor or Subsidiary.
 
Foreign Subsidiary:  a Subsidiary that is a “controlled foreign corporation”
under Section 957 of the Code, such that a guaranty by such Subsidiary of the
Obligations or a Lien on the assets of such Subsidiary to secure the Obligations
would result in material tax liability to Borrowers.
 
 
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Full Payment:  with respect to any Obligations, (a) the full and indefeasible
cash payment thereof, including any interest, fees and other charges accruing
during an Insolvency Proceeding (whether or not allowed in the proceeding);
(b) if such Obligations are LC Obligations or inchoate or contingent in nature,
Cash Collateralization thereof (or delivery of a standby letter of credit
acceptable to Agent in its discretion, in the amount of required Cash
Collateral); and (c) a release of any Claims of Obligors against Agent, Lenders
and Issuing Bank arising on or before the payment date.  No Loans shall be
deemed to have been paid in full until all Commitments related to such Loans
have expired or been terminated.
 
GAAP:  generally accepted accounting principles in effect in the United States
from time to time.
 
Governmental Approvals:  all authorizations, consents, approvals, licenses and
exemptions of, registrations and filings with, and required reports to, all
Governmental Authorities.
 
Governmental Authority:  any federal, state, municipal, foreign or other
governmental department, agency, commission, board, bureau, court, tribunal,
instrumentality, political subdivision, or other entity or officer exercising
executive, legislative, judicial, regulatory or administrative functions for or
pertaining to any government or court, in each case whether associated with the
United States, a state, district or territory thereof, or a foreign entity or
government.
 
Guarantor Payment:  as defined in Section 5.11.3.
 
Guarantor:  Houston Wire & Cable Company, a Delaware corporation.
 
Guaranty:  the Amended and Restated Continuing Guaranty Agreement which is to be
executed by Guarantor in form and substance satisfactory to Agent.
 
Hedging Agreement:  an agreement relating to any swap, cap, floor, collar,
option, forward, cross right or obligation, or combination thereof or similar
transaction, with respect to interest rate, foreign exchange, currency,
commodity, credit or equity risk.
 
Indemnified Taxes:  Taxes other than Excluded Taxes.
 
Indemnitees:  Agent Indemnitees, Lender Indemnitees, Issuing Bank Indemnitees
and Bank of America Indemnitees.
 
Insolvency Proceeding:  any case or proceeding commenced by or against a Person
under any state, federal or foreign law for, or any agreement of such Person to,
(a) the entry of an order for relief under the Bankruptcy Code, or any other
insolvency, debtor relief or debt adjustment law; (b) the appointment of a
receiver, trustee, liquidator, administrator, conservator or other custodian for
such Person or any part of its Property; or (c) an assignment or trust mortgage
for the benefit of creditors.
 
 
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Intellectual Property:  all intellectual and similar Property of a Person,
including inventions, designs, patents, copyrights, trademarks, service marks,
trade names, trade secrets, confidential or proprietary information, customer
lists, know-how, software and databases; all embodiments or fixations thereof
and all related documentation, applications, registrations and franchises; all
licenses or other rights to use any of the foregoing; and all books and records
relating to the foregoing.
 
Intellectual Property Claim:  any claim or assertion (whether in writing, by
suit or otherwise) that a Borrower’s or Subsidiary’s ownership, use, marketing,
sale or distribution of any Inventory, Equipment, Intellectual Property or other
Property violates another Person’s Intellectual Property.
 
Interest Expense:  with respect to any fiscal period, the interest expense
incurred for such period as determined in accordance with GAAP.
 
Interest Period:  as defined in Section 3.1.3.
 
Inventory:  as defined in the UCC, including all goods intended for sale, lease,
display or demonstration; all work in process; and all raw materials, and other
materials and supplies of any kind that are or could be used in connection with
the manufacture, printing, packing, shipping, advertising, sale, lease or
furnishing of such goods, or otherwise used or consumed in a Borrower’s business
(but excluding Equipment).
 
Inventory Formula Amount:  the sum of (x) the lesser of (i) 65% of the Value of
Eligible Inventory; or (ii) 85% of the NOLV Percentage of the Value of Eligible
Inventory, plus (y) the lesser of (i) 65% of the Value of Eligible In-Transit
Inventory or (ii) 85% of the NOLV Percentage of the Value of Eligible In-Transit
Inventory.
 
Inventory Reserve:  reserves established by Agent to reflect factors that may
negatively impact the Value of Inventory, including change in salability,
obsolescence, seasonality, theft, shrinkage, imbalance, change in composition or
mix, markdowns and vendor chargebacks.
 
Investment:  any acquisition of all or substantially all assets of a Person; any
acquisition of record or beneficial ownership of any Equity Interests of a
Person; or any advance or capital contribution to or other investment in a
Person.
 
IRS:  the United States Internal Revenue Service.
 
Issuing Bank:  Bank of America or an Affiliate of Bank of America.
 
Issuing Bank Indemnitees:  Issuing Bank and its officers, directors, employees,
Affiliates, agents and attorneys.
 
LC Application:  an application by Borrower Agent to Issuing Bank for issuance
of a Letter of Credit, in form and substance satisfactory to Issuing Bank.
 
 
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LC Conditions:  the following conditions necessary for issuance of a Letter of
Credit:  (a) each of the conditions set forth in Section 6; (b) after giving
effect to such issuance, total LC Obligations do not exceed the Letter of Credit
Subline, no Overadvance exists and, if no Revolver Loans are outstanding, the LC
Obligations do not exceed the Borrowing Base (without giving effect to the LC
Reserve for purposes of this calculation); (c) the expiration date of such
Letter of Credit is (i) no more than 365 days from issuance, in the case of
standby Letters of Credit, (ii) no more than 120 days from issuance, in the case
of documentary Letters of Credit, and (iii) at least 20 Business Days prior to
the Revolver Termination Date; (d) the Letter of Credit and payments thereunder
are denominated in Dollars; and (e) the purpose and form of the proposed Letter
of Credit is satisfactory to Agent and Issuing Bank in their reasonable
discretion.
 
LC Documents:  all documents, instruments and agreements (including LC Requests
and LC Applications) delivered by Borrowers or any other Person to Issuing Bank
or Agent in connection with issuance, amendment or renewal of, or payment under,
any Letter of Credit.
 
LC Obligations:  the sum (without duplication) of (a) all amounts owing by
Borrowers for any drawings under Letters of Credit; (b) the stated amount of all
outstanding Letters of Credit; and (c) all fees and other amounts owing with
respect to Letters of Credit.
 
LC Request:  a request for issuance of a Letter of Credit, to be provided by
Borrower Agent to Issuing Bank, in form satisfactory to Agent and Issuing Bank.
 
LC Reserve:  the aggregate of all LC Obligations, other than (a) those that have
been Cash Collateralized; and (b) if no Default or Event of Default exists,
those constituting charges owing to Agent.
 
Lender Indemnitees:  Lenders and their officers, directors, employees,
Affiliates, agents and attorneys.
 
Lenders:  as defined in the preamble to this Agreement, including Agent in its
capacity as a provider of Swingline Loans and any other Person who hereafter
becomes a “Lender” pursuant to an Assignment and Acceptance.
 
Lending Office:  the office designated as such by the applicable Lender at the
time it becomes party to this Agreement or thereafter by notice to Agent and
Borrower Agent.
 
Letter of Credit:  any standby or documentary letter of credit issued by Issuing
Bank for the account of a Borrower, or any indemnity, guarantee, exposure
transmittal memorandum or similar form of credit support issued by Agent or
Issuing Bank for the benefit of a Borrower.
 
Letter of Credit Subline:  $10,000,000.
 
 
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LIBOR:  for any Interest Period with respect to a LIBOR Loan, the per annum rate
of interest (rounded up, if necessary, to the nearest 1/8th of 1%), determined
by Agent at approximately 11:00 a.m. (London time) two Business Days prior to
commencement of such Interest Period, for a term comparable to such Interest
Period, equal to (a) the British Bankers Association LIBOR Rate (“BBA LIBOR”),
as published by Reuters (or other commercially available source designated by
Lender); or (b) if BBA LIBOR is not available for any reason, the interest rate
at which Dollar deposits in the approximate amount of the LIBOR Loan would be
offered by Agent’s London branch to major banks in the London interbank
Eurodollar market.  If the Board of Governors imposes a Reserve Percentage with
respect to LIBOR deposits, then LIBOR shall be the foregoing rate, divided by 1
minus the Reserve Percentage.
 
LIBOR Loan:  each set of LIBOR Revolver Loans having a common length and
commencement of Interest Period.
 
LIBOR Revolver Loan:  a Revolver Loan that bears interest based on LIBOR.
 
License:  any license or agreement under which an Obligor is authorized to use
Intellectual Property in connection with any manufacture, marketing,
distribution or disposition of Collateral, any use of Property or any other
conduct of its business.
 
Licensor:  any Person from whom an Obligor obtains the right to use any
Intellectual Property.
 
Lien:  any Person’s interest in Property securing an obligation owed to, or a
claim by, such Person, whether such interest is based on common law, statute or
contract, including liens, security interests, pledges, hypothecations,
statutory trusts, reservations, exceptions, encroachments, easements,
rights-of-way, covenants, conditions, restrictions, leases, and other title
exceptions and encumbrances affecting Property.
 
Lien Waiver:  an agreement, in form and substance satisfactory to Agent, by
which (a) for any material Collateral located on leased premises, the lessor
waives or subordinates any Lien it may have on the Collateral, and agrees to
permit Agent to enter upon the premises and remove the Collateral or to use the
premises to store or dispose of the Collateral; (b) for any Collateral held by a
warehouseman, processor, shipper, customs broker or freight forwarder, such
Person waives or subordinates any Lien it may have on the Collateral, agrees to
hold any Documents in its possession relating to the Collateral as agent for
Agent, and agrees to deliver the Collateral to Agent upon request; (c) for any
Collateral held by a repairman, mechanic or bailee, such Person acknowledges
Agent’s Lien, waives or subordinates any Lien it may have on the Collateral, and
agrees to deliver the Collateral to Agent upon request; and (d) for any
Collateral subject to a Licensor’s Intellectual Property rights, the Licensor
grants to Agent the right, vis-à-vis such Licensor, to enforce Agent’s Liens
with respect to the Collateral, including the right to dispose of it with the
benefit of the Intellectual Property, whether or not a default exists under any
applicable License.
 
Loan:  a Revolver Loan.
 
 
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Loan Account:  the loan account established by each Lender on its books pursuant
to Section 5.8.
 
Loan Documents:  this Agreement, Other Agreements and Security Documents.
 
Loan Year:  each 12 month period commencing on the Closing Date and on each
anniversary of the Closing Date.
 
Margin Stock:  as defined in Regulation U of the Board of Governors.
 
Material Adverse Effect:  the effect of any event or circumstance that, taken
alone or in conjunction with other events or circumstances, (a) has or could be
reasonably expected to have a material adverse effect on the business,
operations, Properties, or financial condition of any Obligor, on the value of
any material Collateral, on the enforceability of any Loan Documents, or on the
validity or priority of Agent’s Liens on any Collateral; (b) impairs the ability
of any Obligor to perform any obligations under the Loan Documents, including
repayment of any Obligations; or (c) otherwise impairs the ability of Agent or
any Lender to enforce or collect any Obligations or to realize upon any
Collateral.
 
Material Contract:  any agreement or arrangement to which a Borrower or
Subsidiary is party (other than the Loan Documents) (a) that is deemed to be a
material contract under any securities law applicable to such Obligor, including
the Securities Act of 1933; (b) for which breach, termination, nonperformance or
failure to renew could reasonably be expected to have a Material Adverse Effect;
or (c) that relates to Subordinated Debt, or Debt in an aggregate amount of
$150,000 or more.
 
Moody’s:  Moody’s Investors Service, Inc., and its successors.
 
Multiemployer Plan:  any employee benefit plan of the type described in
Section 4001(a)(3) of ERISA, to which any Obligor or ERISA Affiliate makes or is
obligated to make contributions, or during the preceding five plan years, has
made or been obligated to make contributions.
 
Net Proceeds:  with respect to an Asset Disposition, proceeds (including, when
received, any deferred or escrowed payments) received by a Borrower or
Subsidiary in cash from such disposition, net of (a) reasonable and customary
costs and expenses actually incurred in connection therewith, including legal
fees and sales commissions; (b) amounts applied to repayment of Debt secured by
a Permitted Lien senior to Agent’s Liens on Collateral sold; (c) transfer or
similar taxes; and (d) reserves for indemnities, until such reserves are no
longer needed.
 
NOLV Percentage:  the net orderly liquidation value of Inventory, expressed as a
percentage, expected to be realized at an orderly, negotiated sale held within a
reasonable period of time, net of all liquidation expenses, as determined from
the most recent appraisal of Borrowers’ Inventory performed by an appraiser and
on terms satisfactory to Agent.
 
 
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Notes:  each Revolver Note or other promissory note executed by a Borrower to
evidence any Obligations.
 
Notice of Borrowing:  a Notice of Borrowing to be provided by Borrower Agent to
request a Borrowing of Revolver Loans, in form satisfactory to Agent.
 
Notice of Conversion/Continuation:  a Notice of Conversion/Continuation to be
provided by Borrower Agent to request a conversion or continuation of any Loans
as LIBOR Loans, in form satisfactory to Agent.
 
Obligations:  all (a) principal of and premium, if any, on the Loans, (b) LC
Obligations and other obligations of Obligors with respect to Letters of Credit,
(c) interest, expenses, fees and other sums payable by Obligors under the Loan
Documents, (d) obligations of Obligors under any indemnity for Claims,
(e) Extraordinary Expenses, (f) Bank Product Debt, and (g) other Debts,
obligations and liabilities of any kind owing by Obligors pursuant to the Loan
Documents, whether now existing or hereafter arising, whether evidenced by a
note or other writing, whether allowed in any Insolvency Proceeding, whether
arising from an extension of credit, issuance of a letter of credit, acceptance,
loan, guaranty, indemnification or otherwise, and whether direct or indirect,
absolute or contingent, due or to become due, primary or secondary, or joint or
several.
 
Obligor:  each Borrower, Guarantor, or other Person that is liable for payment
of any Obligations or that has granted a Lien in favor of Agent on its assets to
secure any Obligations.
 
Ordinary Course of Business:  the ordinary course of business of any Borrower or
Subsidiary, consistent with past practices and undertaken in good faith.
 
Organic Documents:  with respect to any Person, its charter, certificate or
articles of incorporation, bylaws, articles of organization, limited liability
agreement, operating agreement, members agreement, shareholders agreement,
partnership agreement, certificate of partnership, certificate of formation,
voting trust agreement, or similar agreement or instrument governing the
formation or operation of such Person.
 
OSHA:  the Occupational Safety and Hazard Act of 1970.
 
Other Agreement:  each Note; LC Document; Fee Letter; Lien Waiver; Borrowing
Base Certificate, Compliance Certificate, financial statement or report
delivered hereunder; or other document, instrument or agreement (other than this
Agreement or a Security Document) now or hereafter delivered by an Obligor or
other Person to Agent or a Lender in connection with any transactions relating
hereto.
 
Other Taxes:  all present or future stamp or documentary taxes or any other
excise or property taxes, charges or similar levies arising from any payment
made under any Loan Document or from the execution, delivery or enforcement of,
or otherwise with respect to, any Loan Document.
 
 
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Overadvance:  as defined in Section 2.1.4.
 
Overadvance Loan:  a Base Rate Revolver Loan made when an Overadvance exists or
is caused by the funding thereof.
 
Participant:  as defined in Section 13.2.
 
Patent Assignment:  each patent collateral assignment agreement pursuant to
which an Obligor assigns to Agent, for the benefit of Secured Parties, such
Obligor’s interests in its patents, as security for the Obligations.
 
Patriot Act:  the Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L.
No. 107-56, 115 Stat. 272 (2001).
 
Payment Item:  each check, draft or other item of payment payable to a Borrower,
including those constituting proceeds of any Collateral.
 
PBGC:  the Pension Benefit Guaranty Corporation.
 
Pension Plan:  any employee pension benefit plan (as such term is defined in
Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to
Title IV of ERISA and is sponsored or maintained by any Obligor or ERISA
Affiliate or to which the Obligor or ERISA Affiliate contributes or has an
obligation to contribute, or in the case of a multiple employer or other plan
described in Section 4064(a) of ERISA, has made contributions at any time during
the preceding five plan years.
 
Participating Lender:  each Person who shall be granted the right by any Lender
to participate in any of the Loans described in the Agreement and who shall have
entered into a participation agreement in form and substance satisfactory to
such Lender.
 
Permitted Acquisition(s):  means any acquisition(s) by a Borrower of all or
substantially all of the assets or outstanding capital stock or other ownership
interests of a Person, or an operating division of a Person or a merger of a
Person with a Borrower, which in either case, constitutes a business unit so
long as each of the following conditions precedent (collectively, the
“Acquisition Conditions”) have been fulfilled to the reasonable satisfaction of
Agent:  (i) no Default or Event of Default shall have occurred and be continuing
at the time of such acquisition or would occur as a result thereof; (ii) the
business unit being acquired (the “Target”) is primarily located in the United
States of America and is in the same or related line of business as Borrower
Agent; (iii) immediately after giving effect to any such Acquisition, Borrowers
shall be in compliance with Section 10.1.9; (iv) the Fixed Charge Coverage Ratio
shall be greater than or equal to 1.10 to 1 (x) for the twelve-month period
immediately preceding the making of such acquisition, and (y)  on a pro forma
basis for the twelve-month period following the making of such acquisition,
after giving effect to the making of such acquisition, such pro forma
calculation to be demonstrated to Agent and to be reasonably acceptable to Agent
based on projections prepared using reasonable assumptions by Borrower;
(v) Availability was or will not be less than $15,000,000 at any time within the
90 days immediately prior to the date of the consummation of the proposed
Acquisition or after giving effect to such Acquisition; (vi) all conditions
precedent to the consummation of the transactions under such acquisition shall
have been satisfied in all material respects; and (vii) Agent shall have
received a copy of the purchase agreement with respect to such Permitted
Acquisition, certified as true and correct by Borrower Agent and such other
agreements, documents, and instruments as Agent may reasonably request.
 
 
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Permitted Asset Disposition:  as long as no Default or Event of Default exists
and, during a Trigger Period, all Net Proceeds are remitted to Agent, an Asset
Disposition that is (a) a sale of Inventory in the Ordinary Course of Business;
(b) a disposition of Equipment that, in the aggregate during any 12 month
period, has a fair market or book value (whichever is more) of $100,000 or less;
(c) a disposition of Inventory that is obsolete, unmerchantable or otherwise
unsalable in the Ordinary Course of Business; (d) termination of a lease of real
or personal Property that is not necessary for the Ordinary Course of Business,
could not reasonably be expected to have a Material Adverse Effect and does not
result from an Obligor’s default; or (e) approved in writing by Agent and
Required Lenders.
 
Permitted Contingent Obligations:  Contingent Obligations (a) arising from
endorsements of Payment Items for collection or deposit in the Ordinary Course
of Business; (b) arising from Hedging Agreements permitted hereunder;
(c) existing on the Closing Date, and any extension or renewal thereof that does
not increase the amount of such Contingent Obligation when extended or renewed;
(d) incurred in the Ordinary Course of Business with respect to surety, appeal
or performance bonds, or other similar obligations; (e) arising from customary
indemnification obligations in favor of purchasers in connection with Permitted
Asset Dispositions; or (f) arising under the Loan Documents.
 
Permitted Lien:  as defined in Section 10.2.2.
 
Permitted Purchase Money Debt:  Purchase Money Debt of Borrowers and
Subsidiaries that is unsecured or secured only by a Purchase Money Lien, as long
as the aggregate amount does not exceed $3,000,000 at any time and its
incurrence does not violate Section 10.2.2.
 
Person:  any individual, corporation, limited liability company, partnership,
joint venture, joint stock company, land trust, business trust, unincorporated
organization, Governmental Authority or other entity.
 
Plan:  any employee benefit plan (as such term is defined in Section 3(3) of
ERISA) established by an Obligor or, with respect to any such plan that is
subject to Section 412 of the Code or Title IV of ERISA, an ERISA Affiliate.
 
 
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Prime Rate:  the rate of interest announced by Agent from time to time as its
prime rate.  Such rate is set by Agent on the basis of various factors,
including its costs and desired return, general economic conditions and other
factors, and is used as a reference point for pricing some loans, which may be
priced at, above or below such rate.  Any change in such rate announced by Agent
shall take effect at the opening of business on the day specified in the public
announcement of such change.
 
Pro Rata:  with respect to any Lender, a percentage (carried out to the ninth
decimal place) determined (a) while Revolver Commitments are outstanding, by
dividing the amount of such Lender’s Revolver Commitment by the aggregate amount
of all Revolver Commitments; and (b) at any other time, by dividing the amount
of such Lender’s Loans and LC Obligations by the aggregate amount of all
outstanding Loans and LC Obligations.
 
Properly Contested:  with respect to any obligation of an Obligor, (a) the
obligation is subject to a bona fide dispute regarding amount or the Obligor’s
liability to pay; (b) the obligation is being properly contested in good faith
by appropriate proceedings promptly instituted and diligently pursued;
(c) appropriate reserves have been established in accordance with GAAP;
(d) non-payment could not have a Material Adverse Effect, nor result in
forfeiture or sale of any assets of the Obligor; (e) no Lien is imposed on
assets of the Obligor, unless bonded and stayed to the satisfaction of Agent;
and (f) if the obligation results from entry of a judgment or other order, such
judgment or order is stayed pending appeal or other judicial review.
 
Property:  any interest in any kind of property or asset, whether real, personal
or mixed, or tangible or intangible.
 
Protective Advances:  as defined in Section 2.1.5.
 
Purchase Money Debt:  (a) Debt (other than the Obligations) for payment of any
of the purchase price of fixed assets; (b) Debt (other than the Obligations)
incurred within 10 days before or after acquisition of any fixed assets, for the
purpose of financing any of the purchase price thereof; and (c) any renewals,
extensions or refinancings (but not increases) thereof.
 
Purchase Money Lien:  a Lien that secures Purchase Money Debt, encumbering only
the fixed assets acquired with such Debt and constituting a Capital Lease or a
purchase money security interest under the UCC.
 
RCRA:  the Resource Conservation and Recovery Act (42 U.S.C. §§ 6991-6991i).
 
Real Estate:  all right, title and interest (whether as owner, lessor or lessee)
in any real Property or any buildings, structures, parking areas or other
improvements thereon.
 
Refinancing Conditions:  the following conditions for Refinancing Debt:   (a) it
is in an aggregate principal amount that does not exceed the principal amount of
the Debt being extended, renewed or refinanced; (b) it has a final maturity no
sooner than, a weighted average life no less than, and an interest rate no
greater than, the Debt being extended, renewed or refinanced; (c) it is
subordinated to the Obligations at least to the same extent as the Debt being
extended, renewed or refinanced; (d) the representations, covenants and defaults
applicable to it are no less favorable to Borrowers than those applicable to the
Debt being extended, renewed or refinanced; (e) no additional Lien is granted to
secure it; (f) no additional Person is obligated on such Debt; and (g) upon
giving effect to it, no Default or Event of Default exists.
 
 
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Refinancing Debt:  Borrowed Money that is the result of an extension, renewal or
refinancing of Debt permitted under Section 10.2.1(e) or (h).
 
Reimbursement Date:  as defined in Section 2.3.2.
 
Rent and Charges Reserve:  the aggregate of (a) all past due rent and other
amounts owing by an Obligor to any landlord, warehouseman, processor, repairman,
mechanic, shipper, freight forwarder, broker or other Person who possesses any
Collateral or could assert a Lien on any Collateral; and (b) a reserve at least
equal to three months rent and other charges that could be payable to any such
Person, unless it has executed a Lien Waiver.
 
Report:  as defined in Section 12.2.3.
 
Reportable Event:  any of the events set forth in Section 4043(c) of ERISA,
other than events for which the 30 day notice period has been waived.
 
Required Lenders:  Lenders (subject to Section 4.2) having (a) Revolver
Commitments in excess of 50% of the aggregate Revolver Commitments; and (b) if
the Revolver Commitments have terminated, Loans in excess of 50% of all
outstanding Loans; provided that in each case, if there are 2 or more Lenders
with outstanding Loans or Revolver Commitments, at least 2 Lenders shall be
required to constitute Required Lenders.
 
Reserve Percentage:  the reserve percentage (expressed as a decimal, rounded up
to the nearest 1/8th of 1%) applicable to member banks under regulations issued
from time to time by the Board of Governors for determining the maximum reserve
requirement (including any emergency, supplemental or other marginal reserve
requirement) with respect to Eurocurrency funding (currently referred to as
“Eurocurrency liabilities”).
 
Restricted Investment:  any Investment by a Borrower or Subsidiary, other than
(a) Investments in Subsidiaries to the extent existing on the Closing Date;
(b) Cash Equivalents that are subject to Agent’s Lien and control, pursuant to
documentation in form and substance satisfactory to Agent; (c) loans and
advances permitted under Section 10.2.7; and (d) Investments in Permitted
Acquisitions.
 
Restrictive Agreement:  an agreement (other than a Loan Document) that
conditions or restricts the right of any Borrower, Subsidiary or other Obligor
to incur or repay Borrowed Money, to grant Liens on any assets, to declare or
make Distributions, to modify, extend or renew any agreement evidencing Borrowed
Money, or to repay any intercompany Debt.
 
 
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Revolver Commitment:  for any Lender, its obligation to make Revolver Loans and
to participate in LC Obligations up to the maximum principal amount shown on
Schedule 1.1, or as hereafter determined pursuant to each Assignment and
Acceptance to which it is a party.  “Revolver Commitments” means the aggregate
amount of such commitments of all Lenders.
 
Revolver Loan:  a loan made pursuant to Section 2.1.1, and any Swingline Loan,
Overadvance Loan or Protective Advance.
 
Revolver Note:  a promissory note to be executed by Borrowers in favor of a
Lender in the form of Exhibit A, which shall be in the amount of such Lender’s
Revolver Commitment and shall evidence the Revolver Loans made by such Lender.
 
Revolver Termination Date:  September 30, 2016.
 
Royalties:  all royalties, fees, expense reimbursement and other amounts payable
by a Borrower under a License.
 
S&P:  Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc., and its successors.
 
Secured Parties:  Agent, Issuing Bank, Lenders and providers of Bank Products.
 
Security Documents:  the Guaranty, Patent Assignments, Trademark Security
Agreements, Deposit Account Control Agreements, and all other documents,
instruments and agreements now or hereafter securing (or given with the intent
to secure) any Obligations.
 
Senior Officer:  the chairman of the board, president, chief executive officer
or chief financial officer of a Borrower or, if the context requires, an
Obligor.
 
Settlement Report:  a report delivered by Agent to Lenders summarizing the
Revolver Loans and participations in LC Obligations outstanding as of a given
settlement date, allocated to Lenders on a Pro Rata basis in accordance with
their Revolver Commitments.
 
Solvent:  as to any Person, such Person (a) owns Property whose fair salable
value is greater than the amount required to pay all of its debts (including
contingent, subordinated, unmatured and unliquidated liabilities); (b) owns
Property whose present fair salable value (as defined below) is greater than the
probable total liabilities (including contingent, subordinated, unmatured and
unliquidated liabilities) of such Person as they become absolute and matured;
(c) is able to pay all of its debts as they mature; (d) has capital that is not
unreasonably small for its business and is sufficient to carry on its business
and transactions and all business and transactions in which it is about to
engage; (e) is not “insolvent” within the meaning of Section 101(32) of the
Bankruptcy Code; and (f) has not incurred (by way of assumption or otherwise)
any obligations or liabilities (contingent or otherwise) under any Loan
Documents, or made any conveyance in connection therewith, with actual intent to
hinder, delay or defraud either present or future creditors of such Person or
any of its Affiliates.  “Fair salable value” means the amount that could be
obtained for assets within a reasonable time, either through collection or
through sale under ordinary selling conditions by a capable and diligent seller
to an interested buyer who is willing (but under no compulsion) to purchase.
 
