Exhibit 10.18

 

 

 

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AMENDED AND RESTATED CREDIT AGREEMENT

Dated as of March 30, 2011

by and among

INTERNATIONAL TEXTILE GROUP, INC.,

BURLINGTON INDUSTRIES LLC,

CARLISLE FINISHING LLC,

CONE DENIM LLC,

CONE JACQUARDS LLC,

SAFETY COMPONENTS FABRIC TECHNOLOGIES, INC. and

NARRICOT INDUSTRIES LLC,

as the Borrowers,

THE OTHER PERSONS PARTY HERETO THAT ARE

DESIGNATED AS CREDIT PARTIES,

GENERAL ELECTRIC CAPITAL CORPORATION,
for itself, as a Lender, as L/C Issuer, Swingline Lender, Co-Collateral Agent
and as the Administrative Agent

for all Lenders,

 

THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO,
as Lenders,

 

GE CAPITAL MARKETS, INC.,
as Sole Lead Arranger and Joint Bookrunner,

 

BANK OF AMERICA, N.A.,

as Co-Collateral Agent and Syndication Agent,

 

and

 

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,

as Joint Bookrunner.

 

 

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TABLE OF CONTENTS 

 

 

ARTICLE I - THE CREDITS  

2

1.1

Amounts and Terms of Commitments

2

1.2

Notes

11

1.3

Interest

12

1.4

Loan Accounts

13

1.5

Procedure for Revolving Credit Borrowing

14

1.6

Conversion and Continuation Elections

15

1.7

Optional Prepayments

15

1.8

Mandatory Prepayments of Loans and Commitment Reductions

16

1.9

Fees

22

1.10

Payments by the Borrowers

22

1.11

Payments by the Lenders to the Agent; Settlement

24

1.12

Eligible Accounts.

28

1.13

Eligible Inventory.

30

1.14

Borrower Representative

31

   

ARTICLE II - CONDITIONS PRECEDENT

33

2.1

Conditions of Initial Loans

33

2.2

Conditions to All Borrowings

34

   

ARTICLE III - REPRESENTATIONS AND WARRANTIES

34

3.1

Corporate Existence and Power

34

3.2

Corporate Authorization; No Contravention

35

3.3

Governmental Authorization

36

3.4

Binding Effect

36

3.5

Litigation

36

3.6

No Default

37

3.7

ERISA Compliance

37

3.8

Use of Proceeds; Margin Regulations

37

3.9

Title to Properties

37

3.10

Taxes

38

3.11

Financial Condition

38

3.12

Environmental Matters

39

3.13

Regulated Entities

40

3.14

Solvency

40

3.15

Labor Relations

40

3.16

Intellectual Property

40

3.17

Subsidiaries

40

3.18

Brokers’ Fees; Transaction Fees

40

3.19

Insurance

41

3.20

Full Disclosure

41

3.21

Foreign Assets Control Regulations and Anti-Money Laundering.

41

 

 

 
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ARTICLE IV - AFFIRMATIVE COVENANTS

41

4.1

Financial Statements

42

4.2

Certificates; Other Information

43

4.3

Notices

45

4.4

Preservation of Corporate Existence, Etc

46

4.5

Maintenance of Property

47

4.6

Insurance

47

4.7

Payment of Obligations

48

4.8

Compliance with Laws

49

4.9

Inspection of Property and Books and Records

49

4.10

Use of Proceeds

50

4.11

Cash Management Systems

50

4.12

Landlord Agreements

50

4.13

Further Assurances; Limitation on Guarantees and Liens

50

4.14

Lender Conference Calls

51

   

ARTICLE V - NEGATIVE COVENANTS

52

5.1

Limitation on Liens

52

5.2

Disposition of Assets

54

5.3

Consolidations and Mergers

57

5.4

Loans and Investments

57

5.5

Limitation on Indebtedness

59

5.6

Transactions with Affiliates

60

5.7

Management Fees and Compensation

60

5.8

Use of Proceeds

61

5.9

Contingent Obligations

61

5.10

Compliance with ERISA

62

5.11

Restricted Payments

62

5.12

Change in Business

63

5.13

Amendment to Organization Documents

63

5.14

Accounting Changes

63

5.15

Amendments to Subordinated Indebtedness and WLR Subordinated Indebtedness

64

5.16

No Negative Pledges

64

5.17

OFAC

65

5.18

Press Release and Related Matters

65

5.19

Sale-Leasebacks; Synthetic Leases; Factoring; etc

65

5.20

Hazardous Materials

65

5.21

Food Security Act

65

   

ARTICLE VI - FINANCIAL COVENANTS

66

6.1

Fixed Charge Coverage Ratio.

66

   

ARTICLE VII - EVENTS OF DEFAULT

67

7.1

Event of Default

67

7.2

Remedies

69

7.3

Rights Not Exclusive

69

 

 

 
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7.4

Cash Collateral for Letters of Credit

70

   

ARTICLE VIII - THE AGENT

71

8.1

Appointment and Duties.

71

8.2

Binding Effect

73

8.3

Use of Discretion.

73

8.4

Delegation of Rights and Duties

73

8.5

Reliance and Liability.

73

8.6

Agent Individually

75

8.7

Lender Credit Decision

75

8.8

Expenses; Indemnities.

75

8.9

Resignation of Agent, Collateral Agent or L/C Issuer.

76

8.10

Release of Collateral or Guarantors

77

8.11

Additional Secured Parties

78

   

ARTICLE IX - MISCELLANEOUS

78

9.1

Amendments and Waivers

78

9.2

Notices

80

9.3

Electronic Transmissions

81

9.4

No Waiver; Cumulative Remedies

82

9.5

Costs and Expenses

83

9.6

Indemnity

83

9.7

Marshaling; Payments Set Aside

84

9.8

Successors and Assigns

85

9.9

Assignments and Participations; Binding Effect

85

9.10

Confidentiality.

88

9.11

Set-off; Sharing of Payments

88

9.12

Counterparts

89

9.13

Severability; Facsimile Signature

89

9.14

Captions

89

9.15

Independence of Provisions

89

9.16

Interpretation

89

9.17

No Third Parties Benefited

90

9.18

Governing Law and Jurisdiction

90

9.19

Waiver of Jury Trial

90

9.20

Entire Agreement; Release; Survival

91

9.21

Patriot Act

91

9.22

Replacement of Lender

92

9.23

Joint and Several

92

9.24

Lender-Creditor Relationship

92

9.25

Judgment Currency

92

9.26

Original Credit Agreement Superseded

93

   

ARTICLE X - TAXES, YIELD PROTECTION AND ILLEGALITY

93

10.1

Taxes

93

10.2

Illegality

96

10.3

Increased Costs and Reduction of Return

97

 

 

 
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10.4

Funding Losses

98

10.5

Inability to Determine Rates

99

10.6

Reserves on LIBOR Rate Loans

99

10.7

Certificates of Lenders

100

10.8

Survival

100

   

ARTICLE XI - DEFINITIONS

100

11.1

Defined Terms

100

11.2

Other Interpretive Provisions.

137

11.3

Accounting Terms and Principles

139

11.4

Payments

139

  

 

 
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SCHEDULES

 

Schedule 1.1(a)

Term Loan Commitments

Schedule 1.1(b)

Revolving Loan Commitments

Schedule 1.1(c)

Letters of Credit

Schedule 1.8(a)

Scheduled Term Loan Payments

Schedule 1.12

Eligible Accounts

Schedule 3.2

Capitalization

Schedule 3.5

Litigation

Schedule 3.7

ERISA

Schedule 3.10

Tax Matters

Schedule 3.12

Environmental

Schedule 3.15

Labor Relations

Schedule 5.1

Liens

Schedule 5.2

Other Dispositions

Schedule 5.4

Investments

Schedule 5.5

Indebtedness

Schedule 5.6

Transactions with Affiliates

Schedule 5.9

Contingent Obligations

Schedule 5.16

Negative Pledges

Schedule 11.1(a)

Prior Indebtedness

 

 

EXHIBITS

 

Exhibit 1.1(c)

Form of L/C Request

Exhibit 1.1(d)

Form of Swing Loan Request

Exhibit 1.6

Form of Notice of Conversion/Continuation

Exhibit 2.1

Closing Checklist

Exhibit 4.2(b)

Compliance Certificate

Exhibit 10.1(f)-I

Tax Compliance Certificate (Lender/Non-Partnership)

Exhibit 10.1(f)-II

Tax Compliance Certificate (Participant/Non-Partnership)

Exhibit 10.1(f)-III

Tax Compliance Certificate (Participant/Partnership)

Exhibit 10.1(f)-IV

Tax Compliance Certificate (Lender/Partnership)

Exhibit 11.1(a)

Form of Assignment

Exhibit 11.1(b)

Borrowing Base Certificate

Exhibit 11.1(c)

Notice of Borrowing

Exhibit 11.1(d)

Form of Revolving Note

Exhibit 11.1(e)

Form of Swing Line Note

Exhibit 11.1(f)

Form of Term Note

 

 

 

 
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AMENDED AND RESTATED CREDIT AGREEMENT

 

This AMENDED AND RESTATED CREDIT AGREEMENT (including all exhibits and schedules
hereto, as the same may be amended, modified and/or restated from time to time,
this “Agreement”) is entered into as of March 30, 2011, by and among
International Textile Group, Inc., a Delaware corporation (“ITG”), Burlington
Industries LLC, a Delaware limited liability company (“Burlington”), Carlisle
Finishing LLC, a Delaware limited liability company (“Carlisle”), Cone Denim
LLC, a Delaware limited liability company (“Denim”), Cone Jacquards LLC, a
Delaware limited liability company (“Jacquards”), Safety Components Fabric
Technologies, Inc., a Delaware corporation (“SCFTI”), Narricot Industries LLC, a
Delaware limited liability company (“Narricot”) (ITG, Burlington, Carlisle,
Denim, Jacquards, SCFTI and Narricot are sometimes referred to herein together
as the “Borrowers” and individually as a “Borrower”), the other Persons party
hereto that are designated as a “Credit Party”, GE Capital Markets, Inc., as
Sole Lead Arranger and Joint Bookrunner, Bank of America, N.A., as Co-Collateral
Agent and Syndication Agent, Merrill Lynch, Pierce, Fenner & Smith Incorporated,
as Joint Bookrunner, General Electric Capital Corporation, a Delaware
corporation (in its individual capacity, “GE Capital”), as the Agent for the
several financial institutions from time to time party to this Agreement
(collectively, the “Lenders” and individually each a “Lender”) and for itself as
a Lender (including as Swingline Lender) and L/C Issuer, and such Lenders.

 

W I T N E S S E T H:

 

WHEREAS, the Borrowers, Agent and certain Lenders are parties to that certain
Credit Agreement dated as of the Original Closing Date (as amended, restated,
amended and restated, supplemented or otherwise modified prior to the date
hereof, the “Original Credit Agreement”);

 

WHEREAS, the Borrowers, Agent and the Lenders desire to amend and restate the
Original Credit Agreement, subject to the terms and conditions set forth herein
to, among other things, provide for a revolving credit facility (including a
letter of credit subfacility) and a term loan upon and subject to the terms and
conditions set forth in this Agreement to (a) refinance Prior Indebtedness,
provide for working capital, capital expenditures and other general corporate
purposes of the Borrowers and (b) fund certain fees and expenses associated with
the funding of the Loans;

 

WHEREAS, on the Original Closing Date (or subsequent thereto (but prior to the
Closing Date) pursuant to a joinder or similar agreement), each Borrower agreed
to secure all of its Obligations (as defined in the Original Credit Agreement)
by granting to the Agent, for the benefit of the Secured Parties, a security
interest in and lien upon substantially all of its personal and real property in
accordance with and subject to the limitations set forth in the Loan Documents
(as defined in the Original Credit Agreement);

 

 

 
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WHEREAS, on the Original Closing Date (or subsequent thereto (but prior to the
Closing Date) pursuant to a joinder or similar agreement), subject to the terms
set forth in the Original Credit Agreement, each Credit Party agreed to
guarantee all of the Obligations (as defined in the Original Credit Agreement)
of Borrowers and to grant to Agent, for the benefit of Agent, Lenders and L/C
Issuers, a security interest in and lien upon substantially all of its personal
and real property; and

 

WHEREAS, each Credit Party desires to reaffirm (i) its Obligations (as defined
in the Original Credit Agreement) arising under the Original Credit Agreement
and the other Loan Documents (as defined in the Original Credit Agreement) and
(ii) its prior grant of security interests to secure any and all Obligations (as
defined in the Original Credit Agreement), in each case, as continued hereunder
and the other Loan Documents, subject to any releases of Collateral which have
occurred from and after the Original Closing Date but prior to the Closing Date
in accordance with the terms of the Original Credit Agreement.

 

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

 

ARTICLE I - THE CREDITS

 

1.1     Amounts and Terms of Commitments.

 

(a)     The Term Loan.

 

(i)     Subject to the terms and conditions of this Agreement and in reliance
upon the representations and warranties of the Credit Parties contained herein,
each Lender with a Term Loan Commitment severally and not jointly agrees to
lend, on the Closing Date, to the Borrowers the amount set forth opposite such
Lender’s name in Schedule 1.1(a) under the heading “Term Loan Commitments” (such
amount being referred to herein as such Lender’s “Term Loan Commitment”).
Amounts borrowed under this subsection 1.1(a)(i) are referred to as the “Term
Loan.”

 

(ii)     Amounts borrowed as a Term Loan which are repaid or prepaid may not be
reborrowed.

 

(b)     The Revolving Credit.

 

(i)     Subject to the terms and conditions of this Agreement and in reliance
upon the representations and warranties of the Credit Parties contained herein,
each Revolving Lender severally and not jointly agrees to make Loans to any of
the Borrowers (each such Loan, a “Revolving Loan”) from time to time on any
Business Day during the period from the Closing Date to the Revolving
Termination Date, in an aggregate amount not to exceed at any time outstanding
the amount set forth opposite such Lender’s name in Schedule 1.1(b) under the
heading “Revolving Loan Commitment” (such amount as the same may be reduced or
increased from time to time as a result of one or more assignments pursuant to
Section 9.9 or as a result of a Commitment Increase in accordance with Section
1.1(b)(iv), being referred to herein as such Lender’s “Revolving Loan
Commitment”); provided, however, that, after giving effect to any Borrowing of
Revolving Loans, the aggregate principal amount of all outstanding Revolving
Loans (excluding, solely for purposes of this determination only, Revolving
Loans, if any, for which WLR Recovery Fund IV, L.P. has purchased a WLR
Participation pursuant to the WLR Last-Out Participation Agreement) shall not
exceed the Maximum Revolving Loan Balance. Subject to the other terms and
conditions hereof, amounts borrowed under this subsection 1.1(b) may be repaid
and reborrowed from time to time. On the Closing Date, the outstanding principal
balance of the “Revolving Loans” made under the Original Credit Agreement equals
$38,576,628.93, which amount shall remain outstanding Obligations of the
Borrowers and shall be deemed to be outstanding Revolving Loans hereunder. The
“Maximum Revolving Loan Balance” from time to time will be the lesser of:

 

 

 
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(A)     the “Borrowing Base” (as calculated pursuant to the Borrowing Base
Certificate) in effect from time to time, or

 

(B)     the Aggregate Revolving Loan Commitment then in effect;

 

less, in either case, the sum of (x) the aggregate amount of Letter of Credit
Obligations plus (y) outstanding Swing Loans.

 

(ii)     If at any time the then outstanding principal balance of Revolving
Loans exceeds the Maximum Revolving Loan Balance then the Borrowers shall
immediately prepay outstanding Revolving Loans in an amount sufficient to
eliminate such excess; provided that if such excess results from fluctuations in
foreign currency exchange rates relating to any outstanding Letter of Credit
which is denominated in a currency other than Dollars (a “Currency
Overadvance”), such excess must be prepaid within five (5) Business Days.

 

(iii)     If the Borrower Representative requests that Revolving Lenders make,
or permit to remain outstanding Revolving Loans (excluding, solely for purposes
of this determination only, Revolving Loans, if any, for which WLR Recovery Fund
IV, L.P. has purchased a WLR Participation pursuant to the WLR Last-Out
Participation Agreement) in excess of the Borrowing Base (any such excess
Revolving Loan is herein referred to as an “Overadvance”), the Agent and the
Collateral Agents may, in their sole discretion, elect to make, or permit to
remain outstanding such Overadvance; provided, however, that the Agent and the
Collateral Agents may not cause Revolving Lenders to make, or permit to remain
outstanding, (x) aggregate Revolving Loans in excess of the Aggregate Revolving
Loan Commitment less the sum of outstanding Swing Loans plus the aggregate
amount of Letter of Credit Obligations or (y) an Overadvance in an aggregate
amount in excess of 5% of the Aggregate Revolving Loan Commitment. If an
Overadvance is made, or permitted to remain outstanding, pursuant to the
preceding sentence, then all Revolving Lenders shall be bound to make, or permit
to remain outstanding, such Overadvance based upon their Commitment Percentage
of the Aggregate Revolving Loan Commitment in accordance with the terms of this
Agreement. If an Overadvance remains outstanding for more than ninety (90) days
during any three hundred sixty (360) day period, Revolving Loans must be repaid
immediately in an amount sufficient to eliminate all of such Overadvance.
Furthermore, the Majority Revolving Lenders may prospectively revoke the Agent’s
and the Collateral Agents’ ability to make or permit Overadvances by written
notice to the Agent or the Collateral Agents, as applicable. All Overadvances
shall constitute Base Rate Loans and shall bear interest at the Base Rate plus
the Applicable Margin for Revolving Loans and shall bear interest at the default
rate under Section 1.3(c) only if not repaid within five (5) Business Days. The
funding or sufferance of any Overadvance shall not constitute a waiver by the
Agent, the Collateral Agents or Lenders of any Event of Default caused thereby.

 

 

 
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(iv)     From time to time after the Closing Date but on or prior to ninety-one
(91) days before the Revolving Termination Date, the Revolving Loan Commitments
may be increased (but in no event in excess of $15,000,000 in the aggregate for
all such increases) (the “Commitment Increase Cap”) such that the Aggregate
Revolving Loan Commitment shall at no time exceed $100,000,000 (any such
increase, a “Commitment Increase”) at the option of the Borrowers pursuant to
delivery of written notice from the Borrowers of a proposed Commitment Increase
(the “Increased Commitment Proposal”) to the Agent if each of the following
conditions have been met:

 

(A)     no Default or Event of Default shall exist on the effective date of such
increase;

 

(B)     no Commitment Increase may be in an amount less than $5,000,000 (or if
less, the remaining amount of the Commitment Increase Cap);

 

(C)     the proposed Commitment Increase shall have been consented to in writing
by each existing Lender (if any) who is increasing its Revolving Loan
Commitment;

 

(D)     the proposed Commitment Increase, together with all prior Commitment
Increases (if any), shall not, in the aggregate, exceed the Commitment Increase
Cap;

 

(E)     the terms, including pricing and maturity of the incremental Revolving
Loans shall be the same as those applicable to the existing Revolving Loans; and

 

(F)      the Agent shall have received (i) joinder agreements for any new
Lenders and (ii) to the extent required by Agent in its sole discretion, (a) a
modification to each existing Mortgage with respect to the Mortgaged Property,
duly executed and acknowledged by each Credit Party that is the owner of or
holder of any interest in the applicable Mortgaged Property (as defined in the
applicable Mortgage) and otherwise in form for recording in the recording office
of the applicable political subdivision where such Mortgaged Property is
situated (each, a “Mortgage Modification”) and (b) a modification endorsement in
respect of each title policy currently applicable to any such existing Mortgage.

 

 

 
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The Increased Commitment Proposal shall be offered first to existing Lenders,
who may accept, but are not obligated to accept, based on their respective
Commitment Percentage of the Commitment Increase. If the existing Lenders do not
accept the total amount of the Commitment Increase on such pro rata basis, then
existing Lenders may accept, but are not obligated to accept, the remaining
portions on a non-pro rata basis. To the extent that existing Lenders do not
accept the Commitment Increase, the Increased Commitment Proposal may be offered
to Persons who would otherwise be assignees in accordance with Section 9.9(b)
(each such Person, an “Eligible Assignee”). The Agent shall have discretion to
adjust the allocation of the proposed additional commitments, as the case may
be, between and among Lenders that accept the Increased Commitment Proposal and
Eligible Assignees that accept the Increased Commitment Proposal.

 

Each of the Borrowers, Lenders and the Agent acknowledges and agrees that each
Commitment Increase meeting the conditions set forth in this Section 1.1(b)(iv)
shall not require the consent of any Lender other than those Lenders, if any,
which have agreed to increase their Revolving Loan Commitments in connection
with such proposed Commitment Increase. After giving effect to any Commitment
Increase, it may be the case that the outstanding Revolving Loans are not held
pro rata in accordance with the new Revolving Loan Commitments. In order to
remedy the foregoing, on the effective date of the applicable Commitment
Increase, the Revolving Lenders (including, without limitation, any new Lenders)
shall make advances among themselves so that after giving effect thereto the
Revolving Loans will be held by the Revolving Lenders (including, without
limitation, any new Lenders), pro rata in accordance with the applicable
Commitment Percentages hereunder (after giving effect to the applicable
Commitment Increase).

 

(c)     Letters of Credit. (i) Commitment and Conditions. On the terms and
subject to the conditions contained herein, each L/C Issuer agrees to Issue, at
the request of the Borrower Representative, in accordance with such L/C Issuer’s
usual and customary business practices, and for the account of the Borrowers
(or, as long as the applicable Borrowers remain responsible for the payment in
full of all amounts drawn thereunder and related fees, costs and expenses, and
subject to Section 5.4(a), for the account of any Subsidiary of a Borrower),
Letters of Credit (denominated in Dollars) from time to time on any Business Day
during the period from the Closing Date through the earlier of the Revolving
Termination Date and 7 days prior to the date specified in clause (a) of the
definition of Revolving Termination Date; provided, however, that such L/C
Issuer shall not be under any obligation to Issue any Letter of Credit upon the
occurrence of any of the following, after giving effect to such Issuance:

 

 

 
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(A)     (i) the aggregate outstanding principal balance of Revolving Loans would
exceed the Maximum Revolving Loan Balance or (ii) the Letter of Credit
Obligations for all Letters of Credit would exceed the US Dollar Equivalent of
$17,500,000 (the “L/C Sublimit”);

 

(B)     the expiration date of such Letter of Credit (i) is not a Business Day,
(ii) is more than one year after the date of issuance thereof or (iii) is later
than 7 days prior to the date specified in clause (a) of the definition of
Revolving Termination Date; provided, however, that any Letter of Credit with a
term not exceeding one year may provide for its renewal for additional periods
not exceeding one year as long as (x) the applicable Borrower and such L/C
Issuer have the option to prevent such renewal before the expiration of such
term or any such period and (y) neither such L/C Issuer nor any Borrower shall
permit any such renewal to extend such expiration date beyond the date set forth
in clause (iii) above; or

 

(C)     (i) any fee due in connection with, and on or prior to, such Issuance
has not been paid, (ii) such Letter of Credit is requested to be issued in a
form that is not reasonably acceptable to such L/C Issuer or (iii) such L/C
Issuer shall not have received, each in form and substance reasonably acceptable
to it and duly executed by the applicable Borrowers or the Borrower
Representative on their behalf (and, if such Letter of Credit is issued for the
account of any Subsidiary of a Borrower, such Person), the documents that such
L/C Issuer generally uses in the ordinary course of its business for the
Issuance of letters of credit of the type of such Letter of Credit
(collectively, the “L/C Reimbursement Agreement”). Furthermore, GE Capital as an
L/C Issuer may elect only to issue Letters of Credit in its own name and such
Letters of Credit may not be accepted by certain beneficiaries such as insurance
companies. Notwithstanding anything in this Agreement or any other Loan Document
to the contrary, in the event of any conflict between the terms or provisions of
this Agreement and the terms or provisions of any L/C Reimbursement Agreement,
the terms and provisions of this Agreement shall control.

 

For each such Issuance, the applicable L/C Issuer may, but shall not be required
to, determine that, or take notice whether, the conditions precedent set forth
in Section 2.2 have been satisfied or waived in connection with the Issuance of
any Letter of Credit; provided, however, that no Letter of Credit shall be
Issued during the period starting on the first Business Day after the receipt by
such L/C Issuer of notice from the Agent or the Majority Revolving Lenders that
any condition precedent contained in Section 2.2 is not satisfied and ending on
the date all such conditions are satisfied or duly waived.

 

Notwithstanding anything else to the contrary herein, if any Lender is a
Non-Funding Lender or Impacted Lender, no L/C Issuer shall be obligated to Issue
any Letter of Credit unless (w) the Non-Funding Lender or Impacted Lender has
been replaced in accordance with Section 9.9 or 9.22, (x) the Letter of Credit
Obligations of such Non-Funding Lender or Impacted Lender have been cash
collateralized, or (y) the Revolving Loan Commitments of the other Lenders have
been increased by an amount sufficient to satisfy Agent that all future Letter
of Credit Obligations will be covered by all Revolving Lenders that are not
Non-Funding Lenders or Impacted Lenders, or (z) the Letter of Credit Obligations
of such Non-Funding Lender or Impacted Lender have been reallocated to other
Revolving Lenders in a manner consistent with subsection 1.11(e)(ii).

 

 

 
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(i)     Notice of Issuance. The Borrower Representative shall give the relevant
L/C Issuer and the Agent a notice of any requested Issuance of any Letter of
Credit, which shall be effective only if received by such L/C Issuer and the
Agent not later than 12:00 noon (New York time) on the third Business Day prior
to the date of such requested Issuance, or such later time as is agreed by such
L/C Issuer. Such notice may be made in a writing substantially the form of
Exhibit 1.1(c) duly completed or in a writing in any other form acceptable to
such L/C Issuer (an “L/C Request”) or by telephone if confirmed promptly, but in
any event within one Business Day and prior to such Issuance, with such an L/C
Request.

 

(ii)     Reporting Obligations of L/C Issuers. Each L/C Issuer agrees to provide
the Agent (which, after receipt, the Agent shall provide to each Revolving
Lender), in form and substance satisfactory to the Agent, each of the following
on the following dates: (A) (i) on or prior to any Issuance of any Letter of
Credit by such L/C Issuer, (ii) immediately after any drawing under any such
Letter of Credit or (iii) immediately after any payment (or failure to pay when
due) by the applicable Borrowers of any related L/C Reimbursement Obligation,
notice thereof, which shall contain a reasonably detailed description of such
Issuance, drawing or payment; (B) upon the request of the Agent (or any
Revolving Lender through the Agent), copies of any Letter of Credit Issued by
such L/C Issuer and any related L/C Reimbursement Agreement and such other
documents and information as may reasonably be requested by the Agent; and (C)
on the first Business Day of each calendar week, a schedule of the Letters of
Credit Issued by such L/C Issuer, in form and substance reasonably satisfactory
to the Agent, setting forth the Letter of Credit Obligations for such Letters of
Credit outstanding on the last Business Day of the previous calendar week.

 

(iii)     Acquisition of Participations. Upon any Issuance of a Letter of Credit
in accordance with the terms of this Agreement resulting in any increase in the
Letter of Credit Obligations, each Revolving Lender shall be deemed to have
acquired, without recourse or warranty, an undivided interest and participation
in such Letter of Credit and the related Letter of Credit Obligations in an
amount equal to its Commitment Percentage of such Letter of Credit Obligations.

 

 

 
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(iv)     Reimbursement Obligations of the Borrowers. The Borrowers agree to pay
to the L/C Issuer of any Letter of Credit each L/C Reimbursement Obligation
owing with respect to such Letter of Credit no later than the first Business Day
after the applicable Borrowers or the Borrower Representative receive notice
from such L/C Issuer that payment has been made under such Letter of Credit or
that such L/C Reimbursement Obligation is otherwise due (the “L/C Reimbursement
Date”) with interest thereon computed as set forth in clause (A) below. In the
event that any L/C Issuer incurs any L/C Reimbursement Obligation not repaid by
the Borrowers as provided in this clause (v) (or any such payment by the
Borrowers is rescinded or set aside for any reason), such L/C Issuer shall
promptly notify the Agent of such failure (and, upon receipt of such notice, the
Agent shall forward a copy to each Revolving Lender) and, irrespective of
whether such notice is given, such L/C Reimbursement Obligation shall be payable
on demand (which shall be deemed paid in full upon the making of the Revolving
Loans described in subsection (vi) below) by the Borrowers with interest thereon
computed (A) from the date on which such L/C Reimbursement Obligation arose to
the L/C Reimbursement Date, at the interest rate applicable during such period
to Revolving Loans that are Base Rate Loans and (B) thereafter until payment in
full, at the interest rate applicable during such period to past due Revolving
Loans that are Base Rate Loans.

 

(v)     Reimbursement Obligations of the Revolving Credit Lenders. Upon receipt
of the notice described in clause (v) above from the Agent, each Revolving
Lender shall pay to the Agent for the account of such L/C Issuer its Commitment
Percentage of such L/C Reimbursement Obligation (as such amount may be increased
pursuant to subsection 1.11(e)(ii)). By making such payment (other than during
the continuation of an Event of Default under subsection 7.1(f) or 7.1(g)), such
Lender shall be deemed to have made a Revolving Loan to the Borrowers, which,
upon receipt thereof by such L/C Issuer, the Borrowers shall be deemed to have
used in whole to repay such L/C Reimbursement Obligation. Any such payment that
is not deemed a Revolving Loan shall be deemed a funding by such Lender of its
participation in the applicable Letter of Credit and the related L/C
Obligations. Such participation shall not otherwise be required to be funded.
Upon receipt by any L/C Issuer of any payment from any Lender pursuant to this
clause (vi) with respect to any portion of any L/C Reimbursement Obligation,
such L/C Issuer shall promptly pay over to such Lender all payments received by
such L/C Issuer after such payment by such Lender with respect to such portion.

 

(vi)     Obligations Absolute. The obligations of the Borrowers and the
Revolving Lenders pursuant to clauses (iv), (v) and (vi) above shall be
absolute, unconditional and irrevocable and performed strictly in accordance
with the terms of this Agreement irrespective of (A) (i) the invalidity or
unenforceability of any term or provision in any Letter of Credit, any document
transferring or purporting to transfer a Letter of Credit, any Loan Document
(including the sufficiency of any such instrument), or any modification to any
provision of any of the foregoing, (ii) any document presented under a Letter of
Credit being forged, fraudulent, invalid, insufficient or inaccurate in any
respect or failing to comply with the terms of such Letter of Credit or (iii)
any loss or delay, including in the transmission of any document, (B) the
existence of any setoff, claim, abatement, recoupment, defense or other right
that any Person (including any Credit Party) may have against the beneficiary of
any Letter of Credit or any other Person, whether in connection with any Loan
Document or any other Contractual Obligation or transaction, or the existence of
any other withholding, abatement or reduction, (C) in the case of the
obligations of any Revolving Lender, (i) the failure of any condition precedent
set forth in Section 2.2 to be satisfied (each of which conditions precedent the
Revolving Lenders hereby irrevocably waive) or (ii) any adverse change in the
condition (financial or otherwise) of any Credit Party and (D) any other act or
omission to act or delay of any kind of the Agent, any Lender or any other
Person or any other event or circumstance whatsoever, whether or not similar to
any of the foregoing, that might, but for the provisions of this subsection
1.1(c)(vii), constitute a legal or equitable discharge of any obligation of the
Borrowers or any Revolving Lender hereunder.