 
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Subordinated Debt:  Debt incurred by a Borrower that is expressly subordinate
and junior in right of payment to Full Payment of all Obligations, and is on
terms (including maturity, interest, fees, repayment, covenants and
subordination) satisfactory to Agent.
 
Subsidiary:  any entity at least 50% of whose voting securities or Equity
Interests is owned by a Borrower or any combination of Borrowers (including
indirect ownership by a Borrower through other entities in which the Borrower
directly or indirectly owns at least 50% of the voting securities or Equity
Interests).
 
Swingline Loan:  any Borrowing of Base Rate Revolver Loans funded with Agent’s
funds, until such Borrowing is settled among Lenders pursuant to Section 4.1.3.
 
Taxes:  all present or future taxes, levies, imposts, duties, deductions,
withholdings, assessments, fees or other charges imposed by any Governmental
Authority, including any interest, additions to tax or penalties applicable
thereto.
 
Trademark Security Agreement:  each trademark security agreement pursuant to
which an Obligor grants to Agent, for the benefit of Secured Parties, a Lien on
such Obligor’s interests in trademarks, as security for the Obligations.
 
Transferee:  any actual or potential Eligible Assignee, Participant or other
Person acquiring an interest in any Obligations.
 
Trigger Period:  the period (a) commencing on the day that an Event of Default
occurs, or Availability is less than $12,500,000 at any time; and (b) continuing
until, during the preceding 60 consecutive days, no Event of Default has existed
and Availability has been greater than $12,500,000 at all times; provided,
however, that Trigger Periods shall not terminate more than twice within any
Fiscal Year.
 
Type:  the character of a Loan (Base Rate Loan or LIBOR Loan).
 
UCC:  the Uniform Commercial Code as in effect in the State of Illinois or, when
the laws of any other jurisdiction govern the perfection or enforcement of any
Lien, the Uniform Commercial Code of such jurisdiction.
 
Unfunded Pension Liability:  the excess of a Pension Plan’s benefit liabilities
under Section 4001(a)(16) of ERISA, over the current value of that Pension
Plan’s assets, determined in accordance with the assumptions used for funding
the Pension Plan pursuant to Section 412 of the Code for the applicable plan
year.
 
 
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Unused Line Fee Applicable Margin:  the margin set forth below, as determined
quarterly based on the average daily balance (said average daily balance
hereinafter “Average Utilization”) of Revolver Loans and the stated amount of
outstanding Letters of Credit during said Fiscal Quarter:
 
Level
 
Average Utilization
 
Unused Line Fee
Applicable Margin
   I  
> 50% of Revolver Commitments
    0.25 %              
II
 
< 50% of Revolver Commitments
    0.30 %

Until January 1, 2012, margins shall be determined as if Level I were
applicable.  Thereafter, the margins shall be subject to increase or decrease
upon the first day of each Fiscal Quarter based on Average Utilization for the
immediately preceding Fiscal Quarter.

Upstream Payment:  a Distribution by a Subsidiary of a Borrower to such
Borrower.
 
Value:  (a) for Inventory, its value determined on the basis of the lower of
cost or market, calculated on a first-in, first out basis, and excluding any
portion of cost attributable to intercompany profit among Borrowers and their
Affiliates; and (b) for an Account, its face amount, net of any returns,
rebates, discounts (calculated on the shortest terms), credits, allowances or
Taxes (including sales, excise or other taxes) that have been or could be
claimed by the Account Debtor or any other Person.
 
1.2           Accounting Terms.  Under the Loan Documents (except as otherwise
specified herein), all accounting terms shall be interpreted, all accounting
determinations shall be made, and all financial statements shall be prepared, in
accordance with GAAP applied on a basis consistent with the most recent audited
financial statements of Borrowers delivered to Agent before the Closing Date and
using the same inventory valuation method as used in such financial statements,
except for any change required or permitted by GAAP if Borrowers’ certified
public accountants concur in such change, the change is disclosed to Agent, and
Section 10.3 is amended in a manner satisfactory to Required Lenders to take
into account the effects of the change.
 
1.3           Uniform Commercial Code.  As used herein, the following terms are
defined in accordance with the UCC in effect in the State of Illinois from time
to time:  “Chattel Paper,” “Commercial Tort Claim,” “Deposit Account,”
“Document,” “Equipment,” “General Intangibles,” “Goods,” “Instrument,”
“Investment Property,” “Letter-of-Credit Right” and “Supporting Obligation.”
 
 
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1.4           Certain Matters of Construction.  The terms “herein,” “hereof,”
“hereunder” and other words of similar import refer to this Agreement as a whole
and not to any particular section, paragraph or subdivision.  Any pronoun used
shall be deemed to cover all genders.  In the computation of periods of time
from a specified date to a later specified date, “from” means “from and
including,” and “to” and “until” each mean “to but excluding.”  The terms
“including” and “include” shall mean “including, without limitation” and, for
purposes of each Loan Document, the parties agree that the rule of ejusdem
generis shall not be applicable to limit any provision.  Section titles appear
as a matter of convenience only and shall not affect the interpretation of any
Loan Document.  All references to (a) laws or statutes include all related
rules, regulations, interpretations, amendments and successor provisions;
(b) any document, instrument or agreement include any amendments, waivers and
other modifications, extensions or renewals (to the extent permitted by the Loan
Documents); (c) any section mean, unless the context otherwise requires, a
section of this Agreement; (d) any exhibits or schedules mean, unless the
context otherwise requires, exhibits and schedules attached hereto, which are
hereby incorporated by reference; (e) any Person include successors and assigns;
(f) time of day mean time of day at Agent’s notice address under Section 14.3.1;
and (g) discretion of Agent, Issuing Bank or any Lender mean the sole and
absolute discretion of such Person exercised in good faith.  All calculations of
Value, fundings of Loans, issuances of Letters of Credit and payments of
Obligations shall be in Dollars and, unless the context otherwise requires, all
determinations (including calculations of Borrowing Base and financial
covenants) made from time to time under the Loan Documents shall be made in
light of the circumstances existing at such time.  Borrowing Base calculations
shall be consistent with historical methods of valuation and calculation, and
otherwise satisfactory to Agent (and not necessarily calculated in accordance
with GAAP).  Borrowers shall have the burden of establishing any alleged
negligence, misconduct or lack of good faith by Agent, Issuing Bank or any
Lender under any Loan Documents.  No provision of any Loan Documents shall be
construed against any party by reason of such party having, or being deemed to
have, drafted the provision.  Whenever the phrase “to the best of Borrowers’
knowledge” or words of similar import are used in any Loan Documents, it means
actual knowledge of a Senior Officer, or knowledge that a Senior Officer would
have obtained if he or she had engaged in good faith and diligent performance of
his or her duties, including reasonably specific inquiries of employees or
agents and a good faith attempt to ascertain the matter to which such phrase
relates.
 
SECTION 2.  CREDIT FACILITIES
 
2.1         Revolver Commitment.
 
2.1.1                Revolver Loans.  Each Lender agrees, severally on a Pro
Rata basis up to its Revolver Commitment, on the terms set forth herein, to make
Revolver Loans to Borrowers from time to time through the Commitment Termination
Date.  The Revolver Loans may be repaid and reborrowed as provided herein.  In
no event shall Lenders have any obligation to honor a request for a Revolver
Loan if the unpaid balance of Revolver Loans outstanding at such time (including
the requested Loan) would exceed the Borrowing Base.
 
2.1.2                Revolver Notes.  The Revolver Loans made by each Lender and
interest accruing thereon shall be evidenced by the records of Agent and such
Lender.  At the request of any Lender, Borrowers shall deliver a Revolver Note
to such Lender.

 
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2.1.3                Use of Proceeds.  The proceeds of Revolver Loans shall be
used by Borrowers solely (a) to pay fees and transaction expenses associated
with the closing of this credit facility; (b) to pay Obligations in accordance
with this Agreement; (c) for working capital and other lawful corporate purposes
of Borrowers; and (d) for Permitted Acquisitions.
 
2.1.4                Overadvances.  If the aggregate Revolver Loans exceed the
Borrowing Base (“Overadvance”) at any time, the excess amount shall be payable
by Borrowers on demand by Agent, but all such Revolver Loans shall nevertheless
constitute Obligations secured by the Collateral and entitled to all benefits of
the Loan Documents.  Unless its authority has been revoked in writing by
Required Lenders, Agent may require Lenders to honor requests for Overadvance
Loans and to forbear from requiring Borrowers to cure an Overadvance, (a) when
no Event of Default (other than an Event of Default caused by such Overadvance)
is known to Agent, as long as (i) the Overadvance does not continue for more
than 30 consecutive days (and no Overadvance may exist for at least five
consecutive days thereafter before further Overadvance Loans are required), and
(ii) the Overadvance is not known by Agent to exceed 10% of the Borrowing Base;
and (b) regardless of whether an Event of Default exists, if Agent discovers an
Overadvance not previously known by it to exist, as long as from the date of
such discovery the Overadvance (i) is not increased by more than $1,000,000, and
(ii) does not continue for more than 30 consecutive days.  In no event shall
Overadvance Loans be required that would cause the outstanding Revolver Loans
and LC Obligations to exceed the aggregate Revolver Commitments.  Any funding of
an Overadvance Loan or sufferance of an Overadvance shall not constitute a
waiver by Agent or Lenders of any Event of Default that may be caused
thereby.  In no event shall any Borrower or other Obligor be deemed a
beneficiary of this Section nor authorized to enforce any of its terms.
 
2.1.5                Protective Advances.  Agent shall be authorized, in its
discretion, at any time that any conditions in Section 6 are not satisfied, and
without regard to the aggregate Commitments, to make Base Rate Revolver Loans
(“Protective Advances”) (a) up to an amount which when aggregated with existing
Overadvances shall not exceed 10% of the Borrowing Base, if Agent deems such
Loans necessary or desirable to preserve or protect Collateral, or to enhance
the collectibility or repayment of Obligations; or (b) to pay any other amounts
chargeable to Obligors under any Loan Documents, including costs, fees and
expenses.  Each Lender shall participate in each Protective Advance on a Pro
Rata basis.  Required Lenders may at any time revoke Agent’s authority to make
further Protective Advances by written notice to Agent.  Absent such revocation,
Agent’s determination that funding of a Protective Advance is appropriate shall
be conclusive.

 
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2.1.6                Voluntary Reduction or Termination of Revolver Commitments.
 
(a)           The Revolver Commitments shall terminate on the Revolver
Termination Date, unless sooner terminated in accordance with this
Agreement.  Upon at least 90 days prior written notice to Agent at any time
after the first Loan Year, Borrowers may, at their option, terminate the
Revolver Commitments and this credit facility.  Any notice of termination given
by Borrowers shall be irrevocable.  On the termination date, Borrowers shall
make Full Payment of all Obligations.
 
(b)           Borrowers may permanently reduce the Revolver Commitments, on a
Pro Rata basis for each Lender, upon at least 90 days prior written notice to
Agent, which notice shall specify the amount of the reduction and shall be
irrevocable once given.  Each reduction shall be in a minimum amount of
$10,000,000, or an increment of $5,000,000 in excess thereof.
 
2.2         Reserved.
 
2.3         Letter of Credit Facility.
 
2.3.1                Issuance of Letters of Credit.  Issuing Bank agrees to
issue Letters of Credit from time to time until 30 days prior to the Revolver
Termination Date (or until the Commitment Termination Date, if earlier), on the
terms set forth herein, including the following:
 
(a)           Each Borrower acknowledges that Issuing Bank’s willingness to
issue any Letter of Credit is conditioned upon Issuing Bank’s receipt of a LC
Application with respect to the requested Letter of Credit, as well as such
other instruments and agreements as Issuing Bank may customarily require for
issuance of a letter of credit of similar type and amount.  Issuing Bank shall
have no obligation to issue any Letter of Credit unless (i) Issuing Bank
receives a LC Request and LC Application at least three Business Days prior to
the requested date of issuance; (ii) each LC Condition is satisfied; and (iii)
if a Defaulting Lender exists, such Defaulting Lender or Borrowers have entered
into arrangements satisfactory to Agent and Issuing Bank to eliminate any
funding risk associated with the Defaulting Lender.  If Issuing Bank receives
written notice from a Lender at least five Business Days before issuance of a
Letter of Credit that any LC Condition has not been satisfied, Issuing Bank
shall have no obligation to issue the requested Letter of Credit (or any other)
until such notice is withdrawn in writing by that Lender or until Required
Lenders have waived such condition in accordance with this Agreement.  Prior to
receipt of any such notice, Issuing Bank shall not be deemed to have knowledge
of any failure of LC Conditions.

 
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(b)           Letters of Credit may be requested by a Borrower only (i) to
support obligations of such Borrower incurred in the Ordinary Course of
Business; or (ii) for other purposes as Agent and Lenders may approve in its
reasonable discretion from time to time in writing.  The renewal or extension of
any Letter of Credit shall be treated as the issuance of a new Letter of Credit,
except that delivery of a new LC Application shall be required at the discretion
of Issuing Bank.
 
(c)           Borrowers assume all risks of the acts, omissions or misuses of
any Letter of Credit by the beneficiary.  In connection with issuance of any
Letter of Credit, none of Agent, Issuing Bank or any Lender shall be responsible
for the existence, character, quality, quantity, condition, packing, value or
delivery of any goods purported to be represented by any Documents; any
differences or variation in the character, quality, quantity, condition,
packing, value or delivery of any goods from that expressed in any Documents;
the form, validity, sufficiency, accuracy, genuineness or legal effect of any
Documents or of any endorsements thereon; the time, place, manner or order in
which shipment of goods is made; partial or incomplete shipment of, or failure
to ship, any goods referred to in a Letter of Credit or Documents; any deviation
from instructions, delay, default or fraud by any shipper or other Person in
connection with any goods, shipment or delivery; any breach of contract between
a shipper or vendor and a Borrower; errors, omissions, interruptions or delays
in transmission or delivery of any messages, by mail, cable, telegraph, telex,
telecopy, e-mail, telephone or otherwise; errors in interpretation of technical
terms; the misapplication by a beneficiary of any Letter of Credit or the
proceeds thereof; or any consequences arising from causes beyond the control of
Issuing Bank, Agent or any Lender, including any act or omission of a
Governmental Authority.  The rights and remedies of Issuing Bank under the Loan
Documents shall be cumulative.  Issuing Bank shall be fully subrogated to the
rights and remedies of each beneficiary whose claims against Borrowers are
discharged with proceeds of any Letter of Credit.
 
(d)           In connection with its administration of and enforcement of rights
or remedies under any Letters of Credit or LC Documents, Issuing Bank shall be
entitled to act, and shall be fully protected in acting, upon any certification,
documentation or communication in whatever form believed by Issuing Bank, in
good faith, to be genuine and correct and to have been signed, sent or made by a
proper Person.  Issuing Bank may consult with and employ legal counsel,
accountants and other experts to advise it concerning its obligations, rights
and remedies, and shall be entitled to act upon, and shall be fully protected in
any action taken in good faith reliance upon, any advice given by such
experts.  Issuing Bank may employ agents and attorneys-in-fact in connection
with any matter relating to Letters of Credit or LC Documents, and shall not be
liable for the negligence or misconduct of agents and attorneys-in-fact selected
with reasonable care.

 
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2.3.2                Reimbursement; Participations.
 
(a)           If Issuing Bank honors any request for payment under a Letter of
Credit, Borrowers shall pay to Issuing Bank, on the same day (“Reimbursement
Date”), the amount paid by Issuing Bank under such Letter of Credit, together
with interest at the interest rate for Base Rate Revolver Loans from the
Reimbursement Date until payment by Borrowers.  The obligation of Borrowers to
reimburse Issuing Bank for any payment made under a Letter of Credit shall be
absolute, unconditional, irrevocable, and joint and several, and shall be paid
without regard to any lack of validity or enforceability of any Letter of Credit
or the existence of any claim, setoff, defense or other right that Borrowers may
have at any time against the beneficiary.  Whether or not Borrower Agent submits
a Notice of Borrowing, Borrowers shall be deemed to have requested a Borrowing
of Base Rate Revolver Loans in an amount necessary to pay all amounts due
Issuing Bank on any Reimbursement Date and each Lender agrees to fund its Pro
Rata share of such Borrowing whether or not the Commitments have terminated, an
Overadvance exists or is created thereby, or the conditions in Section 6 are
satisfied.
 
(b)           Upon issuance of a Letter of Credit, each Lender shall be deemed
to have irrevocably and unconditionally purchased from Issuing Bank, without
recourse or warranty, an undivided Pro Rata interest and participation in all LC
Obligations relating to the Letter of Credit.  If Issuing Bank makes any payment
under a Letter of Credit and Borrowers do not reimburse such payment on the
Reimbursement Date, Agent shall promptly notify Lenders and each Lender shall
promptly (within one Business Day) and unconditionally pay to Agent, for the
benefit of Issuing Bank, the Lender’s Pro Rata share of such payment.  Upon
request by a Lender, Issuing Bank shall furnish copies of any Letters of Credit
and LC Documents in its possession at such time.
 
(c)           The obligation of each Lender to make payments to Agent for the
account of Issuing Bank in connection with Issuing Bank’s payment under a Letter
of Credit shall be absolute, unconditional and irrevocable, not subject to any
counterclaim, setoff, qualification or exception whatsoever, and shall be made
in accordance with this Agreement under all circumstances, irrespective of any
lack of validity or unenforceability of any Loan Documents; any draft,
certificate or other document presented under a Letter of Credit having been
determined to be forged, fraudulent, invalid or insufficient in any respect or
any statement therein being untrue or inaccurate in any respect; or the
existence of any setoff or defense that any Obligor may have with respect to any
Obligations.  Issuing Bank does not assume any responsibility for any failure or
delay in performance or any breach by any Borrower or other Person of any
obligations under any LC Documents.  Issuing Bank does not make to Lenders any
express or implied warranty, representation or guaranty with respect to the
Collateral, LC Documents or any Obligor.  Issuing Bank shall not be responsible
to any Lender for any recitals, statements, information, representations or
warranties contained in, or for the execution, validity, genuineness,
effectiveness or enforceability of any LC Documents; the validity, genuineness,
enforceability, collectibility, value or sufficiency of any Collateral or the
perfection of any Lien therein; or the assets, liabilities, financial condition,
results of operations, business, creditworthiness or legal status of any
Obligor.

 
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(d)           No Issuing Bank Indemnitee shall be liable to any Lender or other
Person for any action taken or omitted to be taken in connection with any LC
Documents except as a result of its actual gross negligence or willful
misconduct.  Issuing Bank shall not have any liability to any Lender if Issuing
Bank refrains from any action under any Letter of Credit or LC Documents until
it receives written instructions from Required Lenders.
 
2.3.3                Cash Collateral.  If any LC Obligations, whether or not
then due or payable, shall for any reason be outstanding at any time (a) that an
Event of Default exists, (b) that Availability is less than zero, (c) after the
Commitment Termination Date, or (d) within 20 Business Days prior to the
Revolver Termination Date, then Borrowers shall, at Issuing Bank’s or Agent’s
request, Cash Collateralize the stated amount of all outstanding Letters of
Credit and pay to Issuing Bank the amount of all other LC
Obligations.  Borrowers shall, on demand by Issuing Bank or Agent from time to
time, Cash Collateralize the LC Obligations of any Defaulting Lender.  If
Borrowers fail to provide Cash Collateral as required herein, Lenders may (and
shall upon direction of Agent) advance, as Revolver Loans, the amount of the
Cash Collateral required (whether or not the Commitments have terminated, an
Overadvance exists or the conditions in Section 6 are satisfied).
 
SECTION 3.  INTEREST, FEES AND CHARGES
 
3.1         Interest.
 
3.1.1                Rates and Payment of Interest.
 
(a)           The Obligations shall bear interest (i) if a Base Rate Loan, at
the Base Rate in effect from time to time, plus the Applicable Margin; (ii) if a
LIBOR Loan, at LIBOR for the applicable Interest Period, plus the Applicable
Margin; and (iii) if any other Obligation (including, to the extent permitted by
law, interest not paid when due), at the Base Rate in effect from time to time,
plus the Applicable Margin for Base Rate Revolver Loans.  Interest shall accrue
from the date the Loan is advanced or the Obligation is incurred or payable,
until paid by Borrowers.  If a Loan is repaid on the same day made, one day’s
interest shall accrue.

 
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(b)           During an Insolvency Proceeding with respect to any Borrower, or
during any other Event of Default if Agent or Required Lenders in their
discretion so elect, Obligations shall bear interest at the Default Rate
(whether before or after any judgment).  Each Borrower acknowledges that the
cost and expense to Agent and Lenders due to an Event of Default are difficult
to ascertain and that the Default Rate is a fair and reasonable estimate to
compensate Agent and Lenders for this.
 
(c)           Interest accrued on the Loans shall be due and payable in arrears,
(i) on the first day of each month; (ii) on any date of prepayment, with respect
to the principal amount of Loans being prepaid; and (iii) on the Commitment
Termination Date.  Interest accrued on any other Obligations shall be due and
payable as provided in the Loan Documents and, if no payment date is specified,
shall be due and payable on demand.  Notwithstanding the foregoing, interest
accrued at the Default Rate shall be due and payable on demand.
 
3.1.2                Application of LIBOR to Outstanding Loans.
 
(a)           Borrowers may on any Business Day, subject to delivery of a Notice
of Conversion/Continuation, elect to convert any portion of the Base Rate Loans
to, or to continue any LIBOR Loan at the end of its Interest Period as, a LIBOR
Loan.  During any Default or Event of Default, Agent may (and shall at the
direction of Required Lenders) declare that no Loan may be made, converted or
continued as a LIBOR Loan.
 
(b)           Whenever Borrowers desire to convert or continue Loans as LIBOR
Loans, Borrower Agent shall give Agent a Notice of Conversion/Continuation, no
later than 11:00 a.m. at least three Business Days before the requested
conversion or continuation date.  Promptly after receiving any such notice,
Agent shall notify each Lender thereof.  Each Notice of Conversion/Continuation
shall be irrevocable, and shall specify the amount of Loans to be converted or
continued, the conversion or continuation date (which shall be a Business Day),
and the duration of the Interest Period (which shall be deemed to be 30 days if
not specified).  If, upon the expiration of any Interest Period in respect of
any LIBOR Loans, Borrowers shall have failed to deliver a Notice of
Conversion/Continuation, they shall be deemed to have elected to convert such
Loans into Base Rate Loans.

 
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3.1.3                Interest Periods.  In connection with the making,
conversion or continuation of any LIBOR Loans, Borrowers shall select an
interest period (“Interest Period”) to apply, which interest period shall be
one, 30, 60, 90 or 180 days; provided, however, that:
 
(a)           the Interest Period shall commence on the date the Loan is made or
continued as, or converted into, a LIBOR Loan, and shall expire on the
numerically corresponding day in the calendar month at its end;
 
(b)           if any Interest Period commences on a day for which there is no
corresponding day in the calendar month at its end or if such corresponding day
falls after the last Business Day of such month, then the Interest Period shall
expire on the last Business Day of such month; and if any Interest Period would
expire on a day that is not a Business Day, the period shall expire on the next
Business Day; and
 
(c)           no Interest Period shall extend beyond the Revolver Termination
Date.
 
3.1.4                Interest Rate Not Ascertainable.  If Agent shall determine
that on any date for determining LIBOR, due to any circumstance affecting the
London interbank market, adequate and fair means do not exist for ascertaining
such rate on the basis provided herein, then Agent shall immediately notify
Borrowers of such determination.  Until Agent notifies Borrowers that such
circumstance no longer exists, the obligation of Lenders to make LIBOR Loans
shall be suspended, and no further Loans may be converted into or continued as
LIBOR Loans.
 
3.2         Fees.
 
3.2.1                Unused Line Fee.  Borrowers shall pay to Agent, for the Pro
Rata benefit of Lenders, a fee equal to the Unused Line Fee Applicable Margin
per annum times the amount by which the Revolver Commitments exceed the average
daily balance of Revolver Loans and stated amount of Letters of Credit during
any month.  Such fee shall be payable in arrears, on the first day of each month
and on the Commitment Termination Date.
 
3.2.2                LC Facility Fees.  Borrowers shall pay (a) to Agent, for
the Pro Rata benefit of Lenders, a fee equal to the Applicable Margin in effect
for LIBOR Revolver Loans times the average daily stated amount of Letters of
Credit, which fee shall be payable monthly in arrears, on the first day of each
month; (b) to Agent, for its own account, a fronting fee equal to 0.25% per
annum on the stated amount of each outstanding Letter of Credit, which fee shall
be payable monthly in arrears, on the first day of each month; and (c) to
Issuing Bank, for its own account, all customary charges associated with the
issuance, amending, negotiating, payment, processing, transfer and
administration of Letters of Credit, which charges shall be paid as and when
incurred.  During an Event of Default, the fee payable under clause (a) shall be
increased by 2% per annum.

 
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3.2.3                Agent Fees.  In consideration of Agent’s syndication of the
Commitments and service as Agent hereunder, Borrowers shall pay to Agent, for
its own account, the fees described in the Fee Letter.
 
3.3         Computation of Interest, Fees, Yield Protection.  All interest, as
well as fees and other charges calculated on a per annum basis, shall be
computed for the actual days elapsed, based on a year of 360 days.  Each
determination by Agent of any interest, fees or interest rate hereunder shall be
final, conclusive and binding for all purposes, absent manifest error.  All fees
shall be fully earned when due and shall not be subject to rebate, refund or
proration.  All fees payable under Section 3.2 are compensation for services and
are not, and shall not be deemed to be, interest or any other charge for the
use, forbearance or detention of money.  A certificate as to amounts payable by
Borrowers under Section 3.4, 3.6, 3.7, 3.9 or 5.9, submitted to Borrower Agent
by Agent or the affected Lender, as applicable, shall be final, conclusive and
binding for all purposes, absent manifest error, and Borrowers shall pay such
amounts to the appropriate party within 10 days following receipt of the
certificate.
 
3.4         Reimbursement Obligations. Borrowers shall reimburse Agent for all
Extraordinary Expenses.  Borrowers shall also reimburse Agent for all reasonable
legal, accounting, appraisal, consulting, and other fees, costs and expenses
incurred by it in connection with (a) negotiation and preparation of any Loan
Documents, including any amendment or other modification thereof;
(b) administration of and actions relating to any Collateral, Loan Documents and
transactions contemplated thereby, including any actions taken to perfect or
maintain priority of Agent’s Liens on any Collateral, to maintain any insurance
required hereunder or to verify Collateral; and (c) subject to the limits of
Section 10.1.1(b), each inspection, audit or appraisal with respect to any
Obligor or Collateral, whether prepared by Agent’s personnel or a third
party.  If, for any reason (including inaccurate reporting on financial
statements or a Compliance Certificate), it is determined that a higher
Applicable Margin should have applied to a period than was actually applied,
then the proper margin shall be applied retroactively and Borrowers shall
immediately pay to Agent, for the Pro Rata benefit of Lenders, an amount equal
to the difference between the amount of interest and fees that would have
accrued using the proper margin and the amount actually paid.  All amounts
payable by Borrowers under this Section shall be due on demand.
 
3.5         Illegality.  If any Lender determines that any Applicable Law has
made it unlawful, or that any Governmental Authority has asserted that it is
unlawful, for any Lender or its applicable Lending Office to make, maintain or
fund LIBOR Loans, or to determine or charge interest rates based upon LIBOR, or
any Governmental Authority has imposed material restrictions on the authority of
such Lender to purchase or sell, or to take deposits of, Dollars in the London
interbank market, then, on notice thereof by such Lender to Agent, any
obligation of such Lender to make or continue LIBOR Loans or to convert Base
Rate Loans to LIBOR Loans shall be suspended until such Lender notifies Agent
that the circumstances giving rise to such determination no longer exist.  Upon
delivery of such notice, Borrowers shall prepay or, if applicable, convert all
LIBOR Loans of such Lender to Base Rate Loans, either on the last day of the
Interest Period therefor, if such Lender may lawfully continue to maintain such
LIBOR Loans to such day, or immediately, if such Lender may not lawfully
continue to maintain such LIBOR Loans.  Upon any such prepayment or conversion,
Borrowers shall also pay accrued interest on the amount so prepaid or converted.

 
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3.6         Inability to Determine Rates.  If Required Lenders notify Agent for
any reason in connection with a request for a Borrowing of, or conversion to or
continuation of, a LIBOR Loan that (a) Dollar deposits are not being offered to
banks in the London interbank Eurodollar market for the applicable amount and
Interest Period of such Loan, (b) adequate and reasonable means do not exist for
determining LIBOR for the requested Interest Period, or (c) LIBOR for the
requested Interest Period does not adequately and fairly reflect the cost to
such Lenders of funding such Loan, then Agent will promptly so notify Borrower
Agent and each Lender.  Thereafter, the obligation of Lenders to make or
maintain LIBOR Loans shall be suspended until Agent (upon instruction by
Required Lenders) revokes such notice.  Upon receipt of such notice, Borrower
Agent may revoke any pending request for a Borrowing of, conversion to or
continuation of a LIBOR Loan or, failing that, will be deemed to have submitted
a request for a Base Rate Loan.
 
3.7         Increased Costs; Capital Adequacy.
 
3.7.1                Change in Law.  If any Change in Law shall:
 
(a)           impose modify or deem applicable any reserve, special deposit,
compulsory loan, insurance charge or similar requirement against assets of,
deposits with or for the account of, or credit extended or participated in by,
any Lender (except any reserve requirement reflected in LIBOR);
 
(b)           subject any Lender to any Tax with respect to any Loan, Loan
Document, Letter of Credit, or change the basis of taxation of payments to such
Lender in respect thereof (except for Indemnified Taxes or Other Taxes covered
by Section 5.9 and the imposition of, or any change in the rate of, any Excluded
Tax payable by such Lender); or
 
(c)           impose on any Lender or the London interbank market any other
condition, cost or expense affecting any Loan, Loan Document or Letter of
Credit;
 
and the result thereof shall be to increase the cost to such Lender of making or
maintaining any LIBOR Loan (or of maintaining its obligation to make any such
Loan), or to increase the cost to such Lender or Issuing Bank of participating
in, issuing or maintaining any Letter of Credit (or of maintaining its
obligation to participate in or to issue any Letter of Credit), or to reduce the
amount of any sum received or receivable by such Lender or Issuing Bank
hereunder (whether of principal, interest or any other amount) then, upon
request of such Lender or Issuing Bank, Borrowers will pay to such Lender or
Issuing Bank, as applicable, such additional amount or amounts as will
compensate such Lender or Issuing Bank, as applicable, for such additional costs
incurred or reduction suffered.

 
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3.7.2                Capital Adequacy.  If any Lender determines that any Change
in Law affecting such Lender or its holding company regarding capital
requirements has or would have the effect of reducing the rate of return on such
Lender’s or such holding company’s capital as a consequence of this Agreement,
Commitments, Loans or Letters of Credit to a level below that which such Lender
or such holding company could have achieved but for such Change in Law (taking
into consideration such Lender’s and such holding company’s policies with
respect to capital adequacy), then from time to time Borrowers will pay to such
Lender such additional amount or amounts as will compensate it or its holding
company for any such reduction suffered.
 
3.7.3                Compensation.  Failure or delay on the part of any Lender
to demand compensation pursuant to this Section shall not constitute a waiver of
its right to demand such compensation, but Borrowers shall not be required to
compensate a Lender for any increased costs incurred or reductions suffered more
than nine months prior to the date that a Lender notifies Borrowers Agent of the
Change in Law giving rise to such increased costs or reductions and of such
Lender’s intention to claim compensation therefor (except that, if the Change in
Law giving rise to such increased costs or reductions is retroactive, then the
nine-month period referred to above shall be extended to include the period of
retroactive effect thereof).
 
3.8         Mitigation.  If Agent or a Lender gives a notice under Section 3.5
or requests compensation under Section 3.7, or if Borrowers are required to pay
additional amounts under Section 5.9, then Agent or such Lender shall use
reasonable efforts to designate a different lending office or to assign its
rights and obligations hereunder to another of its offices, branches or
Affiliates, if, in the judgment of Agent or such Lender, such designation or
assignment (a) would eliminate the need for such notice or reduce amounts
payable or to be withheld in the future, as applicable; and (b) would not
subject Agent or such Lender to any unreimbursed cost or expense and would not
otherwise be disadvantageous to it.  Borrowers shall pay all reasonable costs
and expenses incurred by Agent or such Lender in connection with any such
designation or assignment.
 
3.9         Funding Losses.  If for any reason (other than default by a Lender)
(a) any Borrowing of, or conversion to or continuation of, a LIBOR Loan does not
occur on the date specified therefor in a Notice of Borrowing or Notice of
Conversion/Continuation (whether or not withdrawn), (b) any repayment or
conversion of a LIBOR Loan occurs on a day other than the end of its Interest
Period, or (c) Borrowers fail to repay a LIBOR Loan when required hereunder,
then Borrowers shall pay to Agent its customary administrative charge and to
each Lender all losses and expenses that it sustains as a consequence thereof,
including loss of anticipated profits and any loss or expense arising from
liquidation or redeployment of funds or from fees payable to terminate deposits
of matching funds.  Lenders shall not be required to purchase Dollar deposits in
the London interbank market or any other offshore Dollar market to fund any
LIBOR Loan, but the provisions hereof shall be deemed to apply as if each Lender
had purchased such deposits to fund its LIBOR Loans.

 
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3.10        Maximum Interest.  Notwithstanding anything to the contrary
contained in any Loan Document, the interest paid or agreed to be paid under the
Loan Documents shall not exceed the maximum rate of non-usurious interest
permitted by Applicable Law (“maximum rate”).  If Agent or any Lender shall
receive interest in an amount that exceeds the maximum rate, the excess interest
shall be applied to the principal of the Obligations or, if it exceeds such
unpaid principal, refunded to Borrowers.  In determining whether the interest
contracted for, charged or received by Agent or a Lender exceeds the maximum
rate, such Person may, to the extent permitted by Applicable Law,
(a) characterize any payment that is not principal as an expense, fee or premium
rather than interest; (b) exclude voluntary prepayments and the effects thereof;
and (c) amortize, prorate, allocate and spread in equal or unequal parts the
total amount of interest throughout the contemplated term of the Obligations
hereunder.
 
SECTION 4.  LOAN ADMINISTRATION
 
4.1         Manner of Borrowing and Funding Revolver Loans.
 
4.1.1                Notice of Borrowing.
 
(a)           Whenever Borrowers desire funding of a Borrowing of Revolver
Loans, Borrower Agent shall give Agent a Notice of Borrowing.  Such notice must
be received by Agent no later than 11:00 a.m. (i) on the Business Day of the
requested funding date, in the case of Base Rate Loans, and (ii) at least three
Business Days prior to the requested funding date, in the case of LIBOR
Loans.  Notices received after 11:00 a.m. shall be deemed received on the next
Business Day.  Each Notice of Borrowing shall be irrevocable and shall specify
(A) the amount of the Borrowing, (B) the requested funding date (which must be a
Business Day), (C) whether the Borrowing is to be made as Base Rate Loans or
LIBOR Loans, and (D) in the case of LIBOR Loans, the duration of the applicable
Interest Period (which shall be deemed to be 30 days if not specified).
 
(b)           Unless payment is otherwise timely made by Borrowers, the becoming
due of any Obligations (whether principal, interest, fees or other charges,
including Extraordinary Expenses, LC Obligations, Cash Collateral and Bank
Product Debt) shall be deemed to be a request for Base Rate Revolver Loans on
the due date, in the amount of such Obligations.  The proceeds of such Revolver
Loans shall be disbursed as direct payment of the relevant Obligation.  In
addition, Agent may, at its option, charge such Obligations against any
operating, investment or other account of a Borrower maintained with Agent or
any of its Affiliates.

 
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(c)           If Borrowers establish a controlled disbursement account with
Agent or any Affiliate of Agent, then the presentation for payment of any check
or other item of payment drawn on such account at a time when there are
insufficient funds to cover it shall be deemed to be a request for Base Rate
Revolver Loans on the date of such presentation, in the amount of the check and
items presented for payment.  The proceeds of such Revolver Loans may be
disbursed directly to the controlled disbursement account or other appropriate
account.
 
4.1.2                Fundings by Lenders.  Each Lender shall timely honor its
Revolver Commitment by funding its Pro Rata share of each Borrowing of Revolver
Loans that is properly requested hereunder.  Except for Borrowings to be made as
Swingline Loans, Agent shall endeavor to notify Lenders of each Notice of
Borrowing (or deemed request for a Borrowing) by 12:00 noon on the proposed
funding date for Base Rate Loans or by 3:00 p.m. at least two Business Days
before any proposed funding of LIBOR Loans.  Each Lender shall fund to Agent
such Lender’s Pro Rata share of the Borrowing to the account specified by Agent
in immediately available funds not later than 2:00 p.m. on the requested funding
date, unless Agent’s notice is received after the times provided above, in which
event Lender shall fund its Pro Rata share by 11:00 a.m. on the next Business
Day.  Subject to its receipt of such amounts from Lenders, Agent shall disburse
the proceeds of the Revolver Loans as directed by Borrower Agent.  Unless Agent
shall have received (in sufficient time to act) written notice from a Lender
that it does not intend to fund its Pro Rata share of a Borrowing, Agent may
assume that such Lender has deposited or promptly will deposit its share with
Agent, and Agent may disburse a corresponding amount to Borrowers.  If a
Lender’s share of any Borrowing or of any settlement pursuant to
Section 4.1.3(b) is not received by Agent, then Borrowers agree to repay to
Agent on demand the amount of such share, together with interest thereon from
the date disbursed until repaid, at the rate applicable to such Borrowing.
 
4.1.3                Swingline Loans; Settlement.
 
(a)           Agent may, but shall not be obligated to, advance Swingline Loans
to Borrowers, up to an aggregate outstanding amount of $10,000,000, unless the
funding is specifically required to be made by all Lenders hereunder.  Each
Swingline Loan shall constitute a Revolver Loan for all purposes, except that
payments thereon shall be made to Agent for its own account.  The obligation of
Borrowers to repay Swingline Loans shall be evidenced by the records of Agent
and need not be evidenced by any promissory note.

 
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(b)           To facilitate administration of the Revolver Loans, Lenders and
Agent agree (which agreement is solely among them, and not for the benefit of or
enforceable by any Borrower) that settlement among them with respect to
Swingline Loans and other Revolver Loans may take place on a date determined
from time to time by Agent, which shall occur at least once each week.  On each
settlement date, settlement shall be made with each Lender in accordance with
the Settlement Report delivered by Agent to Lenders.  Between settlement dates,
Agent may in its discretion apply payments on Revolver Loans to Swingline Loans,
regardless of any designation by Borrower or any provision herein to the
contrary.  Each Lender’s obligation to make settlements with Agent is absolute
and unconditional, without offset, counterclaim or other defense, and whether or
not the Commitments have terminated, an Overadvance exists or the conditions in
Section 6 are satisfied.  If, due to an Insolvency Proceeding with respect to a
Borrower or otherwise, any Swingline Loan may not be settled among Lenders
hereunder, then each Lender shall be deemed to have purchased from Agent a Pro
Rata participation in each unpaid Swingline Loan and shall transfer the amount
of such participation to Agent, in immediately available funds, within one
Business Day after Agent’s request therefor.
 
4.1.4                Notices.  Each Borrower authorizes Agent and Lenders to
extend, convert or continue Loans, effect selections of interest rates, and
transfer funds to or on behalf of Borrowers based on telephonic or e-mailed
instructions.  Borrowers shall confirm each such request by prompt delivery to
Agent of a Notice of Borrowing or Notice of Conversion/Continuation, if
applicable, but if it differs in any material respect from the action taken by
Agent or Lenders, the records of Agent and Lenders shall govern.  Neither Agent
nor any Lender shall have any liability for any loss suffered by a Borrower as a
result of Agent or any Lender acting upon its understanding of telephonic or
e-mailed instructions from a person believed in good faith by Agent or any
Lender to be a person authorized to give such instructions on a Borrower’s
behalf.
 
4.2         Defaulting Lender.  Agent may (but shall not be required to), in its
discretion, retain payments or other funds received by Agent that are to be
provided to a Defaulting Lender hereunder, and may apply such funds to such
Lender’s defaulted obligations or readvance the funds to Borrowers in accordance
with this Agreement.  The failure of any Lender to fund a Loan, to make any
payment in respect of LC Obligations or to otherwise perform its obligations
hereunder shall not relieve any other Lender of its obligations, and no Lender
shall be responsible for default by another Lender.  Lenders and Agent agree
(which agreement is solely among them, and not for the benefit of or enforceable
by any Borrower) that, solely for purposes of determining a Defaulting Lender’s
right (a) to vote on matters relating to the Loan Documents and (b) to share in
payments, fees and Collateral proceeds thereunder, a Defaulting Lender shall not
be deemed to be a “Lender” until all its defaulted obligations have been cured.
 
4.3         Number and Amount of LIBOR Loans; Determination of Rate.  Each
Borrowing of LIBOR Loans when made shall be in a minimum amount of $1,000,000
plus any increment of $100,000 in excess thereof.  No more than five (5)
Borrowings of LIBOR Loans may be outstanding at any time and all LIBOR Loans
having the same length and beginning date of their Interest Periods shall be
aggregated together and considered one Borrowing for this purpose.  Upon
determining LIBOR for any Interest Period requested by Borrowers, Agent shall
promptly notify Borrowers thereof by telephone or electronically and, if
requested by Borrowers, shall confirm any telephonic notice in writing.

 
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4.4         Borrower Agent.  Each Borrower hereby designates HWC Wire & Cable
Company (“Borrower Agent”) as its representative and agent for all purposes
under the Loan Documents, including requests for Loans and Letters of Credit,
designation of interest rates, delivery or receipt of communications,
preparation and delivery of Borrowing Base and financial reports, receipt and
payment of Obligations, requests for waivers, amendments or other
accommodations, actions under the Loan Documents (including in respect of
compliance with covenants), and all other dealings with Agent, Issuing Bank or
any Lender.  Borrower Agent hereby accepts such appointment.  Agent and Lenders
shall be entitled to rely upon, and shall be fully protected in relying upon,
any notice or communication (including any notice of borrowing) delivered by
Borrower Agent on behalf of any Borrower.  Agent and Lenders may give any notice
or communication with a Borrower hereunder to Borrower Agent on behalf of such
Borrower.  Each of Agent, Issuing Bank and Lenders shall have the right, in its
discretion, to deal exclusively with Borrower Agent for any or all purposes
under the Loan Documents.  Each Borrower agrees that any notice, election,
communication, representation, agreement or undertaking made on its behalf by
Borrower Agent shall be binding upon and enforceable against it.
 
4.5         One Obligation.  The Loans, LC Obligations and other Obligations
shall constitute one general obligation of Borrowers and (unless otherwise
expressly provided in any Loan Document) shall be secured by Agent’s Lien upon
all Collateral; provided, however, that Agent and each Lender shall be deemed to
be a creditor of, and the holder of a separate claim against, each Borrower to
the extent of any Obligations jointly or severally owed by such Borrower.
 
4.6         Effect of Termination.  On the effective date of any termination of
the Commitments, all Obligations shall be immediately due and payable, and any
Lender may terminate its and its Affiliates’ Bank Products (including, only with
the consent of Agent, any Cash Management Services).  All undertakings of
Borrowers contained in the Loan Documents shall survive any termination, and
Agent shall retain its Liens in the Collateral and all of its rights and
remedies under the Loan Documents until Full Payment of the
Obligations.  Notwithstanding Full Payment of the Obligations, Agent shall not
be required to terminate its Liens in any Collateral unless, with respect to any
damages Agent may incur as a result of the dishonor or return of Payment Items
applied to Obligations, Agent receives (a) a written agreement, executed by
Borrowers and any Person whose advances are used in whole or in part to satisfy
the Obligations, indemnifying Agent and Lenders from any such damages; or
(b) such Cash Collateral as Agent, in its discretion, deems necessary to protect
against any such damages.  The provisions of Sections 2.3, 3.4, 3.7, 3.9, 5.5,
5.9, 12, 14.2 and this Section, and the obligation of each Obligor and Lender
with respect to each indemnity given by it in any Loan Document, shall survive
Full Payment of the Obligations and any release relating to this credit
facility.

 
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SECTION 5.  PAYMENTS
 
5.1         General Payment Provisions.  All payments of Obligations shall be
made in Dollars, without offset, counterclaim or defense of any kind, free of
(and without deduction for) any Taxes, and in immediately available funds, not
later than 12:00 noon on the due date.  Any payment after such time shall be
deemed made on the next Business Day.  Any payment of a LIBOR Loan prior to the
end of its Interest Period shall be accompanied by all amounts due under
Section 3.9.  Any prepayment of Loans shall be applied first to Base Rate Loans
and then to LIBOR Loans.
 
5.2         Repayment of Revolver Loans.  Revolver Loans shall be due and
payable in full on the Revolver Termination Date, unless payment is sooner
required hereunder.  Revolver Loans may be prepaid from time to time, without
penalty or premium.  If any Asset Disposition includes the disposition of
Accounts or Inventory, then Net Proceeds equal to the greater of (a) the net
book value of such Accounts and Inventory, or (b) the reduction in the Borrowing
Base upon giving effect to such disposition, shall be applied to the Revolver
Loans.  Notwithstanding anything herein to the contrary, if an Overadvance
exists, Borrowers shall, on the sooner of Agent’s demand or the first Business
Day after any Borrower has knowledge thereof, repay the outstanding Revolver
Loans in an amount sufficient to reduce the principal balance of Revolver Loans
to the Borrowing Base.
 
5.3         Other Mandatory Prepayments.
 
5.3.1                Proceeds of Sale, Loss, Destruction or Condemnation of
Collateral.  Except as provided below or in Section 8.4.2 hereof, if any
Borrower sells any of the Collateral (other than Inventory if a Trigger Period
does not exist), or if any of the Collateral is lost or destroyed or taken by
condemnation, Borrowers shall pay to Agent for the ratable benefit of Lenders,
unless otherwise agreed by Required Lenders, as and when received by Borrowers
and as a mandatory prepayment of the Loans, as herein provided, a sum equal to
the net cash proceeds (including insurance payments) received by Borrowers from
such sale, loss, destruction or condemnation.  The applicable prepayment shall
be applied to reduce the outstanding principal balance of the Revolver Loans.
 
5.3.2                Other Mandatory Prepayments.
 
(a)           If during a Trigger Period any Borrower receives any proceeds from
any tax refunds, indemnity payments or pension reversions, Borrowers shall pay
to Agent for the ratable benefit of Lenders, as and when received by Borrowers
and as a mandatory prepayment of the Loans, a sum equal to the proceeds of such
tax refund, indemnity payment or pension reversion so received by such Borrower.
 
(b)           During a Trigger Period Borrower shall make a mandatory prepayment
of the Loans in the amount of the net proceeds received by Borrower from any
offering or sale of its debt or equity Securities.

 
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(c)           Any applicable prepayment made pursuant to Section 5.3.2(a) or (b)
above shall be applied to reduce the outstanding principal balance of the
Revolver Loans.
 
5.4         Payment of Other Obligations.  Obligations other than Loans,
including LC Obligations and Extraordinary Expenses, shall be paid by Borrowers
as provided in the Loan Documents or, if no payment date is specified, on
demand.
 
5.5         Marshaling; Payments Set Aside.  None of Agent or Lenders shall be
under any obligation to marshal any assets in favor of any Obligor or against
any Obligations.  If any payment by or on behalf of Borrowers is made to Agent,
Issuing Bank or any Lender, or Agent, Issuing Bank or any Lender exercises a
right of setoff, and such payment or the proceeds of such setoff or any part
thereof is subsequently invalidated, declared to be fraudulent or preferential,
set aside or required (including pursuant to any settlement entered into by
Agent, Issuing Bank or such Lender in its discretion) to be repaid to a trustee,
receiver or any other Person, then to the extent of such recovery, the
Obligation originally intended to be satisfied, and all Liens, rights and
remedies relating thereto, shall be revived and continued in full force and
effect as if such payment had not been made or such setoff had not occurred.
 
5.6         Post-Default Allocation of Payments.
 
5.6.1                Allocation.  Notwithstanding anything herein to the
contrary, during an Event of Default, monies to be applied to the Obligations,
whether arising from payments by Obligors, realization on Collateral, setoff or
otherwise, shall be allocated as follows:
 
(a)           first, to all costs and expenses, including Extraordinary
Expenses, owing to Agent;
 
(b)           second, to all amounts owing to Agent on Swingline Loans;
 
(c)           third, to all amounts owing to Issuing Bank on LC Obligations;
 
(d)           fourth, to all Obligations constituting fees (excluding amounts
relating to Bank Products);
 
(e)           fifth, to all Obligations constituting interest (excluding amounts
relating to Bank Products);
 
(f)           sixth, to provide Cash Collateral for outstanding Letters of
Credit;
 
(g)           seventh, to all other Obligations, other than Bank Product Debt;
and
 
(h)           last, to Bank Product Debt.

 
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Amounts shall be applied to each category of Obligations set forth above until
Full Payment thereof and then to the next category.  If amounts are insufficient
to satisfy a category, they shall be applied on a pro rata basis among the
Obligations in the category.  Amounts distributed with respect to any Bank
Product Debt shall be the lesser of the applicable Bank Product Amount last
reported to Agent or the actual Bank Product Debt as calculated by the
methodology reported to Agent for determining the amount due.  Agent shall have
no obligation to calculate the amount to be distributed with respect to any Bank
Product Debt, but may rely upon written notice of the amount (setting forth a
reasonably detailed calculation) from the Secured Party.  In the absence of such
notice, Agent may assume the amount to be distributed is the Bank Product Amount
last reported to it.  The allocations set forth in this Section are solely to
determine the rights and priorities of Agent and Lenders as among themselves,
and may be changed by agreement among them without the consent of any
Obligor.  This Section is not for the benefit of or enforceable by any Borrower.
 
5.6.2                Erroneous Application.  Agent shall not be liable for any
application of amounts made by it in good faith and, if any such application is
subsequently determined to have been made in error, the sole recourse of any
Lender or other Person to which such amount should have been made shall be to
recover the amount from the Person that actually received it (and, if such
amount was received by any Lender, such Lender hereby agrees to return it).
 
5.7         Application of Payments.  The ledger balance in the main Dominion
Account as of the end of a Business Day shall be applied to the Obligations at
the beginning of the next Business Day, during any Trigger Period.  If, as a
result of such application, a credit balance exists, the balance shall not
accrue interest in favor of Borrowers and shall be made available to Borrowers
as long as no Default or Event of Default exists.  Each Borrower irrevocably
waives the right to direct the application of any payments or Collateral
proceeds, and agrees that Agent shall have the continuing, exclusive right to
apply and reapply same against the Obligations, in such manner as set forth in
Section 5.6.1 (if an Event of Default shall exist), notwithstanding any entry by
Agent in its records.
 
5.8         Loan Account; Account Stated.
 
5.8.1                Loan Account.  Agent shall maintain in accordance with its
usual and customary practices an account or accounts (“Loan Account”) evidencing
the Debt of Borrowers resulting from each Loan or issuance of a Letter of Credit
from time to time.  Any failure of Agent to record anything in the Loan Account,
or any error in doing so, shall not limit or otherwise affect the obligation of
Borrowers to pay any amount owing hereunder.  Agent may maintain a single Loan
Account in the name of Borrower Agent, and each Borrower confirms that such
arrangement shall have no effect on the joint and several character of its
liability for the Obligations.

 
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5.8.2                Entries Binding.  Entries made in the Loan Account shall
constitute presumptive evidence of the information contained therein.  If any
information contained in the Loan Account is provided to or inspected by any
Person, then such information shall be conclusive and binding on such Person for
all purposes absent manifest error, except to the extent such Person notifies
Agent in writing within 30 days after receipt or inspection that specific
information is subject to dispute.
 
5.9         Taxes.
 
5.9.1                Payments Free of Taxes.  All payments by Obligors of
Obligations shall be free and clear of and without reduction for any Taxes.  If
Applicable Law requires any Obligor, Agent or any Lender to withhold or deduct
any Tax (including backup withholding or withholding Tax), Agent or the
applicable Lender shall pay the amount withheld or deducted to the relevant
Governmental Authority.  If the withholding or deduction is made on account of
Indemnified Taxes or Other Taxes, the sum payable by Borrowers shall be
increased so that Agent or such Lender receives an amount equal to the sum it
would have received if no such withholding or deduction (including deductions
applicable to additional sums payable under this Section) had been
made.  Without limiting the foregoing, Borrowers shall timely pay all Other
Taxes to the relevant Governmental Authorities.
 
5.9.2                Payment.  Borrowers shall indemnify, hold harmless and
reimburse (within 10 days after demand therefor) Agent and each Lender for any
Indemnified Taxes or Other Taxes (including those attributable to amounts
payable under this Section) withheld or deducted by any Obligor, Agent or any
Lender, or paid by Agent or any Lender, with respect to any Obligations, Letters
of Credit or Loan Documents, whether or not such Taxes were properly asserted by
the relevant Governmental Authority, and including all penalties, interest and
reasonable expenses relating thereto.  A certificate as to the amount of any
such payment or liability delivered to Borrowers by Agent or the applicable
Lender shall be conclusive, absent manifest error.  As soon as practicable after
any payment of Taxes by Borrowers, Borrowers shall deliver to Agent a receipt
from the Governmental Authority or other evidence of payment satisfactory to
Agent.
 
5.10        Foreign Lenders.
 
5.10.1                Exemption.  Any Foreign Lender that is entitled to an
exemption from or reduction of withholding tax under the law of the jurisdiction
in which an Obligor is resident for tax purposes, or any treaty to which such
jurisdiction is a party, with respect to payments under any Loan Document shall
deliver to Agent and Borrower Agent, at the time or times prescribed by
Applicable Law or reasonably requested by Agent or Borrower Agent, such properly
completed and executed documentation prescribed by Applicable Law as will permit
such payments to be made without withholding or at a reduced rate of
withholding.  In addition, any Lender, if requested by Agent or Borrower Agent,
shall deliver such other documentation prescribed by Applicable Law or
reasonably requested by Agent or Borrower Agent as will enable Agent and
Borrower Agent to determine whether or not such Lender is subject to backup
withholding or information reporting requirements.

 
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5.10.2                Documentation.  Without limiting the generality of the
foregoing, if a Borrower is resident for tax purposes in the United States, a
Foreign Lender shall deliver to Agent and Borrower 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 hereunder (and from time to time thereafter
upon the request of Agent or Borrower Agent, but only if such Foreign Lender is
legally entitled to do so), (a) duly completed copies of IRS Form W-8BEN
claiming eligibility for benefits of an income tax treaty to which the United
States is a party; (b) duly completed copies of IRS Form W-8ECI; (c) in the case
of a Foreign Lender claiming the benefits of the exemption for portfolio
interest under Section 881(c) of the Code, (i) a certificate to the effect that
such Foreign Lender is not (A) a “bank” within the meaning of Section
881(c)(3)(A) of the Code, (B) a “10 percent shareholder” of any Obligor within
the meaning of Section 881(c)(3)(B) of the Code, or (C) a “controlled foreign
corporation” described in Section 881(c)(3)(C) of the Code, and (ii) duly
completed copies of IRS Form W-8BEN; or (d) any other form prescribed by
Applicable Law as a basis for claiming exemption from or a reduction in United
States federal withholding tax, duly completed together with such supplementary
documentation as may be prescribed by Applicable Law to permit Borrowers to
determine the withholding or deduction required to be made.
 