 

 

 
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(vii)     Outstanding Letters of Credit. The parties hereto agree that (i) the
letters of credit issued by Bank of America, N.A. and set forth on Schedule
1.1(c) shall constitute Letters of Credit hereunder and (ii) any and all Letters
of Credit (as such term is defined in the Original Credit Agreement) outstanding
on the Closing Date shall be deemed to be Letters of Credit issued under this
Agreement.

 

(d)     Swing Loans. (i) Availability. Subject to the terms and conditions of
this Agreement and in reliance upon the representations and warranties of the
Credit Parties contained herein, the Swingline Lender shall make Loans (each a
“Swing Loan”) available to the Borrowers under the Revolving Loan Commitments
from time to time on any Business Day during the period from the Closing Date
until the Revolving Termination Date in an aggregate principal amount at any
time outstanding not to exceed the Swingline Commitment; provided, however, that
the Swingline Lender may not make any Swing Loan (x) to the extent that after
giving effect to such Swing Loan, the aggregate principal amount of all
Revolving Loans would exceed the Maximum Revolving Loan Balance and (y) during
the period commencing on the first Business Day after it receives notice from
the Agent or the Majority Revolving Lenders that one or more of the conditions
precedent contained in Section 2.2 are not satisfied and ending when such
conditions are satisfied or duly waived. In connection with the making of any
Swing Loan, the Swingline Lender may but shall not be required to determine
that, or take notice whether, the conditions precedent set forth in Section 2.2
have been satisfied or waived. Each Swing Loan shall be a Base Rate Loan and
must be repaid in full on the earliest of (A) the funding date of any Borrowing
of Revolving Loans and (B) the Revolving Termination Date. Within the limits set
forth in the first sentence of this clause (i), amounts of Swing Loans repaid
may be reborrowed under this clause (i).

 

(i)     Borrowing Procedures. In order to request a Swing Loan, the Borrower
Representative shall give to the Agent a notice to be received not later than
2:00 p.m. (New York time) on the day of the proposed Borrowing, which may be
made in a writing substantially in the form of Exhibit 1.1(d) duly completed (a
“Swingline Request”) or by telephone if confirmed promptly but, in any event,
prior to such Borrowing, with such a Swingline Request. In addition, if any
Notice of Borrowing of Revolving Loans requests a Borrowing of Base Rate Loans
(other than a Borrowing to refinance outstanding Swing Loans), the Swingline
Lender may, notwithstanding anything else to the contrary herein, make a Swing
Loan available to the Borrowers in an aggregate amount not to exceed such
proposed Borrowing, and the aggregate amount of the corresponding proposed
Borrowing shall be reduced accordingly by the principal amount of such Swing
Loan. The Agent shall promptly notify the Swingline Lender of the details of any
requested Swing Loan. Upon receipt of such notice and subject to the terms of
this Agreement, the Swingline Lender shall make a Swing Loan available to the
Borrowers by making the proceeds thereof available to the Agent and, in turn,
the Agent shall make such proceeds available to the Borrowers on the date set
forth in the relevant Swingline Request or Notice of Borrowing.

 

 

 
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(ii)     Refinancing Swing Loans. The Swingline Lender may (and shall no less
frequently than once each week) or, subject to subsection 1.5(a), the Borrower
Representative, may at any time forward a demand to the Agent (which the Agent
shall, upon receipt, forward to each Revolving Lender) that each Revolving
Lender pay to the Agent, for the account of the Swingline Lender, such Revolving
Lender’s Commitment Percentage of all or a portion of the outstanding Swing
Loans (as such amount may be increased pursuant to subsection 1.11(e)(ii)). Each
Revolving Lender shall pay such Commitment Percentage to the Agent for the
account of the Swingline Lender (A) if the notice or demand therefor was
received by such Lender prior to 12:00 p.m. (New York time) on any Business Day,
on such Business Day and (B) otherwise, on the Business Day following such
receipt. Payments received by the Agent after 2:00 p.m. (New York time) shall be
deemed to be received on the next Business Day. Upon receipt by the Agent of
such payment (other than during the continuation of any Event of Default under
subsection 7.1(f) or 7.1(g)), such Revolving Lender shall be deemed to have made
a Revolving Loan to the Borrowers, which, upon receipt of such payment by the
Swingline Lender from the Agent, the Borrowers shall be deemed to have used in
whole to refinance such Swing Loan. In addition, regardless of whether any such
demand is made, upon the occurrence of any Event of Default under subsection
7.1(f) or 7.1(g), each Revolving Lender shall be deemed to have acquired,
without recourse or warranty, an undivided interest and participation in each
Swing Loan in an amount equal to such Lender’s Commitment Percentage of such
Swing Loan. If any payment made by any Revolving Lender as a result of any such
demand is not deemed a Revolving Loan, such payment shall be deemed a funding by
such Lender of such participation. Such participation shall not be otherwise
required to be funded. Upon receipt by the Swingline Lender of any payment from
any Revolving Lender pursuant to this clause (iii) with respect to any portion
of any Swing Loan, the Swingline Lender shall promptly pay over to such
Revolving Lender all payments of principal (to the extent received after such
payment by such Lender) and interest (to the extent accrued with respect to
periods after such payment) received by the Swingline Lender from any Borrower
with respect to such portion.

 

 

 
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(iii)     Obligation to Fund Absolute. Each Revolving Lender’s obligations
pursuant to clause (iii) above shall be absolute, unconditional and irrevocable
and shall be performed strictly in accordance with the terms of this Agreement
under any and all circumstances whatsoever, including (A) the existence of any
setoff, claim, abatement, recoupment, defense or other right that such Lender,
any Affiliate thereof or any other Person may have against the Swingline Lender,
the Agent, any other Lender or L/C Issuer or any other Person, (B) the failure
of any condition precedent set forth in Section 2.2 to be satisfied or the
failure of the Borrower Representative to deliver a Notice of Borrowing (each of
which requirements the Revolving Lenders hereby irrevocably waive) and (C) any
adverse change in the condition (financial or otherwise) of any Credit Party.

 

(e)     Interest and principal on all Loans shall be paid in Dollars. For
purposes of preparing Borrowing Base Certificates, financial statements,
calculating financial covenants and determining compliance with covenants
expressed in Dollars, Pounds Sterling, Canadian Dollars and Euros will be
converted to Dollars based on (i) GAAP, consistently applied, for the purposes
of preparing cash flow statements and income statements and (ii) as of the last
day of the relevant period or as of the date of Borrowing Base Certificates for
the purposes of preparing balance sheets, Borrowing Base Certificates, or
covenants determined as of a specified date. If the Agent receives any payment
from or on behalf of any Credit Party in a currency other than the currency in
which the relevant Obligation is denominated, the Agent may convert the payment
(including the monetary proceeds of realization upon any Collateral and any
funds held in a cash collateral account) into the currency in which the relevant
Obligation is payable at the exchange rate published in The Wall Street Journal
on the Business Day closest in time to the date on which such payment was due.
The relevant Obligations shall be satisfied only to the extent of the amount
actually received by the Agent upon such conversion. Unless otherwise specified
herein, all determinations of US Dollar Equivalents shall be determined by
reference to The Wall Street Journal published on the Business Day closest in
time to the relevant date of determination or for the relevant period of
determination.

 

1.2     Notes.

 

(a)     The Term Loan made by each Lender with a Term Loan Commitment shall be
evidenced by this Agreement and, if requested by such Lender, a Term Note
payable to such Lender in an amount equal to the unpaid principal balance of the
Term Loan held by such Lender.

 

(b)     The Revolving Loans made by each Revolving Lender shall be evidenced by
this Agreement and, if requested by such Lender, a Revolving Note payable to the
order of such Lender in an amount equal to such Lender’s Revolving Loan
Commitment.

 

 

 
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(c)     Swing Loans made by the Swingline Lender shall be evidenced by this
Agreement and, if requested by such Lender, a Swingline Note in an amount equal
to the Swingline Commitment.

 

1.3     Interest.

 

(a)     Subject to subsections 1.3(c) and 1.3(d), each Loan shall bear interest
on the outstanding principal amount thereof from the date when made at a rate
per annum equal to the LIBOR or the Base Rate, as the case may be, plus the
Applicable Margin; provided Swing Loans may not be LIBOR Rate Loans. The
Applicable Margin for Loans shall be adjusted as set forth in the definition of
Applicable Margin. Each determination of an interest rate by the Agent shall be
conclusive and binding on each Borrower and the Lenders in the absence of
demonstrable error. All computations of fees and interest payable under this
Agreement shall be made on the basis of a 360-day year and actual days elapsed;
provided, that, computations with respect to interest on Base Rate Loans shall
be based on a 365/366 day year and actual days elapsed. Interest and fees shall
accrue during each period during which interest or such fees are computed from
the first day thereof to the last day thereof.

 

(b)     Interest on each Loan shall be paid in arrears on each Interest Payment
Date. Interest shall also be paid on the date of any payment or prepayment of
the Term Loan in full and Revolving Loans on the Revolving Termination Date.

 

(c)     At the election of the Majority Lenders while any Event of Default
exists (or automatically while any Event of Default under subsection 7.1(f) or
7.1(g) exists), the Borrowers shall pay interest (after as well as before entry
of judgment thereon to the extent permitted by law) on the Obligations owing by
them under the Loan Documents from and after the date of occurrence of such
Event of Default, at a rate per annum which is determined by adding two percent
(2.0%) per annum to the Applicable Margin then in effect for such Loans (plus
the LIBOR or Base Rate, as the case may be) and, in the case of Obligations
under the Loan Documents not subject to an Applicable Margin (other than the
fees described in subsection 1.9(c)), at a rate per annum equal to the rate per
annum applicable to Revolving Loans which are Base Rate Loans (including the
Applicable Margin with respect thereto) plus two percent (2.0%). All such
interest shall be payable on demand of the Agent or the Majority Lenders.

 

(d)     Anything herein to the contrary notwithstanding, the obligations of the
Borrowers hereunder shall be subject to the limitation that payments of interest
shall not be required, for any period for which interest is computed hereunder,
to the extent (but only to the extent) that contracting for, charging or
receiving such payment by the respective Lender would be contrary to the
provisions of any law applicable to such Lender limiting the highest rate of
interest which may be lawfully contracted for, charged or received by such
Lender, and in such event the Borrowers shall pay such Lender interest at the
highest rate permitted by applicable law (“Maximum Lawful Rate”); provided,
however, that if at any time thereafter the rate of interest payable hereunder
is less than the Maximum Lawful Rate, Borrowers shall continue to pay interest
hereunder at the Maximum Lawful Rate until such time as the total interest
received by the Agent, on behalf of Lenders, is equal to the total interest that
would have been received since the Closing Date had the interest payable
hereunder been (but for the operation of this paragraph) permitted at the
interest rate payable as provided in this Agreement.

 

 

 
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1.4     Loan Accounts.

 

(a)     The Agent, on behalf of the Lenders, shall record on its books and
records the amount of each Loan made, the interest rate applicable, all payments
of principal and interest thereon and the principal balance thereof from time to
time outstanding. The Agent shall deliver to the Borrower Representative on a
monthly basis a loan statement setting forth such record for the immediately
preceding month. Such record shall, absent manifest error, be conclusive
evidence of the amount of the Loans made by the Lenders to the Borrowers and the
interest and payments thereon. Any failure to so record or any error in doing
so, or any failure to deliver such loan statement shall not, however, limit or
otherwise affect the obligation of the Borrowers hereunder (and under any Note)
to pay any amount owing with respect to the Loans or provide the basis for any
claim against the Agent.

 

(b)     The Agent, acting as agent of the Borrowers solely for tax purposes to
the extent provided for in this Agreement and solely with respect to the actions
described in this subsection 1.4(b), shall establish and maintain at its address
referred to in Section 9.2 (or at such other address as the Agent may notify the
Borrower Representative) (A) a record of ownership (the “Register”) in which the
Agent agrees to register by book entry the interests (including any rights to
receive payment hereunder) of the Agent, each Lender and each L/C Issuer in the
Term Loan, Revolving Loans, Swing Loans and Letter of Credit Obligations, each
of their obligations under this Agreement to participate in each Loan, Letter of
Credit and L/C Reimbursement Obligations, and any assignment of any such
interest, obligation or right and (B) accounts in the Register in accordance
with its usual practice in which it shall record (1) the names and addresses of
the Lenders and the L/C Issuers (and each change thereto pursuant to Sections
9.9 and 9.22), (2) the Commitments of each Lender, (3) the amount of each Loan
and each funding of any participation described in clause (A) above, for LIBOR
Rate Loans, the Interest Period applicable thereto, (4) the amount of any
principal or interest due and payable or paid, (5) the amount of the L/C
Reimbursement Obligations due and payable or paid in respect of Letters of
Credit and (6) any other payment received by the Agent from a Borrower and its
application to the Obligations.

 

(c)     Notwithstanding anything to the contrary contained in this Agreement,
the Loans (including any Notes evidencing such Loans and, in the case of
Revolving Loans, the corresponding obligations to participate in Letter of
Credit Obligations and Swing Loans) and the L/C Reimbursement Obligations are
registered obligations, the right, title and interest of the Lenders and the L/C
Issuers and their assignees in and to such Loans or L/C Reimbursement
Obligations, as the case may be, shall be transferable only upon notation of
such transfer in the Register and no assignment thereof shall be effective until
recorded therein. This Section 1.4 and Section 9.9 shall be construed so that
the Loans and L/C Reimbursement Obligations are at all times maintained in
“registered form” within the meaning of Sections 163(f), 871(h)(2) and 881(c)(2)
of the Code.

 

 

 
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(d)     The Credit Parties, the Agent, the Lenders and the L/C Issuers shall
treat each Person whose name is recorded in the Register as a Lender or L/C
Issuer, as applicable, for all purposes of this Agreement. Information contained
in the Register with respect to any Lender or any L/C Issuer shall be available
for access by the Borrowers, the Borrower Representative, the Agent, such Lender
or such L/C Issuer at any reasonable time and from time to time upon reasonable
prior notice. No Lender or L/C Issuer shall, in such capacity, have access to or
be otherwise permitted to review any information in the Register other than
information with respect to such Lender or L/C Issuer unless otherwise agreed by
the Agent.

 

1.5     Procedure for Revolving Credit Borrowing.

 

(a)     Each Borrowing of a Revolving Loan shall be made upon the Borrower
Representative’s irrevocable (subject to Section 10.5 hereof) written notice
delivered to the Agent in the form of a Notice of Borrowing, which notice must
be received by the Agent prior to 2:00 p.m. (New York time) on the requested
Borrowing date in the case of each Base Rate Loan and (ii) on the day which is
three (3) Business Days prior to the requested Borrowing date in the case of
each LIBOR Rate Loan. Such Notice of Borrowing shall specify:

 

(i)       the amount of the Borrowing (which shall be in an aggregate minimum
principal amount of $100,000 and multiples of $50,000 in excess thereof);

 

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

 

(iii)     whether the Borrowing is to be comprised of LIBOR Rate Loans or Base
Rate Loans; and

 

(iv)     if the Borrowing is to be LIBOR Rate Loans, the Interest Period
applicable to such Loans.

 

(b)     Upon receipt of a Notice of Borrowing, the Agent will promptly notify
each Revolving Lender of such Notice of Borrowing and of the amount of such
Lender’s Commitment Percentage of the Borrowing.

 

(c)     Unless the Agent is otherwise directed in writing by the Borrower
Representative, the proceeds of each requested Borrowing after the Closing Date
will be made available to the Borrowers by the Agent by wire transfer of such
amount to the Borrowers pursuant to the wire transfer instructions specified on
the signature page hereto.

 

 

 
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1.6     Conversion and Continuation Elections.

 

(a)     Borrowers shall have the option to (i) request that any Revolving Loan
be made as a LIBOR Rate Loan, (ii) convert at any time all or any part of
outstanding Loans (other than Swing Loans) from Base Rate Loans to LIBOR Rate
Loans, (iii) convert any LIBOR Rate Loan to a Base Rate Loan, subject to Section
10.4 if such conversion is made prior to the expiration of the Interest Period
applicable thereto, or (iv) continue all or any portion of any Loan as a LIBOR
Rate Loan upon the expiration of the applicable Interest Period. Any Loan or
group of Loans having the same proposed Interest Period to be made or continued
as, or converted into, a LIBOR Rate Loan must be in a minimum amount of
$1,000,000 and integral multiples of $100,000 in excess of such amount. Any such
election must be made by the Borrower Representative by 2:00 p.m. (New York
time) on the 3rd Business Day prior to (1) the date of any proposed Revolving
Loan which is to bear interest at LIBOR, (2) the end of each Interest Period
with respect to any LIBOR Rate Loans to be continued as such, or (3) the date on
which Borrowers wish to convert any Base Rate Loan to a LIBOR Rate Loan for a
Interest Period designated by the Borrower Representative in such election. If
no election is received with respect to a LIBOR Rate Loan by 2:00 p.m. (New York
time) on the 3rd Business Day prior to the end of the Interest Period with
respect thereto, that LIBOR Rate Loan shall be converted to a Base Rate Loan at
the end of its Interest Period. The Borrower Representative must make such
election by notice to the Agent in writing, by fax or overnight courier (or by
telephone, to be confirmed in writing on such day) or Electronic Transmission.
In the case of any conversion or continuation, such election must be made
pursuant to a written notice (a “Notice of Conversion/Continuation”) in the form
of Exhibit 1.6. No Loan shall be made, converted into or continued as a LIBOR
Rate Loan, if an Event of Default has occurred and is continuing and the Agent
or the Majority Lenders have determined not to make or continue any Loan as a
LIBOR Rate Loan as a result thereof. No Loan may be made as or converted into a
LIBOR Rate Loan until 15 days after the Closing Date.

 

(b)     Upon receipt of a Notice of Conversion/Continuation, the Agent will
promptly notify each Lender thereof. In addition, the Agent will, with
reasonable promptness, notify the Borrower Representative and the Lenders of
each determination of LIBOR; provided that any failure to do so shall not
relieve any Borrower of any liability hereunder or provide the basis for any
claim against the Agent. All conversions and continuations shall be made pro
rata according to the respective outstanding principal amounts of the Loans held
by each Lender with respect to which the notice was given.

 

(c)     Notwithstanding any other provision contained in this Agreement, after
giving effect to any Borrowing, or to any continuation or conversion of any
Loans, there shall not be more than ten (10) different Interest Periods in
effect.

 

1.7     Optional Prepayments.

 

(a)     The Borrowers may at any time prepay the Revolving Loans in whole or in
part (other than prepayments which have the effect of permanently reducing the
Commitments and other than in the case of Revolving Loans, if any, for which WLR
Recovery Fund IV, L.P. has purchased a WLR Participation pursuant to the WLR
Last-Out Participation Agreement, which Revolving Loans, if any, shall not be
repaid until such time as all other Obligations have been Paid in Full) in an
amount greater than or equal to $100,000 (other than Swing Loans for which no
minimum shall apply), in each instance, without penalty or premium but subject
to payment of LIBOR breakage costs as provided in Section 10.4.

 

 

 
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(b)     The Borrowers may at any time upon at least two (2) Business Days’ prior
written notice by the Borrower Representative to the Agent, prepay the Term Loan
in whole or in part in an amount greater than or equal to $1,000,000, in each
instance, without penalty or premium but subject to payment of LIBOR breakage
costs as provided in Section 10.4. Optional partial prepayments of the Term Loan
shall be applied in the manner set forth in Section 1.8(e). Optional partial
prepayments of the Term Loan in amounts less than $1,000,000 shall not be
permitted.

 

(c)     The notice of any prepayment shall not thereafter be revocable (other
than with respect to a prepayment in full of the Loans and the termination of
all Commitments, which such prepayment may be conditioned upon the successful
closing of a new credit facility) by the Borrowers or the Borrower
Representative and the Agent will promptly notify each Lender thereof and of
such Lender’s Commitment Percentage of such prepayment. The payment amount
specified in such notice shall be due and payable on the date specified therein.
Together with each prepayment under this Section 1.7, the Borrowers shall pay
any amounts required pursuant to Section 10.4.

 

1.8     Mandatory Prepayments of Loans and Commitment Reductions.

 

(a)     Scheduled Term Loan Payments. The principal amount of the Term Loan
shall be paid in installments on the dates and in the respective amounts set
forth on Schedule 1.8(a) hereto (which Schedule shall be amended and restated
without any further action of any party hereto in connection with any
recalculation of scheduled installments pursuant to subsections 1.8(e)(ii) and
1.8(f) hereof); provided that (i) the entire amount of such remaining
installment payments shall be applied to the Term Loans for which WLR Recovery
Fund IV, L.P. has not purchased a WLR Participation pursuant to the WLR Last-Out
Participation Agreement and (ii) from and after repayment in full in cash of all
Term Loans for which WLR Recovery Fund IV, L.P. has not purchased a WLR
Participation pursuant to the WLR Last-Out Participation Agreement, such
remaining installments (other than as set forth in the next sentence) shall be
reduced to zero. Notwithstanding the foregoing, the entire remaining principal
balance of the Term Loans shall be payable on the Stated Term Loan Maturity
Date.

 

(b)     Revolving Loan. The Borrowers shall repay to the Lenders in full on the
date specified in clause (a) of the definition of “Revolving Termination Date”
the aggregate principal amount of the Revolving Loans and Swing Loans owing by
such Borrowers outstanding on the Revolving Termination Date.

 

(c)     Asset Dispositions. If a Borrower or any Guarantor shall at any time or
from time to time:

 

 

 
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(i)     make a Disposition (other than a Disposition in accordance with
subsections 5.2(k), 5.2(m), 5.2(n) and 5.2(o) hereof); or

 

(ii)     suffer an Event of Loss;

 

and, in each case, the aggregate amount of the Net Proceeds received by such
Borrower or Guarantor in connection with such Disposition or Event of Loss and
all other Dispositions and Events of Loss occurring during the fiscal year
exceeds the US Dollar Equivalent of $2,500,000, then (A) the Borrower
Representative shall promptly notify the Agent of such Disposition or Event of
Loss (including the amount of the estimated Net Proceeds to be received by such
Borrower or Guarantor in respect thereof) and (B) promptly upon receipt by such
Borrower or Guarantor of the Net Proceeds of such Disposition or Event of Loss,
the Borrowers shall deliver, or cause to be delivered, such Net Proceeds to the
Agent for distribution to the Lenders as a prepayment of the Loans owing by the
Borrowers, which prepayment in either case shall be applied in accordance with
subsection 1.8(e) hereof; provided that, the Borrowers shall not be required to
prepay the Loans with Net Proceeds constituting Excess Asset Sale Proceeds,
which, for the avoidance of doubt, may be retained and used by the Borrowers in
their sole discretion. Notwithstanding the foregoing and provided no Event of
Default has occurred and is continuing, such prepayment shall not be required to
the extent a Borrower or a Subsidiary reinvests or enters into any binding
commitment that would effect such a reinvestment of the Net Proceeds of such
Disposition or Event of Loss in productive assets (other than Inventory) of a
kind then used or usable in the business of a Borrower or such Guarantor, within
one hundred eighty (180) days after the date of such Disposition or Event of
Loss and in the case of a binding commitment, such funds are reinvested within
ninety (90) days after the date such binding commitment is entered into. Pending
such reinvestment, the Net Proceeds shall be delivered to the Agent, for
distribution first, to the Swingline Lender as a prepayment of Swing Loans (to
the extent of Swing Loans outstanding), but not as a permanent reduction of the
Swingline Commitment) and thereafter to the Revolving Lenders, as a prepayment
of the Revolving Loans (to the extent of Revolving Loans then outstanding), but
not as a permanent reduction of the Revolving Loan Commitment.

 

(d)     Issuance of Securities/Indebtedness. Immediately upon the receipt by
ITG, or any Holding Company of ITG, of the Net Issuance Proceeds of: (i) the
issuance of Stock or Stock Equivalents (including any capital contribution but
excluding any Net Issuance Proceeds from Excluded Equity Issuances) or (ii)
Holdco Debt (other than the Secured Note Indebtedness), then, in each case, the
Borrowers shall deliver, or cause to be delivered, to the Agent an amount equal
to such Net Issuance Proceeds for application to the Loans in accordance with
subsection 1.8(e).

 

(e)     Application of Certain Prepayments.

 

(i)     Subject to subsection 1.10(c) and subsection 1.8(e)(iii), any
prepayments pursuant to Section 1.7 or subsection 1.8(d) shall be applied first
to prepay all remaining installments of the Term Loan in inverse order of
maturity, second to prepay outstanding Swing Loans, and third to prepay
outstanding Revolving Loans owing by the Borrowers without a permanent reduction
of the Aggregate Revolving Loan Commitment (other than in the case of subsection
1.8(d), which shall result in a permanent reduction of the Aggregate Revolving
Loan Commitment by a corresponding amount).

 

 

 
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(ii)     Subject to subsection 1.10(c) and subsection 1.8(e)(iii), any
prepayments pursuant to subsection 1.8(c) (other than prepayments of Swing Loans
and Revolving Loans pending reinvestment pursuant to a binding commitment as set
forth in the last sentence of subsection 1.8(c)) shall be applied first to
prepay remaining installments of the Term Loans in the inverse order of maturity
in an amount equal to 85% of the Net Orderly Liquidation Value of the Equipment,
if any, sold pursuant to such Disposition and 60% of the fair market value of
the real Property, if any, sold pursuant to such Disposition (which such
prepayment shall result in a recalculation of the scheduled Term Loan payments
under Section 1.8(a) based on the principal amount of outstanding Term Loans),
second to prepay outstanding Revolving Loans in an amount equal to the aggregate
amount of Eligible Accounts and Eligible Inventory attributed to such
Disposition, if any, in the Borrowing Base Certificate most recently delivered
to the Agent prior to such sale (without a permanent reduction of the Aggregate
Revolving Loan Commitment) and third:

 

(x) from and after the Closing Date through and including March 31, 2012,

 

(A) if Average Adjusted Availability is no less than $10,000,000 and the Fixed
Charge Coverage Ratio for the twelve month period ending as of the last day of
the immediately preceding fiscal month both before and after giving effect to
such Disposition is no less than 1.15 to 1.00, as determined by the Borrowers in
their sole discretion (such amounts, the “Pre 3/31 Clause (A) Excess Proceeds”);
or

 

(B) if Average Adjusted Availability is less than $10,000,000 or the Fixed
Charge Coverage Ratio for the twelve month period ending as of the last day of
the immediately preceding fiscal month both before and after giving effect to
such Disposition is less than 1.15 to 1.00, first to prepay remaining
installments of the Term Loans in the inverse order of maturity until paid in
full, second to prepay outstanding Revolving Loans until paid in full (without a
permanent reduction of the Aggregate Revolving Loan Commitment) and third as
determined by the Borrowers in their sole discretion (such amounts in this
clause third of subclause (B), the “Pre 3/31 Clause (B) Excess Proceeds”); and

 

(y) from and after April 1, 2012,

 

 

 
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(A) if Average Adjusted Availability is no less than $12,500,000 and the Fixed
Charge Coverage Ratio for the twelve month period ending as of the last day of
the immediately preceding fiscal month both before and after giving effect to
such Disposition is no less than 1.25 to 1.00, as determined by the Borrowers in
their sole discretion (such amounts, the “Post 3/31 Clause (A) Excess
Proceeds”); or

 

(B) if Average Adjusted Availability is less than $12,500,000 or the Fixed
Charge Coverage Ratio for the twelve month period ending as of the last day of
the immediately preceding fiscal month both before and after giving effect to
such Disposition is less than 1.25 to 1.00, first to prepay remaining
installments of the Term Loans in the inverse order of maturity until paid in
full, second to prepay outstanding Revolving Loans until paid in full (without a
permanent reduction of the Aggregate Revolving Loan Commitment) and third as
determined by the Borrowers in their sole discretion (such amounts in this
clause third of subclause (B), the “Post 3/31 Clause (B) Excess Proceeds” and,
together with the Pre 3/31 Clause (A) Excess Proceeds, the Pre 3/31 Clause (B)
Excess Proceeds and the Post 3/31 Clause (A) Excess Proceeds, the “Excess Asset
Sale Proceeds”).

 

Amounts prepaid under this Section 1.8(e) shall be applied first to any Base
Rate Loans then outstanding and then to outstanding LIBOR Rate Loans with the
shortest Interest Periods remaining. Together with each prepayment under this
Section 1.8(e), the Borrowers shall pay any amounts required pursuant to Section
10.4 hereof.

 

(iii)     Notwithstanding anything in subclauses (i) or (ii) of this subsection
1.8(e), (x) no such prepayments shall be applied to that portion of the Term
Loans and Revolving Loans, if any, for which WLR Recovery Fund IV, L.P. has
purchased a WLR Participation pursuant to the WLR Last-Out Participation
Agreement until such time as all other Obligations have been Paid in Full and
(y) in carrying out the application of proceeds pursuant to subclauses (i) and
(ii) of this subsection 1.8(e), (A) amounts received shall be applied in the
numerical order provided until exhausted prior to the application to the next
succeeding category (other than in the case of Term Loans and Revolving Loans,
if any, for which WLR Recovery Fund IV, L.P. has purchased a WLR Participation
pursuant to the WLR Last-Out Participation Agreement, which Term Loans and
Revolving Loans, if any, shall not be repaid until such time as all other
Obligations have been Paid in Full) and (B) each of the Lenders or other Persons
entitled to payment shall receive an amount equal to its pro rata share of
amounts available to be applied pursuant thereto.

 

 

 
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(f)     Application of Prepayments from Proceeds from Cone Jacquards Purchase
Agreement. Subject to subsection 1.10(c), the Net Proceeds received from the
sale of certain assets of Denim and Jacquards pursuant to the Cone Jacquards
Purchase Agreement shall be applied first to prepay remaining installments of
the Term Loans in order of their maturity in an amount equal to 85% of the Net
Orderly Liquidation Value of the Equipment sold pursuant to the Cone Jacquards
Purchase Agreement and 60% of the fair market value of the real Property sold
pursuant to the Cone Jacquards Purchase Agreement (which such prepayment shall
result in a recalculation of the scheduled Term Loan payments under Section
1.8(a) based on the principal amount of outstanding Term Loans after such
prepayment in a manner agreed between the Borrowers and the Agent on or prior to
the Closing Date), second to prepay outstanding Revolving Loans in an amount
equal to the aggregate amount of Eligible Accounts and Eligible Inventory
attributed to Jacquards in the Borrowing Base Certificate most recently
delivered to the Agent prior to such sale (without a permanent reduction of the
Aggregate Revolving Loan Commitment) and third as determined by the Borrowers in
their sole discretion (such amounts in this clause third, the “Cone Jacquards
Excess Proceeds”); provided, that, notwithstanding the foregoing, any amounts
received by Borrowers in payment of the Promissory Note (as defined in the Cone
Jacquards Purchase Agreement) shall be applied to prepay outstanding Revolving
Loans (without a permanent reduction of the Aggregate Revolving Loan
Commitment), if any. Amounts prepaid shall be applied first to any Base Rate
Loans then outstanding and then to outstanding LIBOR Rate Loans with the
shortest Interest Periods remaining. Together with each prepayment under this
Section 1.8(f), the Borrowers shall pay any amounts required pursuant to Section
10.4 hereof.