5.11        Nature and Extent of Each Borrower’s Liability.
 
5.11.1                Joint and Several Liability.  Each Borrower agrees that it
is jointly and severally liable for, and absolutely and unconditionally
guarantees to Agent and Lenders the prompt payment and performance of, all
Obligations and all agreements under the Loan Documents.  Each Borrower agrees
that its guaranty obligations hereunder constitute a continuing guaranty of
payment and not of collection, that such obligations shall not be discharged
until Full Payment of the Obligations, and that such obligations are absolute
and unconditional, irrespective of (a) the genuineness, validity, regularity,
enforceability, subordination or any future modification of, or change in, any
Obligations or Loan Document, or any other document, instrument or agreement to
which any Obligor is or may become a party or be bound; (b) the absence of any
action to enforce this Agreement (including this Section) or any other Loan
Document, or any waiver, consent or indulgence of any kind by Agent or any
Lender with respect thereto; (c) the existence, value or condition of, or
failure to perfect a Lien or to preserve rights against, any security or
guaranty for the Obligations or any action, or the absence of any action, by
Agent or any Lender in respect thereof (including the release of any security or
guaranty); (d) the insolvency of any Obligor; (e) any election by Agent or any
Lender in an Insolvency Proceeding for the application of Section 1111(b)(2) of
the Bankruptcy Code; (f) any borrowing or grant of a Lien by any other Borrower,
as debtor-in-possession under Section 364 of the Bankruptcy Code or otherwise;
(g) the disallowance of any claims of Agent or any Lender against any Obligor
for the repayment of any Obligations under Section 502 of the Bankruptcy Code or
otherwise; or (h) any other action or circumstances that might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor,
except Full Payment of all Obligations.

 
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5.11.2                Waivers.
 
(a)           Each Borrower expressly waives all rights that it may have now or
in the future under any statute, at common law, in equity or otherwise, to
compel Agent or Lenders to marshal assets or to proceed against any Obligor,
other Person or security for the payment or performance of any Obligations
before, or as a condition to, proceeding against such Borrower.  Each Borrower
waives all defenses available to a surety, guarantor or accommodation co-obligor
other than Full Payment of all Obligations.  It is agreed among each Borrower,
Agent and Lenders that the provisions of this Section 5.11 are of the essence of
the transaction contemplated by the Loan Documents and that, but for such
provisions, Agent and Lenders would decline to make Loans and issue Letters of
Credit.  Each Borrower acknowledges that its guaranty pursuant to this
Section is necessary to the conduct and promotion of its business, and can be
expected to benefit such business.
 
(b)           Agent and Lenders may, in their discretion, pursue such rights and
remedies as they deem appropriate, including realization upon Collateral by
judicial foreclosure or non judicial sale or enforcement, without affecting any
rights and remedies under this Section 5.11.  If, in taking any action in
connection with the exercise of any rights or remedies, Agent or any Lender
shall forfeit any other rights or remedies, including the right to enter a
deficiency judgment against any Borrower or other Person, whether because of any
Applicable Laws pertaining to “election of remedies” or otherwise, each Borrower
consents to such action and waives any claim based upon it, even if the action
may result in loss of any rights of subrogation that any Borrower might
otherwise have had.  Any election of remedies that results in denial or
impairment of the right of Agent or any Lender to seek a deficiency judgment
against any Borrower shall not impair any other Borrower’s obligation to pay the
full amount of the Obligations.  Each Borrower waives all rights and defenses
arising out of an election of remedies, such as nonjudicial foreclosure with
respect to any security for the Obligations, even though that election of
remedies destroys such Borrower’s rights of subrogation against any other
Person.  Agent may bid all or a portion of the Obligations at any foreclosure or
trustee’s sale or at any private sale, and the amount of such bid need not be
paid by Agent but shall be credited against the Obligations.  The amount of the
successful bid at any such sale, whether Agent or any other Person is the
successful bidder, shall be conclusively deemed to be the fair market value of
the Collateral, and the difference between such bid amount and the remaining
balance of the Obligations shall be conclusively deemed to be the amount of the
Obligations guaranteed under this Section 5.11, notwithstanding that any present
or future law or court decision may have the effect of reducing the amount of
any deficiency claim to which Agent or any Lender might otherwise be entitled
but for such bidding at any such sale.

 
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5.11.3                Extent of Liability; Contribution.
 
(a)           Notwithstanding anything herein to the contrary, each Borrower’s
liability under this Section 5.11 shall be limited to the greater of (i) all
amounts for which such Borrower is primarily liable, as described below, and
(ii) such Borrower’s Allocable Amount.
 
(b)           If any Borrower makes a payment under this Section 5.11 of any
Obligations (other than amounts for which such Borrower is primarily liable) (a
“Guarantor Payment”) that, taking into account all other Guarantor Payments
previously or concurrently made by any other Borrower, exceeds the amount that
such Borrower would otherwise have paid if each Borrower had paid the aggregate
Obligations satisfied by such Guarantor Payments in the same proportion that
such Borrower’s Allocable Amount bore to the total Allocable Amounts of all
Borrowers, then such Borrower shall be entitled to receive contribution and
indemnification payments from, and to be reimbursed by, each other Borrower for
the amount of such excess, pro rata based upon their respective Allocable
Amounts in effect immediately prior to such Guarantor Payment.  The “Allocable
Amount” for any Borrower shall be the maximum amount that could then be
recovered from such Borrower under this Section 5.11 without rendering such
payment voidable under Section 548 of the Bankruptcy Code or under any
applicable state fraudulent transfer or conveyance act, or similar statute or
common law.
 
(c)           Nothing contained in this Section 5.11 shall limit the liability
of any Borrower to pay Loans made directly or indirectly to that Borrower
(including Loans advanced to any other Borrower and then re-loaned or otherwise
transferred to, or for the benefit of, such Borrower), LC Obligations relating
to Letters of Credit issued to support such Borrower’s business, and all accrued
interest, fees, expenses and other related Obligations with respect thereto, for
which such Borrower shall be primarily liable for all purposes hereunder.  Agent
and Lenders shall have the right, at any time in their discretion, to condition
Loans and Letters of Credit upon a separate calculation of borrowing
availability for each Borrower and to restrict the disbursement and use of such
Loans and Letters of Credit to such Borrower.

 
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5.11.4                Joint Enterprise.  Each Borrower has requested that Agent
and Lenders make this credit facility available to Borrowers on a combined
basis, in order to finance Borrowers’ business most efficiently and
economically.  Borrowers’ business is a mutual and collective enterprise, and
Borrowers believe that consolidation of their credit facility will enhance the
borrowing power of each Borrower and ease the administration of their
relationship with Lenders, all to the mutual advantage of Borrowers.  Borrowers
acknowledge and agree that Agent’s and Lenders’ willingness to extend credit to
Borrowers and to administer the Collateral on a combined basis, as set forth
herein, is done solely as an accommodation to Borrowers and at Borrowers’
request.
 
5.11.5                Subordination.  Each Borrower hereby subordinates any
claims, including any rights at law or in equity to payment, subrogation,
reimbursement, exoneration, contribution, indemnification or set off, that it
may have at any time against any other Obligor, howsoever arising, to the Full
Payment of all Obligations.
 
SECTION 6.  CONDITIONS PRECEDENT
 
Notwithstanding any other provision of this Agreement or any of the other Loan
Documents, and without affecting in any manner the rights of Agent or Lenders
under the other sections of this Agreement, neither any Lender nor Agent shall
be required to make the Loans contemplated to be made under this Agreement
unless and until each of the following conditions has been and continues to be
satisfied (the date on which conditions have been and continue to be so
satisfied, the “Closing Date”):
 
6.1         Documentation.  Agent shall have received, in form and substance
satisfactory to Agent and its counsel, a duly executed copy of this Agreement
and the other Loan Documents, together with such additional documents,
instruments and certificates as Agent and its counsel shall reasonably require
in connection therewith, including all documents, instruments, agreements and
schedules listed in the Schedule of Documents attached hereto and incorporated
herein as Schedule 6.1, all in form and substance satisfactory to Agent and its
counsel.
 
6.2         No Default.  No Default or Event of Default shall exist.
 
6.3         Conditions Precedent to All Credit Extensions.  Agent, Issuing Bank
and Lenders shall not be required to fund any Loans, arrange for issuance of any
Letters of Credit or grant any other accommodation to or for the benefit of
Borrowers, unless the following conditions are satisfied:
 
(a)           No Default or Event of Default shall exist at the time of, or
result from, such funding, issuance or grant;
 
(b)           The representations and warranties of each Obligor in the Loan
Documents shall be true and correct on the date of, and upon giving effect to,
such funding, issuance or grant (except for representations and warranties that
expressly relate to an earlier date);

 
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(c)           All conditions precedent in any other Loan Document shall be
satisfied;
 
(d)           No event shall have occurred or circumstance exist that has or
could reasonably be expected to have a Material Adverse Effect; and
 
(e)           With respect to issuance of a Letter of Credit, the LC Conditions
shall be satisfied.
 
Each request (or deemed request) by Borrowers for funding of a Loan, issuance of
a Letter of Credit or grant of an accommodation shall constitute a
representation by Borrowers that the foregoing conditions are satisfied on the
date of such request and on the date of such funding, issuance or grant.  As an
additional condition to any funding, issuance or grant, Agent shall have
received such other information, documents, instruments and agreements as it
deems appropriate in connection therewith.
 
SECTION 7.  COLLATERAL
 
7.1         Grant of Security Interest.  To secure the prompt payment and
performance of all Obligations, each Borrower hereby grants to Agent, for the
benefit of Secured Parties, a continuing security interest in and Lien upon all
Property of such Borrower, including all of the following Property, whether now
owned or hereafter acquired, and wherever located:
 
(a)           all Accounts;
 
(b)           all Chattel Paper, including electronic chattel paper;
 
(c)           all Commercial Tort Claims, including those shown on Schedule
9.1.16;
 
(d)           all Deposit Accounts;
 
(e)           all Documents;
 
(f)           all General Intangibles, including Intellectual Property;
 
(g)           all Goods, including Inventory, Equipment and fixtures;
 
(h)           all Instruments;
 
(i)           all Investment Property;
 
(j)           all Letter-of-Credit Rights;
 
(k)           all Supporting Obligations;

 
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(l)           all monies, whether or not in the possession or under the control
of Agent, a Lender, or a bailee or Affiliate of Agent or a Lender, including any
Cash Collateral;
 
(m)           all accessions to, substitutions for, and all replacements,
products, and cash and non-cash proceeds of the foregoing, including proceeds of
and unearned premiums with respect to insurance policies, and claims against any
Person for loss, damage or destruction of any Collateral; and
 
(n)           all books and records (including customer lists, files,
correspondence, tapes, computer programs, print-outs and computer records)
pertaining to the foregoing.
 
Notwithstanding the foregoing, Collateral shall not include:  (1) any licenses
or permits, the encumbrance of which would violate any law, statute or
regulation; or (2) any material contract rights (including, without limitation,
any contracts or leases), the encumbrance of which would violate the terms of
the agreements establishing such rights; provided that Borrowers shall use
reasonable good faith efforts to obtain any necessary consent to enable any such
contract right to be included within the Collateral.
 
7.2         Lien on Deposit Accounts; Cash Collateral.
 
7.2.1                Deposit Accounts.  To further secure the prompt payment and
performance of all Obligations, each Borrower hereby grants to Agent, for the
benefit of Secured Parties, a continuing security interest in and Lien upon all
amounts credited to any Deposit Account of such Borrower, including any sums in
any blocked or lockbox accounts or in any accounts into which such sums are
swept.  Each Borrower hereby authorizes and directs each bank or other
depository to deliver to Agent, upon request, all balances in any Deposit
Account maintained by such Borrower, without inquiry into the authority or right
of Agent to make such request.  Agent agrees that it will not issue any such
request unless (x) with respect to the Dominion Account, a Trigger Period exists
or (y) with respect to any other Deposit Account, an Event of Default exists.
 
7.2.2                Cash Collateral.  Any Cash Collateral may be invested, at
Agent’s discretion, in Cash Equivalents, but Agent shall have no duty to do so,
regardless of any agreement or course of dealing with any Borrower, and shall
have no responsibility for any investment or loss.  Each Borrower hereby grants
to Agent, for the benefit of Secured Parties, a security interest in all Cash
Collateral held from time to time and all proceeds thereof, as security for the
Obligations, whether such Cash Collateral is held in a Cash Collateral Account
or elsewhere.  Agent may apply Cash Collateral to the payment of any
Obligations, in such order as Agent may elect, as they become due and
payable.  Each Cash Collateral Account and all Cash Collateral shall be under
the sole dominion and control of Agent.  No Borrower or other Person claiming
through or on behalf of any Borrower shall have any right to any Cash
Collateral, until Full Payment of all Obligations or until the events requiring
the delivery of such Cash Collateral pursuant to Section 2.3.3(a) or (b) have
been cured or waived.

 
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7.3         Other Collateral.
 
7.3.1                Commercial Tort Claims.  Borrowers shall promptly notify
Agent in writing if any Borrower has a Commercial Tort Claim (other than, as
long as no Default or Event of Default exists, a Commercial Tort Claim for less
than $1,000,000), shall promptly amend Schedule 9.1.16 to include such claim,
and shall take such actions as Agent deems appropriate to subject such claim to
a duly perfected, first priority Lien upon such claim in favor of Agent.
 
7.3.2                Certain After-Acquired Collateral.  Borrowers shall
promptly notify Agent in writing if, after the Closing Date, any Borrower
obtains any interest in any Collateral consisting of Deposit Accounts, Chattel
Paper, Documents, Instruments, Intellectual Property, Investment Property or
Letter-of-Credit Rights and, upon Agent’s request, shall promptly take such
actions as Agent deems appropriate to effect Agent’s duly perfected, first
priority Lien upon such Collateral, including obtaining any appropriate
possession, control agreement or Lien Waiver.  If any Collateral is in the
possession of a third party, at Agent’s request, Borrowers shall obtain an
acknowledgment that such third party holds the Collateral for the benefit of
Agent.
 
7.4         No Assumption of Liability.  The Lien on Collateral granted
hereunder is given as security only and shall not subject Agent or any Lender
to, or in any way modify, any obligation or liability of Borrowers relating to
any Collateral.
 
7.5         Further Assurances.  Promptly upon request, Borrowers shall deliver
such instruments, assignments, title certificates, or other documents or
agreements, and shall take such actions, as Agent deems appropriate under
Applicable Law to evidence or perfect its Lien on any Collateral, or otherwise
to give effect to the intent of this Agreement.  Each Borrower authorizes Agent
to file any financing statement that indicates the Collateral as “all assets” or
“all personal property” of such Borrower, or words to similar effect, and
ratifies any action taken by Agent before the Closing Date to effect or perfect
its Lien on any Collateral.
 
7.6         Foreign Subsidiary Stock.  Notwithstanding Section 7.1, the
Collateral shall include only 65% of the voting stock of any Foreign Subsidiary.
 
 
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SECTION 8.  COLLATERAL ADMINISTRATION
 
8.1         Borrowing Base Certificates.  By the 25th day of each month,
Borrowers shall deliver to Agent (and Agent shall promptly deliver same to
Lenders) a Borrowing Base Certificate prepared as of the close of business of
the previous month, and at such other times as Agent may request.  All
calculations of Availability in any Borrowing Base Certificate shall originally
be made by Borrowers and certified by a Senior Officer, provided that Agent may
from time to time review and adjust any such calculation (a) to reflect its
reasonable estimate of declines in value of any Collateral, due to collections
received in the Dominion Account or otherwise; (b) to adjust advance rates to
reflect changes in dilution, quality, mix and other factors affecting
Collateral; and (c) to the extent the calculation is not made in accordance with
this Agreement or does not accurately reflect the Availability Reserve.  On or
before the 25th day of each calendar month from and after the date hereof,
Borrowers shall deliver to Agent, in the form reasonably acceptable to Agent,
(i) reconciliations of Borrowers’ Accounts as shown on the month-end Borrowing
Base Certificate for the immediately preceding Fiscal Month to Borrowers’
accounts receivable agings, to Borrowers’ general ledger and to Borrowers’ most
recent financial statements and (ii) reconciliations of Borrowers’ Inventory as
shown on Borrowers’ perpetual inventory, to Borrowers’ general ledger and to
Borrowers’ financial statements, all with supporting materials as Agent shall
reasonably request.  If Borrower Agent deems advisable, Borrowers shall execute
and deliver to Agent Borrowing Base Certificates more frequently than
monthly.  In the event that Borrower Agent furnishes Borrowing Base Certificates
more frequently than monthly, Agent and Lenders acknowledge that Inventory and
Eligible Inventory amounts shall only be updated monthly.
 
8.2         Administration of Accounts.
 
8.2.1                Records and Schedules of Accounts.  Each Borrower shall
keep accurate and complete records of its Accounts, including all payments and
collections thereon, and shall submit to Agent sales, collection, reconciliation
and other reports in form satisfactory to Agent, on such periodic basis as Agent
may request.  Each Borrower shall also provide to Agent, on or before the 25th
day of each month, a detailed aged trial balance of all Accounts as of the end
of the preceding month, specifying each Account’s Account Debtor name and
address, amount, invoice date and due date, showing any discount, allowance,
credit, authorized return or dispute, and including (if requested) such proof of
delivery, copies of invoices and invoice registers, copies of related documents,
repayment histories, status reports and other information as Agent may
reasonably request.  If Accounts in an aggregate face amount of $500,000 or more
cease to be Eligible Accounts, Borrowers shall notify Agent of such occurrence
promptly (and in any event within one Business Day) after any Borrower has
knowledge thereof.
 
8.2.2                Taxes.  If an Account of any Borrower includes a charge for
any Taxes, Agent is authorized, in its discretion, to pay the amount thereof to
the proper taxing authority for the account of such Borrower and to charge
Borrowers therefor; provided, however, that neither Agent nor Lenders shall be
liable for any Taxes that may be due from Borrowers or with respect to any
Collateral.
 
8.2.3                Account Verification.  Whether or not a Default or Event of
Default exists, Agent shall have the right at any time, in the name of Agent,
any designee of Agent or any Borrower, to verify the validity, amount or any
other matter relating to any Accounts of Borrowers by mail, telephone or
otherwise.  Borrowers shall cooperate fully with Agent in an effort to
facilitate and promptly conclude any such verification process.

 
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8.2.4                Maintenance of Dominion Account.  Borrowers shall maintain
Dominion Accounts pursuant to lockbox or other arrangements reasonably
acceptable to Agent.  Borrowers shall obtain an agreement (in form and substance
satisfactory to Agent) from each lockbox servicer and Dominion Account bank,
establishing Agent’s control over and Lien in the lockbox or Dominion Account,
which may be exercised by Agent during any Trigger Period, requiring immediate
deposit of all remittances received in the lockbox to a Dominion Account, and
waiving offset rights of such servicer or bank, except for customary
administrative charges.  If a Dominion Account is not maintained with Agent,
Agent may, during any Trigger Period, require immediate transfer of all funds in
such account to a Dominion Account maintained with Agent.  Agent assumes no
responsibility to Borrowers for any lockbox arrangement or Dominion Account,
including any claim of accord and satisfaction or release with respect to any
Payment Items accepted by any bank.
 
8.2.5                Proceeds of Collateral.  Borrowers shall request in writing
and otherwise take all necessary steps to ensure that all payments on Accounts
or otherwise relating to Collateral are made directly to a Dominion Account (or
a lockbox relating to a Dominion Account).  If any Borrower or Subsidiary
receives cash or Payment Items with respect to any Collateral, it shall hold
same in trust for Agent and promptly (not later than the next Business Day)
deposit same into a Dominion Account.
 
8.3         Administration of Inventory.
 
8.3.1                Records and Reports of Inventory.  Each Borrower shall keep
accurate and complete records of its Inventory, including costs and daily
withdrawals and additions, and shall submit to Agent inventory and
reconciliation reports in form satisfactory to Agent, on such periodic basis as
Agent may request.  Each Borrower shall conduct a physical inventory at least
once per calendar year (and on a more frequent basis if requested by Agent when
an Event of Default exists) and periodic cycle counts consistent with historical
practices, and shall provide to Agent, upon request by Agent, a report based on
each such inventory and count promptly upon completion thereof, together with
such supporting information as Agent may request.  Agent may participate in and
observe each physical count.
 
8.3.2                Returns of Inventory.  No Borrower shall return any
Inventory to a supplier, vendor or other Person, whether for cash, credit or
otherwise, unless (a) such return is in the Ordinary Course of Business; (b) no
Default, Event of Default or Overadvance exists or would result therefrom;
(c) Agent is promptly notified if the aggregate Value of all Inventory returned
in any month exceeds $500,000; and (d) any payment received by a Borrower for a
return is promptly remitted to Agent for application to the Obligations.

 
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8.3.3                Acquisition, Sale and Maintenance.  Each Borrower shall
take all steps to assure that all Inventory is produced in accordance with
Applicable Law, including the FLSA.  No Borrower shall sell any Inventory on
consignment or approval or any other basis under which the customer may return
or require a Borrower to repurchase such Inventory.  Borrowers shall use, store
and maintain all Inventory with reasonable care and caution, in accordance with
applicable standards of any insurance and in conformity with all Applicable Law,
and shall make current rent payments (within applicable grace periods provided
for in leases) at all locations where any Collateral is located.
 
8.4         Administration of Equipment.
 
8.4.1                Records and Schedules of Equipment.  Each Borrower shall
keep accurate and complete records of its Equipment, including kind, quality,
quantity, cost, acquisitions and dispositions thereof, and shall submit to
Agent, on such periodic basis as Agent may request, a current schedule thereof,
in form satisfactory to Agent.  Promptly upon request, Borrowers shall deliver
to Agent evidence of their ownership or interests in any Equipment.
 
8.4.2                Dispositions of Equipment.  No Borrower shall sell, lease
or otherwise dispose of any Equipment, without the prior written consent of
Agent, other than (a) a Permitted Asset Disposition; and (b) replacement of
Equipment that is worn, damaged or obsolete with Equipment of like function and
value, if the replacement Equipment is acquired substantially contemporaneously
with such disposition and is free of Liens.
 
8.4.3                Condition of Equipment.  The Equipment is in good operating
condition and repair, and all necessary replacements and repairs have been made
so that the value and operating efficiency of the Equipment is preserved at all
times, reasonable wear and tear excepted.  Each Borrower shall ensure that the
Equipment is mechanically and structurally sound, and capable of performing the
functions for which it was designed, in accordance with manufacturer
specifications.  No Borrower shall permit any Equipment to become affixed to
real Property unless any landlord or mortgagee delivers a Lien Waiver.
 
8.5         Administration of Deposit Accounts.  Schedule 8.5 sets forth all
Deposit Accounts maintained by Borrowers, including all Dominion Accounts.  Each
Borrower shall take all actions necessary to establish Agent’s control of each
such Deposit Account (other than an account exclusively used for payroll,
payroll taxes or employee benefits, or an account containing not more than
$10,000 at any time).  Each Borrower shall be the sole account holder of each
Deposit Account and shall not allow any other Person (other than Agent) to have
control over a Deposit Account or any Property deposited therein.  Each Borrower
shall promptly notify Agent of any opening or closing of a Deposit Account and,
with the consent of Agent, will amend Schedule 8.5 to reflect same.
 

 
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8.6         General Provisions.
 
8.6.1                Location of Collateral.  All tangible items of Collateral,
other than Inventory in transit, shall at all times be kept by Borrowers at the
business locations set forth in Schedule 8.6.1, except that Borrowers may
(a) make sales or other dispositions of Collateral in accordance with
Section 10.2.6; and (b) move Collateral to another location in the United
States, upon 30 Business Days prior written notice to Agent.
 
8.6.2                Insurance of Collateral; Condemnation Proceeds.
 
(a)           Each Borrower shall maintain insurance with respect to the
Collateral, covering casualty, hazard, public liability, theft, malicious
mischief, flood and other risks, in amounts, with endorsements and with insurers
(with a Best Rating of at least A+, unless otherwise approved by Agent)
reasonably satisfactory to Agent.  All proceeds under each policy shall be
payable to Agent.  From time to time upon request, Borrowers shall deliver to
Agent the originals or certified copies of its insurance policies and updated
flood plain searches.  Unless Agent shall agree otherwise, each policy shall
include satisfactory endorsements (i) showing Agent as loss payee;
(ii) requiring 30 days prior written notice to Agent in the event of
cancellation of the policy for any reason whatsoever; and (iii) specifying that
the interest of Agent shall not be impaired or invalidated by any act or neglect
of any Borrower or the owner of the Property, nor by the occupation of the
premises for purposes more hazardous than are permitted by the policy.  If any
Borrower fails to provide and pay for any insurance, Agent may, at its option,
but shall not be required to, procure the insurance and charge Borrowers
therefor.  Each Borrower agrees to deliver to Agent, promptly as rendered,
copies of all reports made to insurance companies.  While no Event of Default
exists, Borrowers may settle, adjust or compromise any insurance claim, as long
as the proceeds are delivered to Agent.  If an Event of Default exists, only
Agent shall be authorized to settle, adjust and compromise such claims.
 
(b)           Any proceeds of insurance (other than proceeds from workers’
compensation or D&O insurance) and any awards arising from condemnation of any
Collateral shall be paid to Agent.  Any such proceeds or awards shall be applied
to payment of the Revolver Loans, and then to any other Obligations outstanding.
 
8.6.3                Protection of Collateral.  All expenses of protecting,
storing, warehousing, insuring, handling, maintaining and shipping any
Collateral, all Taxes payable with respect to any Collateral (including any sale
thereof), and all other payments required to be made by Agent to any Person to
realize upon any Collateral, shall be borne and paid by Borrowers.  Agent shall
not be liable or responsible in any way for the safekeeping of any Collateral,
for any loss or damage thereto (except for reasonable care in its custody while
Collateral is in Agent’s actual possession), for any diminution in the value
thereof, or for any act or default of any warehouseman, carrier, forwarding
agency or other Person whatsoever, but the same shall be at Borrowers’ sole
risk.
 
 
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8.6.4       Defense of Title to Collateral.  Each Borrower shall at all times
defend its title to Collateral and Agent’s Liens therein against all Persons,
claims and demands whatsoever, except Permitted Liens.
 
8.7           Power of Attorney.  Each Borrower hereby irrevocably constitutes
and appoints Agent (and all Persons designated by Agent) as such Borrower’s true
and lawful attorney (and agent-in-fact) for the purposes provided in this
Section.  Agent, or Agent’s designee, may, without notice and in either its or a
Borrower’s name, but at the cost and expense of Borrowers:
 
(a)      Endorse a Borrower’s name on any Payment Item or other proceeds of
Collateral (including proceeds of insurance) that come into Agent’s possession
or control; and
 
(b)      During an Event of Default, (i) notify any Account Debtors of the
assignment of their Accounts, demand and enforce payment of Accounts, by legal
proceedings or otherwise, and generally exercise any rights and remedies with
respect to Accounts; (ii) settle, adjust, modify, compromise, discharge or
release any Accounts or other Collateral, or any legal proceedings brought to
collect Accounts or Collateral; (iii) sell or assign any Accounts and other
Collateral upon such terms, for such amounts and at such times as Agent deems
advisable; (iv) collect, liquidate and receive balances in Deposit Accounts or
investment accounts, and take control, in any manner, of any proceeds of
Collateral; (v) prepare, file and sign a Borrower’s name to a proof of claim or
other document in a bankruptcy of an Account Debtor, or to any notice,
assignment or satisfaction of Lien or similar document; (vi) receive, open and
dispose of mail addressed to a Borrower, and notify postal authorities to
deliver any such mail to an address designated by Agent; (vii) endorse any
Chattel Paper, Document, Instrument, bill of lading, or other document or
agreement relating to any Accounts, Inventory or other Collateral; (viii) use a
Borrower’s stationery and sign its name to verifications of Accounts and notices
to Account Debtors; (ix) use the information recorded on or contained in any
data processing, electronic or information systems relating to Collateral;
(x) make and adjust claims under insurance policies; (xi) take any action as may
be necessary or appropriate to obtain payment under any letter of credit,
banker’s acceptance or other instrument for which a Borrower is a beneficiary;
and (xii) take all other actions as Agent deems appropriate to fulfill any
Borrower’s obligations under the Loan Documents.
 