 

(g)     No Implied Consent. Provisions contained in this Section 1.8 for the
application of proceeds of certain transactions shall not be deemed to
constitute consent of the Lenders to transactions that are not otherwise
permitted by the term hereof.

 

(h)     Application of Prepayments from Net Proceeds of Phong Phu Asset Sales.
Subject to subsection 1.10(c), if a Borrower or any of its Subsidiaries receives
any Net Proceeds from the sale, lease, conveyance or other disposition of any
Property of Phong Phu (a “Phong Phu Asset Sale”), then (A) the Borrower
Representative shall promptly notify the Agent of such Phong Phu Asset Sale
(including the amount of the estimated Net Proceeds to be received by such
Borrower or such Subsidiary in respect thereof) and (B) promptly upon receipt by
such Borrower or such Subsidiary of the Net Proceeds of such Phong Phu Asset
Sale, the Borrowers shall deliver, or cause to be delivered, such Net Proceeds
to the Agent for distribution to the Lenders as a prepayment of the Loans owing
by the Borrowers, which prepayment shall be applied first to prepay outstanding
Swing Loans, second to prepay outstanding Revolving Loans owing by the Borrowers
without a permanent reduction of the Aggregate Revolving Loan Commitment and
third to prepay all remaining installments of the Term Loan in inverse order of
maturity; provided that the aggregate amount of Net Proceeds of one or more
Phong Phu Asset Sales that shall be required to be applied to prepay the
Obligations pursuant to this clause (h) shall not exceed $3,500,000. In carrying
out the foregoing, (i) amounts received shall be applied in the numerical order
provided until exhausted prior to the application to the next succeeding
category and (ii) each of the Lenders or other Persons entitled to payment shall
receive an amount equal to its pro rata share of amounts available to be applied
pursuant to clauses first, second and third above. Amounts prepaid shall be
applied first to any Base Rate Loans then outstanding and then to outstanding
LIBOR Rate Loans with the shortest Interest Periods remaining. Together with
each prepayment under this Section 1.8(h), the Borrowers shall pay any amounts
required pursuant to Section 10.4 hereof.

 

 

 
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(i)     Application of Prepayments from Net Proceeds from Narricot Sale. Subject
to subsection 1.10(c), if a Borrower or any of its Subsidiaries receives any Net
Proceeds from the Narricot Sale then (A) the Borrower Representative shall
promptly notify the Agent of such Narricot Sale (including the amount of the
estimated Net Proceeds to be received by such Borrower or such Subsidiary in
respect thereof) and (B) promptly upon receipt by such Borrower or such
Subsidiary of the Net Proceeds of such Narricot Sale, the Borrowers shall
deliver, or cause to be delivered, such Net Proceeds to the Agent for
distribution to the Lenders as a prepayment of the Loans owing by the Borrowers,
which prepayment shall be applied first to prepay all remaining installments of
the Term Loan in inverse order of maturity in an amount equal to $1,200,000,
second to prepay outstanding Swing Loans and third to prepay outstanding
Revolving Loans owing by the Borrowers without a permanent reduction of the
Aggregate Revolving Loan Commitment. In carrying out the foregoing, (i) amounts
received shall be applied in the numerical order provided until exhausted prior
to the application to the next succeeding category and (ii) each of the Lenders
or other Persons entitled to payment shall receive an amount equal to its pro
rata share of amounts available to be applied pursuant to clauses first, second
and third above. Amounts prepaid shall be applied first to any Base Rate Loans
then outstanding and then to outstanding LIBOR Rate Loans with the shortest
Interest Periods remaining. Together with each prepayment under this Section
1.8(i), the Borrowers shall pay any amounts required pursuant to Section 10.4
hereof.

 

(j)     Application of Prepayments from Net Proceeds from Summit Sale. Subject
to subsection 1.10(c), if a Borrower or any of its Subsidiaries receives any Net
Proceeds from the Summit Sale then (A) the Borrower Representative shall
promptly notify the Agent of such Summit Sale (including the amount of the
estimated Net Proceeds to be received by such Borrower or such Subsidiary in
respect thereof) and (B) promptly upon receipt by such Borrower or such
Subsidiary of the Net Proceeds of such Summit Sale, the Borrowers shall deliver,
or cause to be delivered, such Net Proceeds to the Agent for distribution to the
Lenders as a prepayment of the Loans owing by the Borrowers, which prepayment
shall be applied first to prepay outstanding Swing Loans, second to prepay
outstanding Revolving Loans owing by the Borrowers without a permanent reduction
of the Aggregate Revolving Loan Commitment and third to prepay all remaining
installments of the Term Loan in inverse order of maturity. In carrying out the
foregoing, (i) amounts received shall be applied in the numerical order provided
until exhausted prior to the application to the next succeeding category and
(ii) each of the Lenders or other Persons entitled to payment shall receive an
amount equal to its pro rata share of amounts available to be applied pursuant
to clauses first, second and third above. Amounts prepaid shall be applied first
to any Base Rate Loans then outstanding and then to outstanding LIBOR Rate Loans
with the shortest Interest Periods remaining. Together with each prepayment
under this Section 1.8(j), the Borrowers shall pay any amounts required pursuant
to Section 10.4 hereof.

 

 

 
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1.9     Fees.

 

(a)     Agent’s Fees. The Borrowers shall pay to the Agent, for the Agent’s own
account, fees in the amounts and at the times set forth in a letter agreement
between the Borrowers and the Agent dated as of the Closing Date (as amended
from time to time, the “Fee Letter”).

 

(b)     Unused Commitment Fee. The Borrowers shall pay to the Agent, for the
ratable benefit of the Revolving Lenders, a fee (the “Unused Commitment Fee”) in
an amount equal to the Usage multiplied by the Applicable Commitment Fee
Percentage calculated as of the last day of such preceding month. The total fee
paid by the Borrowers will be equal to the sum of all of the fees due to the
Lenders, subject to subsection 1.11(e)(vi). Such fee shall be payable monthly in
arrears on the first day of the month following the date hereof and the first
day of each month thereafter. The Unused Commitment Fee provided in this
subsection 1.9(b) shall accrue at all times from and after mutual execution and
delivery of this Agreement. For purposes of this subsection 1.9(b), the
Revolving Loan Commitment of any Non-Funding Lender pursuant to clause (a) of
the definition thereof shall be deemed to be zero.

 

(c)     Letter of Credit Fee. The applicable Borrower agrees to pay to the Agent
for the ratable benefit of the Revolving Lenders, as compensation to such
Lenders for Letter of Credit Obligations incurred hereunder, (i) without
duplication of costs and expenses otherwise payable to the Agent or Revolving
Lenders hereunder or fees otherwise paid by the Borrowers, all reasonable costs
and expenses incurred by the Agent or any Lender on account of such Letter of
Credit Obligations, and (ii) for each month during which any Letter of Credit
Obligation shall remain outstanding, a fee (the “Letter of Credit Fee”) in an
amount equal to the product of the average daily undrawn face amount of all
Letters of Credit issued, guaranteed or supported by risk participation
agreements multiplied by a per annum rate equal to the Applicable Margin with
respect to Revolving Loans which are LIBOR Rate Loans; provided, however, at the
Majority Revolving Lenders’ option, while an Event of Default exists (or
automatically while an Event of Default under subsection 7.1(f) or 7.1(g)
exists), such rate shall be increased by two percent (2.00%) per annum. Such fee
shall be paid to the Agent for the benefit of the Revolving Lenders in arrears,
on the first day of each calendar month and on the Revolving Termination Date.
In addition, the Borrowers shall pay to any L/C Issuer, on demand, such
reasonable fees, without duplication of fees otherwise payable hereunder
(including all per annum fees), a fronting fee equal to .125% per annum on the
average outstanding amounts of each Letter of Credit, which fee shall be payable
monthly in arrears, on the first day of each month, and other charges and
expenses of such L/C Issuer in respect of the issuance, negotiation, acceptance,
amendment, transfer and payment of such Letter of Credit or otherwise payable
pursuant to the application and related documentation under which such Letter of
Credit is issued.

 

1.10     Payments by the Borrowers.

 

(a)     All payments (including prepayments) to be made by each Credit Party on
account of principal, interest, fees and other amounts required hereunder shall
be made without set off, recoupment, counterclaim, withholding or deduction of
any kind, and shall, except as otherwise expressly provided herein, be made to
the Agent (for the ratable account of the Persons entitled thereto) at the
address for payment specified in the signature page hereof in relation to the
Agent (or such other address as the Agent may from time to time specify in
accordance with Section 9.2), and shall be made in Dollars and in immediately
available funds, no later than 2:00 p.m. (New York time) on the date due;
provided that, accrued interest payable with respect to Term Loans and Revolving
Loans, if any, for which WLR Recovery Fund IV, L.P. has purchased a WLR
Participation pursuant to the WLR Last-Out Participation Agreement shall be
capitalized on the applicable Interest Payment Date and the capitalized amount
shall be added to the then outstanding principal amount of such Term Loans and
Revolving Loans, as the case may be. Any payment which is received by the Agent
later than 2:00 p.m. (New York time) shall be deemed to have been received on
the immediately succeeding Business Day and any applicable interest or fee shall
continue to accrue. Each Borrower and each other Credit Party hereby irrevocably
waives the right to direct the application during the continuance of an Event of
Default of any and all payments in respect of any Obligation and any proceeds of
Collateral. Each Borrower hereby authorizes the Agent and each Lender to make a
Revolving Loan (which shall be a Base Rate Loan and which may be a Swing Loan)
to pay (i) interest, principal (including Swing Loans), Unused Commitment Fees,
Letter of Credit Fees and fees payable to Agent pursuant to the Fee Letter owing
by the Borrowers on the date due, or (ii) after ten (10) days prior notice to
the Borrower Representative, other fees, costs or expenses payable by such
Borrower or any of its Subsidiaries hereunder or under the other Loan Documents.

 

 

 
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(b)     Subject to the provisions set forth in the definition of “Interest
Period” herein, if any payment hereunder shall be stated to be due on a day
other than a Business Day, such payment shall be made on the next succeeding
Business Day, and such extension of time shall in such case be included in the
computation of interest or fees, as the case may be.

 

(c)     During the continuance of an Event of Default, the Agent may, and shall
upon the direction of the Majority Lenders apply any and all payments in respect
of any Obligation in accordance with clauses first through eighth below;
provided that, notwithstanding the foregoing, amounts received by Agent and/or
any Lender in respect of the WLR/RBS Letter of Credit II shall be applied in
accordance with Section 1.15. Notwithstanding any provision herein to the
contrary (other than as set forth in the immediately preceding sentence), all
amounts collected or received by the Agent from Borrowers or their Subsidiaries
after any or all of the Obligations have been accelerated (so long as such
acceleration has not been rescinded) and all proceeds of Collateral of any
Borrower and its Subsidiaries received by the Agent from any Borrowers or its
Subsidiaries as a result of the exercise of its remedies under the Collateral
Documents after the occurrence and during the continuance of an Event of Default
shall be applied as follows:

 

first, to payment of costs and expenses, including Attorney Costs, of the Agent
and the Collateral Agents payable or reimbursable by the Credit Parties under
the Loan Documents;

 

 

 
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second, to payment of Attorney Costs of Lenders payable or reimbursable by the
Borrowers under this Agreement;

 

third, to payment of all accrued unpaid interest on the Obligations and fees
owed to the Agent, the Collateral Agents, Lenders and L/C Issuers;

 

fourth, to payment of principal of the Obligations including, without
limitation, L/C Reimbursement Obligations then due and payable and cash
collateralization of L/C Reimbursement Obligations to the extent not then due
and payable;

 

fifth, to payment of Obligations with respect to Secured Rate Contracts (other
than Secured Rate Contracts that are Equipment Finance Contracts);

 

sixth, to payment of Obligations with respect to Bank Products and Secured Rate
Contracts that are Equipment Finance Contracts;

 

seventh, to payment of any other amounts owing constituting Obligations; and

 

eighth, any remainder shall be for the account of and paid to whoever may be
lawfully entitled thereto. 

 

Notwithstanding anything in subclauses first through eighth of this subsection
1.10(c), (x) no such proceeds shall be applied to that portion of the Term Loans
and Revolving Loans, if any, for which WLR Recovery Fund IV, L.P. has purchased
a WLR Participation pursuant to the WLR Last-Out Participation Agreement until
such time as all other Obligations have been Paid in Full and (y) in carrying
out the application of proceeds pursuant to subclauses first through eighth of
this subsection 1.10(c), (A) amounts received shall be applied in the numerical
order provided until exhausted prior to the application to the next succeeding
category (other than in the case of Term Loans and Revolving Loans, if any, for
which WLR Recovery Fund IV, L.P. has purchased a WLR Participation pursuant to
the WLR Last-Out Participation Agreement, which Term Loans and Revolving Loans,
if any, shall not be repaid until such time as all other Obligations have been
Paid in Full) and (B) each of the Lenders or other Persons entitled to payment
shall receive an amount equal to its pro rata share of amounts available to be
applied pursuant to clauses third, fourth, fifth, sixth and seventh above.

 

Furthermore, notwithstanding anything in clause (c) above to the contrary, to
the extent the Agent receives proceeds of voting equity interests in any Foreign
Subsidiary of a Credit Party, such proceeds shall be applied in accordance with
(and in the order of) clauses first through eighth of clause (c) above;
provided, however, that in no case shall proceeds from the sale of more than 65%
of such voting equity interests be applied to the payments described in clauses
first through fifth of clause (c) above.

 

1.11     Payments by the Lenders to the Agent; Settlement.

 

(a)     The Agent may, on behalf of Lenders, disburse funds to the Borrowers for
Loans requested. Each Lender shall reimburse the Agent on demand for all funds
disbursed on its behalf by the Agent, or if the Agent so requests, each Lender
will remit to the Agent its Commitment Percentage of any Loan before the Agent
disburses same to the Borrowers. If the Agent elects to require that each Lender
make funds available to the Agent prior to disbursement by the Agent to the
Borrowers, the Agent shall advise each Lender by telephone, fax or email of the
amount of such Lender’s Commitment Percentage of the Loan requested by the
Borrower Representative no later than 2:00 p.m. (New York time) on the scheduled
Borrowing date applicable thereto, and each such Lender shall pay the Agent such
Lender’s Commitment Percentage of such requested Loan, in same day funds, by
wire transfer to the Agent’s account on such scheduled Borrowing date. If any
Lender fails to pay its Commitment Percentage within one (1) Business Day after
the Agent’s demand, the Agent shall promptly notify the Borrower Representative,
and the Borrowers shall immediately repay such amount to the Agent. Any
repayment required pursuant to this subsection 1.11(a) shall be without premium
or penalty. Nothing in this subsection 1.11(a) or elsewhere in this Agreement or
the other Loan Documents, including the remaining provisions of Section 1.11,
shall be deemed to require the Agent to advance funds on behalf of any Lender or
to relieve any Lender from its obligation to fulfill its Commitments hereunder
or to prejudice any rights that the Agent, Swingline Lender or Borrowers may
have against any Lender as a result of any default by such Lender hereunder.

 

 

 
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(b)     At least once each calendar week or more frequently at the Agent’s
election (each, a “Settlement Date”), the Agent shall advise each Lender by
telephone, fax or email of the amount of such Lender’s Commitment Percentage of
principal, interest and fees paid for the benefit of Lenders with respect to
each applicable Loan. The Agent shall pay to each Lender such Lender’s
Commitment Percentage (except as otherwise provided in subsection 1.1(c)(vi) and
subsection 1.11(e)) of principal, interest and fees paid by the Borrowers since
the previous Settlement Date for the benefit of such Lender with respect to the
Loans held by it. Such payments shall be made by wire transfer to such Lender
not later than 2:00 p.m. (New York time) on the next Business Day following each
Settlement Date.

 

(c)     Availability of Lender’s Commitment Percentage. The Agent may assume
that each Revolving Lender will make its Commitment Percentage of each Revolving
Loan available to the Agent on each Borrowing date. If such Commitment
Percentage is not, in fact, paid to the Agent by such Revolving Lender when due,
the Agent will be entitled to recover such amount on demand from such Revolving
Lender without setoff, counterclaim, withholding or deduction of any kind. If
any Revolving Lender fails to pay the amount of its Commitment Percentage
forthwith upon the Agent’s demand, the Agent shall promptly notify the Borrower
Representative and the applicable Borrowers shall immediately repay such amount
to the Agent. Nothing in this subsection 1.11(c) or elsewhere in this Agreement
or the other Loan Documents shall be deemed to require the Agent to advance
funds on behalf of any Revolving Lender or to relieve any Revolving Lender from
its obligation to fulfill its Commitments hereunder or to prejudice any rights
that the Borrowers may have against any Revolving Lender as a result of any
default by such Revolving Lender hereunder. Without limiting the provisions of
subsection 1.11(b), to the extent that the Agent advances funds to the Borrowers
on behalf of any Revolving Lender and is not reimbursed therefor on the same
Business Day as such advance is made, the Agent shall be entitled to retain for
its account all interest accrued on such advance from the date such advance was
made until reimbursed by the applicable Revolving Lender.

 

 

 
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(d)     Return of Payments.

 

(i)     If the Agent pays an amount to a Lender under this Agreement in the
belief or expectation that a related payment has been or will be received by the
Agent from the Borrowers and such related payment is not received by the Agent,
then the Agent will be entitled to recover such amount from such Lender on
demand without setoff, counterclaim, withholding or deduction of any kind.

 

(ii)     If the Agent determines at any time that any amount received by the
Agent under this Agreement must be returned to any Credit Party or paid to any
other Person pursuant to any insolvency law or otherwise, then, notwithstanding
any other term or condition of this Agreement or any other Loan Document, the
Agent will not be required to distribute any portion thereof to any Lender. In
addition, each Lender will repay to the Agent on demand any portion of such
amount that the Agent has distributed to such Lender, together with interest at
such rate, if any, as the Agent is required to pay to any Borrower or such other
Person, without setoff, counterclaim, withholding or deduction of any kind, and
Agent will be entitled to set-off against future distributions to such Lender
any such amounts (with interest) that are not repaid on demand.

 

(e)     Non-Funding Lenders.

 

(i)     Responsibility. The failure of any Non-Funding Lender to make any
Revolving Loan, Letter of Credit Obligation or any payment required by it, or to
make any payment required by it hereunder, or to fund any purchase of any
participation to be made or funded by it on the date specified therefor shall
not relieve any other Lender (each such other Revolving Lender, an “Other
Lender”) of its obligations to make such loan, fund the purchase of any such
participation, or make any other payment required hereunder on such date, and
neither the Agent nor, other than as expressly set forth herein, any other
Lender shall be responsible for the failure of any Non-Funding Lender to make a
loan, fund the purchase of a participation or make any other payment required
hereunder.

 

(ii)     Reallocation. If any Revolving Lender is a Non-Funding Lender, all or a
portion of such Non-Funding Lender’s Letter of Credit Obligations (unless such
Lender is the L/C Issuer that issued such Letter of Credit), funding obligations
with respect to Revolving Loans and reimbursement obligations with respect to
Swing Loans shall, at the Agent’s election at any time or upon any L/C Issuer’s
or Swingline Lender’s, as applicable, written request delivered to the Agent
(whether before or after the occurrence of any Default or Event of Default), be
reallocated to and assumed by the Revolving Lenders that are not Non-Funding
Lenders or Impacted Lenders pro rata in accordance with their Commitment
Percentages of the Aggregate Revolving Loan Commitment (calculated as if the
Non-Funding Lender’s Commitment Percentage was reduced to zero and each other
Revolving Lender’s Commitment Percentage had been increased proportionately),
provided that no Revolving Lender shall be reallocated any such amounts or be
required to fund any amounts that would cause the sum of its outstanding
Revolving Loans, outstanding Letter of Credit Obligations, amounts of its
participations in Swing Loans and its pro rata share of unparticipated amounts
in Swing Loans to exceed its Revolving Loan Commitment.

 

 

 
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(iii)     Voting Rights. Notwithstanding anything set forth herein to the
contrary, including Section 9.1, a Non-Funding Lender (other than a Non-Funding
Lender who only holds Term Loans) shall not have any voting or consent rights
under or with respect to any Loan Document or constitute a “Lender” or a
“Revolving Lender” (or be, or have its Loans and Commitments, included in the
determination of “Majority Lenders”, “Majority Revolving Lenders”,
“Supermajority Revolving Lenders” or “Lenders directly affected” pursuant to
Section 9.1) for any voting or consent rights under or with respect to any Loan
Document, provided that (A) the Commitment of a Non-Funding Lender may not be
increased, (B) the principal of a Non-Funding Lender’s Loans may not be reduced
or forgiven, and (C) the interest rate applicable to Obligations owing to a
Non-Funding Lender may not be reduced in such a manner that by its terms affects
such Non-Funding Lender more adversely than other Lenders, in each case without
the consent of such Non-Funding Lender. Moreover, for the purposes of
determining Majority Lenders, Majority Revolving Lenders and Supermajority
Revolving Lenders, the Loans, Letter of Credit Obligations, and Commitments held
by Non-Funding Lenders shall be excluded from the total Loans and Commitments
outstanding.

 

(iv)     Borrower Payments to a Non-Funding Lender. The Agent shall be
authorized to use all payments received by the Agent for the benefit of any
Non-Funding Lender pursuant to this Agreement to pay in full the Aggregate
Excess Funding Amount to the appropriate Secured Parties. Following such payment
in full of the Aggregate Excess Funding Amount, Agent shall be entitled to hold
such funds as cash collateral in a non-interest bearing account up to an amount
equal to such Non-Funding Lender’s unfunded Revolving Loan Commitment and to use
such amount to pay such Non-Funding Lender’s funding obligations hereunder until
the Obligations are paid in full in cash, all Letter of Credit Obligations have
been discharged or cash collateralized and all Commitments have been terminated.
Upon any such unfunded obligations owing by a Non-Funding Lender becoming due
and payable, Agent shall be authorized to use such cash collateral to make such
payment on behalf of such Non-Funding Lender. With respect to such Non-Funding
Lender’s failure to fund Revolving Loans or purchase participations in Letters
of Credit or Letter of Credit Obligations, any amounts applied by Agent to
satisfy such funding shortfalls shall be deemed to constitute a Revolving Loan
or amount of the participation required to be funded and, if necessary to
effectuate the foregoing, the other Revolving Lenders shall be deemed to have
sold, and such Non-Funding Lender shall be deemed to have purchased, Revolving
Loans or Letter of Credit participation interests from the other Revolving
Lenders until such time as the aggregate amount of the Revolving Loans and
participations in Letters of Credit and Letter of Credit Obligations are held by
the Revolving Lenders in accordance with their Commitment Percentages of the
Aggregate Revolving Loan Commitment. Any amounts owing by a Non-Funding Lender
to Agent which are not paid when due shall accrue interest at the interest rate
applicable during such period to Revolving Loans that are Base Rate Loans. In
the event that Agent is holding cash collateral of a Non-Funding Lender that
cures pursuant to clause (v) below or ceases to be a Non-Funding Lender pursuant
to the definition of Non-Funding Lender, Agent shall return the unused portion
of such cash collateral to such Lender. The “Aggregate Excess Funding Amount” of
a Non-Funding Lender shall be the aggregate amount of (A) all unpaid obligations
owing by such Lender to the Agent, L/C Issuers, Swing Line Lender, and other
Lenders under the Loan Documents, including such Lender’s pro rata share of all
Revolving Loans, Letter of Credit Obligations, Swing Line Loans, plus, without
duplication, (B) all amounts of such Non-Funding Lender’s Commitment reallocated
to other Lenders pursuant to subsection 1.11(e)(ii).

 

 

 
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(v)     Cure. A Lender may cure its status as a Non-Funding Lender under clause
(a) of the definition of Non-Funding Lender if such Lender (A) fully pays to
Agent, on behalf of the applicable Secured Parties, the Aggregate Excess Funding
Amount, plus all interest due thereon and (B) timely funds the next Revolving
Loan required to be funded by such Lender or makes the next reimbursement
required to be made by such Lender. Any such cure shall not relieve any Lender
from liability for breaching its contractual obligations hereunder.

 

(vi)     Fees. A Lender that is a Non-Funding Lender pursuant to clause (a) of
the definition of Non-Funding Lender shall not earn and shall not be entitled to
receive, and the Borrowers shall not be required to pay, such Lender’s portion
of the Unused Commitment Fee during the time such Lender is a Non-Funding Lender
pursuant to clause (a) thereof. In the event that any reallocation of Letter of
Credit Obligations occurs pursuant to subsection 1.11(e)(ii), during the period
of time that such reallocation remains in effect, the Letter of Credit Fee
payable with respect to such reallocated portion shall be payable to (A) all
Revolving Lenders based on their pro rata share of such reallocation or (B) to
the L/C Issuer for any remaining portion not reallocated to any other Revolving
Lenders.

 

1.12     Eligible Accounts.

 

(a)     All of the Accounts owned by the Borrowers and properly reflected as
“Eligible Accounts” (as defined below in clause (b) below) in the most recent
Borrowing Base Certificate delivered by the Borrower Representative to the Agent
shall be “Eligible Accounts” for purposes of this Agreement. The Agent and the
Collateral Agents shall have the right to establish, modify or eliminate
Reserves against Eligible Accounts from time to time in its reasonable credit
judgment. In addition, the Agent and the Collateral Agents reserve the right, at
any time and from time to time after the Closing Date, to adjust any of the
applicable criteria or to establish new criteria for the determination of
Eligible Accounts in its reasonable credit judgment, subject to the approval of
the Lenders in the case of adjustments or new criteria for the determination of
Eligible Accounts that would have the effect of making more credit available
under the new determination criteria than what was available under the
determination criteria in place as of the Closing Date.

 

 

 
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(b)     “Eligible Accounts” means on any date of determination, all Accounts,
but excluding Accounts:

 

(i)     that are unpaid more than 120 days after the invoice date (or 150 days
in the case of Extended Terms Accounts) or more than 60 days past due;

 

(ii)     that are owed by an Account Debtor who is obligated on Accounts owed to
Borrowers more than fifty percent (50%) of the aggregate unpaid balance of which
have been unpaid for longer than the relevant period specified in clause (a)
above, unless the Agent has approved the continued eligibility thereof;

 

(iii)     that do not arise out of the sale by a Borrower of Inventory and/or
the rendition by a Borrower of services in the ordinary course of business to an
Account Debtor;

 

(iv)     owing by Account Debtors located outside of the United States or
Canada, except: (A) aggregate Accounts of up to the US Dollar Equivalent of
$10,000,000 (x) owing by Account Debtors set forth on Schedule 1.12 (as amended
from time to time with the consent of Agent) and subject to the sub-limits set
forth on Schedule 1.12 and (y) such other Account Debtors set forth in the
Borrowing Base Certificate which are approved by the Agent; (B) Accounts owing
by subsidiaries of Autoliv located in Mexico not to exceed the US Dollar
Equivalent of $1,000,000 in the aggregate; and (C) without duplication of clause
(A) and (B) above, Accounts which are insured through credit insurance issued by
insurers and with coverage reasonably satisfactory to the Agent pursuant to
documents in form and substance reasonably satisfactory to the Agent and which
are otherwise Eligible Accounts (“Insured Accounts”);

 

(v)     with respect to which the Account Debtor is (A) an Affiliate of a
Borrower, (B) a director, officer or employee of a Borrower or an Affiliate of a
Borrower, (C) the United States of America or any department, agency or
instrumentality thereof, unless the applicable Borrower shall have complied with
the Federal Assignment of Claims Act of 1940, as amended, to the satisfaction of
the Agent or proceeds of the Accounts arising under the applicable contract are
deposited in a depository account subject to a Control Agreement, (D) any
government other than the United States of America, including any department,
agency or instrumentality thereof, (E) a debtor under any proceeding under the
Bankruptcy Code or any other comparable bankruptcy or insolvency law applicable
under the law of any other country or political subdivision thereof unless
otherwise agreed by the Agent, or (F) an assignor for the benefit of creditors;

 

(vi)      that are not subject to a first priority perfected Lien in favor of
the Agent for the benefit of the Secured Parties, or Accounts which are subject
to any Lien, in each case, other than Permitted Liens;

 

(vii)      of any Borrower which are not subject to a valid and binding sales
contract (or if there is no sales contract, purchase order or order
confirmation) governed by the laws of the United States or if disputes arising
thereunder are not subject to the jurisdiction of the United States or any state
of the United States;

 

 

 
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(viii)      [Intentionally Omitted];

 

(ix)      with respect to which there is an unresolved dispute (or in respect of
which any setoff, counterclaim or defense is asserted) (but only to the extent
of the disputed amount or asserted claim);

 

(x)     otherwise Eligible Accounts, only to the extent that including such
Accounts as Eligible Accounts would cause the total Eligible Accounts owing from
the Account Debtor obligated thereon or its Affiliates to exceed twenty percent
(20%) of all Eligible Accounts;

 

(xi)     that arise from a sale to an Account Debtor on a bill-and-hold
guaranteed sale, sale-or-return, sale-on-approval, consignment, trial approval,
evaluation or any other repurchase or return basis or with respect to which the
obligations of the applicable Account Debtor thereon are contingent upon any
further performance or delivery to be made by a Borrower or one of its
Subsidiaries;

 

(xii)     that are not payable in Dollars, Canadian Dollars, Euros or Pounds
Sterling; and

 

(xiii)     originated by Parras Cone, unless (A) such Accounts have been sold to
Denim pursuant to the Mexican Sale Agreement, (B) such Accounts are owing by
Account Debtors located in the United States, and (C) the contracts giving rise
to such Accounts are governed by the laws of a jurisdiction within the United
States.

 

1.13     Eligible Inventory.

 

(a)     All of the Inventory owned by a Borrower and properly reflected as
“Eligible Inventory” (as defined in clause (b) below) in the most recent
Borrowing Base Certificate delivered by the Borrower Representative to the Agent
shall be “Eligible Inventory” for purposes of this Agreement. The Agent and the
Collateral Agents shall have the right to establish, modify, or eliminate
Reserves against Eligible Inventory from time to time in its reasonable credit
judgment. In addition, the Agent reserves the right, at any time and from time
to time after the Closing Date, to adjust any of the applicable criteria or to
establish new criteria, in its reasonable credit judgment, subject to the
approval of the Lenders in the case of adjustments or new criteria for the
determination of Eligible Inventory that would have the effect of making more
credit available under the new determination criteria than what was available
under the determination criteria in place as of the Closing Date.

 

(b)     “Eligible Inventory” means all Inventory in the possession of a Borrower
and located within the United States of America or Canada, including, but not
limited to all raw material inventory, Greige Goods and finished goods
inventory, and as to which such Borrower has title, valued at the lower of cost
(on a FIFO basis) or market, excluding Inventory:

 

 

 
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(i)     which is not subject to a perfected first priority Lien in favor of the
Agent for the benefit of the Agent and the Lenders, or Inventory which is
subject to any Lien, in each case, other than Permitted Liens;

 

(ii)     which has been acquired by a Borrower on consignment or has been placed
out on consignment by a Borrower, unless such Inventory is subject to a first
priority perfected security interest in favor of the Agent for the benefit of
the Secured Parties;

 

(iii)     which is obsolete, non-first quality, without sales activity (or with
minimal sales activity) in the past twelve months, or which consists of
Inventory returned by a buyer, or which is not free from any defects which might
adversely affect the market value thereof;

 

(iv)     produced in violation of the Fair Labor Standards Act and subject to
the so-called “hot goods” provision contained in Title § 29 U.S.C. 215(a)(1);

 

(v)     subject to any licensing, patent, royalty, trademark, trade name or
copyright agreements with any third parties which would require any consent of
any third party for the sale or disposition of such Inventory (which consent has
not been obtained) or the payment of any monies to any third party upon such
sale or other disposition (to the extent of such monies);

 

(vi)     which is located at any site in the United States or Canada where the
aggregate value of all Inventory at that site is less than $100,000;

 

(vii)     which is work-in-process (other than Greige Goods), or which consists
of packing or shipping materials, replacement parts, dyes, chemicals, fuel and
supplies;

 

(viii)     which consists of costs associated with “freight-in” charges;

 

(ix)     consists of Hazardous Materials or goods that can be transported or
sold only with licenses that are not readily available; and

 

(x)     which is not covered by insurance in accordance herewith.

 

Notwithstanding anything to the contrary herein, Agent and the Collateral Agents
may include Inventory located in Mexico in the Borrowing Base with the consent
of, and subject to any requested terms required by, the Lenders.

 

1.14     Borrower Representative. Each Borrower hereby designates and appoints
ITG as its representative and agent on its behalf (the “Borrower
Representative”) for the purposes of issuing Notices of Borrowings, Notices of
Conversion/Continuation, L/C Requests and Swingline Requests, delivering
certificates including Compliance Certificates and Borrowing Base Certificates,
giving instructions with respect to the disbursement of the proceeds of the
Loans, selecting interest rate options, giving and receiving all other notices
and consents hereunder or under any of the other Loan Documents and taking all
other actions (including in respect of compliance with covenants) on behalf of
any Borrower or Borrowers under the Loan Documents. The Borrower Representative
hereby accepts such appointment. The Agent and each Lender may regard any notice
or other communication pursuant to any Loan Document from the Borrower
Representative as a notice or communication from all Borrowers. Each warranty,
covenant, agreement and undertaking made on behalf of a Borrower by the Borrower
Representative shall be deemed for all purposes to have been made by such
Borrower and shall be binding upon and enforceable against such Borrower to the
same extent as if the same had been made directly by such Borrower.

 

 

 
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1.15     WLR/RBS Letters of Credit.

 

(a)     Agent, for and on behalf of itself and the Lenders, hereby acknowledges
and agrees that (i) Agent will not request payment under the WLR/RBS Letter of
Credit II until such time as a Specified WLR/RBS LC II Event under clause (v) of
the definition thereof shall have occurred (as determined by Agent in its sole
and absolute discretion), (ii) Agent will not request payment under the WLR/RBS
Letter of Credit II until such time as a Specified WLR/RBS LC II Event under
clause (i), (ii), (iii), (iv) or (vi) of the definition thereof shall have
occurred (as determined by Agent in its sole and absolute discretion); provided
that, notwithstanding the foregoing, the Agent shall, at the request of the
Majority Lenders, request payment under the WLR/RBS Letter of Credit II at such
time as a Specified WLR/RBS LC II Event under clause (i), (ii), (iii), (iv) or
(vi) of the definition thereof shall have occurred, and (iii) Agent will not
request payment under the WLR/RBS Letter of Credit II in an amount in excess of
the total aggregate amount of Obligations outstanding at the time of such
request for payment (as determined by Agent in its sole and absolute discretion
after consultation with any applicable Bank Product provider). Nothing in this
Section 1.15(a) shall limit Agent’s or any Lender’s right to apply the proceeds
of the WLR/RBS Letter of Credit II in payment of the Obligations independent of
any other right or remedy that Agent or any Lender may at any time hold with
respect to the Obligations or any security or guarantee therefor. In furtherance
of the foregoing, each Credit Party hereby waives any right to require Agent or
any Lender, prior to or as a condition to any request by Agent for payment under
the WLR/RBS Letter of Credit II, to (w) proceed against the Borrowers or any
other Person, (x) proceed against or exhaust any security for the Obligations or
to marshal assets in connection with foreclosing collateral security, (y) give
notice of the terms, time and place of any public or private sale of any
security for the Obligations or (z) pursue any other remedy in Agent’s or such
Lender’s power whatsoever.

 

(b)     [Intentionally Omitted].

 

(c)     Any amounts received by Agent and/or any Lender in respect of the
WLR/RBS Letter of Credit II shall first be paid to the applicable Lenders as
consideration for the WLR Participations purchased by WLR Recovery Fund IV, L.P.
pursuant to the terms of the WLR Last-Out Participation Agreement and second be
applied to prepay the Obligations in accordance with clauses first through
seventh of Section 1.10(c); provided that, if for any reason (whether as a
result of a Requirement of Law, as a result of a contractual obligation to which
WLR Recovery Fund IV, L.P. is a party or otherwise) WLR Recovery Fund IV, L.P.
is not permitted or fails to purchase, or the Lenders are prohibited from
selling, one or more WLR Participations pursuant to the WLR Last-Out
Participation Agreement, Agent shall apply proceeds of the WLR/RBS Letter of
Credit II to prepay the Obligations in accordance with clauses first through
seventh of Section 1.10(c). In carrying out the foregoing, (i) amounts received
shall be applied in the numerical order provided until exhausted prior to the
application to the next succeeding category and (ii) each of the Lenders or
other Persons entitled to payment shall receive an amount equal to its pro rata
share of amounts available to be applied pursuant to clauses first and second of
this Section 1.15(c).

 

 

 
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ARTICLE II - CONDITIONS PRECEDENT

 

2.1     Conditions of Initial Loans. The effectiveness of this Agreement and the
obligation of each Lender to make its initial Loans and of each L/C Issuer to
Issue, or cause to be Issued, the initial Letters of Credit hereunder is subject
to satisfaction of the following conditions:

 

(a)     Loan Documents. The Agent shall have received on or before the Closing
Date all of the agreements, documents, instruments and other items set forth on
the Closing Checklist attached hereto as Exhibit 2.1, each in form and substance
reasonably satisfactory to the Agent;

 

(b)     Pro Forma Balance Sheet; Sources and Uses. The Agent shall have received
a pro forma balance sheet of ITG and its Subsidiaries giving effect to the Loans
advanced on the Closing Date and including the sources and uses thereof, in form
and substance reasonably satisfactory to the Agent;

 

(c)     Availability. Not more than $55,000,000 in Revolving Loans shall be
advanced on the Closing Date, and after giving effect to the payment of all
costs and expenses due as of the Closing Date in connection therewith, funding
of the initial Loans and issuance of the initial Letters of Credit, Availability
(which shall be reduced by an amount equal to the aggregate of all accounts
payable that are not current, determined in a manner consistent with past
business practices) shall be not less than $10,000,000;

 

(d)     Termination of Mexican Facility. The Agent shall have received evidence
in form and substance reasonably satisfactory to it that all Indebtedness of any
Credit Party under that certain Term Loan Agreement dated as of the Original
Closing Date by and among Burlington Morelos, GE Capital, as agent, the lenders
signatory thereto, and the other Persons signatory thereto, has been repaid in
full, together with all fees and other amounts owing thereunder, and all
commitments thereunder have terminated, and all Liens securing such Indebtedness
have been terminated and released;

 

(e)     Repayment of Specified Secured Notes. The Agent shall have received
evidence that the aggregate principal balance of the Specified Secured Notes,
after giving effect to repayments thereof occurring on or prior to the Closing
Date, does not exceed $15,500,000;

 

(f)     Amendment to Secured Note Purchase Agreement. The Agent shall have
received an amendment to the Secured Note Purchase Agreement extending the
maturity date of the notes issued thereunder to a date that is no earlier than
June 30, 2013; and

 

 

 
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(g)     Payment of Fees. The Agent and the Lenders shall have received the fees
required to be paid on the Closing Date in the respective amounts specified in
the Fee Letter, and shall have reimbursed the Agent for all fees, costs and
expenses of closing presented as of the Closing Date.

 

2.2     Conditions to All Borrowings. Except as otherwise expressly provided
herein, no Lender or L/C Issuer shall be obligated to fund any Loan or incur any
Letter of Credit Obligation, if, as of the date thereof:

 

(a)     any representation or warranty by any Credit Party contained herein or
in any other Loan Document is untrue or incorrect in any material respect
(without duplication of any materiality qualifier contained therein) as of such
date, except to the extent that such representation or warranty expressly
relates to an earlier date (in which event such representations and warranties
were untrue or incorrect as of such earlier date);

 

(b)     any Default or Event of Default has occurred and is continuing or would
result after giving effect to any Loan (or the incurrence of any Letter of
Credit Obligation); and

 

(c)     after giving effect to any Loan (or the incurrence of any Letter of
Credit Obligations), the aggregate outstanding amount of the Revolving Loans
(excluding, solely for purposes of this determination only, Revolving Loans, if
any, for which WLR Recovery Fund IV, L.P. has purchased a WLR Participation
pursuant to the WLR Last-Out Participation Agreement) would exceed the Maximum
Revolving Loan Balance (except as provided in Section 1.1(b).

 

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

 

 

ARTICLE III - REPRESENTATIONS AND WARRANTIES

 

The Credit Parties, jointly and severally, represent and warrant to the Agent
and each Lender that the following are true, correct and complete:

 

3.1     Corporate Existence and Power. Each Credit Party:

 

 

 
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(a)     is a corporation, limited liability company or limited partnership, as
applicable, duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation, organization or formation, as
applicable;

 

(b)     has (i) the corporate or limited liability company power and authority
and (ii) all governmental licenses, authorizations, Permits, consents and
approvals to own its assets, carry on its business and execute, deliver, and
perform its obligations under, the Loan Documents to which it is a party;

 

(c)     is duly qualified as a foreign corporation, limited liability company or
limited partnership, as applicable, and licensed and in good standing, under the
laws of each jurisdiction where its ownership, lease or operation of Property or
the conduct of its business requires such qualification or license; and

 

(d)     is in compliance with all Requirements of Law;

 

except, in the case of clauses (b)(ii), (c) or (d), to the extent that the
failure to do so would not reasonably be expected to have, either individually
or in the aggregate, a Material Adverse Effect.

 

3.2     Corporate Authorization; No Contravention.

 

(a)     The execution, delivery and performance of this Agreement by each of the
Credit Parties and of any other Loan Document to which such Person is party,
have been duly authorized by all necessary corporate or other applicable action,
and do not and will not:

 

(i)     contravene the terms of any of that Person’s Organization Documents;

 

(ii)     conflict with or result in any breach or contravention of, or result of
the creation of any Lien under, any document evidencing any material Contractual
Obligation to which such Person is a party or any order, injunction, writ or
decree of any Governmental Authority to which such Person or its Property is
subject; or

 

(iii)     violate any Requirement of Law;

 

except in each case referred to in clauses (i), (ii) and (iii) above, as would
not reasonably be expected to result in a Material Adverse Effect.

 

(b)     Schedule 3.2 sets forth as of the Closing Date the authorized Stock and
Stock Equivalents of each of the Credit Parties other than ITG and each of their
respective Subsidiaries. All issued and outstanding Stock and Stock Equivalents
of each of the Credit Parties (other than ITG) are duly authorized and validly
issued, fully paid, non-assessable, and free and clear of all Liens other than,
with respect to the Stock and Stock Equivalents of the Credit Parties (other
than ITG), those in favor of the Agent, for the benefit of the Secured Parties.
All such securities were issued in compliance with all applicable state and
federal laws concerning the issuance of securities. As of the Closing Date, all
of the issued and outstanding Stock and Stock Equivalents of each of the Credit
Parties other than ITG is owned by the Persons and in the amounts set forth on
Schedule 3.2. Except as set forth on Schedule 3.2, as of the Closing Date there
are no pre-emptive or other outstanding rights, options, warrants, conversion
rights or other similar agreements or understandings for the purchase or
acquisition of any Stock and Stock Equivalents of any Credit Party other than
ITG.

 

 

 
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3.3     Governmental Authorization. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority is necessary or required in connection with the
execution, delivery or performance by, or enforcement against, any Credit Party
or any Subsidiary of any Credit Party of this Agreement or any other Loan
Document except (a) for recordings and filings in connection with the Liens
granted to the Agent under the Collateral Documents, (b) those obtained or made
on or prior to the Closing Date and (c) other non-material approvals, consents,
exemptions, authorizations, other actions, notices or filings which, if not
obtained or made, would not reasonably be expected to have, either individually
or in the aggregate, a Material Adverse Effect.

 

3.4     Binding Effect. This Agreement and each other Loan Document to which any
Credit Party or any Subsidiary of any Credit Party is a party constitute the
legal, valid and binding obligations of each such Person which is a party
thereto, enforceable against such Person in accordance with their respective
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, or similar laws affecting the enforcement of creditors’ rights
generally or by equitable principles relating to enforceability.

 

3.5     Litigation. Except as specifically disclosed in Schedule 3.5, as of the
Closing Date there are no actions, suits, proceedings, claims or disputes
pending, or to the best knowledge of each Credit Party, threatened or
contemplated, at law, in equity, in arbitration or before any Governmental
Authority, against any Credit Party, any Subsidiary of any Credit Party or any
of their respective Properties which:

 

(a)     purport to challenge the validity or enforceability of this Agreement or
any other Loan Document, or any of the transactions contemplated hereby or
thereby; or

 

(b)     would reasonably be expected to result in equitable relief that would
result in a Material Adverse Effect or monetary judgment(s), individually or in
the aggregate, in excess of the US Dollar Equivalent of $2,000,000.

 

No injunction, writ, temporary restraining order or any order of any nature has
been issued by any court or other Governmental Authority purporting to enjoin or
restrain any Credit Party from the execution, delivery or performance of this
Agreement or any other Loan Document, or directing that the transactions
provided for herein or therein not be consummated as herein or therein provided.
As of the Closing Date, no Credit Party or any Subsidiary of any Credit Party is
the subject of an audit by the IRS or other Governmental Authority or, to each
Credit Party’s knowledge, any review or investigation by the IRS or other
Governmental Authority concerning the violation or possible violation of any
Requirement of Law.

 

 

 
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3.6     No Default. No Default or Event of Default exists or would result from
the incurring of any Obligations by any Credit Party or the grant or perfection
of the Agent’s Liens on the Collateral. No Credit Party and no Subsidiary of any
Credit Party is in default under or with respect to any Contractual Obligation
in any respect which, individually or together with all such defaults, would
reasonably be expected to have a Material Adverse Effect.

 

3.7     ERISA Compliance. Schedule 3.7 sets forth, as of the Closing Date, a
complete and correct list of, and that separately identifies, (i) all Title IV
Plans, (ii) all Multiemployer Plans and (iii) all material Benefit Plans. The
relevant Credit Party has received from the IRS, with respect to each Benefit
Plan and each trust thereunder, intended to qualify for tax exempt status under
Section 401 or Section 501 of the Code or other Requirements of Law, a
determination letter stating that such Benefit Plan is a qualified plan under
Section 401(a) of the Code and is exempt from United States federal income tax
under Section 501(a) of the Code, and there has been no occurrence since the
date of such determination letter which has adversely affected such
qualification. Except for those that would not, in the aggregate, have a
Material Adverse Effect, (x) each Benefit Plan is in compliance with applicable
provisions of ERISA, the Code and other Requirements of Law, (y) there are no
existing or pending (or to the knowledge of any Credit Party, threatened) claims
(other than routine claims for benefits in the normal course), sanctions,
actions, lawsuits or other proceedings or investigation involving any Benefit
Plan to which any Credit Party incurs or otherwise has or could have an
obligation or any Liability and (z) no ERISA Event is reasonably expected to
occur. On the Closing Date, no ERISA Event has occurred in connection with which
obligations and liabilities (contingent or otherwise) remain outstanding. No
ERISA Affiliate would have any Withdrawal Liability as a result of a complete
withdrawal from any Multiemployer Plan on the date this representation is made.

 

3.8     Use of Proceeds; Margin Regulations. The proceeds of the Loans are
intended to be and shall be used solely for the purposes set forth in and
permitted by Section 4.10, and are intended to be and shall be used in
compliance with Section 5.8. No Credit Party and no Subsidiary of any Credit
Party is engaged in the business of purchasing or selling Margin Stock or
extending credit for the purpose of purchasing or carrying Margin Stock.
Proceeds of the Loans shall not be used for the purpose of purchasing or
carrying Margin Stock.

 

3.9     Title to Properties. Each of the Credit Parties and each of their
respective Subsidiaries has good record and marketable title in fee simple to,
or valid leasehold interests in, all real Property, and good and valid title to
all owned personal Property and valid leasehold interests in all leased personal
Property, in each instance, necessary to the ordinary conduct of their
respective businesses. The Property of the Credit Parties and its Subsidiaries
is subject to no Liens, other than Permitted Liens.

 

 

 
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3.10     Taxes. Except as set forth on Schedule 3.10, all material federal,
state, local and foreign income and franchise and other material tax returns,
reports and statements (collectively, the “Tax Returns”) required to be filed by
any Tax Affiliate have been filed with the appropriate Governmental Authorities
in all jurisdictions in which such Tax Returns are required to be filed and all
taxes, charges and other impositions reflected therein or otherwise due and
payable have been paid in all material respects prior to the date on which any
Liability may be added thereto for non-payment thereof except for those
contested in good faith by appropriate proceedings diligently conducted and for
which adequate reserves are maintained on the books of the appropriate Tax
Affiliate in accordance with GAAP. Except as set forth on Schedule 3.10, as of
the Closing Date, to the knowledge of the Borrowers, no Tax Return is under
audit or examination by any Governmental Authority and no notice of such an
audit or examination or any assertion of any claim for Taxes has been given or
made by any Governmental Authority. All required amounts have been withheld by
each Tax Affiliate from their respective employees for all periods in compliance
with the tax, social security, employment and unemployment withholding
provisions of applicable Requirements of Law and such withholdings have been
timely paid to the appropriate Governmental Authorities. No Tax Affiliate has
participated in a “reportable transaction” within the meaning of Treasury
Regulation Section 1.6011-4(b) or has been a member of an affiliated, combined
or unitary group other than the group of which a Tax Affiliate is the common
parent.

 

3.11     Financial Condition.

 

(a)     Each of (i) the audited consolidated balance sheet of ITG and its
Subsidiaries dated December 31, 2009 and the related audited consolidated
statements of income or operations, shareholders’ equity and cash flows for the
fiscal year ended on that date, (ii) the unaudited consolidated balance sheet of
ITG and its Subsidiaries dated December 31, 2010 and the related unaudited
consolidated statements of income or operations, shareholders’ equity and cash
flows for the fiscal year ended on that date and (iii) the unaudited interim
consolidated balance sheet of ITG and its Subsidiaries dated January 31, 2011
and the related unaudited consolidated statements of income, shareholders’
equity and cash flows for the twelve (12) months then ended:

 

(x)     were prepared in accordance with GAAP consistently applied throughout
the respective periods covered thereby, except as otherwise expressly noted
therein, subject to, in the case of the unaudited interim financial statements,
normal year-end adjustments and the lack of footnote disclosures; and

 

(y)     present fairly in all material respects the consolidated financial
condition of ITG and its Subsidiaries as of the dates thereof and results of
operations for the periods covered thereby.

 

(b)     Since December 31, 2009, there has been no Material Adverse Effect.

 

 

 
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(c)     The Credit Parties and their Subsidiaries have no Indebtedness other
than Indebtedness permitted pursuant to Section 5.5 and have no Contingent
Obligations other than Contingent Obligations permitted pursuant to Section 5.9.

 

(d)     The Projections were prepared in good faith and based on assumptions
believed by the Borrowers to be fair and reasonable at the time delivered in
light of current market conditions, it being acknowledged and agreed by the
Agent and Lenders that projections as to future events are not to be viewed as
facts and that the actual results during the period or periods covered by such
projections may differ materially from the projected results.

 

3.12     Environmental Matters. As of the Closing Date, except as set forth on
Schedule 3.12: (a) the operations of each Credit Party and each Subsidiary of
such Credit Party are and have been in compliance with all applicable
Environmental Laws, including obtaining, maintaining and complying with all
Permits required by any applicable Environmental Law, other than non-compliances
that, in the aggregate, would not have a reasonable likelihood of resulting in
Material Environmental Liabilities to any Credit Party or any Subsidiary of any
Credit Party, (b) no Credit Party and no Subsidiary of any Credit Party is party
to, and no Credit Party and no Subsidiary of any Credit Party and no real
property currently (or to the knowledge of any Credit Party previously) owned,
leased, subleased, operated or otherwise occupied by or for any such Person that
is subject to or the subject of, any material Contractual Obligation or any
pending (or, to the knowledge of any Credit Party, threatened) order, action,
investigation, suit, proceeding, audit, claim, demand, dispute or notice of
violation or of potential liability or similar notice relating in any manner to
any Environmental Law other than those that, in the aggregate, are not
reasonably likely to result in Material Environmental Liabilities to any Credit
Party or any Subsidiary of any Credit Party, (c) no Lien in favor of any
Governmental Authority securing, in whole or in part, Environmental Liabilities
has attached to any property of any Credit Party or any Subsidiary of any Credit
Party and, to the knowledge of any Credit Party, no facts, circumstances or
conditions exist that could reasonably be expected to result in any such Lien
attaching to any such property, (d) no Credit Party and no Subsidiary of any
Credit Party has caused or suffered to occur a Release of Hazardous Materials
at, to or from any real property of any such Person and each such real property
is free of contamination by any Hazardous Materials except for such Release or
contamination that would not reasonably be expected to result, in the aggregate,
in Material Environmental Liabilities to any Credit Party or any Subsidiary of
any Credit Party, (e) no Credit Party and no Subsidiary of any Credit Party (i)
is or has been engaged in, or has permitted any current or former tenant to
engage in, operations or (ii) knows of any facts, circumstances or conditions,
including receipt of any information request or notice of potential
responsibility under the Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C. §§ 9601 et seq.) or similar Environmental Laws, that,
in the aggregate, would have a reasonable likelihood of resulting in Material
Environmental Liabilities to any Credit Party or any Subsidiary of any Credit
Party and (f) as of the Closing Date, each Credit Party has made available to
the Agent copies of all existing environmental reports, reviews and audits and
all documents pertaining to actual or potential Environmental Liabilities, in
each case to the extent such reports, reviews, audits and documents are in its
possession, custody or control.

 

 

 
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3.13     Regulated Entities. None of any Credit Party, any Person controlling
any Credit Party, or any Subsidiary of any Credit Party, is an “investment
company” within the meaning of the Investment Company Act of 1940.

 

3.14     Solvency. Both before and after giving effect to (a) the Loans made and
Letters of Credit Issued on or prior to the date this representation and
warranty is made or remade, (b) the disbursement of the proceeds of such Loans
and (c) the payment and accrual of all transaction costs in connection with the
foregoing, the Credit Parties taken as a whole are Solvent.

 

3.15     Labor Relations. There are no strikes, work stoppages, slowdowns or
lockouts existing, pending (or, to the knowledge of any Credit Party,
threatened) against or involving any Credit Party or any Subsidiary of any
Credit Party, except for those that would not, in the aggregate, reasonably be
expected to have a Material Adverse Effect. Except as set forth on Schedule
3.15, as of the Closing Date, (a) there is no collective bargaining or similar
agreement with any union, labor organization, works council or similar
representative covering any employee of any Credit Party or any Subsidiary of
any Credit Party, (b) no petition for certification or election of any such
representative is existing or pending with respect to any employee of any Credit
Party or any Subsidiary of any Credit Party and (c) no such representative has
sought certification or recognition with respect to any employee of any Credit
Party or any Subsidiary of any Credit Party.

 

3.16     Intellectual Property. Each Credit Party and each Subsidiary of each
Credit Party owns, or is licensed to use, all Intellectual Property necessary to
conduct its business as currently conducted except for such Intellectual
Property the failure of which to own or license would not reasonably be expected
to have, either individually or in the aggregate, a Material Adverse Effect. To
the knowledge of each Credit Party, (a) the conduct and operations of the
businesses of each Credit Party and each Subsidiary of each Credit Party does
not infringe, misappropriate, dilute, violate or otherwise impair any
Intellectual Property owned by any other Person and (b) no other Person has
contested any right, title or interest of any Credit Party or any Subsidiary of
any Credit Party in, or relating to, any Intellectual Property, other than, in
each case, as would not reasonably be expected to materially and adversely
affect the Loan Documents and the transactions contemplated therein and would
not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

3.17     Subsidiaries. As of the Closing Date, no Credit Party has any
Subsidiaries or equity investments in any other corporation or entity other than
those disclosed in Schedule 3.2.

 

3.18     Brokers’ Fees; Transaction Fees. Except for fees payable to the Agent
and the Lenders, none of the Credit Parties or any of their respective
Subsidiaries has any obligation to any Person in respect of any finder’s,
broker’s or investment banker’s fee in connection with this Agreement.

 

 

 
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3.19     Insurance. Each of the Credit Parties and each of their respective
Subsidiaries and their respective Properties are insured with financially sound
and reputable insurance companies which are not Affiliates of the Borrowers, in
such amounts, with such deductibles and covering such risks as are customarily
carried by companies engaged in similar businesses and owning similar Properties
in localities where such Person operates (subject to deductibles and
self-insurance provisions). A true and complete listing of such insurance,
including issuers, coverages and deductibles, has been provided to the Agent.

 

3.20     Full Disclosure. None of the representations or warranties made by any
Credit Party or any of its Subsidiaries in the Loan Documents as of the date
such representations and warranties are made or deemed made, and none of the
statements contained in any exhibit, report, statement or certificate furnished
by or on behalf of any Credit Party or any of its Subsidiaries in connection
with the Loan Documents, contains any untrue statement of a material fact or
omits any material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which they are
made, not misleading as of the time when made or delivered.

 

3.21     Foreign Assets Control Regulations and Anti-Money Laundering.

 

(a)     OFAC. Neither any Credit Party nor any Subsidiary of any Credit Party
(i) is a person whose property or interest in property is blocked or subject to
blocking pursuant to Section 1 of Executive Order 13224 of September 23, 2001
Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten
to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)), (ii) engages in any
dealings or transactions prohibited by Section 2 of such executive order, or is
otherwise associated with any such person in any manner violative of Section 2,
or (iii) is a person on the list of Specially Designated Nationals and Blocked
Persons or subject to the limitations or prohibitions under any other US
Department of Treasury’s Office of Foreign Assets Control regulation or
executive order.

 

(b)     Patriot Act. Each of the Credit Parties and each of their respective
Subsidiaries are in compliance, in all material respects, with the Patriot Act.
No part of the proceeds of the Loans will be used, directly or indirectly, for
any payments to any governmental official or employee, political party, official
of a political party, candidate for political office, or anyone else acting in
an official capacity, in order to obtain, retain or direct business or obtain
any improper advantage, in violation of the United States Foreign Corrupt
Practices Act of 1977, as amended.

 

ARTICLE IV - AFFIRMATIVE COVENANTS

 

Each Credit Party covenants and agrees that, so long as any Lender shall have
any Commitment hereunder, or any Loan or other Obligation (other than contingent
indemnification Obligations to the extent no claim giving rise thereto has been
asserted) shall remain unpaid or unsatisfied:

 

 

 
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4.1     Financial Statements. Such Credit Party shall maintain, and shall cause
each of its Subsidiaries to maintain, a system of accounting established and
administered in accordance with sound business practices to permit the
preparation of financial statements in conformity with GAAP (provided that
monthly financial statements shall not be required to have footnote disclosures
and are subject to normal year-end adjustments). The Borrower Representative, on
behalf of the Borrowers shall deliver to the Agent in electronic form:

 

(a)     as soon as available, but not later than ninety (90) days after the end
of fiscal year ended December 31, 2010 and each fiscal year thereafter, a copy
of the audited consolidated balance sheets of ITG and each of its Subsidiaries
(including the Excluded Subsidiaries) as at the end of such year and the related
consolidated statements of income or operations, shareholders’ equity and cash
flows for such fiscal year, setting forth in each case in comparative form the
figures for the previous fiscal year, and accompanied by the unqualified opinion
(as to going concern and scope of audit) of any “Big Four” or other nationally
recognized independent public accounting firm reasonably acceptable to the Agent
which report shall state that such consolidated financial statements present
fairly in all material respects the financial position for the periods indicated
in conformity with GAAP applied on a basis consistent with prior years;

 

(b)     as soon as available, but not later than forty-five (45) days, with
respect to any month ending on the last day of any fiscal quarter (other than
any month ending on the last day of any fiscal year) and not later than sixty
(60) days, with respect to any month ending on the last day of any fiscal year,
a copy of the unaudited consolidated sheets of ITG and each of its Subsidiaries
(including the Excluded Subsidiaries), and the related consolidated statements
of income, shareholders’ equity and cash flows as of the end of such month and
for the portion of the fiscal year then ended, all certified on behalf of the
Borrowers by an appropriate Responsible Officer of the Borrower Representative
as being complete and correct and fairly presenting, in all material respects,
in accordance with GAAP, the financial position and the results of operations of
ITG and its Subsidiaries, subject to normal year-end adjustments and absence of
footnote disclosures; provided, however, that the posting on the Securities and
Exchange Commission’s website at www.sec.gov and notification by the Borrowers
to the Agent of such posting of its annual reports on Form 10-K shall be deemed
to satisfy the deliveries required pursuant to Section 4.1(a) above; and

 

(c)     as soon as available, but not later than thirty (30) days after the end
of each fiscal month of each year (other than any month ending on the last day
of any fiscal quarter), a copy of the unaudited geographical consolidating
financial statements of ITG and each of its Subsidiaries (including the Excluded
Subsidiaries), and the related consolidated statements of income, shareholders’
equity and cash flows as of the end of such month and for the portion of the
fiscal year then ended, all certified on behalf of the Borrowers by an
appropriate Responsible Officer of the Borrower Representative as being complete
and correct and fairly presenting, in all material respects, in accordance with
GAAP, the financial position and the results of operations of ITG and its
Subsidiaries, subject to normal year-end adjustments and absence of footnote
disclosures.