SECTION 9.  REPRESENTATIONS AND WARRANTIES
 
9.1           General Representations and Warranties.  To induce Agent and
Lenders to enter into this Agreement and to make available the Commitments,
Loans and Letters of Credit, each Borrower represents and warrants that:
 
 
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9.1.1       Organization and Qualification.  Each Borrower and Subsidiary is
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization.  Each Borrower and Subsidiary is duly
qualified, authorized to do business and in good standing as a foreign
corporation in each jurisdiction where failure to be so qualified could
reasonably be expected to have a Material Adverse Effect.
 
9.1.2       Power and Authority.  Each Obligor is duly authorized to execute,
deliver and perform its Loan Documents.  The execution, delivery and performance
of the Loan Documents have been duly authorized by all necessary action, and do
not (a) require any consent or approval of any holders of Equity Interests of
any Obligor, other than those already obtained; (b) contravene the Organic
Documents of any Obligor; (c) violate or cause a default under any Applicable
Law or Material Contract; or (d) result in or require the imposition of any Lien
(other than Permitted Liens) on any Property of any Obligor.
 
9.1.3       Enforceability.  Each Loan Document is a legal, valid and binding
obligation of each Obligor party thereto, enforceable in accordance with its
terms, except as enforceability may be limited by bankruptcy, insolvency or
similar laws affecting the enforcement of creditors’ rights generally.
 
9.1.4       Capital Structure.  Schedule 9.1.4 shows, for each Borrower and
Subsidiary, its name, its jurisdiction of organization, its authorized and
issued Equity Interests, the holders of its Equity Interests, and all agreements
binding on such holders with respect to their Equity Interests.  Except as
disclosed in Schedule 9.1.4 in the five years preceding the Closing Date,
neither Borrowers nor any Subsidiaries have acquired any substantial assets from
any other person nor been the surviving entity in a merger or combination.  Each
Borrower has good title to its Equity Interests in its Subsidiaries, subject
only to Agent’s Lien, and all such Equity Interests are duly issued, fully paid
and non-assessable.  There are no outstanding purchase options, warrants,
subscription rights, agreements to issue or sell, convertible interests, phantom
rights or powers of attorney relating to any Equity Interests of any Borrower or
Subsidiary.
 
9.1.5       Title to Properties; Priority of Liens.  Each Borrower and
Subsidiary has good and marketable title to (or valid leasehold interests in)
all of its Real Estate, and good title to all of its personal Property,
including all Property reflected in any financial statements delivered to Agent
or Lenders, in each case free of Liens except Permitted Liens.  Each Borrower
and Subsidiary has paid and discharged all lawful claims that, if unpaid, could
become a Lien on its Properties, other than Permitted Liens.  All Liens of Agent
in the Collateral are duly perfected, first priority Liens, subject only to
Permitted Liens that are expressly allowed to have priority over Agent’s Liens.
 
 
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9.1.6       Accounts.  Agent may rely, in determining which Accounts are
Eligible Accounts, on all statements and representations made by Borrowers with
respect thereto.  Borrowers warrant, with respect to each Account at the time it
is shown as an Eligible Account in a Borrowing Base Certificate, that:
 
(a)      it is genuine and in all respects what it purports to be, and is not
evidenced by a judgment;
 
(b)      it arises out of a completed, bona fide sale and delivery of goods or
rendition of services in the Ordinary Course of Business, and substantially in
accordance with any purchase order, contract or other document relating thereto;
 
(c)      it is for a sum certain, maturing as stated in the invoice covering
such sale or rendition of services, a copy of which has been furnished or is
available to Agent on request;
 
(d)      it is not subject to any offset, Lien (other than Agent’s Lien),
deduction, defense, dispute, counterclaim or other adverse condition except as
arising in the Ordinary Course of Business and disclosed to Agent; and it is
absolutely owing by the Account Debtor, without contingency in any respect;
 
(e)      no purchase order, agreement, document or Applicable Law restricts
assignment of the Account to Agent (regardless of whether, under the UCC, the
restriction is ineffective), and the applicable Borrower is the sole payee or
remittance party shown on the invoice;
 
(f)       no extension, compromise, settlement, modification, credit, deduction
or return has been authorized with respect to the Account, except discounts or
allowances granted in the Ordinary Course of Business for prompt payment that
are reflected on the face of the invoice related thereto and in the reports
submitted to Agent hereunder; and
 
(g)      to the best of Borrowers’ knowledge, (i) there are no facts or
circumstances that are reasonably likely to impair the enforceability or
collectibility of such Account; (ii) the Account Debtor had the capacity to
contract when the Account arose, continues to meet the applicable Borrower’s
customary credit standards, is Solvent, is not contemplating or subject to an
Insolvency Proceeding, and has not failed, or suspended or ceased doing
business; and (iii) there are no proceedings or actions threatened or pending
against any Account Debtor that could reasonably be expected to have a material
adverse effect on the Account Debtor’s financial condition.
 

 
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9.1.7       Financial Statements.  The consolidated and consolidating balance
sheets, and related statements of income, cash flow and shareholder’s equity, of
Guarantor and such other Persons described therein that have been and are
hereafter delivered to Agent and Lenders, are prepared in accordance with GAAP,
and fairly present the financial positions and results of operations of
Borrowers and Subsidiaries at the dates and for the periods indicated.  All
projections delivered from time to time to Agent and Lenders have been prepared
in good faith, based on reasonable assumptions in light of the circumstances at
such time.  Since December 31, 2010, there has been no change in the condition,
financial or otherwise, of Guarantor, any Borrower or Subsidiary that could
reasonably be expected to have a Material Adverse Effect.  No financial
statement delivered to Agent or Lenders at any time contains any untrue
statement of a material fact, nor fails to disclose any material fact necessary
to make such statement not materially misleading.  Each Borrower and Subsidiary
is Solvent.
 
9.1.8       Surety Obligations.  Neither any Borrower nor any of its
Subsidiaries is obligated as surety or indemnitor under any surety or similar
bond or other contract issued or entered into any agreement to assure payment,
performance or completion of performance of any undertaking or obligation of any
Person, except as provided in Schedule 9.1.8 or with respect to performance
bonds given in the ordinary course of business so long as the amount of
Indebtedness (contingent or otherwise) (a) with respect to any such bonds does
not at any time exceed $15,000,000 with respect to any one bond or related
series of bonds or (b) the greater of (x) $25,000,000 and (y) an amount equal to
ten percent (10%) of Borrowers’ net sales for the most recently ended four
fiscal quarters, in the aggregate.
 
9.1.9       Taxes.  Each Borrower and Subsidiary has filed all federal, state
and local tax returns and other reports that it is required by law to file, and
has paid, or made provision for the payment of, all Taxes upon it, its income
and its Properties that are due and payable, except to the extent being Properly
Contested.  The provision for Taxes on the books of each Borrower and Subsidiary
is adequate for all years not closed by applicable statutes, and for its current
Fiscal Year.
 
9.1.10     Brokers.  There are no brokerage commissions, finder’s fees or
investment banking fees payable in connection with any transactions contemplated
by the Loan Documents.
 
9.1.11     Intellectual Property.  Each Borrower and Subsidiary owns or has the
lawful right to use all Intellectual Property necessary for the conduct of its
business, without conflict with any rights of others.  There is no pending or,
to any Borrower’s knowledge, threatened Intellectual Property Claim with respect
to any Borrower, any Subsidiary or any of their Property (including any
Intellectual Property).  Except as disclosed on Schedule 9.1.11, no Borrower or
Subsidiary pays or owes any Royalty or other compensation to any Person with
respect to any Intellectual Property.  All Intellectual Property owned, used or
licensed by, or otherwise subject to any interests of, any Borrower or
Subsidiary is shown on Schedule 9.1.11.
 
 
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9.1.12     Governmental Approvals.  Each Borrower and Subsidiary has, is in
compliance with, and is in good standing with respect to, all Governmental
Approvals necessary to conduct its business and to own, lease and operate its
Properties.  All necessary import, export or other licenses, permits or
certificates for the import or handling of any goods or other Collateral have
been procured and are in effect, and Borrowers and Subsidiaries have complied
with all foreign and domestic laws with respect to the shipment and importation
of any goods or Collateral, except where noncompliance could not reasonably be
expected to have a Material Adverse Effect.
 
9.1.13     Compliance with Laws.  Each Borrower and Subsidiary has duly
complied, and its Properties and business operations are in compliance, in all
material respects with all Applicable Law, except where noncompliance could not
reasonably be expected to have a Material Adverse Effect.  There have been no
citations, notices or orders of material noncompliance issued to any Borrower or
Subsidiary under any Applicable Law.  To Borrowers’ knowledge, no Inventory has
been produced in violation of the FLSA.
 
9.1.14     Compliance with Environmental Laws.  Except as disclosed on
Schedule 9.1.14, no Borrower’s or Subsidiary’s past or present operations, Real
Estate or other Properties are subject to any federal, state or local
investigation to determine whether any remedial action is needed to address any
environmental pollution, hazardous material or environmental clean-up.  No
Borrower or Subsidiary has received any Environmental Notice.  No Borrower or
Subsidiary has any contingent liability with respect to any Environmental
Release, environmental pollution or hazardous material on any Real Estate now or
previously owned, leased or operated by it.
 
9.1.15     Burdensome Contracts.  No Borrower or Subsidiary is a party or
subject to any contract, agreement or charter restriction that could reasonably
be expected to have a Material Adverse Effect.  No Borrower or Subsidiary is
party or subject to any Restrictive Agreement, except as shown on
Schedule 9.1.15.  No such Restrictive Agreement prohibits the execution,
delivery or performance of any Loan Documents by an Obligor.
 
9.1.16     Litigation.  Except as shown on Schedule 9.1.16, there are no
proceedings or investigations pending or, to any Borrower’s knowledge,
threatened against any Borrower or Subsidiary, or any of their businesses,
operations, Properties, prospects or conditions, that (a) relate to any Loan
Documents or transactions contemplated thereby; or (b) could reasonably be
expected to have a Material Adverse Effect if determined adversely to any
Borrower or Subsidiary.  Except as shown on such Schedule, no Obligor has a
Commercial Tort Claim (other than, as long as no Default or Event of Default
exists, a Commercial Tort Claim for less than $1,000,000).  No Borrower or
Subsidiary is in default with respect to any order, injunction or judgment of
any Governmental Authority.
 
 
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9.1.17     No Defaults.  No event or circumstance has occurred or exists that
constitutes a Default or Event of Default.  No Borrower or Subsidiary is in
default, and no event or circumstance has occurred or exists that with the
passage of time or giving of notice would constitute a default, under any
Material Contract or in the payment of any Borrowed Money.  There is no basis
upon which any party (other than a Borrower or Subsidiary) could terminate a
Material Contract prior to its scheduled termination date.
 
9.1.18     ERISA.  Except as disclosed on Schedule 9.1.18:
 
(a)      Each Plan is in compliance in all material respects with the applicable
provisions of ERISA, the Code, and other federal and state laws.  Each Plan that
is intended to qualify under Section 401(a) of the Code has received a favorable
determination letter from the IRS or an application for such a letter is
currently being processed by the IRS with respect thereto and, to the knowledge
of Borrowers, nothing has occurred which would prevent, or cause the loss of,
such qualification.  Each Obligor and ERISA Affiliate has made all required
contributions to each Plan subject to Section 412 of the Code, and no
application for a funding waiver or an extension of any amortization period
pursuant to Section 412 of the Code has been made with respect to any Plan.
 
(b)      There are no pending or, to the knowledge of Borrowers, threatened
claims, actions or lawsuits, or action by any Governmental Authority, with
respect to any Plan that could reasonably be expected to have a Material Adverse
Effect.  There has been no prohibited transaction or violation of the fiduciary
responsibility rules with respect to any Plan that has resulted in or could
reasonably be expected to have a Material Adverse Effect.
 
(c)      (i) No ERISA Event has occurred or is reasonably expected to occur;
(ii) no Pension Plan has any Unfunded Pension Liability; (iii) no Obligor or
ERISA Affiliate has incurred, or reasonably expects to incur, any liability
under Title IV of ERISA with respect to any Pension Plan (other than premiums
due and not delinquent under Section 4007 of ERISA); (iv) no Obligor or ERISA
Affiliate has incurred, or reasonably expects to incur, any liability (and no
event has occurred which, with the giving of notice under Section 4219 of ERISA,
would result in such liability) under Section 4201 or 4243 of ERISA with respect
to a Multiemployer Plan; and (v) no Obligor or ERISA Affiliate has engaged in a
transaction that could be subject to Section 4069 or 4212(c) of ERISA.
 

 
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(d)      With respect to any Foreign Plan, (i) all employer and employee
contributions required by law or by the terms of the Foreign Plan have been
made, or, if applicable, accrued, in accordance with normal accounting
practices; (ii) the fair market value of the assets of each funded Foreign Plan,
the liability of each insurer for any Foreign Plan funded through insurance, or
the book reserve established for any Foreign Plan, together with any accrued
contributions, is sufficient to procure or provide for the accrued benefit
obligations with respect to all current and former participants in such Foreign
Plan according to the actuarial assumptions and valuations most recently used to
account for such obligations in accordance with applicable generally accepted
accounting principles; and (iii) it has been registered as required and has been
maintained in good standing with applicable regulatory authorities.
 
9.1.19     Trade Relations.  There exists no actual or threatened termination,
limitation or modification of any business relationship between any Borrower or
Subsidiary and any customer or supplier, or any group of customers or suppliers,
who individually or in the aggregate are material to the business of such
Borrower or Subsidiary.  There exists no condition or circumstance that could
reasonably be expected to impair the ability of any Borrower or Subsidiary to
conduct its business at any time hereafter in substantially the same manner as
conducted on the Closing Date.
 
9.1.20     Labor Relations.  Except as described on Schedule 9.1.20, no Borrower
or any Subsidiary is party to or bound by any collective bargaining agreement,
management agreement or consulting agreement.  There are no material grievances,
disputes or controversies with any union or other organization of any Borrower’s
or Subsidiary’s employees, or, to any Borrower’s knowledge, any asserted or
threatened strikes, work stoppages or demands for collective bargaining.
 
9.1.21     Payable Practices.  No Borrower or Subsidiary has made any material
change in its historical accounts payable practices from those in effect on the
Closing Date.
 
9.1.22     Not a Regulated Entity.  No Obligor is (a) an “investment company” or
a “person directly or indirectly controlled by or acting on behalf of an
investment company” within the meaning of the Investment Company Act of 1940; or
(b) subject to regulation under the Federal Power Act, the Interstate Commerce
Act, any public utilities code or any other Applicable Law regarding its
authority to incur Debt.
 
9.1.23     Margin Stock.  No Borrower or Subsidiary is engaged, principally or
as one of its important activities, in the business of extending credit for the
purpose of purchasing or carrying any Margin Stock.  No Loan proceeds or Letters
of Credit will be used by Borrowers to purchase or carry, or to reduce or
refinance any Debt incurred to purchase or carry, any Margin Stock or for any
related purpose governed by Regulations T, U or X of the Board of Governors.
 
9.2           Complete Disclosure.  No Loan Document contains any untrue
statement of a material fact, nor fails to disclose any material fact necessary
to make the statements contained therein not materially misleading.  There is no
fact or circumstance that any Obligor has failed to disclose to Agent in writing
that could reasonably be expected to have a Material Adverse Effect.
 
 
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SECTION 10.  COVENANTS AND CONTINUING AGREEMENTS
 
10.1        Affirmative Covenants.  As long as any Commitments or Obligations
are outstanding, each Borrower shall, and shall cause each Subsidiary to:
 
10.1.1     Inspections; Appraisals.
 
(a)      Permit Agent from time to time, subject (except when a Default or Event
of Default exists) to reasonable notice and normal business hours, to visit and
inspect the Properties of any Borrower or Subsidiary, inspect, audit and make
extracts from any Borrower’s or Subsidiary’s books and records, and discuss with
its officers, employees, agents, advisors and independent accountants such
Borrower’s or Subsidiary’s business, financial condition, assets, prospects and
results of operations.  Lenders may participate in any such visit or inspection,
at their own expense.  Neither Agent nor any Lender shall have any duty to any
Borrower to make any inspection, nor to share any results of any inspection,
appraisal or report with any Borrower.  Borrowers acknowledge that all
inspections, appraisals and reports are prepared by Agent and Lenders for their
purposes, and Borrowers shall not be entitled to rely upon them.  So long as no
Default or Event of Default has occurred and is continuing, Agent and Lenders
agree to give Borrower Agent reasonable notice of any such visit or inspection.
 
(b)      Reimburse Agent for all charges, costs and expenses of Agent in
connection with (i) examinations of any Obligor’s books and records or any other
financial or Collateral matters as Agent deems appropriate; and (ii) appraisals
of Inventory.  Without limiting the foregoing, Borrowers specifically agree to
pay Agent’s then standard charges for each day that an employee of Agent or its
Affiliates is engaged in any examination activities, and shall pay the standard
charges of Agent’s internal appraisal group.  This Section shall not be
construed to limit Agent’s right to conduct examinations or to obtain appraisals
at any time in its discretion, nor to use third parties for such purposes.
 
10.1.2     Financial and Other Information.  Keep adequate records and books of
account with respect to its business activities, in which proper entries are
made in accordance with GAAP reflecting all financial transactions; and furnish
to Agent and Lenders:

 
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(a)      as soon as available, and in any event within 90 days after the close
of each Fiscal Year, balance sheets as of the end of such Fiscal Year and the
related statements of income, cash flow and shareholders’ equity for such Fiscal
Year, on consolidated and consolidating (if requested by Agent) basis for
Guarantor, Borrowers and Subsidiaries, which consolidated statements shall be
audited and certified (without qualification) by a firm of independent certified
public accountants of recognized standing selected by Guarantor and acceptable
to Agent, and shall set forth in comparative form corresponding figures for the
preceding Fiscal Year and other information acceptable to Agent;
 
(b)      as soon as available, and in any event within 30 days after the end of
each month, unaudited balance sheets as of the end of such month and the related
statements of income and cash flow for such month and for the portion of the
Fiscal Year then elapsed, on consolidated and consolidating bases for Guarantor,
Borrowers and Subsidiaries, setting forth in comparative form corresponding
figures for the preceding Fiscal Year and certified by the chief financial
officer of Borrower Agent as prepared in accordance with GAAP and fairly
presenting the financial position and results of operations for such month and
period, subject to normal year end adjustments and the absence of footnotes;
 
(c)      concurrently with delivery of financial statements under clauses (a)
and (b) above, or more frequently if requested by Agent while a Default or Event
of Default exists, a Compliance Certificate executed by the chief financial
officer of Borrower Agent;
 
(d)      reserved;
 
(e)      not later than the first day of each Fiscal Year, projections of
Borrowers’ consolidated balance sheets, results of operations, cash flow and
Availability for the next Fiscal Year, month by month and for the next two
Fiscal Years, quarter by quarter;
 
(f)       promptly after the sending or filing thereof, copies of any proxy
statements, financial statements or reports that any Borrower has made generally
available to its shareholders; copies of any regular, periodic and special
reports or registration statements or prospectuses that any Borrower files with
the Securities and Exchange Commission or any other Governmental Authority, or
any securities exchange; and copies of any press releases or other statements
made available by a Borrower to the public concerning material changes to or
developments in the business of such Borrower;
 
(g)      promptly after the sending or filing thereof, copies of any annual
report to be filed in connection with each Plan or Foreign Plan; and
 
(h)      such other reports and information (financial or otherwise) as Agent
may request from time to time in connection with any Collateral or any
Guarantor’s, Borrower’s, Subsidiary’s or other Obligor’s financial condition or
business.
 
 
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10.1.3     Notices.  Notify Agent and Lenders in writing, promptly after a
Borrower’s obtaining knowledge thereof, of any of the following that affects an
Obligor:  (a) the threat or commencement of any proceeding or investigation,
whether or not covered by insurance, if an adverse determination could have a
Material Adverse Effect; (b) any pending or threatened labor dispute, strike or
walkout, or the expiration of any material labor contract; (c) any default under
or termination of a Material Contract; (d) the existence of any Default or Event
of Default; (e) any judgment in an amount exceeding $1,000,000; (f) the
assertion of any Intellectual Property Claim, if an adverse resolution could
have a Material Adverse Effect; (g) any violation or asserted violation of any
Applicable Law (including ERISA, OSHA, FLSA, or any Environmental Laws), if an
adverse resolution could have a Material Adverse Effect; (h) any Environmental
Release by an Obligor or on any Property owned, leased or occupied by an
Obligor; or receipt of any Environmental Notice; (i) the occurrence of any ERISA
Event; (j) the discharge of or any withdrawal or resignation by Borrowers’
independent accountants; or (k) any opening of a new office or place of
business, at least 30 days prior to such opening.
 
10.1.4     Landlord and Storage Agreements.  Upon request, provide Agent with
copies of all existing agreements, and promptly after execution thereof provide
Agent with copies of all future agreements, between an Obligor and any landlord,
warehouseman, processor, shipper, bailee or other Person that owns any premises
at which any Collateral may be kept or that otherwise may possess or handle any
Collateral.
 
10.1.5     Compliance with Laws.  Comply with all Applicable Laws, including
ERISA, Environmental Laws, FLSA, OSHA, Anti-Terrorism Laws, and laws regarding
collection and payment of Taxes, and maintain all Governmental Approvals
necessary to the ownership of its Properties or conduct of its business, unless
failure to comply (other than failure to comply with Anti-Terrorism Laws) or
maintain could not reasonably be expected to have a Material Adverse
Effect.  Without limiting the generality of the foregoing, if any material
Environmental Release occurs at or on any Properties of any Borrower or
Subsidiary, it shall act promptly and diligently to investigate and report to
Agent and all appropriate Governmental Authorities the extent of, and to make
appropriate remedial action to eliminate, such Environmental Release, whether or
not directed to do so by any Governmental Authority.
 
10.1.6     Taxes.  Pay and discharge all material Taxes prior to the date on
which they become delinquent or penalties attach, unless such Taxes are being
Properly Contested.
 
10.1.7     Insurance.  In addition to the insurance required hereunder with
respect to Collateral, maintain insurance with insurers (with a Best Rating of
at least A+, unless otherwise approved by Agent) satisfactory to Agent, (a) with
respect to the Properties and business of Borrowers and Subsidiaries of such
type (including product liability, workers’ compensation, larceny, embezzlement,
or other criminal misappropriation insurance), in such amounts, and with such
coverages and deductibles as are customary for companies similarly situated; and
(b) business interruption insurance in an amount not less than $20,000,000, with
deductibles and subject to an Insurance Assignment satisfactory to Agent.
 
 
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10.1.8     Licenses.  Keep each License affecting any Collateral (including the
manufacture, distribution or disposition of Inventory) or any other material
Property of Borrowers and Subsidiaries in full force and effect unless the
failure to maintain such License could not reasonably be expected to have a
Material Adverse Effect; promptly notify Agent of any proposed material
modification to any such License, or entry into any new License, in each case at
least 30 days prior to its effective date; pay all Royalties when due; and
notify Agent of any default or breach asserted by any Person to have occurred
under any License.
 
10.1.9     Future Subsidiaries.  Promptly notify Agent upon any Person becoming
a Subsidiary and, if such Person is not a Foreign Subsidiary, cause it to
guaranty the Obligations in a manner satisfactory to Agent, and to execute and
deliver such documents, instruments and agreements and to take such other
actions as Agent shall require to evidence and perfect a Lien in favor of Agent
(for the benefit of Secured Parties) on all assets of such Person, including
delivery of such legal opinions, in form and substance satisfactory to Agent, as
it shall deem appropriate.
 
10.2        Negative Covenants.  As long as any Commitments or Obligations are
outstanding, each Borrower shall not, and shall cause each Subsidiary not to:
 
10.2.1     Permitted Debt.  Create, incur, guarantee or suffer to exist any
Debt, except:
 
(a)      the Obligations;
 
(b)      Debt of any Borrower to a Borrower;
 
(c)      Permitted Purchase Money Debt;
 
(d)      Bank Product Debt;
 
(e)      Debt that is in existence when a Person becomes a Subsidiary or that is
secured by an asset when such asset is acquired by a Borrower or Subsidiary, as
long as such Debt was not incurred in contemplation of such Person becoming a
Subsidiary or such acquisition, and does not exceed $1,000,000 in the aggregate
at any time;
 
(f)       Permitted Contingent Obligations;
 
(g)      Refinancing Debt as long as each Refinancing Condition is satisfied;
 
 
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(h)      Debt incurred to finance the purchase or development of Real Estate and
improvements thereon for use by Borrowers in the Ordinary Course of Business so
long as the aggregate principal amount of such Debt does not at any time exceed
$10,000,000; and
 
(i)       Debt that is not included in any of the preceding clauses of this
Section, is not secured by a Lien and does not exceed $1,000,000 in the
aggregate at any time.
 
10.2.2     Permitted Liens.  Create or suffer to exist any Lien upon any of its
Property, except the following (collectively, “Permitted Liens”):
 
(a)      Liens in favor of Agent;
 
(b)      Purchase Money Liens securing Permitted Purchase Money Debt;
 
(c)      Liens for Taxes not yet due or being Properly Contested;
 
(d)      statutory Liens (other than Liens for Taxes or imposed under ERISA)
arising in the Ordinary Course of Business, but only if (i) payment of the
obligations secured thereby is not yet due or is being Properly Contested, and
(ii) such Liens do not materially impair the value or use of the Property or
materially impair operation of the business of any Borrower or Subsidiary;
 
(e)      Liens incurred or deposits made in the Ordinary Course of Business to
secure the performance of tenders, bids, leases, contracts (except those
relating to Borrowed Money), statutory obligations and other similar
obligations, or arising as a result of progress payments under government
contracts, as long as such Liens are at all times junior to Agent’s Liens;
 
(f)       Liens arising in the Ordinary Course of Business that are subject to
Lien Waivers;
 
(g)      Liens arising by virtue of a judgment or judicial order against any
Borrower or Subsidiary, or any Property of a Borrower or Subsidiary, as long as
such Liens are (i) in existence for less than 20 consecutive days or being
Properly Contested, and (ii) at all times junior to Agent’s Liens;
 
(h)      easements, rights-of-way, restrictions, covenants or other agreements
of record, and other similar charges or encumbrances on Real Estate, that do not
secure any monetary obligation and do not interfere with the Ordinary Course of
Business;
 
 
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(i)       normal and customary rights of setoff upon deposits in favor of
depository institutions, and Liens of a collecting bank on Payment Items in the
course of collection;
 
(j)       existing Liens shown on Schedule 10.2.2;
 
(k)      Liens securing Debt permitted to be incurred pursuant to
Section 10.1.1(e) or arising under Permitted Contingent Obligations of the type
described in clause (a), (d) and (f) of the definition of such term;
 
(l)       Liens on Real Estate securing Debt permitted to be incurred pursuant
to Section 10.1.1(h);
 
(m)     Liens (subordinated to the Liens of Agent) in favor of another Borrower;
and
 
(n)      Such other Liens as Required Lenders may hereafter approve in writing.
 