 

 

 
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4.2     Certificates; Other Information. The Borrower Representative, on behalf
of the Borrowers shall furnish in electronic form, to the Agent:

 

(a)     together with each delivery of financial statements pursuant to
subsections 4.1(a) and (b)(i) above, (i) a management report, in reasonable
detail, signed by the chief financial officer (or other Responsible Officer
acceptable to the Agent) of the Borrower Representative, describing the
operations and financial condition of the Credit Parties and their Subsidiaries
for the month and the portion of the fiscal year then ended (or for the fiscal
year then ended in the case of annual financial statements), and (ii) a report
setting forth in comparative form the corresponding figures for the
corresponding periods of the previous fiscal year and the corresponding figures
from the most recent Projections for the current fiscal year delivered pursuant
to subsection 4.2(l) and discussing the reasons for any significant variations;

 

(b)     (i) concurrently with the delivery of the financial statements referred
to in subsections 4.1(a) and 4.1(b) above, a fully and properly completed
Compliance Certificate in the form of Exhibit 4.2(b), certified on behalf of the
Borrowers by a Responsible Officer of the Borrower Representative and (ii)
concurrently with the delivery of the financial statements referred to in
subsections 4.1(a) and 4.1(b) above, geographical consolidating financial
statements of ITG and each of its Subsidiaries (including the Excluded
Subsidiaries) reconciled to such financial statements delivered pursuant to
subsection 4.1(a) or 4.1(b), as applicable;

 

(c)     (i) promptly after the same are sent, copies of all annual and quarterly
reports that ITG generally sends to its shareholders, and (ii) promptly after
the same are filed, copies of all financial statements and regular, periodic or
special reports which such Person may make to, or file with, the Securities and
Exchange Commission or any successor or similar Governmental Authority;

 

(d)     as soon as available and in any event within twenty (20) days after the
end of each calendar month, and during the continuance of a Default or an Event
of Default, at such other times as the Agent or the Collateral Agents may
reasonably require, a Borrowing Base Certificate, certified on behalf of the
Borrowers by a Responsible Officer of the Borrower Representative, setting forth
the Borrowing Base as at the end of the most-recently ended fiscal month or as
at such other date as the Agent or the Collateral Agents may reasonably require;

 

(e)     concurrently with the delivery of the Borrowing Base Certificate, with
respect to Borrowers, a summary of Inventory by location and type, in each case
accompanied by such supporting detail and documentation as shall be requested by
the Agent and the Collateral Agents in its or their reasonable discretion;

 

(f)     concurrently with the delivery of the Borrowing Base Certificate, with
respect to Borrowers, a monthly trial balance showing Accounts outstanding aged
from due date as follows: current, 1 to 30 days, 31 to 60 days, 61 to 90 days
and 91 days or more, accompanied by such supporting detail and documentation as
shall be requested by the Agent and the Collateral Agents in its or their
reasonable discretion;

 

 

 
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(g)     concurrently with the delivery of the financial statements referred to
in subsection 4.1(a) and 4.1(b)(i) (or together with the Borrowing Base
Certificate or at such more frequent intervals as the Agent or Collateral Agents
may request from time to time during the continuance of a Default or an Event of
Default, or with respect to any fiscal month in which Average Adjusted
Availability is less than $22,500,000 at any time), (i) an officers’ certificate
signed by a Responsible Officer summarizing Capital Expenditures to be paid for
in the next three months or for the next succeeding one month when reporting
occurs on a monthly basis and (ii) certifying that such Capital Expenditure
payments will be funded from contributions to capital, working capital or third
party financing;

 

(h)     on a monthly basis, within twenty (20) days after the end of each month
(or on a weekly basis or at such more frequent intervals as the Agent may
request from time to time during the continuance of a Default or an Event of
Default, or during any fiscal month in which Average Adjusted Availability is
less than $30,000,000 at any time) (together with a copy of all or any part of
such delivery requested by any Lender in writing after the Closing Date),
collateral reports with respect to Borrowers, including a Borrowing Base
Certificate and all additions and reductions (cash and non-cash) with respect to
Accounts of Borrowers, in each case accompanied by such supporting detail and
documentation as shall be requested by Agent in its reasonable discretion each
of which shall be prepared by the Borrowers as of the last day of the
immediately preceding week or the date two (2) days prior to the date of any
request;

 

(i)     no later than five (5) Business Days prior to termination by ITG of the
Specified Receivables Purchase Agreement and/or the transactions contemplated
thereby, Borrower Representative, on behalf of the Borrowers, shall provide
Agent written notice of such termination;

 

(j)     at the time of delivery of each of the quarterly financial statements
delivered pursuant to Section 4.1, (i) a listing of government contracts of
Borrowers subject to the Federal Assignment of Claims Act of 1940; and (ii) a
list of any applications for the registration of any Material Intellectual
Property (as defined in the Guaranty and Security Agreement) which are filed by
any Credit Party with the United States Patent and Trademark Office, the United
States Copyright Office or any similar office or agency in the prior Fiscal
Quarter;

 

(k)     upon the reasonable request of the Agent, at any time if an Event of
Default shall have occurred and be continuing but otherwise not more often than
twice a year (with one such appraisal being a “desktop” appraisal and the other
being a full appraisal), the Borrowers will obtain and deliver to the Agent a
report of an independent collateral auditor satisfactory to the Agent with
respect to the Accounts, Inventory, Equipment and real Property of the Credit
Parties including, without limitation, Appraisals reports in form and substance
and from appraisers reasonably satisfactory to the Agent, stating the then Net
Orderly Liquidation Values of all or any portion of the Inventory, Net Orderly
Liquidation Values of Equipment and fair market value of real Property;

 

 

 
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(l)     no later than thirty (30) days after the last day of each fiscal year,
the annual business plan, with annual forecasts (to include forecasted
consolidated balance sheet, income statement and cash flow statements and a
forecasted product line summary) for the Borrowers and their consolidated
Domestic Subsidiaries as at the end of and for each fiscal month of the
forthcoming fiscal year and as at the end of the subsequent three years (the
“Projections”);

 

(m)     promptly upon receipt thereof, copies of any reports submitted by the
certified public accountants of the Credit Parties in connection with each
annual, interim or special audit or review of any type of the financial
statements or internal control systems of any Credit Party made by such
accountants, including any comment letters submitted by such accountants to
management of any Credit Party in connection with their services;

 

(n)     at any time if an Event of Default shall have occurred and be
continuing, the Agent may, or may require the Borrowers to, in either case at
the Borrowers’ expense, obtain appraisals in form and substance and from
appraisers reasonably satisfactory to the Agent stating the then current fair
market value of all or any portion of the real or personal Property of any
Credit Party or any Subsidiary of any Credit Party; and

 

(o)     promptly, such additional business, financial, corporate affairs,
perfection certificates and other information as the Agent may from time to time
reasonably request.

 

4.3     Notices. The Borrower Representative, on behalf of the Borrowers shall
notify promptly the Agent of each of the following (and in no event later than
three (3) Business Days after a Responsible Officer becomes aware thereof):

 

(a)     the occurrence or existence of any Default or Event of Default;

 

(b)     the occurrence of any event or condition that has caused or would
reasonably be expected to result in a Material Adverse Effect;

 

(c)     the commencement of, or any material development in, any litigation or
proceeding affecting any Credit Party or any Subsidiary of any Credit Party (i)
in which the amount of damages claimed is the US Dollar Equivalent of $2,000,000
(or its equivalent in another currency or currencies) or more, (ii) in which
injunctive or similar relief is sought and which, if adversely determined, would
reasonably be expected to have a Material Adverse Effect, or (iii) in which the
relief sought is an injunction or other stay of the performance of this
Agreement or any other Loan Document;

 

(d)     (i) the receipt by any Credit Party of any notice of violation of or
potential liability or similar notice under Environmental Law, (ii)(A)
unpermitted Releases, (B) the existence of any condition that could reasonably
be expected to result in violations of or liabilities under, any Environmental
Law or (C) the commencement of, or any material change to, any action,
investigation, suit, proceeding, audit, claim, demand, dispute alleging a
violation of or liability under any Environmental Law, that, for each of clauses
(A), (B) and (C) above (and, in the case of clause (C), if adversely
determined), in the aggregate for each such clause, could reasonably be expected
to result in Material Environmental Liabilities, (iii) the receipt by any Credit
Party of notification that any property of any Credit Party is subject to any
Lien in favor of any Governmental Authority securing, in whole or in part,
Material Environmental Liabilities and (iv) any proposed acquisition or lease of
real property, if such acquisition or lease would have a reasonable likelihood
of resulting in aggregate Material Environmental Liabilities;

 

 

 
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(e)     (i) on or prior to any filing by any ERISA Affiliate of any notice of
intent to terminate any Title IV Plan, a copy of such notice and (ii) promptly,
and in any event within 10 days, after any officer of any ERISA Affiliate knows
that a request for a minimum funding waiver under Section 412 of the Code has
been filed with respect to any Title IV Plan or Multiemployer Plan, a notice
(which may be made by telephone if promptly confirmed in writing) describing
such waiver request and any action that any ERISA Affiliate proposes to take
with respect thereto, together with a copy of any notice filed with the PBGC or
the IRS pertaining thereto;

 

(f)     any material change in accounting policies or financial reporting
practices by any Credit Party or any Subsidiary of any Credit Party;

 

(g)     the creation, establishment or acquisition of any Domestic Subsidiary;

 

(h)     (i) the execution of a contract with a Governmental Authority tolling
the statute of limitations with respect to the assessment of income or franchise
taxes and (ii) the creation of any Contractual Obligation of any Tax Affiliate,
or the receipt of any request directed to any Tax Affiliate, to make any
adjustment under Section 481(a) of the Code, by reason of a change in accounting
method or otherwise, which would have a Material Adverse Effect; and

 

(i)     if the Accounts owing by any Account Debtor and its Affiliates to
Borrowers and their Subsidiaries exceed twenty percent (20%) of all Accounts
owing by all Account Debtors as of any date.

 

Each notice pursuant to this Section 4.3 shall be in electronic form accompanied
by a statement by a Responsible Officer of the Borrower Representative, on
behalf of the Borrowers, setting forth details of the occurrence referred to
therein, and stating what action the Borrowers or other Person proposes to take
with respect thereto and at what time. Each notice under subsection 4.3(a) shall
describe with particularity any and all clauses or provisions of this Agreement
or other Loan Document that have been breached or violated.

 

4.4     Preservation of Corporate Existence, Etc. Such Credit Party shall, and
shall cause each of its Subsidiaries to:

 

(a)     preserve and maintain in full force and effect its organizational
existence and good standing under the laws of its jurisdiction of incorporation,
organization or formation, as applicable, except, with respect to the Borrowers’
Subsidiaries, in connection with transactions permitted by Section 5.3;

 

 

 
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(b)     preserve and maintain in full force and effect all rights, privileges,
qualifications, permits, licenses and franchises necessary in the normal conduct
of its business except in connection with transactions permitted by Section 5.2
or Section 5.3 or as would not reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect;

 

(c)     use its reasonable efforts, in the Ordinary Course of Business, to
preserve its business organization and preserve the goodwill and business of the
customers, suppliers and others having material business relations with it; and

 

(d)     preserve or renew all of its registered trademarks, trade names and
service marks, the non-preservation of which would reasonably be expected to
have, either individually or in the aggregate, a Material Adverse Effect.

 

4.5     Maintenance of Property. Such Credit Party shall maintain, and shall
cause each of its Subsidiaries to maintain, and preserve all its Property which
is used or useful in its business in good working order and condition, ordinary
wear and tear excepted and shall make all necessary repairs thereto and renewals
and replacements thereof except where the failure to do so would not reasonably
be expected to have, either individually or in the aggregate, a Material Adverse
Effect, or as otherwise permitted under this Agreement.

 

4.6     Insurance.

 

(a)     Such Credit Party shall, and shall cause each of its Subsidiaries to,
(i) maintain or cause to be maintained in full force and effect all policies of
insurance of any kind with respect to the property and businesses of such Credit
Party and such Subsidiaries (including policies of life, fire, theft, product
liability, public liability, property damage, other casualty, employee fidelity,
workers’ compensation, business interruption and employee health and welfare
insurance) with financially sound and reputable insurance companies or
associations (in each case that are not Affiliates of Borrowers) of a nature and
providing such coverage as is sufficient and as is customarily carried by
Persons with businesses of the size and character of the business of the Credit
Parties in localities where such Persons operate and (ii) cause all such
insurance relating to any Collateral of such Credit Party to name the Agent as
additional insured or loss payee, as appropriate. All policies of insurance on
real and personal Property of the Credit Parties will contain an endorsement, in
form and substance reasonably acceptable to the Agent, showing loss payable to
the Agent (Form 438 BFU or equivalent) and extra expense and business
interruption endorsements. Unless otherwise agreed by the Agent, such Credit
Party will use commercially reasonable efforts to ensure that such endorsement,
or an independent instrument furnished to the Agent, will provide that the
insurance companies will give the Agent at least 30 days’ prior written notice
before any such policy or policies of insurance shall be altered or canceled and
that no act or default of Borrowers or any other Person shall affect the right
of the Agent to recover under such policy or policies of insurance in case of
loss or damage. Such Credit Party shall direct all present and future insurers
under its “All Risk” policies of insurance to pay all proceeds payable
thereunder directly to the Agent. If any insurance proceeds are paid by check,
draft or other instrument payable to any Credit Party and the Agent jointly, the
Agent may endorse such Credit Party’s name thereon and do such other things as
the Agent may deem advisable to reduce the same to cash. The Agent reserves the
right at any time, upon review of each Credit Party’s risk profile, to require
additional forms and limits of insurance.

 

 

 
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(b)     Unless the Borrowers provide the Agent with evidence of the insurance
coverage required by this Agreement from time to time upon the reasonable
request of the Agent, the Agent may purchase insurance at the Credit Parties’
expense to protect the Agent’s and Lenders’ interests in the Credit Parties’ and
their Subsidiaries’ properties. This insurance may, but need not, protect the
Credit Parties’ and their Subsidiaries’ interests. The coverage that the Agent
purchases may provide that such coverage will not pay any claim that any Credit
Party or any Subsidiary of any Credit Party makes or any claim that is made
against such Credit Party or any Subsidiary in connection with such coverage.
The Borrowers may later cancel any insurance purchased by the Agent, but only
after providing the Agent with evidence that there has been obtained insurance
as required by this Agreement. If the Agent purchases any such insurance, the
Credit Parties will be responsible for the costs of that insurance, including
interest and any other charges the Agent may impose in connection with the
placement of such insurance, until the effective date of the cancellation or
expiration of the insurance. The costs of any such insurance shall be added to
the Obligations. The costs of any such insurance may be more than the cost of
insurance the Borrowers may be able to obtain on their own.

 

4.7     Payment of Obligations. Such Credit Party shall, and shall cause each of
its Subsidiaries to, pay, discharge and perform as the same shall become due and
payable or required to be performed, all their respective obligations and
liabilities, including:

 

(a)     all tax liabilities, assessments and governmental charges or levies upon
it or its properties or assets, unless the same are being contested in good
faith by appropriate proceedings diligently prosecuted which stay the
enforcement of any Lien and for which adequate reserves in accordance with GAAP
are being maintained by such Person;

 

(b)     all lawful claims which, if unpaid, would by law become a Lien (other
than a Permitted Lien) upon its Property unless the same are being contested in
good faith by appropriate proceedings diligently prosecuted which stay the
imposition or enforcement of the Lien and for which adequate reserves in
accordance with GAAP are being maintained by such Person;

 

(c)     all Indebtedness, as and when due and payable, but subject to any
subordination provisions contained herein and/or in any instrument or agreement
evidencing such Indebtedness, except to the extent the failure to so pay any
such Indebtedness would not constitute an Event of Default under Section 7.1(e);
and

 

 

 
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(d)     the performance of all obligations under any Contractual Obligation to
which such Credit Party or any of its Subsidiaries is bound, or to which it or
any of its properties is subject, except where the failure to perform would not
reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect.

 

4.8     Compliance with Laws.

 

(a)     Such Credit Party shall, and shall cause each of its Subsidiaries to,
comply with all Requirements of Law of any Governmental Authority having
jurisdiction over it or its business, except where the failure to comply would
not reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect.

 

(b)     Without limiting the generality of the foregoing, such Credit Party
shall, and shall cause each of its Subsidiaries to, comply with, and maintain
its real Property, whether owned, leased, subleased or otherwise operated or
occupied, in compliance with, all applicable Environmental Laws (including by
implementing any Remedial Action necessary to achieve such compliance or that is
required by orders and directives of any Governmental Authority) except for
failures to comply that would not, in the aggregate, have a Material Adverse
Effect. Without limiting the foregoing, if an Event of Default is continuing and
the Agent has a reasonable basis to believe that (i) there exist violations of
Environmental Laws by any Credit Party or any Subsidiary of any Credit Party or
(ii) there exist any Material Environmental Liabilities, in each case, that
would have, in the aggregate, a Material Adverse Effect, then such Credit Party
shall, promptly upon receipt of request from the Agent, allow the Agent and its
Related Persons access to such real property for the purpose of conducting, such
environmental audits and assessments, including subsurface sampling of soil and
groundwater, and cause the preparation of such reports, in each case as the
Agent may from time to time reasonably request. Such audits, assessments and
reports, to the extent not conducted by the Agent or any of its Related Persons,
shall be conducted and prepared by reputable environmental consulting firms
reasonably acceptable to the Agent and shall be in form and detail reasonably
acceptable to the Agent.

 

4.9     Inspection of Property and Books and Records. Each Credit Party shall
maintain and shall cause each of its Subsidiaries to maintain proper books of
record and account, in which full, true and correct entries in conformity with
GAAP (or in the case of Foreign Subsidiaries, standard acceptable accounting
practices as in effect in the country where such Person is organized)
consistently applied shall be made of all financial transactions and matters
involving the assets and business of such Person. Such Credit Party shall, and
shall cause each of its Subsidiaries to, with respect to each owned, leased, or
controlled property, during normal business hours and upon reasonable advance
notice (unless an Event of Default shall have occurred and be continuing, in
which event no notice shall be required and the Agent shall have access at any
and all times during the continuance thereof): (a) provide access to such
property to the Agent and any of its Related Persons, as frequently as the Agent
reasonably determines to be appropriate; (b) permit the Agent and any of its
Related Persons to inspect, audit and make extracts and copies (or take
originals if reasonably necessary) from all of such Credit Party’s books and
records; and (c) permit the Agent to inspect, review, evaluate and make physical
verifications and appraisals of the inventory and other Collateral in any manner
and through any medium that the Agent considers advisable, in each instance, at
the Credit Parties’ expense provided the Credit Parties shall not be responsible
for costs and expenses more than three (3) times per year unless an Event of
Default has occurred and is continuing. Any Lender may accompany the Agent in
connection with any inspection at such Lender’s expense.

 

 

 
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4.10     Use of Proceeds. The Borrowers shall use the proceeds of the Loans
solely as follows: (a) to refinance Prior Indebtedness on the Closing Date, (b)
to pay costs and expenses required to be paid pursuant to Section 2.1, (c) to
repay the Specified Secured Notes to the extent permitted by the Intercreditor
Agreement and (d) for working capital and other general corporate purposes not
in contravention of any Requirement of Law and not in violation of this
Agreement.

 

4.11     Cash Management Systems. Each Credit Party shall, and shall cause each
Domestic Subsidiary of each Credit Party to, enter into, and cause each
depository, securities intermediary or commodities intermediary to enter into,
Control Agreements with respect to any deposit, securities, commodity or similar
account maintained by such Person (other than any payroll account, so long as
such payroll account is a zero balance account, and withholding tax and
fiduciary accounts) as of or after the Closing Date.

 

4.12     Landlord Agreements. Each Credit Party shall, and shall cause each of
its Domestic Subsidiaries to, use commercially reasonable efforts to obtain a
landlord agreement or bailee or mortgagee waivers, as applicable, from the
lessor of each leased property, bailee in possession of any Collateral or
mortgagee of any owned property with respect to each location where any
Collateral is stored or located, which agreement shall be reasonably
satisfactory in form and substance to the Agent. The Agent and the Collateral
Agents may, in its or their discretion, exclude from the Borrowing Base, or
impose Reserves with respect to, Inventory or Equipment at each such location
where a landlord agreement or bailee or mortgagee waiver is not obtained.

 

4.13     Further Assurances; Limitation on Guarantees and Liens.

 

(a)     Such Credit Party shall ensure that all written information, exhibits
and reports furnished to the Agent or the Lenders do not and will not contain
any untrue statement of a material fact when made and do not and will not omit
to state any material fact or any fact necessary to make the statements
contained therein not misleading in light of the circumstances in which made,
and will promptly disclose to the Agent and the Lenders and correct any defect
or error that may be discovered therein or in any Loan Document or in the
execution, acknowledgement or recordation thereof.

 

(b)     Promptly upon request by the Agent, such Credit Party shall (and,
subject to the limitations hereinafter set forth and set forth in the Collateral
Documents, shall cause each of its Subsidiaries to) take such additional actions
as the Agent may reasonably require from time to time in order (i) to carry out
more effectively the purposes of this Agreement or any other Loan Document, (ii)
to subject to the Liens created by any of the Collateral Documents any of the
Properties, rights or interests in which any Lien is granted pursuant to any of
the Collateral Documents, (iii) to perfect and maintain the validity,
effectiveness and priority of any of the Collateral Documents and the Liens
intended to be created thereby, and (iv) to better assure, convey, grant,
assign, transfer, preserve, protect and confirm to the Agent, Lenders and L/C
Issuers the rights granted or now or hereafter intended to be granted to the
Agent, Lenders and L/C Issuers under any Loan Document or under any other
document executed in connection therewith.

 

 

 
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(c)     Without limiting the generality of the foregoing, upon the reasonable
request of the Majority Lenders, such Credit Party shall cause each of its
Domestic Subsidiaries to guaranty the Obligations and to cause each such
Domestic Subsidiary to grant to the Agent, for the benefit of the Secured
Parties, a security interest in, subject to the limitations hereinafter set
forth, all of such Subsidiary’s Property to secure such guaranty. Furthermore,
upon the reasonable request of the Majority Lenders, such Credit Party shall,
and shall cause each of its Domestic Subsidiaries to pledge all of the Stock and
Stock Equivalents of each of its Domestic Subsidiaries and First Tier Foreign
Subsidiaries (provided that with respect to any First Tier Foreign Subsidiary,
such pledge shall be limited to sixty-five percent (65%) of such Foreign
Subsidiary’s outstanding voting Stock and Stock Equivalents and one hundred
percent (100%) of such Foreign Subsidiary’s outstanding non-voting Stock and
Stock Equivalents) to the Agent for the benefit of the Secured Parties, to
secure the Obligations. In connection with each pledge of Stock and Stock
Equivalents, the Credit Parties shall deliver, or cause to be delivered, to the
Agent, irrevocable proxies and stock powers and/or assignments, as applicable,
duly executed in blank. In the event any Credit Party acquires any real Property
with a fair market value in excess of the US Dollar Equivalent of $500,000 that
is not otherwise subject to a Mortgage, promptly after such acquisition, such
Person shall execute and/or deliver, or cause to be executed and/or delivered,
to the Agent, (v) a fully executed Mortgage, in form and substance reasonably
satisfactory to the Agent together with an A.L.T.A. lender’s title insurance
policy issued by a title insurer reasonably satisfactory to the Agent, in form
and substance and in an amount reasonably satisfactory to the Agent insuring
that the Mortgage is a valid and enforceable first priority Lien on the
respective property, free and clear of all defects, encumbrances and Liens,
other than Permitted Liens and other encumbrances agreed to by the Agent, (w)
then current A.L.T.A. surveys, certified to the Agent by a licensed surveyor
sufficient to allow the issuer of the lender’s title insurance policy to issue
such policy without a survey exception, (x) with respect to each Mortgage, an
opinion of counsel to the applicable Credit Parties in the applicable
jurisdiction in which the Mortgaged Property is situated addressed to the Agent
and the Lenders, (y) a completed Flood Certificate with respect to each
Mortgaged Property and if any portion of any such property is located in an area
identified as a special flood hazard area by the Federal Emergency Management
Agency or other applicable agency, the Borrowers shall maintain or cause to be
maintained, flood insurance to the extent required by law, all in form and
substance reasonably satisfactory to Agent and (z) an environmental site
assessment prepared by a qualified firm reasonably acceptable to the Agent, in
form and substance satisfactory to the Agent.

 

4.14     Lender Conference Calls. The Credit Parties shall participate in
quarterly telephone conference calls with the Agent and the Lenders (or more
frequently, though not to exceed biweekly, to the extent reasonably requested by
the Agent and/or the Majority Lenders), which conference calls shall include a
report by the Credit Parties of the financial performance and business
conditions of the Credit Parties and certain of their Affiliates, including,
without limitation, updates on potential or proposed mergers, backlog and sales
volumes and any proposed refinancings.

 

 

 
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ARTICLE V - NEGATIVE COVENANTS

 

Each Credit Party covenants and agrees that, so long as any Lender shall have
any Commitment hereunder, or any Loan or other Obligation (other than contingent
indemnification Obligations to the extent no claim giving rise thereto has been
asserted) shall remain unpaid or unsatisfied:

 

5.1     Limitation on Liens. Such Credit Party shall not, and shall not suffer
or permit any of its Subsidiaries to, directly or indirectly, make, create,
incur, assume or suffer to exist any Lien upon or with respect to any part of
its Property, whether now owned or hereafter acquired, other than the following
(“Permitted Liens”):

 

(a)     any Lien existing on the Property of a Credit Party or a Subsidiary of a
Credit Party on the Closing Date and set forth on Schedule 5.1, and in the case
of any such Liens securing Indebtedness outstanding on such date which
Indebtedness is permitted by subsection 5.5(c), in each case, including
replacement Liens on the Property currently subject to such Liens securing
Indebtedness permitted by Section 5.5(c);

 

(b)     any Lien created under any Loan Document;

 

(c)     Liens for taxes, fees, assessments or other governmental charges (i)
which are not delinquent or remain payable without penalty, or (ii) the
non-payment of which is permitted by Section 4.7;

 

(d)     carriers’, warehousemen’s, mechanics’, landlords’, materialmen’s,
repairmen’s or other similar Liens arising in the Ordinary Course of Business
which are not delinquent for more than ninety (90) days or remain payable
without penalty or which are being contested in good faith and by appropriate
proceedings diligently prosecuted, which proceedings have the effect of
preventing the forfeiture or sale of the Property subject thereto and for which
adequate reserves in accordance with GAAP are being maintained;

 

(e)     Liens (other than any Lien imposed by ERISA) consisting of pledges or
deposits required in the Ordinary Course of Business in connection with workers’
compensation, unemployment insurance and other social security legislation or to
secure the performance of tenders, statutory obligations, surety, stay, customs
and appeals bonds, bids, leases, governmental contract, trade contracts,
indemnity, performance and return of money bonds and other similar obligations
(exclusive of obligations for the payment of borrowed money) or to secure
liability to insurance carriers;

 

 

 
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(f)     judgment or judicial attachment Liens, provided that either the
enforcement of any such Lien is effectively stayed or all such Liens that are
not stayed secure claims in the aggregate at any time outstanding for the Credit
Parties and their Subsidiaries not exceeding the US Dollar Equivalent of the
limit set forth in Section 7.1(h);

 

(g)     easements, rights-of-way, zoning and other restrictions, minor defects
or other irregularities in title, and other similar encumbrances which do not in
any case materially detract from the value of the Property subject thereto or
interfere in any material respect with the ordinary conduct of the businesses of
any Credit Party or any Subsidiary of any Credit Party;

 

(h)     Liens securing Indebtedness (including Capital Lease Obligations)
permitted under subsection 5.5(d);

 

(i)     any interest or title of a lessor or sublessor under any lease permitted
by this Agreement;

 

(j)     Liens arising from precautionary uniform commercial code financing
statements filed under any lease permitted by this Agreement;

 

(k)     licenses, sublicenses, leases or subleases granted to third parties in
the Ordinary Course of Business not materially interfering with the business of
the Credit Parties or any of their Subsidiaries;

 

(l)     Liens in favor of collecting banks arising under Section 4-210 of the
UCC;

 

(m)     Liens (including the right of set-off) in favor of a bank or other
depository institution arising as a matter of law encumbering deposits;

 

(n)     Liens arising out of consignment, bailment or similar arrangements for
the sale of goods entered into by a Borrower or any Subsidiary of a Borrower in
the Ordinary Course of Business;

 

(o)     Liens in favor of customs and revenue authorities arising as a matter of
law which secure payment of customs duties in connection with the importation of
goods in the Ordinary Course of Business or which secure partial, progress,
advance or other payments pursuant to any contract with respect to purchases of
software or Equipment to the extent that such payments or duties are paid when
due and payable by the Borrowers;

 

(p)     Liens on commodity hedging accounts and amounts held therein to secure
performance under cotton futures contracts in connection with transactions or
positions in a contract for future delivery of cotton entered into in the
Ordinary Course of Business; provided that reserves in accordance with GAAP have
been provided on the books of the Credit Party who incurred such Liens;

 

 

 
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(q)     Environmental Liens not to exceed the US Dollar Equivalent of
$1,000,000;

 

(r)     any right of first refusal or first offer, redemption right, or option
or similar right in respect of any Stock or Stock Equivalent owned by any Credit
Party or any Subsidiary with respect to any Joint Venture or other Investment,
in favor of any co-venturer or other holder of Stock of Stock Equivalent of such
Investment;

 

(s)     Liens on proceeds (including dividends, distributions, interest and like
payments on or with respect to, and insurance and condemnation proceeds and
rental, lease, licensing and similar proceeds) of Property that is otherwise
subject to Liens permitted by this Section 5.1;

 

(t)     [Intentionally Omitted];

 

(u)     Liens on Collateral as long as (i) such Liens solely secure payment and
performance of the Secured Note Indebtedness and (ii) such Liens are, pursuant
to the Intercreditor Agreement, subordinated to the Liens thereon in favor of
the Agent;

 

(v)     other Liens on assets not securing Indebtedness in an aggregate amount
not to exceed $1,500,000 at any time outstanding; and

 

(w)     Liens on the Specified Receivables solely to the extent the sale and
purchase of such Specified Receivables pursuant to the Specified Receivables
Purchase Agreement is deemed to be a financing arrangement between the parties
thereto or if for any reason ownership of the Specified Receivables is deemed to
be vested in ITG or any Subsidiary.