10.2.3     Reserved.
 
10.2.4     Distributions; Upstream Payments.  Create or suffer to exist any
encumbrance or restriction on the ability of a Subsidiary to make any Upstream
Payment, except for restrictions under the Loan Documents, under Applicable Law
or in effect on the Closing Date as shown on Schedule 9.1.15, or declare or make
any Distributions except:
 
(a)      Upstream Payments;
 
(b)      a Borrower may pay dividends to Guarantor in an amount sufficient to
maintain the corporate existence of Guarantor, to pay income taxes and to pay
the reasonable out-of-pocket expenses of Guarantor and audit fees and expenses,
not to exceed $500,000 per annum in the aggregate;
 
(c)      a Borrower may pay dividends to Guarantor for further distribution to
its stockholders in an amount not to exceed the lesser of (x) income taxes on
phantom income incurred on the issuance of payment-in-kind notes with respect to
the Guarantor Subordinated Debt or (y) $500,000 per year;
 
(d)      a Borrower may pay dividends to Guarantor of up to $500,000 in each
Fiscal year to repurchase the capital stock of employees who die or terminate
their employment with any Borrower; and
 
 
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(e)      Borrower Agent may make Distributions to Guarantor to permit Guarantor
to pay dividends on Guarantor’s common stock or make repurchases of Guarantor’s
common stock so long as after giving effect to any such Distribution, (i) no
Event of Default shall have occurred and is continuing, (ii) the Fixed Charge
Coverage Ratio for the most recently ended twelve month period for which
financial statements are available, computed on a pro forma basis treating any
such Distribution as a Fixed Charge made within such period, equals or exceeds
1.10 to 1, and (iii) Availability was or will not be less than $15,000,000 at
any time within the 90 days immediately prior to the date of such Distribution
or after giving effect to such Distribution and any pending Distribution for
declared but unpaid dividends or common stock repurchases.
 
10.2.5     Restricted Investments.  Make any Restricted Investment.
 
10.2.6     Disposition of Assets.  Make any Asset Disposition, except a
Permitted Asset Disposition, a disposition of Equipment under Section 8.4.2, or
a transfer of Property by a Subsidiary or Obligor to a Borrower.
 
10.2.7     Loans.  Make any loans or other advances of money to any Person,
except (a) advances to an officer or employee for salary, travel expenses,
commissions and similar items in the Ordinary Course of Business; (b) prepaid
expenses and extensions of trade credit made in the Ordinary Course of Business;
(c) deposits with financial institutions permitted hereunder; and (d) as long as
no Default or Event of Default exists, intercompany loans by a Borrower to
another Borrower.
 
10.2.8     Reserved.
 
10.2.9     Fundamental Changes.  Merge, combine or consolidate with any Person,
or liquidate, wind up its affairs or dissolve itself, in each case whether in a
single transaction or in a series of related transactions, except for mergers or
consolidations of a wholly-owned Subsidiary with another wholly-owned Subsidiary
or into a Borrower; change its name or conduct business under any fictitious
name; change its tax, charter or other organizational identification number; or
change its form or state of organization.
 
10.2.10   Subsidiaries.  Form or acquire any Subsidiary after the Closing Date,
except in accordance with Sections 10.1.9 and 10.2.5; or permit any existing
Subsidiary to issue any additional Equity Interests except director’s qualifying
shares and Equity Interests issued to existing security holders on a pro rata
basis.
 
10.2.11   Organic Documents.  Amend, modify or otherwise change any of its
Organic Documents as in effect on the Closing Date, in any manner that could
reasonably be expected to adversely affect Agent, any Lender or Issuing Bank in
any material respect.
 
10.2.12   Tax Consolidation.  File or consent to the filing of any consolidated
income tax return with any Person other than Guarantor, Borrowers and
Subsidiaries.
 
 
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10.2.13   Accounting Changes.  Make any material change in accounting treatment
or reporting practices, except as required by GAAP and in accordance with
Section 1.2; or change its Fiscal Year.
 
10.2.14   Restrictive Agreements.  Become a party to any Restrictive Agreement,
except a Restrictive Agreement (a) in effect on the Closing Date; (b) relating
to secured Debt permitted hereunder, as long as the restrictions apply only to
collateral for such Debt; or (c) constituting customary restrictions on
assignment in leases and other contracts.
 
10.2.15   Hedging Agreements.  Enter into any Hedging Agreement, except to hedge
risks arising in the Ordinary Course of Business and not for speculative
purposes.
 
10.2.16   Conduct of Business.  Engage in any business, other than its business
as conducted on the Closing Date and any activities incidental thereto.
 
10.2.17   Affiliate Transactions.  Enter into or be party to any transaction
with an Affiliate, except (a) transactions contemplated by the Loan Documents;
(b) payment of reasonable compensation to officers and employees for services
actually rendered, and loans and advances permitted by Section 10.2.7;
(c) payment of customary directors’ fees and indemnities; (d) transactions
solely among Borrowers; (e) transactions with Affiliates that were consummated
prior to the Closing Date, as shown on Schedule 10.2.17; and (f) transactions
with Affiliates in the Ordinary Course of Business, upon fair and reasonable
terms fully disclosed to Agent and no less favorable than would be obtained in a
comparable arm’s-length transaction with a non-Affiliate.
 
10.2.18  Plans.  Become party to any Multiemployer Plan or Foreign Plan, other
than any in existence on the Closing Date.
 
10.3        Financial Covenants.  As long as any Commitments or Obligations are
outstanding, Borrowers shall:
 
10.3.1     Fixed Charge Coverage Ratio.  If a Trigger Period exists, maintain a
Fixed Charge Coverage Ratio of at least 1.10 to 1.0 for the most recently ended
period of four Fiscal Quarters for which financial statements have been issued.
 
SECTION 11.  EVENTS OF DEFAULT; REMEDIES ON DEFAULT
 
11.1        Events of Default.  Each of the following shall be an “Event of
Default” hereunder, if the same shall occur for any reason whatsoever, whether
voluntary or involuntary, by operation of law or otherwise:
 
 
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(a)      A Borrower fails to pay any Obligations when due (whether at stated
maturity, on demand, upon acceleration or otherwise and such failure shall
continue for five (5) days (ten (10) days with respect to Obligations other than
interest, principal and fees) after the applicable due date.  Borrowers
acknowledge that, to the extent of Availability, such interest, principal, fees
and/or other Obligations shall be paid by advances of Revolver Loans pursuant to
Section 2.1);
 
(b)      Any representation, warranty or other written statement of an Obligor
made in connection with any Loan Documents or transactions contemplated thereby
is incorrect or misleading in any material respect when given;
 
(c)      A Borrower breaches or fails to perform any covenant contained in
Section 7.2 (Lien on Deposit Accounts; Cash Collateral), 7.3 (Other Collateral),
7.5 (Further Assurances), 8.1 (Collateral Administration), 8.2.4 (Maintenance of
Dominion Account), 8.2.5 (Proceeds of Collateral), 8.6.2 (Insurance of
Collateral; Condemnation Proceeds), 10.1.1 (Inspections; Appraisals), 10.1.2
(Financial and Other Information), 10.2 (Negative Covenants) or 10.3 (Financial
Covenants);
 
(d)      An Obligor breaches or fails to perform any other covenant contained in
any Loan Documents, and such breach or failure is not cured within 15 days after
a Senior Officer of such Obligor has knowledge thereof or receives notice
thereof from Agent, whichever is sooner; provided, however, that such notice and
opportunity to cure shall not apply if the breach or failure to perform is not
capable of being cured within such period or is a willful breach by an Obligor;
 
(e)      A Guarantor repudiates, revokes or attempts to revoke its Guaranty; an
Obligor denies or contests the validity or enforceability of any Loan Documents
or Obligations, or the perfection or priority of any Lien granted to Agent; or
any Loan Document ceases to be in full force or effect for any reason (other
than a waiver or release by Agent and Lenders);
 
(f)       Any breach or default of an Obligor occurs under any document,
instrument or agreement to which it is a party or by which it or any of its
Properties is bound, relating to any Debt (other than the Obligations) in excess
of $1,000,000, if the maturity of or any payment with respect to such Debt is
accelerated or demanded due to such breach;
 
(g)      Any money judgments, writ of attachment or similar processes are issued
or rendered against any Borrower or any Subsidiary of any Borrower or any of
their respective Property in an amount of $1,000,000 or more for any single
judgment, attachment or process or $2,000,000 or more for all such judgments,
attachments or processes in the aggregate, in each case in excess of any
applicable insurance with respect to which the insurer has admitted liability
and which judgment, attachment or process is not stayed, released or discharged
within 30 days.  Any non-money judgment (or any non-monetary portion of a
judgment) shall be issued or rendered against any Borrower and such judgment is
reasonably expected to have a Material Adverse Effect and such judgment is not
stayed, released or discharged within 30 days.
 
 
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(h)      A loss, theft, damage or destruction occurs with respect to any
Collateral if the amount not covered by insurance exceeds $1,000,000;
 
(i)       An Obligor is enjoined, restrained or in any way prevented by any
Governmental Authority from conducting any material part of its business; an
Obligor suffers the loss, revocation or termination of any material license,
permit, lease or agreement necessary to its business; there is a cessation of
any material part of an Obligor’s business for a material period of time; any
material Collateral or Property of an Obligor is taken or impaired through
condemnation; an Obligor agrees to or commences any liquidation, dissolution or
winding up of its affairs; or any Obligor is not Solvent;
 
(j)       An Insolvency Proceeding is commenced by an Obligor; an Obligor makes
an offer of settlement, extension or composition to its unsecured creditors
generally; a trustee is appointed to take possession of any substantial Property
of or to operate any of the business of an Obligor; or an Insolvency Proceeding
is commenced against an Obligor and the Obligor consents to institution of the
proceeding, the petition commencing the proceeding is not timely contested by
the Obligor, the petition is not dismissed within 60 days after filing, or an
order for relief is entered in the proceeding;
 
(k)      Any Obligor or any of its Senior Officers is criminally indicted or
convicted for (i) a felony committed in the conduct of the Obligor’s business,
or (ii) violating any state or federal law (including the Controlled Substances
Act, Money Laundering Control Act of 1986 and Illegal Exportation of War
Materials Act) that could lead to forfeiture of any material Property or any
Collateral; or
 
(l)       Guarantor shall cease to own and control, directly or indirectly,
beneficially and of record, all of the issued and outstanding capital stock of
Borrower Agent and each other Borrower.  A Change of Control shall occur with
respect to Guarantor.
 
11.2        Remedies upon Default.  If an Event of Default described in
Section 11.1(j) occurs with respect to any Borrower, then to the extent
permitted by Applicable Law, all Obligations shall become automatically due and
payable and all Commitments shall terminate, without any action by Agent or
notice of any kind.  In addition, or if any other Event of Default exists, Agent
may in its discretion (and shall upon written direction of Required Lenders) do
any one or more of the following from time to time:
 
 
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(a)      declare any Obligations immediately due and payable, whereupon they
shall be due and payable without diligence, presentment, demand, protest or
notice of any kind, all of which are hereby waived by Borrowers to the fullest
extent permitted by law;
 
(b)      terminate, reduce or condition any Commitment, or make any adjustment
to the Borrowing Base;
 
(c)      require Obligors to Cash Collateralize LC Obligations, Bank Product
Debt and other Obligations that are contingent or not yet due and payable, and,
if Obligors fail promptly to deposit such Cash Collateral, Agent may (and shall
upon the direction of Required Lenders) advance the required Cash Collateral as
Revolver Loans (whether or not an Overadvance exists or is created thereby, or
the conditions in Section 6 are satisfied); and
 
(d)      exercise any other rights or remedies afforded under any agreement, by
law, at equity or otherwise, including the rights and remedies of a secured
party under the UCC.  Such rights and remedies include the rights to (i) take
possession of any Collateral; (ii) require Borrowers to assemble Collateral, at
Borrowers’ expense, and make it available to Agent at a place designated by
Agent; (iii) enter any premises where Collateral is located and store Collateral
on such premises until sold (and if the premises are owned or leased by a
Borrower, Borrowers agree not to charge for such storage); and (iv) sell or
otherwise dispose of any Collateral in its then condition, or after any further
manufacturing or processing thereof, at public or private sale, with such notice
as may be required by Applicable Law, in lots or in bulk, at such locations, all
as Agent, in its discretion, deems advisable.  Each Borrower agrees that 10 days
notice of any proposed sale or other disposition of Collateral by Agent shall be
reasonable.  Agent shall have the right to conduct such sales on any Obligor’s
premises, without charge, and such sales may be adjourned from time to time in
accordance with Applicable Law.  Agent shall have the right to sell, lease or
otherwise dispose of any Collateral for cash, credit or any combination thereof,
and Agent may purchase any Collateral at public or, if permitted by law, private
sale and, in lieu of actual payment of the purchase price, may set off the
amount of such price against the Obligations.
 
11.3        License.  Agent is hereby granted an irrevocable, non-exclusive
license or other right to use, license or sub-license (without payment of
royalty or other compensation to any Person) any or all Intellectual Property of
Borrowers, computer hardware and software, trade secrets, brochures, customer
lists, promotional and advertising materials, labels, packaging materials and
other Property, in advertising for sale, marketing, selling, collecting,
completing manufacture of, or otherwise exercising any rights or remedies with
respect to, any Collateral.  Each Borrower’s rights and interests under
Intellectual Property shall inure to Agent’s benefit.
 
 
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11.4        Setoff.  At any time during an Event of Default, Agent, Issuing
Bank, Lenders, and any of their Affiliates are authorized, to the fullest extent
permitted by Applicable Law, to set off and apply any and all deposits (general
or special, time or demand, provisional or final, in whatever currency) at any
time held and other obligations (in whatever currency) at any time owing by
Agent, Issuing Bank, such Lender or such Affiliate to or for the credit or the
account of an Obligor against any Obligations, irrespective of whether or not
Agent, Issuing Bank, such Lender or such Affiliate shall have made any demand
under this Agreement or any other Loan Document and although such Obligations
may be contingent or unmatured or are owed to a branch or office of Agent,
Issuing Bank, such Lender or such Affiliate different from the branch or office
holding such deposit or obligated on such indebtedness.  The rights of Agent,
Issuing Bank, each Lender and each such Affiliate under this Section are in
addition to other rights and remedies (including other rights of setoff) that
such Person may have.
 
11.5        Remedies Cumulative; No Waiver.
 
11.5.1     Cumulative Rights.  All agreements, warranties, guaranties,
indemnities and other undertakings of Borrowers under the Loan Documents are
cumulative and not in derogation of each other.  The rights and remedies of
Agent and Lenders are cumulative, may be exercised at any time and from time to
time, concurrently or in any order, and are not exclusive of any other rights or
remedies available by agreement, by law, at equity or otherwise.  All such
rights and remedies shall continue in full force and effect until Full Payment
of all Obligations.
 
11.5.2     Waivers.  No waiver or course of dealing shall be established by (a)
the failure or delay of Agent or any Lender to require strict performance by
Borrowers with any terms of the Loan Documents, or to exercise any rights or
remedies with respect to Collateral or otherwise, (b) the making of any Loan or
issuance of any Letter of Credit during a Default, Event of Default or other
failure to satisfy any conditions precedent; or (c) acceptance by Agent or any
Lender of any payment or performance of an Obligor under any Loan Documents in a
manner other than that specified therein.  It is expressly acknowledged by
Borrowers that any failure to satisfy a financial covenant on a measurement date
shall not be cured or remedied by satisfaction of such covenant on a subsequent
date.
 
 
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SECTION 12.  AGENT
 
12.1        Appointment, Authority and Duties of Agent.
 
12.1.1     Appointment and Authority.  Each Lender appoints and designates Bank
of America as Agent hereunder.  Agent may, and each Lender authorizes Agent to,
enter into all Loan Documents to which Agent is intended to be a party and
accept all Security Documents, for Agent’s benefit and the Pro Rata benefit of
Lenders.  Each Lender agrees that any action taken by Agent or Required Lenders
in accordance with the provisions of the Loan Documents, and the exercise by
Agent or Required Lenders of any rights or remedies set forth therein, together
with all other powers reasonably incidental thereto, shall be authorized by and
binding upon all Lenders.  Without limiting the generality of the foregoing,
Agent shall have the sole and exclusive authority to (a) act as the disbursing
and collecting agent for Lenders with respect to all payments and collections
arising in connection with the Loan Documents; (b) execute and deliver as Agent
each Loan Document, including any intercreditor or subordination agreement, and
accept delivery of each Loan Document from any Obligor or other Person; (c) act
as collateral agent for Secured Parties for purposes of perfecting and
administering Liens under the Loan Documents, and for all other purposes stated
therein; (d) manage, supervise or otherwise deal with Collateral; and (e) take
any Enforcement Action or otherwise exercise any rights or remedies with respect
to any Collateral under the Loan Documents, Applicable Law or otherwise.  The
duties of Agent shall be ministerial and administrative in nature, and Agent
shall not have a fiduciary relationship with any Lender, Secured Party,
Participant or other Person, by reason of any Loan Document or any transaction
relating thereto.  Agent alone shall be authorized to determine whether any
Accounts or Inventory constitute Eligible Accounts or Eligible Inventory, or
whether to impose or release any reserve, and to exercise its reasonable credit
judgment in connection therewith, which determinations and judgments, if
exercised in good faith, shall exonerate Agent from liability to any Lender or
other Person for any error in judgment.
 
12.1.2     Duties.  Agent shall not have any duties except those expressly set
forth in the Loan Documents.  The conferral upon Agent of any right shall not
imply a duty on Agent’s part to exercise such right, unless instructed to do so
by Required Lenders in accordance with this Agreement.
 
12.1.3     Agent Professionals.  Agent may perform its duties through agents and
employees.  Agent may consult with and employ Agent Professionals, and shall be
entitled to act upon, and shall be fully protected in any action taken in good
faith reliance upon, any advice given by an Agent Professional.  Agent shall not
be responsible for the negligence or misconduct of any agents, employees or
Agent Professionals selected by it with reasonable care.
 
12.1.4     Instructions of Required Lenders.  The rights and remedies conferred
upon Agent under the Loan Documents may be exercised without the necessity of
joinder of any other party, unless required by Applicable Law.  Agent may
request instructions from Required Lenders with respect to any act (including
the failure to act) in connection with any Loan Documents, and may seek
assurances to its satisfaction from Lenders of their indemnification obligations
under Section 12.6 against all Claims that could be incurred by Agent in
connection with any act.  Agent shall be entitled to refrain from any act until
it has received such instructions or assurances, and Agent shall not incur
liability to any Person by reason of so refraining.  Instructions of Required
Lenders shall be binding upon all Lenders, and no Lender shall have any right of
action whatsoever against Agent as a result of Agent acting or refraining from
acting in accordance with the instructions of Required Lenders.  Notwithstanding
the foregoing, instructions by and consent of all Lenders shall be required in
the circumstances described in Section 14.1.1, and in no event shall Required
Lenders, without the prior written consent of each Lender, direct Agent to
accelerate and demand payment of Loans held by one Lender without accelerating
and demanding payment of all other Loans, nor to terminate the Commitments of
one Lender without terminating the Commitments of all Lenders.  In no event
shall Agent be required to take any action that, in its opinion, is contrary to
Applicable Law or any Loan Documents or could subject any Agent Indemnitee to
personal liability.
 
 
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12.2        Agreements Regarding Collateral and Field Examination Reports.
 
12.2.1     Lien Releases; Care of Collateral.  Lenders authorize Agent to
release any Lien with respect to any Collateral (a) upon Full Payment of the
Obligations; (b) that is the subject of an Asset Disposition which Borrowers
certify in writing to Agent is a Permitted Asset Disposition or a Lien which
Borrowers certify is a Permitted Lien entitled to priority over Agent’s Liens
(and Agent may rely conclusively on any such certificate without further
inquiry); (c) that does not constitute a material part of the Collateral; or
(d) with the written consent of all Lenders.  Agent shall have no obligation
whatsoever to any Lenders to assure that any Collateral exists or is owned by a
Borrower, or is cared for, protected, insured or encumbered, nor to assure that
Agent’s Liens have been properly created, perfected or enforced, or are entitled
to any particular priority, nor to exercise any duty of care with respect to any
Collateral.
 
12.2.2     Possession of Collateral.  Agent and Lenders appoint each other
Lender as agent (for the benefit of Secured Parties) for the purpose of
perfecting Liens in any Collateral held by such Lender, to the extent such Liens
are perfected by possession.  If any Lender obtains possession of any
Collateral, it shall notify Agent thereof and, promptly upon Agent’s request,
deliver such Collateral to Agent or otherwise deal with it in accordance with
Agent’s instructions.
 
12.2.3     Reports.  Agent shall promptly, upon receipt thereof, forward to each
Lender copies of the results of any field audit, examination or appraisal
prepared by or on behalf of Agent with respect to any Obligor or Collateral
(“Report”).  Each Lender agrees (a) that neither Bank of America nor Agent makes
any representation or warranty as to the accuracy or completeness of any Report,
and shall not be liable for any information contained in or omitted from any
Report; (b) that the Reports are not intended to be comprehensive audits or
examinations, and that Agent or any other Person performing any audit or
examination will inspect only specific information regarding Obligations or the
Collateral and will rely significantly upon Borrowers’ books and records as well
as upon representations of Borrowers’ officers and employees; and (c) to keep
all Reports confidential and strictly for such Lender’s internal use, and not to
distribute any Report (or the contents thereof) to any Person (except to such
Lender’s Participants, attorneys and accountants) or use any Report in any
manner other than administration of the Loans and other Obligations.  Each
Lender agrees to indemnify and hold harmless Agent and any other Person
preparing a Report from any action such Lender may take as a result of or any
conclusion it may draw from any Report, as well as any Claims arising in
connection with any third parties that obtain any part or contents of a Report
through such Lender.
 
 
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12.3        Reliance By Agent.  Agent shall be entitled to rely, and shall be
fully protected in relying, upon any certification, notice or other
communication (including those by telephone, telex, telegram, telecopy or
e-mail) believed by it to be genuine and correct and to have been signed, sent
or made by the proper Person, and upon the advice and statements of Agent
Professionals.
 
12.4        Action Upon Default.  Agent shall not be deemed to have knowledge of
any Default or Event of Default unless it has received written notice from a
Lender or Borrower specifying the occurrence and nature thereof.  If any Lender
acquires knowledge of a Default or Event of Default, it shall promptly notify
Agent and the other Lenders thereof in writing.  Each Lender agrees that, except
as otherwise provided in any Loan Documents or with the written consent of Agent
and Required Lenders, it will not take any Enforcement Action, accelerate
Obligations under any Loan Documents, or exercise any right that it might
otherwise have under Applicable Law to credit bid at foreclosure sales, UCC
sales or other similar dispositions of Collateral.  Notwithstanding the
foregoing, however, a Lender may take action to preserve or enforce its rights
against an Obligor where a deadline or limitation period is applicable that
would, absent such action, bar enforcement of Obligations held by such Lender,
including the filing of proofs of claim in an Insolvency Proceeding.
 
12.5        Ratable Sharing.  If any Lender shall obtain any payment or
reduction of any Obligation, whether through set-off or otherwise, in excess of
its share of such Obligation, determined on a Pro Rata basis or in accordance
with Section 5.6.1, as applicable, such Lender shall forthwith purchase from
Agent, Issuing Bank and the other Lenders such participations in the affected
Obligation as are necessary to cause the purchasing Lender to share the excess
payment or reduction on a Pro Rata basis or in accordance with Section 5.6.1, as
applicable.  If any of such payment or reduction is thereafter recovered from
the purchasing Lender, the purchase shall be rescinded and the purchase price
restored to the extent of such recovery, but without interest.  No Lender shall
set off against any Dominion Account without the prior consent of Agent.
 
12.6        Indemnification of Agent Indemnitees.  EACH LENDER SHALL INDEMNIFY
AND HOLD HARMLESS AGENT INDEMNITEES, TO THE EXTENT NOT REIMBURSED BY OBLIGORS
(BUT WITHOUT LIMITING THE INDEMNIFICATION OBLIGATIONS OF OBLIGORS UNDER ANY LOAN
DOCUMENTS), ON A PRO RATA BASIS, AGAINST ALL CLAIMS THAT MAY BE INCURRED BY OR
ASSERTED AGAINST ANY AGENT INDEMNITEE, PROVIDED THE CLAIM RELATES TO OR ARISES
FROM AN AGENT INDEMNITEE ACTING AS OR FOR AGENT (IN ITS CAPACITY AS AGENT).  In
Agent’s discretion, it may reserve for any such Claims made against an Agent
Indemnitee, and may satisfy any judgment, order or settlement relating thereto,
from proceeds of Collateral prior to making any distribution of Collateral
proceeds to Lenders.  If Agent is sued by any receiver, bankruptcy trustee,
debtor-in-possession or other Person for any alleged preference or fraudulent
transfer, then any monies paid by Agent in settlement or satisfaction of such
proceeding, together with all interest, costs and expenses (including attorneys’
fees) incurred in the defense of same, shall be promptly reimbursed to Agent by
each Lender to the extent of its Pro Rata share.
 
 
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12.7        Limitation on Responsibilities of Agent.  Agent shall not be liable
to Lenders for any action taken or omitted to be taken under the Loan Documents,
except for losses directly and solely caused by Agent’s gross negligence or
willful misconduct.  Agent does not assume any responsibility for any failure or
delay in performance or any breach by any Obligor or Lender of any obligations
under the Loan Documents.  Agent does not make to Lenders any express or implied
warranty, representation or guarantee with respect to any Obligations,
Collateral, Loan Documents or Obligor.  No Agent Indemnitee shall be responsible
to Lenders for any recitals, statements, information, representations or
warranties contained in any Loan Documents; the execution, validity,
genuineness, effectiveness or enforceability of any Loan Documents; the
genuineness, enforceability, collectibility, value, sufficiency, location or
existence of any Collateral, or the validity, extent, perfection or priority of
any Lien therein; the validity, enforceability or collectibility of any
Obligations; or the assets, liabilities, financial condition, results of
operations, business, creditworthiness or legal status of any Obligor or Account
Debtor.  No Agent Indemnitee shall have any obligation to any Lender to
ascertain or inquire into the existence of any Default or Event of Default, the
observance or performance by any Obligor of any terms of the Loan Documents, or
the satisfaction of any conditions precedent contained in any Loan Documents.
 
12.8        Successor Agent and Co-Agents.
 
12.8.1     Resignation; Successor Agent.  Subject to the appointment and
acceptance of a successor Agent as provided below, Agent may resign at any time
by giving at least 30 days written notice thereof to Lenders and
Borrowers.  Upon receipt of such notice, Required Lenders shall have the right
to appoint a successor Agent which shall be (a) a Lender or an Affiliate of a
Lender; or (b) a commercial bank that is organized under the laws of the United
States or any state or district thereof, has a combined capital surplus of at
least $200,000,000 and (provided no Default or Event of Default exists) is
reasonably acceptable to Borrowers.  If no successor agent is appointed prior to
the effective date of the resignation of Agent, then Agent may appoint a
successor agent from among Lenders.  Upon acceptance by a successor Agent of an
appointment to serve as Agent hereunder, such successor Agent shall thereupon
succeed to and become vested with all the powers and duties of the retiring
Agent without further act, and the retiring Agent shall be discharged from its
duties and obligations hereunder but shall continue to have the benefits of the
indemnification set forth in Sections 12.6 and 14.2.  Notwithstanding any
Agent’s resignation, the provisions of this Section 12 shall continue in effect
for its benefit with respect to any actions taken or omitted to be taken by it
while Agent.  Any successor to Bank of America by merger or acquisition of stock
or this loan shall continue to be Agent hereunder without further act on the
part of the parties hereto, unless such successor resigns as provided above.
 
 
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12.8.2     Separate Collateral Agent.  It is the intent of the parties that
there shall be no violation of any Applicable Law denying or restricting the
right of financial institutions to transact business in any jurisdiction.  If
Agent believes that it may be limited in the exercise of any rights or remedies
under the Loan Documents due to any Applicable Law, Agent may appoint an
additional Person who is not so limited, as a separate collateral agent or
co-collateral agent.  If Agent so appoints a collateral agent or co-collateral
agent, each right and remedy intended to be available to Agent under the Loan
Documents shall also be vested in such separate agent.  Every covenant and
obligation necessary to the exercise thereof by such agent shall run to and be
enforceable by it as well as Agent.  Lenders shall execute and deliver such
documents as Agent deems appropriate to vest any rights or remedies in such
agent.  If any collateral agent or co-collateral agent shall die or dissolve,
become incapable of acting, resign or be removed, then all the rights and
remedies of such agent, to the extent permitted by Applicable Law, shall vest in
and be exercised by Agent until appointment of a new agent.
 
12.9        Due Diligence and Non-Reliance.  Each Lender acknowledges and agrees
that it has, independently and without reliance upon Agent or any other Lenders,
and based upon such documents, information and analyses as it has deemed
appropriate, made its own credit analysis of each Obligor and its own decision
to enter into this Agreement and to fund Loans and participate in LC Obligations
hereunder.  Each Lender has made such inquiries concerning the Loan Documents,
the Collateral and each Obligor as such Lender feels necessary.  Each Lender
further acknowledges and agrees that the other Lenders and Agent have made no
representations or warranties concerning any Obligor, any Collateral or the
legality, validity, sufficiency or enforceability of any Loan Documents or
Obligations.  Each Lender will, independently and without reliance upon the
other Lenders or Agent, and based upon such financial statements, documents and
information as it deems appropriate at the time, continue to make and rely upon
its own credit decisions in making Loans and participating in LC Obligations,
and in taking or refraining from any action under any Loan Documents.  Except
for notices, reports and other information expressly requested by a Lender,
Agent shall have no duty or responsibility to provide any Lender with any
notices, reports or certificates furnished to Agent by any Obligor or any credit
or other information concerning the affairs, financial condition, business or
Properties of any Obligor (or any of its Affiliates) which may come into
possession of Agent or any of Agent’s Affiliates.
 
12.10     Replacement of Certain Lenders.  If a Lender (a) is a Defaulting
Lender, or (b) fails to give its consent to any amendment, waiver or action for
which consent of all Lenders was required and Required Lenders consented, then,
in addition to any other rights and remedies that any Person may have, Agent
may, by notice to such Lender within 120 days after such event, require such
Lender to assign all of its rights and obligations under the Loan Documents to
Eligible Assignee(s) specified by Agent, pursuant to appropriate Assignment and
Acceptance(s) and within 20 days after Agent’s notice.  Agent is irrevocably
appointed as attorney-in-fact to execute any such Assignment and Acceptance if
the Lender fails to execute same.  Such Lender shall be entitled to receive, in
cash, concurrently with such assignment, all amounts owed to it under the Loan
Documents, including all principal, interest and fees through the date of
assignment (but excluding any prepayment charge).
 
 
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12.11      Remittance of Payments and Collections.
 
12.11.1  Remittances Generally.  All payments by any Lender to Agent shall be
made by the time and on the day set forth in this Agreement, in immediately
available funds.  If no time for payment is specified or if payment is due on
demand by Agent and request for payment is made by Agent by 11:00 a.m. on a
Business Day, payment shall be made by Lender not later than 2:00 p.m. on such
day, and if request is made after 11:00 a.m., then payment shall be made by
11:00 a.m. on the next Business Day.  Payment by Agent to any Lender shall be
made by wire transfer, in the type of funds received by Agent.  Any such payment
shall be subject to Agent’s right of offset for any amounts due from such Lender
under the Loan Documents.
 
12.11.2  Failure to Pay.  If any Lender fails to pay any amount when due by it
to Agent pursuant to the terms hereof, such amount shall bear interest from the
due date until paid at the rate determined by Agent as customary in the banking
industry for interbank compensation.  In no event shall Borrowers be entitled to
receive credit for any interest paid by a Lender to Agent, nor shall any
Defaulting Lender be entitled to interest on any amounts held by Agent pursuant
to Section 4.2.
 
12.11.3  Recovery of Payments.  If Agent pays any amount to a Lender in the
expectation that a related payment will be received by Agent from an Obligor and
such related payment is not received, then Agent may recover such amount from
each Lender that received it.  If Agent determines at any time that an amount
received under any Loan Document must be returned to an Obligor or paid to any
other Person pursuant to Applicable Law or otherwise, then, notwithstanding any
other term of any Loan Document, Agent shall not be required to distribute such
amount to any Lender.  If any amounts received and applied by Agent to any
Obligations are later required to be returned by Agent pursuant to Applicable
Law, each Lender shall pay to Agent, on demand, such Lender’s Pro Rata share of
the amounts required to be returned.
 
12.12      Agent in its Individual Capacity.  As a Lender, Bank of America shall
have the same rights and remedies under the other Loan Documents as any other
Lender, and the terms “Lenders,” “Required Lenders” or any similar term shall
include Bank of America in its capacity as a Lender.  Each of Bank of America
and its Affiliates may accept deposits from, maintain deposits or credit
balances for, invest in, lend money to, provide Bank Products to, act as trustee
under indentures of, serve as financial or other advisor to, and generally
engage in any kind of business with, Obligors and their Affiliates, as if Bank
of America were any other bank, without any duty to account therefor (including
any fees or other consideration received in connection therewith) to the other
Lenders.  In their individual capacity, Bank of America and its Affiliates may
receive information regarding Obligors, their Affiliates and their Account
Debtors (including information subject to confidentiality obligations), and each
Lender agrees that Bank of America and its Affiliates shall be under no
obligation to provide such information to Lenders, if acquired in such
individual capacity and not as Agent hereunder.
 
 
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12.13     Agent Titles.  Each Lender, other than Bank of America, that is
designated (on the cover page of this Agreement or otherwise) by Bank of America
as an “Agent” or “Arranger” of any type shall not have any right, power,
responsibility or duty under any Loan Documents other than those applicable to
all Lenders, and shall in no event be deemed to have any fiduciary relationship
with any other Lender.
 
12.14     No Third Party Beneficiaries.  This Section 12 is an agreement solely
among Lenders and Agent, and shall survive Full Payment of the
Obligations.  This Section 12 does not confer any rights or benefits upon
Borrowers or any other Person.  As between Borrowers and Agent, any action that
Agent may take under any Loan Documents or with respect to any Obligations shall
be conclusively presumed to have been authorized and directed by Lenders.
 
SECTION 13.  BENEFIT OF AGREEMENT; ASSIGNMENTS AND PARTICIPATIONS
 
13.1        Successors and Assigns.  This Agreement shall be binding upon and
inure to the benefit of Borrowers, Agent, Lenders, and their respective
successors and assigns, except that (a) no Borrower shall have the right to
assign its rights or delegate its obligations under any Loan Documents; and
(b) any assignment by a Lender must be made in compliance with
Section 13.3.  Agent may treat the Person which made any Loan as the owner
thereof for all purposes until such Person makes an assignment in accordance
with Section 13.3.  Any authorization or consent of a Lender shall be conclusive
and binding on any subsequent transferee or assignee of such Lender.
 
13.2        Participations.
 
13.2.1     Permitted Participants; Effect.  Any Lender may, in the ordinary
course of its business and in accordance with Applicable Law, at any time sell
to a financial institution (“Participant”) a participating interest in the
rights and obligations of such Lender under any Loan Documents.  Despite any
sale by a Lender of participating interests to a Participant, such Lender’s
obligations under the Loan Documents shall remain unchanged, such Lender shall
remain solely responsible to the other parties hereto for performance of such
obligations, such Lender shall remain the holder of its Loans and Commitments
for all purposes, all amounts payable by Borrowers shall be determined as if
such Lender had not sold such participating interests, and Borrowers and Agent
shall continue to deal solely and directly with such Lender in connection with
the Loan Documents.  Each Lender shall be solely responsible for notifying its
Participants of any matters under the Loan Documents, and Agent and the other
Lenders shall not have any obligation or liability to any such Participant.  A
Participant that would be a Foreign Lender if it were a Lender shall not be
entitled to the benefits of Sections 3.5, 3.7 and 5.9 unless Borrowers agree
otherwise in writing.
 
 
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13.2.2     Voting Rights.  Each Lender shall retain the sole right to approve,
without the consent of any Participant, any amendment, waiver or other
modification of any Loan Documents other than that which forgives principal,
interest or fees, reduces the stated interest rate or fees payable with respect
to any Loan or Commitment in which such Participant has an interest, postpones
the Commitment Termination Date or any date fixed for any regularly scheduled
payment of principal, interest or fees on such Loan or Commitment, or releases
any Borrower, Guarantor or substantial portion of the Collateral.
 
13.2.3     Benefit of Set-Off.  Borrowers agree that each Participant shall have
a right of set-off in respect of its participating interest to the same extent
as if such interest were owing directly to a Lender, and each Lender shall also
retain the right of set-off with respect to any participating interests sold by
it.  By exercising any right of set-off, a Participant agrees to share with
Lenders all amounts received through its set-off, in accordance with
Section 12.5 as if such Participant were a Lender.
 
13.3        Assignments.
 
13.3.1     Permitted Assignments.  A Lender may assign to an Eligible Assignee
any of its rights and obligations under the Loan Documents, as long as (a) each
assignment is of a constant, and not a varying, percentage of the transferor
Lender’s rights and obligations under the Loan Documents and, in the case of a
partial assignment, is in a minimum principal amount of $5,000,000 (unless
otherwise agreed by Agent in its discretion) and integral multiples of
$1,000,000 in excess of that amount; (b) except in the case of an assignment in
whole of a Lender’s rights and obligations, the aggregate amount of the
Commitments retained by the transferor Lender is at least $5,000,000 (unless
otherwise agreed by Agent in its discretion); and (c) the parties to each such
assignment shall execute and deliver to Agent, for its acceptance and recording,
an Assignment and Acceptance.  Nothing herein shall limit the right of a Lender
to pledge or assign any rights under the Loan Documents to (i) any Federal
Reserve Bank or the United States Treasury as collateral security pursuant to
Regulation A of the Board of Governors and any Operating Circular issued by such
Federal Reserve Bank, or (ii) counterparties to swap agreements relating to any
Loans; provided, however, that any payment by Borrowers to the assigning Lender
in respect of any Obligations assigned as described in this sentence shall
satisfy Borrowers’ obligations hereunder to the extent of such payment, and no
such assignment shall release the assigning Lender from its obligations
hereunder.
 
 
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13.3.2     Effect; Effective Date.  Upon delivery to Agent of an assignment
notice in the form of Exhibit D and a processing fee of $3,500 (unless otherwise
agreed by Agent in its discretion), the assignment shall become effective as
specified in the notice, if it complies with this Section 13.3.  From such
effective date, the Eligible Assignee shall for all purposes be a Lender under
the Loan Documents, and shall have all rights and obligations of a Lender
thereunder.  Upon consummation of an assignment, the transferor Lender, Agent
and Borrowers shall make appropriate arrangements for issuance of replacement
and/or new Notes, as applicable.  The transferee Lender shall comply with
Section 5.10 and deliver, upon request, an administrative questionnaire
satisfactory to Agent.
 
13.3.3     Pledges.  Notwithstanding any other provision in this Agreement, any
Lender may at any time create a security interest in, or pledge, all or any
portion of its rights under and interest in this Agreement in favor of any
Federal Reserve Bank in accordance with Regulation A of the Board or U.S.
Treasury Regulation 31 CFR §203.14, and such Federal Reserve Bank may enforce
such pledge or security interest in any manner permitted under applicable law.
 
13.3.4     Additional Costs.  The foregoing notwithstanding, provided that no
Event of Default has occurred and is continuing, no Lender shall effect any
transfer, assignment or participation of its interests hereunder if the effect
of any such transfer, assignment or participation is to increase, in any
material respect, Borrowers’ costs or obligation hereunder, including, without
limitation, under Sections 3.7, 5.9 or 5.10.
 
13.3.5     Required Assignments.  If a Lender (a) is a Defaulting Lender or (b)
fails to give its consent to any amendment, waiver or action for which consent
of all Lenders was required and Required Lenders consented, then, in addition to
any other rights and remedies that any Person may have, Agent may, by notice to
such Lender within 120 days after such event, require such Lender to assign all
of its rights and obligations under the Loan Documents to a replacement Lender
(acceptable to Borrowers) specified by Agent, pursuant to appropriate Assignment
and Acceptance(s) and within 20 days after Agent’s notice.  Agent is irrevocably
appointed as attorney-in-fact to execute any such Assignment and Acceptance if
the Lender fails to execute same.  Such Lender shall be entitled to receive, in
cash, concurrently with such assignment, all amounts owed to it under the Loan
Documents, including all principal, interest and fees through the date of
assignment (but excluding any prepayment charge).
 
SECTION 14.  MISCELLANEOUS
 
14.1        Consents, Amendments and Waivers.
 
14.1.1     Amendment.  No modification of any Loan Document, including any
extension or amendment of a Loan Document or any waiver of a Default or Event of
Default, shall be effective without the prior written agreement of Agent (with
the consent of Required Lenders) and each Obligor party to such Loan Document;
provided, however, that
 
 
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(a)      without the prior written consent of Agent, no modification shall be
effective with respect to any provision in a Loan Document that relates to any
rights, duties or discretion of Agent;
 
(b)      without the prior written consent of Issuing Bank, no modification
shall be effective with respect to any LC Obligations or Section 2.3;
 
(c)      without the prior written consent of each affected Lender, no
modification shall be effective that would (i) increase the Commitment of such
Lender; or (ii) reduce the amount of, or waive or delay payment of, any
principal, interest or fees payable to such Lender; and
 
(d)      without the prior written consent of all Lenders (except a Defaulting
Lender as provided in Section 4.2), no modification shall be effective that
would (i) extend the Revolver Termination Date; (ii) alter Section 5.6, 7.1
(except to add Collateral) or 14.1.1; (iii) amend the definitions of Borrowing
Base (and the defined terms used in such definition), Pro Rata or Required
Lenders; (iv) increase any advance rate, decrease the Availability Block or
increase total Commitments; (vi) release all or substantially all of the
Collateral, except as currently contemplated by the Loan Documents; or
(vii) release any Obligor from liability for any Obligations, if such Obligor is
Solvent at the time of the release.
 
14.1.2     Limitations.  The agreement of Borrowers shall not be necessary to
the effectiveness of any modification of a Loan Document that deals solely with
the rights and duties of Lenders, Agent and/or Issuing Bank as among
themselves.  Only the consent of the parties to the Fee Letter or any agreement
relating to a Bank Product shall be required for any modification of such
agreement, and no Affiliate of a Lender that is party to a Bank Product
agreement shall have any other right to consent to or participate in any manner
in modification of any other Loan Document.  The making of any Loans during the
existence of a Default or Event of Default shall not be deemed to constitute a
waiver of such Default or Event of Default, nor to establish a course of
dealing.  Any waiver or consent granted by Lenders hereunder shall be effective
only if in writing, and then only in the specific instance and for the specific
purpose for which it is given.
 
14.1.3     Payment for Consents.  No Borrower will, directly or indirectly, pay
any remuneration or other thing of value, whether by way of additional interest,
fee or otherwise, to any Lender (in its capacity as a Lender hereunder) as
consideration for agreement by such Lender with any modification of any Loan
Documents, unless such remuneration or value is concurrently paid, on the same
terms, on a Pro Rata basis to all Lenders providing their consent.
 
 
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14.2        Indemnity.  EACH BORROWER SHALL INDEMNIFY AND HOLD HARMLESS THE
INDEMNITEES AGAINST ANY CLAIMS THAT MAY BE INCURRED BY OR ASSERTED AGAINST ANY
INDEMNITEE, INCLUDING CLAIMS ARISING FROM THE NEGLIGENCE OF AN INDEMNITEE.  In
no event shall any party to a Loan Document have any obligation thereunder to
indemnify or hold harmless an Indemnitee with respect to a Claim that is
determined in a final, non-appealable judgment by a court of competent
jurisdiction to result from the gross negligence or willful misconduct of such
Indemnitee.
 
14.3        Notices and Communications.
 
14.3.1     Notice Address.  Subject to Section 4.1.4, all notices and other
communications by or to a party hereto shall be in writing and shall be given to
any Borrower, at Borrower Agent’s address shown on the signature pages hereof,
and to any other Person at its address shown on the signature pages hereof (or,
in the case of a Person who becomes a Lender after the Closing Date, at the
address shown on its Assignment and Acceptance), or at such other address as a
party may hereafter specify by notice in accordance with this
Section 14.3.  Each such notice or other communication shall be effective only
(a) if given by facsimile transmission, when transmitted to the applicable
facsimile number, if confirmation of receipt is received; (b) if given by mail,
three Business Days after deposit in the U.S. mail, with first-class postage
pre-paid, addressed to the applicable address; or (c) if given by personal
delivery, when duly delivered to the notice address with receipt
acknowledged.  Notwithstanding the foregoing, no notice to Agent pursuant to
Section 2.1.6, 2.3, 3.1.2, or 4.1.1 shall be effective until actually received
by the individual to whose attention at Agent such notice is required to be
sent.  Any written notice or other communication that is not sent in conformity
with the foregoing provisions shall nevertheless be effective on the date
actually received by the noticed party.  Any notice received by Borrower Agent
shall be deemed received by all Borrowers.
 
14.3.2     Electronic Communications; Voice Mail.  Electronic mail and internet
websites may be used only for routine communications, such as financial
statements, Borrowing Base Certificates and other information required by
Section 10.1.2, administrative matters, distribution of Loan Documents for
execution, and matters permitted under Section 4.1.4.  Agent and Lenders make no
assurances as to the privacy and security of electronic
communications.  Electronic and voice mail may not be used as effective notice
under the Loan Documents.
 
14.3.3     Non-Conforming Communications.  Agent and Lenders may rely upon any
notices purportedly given by or on behalf of any Borrower even if such notices
were not made in a manner specified herein, were incomplete or were not
confirmed, or if the terms thereof, as understood by the recipient, varied from
a later confirmation.  Each Borrower shall indemnify and hold harmless each
Indemnitee from any liabilities, losses, costs and expenses arising from any
telephonic communication purportedly given by or on behalf of a Borrower.
 
 
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14.4     Performance of Borrowers’ Obligations.  Agent may, in its discretion at
any time and from time to time, at Borrowers’ expense, pay any amount or do any
act required of a Borrower under any Loan Documents or otherwise lawfully
requested by Agent to (a) enforce any Loan Documents or collect any Obligations;
(b) protect, insure, maintain or realize upon any Collateral; or (c) defend or
maintain the validity or priority of Agent’s Liens in any Collateral, including
any payment of a judgment, insurance premium, warehouse charge, finishing or
processing charge, or landlord claim, or any discharge of a Lien.  All payments,
costs and expenses (including Extraordinary Expenses) of Agent under this
Section shall be reimbursed to Agent by Borrowers, on demand, with interest from
the date incurred to the date of payment thereof at the Default Rate applicable
to Base Rate Revolver Loans.  Any payment made or action taken by Agent under
this Section shall be without prejudice to any right to assert an Event of
Default or to exercise any other rights or remedies under the Loan Documents.
 
14.5     Credit Inquiries.  Each Borrower hereby authorizes Agent and Lenders
(but they shall have no obligation) to respond to usual and customary credit
inquiries from third parties concerning any Borrower or Subsidiary.
 
14.6     Severability.  Wherever possible, each provision of the Loan Documents
shall be interpreted in such manner as to be valid under Applicable Law.  If any
provision is found to be invalid under Applicable Law, it shall be ineffective
only to the extent of such invalidity and the remaining provisions of the Loan
Documents shall remain in full force and effect.
 
14.7     Cumulative Effect; Conflict of Terms.  The provisions of the Loan
Documents are cumulative.  The parties acknowledge that the Loan Documents may
use several limitations, tests or measurements to regulate similar matters, and
they agree that these are cumulative and that each must be performed as
provided.  Except as otherwise provided in another Loan Document (by specific
reference to the applicable provision of this Agreement), if any provision
contained herein is in direct conflict with any provision in another Loan
Document, the provision herein shall govern and control.
 
14.8     Counterparts; Facsimile Signatures.  Any Loan Document may be executed
in counterparts, each of which shall constitute an original, but all of which
when taken together shall constitute a single contract.  This Agreement shall
become effective when Agent has received counterparts bearing the signatures of
all parties hereto.  Delivery of a signature page of any Loan Document by
telecopy or other electronic means shall be effective as delivery of a manually
executed counterpart of such agreement.
 
14.9     Entire Agreement.  Time is of the essence of the Loan Documents.  The
Loan Documents 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.

 
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14.10   No Control; No Advisory or Fiduciary Responsibility.  Nothing in any
Loan Document and no action of Agent or any Lender pursuant to any Loan Document
shall be deemed to constitute control of any Obligor by Agent or any Lender.  In
connection with all aspects of each transaction contemplated by any Loan
Document, Borrowers acknowledge and agree that (a)(i) this credit facility and
all related services by Agent, Lenders or their Affiliates are arm’s-length
commercial transactions between Borrowers and such Person; (ii) Borrowers have
consulted their own legal, accounting, regulatory and tax advisors to the extent
they have deemed appropriate; and (iii) Borrowers are capable of evaluating and
understanding, and do understand and accept, the terms, risks and conditions of
the transactions contemplated by the Loan Documents; (b) each of Agent, Lenders
and their Affiliates are and have been acting solely as a principal in
connection with this credit facility, is not the financial advisor, agent or
fiduciary for Borrowers, any of their Affiliates or any other Person, and has no
obligation with respect to the transactions contemplated by the Loan Documents
except as expressly set forth therein; and (c) Agent, Lenders and their
Affiliates may be engaged in a broad range of transactions that involve
interests that differ from those of Borrowers and its Affiliates, and have no
obligation to disclose any of such interests to Borrowers or its Affiliates.  To
the fullest extent permitted by Applicable Law, Borrowers hereby waive and
release any claims that they may have against Agent, 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 by a Loan
Document.
 
14.11   Obligations of Lenders.  The obligations of each Lender hereunder are
several, and no Lender shall be responsible for the obligations or Commitments
of any other Lender.  Amounts payable hereunder to each Lender shall be a
separate and independent debt, and each Lender shall be entitled, to the extent
not otherwise restricted hereunder, to protect and enforce its rights arising
out of the Loan Documents.  It shall not be necessary for Agent or any other
Lender to be joined as an additional party in any proceeding for such
purposes.  Nothing in this Agreement and no action of Agent or Lenders pursuant
to the Loan Documents shall be deemed to constitute Agent and Lenders to be a
partnership, association, joint venture or any other kind of entity, nor to
constitute control of any Borrower.
 
14.12   No Advisory or Fiduciary Responsibility.  In connection with all aspects
of each transaction contemplated by any Loan Document, Borrowers acknowledge and
agree that (a)(i) this credit facility and any related arranging or other
services by Agent, any Lender, any of their Affiliates or any arranger are
arm’s-length commercial transactions between Borrowers and such Person;
(ii) Borrowers have consulted their own legal, accounting, regulatory and tax
advisors to the extent they have deemed appropriate; and (iii) Borrowers are
capable of evaluating and understanding, and do understand and accept, the
terms, risks and conditions of the transactions contemplated by the Loan
Documents; (b) each of Agent, Lenders, their Affiliates and any arranger is and
has been acting solely as a principal in connection with this credit facility,
is not the financial advisor, agent or fiduciary for Borrowers, any of their
Affiliates or any other Person, and has no obligation with respect to the
transactions contemplated by the Loan Documents except as expressly set forth
therein; and (c) Agent, Lenders, their Affiliates and any arranger may be
engaged in a broad range of transactions that involve interests that differ from
Borrowers and their Affiliates, and have no obligation to disclose any of such
interests to Borrowers or their Affiliates.  To the fullest extent permitted by
Applicable Law, each Borrower hereby waives and releases any claims that it may
have against Agent, Lenders, their Affiliates and any arranger with respect to
any breach or alleged breach of agency or fiduciary duty in connection with any
aspect of any transaction contemplated by a Loan Document.

 
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14.13   Confidentiality.  Agent and Lenders agree to maintain the
confidentiality of all Information (as defined below), except that Information
may be disclosed (a) to their Affiliates and their partners, directors,
officers, employees, agents, advisors and representatives (provided such Persons
are informed of the confidential nature of the Information and instructed to
keep it confidential); (b) to the extent requested by any governmental,
regulatory or self-regulatory authority purporting to have jurisdiction over it
or its Affiliates; (c) to the extent required by Applicable Law or by any
subpoena or other legal process; (d) to any other party hereto; (e) in
connection with any action or proceeding, or other exercise of rights or
remedies, relating to any Loan Documents or Obligations; (f) subject to an
agreement containing provisions substantially the same as this Section, to any
potential or actual transferee of any interest in a Loan Document or any actual
or prospective party (or its advisors) to any Bank Product; (g) with the consent
of Borrower Agent; or (h) to the extent such Information (i) becomes publicly
available other than as a result of a breach of this Section or (ii) is
available to Agent and Lenders or their Affiliates on a nonconfidential basis
from a source other than Borrowers.  Notwithstanding the foregoing, Agent and
Lenders may publish or disseminate general information describing this credit
facility, including the names and addresses of Borrowers and a general
description of Borrowers’ businesses, and may use Borrower’s logos, trademarks
or product photographs approved by Borrower Agent in advertising materials.  As
used herein, “Information” means all information received from an Obligor or
Subsidiary relating to it or its business, that is identified as confidential
when delivered.  Any Person required to maintain the confidentiality of
Information pursuant to this Section shall be deemed to have complied if it
exercises the same degree of care that it accords its own confidential
information.  Agent and Lenders acknowledge that (i) Information may include
material non-public information concerning an Obligor or Subsidiary; (ii) it has
developed compliance procedures regarding the use of material non-public
information; and (iii) it will handle such material non-public information in
accordance with Applicable Law, including federal and state securities laws.
 
14.14   GOVERNING LAW.  THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, UNLESS
OTHERWISE SPECIFIED, SHALL BE GOVERNED BY THE LAWS OF THE STATE OF ILLINOIS,
WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAW PRINCIPLES (BUT GIVING EFFECT TO
FEDERAL LAWS RELATING TO NATIONAL BANKS).

 
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14.15   Consent to Forum.
 
14.15.1      Forum.  EACH BORROWER HEREBY CONSENTS TO THE NON-EXCLUSIVE
JURISDICTION OF ANY FEDERAL OR STATE COURT SITTING IN OR WITH JURISDICTION OVER
COOK COUNTY, ILLINOIS, IN ANY PROCEEDING OR DISPUTE RELATING IN ANY WAY TO ANY
LOAN DOCUMENTS, AND AGREES THAT ANY SUCH PROCEEDING SHALL BE BROUGHT BY IT
SOLELY IN ANY SUCH COURT.  EACH BORROWER IRREVOCABLY WAIVES ALL CLAIMS,
OBJECTIONS AND DEFENSES THAT IT MAY HAVE REGARDING SUCH COURT’S PERSONAL OR
SUBJECT MATTER JURISDICTION, VENUE OR INCONVENIENT FORUM.  EACH PARTY HERETO
IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN
SECTION 14.3.1.  Nothing herein shall limit the right of Agent or any Lender to
bring proceedings against any Obligor in any other court, nor limit the right of
any party to serve process in any other manner permitted by Applicable
Law.  Nothing in this Agreement shall be deemed to preclude enforcement by Agent
of any judgment or order obtained in any forum or jurisdiction.
 
14.16   Waivers by Borrowers.  To the fullest extent permitted by Applicable
Law, each Borrower waives (a) the right to trial by jury (which Agent and each
Lender hereby also waives) in any proceeding or dispute of any kind relating in
any way to any Loan Documents, Obligations or Collateral; (b) presentment,
demand, protest, notice of presentment, default, non-payment, maturity, release,
compromise, settlement, extension or renewal of any commercial paper, accounts,
documents, instruments, chattel paper and guaranties at any time held by Agent
on which a Borrower may in any way be liable, and hereby ratifies anything Agent
may do in this regard; (c) notice prior to taking possession or control of any
Collateral; (d) any bond or security that might be required by a court prior to
allowing Agent to exercise any rights or remedies; (e) the benefit of all
valuation, appraisement and exemption laws; (f) any claim against Agent or any
Lender, on any theory of liability, for special, indirect, consequential,
exemplary or punitive damages (as opposed to direct or actual damages) in any
way relating to any Enforcement Action, Obligations, Loan Documents or
transactions relating thereto; and (g) notice of acceptance hereof.  Each
Borrower acknowledges that the foregoing waivers are a material inducement to
Agent and Lenders entering into this Agreement and that Agent and Lenders are
relying upon the foregoing in their dealings with Borrowers.  Each Borrower has
reviewed the foregoing waivers with its legal counsel and has knowingly and
voluntarily waived its jury trial and other rights following consultation with
legal counsel.  In the event of litigation, this Agreement may be filed as a
written consent to a trial by the court.