 

5.2     Disposition of Assets. No Credit Party shall, and no Credit Party shall
suffer or permit any of its Subsidiaries to, directly or indirectly, sell,
assign, lease, convey, transfer or otherwise dispose of (whether in one or a
series of transactions) any Property (including accounts and notes receivable,
with or without recourse) except:

 

(a)     dispositions of inventory, or used, worn-out assets or surplus fixed or
capital assets no longer useful in its business, all in the Ordinary Course of
Business;

 

(b)     dispositions not otherwise permitted hereunder which are made for fair
market value determined in good faith by the Borrowers and the mandatory
prepayment in the amount of the Net Proceeds of such disposition is made if and
to the extent required by Section 1.8; provided, that (i) at the time of any
disposition, no Event of Default shall exist or shall result from such
disposition, (ii) not less than 80% of the aggregate sales price from such
disposition shall be paid in cash except as otherwise consented to by Agent in
its reasonable discretion, (iii) the aggregate fair market value of all assets
so sold by the Credit Parties and their Subsidiaries, together, shall not exceed
in any fiscal year the US Dollar Equivalent of $10,000,000 and (iv) after giving
effect to such disposition Availability shall not be less than $12,500,000 and
Average Adjusted Availability shall not be less than $22,500,000;

 

 

 
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(c)     dispositions of Cash Equivalents;

 

(d)     exchanges of equipment for other equipment or trade credit, consistent
with past practice;

 

(e)     licenses, sublicenses, leases or subleases granted to third parties in
the Ordinary Course of Business not materially interfering with the business of
the Credit Parties or any of their Subsidiaries;

 

(f)     (i) any Credit Party may sell, lease, transfer or otherwise dispose of
any of its Property to any other Credit Party, (ii) any Foreign Subsidiary may
sell, lease, transfer or otherwise dispose of any of its Property to any Credit
Party on an arms’ length basis, (iii) any Foreign Subsidiary may sell, lease,
transfer or otherwise dispose of any of its Property to any other Foreign
Subsidiary or any Excluded Subsidiary, (iv) any Credit Party may sell, lease,
transfer or otherwise dispose of any of its Property to any Foreign Subsidiary
and (v) any Credit Party may sell, lease, transfer or otherwise dispose of any
of its Property to any Excluded Subsidiary so long as, in the case of clauses
(iv) and (v), (A) before and after giving effect thereto (x) no Default or Event
of Default occurs or is continuing, (y) Average Adjusted Availability is greater
than $30,000,000 and (z) no default exists under any credit facility to which
such Excluded Subsidiary is a party or to which its assets or property are
subject and (B) promptly upon receipt by any Credit Party of the Net Proceeds of
such sale, lease, transfer or other disposition, the Borrowers shall, if
required pursuant to subsection 1.8(e), deliver, or cause to be delivered, such
Net Proceeds to the Agent for distribution to the Lenders as a prepayment of the
Loans owing by the Borrowers, which prepayment in either case shall be applied
in accordance with subsection 1.8(e) hereof (provided that, if Equipment or real
Property is the subject of such sale, lease, transfer or other disposition, the
Borrowers shall deliver, or cause to be delivered, to the Agent for distribution
to the Lenders as a prepayment of the Loans owing by the Borrowers to be applied
in accordance with subsection 1.8(e) hereof, an amount equal to 85% of the Net
Orderly Liquidation Value of the Equipment or 60% of the fair market value of
the real Property, as applicable, that is the subject of such sale, lease,
transfer or other disposition);

 

(g)     any Subsidiary (which is not a Credit Party) of any Borrower may be
liquidated, wound up or dissolved (upon voluntary liquidation or otherwise) if
such Borrower deems it beneficial to the business of such Borrower and such
liquidation, winding up or dissolution shall not result in a Material Adverse
Effect or impair the Collateral of the Lenders;

 

(h)     any issuances of Stock or Stock Equivalents by any Subsidiary to ITG or
any Wholly-Owned Subsidiary;

 

(i)     the sale or other transfer of any non-cash consideration received as
proceeds of any disposition permitted hereunder or Stock or Stock Equivalent
owned by any Credit Party or any Subsidiary of any Credit Party in any Joint
Venture pursuant to the Organization Documents or other documents governing such
Joint Venture;

 

 

 
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(j)     other dispositions described on Schedule 5.2;

 

(k)     the sale of all or substantially all of the assets of Jacquards pursuant
to and in accordance with the Cone Jacquards Purchase Agreement; provided that
the Net Proceeds of such sale shall be delivered by the Borrowers to the Agent,
for distribution to the Lenders as a prepayment of the Loans owing by the
Borrowers, which prepayment shall be applied in accordance with subsection
1.8(f) hereof (but, for the avoidance of doubt, shall not result in a permanent
reduction of the Revolving Loan Commitment); provided further that the Borrowers
shall only be required to make prepayments equal to the amounts specified in
subsection 1.8(f);

 

(l)     the sale to Bank of America, N.A. of Specified Receivables pursuant to
and in accordance with the Specified Receivables Purchase Agreement; provided
that the Net Proceeds of each such sale shall be delivered by the Borrowers to
the Agent, for distribution to the Lenders as a prepayment of the Loans owing by
the Borrowers, which prepayment shall be applied in accordance with subsection
1.8(e) hereof but shall not result in a permanent reduction of the Revolving
Loan Commitment;

 

(m)     one or more Phong Phu Asset Sales; provided that the Net Proceeds of
such sale shall be delivered by the Borrowers to the Agent, for distribution to
the Lenders as a prepayment of the Loans owing by the Borrowers, which
prepayment shall be applied in accordance with subsection 1.8(h) hereof (but,
for the avoidance of doubt, shall not result in a permanent reduction of the
Revolving Loan Commitment);

 

(n)     the sale of all or substantially all of the assets of Narricot on or
prior to September 30, 2014 pursuant to a purchase agreement having terms and
conditions that are substantially similar to those set forth in the Narricot
Letter of Intent and which purchase agreement is reasonably satisfactory to the
Agent (the “Narricot Sale”); provided that the Net Proceeds of the Narricot Sale
shall be delivered by the Borrowers to the Agent, for distribution to the
Lenders as a prepayment of the Loans owing by the Borrowers, which prepayment
shall be applied in accordance with subsection 1.8(i) hereof (but, for the
avoidance of doubt, shall not result in a permanent reduction of the Revolving
Loan Commitment); provided further that the Borrowers shall only be required to
make prepayments equal to the amounts specified in subsection 1.8(i); and

 

(o)     the sale of all of the Stock of Summit Yarn Holding I, Inc., a Delaware
corporation, Summit Yarn Holding II, Inc., a Delaware corporation, and Summit
Yarn LLC, a North Carolina limited liability company, in each case, held by any
Borrower or any of its Subsidiaries on or prior to September 30, 2014 pursuant
to an equity redemption agreement having terms and conditions that are
substantially similar to those set forth in the Summit Letter of Intent and
which equity redemption agreement is reasonably satisfactory to the Agent (the
“Summit Sale”); provided that the Net Proceeds of the Summit Sale (x) shall not
be less than $9,000,000 and (y) shall be delivered by the Borrowers to the
Agent, for distribution to the Lenders as a prepayment of the Loans owing by the
Borrowers, which prepayment shall be applied in accordance with subsection
1.8(j) hereof (but, for the avoidance of doubt, shall not result in a permanent
reduction of the Revolving Loan Commitment).

 

 

 
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5.3     Consolidations and Mergers. No Credit Party shall, and no Credit Party
shall suffer or permit any of its Subsidiaries to, merge, consolidate with or
into, or convey, transfer, lease or otherwise dispose of (whether in one
transaction or in a series of transactions) all or substantially all of its
assets (whether now owned or hereafter acquired) to or in favor of any Person,
except upon not less than two (2) Business Days prior written notice to the
Agent, (a) any Subsidiary of a Borrower may merge with, or dissolve or liquidate
into, a Borrower or a Wholly-Owned Subsidiary of a Borrower, provided that
Domestic Subsidiaries shall only be merged with and into Borrowers or another
Domestic Subsidiary; (b) any Foreign Subsidiary may merge with or dissolve or
liquidate into a Foreign Subsidiary; (c) any merger or consolidation that
constitutes a Permitted Acquisition; (d) any Credit Party may be converted
(including by way of merger) from a corporation to a limited liability company
or from a limited liability company to a corporation; (e) the merger of WLR Cone
Mills IP, Inc. with and into its parent company with its parent company as the
surviving entity; and (f) the merger of International Textile Holdings, Inc., a
Delaware corporation, with and into ITG so long as ITG is the surviving entity.

 

5.4     Loans and Investments. No Credit Party shall and no Credit Party shall
suffer or permit any of its Subsidiaries to (i) purchase or acquire, or make any
commitment to purchase or acquire any Stock or Stock Equivalents, or any
obligations or other securities of, or any equity or debt interest in, any
Person, including the establishment or creation of a Subsidiary, or (ii) make or
commit to make any Acquisitions, including without limitation, by way of merger
or consolidation or (iii) make or commit to make or provide any advance, loan,
extension of credit, letters of credit to secure the obligations of, or capital
contribution to or any other investment in, any Person including any Affiliate
of a Borrower or any Subsidiary of a Borrower (the items described in clauses
(i), (ii) and (iii) are referred to as “Investments”), except for:

 

(a)     Investments by (i) any Credit Party in, to or for any other Credit Party
(other than ITG), (ii) Foreign Subsidiaries in, to or for to one or more Foreign
Subsidiaries, (iii) any Credit Party in, to or for one or more Foreign
Subsidiaries and (iv) any Credit Party or any Subsidiary of any Credit Party in,
to or for any Excluded Subsidiary organized in an Eligible Country so long as,
in the case of clauses (iii) and (iv), before and after giving effect thereto
(A) no Default or Event of Default has occurred and is continuing, (B)
Availability is greater than $12,500,000 and Average Adjusted Availability is
greater than $22,500,000 and, in the case of clause (iv), no default exists
under any credit facility to which such Excluded Subsidiary is a party or to
which its assets or property are subject, and if any of the foregoing extensions
of credit described in clause (i), (ii), (iii) or (iv) above are evidenced by
notes, such notes shall be pledged and delivered to the Agent, for the benefit
of the Secured Parties, and have such terms as the Agent may reasonably require;

 

(b)     loans and advances to employees in the Ordinary Course of Business;

 

 

 
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(c)     Investments received as the non-cash portion of consideration received
in connection with transactions permitted pursuant to Sections 5.2(b) or 5.2(j);

 

(d)     Investments acquired in connection with the settlement of delinquent
Accounts in the Ordinary Course of Business or in connection with the bankruptcy
or reorganization of suppliers or customers; and

 

(e)     Investments existing on the Closing Date and set forth on Schedule 5.4
and any renewal or replacement thereof;

 

(f)     the Investment by ITG in ITG – Phong Phu Limited Company, a joint
venture organized under the laws of Vietnam (“Phong Phu”), in the form of an
unsecured subordinated loan from ITG (either directly or through one of its
Subsidiaries) to Phong Phu (the “Phong Phu JV Loan”); provided that (w) such
Investment shall be made by no later than June 24, 2011, (x) such Investment
shall not exceed $3,500,000, (y) at the time such Investment is made, no Default
or Event of Default shall have occurred and be continuing and (z) such Phong Phu
JV Loan shall be evidenced by a promissory note in form and substance
satisfactory to the Agent and delivered to the Agent in original copy together
with instruments of transfer executed in blank;

 

(g)     Investments by Narricot in AEC Purchaser in the form of a subordinated
seller note having terms and conditions that are substantially similar to those
set forth in the Narricot Letter of Intent and which subordinated seller note is
(x) reasonably satisfactory to the Agent and (y) delivered to the Agent in
original copy together with instruments of transfer executed in blank;

 

(h)     Permitted Acquisitions;

 

(i)     Investments (i) in the form of deposits, prepayments and other credits
to suppliers made in the Ordinary Course of Business consistent with the past
practices of ITG and its Subsidiaries, (ii) in the form of extensions of trade
credit in the Ordinary Course of Business and (iii) in the form of prepaid
expenses and deposits to other Persons in the Ordinary Course of Business;

 

(j)     Contingent Obligations permitted to Section 5.9;

 

(k)     (i) the endorsement of negotiable instruments held for collection in the
ordinary course of business or (ii) the making of lease, utility and other
similar deposits or prepayments, or deposits or prepayments to suppliers, in
each case in the Ordinary Course of Business;

 

(l)     to the extent constituting Investments, Rate Contracts permitted
pursuant to Section 5.9;

 

(m)     mergers and consolidations in compliance with Section 5.3; and

 

(n)     Investments pursuant to the Mexican Sale Agreement.

 

 

 
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5.5     Limitation on Indebtedness. No Credit Party shall, and no Credit Party
shall suffer or permit any of its Subsidiaries to, create, incur, assume, permit
to exist, or otherwise become or remain directly or indirectly liable with
respect to, any Indebtedness, except:

 

(a)     Indebtedness incurred pursuant to this Agreement;

 

(b)     Indebtedness consisting of Contingent Obligations and permitted pursuant
to Section 5.9;

 

(c)     Indebtedness existing on the Closing Date and set forth in Schedule 5.5
including extensions, replacements and refinancings thereof so long as the
principal amount of such Indebtedness as of the date of such extension,
replacement or refinancing is not increased, other than by the addition of any
accrued but unpaid interest, any applicable premium and/or fees relating to such
extension, replacement or refinancing;

 

(d)     Indebtedness (including Capital Leases) incurred to finance the
acquisition, construction or improvement of any fixed or capital assets,
including any Indebtedness assumed in connection with the acquisition of any
such Property or secured by a Lien on such Property before the acquisition
thereof; provided, that (i) such Indebtedness is incurred before or within 30
days after such acquisition or the completion of such construction or
improvement, (ii) any such Indebtedness shall be secured only by the assets
acquired, constructed or improved in connection with the incurrence of such
Indebtedness and (iii) with respect to Indebtedness incurred to finance the
acquisition of any fixed or capital assets, such Indebtedness shall not exceed
100% of the cost of such Property, and, in each case, any refinancing of any of
the foregoing Indebtedness; provided, further, that in the case of each of the
foregoing, the aggregate outstanding principal amount of all such Indebtedness
shall not exceed at any time $20,000,000;

 

(e)     unsecured intercompany Indebtedness permitted pursuant to subsection
5.4(a);

 

(f)     Indebtedness incurred in connection with the financing of insurance
premiums in the ordinary course of business;

 

(g)     Indebtedness arising in connection with endorsement of instruments for
deposit in the ordinary course of business;

 

(h)     (i) Subordinated Indebtedness (other than the Secured Note Indebtedness)
in an aggregate amount not to exceed the US Dollar Equivalent of $25,000,000,
(ii) the Secured Note Indebtedness and (iii) WLR Subordinated Indebtedness;

 

(i)     Indebtedness deemed to exist in connection with Rate Contracts permitted
under Section 5.9;

 

(j)     [Intentionally Omitted];

 

 

 
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(k)     unsecured Indebtedness not exceeding in the aggregate at any time
outstanding the US Dollar Equivalent of $10,000,000 incurred in connection with
extended term agreements among the Credit Parties and their cotton suppliers;

 

(l)     other unsecured Indebtedness not exceeding in the aggregate at any time
outstanding the US Dollar Equivalent of $5,000,000; and

 

(m)     Indebtedness owing to Bank of America, N.A. under the Specified
Receivables Purchase Agreement, solely to the extent the sale and purchase of
Specified Receivables pursuant to the Specified Receivables Purchase Agreement
is deemed to be a financing arrangement between the parties thereto.

 

Notwithstanding the foregoing, no Credit Party shall create, incur, assume,
permit to exist, or otherwise become or remain directly or indirectly liable
with respect to, any Indebtedness under the Banamex Facility.

 

5.6     Transactions with Affiliates. No Credit Party shall, and no Credit Party
shall suffer or permit any of its Subsidiaries to, enter into any transaction
with any Affiliate of a Borrower or of any such Subsidiary or a WLR Affiliate,
except:

 

(a)     as expressly permitted by this Agreement;

 

(b)     (i) any transaction between a Credit Party and another Credit Party and
(ii) any transaction between a Foreign Subsidiary and another Foreign
Subsidiary;

 

(c)     in the Ordinary Course of Business and pursuant to the reasonable
requirements of the business of such Credit Party or such Subsidiary upon fair
and reasonable terms no less favorable to such Credit Party or such Subsidiary
than would be obtained in a comparable arm’s length transaction with a Person
not an Affiliate of a Borrower or such Subsidiary and not a WLR Affiliate;

 

(d)     any transaction permitted pursuant to Sections 5.2, 5.3, 5.4, 5.5, 5.7
or 5.9; and

 

(e)     transactions set forth on Schedule 5.6.

 

5.7     Management Fees and Compensation. No Credit Party shall, and no Credit
Party shall permit any of its Subsidiaries to, pay any management, consulting or
similar fees to any Affiliate of any Credit Party or to any officer, director or
employee of any Credit Party or any Affiliate of any Credit Party except:

 

(a)     payment of reasonable compensation to officers and employees for actual
services rendered to the Credit Parties and their Subsidiaries in the Ordinary
Course of Business and consistent with past practices;

 

(b)     payment of reasonable directors’ fees and reimbursement of actual
out-of-pocket expenses incurred in connection with duties performed and other
reasonable actions taken in such director’s capacity as a member of any such
board of directors or any committee thereof;

 

 

 
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(c)     payment of a management fee to WLR pursuant to the Management Agreement
from and after the effective date thereof not to exceed $4,000,000 per annum
payable in equal quarterly installments unless deferred voluntarily or as a
result of a Default or an Event of Default; provided, however, that the fees
described in this clause (c) shall not be paid during any period while a Default
or Event of Default has occurred and is continuing or would arise as a result of
such payment; provided, further any fees not paid due to the existence of a
Default or Event of Default shall be deferred and may be paid when no Default or
Event of Default exists; and

 

(d)     reimbursement of reasonable out-of-pocket costs and expenses required to
be paid pursuant to the Management Agreement.

 

5.8     Use of Proceeds. No Credit Party shall, and no Credit Party shall suffer
or permit any of its Subsidiaries to, use any portion of the Loan proceeds,
directly or indirectly, to purchase or carry Margin Stock or repay or otherwise
refinance Indebtedness of any Credit Party or others incurred to purchase or
carry Margin Stock, or otherwise in any manner which is in contravention of any
Requirement of Law or in violation of this Agreement.

 

5.9     Contingent Obligations. No Credit Party shall, and no Credit Party shall
suffer or permit any of its Subsidiaries to, create, incur, assume or suffer to
exist any Contingent Obligations except in respect of the Obligations and
except:

 

(a)     endorsements for collection or deposit in the Ordinary Course of
Business;

 

(b)     commodities hedging agreements and unsecured Rate Contracts entered into
in the Ordinary Course of Business for bona fide hedging purposes and not for
speculation;

 

(c)     Contingent Obligations of the Credit Parties and their Subsidiaries
existing as of the Closing Date and listed in Schedule 5.9, including
extensions, replacements and renewals thereof which do not increase the amount
of such Contingent Obligations as of the date of such extension or renewal;

 

(d)     Contingent Obligations incurred in the Ordinary Course of Business with
respect to surety and appeal bonds, performance bonds and other similar
obligations;

 

(e)     Contingent Obligations arising under indemnity agreements to title
insurers to cause such title insurers to issue to the Agent title insurance
policies;

 

(f)     Contingent Obligations arising with respect to customary indemnification
obligations in favor of (i) sellers in connection with Acquisitions permitted
hereunder and (ii) purchasers in connection with dispositions permitted under
Sections 5.2(b) or 5.2(j);

 

 

 
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(g)     Contingent Obligations arising under Letters of Credit (provided,
however, that any Letter of Credit supporting any obligation of an Excluded
Subsidiary shall be subject to the limitations set forth in Section 5.4(a));

 

(h)     Contingent Obligations arising under guarantees made in the Ordinary
Course of Business of obligations of any Credit Party (other than ITG), which
obligations are otherwise permitted hereunder; provided that if such obligation
is subordinated to the Obligations, such guarantee shall be subordinated to the
same extent;

 

(i)     Contingent Obligations of ITG arising under the WLR Phong Phu Guaranty,
provided that such Contingent Obligations and any Indebtedness of ITG to WLR
Recovery Fund IV, LP resulting from such WLR Phong Phu Guaranty (such
Indebtedness, “WLR Phong Phu Indebtedness”) (i) shall not exceed an aggregate
principal amount of $17,250,000 during the term of this Agreement and (ii) shall
constitute Secured Note Indebtedness that is otherwise permitted pursuant to
Section 5.5(h)(ii);

 

(j)     Contingent Obligations of any Credit Party in respect of Indebtedness
otherwise permitted under Section 5.5(a), (h), (i), (k) and (l);

 

(k)     unsecured guaranties by a Credit Party of a Foreign Subsidiary’s
obligations under extended term cotton purchase agreements; provided, that the
Accounts generated from sales by such Foreign Subsidiary are owned by the
applicable Credit Party;

 

(l)     Without duplication of clause (g) above, Contingent Obligations
supporting obligations of Excluded Subsidiaries (provided however, that any such
Contingent Obligation supporting any obligation of an Excluded Subsidiary shall
be subject to the limitations set forth in Section 5.4(a)); and

 

(m)     other Contingent Obligations not exceeding the US Dollar Equivalent of
$2,500,000 in the aggregate at any time outstanding.

 

5.10     Compliance with ERISA. No ERISA Affiliate shall cause or suffer to
exist (a) any event that could result in the imposition of a Lien in excess of
the US Dollar Equivalent of $500,000 on any asset of a Credit Party or a
Subsidiary of a Credit Party with respect to any Title IV Plan or Multiemployer
Plan or (b) any other ERISA Event, that would, in the aggregate, have a Material
Adverse Effect. No Credit Party shall cause or suffer to exist any event that
could result in the imposition of a Lien with respect to any Benefit Plan.

 

5.11     Restricted Payments. No Credit Party shall, and no Credit Party shall
suffer or permit any of its Subsidiaries to, (i) declare or make any dividend
payment or other distribution of assets, properties, cash, rights, obligations
or securities on account of any Stock or Stock Equivalent, (ii) purchase, redeem
or otherwise acquire for value any Stock or Stock Equivalent now or hereafter
outstanding or (iii) make any payment or prepayment of principal of, premium, if
any, interest, fees, redemption, exchange, purchase, retirement, defeasance,
sinking fund or similar payment with respect to, Subordinated Indebtedness (the
items described in clauses (i), (ii) and (iii) above are referred to as
“Restricted Payments”); except that any Wholly-Owned Subsidiary of a Borrower
may declare and pay dividends to a Borrower or any Wholly-Owned Subsidiary of a
Borrower, and except that:

 

 

 
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(a)     ITG may declare and make dividend payments or other distributions
payable solely in its Stock or Stock Equivalents; and

 

(b)     in the event a Credit Party or Domestic Subsidiary of a Credit Party
files a consolidated income tax return with ITG, Borrowers may make
distributions to ITG to permit ITG to pay federal and state income taxes then
due and owing, franchise taxes and other similar licensing expenses incurred in
the Ordinary Course of Business.

 

(c)     [Intentionally Omitted];

 

(d)     the Credit Parties may pay as and when due and payable, regularly
scheduled payments of interest only at the non-default rate on Subordinated
Indebtedness, subject to the terms of the subordination provisions applicable
thereto; and

 

(e)     with respect to the Secured Note Indebtedness, the Credit Parties may
make Permitted Secured Note Payments.

 

5.12     Change in Business. No Credit Party shall, and no Credit Party shall
permit any of its Subsidiaries to, engage in any material line of business
substantially different from those lines of business carried on by it as of the
Closing Date, other than any line of business that is related or complimentary
to any existing line of business.

 

5.13     Amendment to Organization Documents. No Credit Party shall, and no
Credit Party shall permit any of its Subsidiaries to amend any of its
Organization Documents in any respect that is materially adverse to the Lenders.

 

5.14     Accounting Changes. No Credit Party shall, and no Credit Party shall
suffer or permit any of its Subsidiaries to, make any significant change in
accounting treatment or reporting practices, except as required by GAAP, or
change the fiscal year or method for determining fiscal quarters of any Credit
Party or of any consolidated Subsidiary of any Credit Party.

 

 

 
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5.15     Amendments to Subordinated Indebtedness and WLR Subordinated
Indebtedness. No Credit Party shall, and no Credit Party shall permit any of its
Subsidiaries directly or indirectly to, change or amend the terms of any
Subordinated Indebtedness Documents or WLR Subordinated Indebtedness Documents
except (i) in the case of the Secured Note Documents, to the extent permitted by
the Intercreditor Agreement and (ii) in the case of all other Subordinated
Indebtedness Documents and WLR Subordinated Indebtedness Documents, to the
extent permitted by the applicable Subordination Agreement.

 

5.16     No Negative Pledges.

 

(a)     No Credit Party shall, and no Credit Party shall permit any of its
Subsidiaries to, directly or indirectly, to create or otherwise cause or suffer
to exist or become effective any consensual prohibition or limitation on the
ability of any such Subsidiary to pay dividends or make any other distribution
on any of such Subsidiary’s Stock or Stock Equivalents or to pay fees, including
management fees, or make other payments and distributions to a Borrower or any
of its Subsidiaries. No Credit Party shall, and no Credit Party shall permit any
of its Subsidiaries to, directly or indirectly, enter into, assume or become
subject to any Contractual Obligation prohibiting the existence of any Lien upon
any of its assets in favor of the Agent, whether now owned or hereafter
acquired. Notwithstanding the foregoing two sentences, the following
encumbrances or restrictions shall be permitted: (i) encumbrances or
restrictions existing under or by reason of (A) this Agreement and the other
Loan Documents; (B) Indebtedness permitted by Section 5.5(d); (C) customary
provisions restricting subletting or assignment of any lease governing a
leasehold interest; (D) customary provisions restricting assignment of any
agreement entered into by a Subsidiary of a Borrower in the Ordinary Course of
Business; (E) any holder of a Permitted Lien restricting the transfer of the
property subject thereto; (F) customary restrictions and conditions contained in
any agreement relating to the sale of any property permitted under Section 5.2
pending the consummation of such sale; (G) in the case of a Joint Venture,
restrictions in such person’s Organization Documents or pursuant to any joint
venture agreement or stockholders agreements solely to the extent of the Stock
or Stock Equivalents of or property held in the subject Joint Venture and (H)
any agreement in effect on the Closing Date as set forth on Schedule 5.16; or
(ii) any encumbrances or restrictions imposed by any amendments or refinancings
that are otherwise permitted by the Loan Documents of the agreements referred to
in clause (i) above; provided that such amendments or refinancings are no more
restrictive with respect to such encumbrances and restrictions than those prior
to such amendment or refinancing.

 

(b)     No Borrower (other than ITG) shall issue any Stock or Stock Equivalents
(i) if such issuance would result in an Event of Default under subsection 7.1(m)
and (ii) unless such Stock and Stock Equivalents are pledged to the Agent, for
the benefit of the Secured Parties, as security for the Obligations, on
substantially the same terms and conditions as the Stock and Stock Equivalents
of the Borrowers pledged to the Agent as of the Closing Date.

 

 

 
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5.17     OFAC. No Credit Party shall, and no Credit Party shall permit any of
its Subsidiaries to (i) become a person whose property or interests in property
are blocked or subject to blocking pursuant to Section 1 of Executive Order
13224 of September 23, 2001 Blocking Property and Prohibiting Transactions With
Persons Who Commit, Threaten to Commit or Support Terrorism (66 Fed. Reg.
49079(2001)), (ii) engage in any dealings or transactions prohibited by Section
2 of such executive order, or be otherwise associated with any such person in
any manner violative of Section 2, or (iii) otherwise become a person on the
list of Specially Designated Nationals and Blocked Persons or subject to the
limitations or prohibitions under any other OFAC regulation or executive order.

 

5.18     Press Release and Related Matters. No Credit Party shall, and no Credit
Party shall permit any of its Affiliates to, issue any press release or other
public disclosure using the name, logo or otherwise referring to GE Capital
except (i) for filings required to be made with any Governmental Authority,
including, without limitation, the Securities and Exchange Commission, in
respect of which no consent or consultation with GE Capital shall be required,
or (ii) to the extent any Credit Party is otherwise required to issue any such
release or make any such disclosure under applicable Requirements of Law, only
after using commercially reasonable efforts to consult with GE Capital prior
thereto.

 

5.19     Sale-Leasebacks; Synthetic Leases; Factoring; etc. No Credit Party
shall, and no Credit Party shall permit any of its Subsidiaries to, engage in a
sale leaseback, synthetic lease, factoring, declaring in trust, discounting or
similar transaction involving any of its assets, other than the transactions
contemplated by the Mexican Sale Agreement.

 

5.20     Hazardous Materials. No Credit Party shall, and no Credit Party shall
permit any of its Subsidiaries to, cause or suffer to exist any Release at, to
or from any real Property owned, leased, subleased or otherwise operated or
occupied by any Credit Party or any Subsidiary of any Credit Party that would
violate any Environmental Law, form the basis for any Material Environmental
Liabilities or otherwise adversely affect the value or marketability of any real
property (whether or not owned by any Credit Party or any Subsidiary of any
Credit Party), other than such violations, Environmental Liabilities and effects
that would not, in the aggregate, have a Material Adverse Effect.

 

5.21     Food Security Act.

 

(a)     No Borrower shall purchase any cotton or other goods that would
constitute farm products if the seller were a Person engaged in farming
operations, unless such Borrower acquires good title to such goods free and
clear of all Liens (except Permitted Liens) and, in particular, free from any
statutory or other grower’s or producer’s Liens in favor of any secured party
who has taken steps under the Food Security Act or any other federal or state
statute to preserve its Lien rights upon such goods notwithstanding the passage
of title directly or indirectly to such Borrower.

 

 

 
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(b)     Each Borrower shall in all respects comply with all applicable Food
Security Act Notices during their periods of effectiveness under the Food
Security Act, including directions to make payments to the sellers by issuing
payment instruments directly to the sellers’ secured party or jointly payable to
the seller and the sellers’ secured party, as specified in the Food Security Act
Notice, so as to terminate or release the security interest in cotton or other
farmed products maintained under the Food Security Act. Each Borrower shall
notify the Agent in writing within five (5) Business Days after receipt by such
Borrower any notice received pursuant to the applicable provisions of the Food
Security Act or pursuant to the UCC or any applicable local laws of any Lien
filed with respect to cotton or any other farm products that may be purchased by
such Borrower or intended for resale to such Borrower (a “Food Security Act
Notice”).

 

(c)     If at any time a Borrower purchases cotton or other farm products from a
Person engaged in farming operations or an agent for such Person in a
jurisdiction which has implemented the provisions of the Food Security Act with
respect to the creation of a “central filing system,” such Borrower shall
promptly register with the Secretary of State (or equivalent official) of each
such jurisdiction, pursuant to the registration requirements of the Food
Security Act and notify the Agent in writing of such registration with the
central filing system and, if requested by the Agent, provide the Agent with
copies of any Food Security Act Notices, master list, supplements thereto or
otherwise materials then or thereafter received from the Secretary of State (or
other official) of the central filing system by such Borrower.

 

ARTICLE VI - FINANCIAL COVENANTS

 

6.1     Fixed Charge Coverage Ratio. Each Credit Party covenants and agrees
that, if at any time Availability is less than $17,500,000 (and continuing until
the first date thereafter (if any) that Availability is at least $17,500,000),
the Fixed Charge Coverage Ratio for the twelve month period ending as of the
last day of the immediately preceding fiscal month during any period set forth
below, shall in no event be less than the ratio set forth below for such period:

 

Date

Minimum Ratio

Closing Date through fiscal month ending September 30, 2011

1.00:1.00

October 1, 2011 through November 30, 2011

1.05:1.00

December 1, 2011 through March 31, 2012

0.85:1.00

April 1, 2012 through June 30, 2012

0.95:1.00

July 1, 2012 and thereafter

1.10:1.00

 

 

 
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ARTICLE VII - EVENTS OF DEFAULT

 

7.1     Event of Default. Any of the following shall constitute an “Event of
Default”:

 

(a)     Non-Payment. Any Credit Party fails (i) to pay when and as required to
be paid herein, any amount of principal of any Loan, including after maturity of
the Loans, or to pay any L/C Reimbursement Obligation or (ii) to pay within
three (3) Business Days after the same shall become due, interest on any Loan,
any fee or any other amount payable hereunder or pursuant to any other Loan
Document; or

 

(b)     Representation or Warranty. Any representation, warranty or
certification by or on behalf of any Credit Party or any of its Subsidiaries
made or deemed made herein, in any other Loan Document, or which is contained in
any certificate, document or financial or other statement by any such Person, or
their respective Responsible Officers, furnished at any time under this
Agreement, or in or under any other Loan Document, shall prove to have been
incorrect in any material respect on or as of the date made or deemed made; or

 

(c)     Specific Defaults. (i) Any Credit Party fails to perform or observe any
term, covenant or agreement contained in any of Sections 4.1, 4.2(b), 4.2(d),
4.2(g), 4.3(a), 4.6, 4.9, Article V or Article VI hereof, (ii) any Credit Party
fails to perform or observe any term, covenant or agreement contained in Section
4.2(h) and, in the case of this subclause (ii), such failure to perform or
observe shall continue unremedied for a period of three (3) Business Days or
(iii) any Credit Party fails to perform or observe any term, covenant or
agreement contained in Section 4.14 and, in the case of this subclause (iii),
such failure to perform or observe shall continue unremedied for a period of
seven (7) days; or

 

(d)     Other Defaults. Any Credit Party or Subsidiary of any Credit Party fails
to perform or observe any other term, covenant or agreement contained in this
Agreement or any other Loan Document, and such default shall continue unremedied
for a period of thirty (30) days after the earlier to occur of (i) the date upon
which a Responsible Officer of any Credit Party becomes aware of such default
and (ii) the date upon which written notice thereof is given to the Borrower
Representative by the Agent or the Majority Lenders; or

 

(e)     Cross-Default. Any Credit Party, any Subsidiary of any Credit Party (i)
fails to make any payment in respect of any Indebtedness (other than the
Obligations) having an aggregate principal amount (including undrawn committed
or available amounts and including amounts owing to all creditors under any
combined or syndicated credit arrangement) of more than the US Dollar Equivalent
of $3,500,000 when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) and such failure continues after the
applicable grace or notice period, if any, specified in the document relating
thereto on the date of such failure; or (ii) fails to perform or observe any
other condition or covenant, or any other event shall occur or condition exist,
under any agreement or instrument relating to any such Indebtedness, in either
case of clause (i) or clause (ii) above, if the effect of such failure, event or
condition is to cause, or to permit the holder or holders of such Indebtedness
or beneficiary or beneficiaries of such Indebtedness (or a trustee or agent on
behalf of such holder or holders or beneficiary or beneficiaries) to cause such
Indebtedness to be declared to be due and payable prior to its stated maturity
(without regard to any subordination terms with respect thereto); provided that,
with respect to any default under the Secured Note Documents resulting from any
action or omission by any Excluded Subsidiary, such default shall result in an
Event of Default under this Agreement only to the extent that (x) the Secured
Note Indebtedness is accelerated by the holders of such Indebtedness, or (y) the
holders of the Secured Note Indebtedness deliver a Subordinated Debt Default
Notice (as defined in the Intercreditor Agreement) to the Agent that triggers
the commencement of the applicable period described in Section 2.4 of the
Intercreditor Agreement; or

 

 

 
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(f)     Insolvency; Voluntary Proceedings. A Borrower, individually, ceases or
fails, or the Credit Parties and their Subsidiaries on a consolidated basis,
cease or fail, to be Solvent, or any Credit Party or any Subsidiary of any
Credit Party, in either case, with assets in excess of the US Dollars Equivalent
of $1,000,000: (i) generally fails to pay, or admits in writing its inability to
pay, its debts as they become due, subject to applicable grace periods, if any,
whether at stated maturity or otherwise; (ii) voluntarily ceases to conduct its
business in the ordinary course; (iii) commences any Insolvency Proceeding with
respect to itself; or (iv) takes any action to effectuate or authorize any of
the foregoing; or

 

(g)     Involuntary Proceedings. (i) Any involuntary Insolvency Proceeding is
commenced or filed against any Credit Party or any Subsidiary of any Credit
Party, in either case, with assets in excess of the US Dollar Equivalent of
$1,000,000, or any writ, judgment, warrant of attachment, execution or similar
process, is issued or levied against a substantial part of any such Person’s
Properties, and any such proceeding or petition shall not be dismissed, or such
writ, judgment, warrant of attachment, execution or similar process shall not be
released, vacated or fully bonded, in any case, within sixty (60) days after
such commencement, filing or levy; (ii) any Credit Party or any Subsidiary of
any Credit Party, in either case, with assets in excess of the US Dollar
Equivalent of $1,000,000 admits the material allegations of a petition against
it in any such Insolvency Proceeding, or an order for relief (or similar order
under non-US law) is ordered in any Insolvency Proceeding; or (iii) any Credit
Party or any Subsidiary of any Credit Party, in either case, with assets in
excess of the US Dollar Equivalent $1,000,000 acquiesces in the appointment of a
receiver, trustee, custodian, conservator, liquidator, mortgagee in possession
(or agent therefor), or other similar Person for itself or a substantial portion
of its Property or business; or

 

(h)     Monetary Judgments. One or more judgments, non-interlocutory orders,
decrees or arbitration awards shall be entered against any one or more of the
Credit Parties or any of their respective Subsidiaries involving in the
aggregate a liability (to the extent not covered by independent third-party
insurance) as to any single or related series of transactions, incidents or
conditions, of the US Dollar Equivalent of $3,500,000 or more, and the same
shall remain unsatisfied, unvacated and unstayed pending appeal for a period of
thirty (30) days after the entry thereof; or

 

 

 
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(i)     [Intentionally Omitted]; or

 

(j)     [Intentionally Omitted]; or

 

(k)     Non-Monetary Judgments. One or more non-monetary judgments, orders or
decrees shall be rendered against any one or more of the Credit Parties or any
of their respective Subsidiaries which has or would reasonably be expected to
have, either individually or in the aggregate, a Material Adverse Effect, and
there shall be any period of 30 consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or

 

(l)     Collateral. Any material provision of any Loan Document shall for any
reason cease to be valid and binding on or enforceable against any Credit Party
or any Subsidiary of any Credit Party party thereto or any Credit Party or any
Subsidiary of any Credit Party shall so state in writing or bring an action to
limit its obligations or liabilities thereunder; or any Collateral Document
shall for any reason (other than pursuant to the terms thereof) cease to create
a valid security interest in the Collateral purported to be covered thereby or
such security interest shall for any reason (other than the failure of the Agent
to take any action within its control) cease to be a perfected and first
priority security interest subject only to Permitted Liens; or

 

(m)     Ownership. If (i) at any time after the Closing Date, any Person other
than a Permitted Investor, owns beneficially, directly or indirectly, more than
51% of the issued and outstanding voting Stock of ITG or, in any event, Stock
representing voting control of the Borrowers; or (ii) ITG ceases to own either
directly or indirectly one hundred percent (100%) of the issued and outstanding
Stock and Stock Equivalents of the Borrowers, in each instance in clauses (i)
and (ii), free and clear of all Liens, rights, options, warrants or other
similar agreements or understandings, other than Liens in favor of the Agent,
for the benefit of the Secured Parties or (iii) a “Change of Control” as defined
in the Secured Note Documents shall occur; or

 

(n)     Support Agreement. (i) WLR Recovery Fund IV, L.P. fails at any time to
comply with the terms of the Support Agreement, (ii) from and after the
occurrence of a Specified WLR/RBS LC II Event, RBS Citizens, N.A. (or any other
issuer of a replacement WLR/RBS Letter of Credit II) fails to make any payment
requested by Agent under and in accordance with the WLR/RBS Letter of Credit II
or (iii) the WLR/RBS Letter of Credit II is reduced or terminated for any reason
other than in accordance with Section 1 of the Support Agreement.

 

7.2     Remedies. Upon the occurrence and during the continuance of any Event of
Default, the Agent may, and shall at the request of the Majority Lenders:

 

(a)     declare all or any portion of the Commitment of each Lender to make
Loans or of the L/C Issuer to issue Letters of Credit to be terminated,
whereupon such Commitments shall forthwith be terminated;

 

 

 
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(b)     declare all or any portion of the unpaid principal amount of all
outstanding Loans, all interest accrued and unpaid thereon, and all other
amounts owing or payable hereunder or under any other Loan Document to be
immediately due and payable; without presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived by each Credit
Party; and/or

 

(c)     exercise on behalf of itself and the Lenders all rights and remedies
available to it and the Lenders under the Loan Documents or applicable law;

 

provided, however, that upon the occurrence of any event specified in
subsections 7.1(f) or 7.1(g) above (in the case of clause (i) of subsection
7.1(g) upon the expiration of the sixty (60) day period mentioned therein, the
obligation of each Lender to make Loans and the obligation of the L/C Issuer to
issue Letters of Credit shall automatically terminate and the unpaid principal
amount of all outstanding Loans and all interest and other amounts as aforesaid
shall automatically become due and payable without further act of the Agent, any
Lender or the L/C Issuer. Notwithstanding anything in any Loan Document to the
contrary, including, without limitation, Section 7.2 of the Credit Agreement,
from and after the Tenth Amendment Effective Date, the Agent, on behalf of
itself and the Lenders, shall be entitled to full cash dominion (whether by way
of delivery of Activation Notices or otherwise) over any depository, securities
or commodities accounts of the Credit Parties that are subject to Control
Agreements notwithstanding the occurrence or non-occurrence of a Default or an
Event of Default.

 

7.3     Rights Not Exclusive. The rights provided for in this Agreement and the
other Loan Documents are cumulative and are not exclusive of any other rights,
powers, privileges or remedies provided by law or in equity, or under any other
instrument, document or agreement now existing or hereafter arising.

 

7.4     Cash Collateral for Letters of Credit. If an Event of Default has
occurred and is continuing, the Agent may (and at the request of Majority
Lenders, shall), or if this Agreement (or the Revolving Loan Commitment) is
terminated for any reason, the Agent shall, demand (which demand shall be deemed
to have been delivered automatically upon any acceleration of the Loans and
other obligations hereunder pursuant to Section 7.2 hereof), and the Borrowers
shall thereupon deliver to the Agent, to be held for the benefit of the L/C
Issuer, the Agent and the Lenders entitled thereto, an amount of cash equal to
105% of the amount of Letter of Credit Obligations as additional collateral
security for Obligations in respect of any outstanding Letter of Credit. The
Agent may at any time apply any or all of such cash and cash collateral to the
payment of any or all of the Credit Parties’ Obligations in respect of any
Letters of Credit. Pending such application, the Agent may (but shall not be
obligated to) invest the same in an interest bearing account in the Agent’s
name, for the benefit of the L/C Issuers, the Agent and the Lenders entitled
thereto, under which deposits are available for immediate withdrawal, at such
bank or financial institution as the L/C Issuer and the Agent may, in their
discretion, select.

 

 

 
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ARTICLE VIII - THE AGENT

 

8.1     Appointment and Duties.

 

(a)     Appointment of Agent. Each Lender and each L/C Issuer hereby appoints GE
Capital (together with any successor Agent pursuant to Section 8.9) as the Agent
hereunder and authorizes the Agent to (i) execute and deliver the Loan Documents
and accept delivery thereof on its behalf from any Credit Party, (ii) take such
action on its behalf and to exercise all rights, powers and remedies and perform
the duties as are expressly delegated to the Agent under such Loan Documents and
(iii) exercise such powers as are reasonably incidental thereto.

 

(b)     Duties as Collateral and Disbursing Agent. Without limiting the
generality of clause (a) above, the Agent shall have the sole and exclusive
right and authority (to the exclusion of the Lenders and L/C Issuers), and is
hereby authorized, to (i) act as the disbursing and collecting agent for the
Lenders and the L/C Issuers with respect to all payments and collections arising
in connection with the Loan Documents (including in any proceeding described in
subsection 7.1(g) or any other bankruptcy, insolvency or similar proceeding),
and each Person making any payment in connection with any Loan Document to any
Secured Party is hereby authorized to make such payment to the Agent, (ii) file
and prove claims and file other documents necessary or desirable to allow the
claims of the Secured Parties with respect to any Obligation in any proceeding
described in subsection 7.1(g) or any other bankruptcy, insolvency or similar
proceeding (but not to vote, consent or otherwise act on behalf of such Person),
(iii) act as collateral agent for each Secured Party for purposes of the
perfection of all Liens created by such agreements and all other purposes stated
therein, (iv) manage, supervise and otherwise deal with the Collateral, (v) take
such other action as is necessary or desirable to maintain the perfection and
priority of the Liens created or purported to be created by the Loan Documents,
(vi) except as may be otherwise specified in any Loan Document, exercise all
remedies given to the Agent and the other Secured Parties with respect to the
Collateral, whether under the Loan Documents, applicable Requirements of Law or
otherwise and (vii) execute any amendment, consent or waiver under the Loan
Documents on behalf of any Lender that has consented in writing to such
amendment, consent or waiver; provided, however, that the Agent hereby appoints,
authorizes and directs each Lender and L/C Issuer to act as collateral sub-agent
for the Agent, the Lenders and the L/C Issuers for purposes of the perfection of
all Liens with respect to the Collateral, including any deposit account
maintained by a Credit Party with, and cash and Cash Equivalents held by, such
Lender or L/C Issuer, and may further authorize and direct the Lenders and the
L/C Issuers to take further actions as collateral sub-agents for purposes of
enforcing such Liens or otherwise to transfer the Collateral subject thereto to
the Agent, and each Lender and L/C Issuer hereby agrees to take such further
actions to the extent, and only to the extent, so authorized and directed.

 

(c)     Limited Duties. Under the Loan Documents, each Collateral Agent and the
Agent (i) is acting solely on behalf of the Lenders and the L/C Issuers (except
to the limited extent provided in subsection 1.4(b) with respect to the
Register), with duties that are entirely administrative in nature,
notwithstanding the use of the defined term “Agent”, the terms “agent”, “Agent”,
“collateral agent”, “Collateral Agent” and similar terms in any Loan Document to
refer to the Agent, which terms are used for title purposes only, (ii) is not
assuming any obligation under any Loan Document other than as expressly set
forth therein or any role as agent, fiduciary or trustee of or for any Lender,
L/C Issuer or any other Person and (iii) shall have no implied functions,
responsibilities, duties, obligations or other liabilities under any Loan
Document, and each Lender and L/C Issuer hereby waives and agrees not to assert
any claim against the Agent based on the roles, duties and legal relationships
expressly disclaimed in clauses (i) through (iii) above. The title of
Documentation Agent is purely administrative in nature. The Documentation Agent
named on the cover of this Agreement shall have no duties or liabilities
hereunder other than those duties and liabilities applicable to any Lender.

 

 

 
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(d)     Collateral Agents. Notwithstanding anything contained in this Article
VIII or any other Loan Document to the contrary, no Collateral Agent shall have
any right, power, obligation, liability, responsibility or duty under this
Agreement or any other Loan Document other than those applicable to all Lenders
as such or as expressly set forth below in this Section 8.1(d). All
determinations under this Agreement and the other Loan Documents (including
modifications to such Loan Documents) related, directly or indirectly, to the
Collateral, borrowing base eligibility standards or reserves, intercreditor
arrangements, collateral information rights, access rights, appraisal rights or
audit rights  (including, for the avoidance of doubt, any such determinations
which are assigned to the Agent pursuant to this Agreement and other Loan
Documents) shall be made by the Collateral Agents as set forth in this Section
8.1(d) (hereinafter collectively referred to as a “Collateral Matter”). If a
Collateral Agent makes any proposal with respect to a Collateral Matter
(including without limitation, proposes an adjustment or revision or
interpretation of borrowing base eligibility standards or reserves), the other
Collateral Agent shall respond to such proposal within three (3) Business Days.
In the event that the Collateral Agents cannot agree on a determination with
respect to a Collateral Matter, the determination shall be made by the
individual Collateral Agent either asserting the more conservative credit
judgment or declining to permit the requested action for which consent is being
sought by the Borrowers, as applicable. Notwithstanding the foregoing, the
records of Agent shall control with respect to all matters relating to the
Loans, the Letters of Credit and the Collateral.

 

(e)     Intercreditor Agreement. EACH LENDER AND EACH OTHER PERSON PARTY HERETO
FROM TIME TO TIME (OTHER THAN THE CREDIT PARTIES) HEREBY (A) ACKNOWLEDGES THAT
IT HAS RECEIVED A COPY OF THE INTERCREDITOR AGREEMENT, (B) CONSENTS TO THE
PROVISIONS OF THE INTERCREDITOR AGREEMENT, (C) AGREES THAT IT WILL BE BOUND BY
AND WILL TAKE NO ACTIONS CONTRARY TO THE PROVISIONS OF THE INTERCREDITOR
AGREEMENT AND (D) AUTHORIZES AND INSTRUCTS THE AGENT ON ITS BEHALF TO ENTER INTO
THE INTERCREDITOR AGREEMENT AS FIRST LIEN AGENT (AS DEFINED THEREIN) AND ON
BEHALF OF SUCH LENDER.

 

 

 
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8.2     Binding Effect. Each Lender and each L/C Issuer agrees that (i) any
action taken by the Agent, the Collateral Agents or the Majority Lenders (or, if
expressly required hereby, a greater proportion of the Lenders) in accordance
with the provisions of the Loan Documents, (ii) any action taken by the Agent or
Collateral Agents in reliance upon the instructions of the Majority Lenders (or,
where so required, such greater proportion) and (iii) the exercise by the Agent,
the Collateral Agents or the Majority Lenders (or, where so required, such
greater proportion) of the powers set forth herein or therein, together with
such other powers as are reasonably incidental thereto, shall be authorized and
binding upon all of the Secured Parties.

 

8.3     Use of Discretion.

 

(a)     No Action without Instructions. Neither the Agent nor any Collateral
Agent shall be required to exercise any discretion or take, or to omit to take,
any action, including with respect to enforcement or collection, except any
action it is required to take or omit to take (i) under any Loan Document or
(ii) pursuant to instructions from the Majority Lenders (or, where expressly
required by the terms of this Agreement, a greater proportion of the Lenders).

 

(b)     Right Not to Follow Certain Instructions. Notwithstanding clause (a)
above, neither the Agent nor any Collateral Agent shall be required to take, or
to omit to take, any action (i) unless, upon demand, the Agent or such
Collateral Agent receives an indemnification satisfactory to it from the Lenders
(or, to the extent applicable and acceptable to the Agent or Collateral Agents,
as applicable, any other Person) against all Liabilities that, by reason of such
action or omission, may be imposed on, incurred by or asserted against the
Agent, the Collateral Agent or any Related Person thereof or (ii) that is, in
the opinion of the Agent, the Collateral Agent or its or their counsel, contrary
to any Loan Document or applicable Requirement of Law.

 

8.4     Delegation of Rights and Duties. Each of the Agent and the Collateral
Agents may, upon any term or condition it specifies, delegate or exercise any of
its rights, powers and remedies under, and delegate or perform any of its duties
or any other action with respect to, any Loan Document by or through any
trustee, co-agent, employee, attorney-in-fact and any other Person (including
any Secured Party). Any such Person shall benefit from this Article VIII to the
extent provided by the Agent.

 

8.5     Reliance and Liability.

 

(a)     Each of the Agent and the Collateral Agents may, without incurring any
liability hereunder, (i) treat the payee of any Note as its holder until such
Note has been assigned in accordance with Section 9.9, (ii) rely on the Register
to the extent set forth in Section 1.4, (iii) consult with any of its Related
Persons and, whether or not selected by it, any other advisors, accountants and
other experts (including advisors to, and accountants and experts engaged by,
any Credit Party) and (iv) rely and act upon any document and information
(including those transmitted by Electronic Transmission) and any telephone
message or conversation, in each case believed by it to be genuine and
transmitted, signed or otherwise authenticated by the appropriate parties.

 

 

 
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(b)     None of the Agent, any Collateral Agent and its or their Related Persons
shall be liable for any action taken or omitted to be taken by any of them under
or in connection with any Loan Document, and each Lender, L/C Issuer, ITG, each
Borrower and each other Credit Party hereby waive and shall not assert (and each
of ITG and the Borrowers shall cause each other Credit Party to waive and agree
not to assert) any right, claim or cause of action based thereon, except to the
extent of liabilities resulting from the gross negligence or willful misconduct
of the Agent or, as the case may be, such Related Person (each as determined in
a final, non-appealable judgment by a court of competent jurisdiction) in
connection with the duties expressly set forth herein. Without limiting the
foregoing, neither the Agent nor any Collateral Agent:

 

(i)     shall be responsible or otherwise incur liability for any action or
omission taken in reliance upon the instructions of the Majority Lenders or for
the actions or omissions of any of its Related Persons selected with reasonable
care (other than employees, officers and directors of the Agent or Collateral
Agents, when acting on behalf of such agent);

 

(ii)     shall be responsible to any Lender, L/C Issuer or other Person for the
due execution, legality, validity, enforceability, effectiveness, genuineness,
sufficiency or value of, or the attachment, perfection or priority of any Lien
created or purported to be created under or in connection with, any Loan
Document;

 

(iii)     makes any warranty or representation, and shall be responsible, to any
Lender, L/C Issuer or other Person for any statement, document, information,
representation or warranty made or furnished by or on behalf of any Credit Party
or any Related Person of any Credit Party in connection with any Loan Document
or any transaction contemplated therein or any other document or information
with respect to any Credit Party, whether or not transmitted or (except for
documents expressly required under any Loan Document to be transmitted to the
Lenders) omitted to be transmitted by the Agent or Collateral Agents, as
applicable, including as to completeness, accuracy, scope or adequacy thereof,
or for the scope, nature or results of any due diligence performed by the Agent
in connection with the Loan Documents; and

 

(iv)     shall have any duty to ascertain or to inquire as to the performance or
observance of any provision of any Loan Document, whether any condition set
forth in any Loan Document is satisfied or waived, as to the financial condition
of any Credit Party or as to the existence or continuation or possible
occurrence or continuation of any Default or Event of Default and shall be
deemed to have notice or knowledge of such occurrence or continuation unless it
has received a notice from the Borrower Representative, any Lender or L/C Issuer
describing such Default or Event of Default clearly labeled “notice of default”
(in which case the Agent or Collateral Agent, as applicable, shall promptly give
notice of such receipt to all Lenders);

 

 

 
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and, for each of the items set forth in clauses (i) through (iv) above, each
Lender, L/C Issuer, ITG and each Borrower hereby waives and agrees not to assert
(and each of ITG and each Borrower shall cause each other Credit Party to waive
and agree not to assert) any right, claim or cause of action it might have
against the Agent or any Collateral Agent based thereon.

 

8.6     Agent Individually. Each of the Agent, the Collateral Agents and its or
their Affiliates may make loans and other extensions of credit to, acquire Stock
and Stock Equivalents of, engage in any kind of business with, any Credit Party
or Affiliate thereof as though it were not acting as the Agent or Collateral
Agent, as applicable, and may receive separate fees and other payments therefor.
To the extent the Agent, the Collateral Agents or any of its or their Affiliates
makes any Loan or otherwise becomes a Lender hereunder, it shall have and may
exercise the same rights and powers hereunder and shall be subject to the same
obligations and liabilities as any other Lender and the terms “Lender”,
“Majority Revolving Lender”, “Majority Lender”, “Supermajority Revolving
Lender”, “Revolving Lender” and any similar terms shall, except where otherwise
expressly provided in any Loan Document, include, without limitation, the Agent,
the Collateral Agents or such Affiliate, as the case may be, in its individual
capacity as Lender, Revolving Lender or as one of the Majority Lenders, Majority
Revolving Lenders or Supermajority Revolving Lenders, respectively.

 

8.7     Lender Credit Decision. Each Lender and each L/C Issuer acknowledges
that it shall, independently and without reliance upon the Agent, the Collateral
Agents, any Lender or L/C Issuer or any of their Related Persons or upon any
document (including any offering and disclosure materials in connection with the
syndication of the Loans) solely or in part because such document was
transmitted by the Agent or any of its Related Persons, conduct its own
independent investigation of the financial condition and affairs of each Credit
Party and make and continue to make its own credit decisions in connection with
entering into, and taking or not taking any action under, any Loan Document or
with respect to any transaction contemplated in any Loan Document, in each case
based on such documents and information as it shall deem appropriate. Except for
documents expressly required by any Loan Document to be transmitted by the Agent
or Collateral Agents to the Lenders or L/C Issuers, the Agent shall not have any
duty or responsibility to provide any Lender or L/C Issuer with any credit or
other information concerning the business, prospects, operations, property,
financial and other condition or creditworthiness of any Credit Party or any
Affiliate of any Credit Party that may come in to the possession of the Agent,
the Collateral Agents or any of its or their Related Persons.

 

8.8     Expenses; Indemnities.

 

(a)     Each Lender agrees to reimburse the Agent, the Collateral Agents and
each of its or their Related Persons (to the extent not reimbursed by any Credit
Party) promptly upon demand, severably and ratably, of any costs and expenses
(including fees, charges and disbursements of financial, legal and other
advisors and Other Taxes (as defined in Section 10.1(c)) paid in the name of, or
on behalf of, any Credit Party) that may be incurred by the Agent or any of its
Related Persons in connection with the preparation, execution, delivery,
administration, modification, consent, waiver or enforcement (whether through
negotiations, through any work-out, bankruptcy, restructuring or other legal or
other proceeding or otherwise) of, or legal advice in respect of its rights or
responsibilities under, any Loan Document.

 

 

 
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(b)     Each Lender further agrees to indemnify the Agent, the Collateral Agents
and each of its or their Related Persons (to the extent not reimbursed by any
Credit Party), severally and ratably, from and against Liabilities (including
taxes, interests and penalties imposed for not properly withholding or backup
withholding on payments made to or for the account of any Lender) that may be
imposed on, incurred by or asserted against, the Agent, the Collateral Agents or
any of its or their Related Persons in any matter relating to or arising out of,
in connection with or as a result of, any Loan Document, any Related Document or
any other act, event or transaction related, contemplated in or attendant to any
such document, or, in each case, any action taken or omitted to be taken by the
Agent, the Collateral Agents or any of its or their Related Persons under or
with respect to any of the foregoing; provided, however, that no Lender shall be
liable to the Agent, the Collateral Agents or any of its or their Related
Persons to the extent such liability has resulted primarily from the gross
negligence or willful misconduct of the Agent or the Collateral Agents or, as
the case may be, such Related Person, as determined by a court of competent
jurisdiction in a final non-appealable judgment or order; and provided further,
a Related Person shall be indemnified only to the extent any of the foregoing
relates to or arises from the Related Person acting for Agent (in its capacity
as Agent) or Collateral Agent (in its capacity as Collateral Agent).

 

8.9     Resignation of Agent, Collateral Agent or L/C Issuer.

 

(a)     Each of the Agent and each Collateral Agent (i) may resign at any time
by delivering notice of such resignation to the Lenders and the Borrower
Representative, effective on the date set forth in such notice or, if no such
date is set forth therein, upon the date such notice shall be effective and (ii)
shall automatically resign, without any further action required by any Person,
on the Elevation Date (as defined in the WLR Last-Out Participation Agreement)
pursuant to Section 5.7 of the WLR Last-Out Participation Agreement.

 

(b)     Effective immediately upon its resignation, (i) the retiring agent shall
be discharged from its duties and obligations under the Loan Documents, (ii) the
Lenders shall assume and perform all of the duties of such agent until a
successor Agent or Collateral Agents, as applicable, shall have accepted a valid
appointment hereunder, (iii) the retiring agent and its Related Persons shall no
longer have the benefit of any provision of any Loan Document other than with
respect to any actions taken or omitted to be taken while such retiring agent
was, or because such agent had been, validly acting as the Agent or Collateral
Agents, as applicable, under the Loan Documents and (iv) subject to its rights
under Section 8.3, the retiring agent shall take such action as may be
reasonably necessary to assign to the successor agent its rights as the Agent or
Collateral Agents, as applicable, under the Loan Documents. Effective
immediately upon its acceptance of a valid appointment as the Agent or
Collateral Agents, as applicable, a successor agent shall succeed to, and become
vested with, all the rights, powers, privileges and duties of the retiring agent
under the Loan Documents.

 

 

 
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(c)     So long as at least one L/C Issuer remains, any L/C Issuer may resign at
any time by delivering notice of such resignation to the Agent, effective on the
date set forth in such notice or, if no such date is set forth therein, on the
date such notice shall be effective. Upon such resignation, the L/C Issuer shall
remain an L/C Issuer and shall retain its rights and obligations in its capacity
as such (other than any obligation to Issue Letters of Credit but including the
right to receive fees or to have Lenders participate in any L/C Reimbursement
Obligation thereof) with respect to Letters of Credit issued by such L/C Issuer
prior to the date of such resignation and shall otherwise be discharged from all
other duties and obligations under the Loan Documents.

 

8.10     Release of Collateral or Guarantors. Each Lender and L/C Issuer hereby
consents to the release and hereby directs the Agent and Collateral Agents to
release (or, in the case of clause (b)(ii) below, release or subordinate) the
following:

 

(a)     any Subsidiary of a Borrower from its guaranty of any Obligation if all
of the Stock and Stock Equivalents of such Subsidiary owned by any Credit Party
are sold or transferred in a transaction permitted under the Loan Documents
(including pursuant to a waiver or consent), to the extent that, after giving
effect to such transaction, such Subsidiary would not be required to guaranty
any Obligations pursuant to Section 4.13; and

 

(b)     any Lien held by the Agent or any Collateral Agent for the benefit of
the Secured Parties against (i) any Collateral that is sold, transferred,
conveyed or otherwise disposed of by a Credit Party in a transaction permitted
by the Loan Documents (including pursuant to a valid waiver or consent), to the
extent all Liens required to be granted in such Collateral pursuant to Section
4.13 after giving effect to such transaction have been granted, (ii) any
property subject to a Lien permitted hereunder in reliance upon subsection
5.1(h) or 5.1(i) and (iii) all of the Collateral and all Credit Parties, upon
(A) termination of the Revolving Loan Commitments, (B) payment and satisfaction
in full of all Loans, all L/C Reimbursement Obligations and all other
Obligations under the Loan Documents and all Obligations arising under Secured
Rate Contracts, that the Agent or any Collateral Agent has been notified in
writing are then due and payable, (C) deposit of cash collateral with respect to
all contingent Obligations (or, in the case of any Letter of Credit Obligation,
receipt by the Agent or any Collateral Agent of a back-up letter of credit) in
amounts and on terms and conditions and with parties satisfactory to the Agent
or such Collateral Agent, as applicable, and each Indemnitee that is, or may be,
owed such Obligations and (D) to the extent requested by the Agent or any
Collateral Agent receipt by the Agent or such Collateral Agent and the Secured
Parties of liability releases from the Credit Parties each in form and substance
acceptable to the Agent and Collateral Agents

 

Each Lender and L/C Issuer hereby directs the Agent, and the Agent hereby
agrees, upon five days advance notice from the Borrower Representative (or such
shorter period as the Agent shall agree), to execute and deliver or file such
documents and to perform other actions reasonably necessary to release the
guaranties and Liens when and as directed in this Section 8.10.