 
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14.17   Patriot Act Notice.  Agent and Lenders hereby notify Borrowers that
pursuant to the requirements of the Patriot Act, Agent and Lenders are required
to obtain, verify and record information that identifies each Borrower,
including its legal name, address, tax ID number and other information that will
allow Agent and Lenders to identify it in accordance with the Patriot
Act.  Agent and Lenders will also require information regarding each personal
guarantor, if any, and may require information regarding Borrowers’ management
and owners, such as legal name, address, social security number and date of
birth.
 
14.18   No Novation.  Notwithstanding anything to the contrary contained herein,
this Agreement is not intended to and does not serve to effect a novation of the
Obligations.  Instead, it is the express intention of the parties hereto to
reaffirm the indebtedness created under the 2009 Loan Agreement which is
evidenced by the notes provided for therein and secured by the
Collateral.  Borrowers acknowledge and confirm that the liens and security
interests granted pursuant to the Loan Documents secured the indebtedness,
liabilities and obligations of Borrowers to Agent and Lenders under the 2009
Loan Agreement and that the term “Obligations” as used in the Loan Documents (or
any other terms used therein to describe or refer to the indebtedness,
liabilities and obligations of Borrowers to Agent and Lenders) includes, without
limitation, the indebtedness, liabilities and obligations of Borrowers under the
Notes to be delivered hereunder, and under the 2009 Loan Agreement, as the same
may be further amended, modified, supplemented or restated from time to
time.  The Loan Documents and all agreements, instruments and documents executed
or delivered in connection with any of the foregoing shall each be deemed to be
amended to the extent necessary to give effect to the provisions of this
Agreement.  Cross-references in the Loan Documents to particular section numbers
in the 2009 Loan Agreement shall be deemed to be cross-references to the
corresponding sections, as applicable, to this Agreement.
 
[Remainder of page intentionally left blank; signatures begin on following page]

 
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(Signature Page to Third Amended and Restated Loan and Security Agreement)
 
IN WITNESS WHEREOF, this Agreement has been executed and delivered as of the
date set forth above.
 
BORROWERS:
HWC WIRE & CABLE COMPANY
       
By: 
/s/ Nicol G. Graham
   
 Vice President and Chief Financial
   
 Officer
       
Address:
 
10201 N. Loop East
 
Houston, Texas 77029
 
Attn:  Nicol G. Graham
 
Telecopy:  (713) 609-2205

 
 

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(Signature Page to Third Amended and Restated Loan and Security Agreement)

AGENT AND LENDERS:
BANK OF AMERICA, N.A., as Agent and
sole initial Lender
       
By: 
/s/ Steven J. Chalmers
   
Vice President
       
Address:
 
c/o Bank of America, N.A., as agent
 
135 South LaSalle Street
 
Chicago, IL  60603
 
Attn:  Mr. Steven J. Chalmers
 
Telecopy:  (312) 904-7190

 
 

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EXHIBIT A
to
Third Amended and Restated Loan and Security Agreement
 
REVOLVER NOTE
 
[Date]
$___________________
Chicago, Illinois

HWC WIRE & CABLE COMPANY and each other signatory hereto (if any)
(“Borrowers”), for value received, hereby unconditionally promise to pay, on a
joint and several basis, to the order of ____________________________
(“Lender”), the principal sum of ______________________________ DOLLARS
($___________), or such lesser amount as may be advanced by Lender as Revolver
Loans and owing as LC Obligations from time to time under the Loan Agreement
described below, together with all accrued and unpaid interest thereon.  Terms
are used herein as defined in the Third Amended and Restated Loan and Security
Agreement dated as of September 30, 2011, among Borrowers, Bank of America,
N.A., as Agent, Lender, and certain other financial institutions, as such
agreement may be amended, modified, renewed or extended from time to time (“Loan
Agreement”).
 
Principal of and interest on this Note from time to time outstanding shall be
due and payable as provided in the Loan Agreement.  This Note is issued pursuant
to and evidences Revolver Loans and LC Obligations under the Loan Agreement, to
which reference is made for a statement of the rights and obligations of Lender
and the duties and obligations of Borrowers.  The Loan Agreement contains
provisions for acceleration of the maturity of this Note upon the happening of
certain stated events, and for the borrowing, prepayment and reborrowing of
amounts upon specified terms and conditions.
 
The holder of this Note is hereby authorized by Borrowers to record on a
schedule annexed to this Note (or on a supplemental schedule) the amounts owing
with respect to Revolver Loans and LC Obligations, and the payment
thereof.  Failure to make any notation, however, shall not affect the rights of
the holder of this Note or any obligations of Borrowers hereunder or under any
other Loan Documents.
 
Time is of the essence of this Note.  Each Borrower and all endorsers, sureties
and guarantors of this Note hereby severally waive demand, presentment for
payment, protest, notice of protest, notice of intention to accelerate the
maturity of this Note, diligence in collecting, the bringing of any suit against
any party, and any notice of or defense on account of any extensions, renewals,
partial payments, or changes in any manner of or in this Note or in any of its
terms, provisions and covenants, or any releases or substitutions of any
security, or any delay, indulgence or other act of any trustee or any holder
hereof, whether before or after maturity.  Borrowers jointly and severally agree
to pay, and to save the holder of this Note harmless against, any liability for
the payment of all costs and expenses (including without limitation reasonable
attorneys’ fees) if this Note is collected by or through an attorney-at-law.

 
A-1

--------------------------------------------------------------------------------

 

In no contingency or event whatsoever shall the amount paid or agreed to be paid
to the holder of this Note for the use, forbearance or detention of money
advanced hereunder exceed the highest lawful rate permitted under Applicable
Law.  If any such excess amount is inadvertently paid by Borrowers or
inadvertently received by the holder of this Note, such excess shall be returned
to Borrowers or credited as a payment of principal, in accordance with the Loan
Agreement.  It is the intent hereof that Borrowers not pay or contract to pay,
and that holder of this Note not receive or contract to receive, directly or
indirectly in any manner whatsoever, interest in excess of that which may be
paid by Borrowers under Applicable Law.
 
This Note shall be governed by the laws of the State of Illinois, without giving
effect to any conflict of law principles (but giving effect to federal laws
relating to national banks).
 
IN WITNESS WHEREOF, this Revolver Note is executed as of the date set forth
above.
 

  HWC WIRE & CABLE COMPANY          
By:
     
Name: 
   
  
Title:
 

 
A-2

--------------------------------------------------------------------------------

 

EXHIBIT B
to
Third Amended and Restated Loan and Security Agreement
 
[RESERVED]
 
 
B-1

--------------------------------------------------------------------------------

 

EXHIBIT C
to
Third Amended and Restated Loan and Security Agreement
 
ASSIGNMENT AND ACCEPTANCE
 
Reference is made to the Third Amended and Restated Loan and Security Agreement
dated as of September 30, 2011, as amended (“Loan Agreement”), among  HWC WIRE &
CABLE COMPANY and the domestic Subsidiaries of HWC Wire & Cable Company party
thereto as borrowers (collectively, “Borrowers”), BANK OF AMERICA, N.A., as
agent (“Agent”) for the financial institutions from time to time party to the
Loan Agreement (“Lenders”), and such Lenders.  Terms are used herein as defined
in the Loan Agreement.
 
________________________________ (“Assignor”) and ______________________
_____________ (“Assignee”) agree as follows:
 
1.           Assignor hereby assigns to Assignee and Assignee hereby purchases
and assumes from Assignor (a) a principal amount of $________ of Assignor’s
outstanding Revolver Loans and $___________ of Assignor’s participations in LC
Obligations and (b) the amount of $__________ of Assignor’s Revolver Commitment
(which represents ____% of the total Revolver Commitments) (the foregoing items
being, collectively, the “Assigned Interest”), together with an interest in the
Loan Documents corresponding to the Assigned Interest.  This Agreement shall be
effective as of the date (“Effective Date”) indicated in the corresponding
Assignment Notice delivered to Agent, provided such Assignment Notice is
executed by Assignor, Assignee, Agent and Borrower Agent, if applicable.  From
and after the Effective Date, Assignee hereby expressly assumes, and undertakes
to perform, all of Assignor’s obligations in respect of the Assigned Interest,
and all principal, interest, fees and other amounts which would otherwise be
payable to or for Assignor’s account in respect of the Assigned Interest shall
be payable to or for Assignee’s account, to the extent such amounts accrue on or
after the Effective Date.
 
2.           Assignor (a) represents that as of the date hereof, prior to giving
effect to this assignment, its Revolver Commitment is $__________ and the
outstanding balance of its Revolver Loans and participations in LC Obligations
is $__________; (b) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Loan Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Loan
Agreement or any other instrument or document furnished pursuant thereto, other
than that Assignor is the legal and beneficial owner of the interest being
assigned by it hereunder and that such interest is free and clear of any adverse
claim; and (c) makes no representation or warranty and assumes no responsibility
with respect to the financial condition of Borrowers or the performance by
Borrowers of their obligations under the Loan Documents.  [Assignor is attaching
the Note[s] held by it and requests that Agent exchange such Note[s] for new
Notes payable to Assignee [and Assignor].]

 
C-1

--------------------------------------------------------------------------------

 

3.           Assignee (a) represents and warrants that it is legally authorized
to enter into this Assignment and Acceptance; (b) confirms that it has received
copies of the Loan Agreement and such other Loan Documents and information as it
has deemed appropriate to make its own credit analysis and decision to enter
into this Assignment and Acceptance; (c) agrees that it shall, independently and
without reliance upon Assignor and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Loan Documents; (d) confirms that it is an
Eligible Assignee; (e) appoints and authorizes Agent to take such action as
agent on its behalf and to exercise such powers under the Loan Agreement as are
delegated to Agent by the terms thereof, together with such powers as are
incidental thereto; (f) agrees that it will observe and perform all obligations
that are required to be performed by it as a “Lender” under the Loan Documents;
and (g) represents and warrants that the assignment evidenced hereby will not
result in a non-exempt “prohibited transaction” under Section 406 of ERISA.
 
4.           This Agreement shall be governed by the laws of the State of
______________.  If any provision is found to be invalid under Applicable Law,
it shall be ineffective only to the extent of such invalidity and the remaining
provisions of this Agreement shall remain in full force and effect.
 
5.           Each notice or other communication hereunder shall be in writing,
shall be sent by messenger, by telecopy or facsimile transmission, or by
first-class mail, shall be deemed given when sent and shall be sent as follows:
 
(a)           If to Assignee, to the following address (or to such other address
as Assignee may designate from time to time):
 
__________________________
__________________________
__________________________
 
(b)           If to Assignor, to the following address (or to such other address
as Assignor may designate from time to time):
 
__________________________
__________________________
__________________________
__________________________
 
Payments hereunder shall be made by wire transfer of immediately available
Dollars as follows:
 
If to Assignee, to the following account (or to such other account as Assignee
may designate from time to time):
 
______________________________
______________________________
ABA No._______________________
______________________________
Account No.____________________
Reference:   ____________________

 
C-2

--------------------------------------------------------------------------------

 

If to Assignor, to the following account (or to such other account as Assignor
may designate from time to time):
 
______________________________
______________________________
ABA No.______________________
______________________________
Account No.____________________
Reference:   ____________________
 
 
C-3

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, this Assignment and Acceptance is executed as of
_____________.
 

          (“Assignee”)          
By:
       
Name:
     
Title:
                (“Assignor”)          
By:
       
Name: 
     
Title:
 

 
C-4

--------------------------------------------------------------------------------

 

EXHIBIT D
to
Loan and Security Agreement
 
ASSIGNMENT NOTICE
 
Reference is made to (1) the Loan and Security Agreement dated as of September
30, 2011, as amended (“Loan Agreement”), among HWC WIRE & CABLE COMPANY and the
domestic Subsidiaries of HWC Wire & Cable Company party thereto as borrowers
(collectively, “Borrowers”), BANK OF AMERICA, N.A., as agent (“Agent”) for the
financial institutions from time to time party to the Loan Agreement
(“Lenders”), and such Lenders; and (2) the Assignment and Acceptance dated as of
____________, 20__ (“Assignment Agreement”), between __________________
(“Assignor”) and ____________________ (“Assignee”).  Terms are used herein as
defined in the Loan Agreement.
 
Assignor hereby notifies Borrowers and Agent of Assignor’s intent to assign to
Assignee pursuant to the Assignment Agreement (a) a principal amount of
$________ of Assignor’s outstanding Revolver Loans and $___________ of
Assignor’s participations in LC Obligations and (b) the amount of $__________ of
Assignor’s Revolver Commitment (which represents ____% of the total Revolver
Commitments (the foregoing items being, collectively, the “Assigned Interest”),
together with an interest in the Loan Documents corresponding to the Assigned
Interest.  This Agreement shall be effective as of the date (“Effective Date”)
indicated below, provided this Assignment Notice is executed by Assignor,
Assignee, Agent and Borrower Agent, if applicable.  Pursuant to the Assignment
Agreement, Assignee has expressly assumed all of Assignor’s obligations under
the Loan Agreement to the extent of the Assigned Interest, as of the Effective
Date.
 
For purposes of the Loan Agreement, Agent shall deem Assignor’s Revolver
Commitment to be reduced by $_________, and Assignee’s Revolver Commitment to be
increased by $_________.
 
The address of Assignee to which notices and information are to be sent under
the terms of the Loan Agreement is:
 
________________________
________________________
________________________
________________________
 
The address of Assignee to which payments are to be sent under the terms of the
Loan Agreement is shown in the Assignment and Acceptance.
 
This Notice is being delivered to Borrowers and Agent pursuant to Section 13.3
of the Loan Agreement.  Please acknowledge your acceptance of this Notice by
executing and returning to Assignee and Assignor a copy of this Notice.

 
D-1

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, this Assignment Notice is executed as of _____________.
 

                (“Assignee”)                    
By:
           
Name: 
         
Title:
                                (“Assignor”)                    
By:
           
Name:
         
Title:
            ACKNOWLEDGED AND AGREED, AS         OF THE DATE SET FORTH ABOVE:    
                BORROWER AGENT:*                                          
By 
    
         
Title:
       

* No signature required if Assignee is a Lender, U.S.-based Affiliate of a
Lender or Approved Fund, or if an Event of Default exists.
 
BANK OF AMERICA, N.A., as Agent
       
By
     
Title:
 

 
D-2

--------------------------------------------------------------------------------

 

SCHEDULE 1.1
to
Third Amended and Restated Loan and Security Agreement
 
COMMITMENTS OF LENDERS
 
Lender
 
Revolver Commitment
   
Total Commitments
               
Bank of America, N.A.
  $ 100,000,000     $ 100,000,000  

Schedule 1.1
 

--------------------------------------------------------------------------------

 

SCHEDULE 6.1
to
Third Amended and Restated Loan and Security Agreement
 
SCHEDULE OF DOCUMENTS
 
(A)       A Certificate of the Secretary of each of Borrower and Guarantor,
together with true and correct copies of the Certificate of Incorporation and
Bylaws of Borrower and Guarantor, and all amendments thereto, true and correct
copies of the resolutions of the Board of Directors of Borrower and Guarantor
authorizing or ratifying the execution, delivery and performance of this
Agreement and the Other Agreements executed in connection therewith and the
names of the officer or officers of Borrower and Guarantor authorized to sign
this Agreement and the Other Agreements executed in connection therewith
together with a sample of the true signature of each such officer;
 
(B)       The Second Amended and Restated Guaranty executed by Guarantor in
favor of Agent and Lender; and
 
(C)       Such other documents, instrument and agreements as Agent shall
reasonably request in connection with the foregoing matters.

Schedule 8.5
 

--------------------------------------------------------------------------------

 

SCHEDULE 8.5
to
Third Amended and Restated Loan and Security Agreement
 
DEPOSIT ACCOUNTS
 
Depository Bank
 
Type of Account
 
Account Number
Bank of America
 
Collection
 
xxx
Bank of America
 
Collection
 
xxx
Bank of America
 
Collection
 
xxx

Schedule 8.5
 

--------------------------------------------------------------------------------

 
 
SCHEDULE 8.6.1
to
Third Amended and Restated Loan and Security Agreement
 
BUSINESS LOCATIONS
 
 
1.
Borrowers currently have the following business locations, and no others:

 
Chief Executive Office: 10201 North Loop East, Houston, TX 77029
 
Other Locations:
 
14402 Carmenita Road
 
2453 Prospect Drive, Suite A
Norwalk, CA 90650
 
Aurora, IL 60502
4925 Sirona Drive, Suite 100
 
100 Cheshire Court, Suite 100
Charlotte, NC 28273
 
Coatesville, PA 19320
255 Satellite Blvd. N.E.#150
 
2376 Davis Ave
Suwanee, GA 30024
 
Hayward CA 94545
6565 Exchequer Dr. Suite 130
 
8765 East Sunridge Hollow Rd.
Baton Rouge, LA 70809
 
Parker, CO 80134
6608 South 211th St. Suite 108
 
3401 Cragmont Dr.
Kent, WA 98032
 
Tampa, FL 33619
1355 Sheffield Street
 
8045 Metro Road
Houston TX 77015
 
Olive Branch, MS 38654
1210 Lydia
 
1902 Federal Dr.
Kansas City, MO 64106
 
Houston, TX 77015
12611 Cain Circle
 
8910 Lawndale Ave
Houston TX 77015
 
Houston, TX 77012
1404 HWY 90 West
 
575 Dennis Drive
New Iberia, LA 70560
 
Sulphur, LA 70665

 
2.
Borrowers maintain their books and records relating to Accounts and General
Intangibles at: 10201 North Loop East, Houston, TX 77029

 
 
3.
Borrowers have had no office, place of business or agent for process located in
any county other than as set forth above, except: N/A

 
 
4.
Each Subsidiary currently has the following business locations, and no others:

 
Chief Executive Office: N/A
 
Other Locations: N/A
 
 
5.
Each Subsidiary maintains its books and records relating to Accounts and General
Intangibles at: N/A

 
 
6.
Each Subsidiary has had no office, place of business or agent for process
located in any county other than as set forth above, except: N/A

 
Schedule 8.6.1
 

--------------------------------------------------------------------------------

 

 
7.
The following bailees, warehouseman, similar parties and consignees hold
inventory of Borrower or one of its Subsidiaries:

 
Name and Address of Party
 
Nature of 
Relationship
 
Amount of Inventory
 
Owner of Inventory
Holmes Distributors Inc.
 
Independent Sales Representative
 
xxx
 
Borrower
* Mountain States
 
3rd Party Logistics
 
xxx
 
Borrower
Logistics, LLC
           
14501 East 35th Place,
           
Aurora, CO 80011
           
* Cal Cargo, Inc.
  
3rd Party Logistics
  
xxx
  
Borrower
2376 Davis Ave
           
Haywood, CA 94545
           

* At August 31, 2011

Schedule 8.6.1
 

--------------------------------------------------------------------------------

 

SCHEDULE 9.1.4
to
Third Amended and Restated Loan and Security Agreement
 
NAMES AND CAPITAL STRUCTURE
 
1.
The corporate names, jurisdictions of incorporation, and authorized and issued
Equity Interests of each Borrower and Subsidiary are as follows:

 
Name
 
Jurisdiction
 
Number and Class of
Authorized Shares
 
Number and Class
of Issued Shares
HWC Wire & Cable Company
  
Delaware
  
Common: 1,000
  
100

2.
The record holders of Equity Interests of each Borrower and Subsidiary are as
follows:

 
Name
 
Class of Stock
 
Number of Shares
 
Record Owner
HWC Wire & Cable Company
 
Delaware
 
100
 
Houston Wire & Cable Company

3.
All agreements binding on holders of Equity Interests of Borrowers and
Subsidiaries with respect to such interests are as follows:

None

4.
In the five years preceding the Closing Date, neither any Borrower nor any
Subsidiary has acquired any substantial assets from any other Person nor been
the surviving entity in a merger or combination, except:

 
On June 28, 2010, Houston Wire & Cable Company purchased the limited partnership
interests in Southwest Wire Rope LP and the membership interests in Southwest
Wire Rope GP LLC from Teleflex Incorporated.

Schedule 9.1.4
 

--------------------------------------------------------------------------------

 

SCHEDULE 9.1.11
to
Third Amended and Restated Loan and Security Agreement
 
PATENTS, TRADEMARKS, COPYRIGHTS AND LICENSES
 
1.
Borrowers’ and Subsidiaries’ patents:

 
Patent
 
Owner
 
Status in
Patent Office
 
Federal
Registration No.
 
Registration
    Date    
Apparatus & Method for Sealing A Conduit
 
Borrower
 
Registered
 
US6,852922B2
 
February 8, 2005

2.
Borrowers’ and Subsidiaries’ trademarks:

 
Trademark
 
Assignee
 
Status in
Trademark
Office
 
Federal
Registration
Number
 
Registration
Date
HWC Houston Wire & Cable Company and  Design
 
Houston Wire & Cable Company
 
Registered
 
2,924,985
 
February 8, 2005
 
HWC Houston Wire & Cable Company and Design and Houston Wire & Cable Company
 
Houston Wire & Cable Company
 
Registered
     “ “
     “ “
     “ “
 
2,906,370
2,906,371
2,906,372
2,906,373
 
November 30, 2004
November 30, 2004
November 30, 2004
November 30, 2004
Houston Wire & Cable Company and HWC Houston Wire & Cable Company and Design
 
Houston Wire & Cable Company
 
Registered
     “ “
     “ “
 
2,904,865
2,904,866
2,904,867
 
November 23, 2004
November 23, 2004
November 23, 2004
HOUWIRE
 
Houston Wire & Cable Company
 
Registered
 
2,321,131
 
February 22, 2000
HWC DATACOM
 
Houston Wire & Cable Company
 
Registered
     “ “
     “ “
 
2,965,387
2,805,736
2,809,318
 
July 5, 2005
January 13, 2004
January 27, 2004
DATAGUARD
 
Houston Wire & Cable Company
 
Registered
 
3,072,172
 
March 21, 2006
GOLD NOSE
 
Southwest Wire Rope, Inc.
 
Registered
 
2683154
 
February 4, 2003
SW & (Circle with bars, bands and lines Design)
 
Southwest Wire Rope Inc.
 
Registered
 
2208424
 
December 8, 1998
(Rope Design)
 
Southwest Wire Rope Inc.
 
Registered
 
2441654
 
April 3, 2001
DOUBLE GOLD STRAND
 
Southwest Wire Rope Inc.
 
Registered
 
1565257
 
November 7,1989
GOLD STRAND
 
Southwest Wire Rope Inc.
 
Registered
 
1541208
 
May 30, 1989
GREEN AND WHITE STRAND
 
Southern Wire , LLC
 
Registered
 
1661429
 
October 22, 1991
(Rope on a Spool Design)
 
Southern Wire , LLC
 
Registered
 
1647858
 
June 18, 1991
(Four Circle Design)
 
Southern Wire , LLC
 
Registered
 
1615420
 
October 2, 1990
GREEN & WHITE
 
Southern Wire , LLC
 
Registered
 
1620799
 
November 6, 1998
WIRE ROPE AND DESIGN (Canada)
  
Southwest Wire Rope Inc.
  
Registered
  
TMA502793
  
October 26, 1998

 
Schedule 9.1.11
 

--------------------------------------------------------------------------------

 

3.
Borrowers’ and Subsidiaries’ copyrights:

 
Copyright
 
Owner
 
Status in
Copyright Office
 
Federal
Registration No.
 
Registration
Date
None
               

 
4.
Borrowers’ and Subsidiaries’ licenses (other than routine business licenses,
authorizing them to transact business in local jurisdictions):

 
Licensor
 
Description of License
 
Term of License
 
Royalties Payable
None
                           
  
 
  
 
  
 

Schedule 9.1.11
 

--------------------------------------------------------------------------------

 

SCHEDULE 9.1.14
to
Third Amended and Restated Loan and Security Agreement
 
ENVIRONMENTAL MATTERS
 
As noted in note 9 to the Consolidated Financial Statements of the Guarantor,
Houston Wire & Cable Company for the year ended December 31, 2010, the company
assumed the liability for the post-remediation monitoring of the water quality
for one of the acquired facilities.

Schedule 9.1.14
 
 

--------------------------------------------------------------------------------

 

SCHEDULE 9.1.15
to
Loan and Security Agreement
 
RESTRICTIVE AGREEMENTS
 
Entity
 
Agreement
 
Restrictive Provisions
None
       

Schedule 9.1.15
 
 

--------------------------------------------------------------------------------

 

SCHEDULE 9.1.16
to
Third Amended and Restated Loan and Security Agreement
 
LITIGATION
 
1.
Proceedings and investigations pending against Borrowers or Subsidiaries:

 
 
As noted in note 9 to the Consolidated Financial Statements of the Guarantor,
Houston Wire & Cable Company for the year ended December 31, 2010, the company
has been named in a number of lawsuits involving asbestos.

 
2.
Threatened proceedings or investigations of which any Borrower or Subsidiary is
aware:

 
None
 
3.
Pending Commercial Tort Claim of any Obligor:

 
 
None

Schedule 9.1.16
 
 

--------------------------------------------------------------------------------

 

SCHEDULE 9.1.18
to
Third Amended and Restated Loan and Security Agreement
 
PENSION PLAN DISCLOSURES
 
Borrower
None
[Subsidiaries]
None

Schedule 9.1.18
 
 

--------------------------------------------------------------------------------

 
 
SCHEDULE 10.2.2
to
Third Amended and Restated Loan and Security Agreement
 
EXISTING LIENS
 
The following capital leases have lien holders:
 
Lessee
 
Lessor
 
Term of Lease
 
Property Covered
Borrower
 
Xerox
 
60 months (commencing 10/06)
 
EPSCNTRLC Docusp X86 Cntrl
Borrower
 
Xerox
 
60 months (commencing 10/06)
 
4110EPSC (4110EPS System)
Borrower
 
Xerox
 
60 months (commencing 10/07)
 
D242OC (Office D242 'C') Docucolor w/ finisher
Borrower
 
Xerox
 
60 months (commencing 10/07)
 
D252EFIO (Ofc 242/252 Bustled)
Borrower
 
Xerox
 
60 months (commencing 10/07)
 
W7655P (WC 7655 Copier-Printer) w/ finisher
Borrower
 
Xerox
 
60 months (commencing 10/07)
 
WCP238H (WCP238 Ptr/Scn/Hcf) w/ finisher
Borrower
 
Xerox
 
60 months (commencing 10/07)
 
WCP255HC (WCP255 Ptr/Scn/Hcf) w/ finisher
Borrower
 
Xerox
 
60 months (commencing 10/09)
 
WC7428P (WC7428P Ptr/Scn/Fax) w/ finisher
Borrower
  
Xerox
  
60 months (commencing 10/09)
  
3CQ9201 (3 Mtr ColorQube 9201) w/ finisher

Schedule 10.2.2
 
 

--------------------------------------------------------------------------------

 
 
SCHEDULE 10.2.8
to
Third Amended and Restated Loan and Security Agreement
 
SURETY OBLIGATIONS
 
None

Schedule 10.2.8
 
 

--------------------------------------------------------------------------------

 

SCHEDULE 10.2.17
to
Third Amended and Restated Loan and Security Agreement
 
EXISTING AFFILIATE TRANSACTIONS
 
None
 
Schedule 10.2.17
 
 

--------------------------------------------------------------------------------