 

 

 
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8.11     Additional Secured Parties. The benefit of the provisions of the Loan
Documents directly relating to the Collateral or any Lien granted thereunder
shall extend to and be available to any Secured Party that is not a Lender or
L/C Issuer party hereto as long as, by accepting such benefits, such Secured
Party agrees, as among the Agent and all other Secured Parties, that such
Secured Party is bound by (and, if requested by the Agent, shall confirm such
agreement in a writing in form and substance acceptable to the Agent) this
Article VIII, Section 9.3, Section 9.9, Section 9.10, Section 9.11, Section
9.17, Section 9.24 and Section 10.1 and the decisions and actions of the Agent,
the Collateral Agents and the Majority Lenders (or, where expressly required by
the terms of this Agreement, a greater proportion of the Lenders or other
parties hereto as required herein) to the same extent a Lender is bound;
provided, however, that, notwithstanding the foregoing, (a) such Secured Party
shall be bound by Section 8.8 only to the extent of Liabilities, costs and
expenses with respect to or otherwise relating to the Collateral held for the
benefit of such Secured Party, in which case the obligations of such Secured
Party thereunder shall not be limited by any concept of pro rata share or
similar concept, (b) each of the Agent, the Collateral Agents, the Lenders and
the L/C Issuers party hereto shall be entitled to act at its sole discretion,
without regard to the interest of such Secured Party, regardless of whether any
Obligation to such Secured Party thereafter remains outstanding, is deprived of
the benefit of the Collateral, becomes unsecured or is otherwise affected or put
in jeopardy thereby, and without any duty or liability to such Secured Party or
any such Obligation and (c) except as otherwise set forth herein, such Secured
Party shall not have any right to be notified of, consent to, direct, require or
be heard with respect to, any action taken or omitted in respect of the
Collateral or under any Loan Document.

 

ARTICLE IX - MISCELLANEOUS

 

9.1     Amendments and Waivers.

 

(a)     Except as provided in Section 1.1(b)(iv) with respect to a Commitment
Increase, in Section 1.8(a) regarding amendments to Schedule 1.8(a) and
amendments to Schedule 1.12, no amendment or waiver of any provision of this
Agreement or any other Loan Document, and no consent with respect to any
departure by any Credit Party therefrom, shall be effective unless the same
shall be in writing and signed by the Majority Lenders (or by the Agent with the
consent of the Majority Lenders), the Borrowers and acknowledged by the Agent,
and then such waiver shall be effective only in the specific instance and for
the specific purpose for which given; provided, however, that no such waiver,
amendment, or consent shall, unless in writing and signed by all the Lenders
directly affected thereby (in addition to the Majority Lenders or the Agent with
the consent of the Majority Lenders), the Borrowers and acknowledged by the
Agent, do any of the following:

 

 

 
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(i)       increase or extend the Commitment of any Lender (or reinstate any
Commitment terminated pursuant to subsection 7.2(a));

 

(ii)      postpone or delay any date fixed for, or waive, any scheduled
installment of principal or any payment of interest, fees or other amounts due
to the Lenders (or any of them) or L/C Issuer hereunder or under any other Loan
Document;

 

(iii)      reduce the principal of, or the rate of interest specified herein or
the amount of interest payable in cash specified herein on any Loan, or of any
fees or other amounts payable hereunder or under any other Loan Document,
including L/C Reimbursement Obligations;

 

(iv)      change the percentage of the Commitments or of the aggregate unpaid
principal amount of the Loans which shall be required for the Lenders or any of
them to take any action hereunder;

 

(v)       amend this Section 9.1 or the definition of “Majority Lenders” or any
provision providing for consent or other action by all Lenders;

 

(vi)      amend or waive Section 1.10(c); or

 

(vii)     discharge any Credit Party from its respective payment Obligations
under the Loan Documents, or release all or substantially all of the Collateral,
except as otherwise may be provided in this Agreement or the other Loan
Documents;

 

it being agreed that all Lenders shall be deemed to be directly affected by an
amendment or waiver of the type described in the preceding clauses (iv), (v) and
(vii).

 

(b)     No amendment, waiver or consent shall, unless in writing and signed by
the Agent, the Swingline Lender or the L/C Issuer, as the case may be, in
addition to the Majority Lenders or all the Lenders directly affected thereby,
as the case may be (or by the Agent with the consent of the Majority Lenders or
all the Lenders directly affected thereby, as the case may be), affect the
rights or duties of the Agent, the Swingline Lender or the L/C Issuer, as the
case may be, under this Agreement or any other Loan Document. No amendment,
modification or waiver of this Agreement or any Loan Document altering the
ratable treatment of Obligations arising under Secured Rate Contracts resulting
in such Obligations being junior in right of payment to principal on the Loans
or resulting in Obligations owing to any Secured Swap Provider becoming
unsecured (other than releases of Liens permitted in accordance with the terms
hereof), in each case in a manner adverse to any Secured Swap Provider, shall be
effective without the written consent of such Secured Swap Provider or, in the
case of a Secured Rate Contract provided or arranged by GE Capital or an
Affiliate of GE Capital, GE Capital.

 

 

 
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(c)     No amendment or waiver shall, unless signed by the Agent and
Supermajority Revolving Lenders (or by the Agent with the consent of
Supermajority Revolving Lenders) and the Collateral Agents: (i) amend or waive
compliance with the conditions precedent to the obligations of Lenders to make
any Revolving Loan (or of L/C Issuer to issue any Letter of Credit) in Section
2.2; (ii) amend or waive non-compliance with any provision of subsection
1.1(b)(iii); (iii) waive any Default or Event of Default for the purpose of
satisfying the conditions precedent to the obligations of Lenders to make any
Revolving Loan (or of any L/C Issuer to issue any Letter of Credit) in Section
2.2; (iv) amend or waive this subsection 9.1(c) or the definitions of the terms
used in this subsection 9.1(c) insofar as the definitions affect the substance
of this subsection 9.1(c); or (v) amend or modify the definitions of Eligible
Accounts, Eligible Inventory or Borrowing Base, including any increase in the
percentage advance rates in the definition of Borrowing Base, in a manner which
would increase the availability of credit under the Revolving Loan. No amendment
or waiver shall, unless signed by the Agent and all Revolving Lenders (or by the
Agent with the consent of all Revolving Lenders), change (i) the definition of
the term Majority Revolving Lenders, the percentage of Lenders which shall be
required for Majority Revolving Lenders to take any action hereunder or any
specific right of Majority Revolving Lenders to grant or withhold consent or
take or omit to take any action hereunder or (ii) the definition of the term
Supermajority Revolving Lenders, the percentage of Lenders which shall be
required for Supermajority Revolving Lenders to take any action hereunder or any
specific right of Supermajority Revolving Lenders to grant or withhold consent
or take or omit to take any action hereunder.

 

(d)     Notwithstanding anything set forth herein to the contrary, a Non-Funding
Lender shall not have any voting or consent rights under or with respect to any
Loan Document or constitute a “Lender” or a “Revolving Lender” (or be, or have
its Loans and Commitments, included in the determination of “Majority Lenders”,
“Majority Revolving Lenders”, “Supermajority Revolving Lenders” or “Lenders
directly affected” pursuant to this Section 9.1) for any voting or consent
rights under or with respect to any Loan Document, except that a Non-Funding
Lender shall be treated as an “affected Lender” for purposes of Section
9.1(a)(i) and 9.1(a)(iii) solely with respect to an increase in such Non-Funding
Lender’s Commitments, a reduction of the principal amount owed to such
Non-Funding Lender or, unless such Non-Funding Lender is treated the same as the
other Lenders holding Loans of the same type, a reduction in the interest rates
applicable to the Loans held by such Non-Funding Lender. Moreover, for the
purposes of determining Majority Lenders, Majority Revolving Lenders and
Supermajority Revolving Lenders, the Loans and Commitments held by Non-Funding
Lenders shall be excluded from the total Loans and Commitments outstanding.

 

(e)     Notwithstanding anything to the contrary contained in this Section 9.1,
the Agent may amend Schedule 1.1(b) to reflect assignments entered into pursuant
to Section 9.9 and any Commitment Increase pursuant to Section 1.1(b)(iv).

 

9.2     Notices.

 

(a)     Addresses. All notices, demands, requests, directions and other
communications required or expressly authorized to be made by this Agreement
shall, whether or not specified to be in writing but unless otherwise expressly
specified in this Agreement to be given by any other means (including by way of
facsimile), be given in writing and (i) addressed to the address set forth on
the applicable signature page hereto, (ii) posted to Intralinks® (to the extent
such system is available and set up by or at the direction of the Agent prior to
posting) in an appropriate location by uploading such notice, demand, request,
direction or other communication to www.intralinks.com, faxing it to
866-545-6600 with an appropriate bar-code fax coversheet or using such other
means of posting to Intralinks® as may be available and reasonably acceptable to
the Agent prior to such posting, (iii) posted to any other E-System set up by or
at the direction of the Agent or (iv) addressed to such other address as shall
be notified in writing (A) in the case of the Borrowers, the Agent and the
Swingline Lender, to the other parties hereto and (B) in the case of all other
parties, to the Borrower Representative and the Agent. Transmission by
electronic mail (including E-Fax, even if transmitted to the fax numbers set
forth above) shall not be sufficient or effective to transmit any such notice
under this clause (a) unless such transmission is an available means to post to
any E-System.

 

 

 
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(b)     Effectiveness. All communications described in clause (a) above and all
other notices, demands, requests and other communications made in connection
with this Agreement shall be effective and be deemed to have been received (i)
if delivered by hand, upon personal delivery, (ii) if delivered by overnight
courier service, 1 Business Day after delivery to such courier service, (iii) if
delivered by mail, when deposited in the mails, (iv) if delivered by facsimile
(other than to post to an E-System pursuant to clause (a)(ii) or (a)(iii)
above), upon sender’s receipt of confirmation of proper transmission, and (v) if
delivered by posting to any E-System, on the later of the date of such posting
and the date access to such posting is given to the recipient thereof in
accordance with the standard procedures applicable to such E-System; provided,
however, that no communications to the Agent pursuant to Article I shall be
effective until received by the Agent.

 

(c)     Each Lender shall notify the Agent in writing of any changes in the
address to which notices to such Lender should be directed, of addresses of its
Lending Office, of payment instructions in respect of all payments to be made to
it hereunder and of such other administrative information as the Agent shall
reasonably request.

 

9.3     Electronic Transmissions.

 

(a)     Authorization. Subject to the provisions of Section 9.2(a), each of the
Agent, Lenders, each Credit Party and each of their Related Persons, is
authorized (but not required) to transmit, post or otherwise make or
communicate, in its sole discretion, Electronic Transmissions in connection with
any Loan Document and the transactions contemplated therein. Each Credit Party
and each Secured Party hereto acknowledges and agrees that the use of Electronic
Transmissions is not necessarily secure and that there are risks associated with
such use, including risks of interception, disclosure and abuse and each
indicates it assumes and accepts such risks by hereby authorizing the
transmission of Electronic Transmissions.

 

 

 
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(b)     Signatures. Subject to the provisions of Section 9.2(a), (i)(A) no
posting to any E-System shall be denied legal effect merely because it is made
electronically, (B) each E-Signature on any such posting shall be deemed
sufficient to satisfy any requirement for a “signature” and (C) each such
posting shall be deemed sufficient to satisfy any requirement for a “writing”,
in each case including pursuant to any Loan Document, any applicable provision
of any UCC, the federal Uniform Electronic Transactions Act, the Electronic
Signatures in Global and National Commerce Act and any substantive or procedural
Requirement of Law governing such subject matter, (ii) each such posting that is
not readily capable of bearing either a signature or a reproduction of a
signature may be signed, and shall be deemed signed, by attaching to, or
logically associating with such posting, an E-Signature, upon which the Agent,
each Secured Party and each Credit Party may rely and assume the authenticity
thereof, (iii) each such posting containing a signature, a reproduction of a
signature or an E-Signature shall, for all intents and purposes, have the same
effect and weight as a signed paper original and (iv) each party hereto or
beneficiary hereto agrees not to contest the validity or enforceability of any
posting on any E-System or E-Signature on any such posting under the provisions
of any applicable Requirement of Law requiring certain documents to be in
writing or signed; provided, however, that nothing herein shall limit such
party’s or beneficiary’s right to contest whether any posting to any E-System or
E-Signature has been altered after transmission.

 

(c)     Separate Agreements. All uses of an E-System shall be governed by and
subject to, in addition to Section 9.2 and this Section 9.3, separate terms and
conditions posted or referenced in such E-System and related Contractual
Obligations executed by the Agent and Credit Parties in connection with the use
of such E-System.

 

(d)     LIMITATION OF LIABILITY. ALL E-SYSTEMS AND ELECTRONIC TRANSMISSIONS
SHALL BE PROVIDED “AS IS” AND “AS AVAILABLE”. NONE OF AGENT, ANY LENDER OR ANY
OF THEIR RELATED PERSONS WARRANTS THE ACCURACY, ADEQUACY OR COMPLETENESS OF ANY
E-SYSTEMS OR ELECTRONIC TRANSMISSION AND DISCLAIMS ALL LIABILITY FOR ERRORS OR
OMISSIONS THEREIN. NO WARRANTY OF ANY KIND IS MADE BY AGENT, ANY LENDER OR ANY
OF THEIR RELATED PERSONS IN CONNECTION WITH ANY E-SYSTEMS OR ELECTRONIC
COMMUNICATION, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD-PARTY RIGHTS OR FREEDOM FROM
VIRUSES OR OTHER CODE DEFECTS. Each of each Borrower, each other Credit Party
executing this Agreement and each Secured Party agrees that the Agent has no
responsibility for maintaining or providing any equipment, software, services or
any testing required in connection with any Electronic Transmission or otherwise
required for any E-System.

 

9.4     No Waiver; Cumulative Remedies. No failure to exercise and no delay in
exercising, on the part of the Agent or any Lender, any right, remedy, power or
privilege hereunder, shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege. No course of dealing between any Credit Party, any Affiliate
of any Credit Party, the Agent or any Lender shall be effective to amend, modify
or discharge any provision of this Agreement or any of the other Loan Documents.

 

 

 
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9.5     Costs and Expenses. Any action taken by any Credit Party under or with
respect to any Loan Document, even if required under any Loan Document or at the
request of the Agent, the Collateral Agents or the Majority Lenders, shall be at
the expense of such Credit Party, and neither the Agent, the Collateral Agents
nor any other Secured Party shall be required under any Loan Document to
reimburse any Credit Party or any Subsidiary of any Credit Party therefor except
as expressly provided therein. In addition, the Borrowers agree to pay or
reimburse upon demand (a) the Agent and each Collateral Agent for all reasonable
out-of-pocket costs and expenses incurred by it or any of its Related Persons,
in connection with the investigation, development, preparation, negotiation,
syndication, execution, interpretation or administration of, any modification of
any term of or termination of, any Loan Document, any commitment or proposal
letter therefor, any other document prepared in connection therewith or the
consummation and administration of any transaction contemplated therein, in each
case including Attorney Costs to the Agent and the Collateral Agents, (b) the
Agent and Collateral Agents for all reasonable costs and expenses incurred by it
or any of its Related Persons in connection with internal audit reviews, field
examinations and Collateral examinations (which shall be reimbursed, in addition
to the out-of-pocket costs and expenses of such examiners, at the per diem rate
per individual charged by the Agent or Collateral Agents, as applicable, for its
examiners) in each case performed or conducted as required or permitted by this
Agreement, (c) each of the Agent and each Collateral Agent, each of its Related
Persons, and L/C Issuer for all costs and expenses incurred in connection with
(i) any refinancing or restructuring of the credit arrangements provided
hereunder in the nature of a “work-out”, (ii) the enforcement or preservation of
any right or remedy under any Loan Document, any Obligation, with respect to the
Collateral or any other related right or remedy or (iii) the commencement,
defense, conduct of, intervention in, or the taking of any other action with
respect to, any proceeding (including any bankruptcy or insolvency proceeding)
related to any Credit Party, any Subsidiary of any Credit Party, Loan Document
or Obligation (or the response to and preparation for any subpoena or request
for document production relating thereto), including Attorney Costs and (d) fees
and disbursements of Attorney Costs of one law firm on behalf of all Lenders
(other than the Agent or any Collateral Agent) incurred in connection with any
of the matters referred to in clause (c) above.

 

9.6     Indemnity.

 

(a)     Each Credit Party agrees to indemnify, hold harmless and defend the
Agent, the Collateral Agents, each Lender, each L/C Issuer and each of their
respective Related Persons (each such Person being an “Indemnitee”) from and
against all Liabilities (including brokerage commissions, fees and other
compensation) that may be imposed on, incurred by or asserted against any such
Indemnitee in any matter relating to or arising out of, in connection with or as
a result of (i) any Loan Document, any Obligation (or the repayment thereof),
any Letter of Credit, the use or intended use of the proceeds of any Loan or the
use of any Letter of Credit or any securities filing of, or with respect to, any
Credit Party, (ii) any Contractual Obligation entered into in connection with
any E-Systems or other Electronic Transmissions, (iii) any actual or prospective
investigation, litigation or other proceeding, whether or not brought by any
such Indemnitee or any of its Related Persons, any holders of securities or
creditors (and including attorneys’ fees in any case), whether or not any such
Indemnitee, Related Person, holder or creditor is a party thereto, and whether
or not based on any securities or commercial law or regulation or any other
Requirement of Law or theory thereof, including common law, equity, contract,
tort or otherwise or (iv) any other act, event or transaction related,
contemplated in or attendant to any of the foregoing (collectively, the
“Indemnified Matters”); provided, however, that no Credit Party shall have any
liability under this Section 9.6 to any Indemnitee with respect to any
Indemnified Matter, and no Indemnitee shall have any liability with respect to
any Indemnified Matter other than (to the extent otherwise liable), to the
extent such liability has resulted from the gross negligence or willful
misconduct of such Indemnitee, as determined by a court of competent
jurisdiction in a final non-appealable judgment or order. Furthermore, each of
each Borrower and each other Credit Party executing this Agreement waives and
agrees not to assert against any Indemnitee, and shall cause each other Credit
Party to waive and not assert against any Indemnitee, any right of contribution
with respect to any Liabilities that may be imposed on, incurred by or asserted
against any Related Person.

 

 

 
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(b)     Without limiting the foregoing, “Indemnified Matters” includes all
Environmental Liabilities, including those arising from, or otherwise involving,
any property of any Credit Party or any Related Person of any Credit Party or
any actual, alleged or prospective damage to property or natural resources or
harm or injury alleged to have resulted from any Release of Hazardous Materials
on, upon or into such property or natural resource or any property on or
contiguous to any real property of any Credit Party or any Related Person or any
Credit Party, whether or not, with respect to any such Environmental
Liabilities, any Indemnitee is a mortgagee pursuant to any leasehold mortgage, a
mortgagee in possession, the successor-in-interest to any Credit Party or any
Related Person of any Credit Party or the owner, lessee or operator of any
property of any Related Person through any foreclosure action, in each case
except to the extent such Environmental Liabilities (i) are incurred solely
following foreclosure by the Collateral Agents or the Agent or following the
Agent, the Collateral Agents or any Lender having become the
successor-in-interest to any Credit Party or any Related Person of any Credit
Party and (ii) are attributable solely to acts of such Indemnitee.

 

9.7     Marshaling; Payments Set Aside. No Secured Party shall be under any
obligation to marshal any property in favor of any Credit Party or any other
Person or against or in payment of any Obligation. To the extent that the
Secured Party receives a payment from a Borrower, from any other Credit Party,
from the proceeds of the Collateral, from the exercise of its rights of setoff,
any enforcement action or otherwise, and such payment is subsequently, in whole
or in part, invalidated, declared to be fraudulent or preferential, set aside or
required to be repaid to a trustee, receiver or any other party, then to the
extent of such recovery, the obligation or part thereof originally intended to
be satisfied, and all Liens, rights and remedies therefor, shall be revived and
continued in full force and effect as if such payment had not occurred.

 

 

 
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9.8     Successors and Assigns. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns; provided that any assignment by any Lender shall be
subject to the provisions of Section 9.9 hereof, and provided further that no
Borrower may assign or transfer any of its rights or obligations under this
Agreement without the prior written consent of the Agent and each Lender.

 

9.9     Assignments and Participations; Binding Effect.

 

(a)     This Agreement shall become effective when it shall have been executed
by ITG, the Borrowers, the other Credit Parties signatory hereto and the Agent
and when the Agent shall have been notified by each Lender and the initial L/C
Issuer that such Lender or L/C Issuer has executed it. Thereafter, it shall be
binding upon and inure to the benefit of, but only to the benefit of, ITG, the
Borrowers, the other Credit Parties hereto (in each case except for
Article VIII), the Agent, each Lender and L/C Issuer party hereto and, to the
extent provided in Section 8.11, each other Secured Party and, in each case,
their respective successors and permitted assigns. Except as expressly provided
in any Loan Document (including in Section 8.9), none of ITG, any Borrower, any
other Credit Party, any L/C Issuer or the Agent shall have the right to assign
any rights or obligations hereunder or any interest herein.

 

(b)     Each Lender may sell, transfer, negotiate or assign (a “Sale”) all or a
portion of its rights and obligations hereunder (including all or a portion of
its Commitments and its rights and obligations with respect to Loans and Letters
of Credit) to (i) any existing Lender (other than a Non-Funding Lender or
Impacted Lender), (ii) any Affiliate or Approved Fund of any existing Lender
(other than a Non-Funding Lender or Impacted Lender) or (iii) any other Person
acceptable (which acceptance shall not be unreasonably withheld or delayed) to
the Agent and, as long as no Event of Default is continuing, the Borrower
Representative; provided, however, that (y) such Sales do not have to be ratable
between the Revolving Loan and Term Loan but must be ratable among the
obligations owing to and owed by such Lender with respect to the Revolving Loans
or the Term Loan and, for each Loan, the aggregate outstanding principal amount
(determined as of the effective date of the applicable Assignment) of the Loans,
Commitments and Letter of Credit Obligations subject to any such Sale shall be
in a minimum amount of $10,000,000, unless such Sale is made to an existing
Lender or an Affiliate or Approved Fund of any existing Lender, is of the
assignor’s (together with its Affiliates and Approved Funds) entire interest in
such Loans, Commitments and Letter of Credit Obligations, or is made with the
prior consent of the Borrower Representative and the Agent and (z) such Sales by
Lenders who are Non-Funding Lenders due to clause (a) of the definition of
Non-Funding Lender shall be subject to the Agent’s prior written consent in all
instances, unless in connection with such Sale, such Non-Funding Lender cures,
or causes the cure of, its Non-Funding Lender status as contemplated in
subsection 1.11(e)(v). The Agent’s refusal to accept a Sale to any Person that
would be a Non-Funding Lender or an Impacted Lender, or the imposition of
conditions or limitations (including limitations on voting) upon Sales to such
Persons, shall not be deemed to be unreasonable.

 

 

 
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(c)     The parties to each Sale made in reliance on clause (b) above (other
than those described in clause (e) or (f) below) shall execute and deliver to
the Agent (which shall keep a copy thereof) an Assignment, together with any
existing Note subject to such Sale (or any affidavit of loss therefor acceptable
to the Agent), any tax forms required to be delivered pursuant to Section 10.1
and payment by the assignee of an assignment fee in the amount of $3,500 (unless
waived by the Agent in its sole discretion). Upon receipt of all the foregoing,
and conditioned upon such receipt and upon the Agent consenting to such
Assignment (if required), from and after the effective date specified in such
Assignment, the Agent shall record or cause to be recorded in the Register the
information contained in such Assignment.

 

(d)     Effective upon the entry of such record in the Register, (i) such
assignee shall become a party hereto and, to the extent that rights and
obligations under the Loan Documents have been assigned to such assignee
pursuant to such Assignment, shall have the rights and obligations of a Lender,
(ii) any applicable Note shall be transferred to such assignee through such
entry and (iii) the assignor thereunder shall, to the extent that rights and
obligations under this Agreement have been assigned by it pursuant to such
Assignment, relinquish its rights (except for those surviving the termination of
the Commitments and the payment in full of the Obligations) and be released from
its obligations under the Loan Documents, other than those relating to events or
circumstances occurring prior to such assignment (and, in the case of an
Assignment covering all or the remaining portion of an assigning Lender’s rights
and obligations under the Loan Documents, such Lender shall cease to be a party
hereto).

 

(e)     In addition to the other rights provided in this Section 9.9, each
Lender may grant a security interest in, or otherwise assign as collateral, any
of its rights under this Agreement, whether now owned or hereafter acquired
(including rights to payments of principal or interest on the Loans), to (A) any
federal reserve bank (pursuant to Regulation A of the Federal Reserve Board),
without notice to the Agent or (B) any holder of, or trustee for the benefit of
the holders of, such Lender’s Indebtedness or equity securities, by notice to
the Agent; provided, however, that no such holder or trustee, whether because of
such grant or assignment or any foreclosure thereon (unless such foreclosure is
made through an assignment in accordance with clause (b) above), shall be
entitled to any rights of such Lender hereunder and no such Lender shall be
relieved of any of its obligations hereunder.

 

 

 
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(f)     In addition to the other rights provided in this Section 9.9, each
Lender may, (x) with notice to the Agent, grant to an SPV the option to make all
or any part of any Loan that such Lender would otherwise be required to make
hereunder (and the exercise of such option by such SPV and the making of Loans
pursuant thereto shall satisfy the obligation of such Lender to make such Loans
hereunder) and such SPV may assign to such Lender the right to receive payment
with respect to any Obligation and (y) without notice to or consent from the
Agent or the Borrowers, sell participations to one or more Persons in or to all
or a portion of its rights and obligations under the Loan Documents (including
all its rights and obligations with respect to the Term Loan, Revolving Loans
and Letters of Credit); provided, however, that, whether as a result of any term
of any Loan Document or of such grant or participation, (i) no such SPV or
participant shall have a commitment, or be deemed to have made an offer to
commit, to make Loans hereunder, and, except as provided in the applicable
option agreement, none shall be liable for any obligation of such Lender
hereunder, (ii) such Lender’s rights and obligations, and the rights and
obligations of the Credit Parties and the Secured Parties towards such Lender,
under any Loan Document shall remain unchanged and each other party hereto shall
continue to deal solely with such Lender, which shall remain the holder of the
Obligations in the Register, except that (A) each such participant and SPV shall
be entitled to the benefit of Article X, but, with respect to Section 10.1, only
to the extent such participant or SPV delivers the tax forms such Lender is
required to collect pursuant to subsection 10.1(f) and then only to the extent
of any amount to which such Lender would be entitled in the absence of any such
grant or participation and (B) each such SPV may receive other payments that
would otherwise be made to such Lender with respect to Loans funded by such SPV
to the extent provided in the applicable option agreement and set forth in a
notice provided to the Agent by such SPV and such Lender, provided, however,
that in no case (including pursuant to clause (A) or (B) above) shall an SPV or
participant have the right to enforce any of the terms of any Loan Document, and
(iii) the consent of such SPV or participant shall not be required (either
directly, as a restraint on such Lender’s ability to consent hereunder or
otherwise) for any amendments, waivers or consents with respect to any Loan
Document or to exercise or refrain from exercising any powers or rights such
Lender may have under or in respect of the Loan Documents (including the right
to enforce or direct enforcement of the Obligations), except for those described
in clauses (ii) and (iii) of subsection 9.1(a) with respect to amounts, or dates
fixed for payment of amounts, to which such participant or SPV would otherwise
be entitled. No party hereto shall institute (and each Borrower and ITG shall
cause each other Credit Party not to institute) against any SPV grantee of an
option pursuant to this clause (f) any bankruptcy, reorganization, insolvency,
liquidation or similar proceeding, prior to the date that is one year and one
day after the payment in full of all outstanding commercial paper of such SPV;
provided, however, that each Lender having designated an SPV as such agrees to
indemnify each Indemnitee against any Liability that may be incurred by, or
asserted against, such Indemnitee as a result of failing to institute such
proceeding (including a failure to get reimbursed by such SPV for any such
Liability). The agreement in the preceding sentence shall survive the
termination of the Commitments and the payment in full of the Obligations.

 

 

 
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9.10     Confidentiality. (a)     Each Lender, L/C Issuer and the Agent shall
maintain the confidentiality of information obtained by it pursuant to any Loan
Document and designated in writing by any Credit Party as confidential for a
period ending on the date two (2) years following the date on which this
Agreement terminates in accordance with the terms hereof, except that such
information may be disclosed (i) with the Borrower Representative’s consent,
(ii) to Related Persons of such Lender, L/C Issuer or the Agent, as the case may
be, or to any Person that any L/C Issuer causes to issue Letters of Credit
hereunder, that are advised of the confidential nature of such information and
are instructed to keep such information confidential, (iii) to the extent such
information presently is or hereafter becomes available to such Lender, L/C
Issuer or the Agent, as the case may be, on a non-confidential basis from a
source other than any Credit Party, (iv) to the extent disclosure is required by
applicable Requirements of Law or other legal process or requested or demanded
by any Governmental Authority, (v) to the extent necessary or customary for
inclusion in league table measurements or in any tombstone or other advertising
materials (and the Loan Parties consent to the publication of such tombstone or
other advertising materials by the Agent, any Lender, any L/C Issuer or any of
their Related Persons), (vi) (A) to the National Association of Insurance
Commissioners or any similar organization, any examiner or any nationally
recognized rating agency or (B) otherwise to the extent consisting of general
portfolio information that does not identify borrowers, (vii) to current or
prospective assignees, SPVs (including the investors therein) or participants,
direct or contractual counterparties to any Secured Rate Contracts and to their
respective Related Persons, in each case to the extent such assignees,
investors, participants or Related Persons agree to be bound by provisions
substantially similar to the provisions of this Section 9.10 and (viii) in
connection with the exercise of any remedy under any Loan Document. In the event
of any conflict between the terms of this Section 9.10 and those of any other
Contractual Obligation entered into with any Credit Party (whether or not a Loan
Document), the terms of this Section 9.10 shall govern.

 

(b)     Each Credit Party consents to the publication by the Agent or any Lender
of advertising material relating to the financing transactions contemplated by
this Agreement using a Borrower’s or any other Credit Party’s name, product
photographs, logo or trademark. The Agent or such Lender shall provide a draft
of any advertising material to the Borrower Representative for review and
comment prior to the publication thereof.

 

9.11     Set-off; Sharing of Payments.

 

(a)     Right of Setoff. Each of the Agent, each Lender, each L/C Issuer and
each Affiliate (including each branch office thereof) of any of them is hereby
authorized, without notice or demand (each of which is hereby waived by each
Credit Party), at any time and from time to time during the continuance of any
Event of Default and to the fullest extent permitted by applicable Requirements
of Law, to set off and apply any and all deposits (whether general or special,
time or demand, provisional or final) at any time held and other Indebtedness,
claims or other obligations at any time owing by the Agent, such Lender, such
L/C Issuer or any of their respective Affiliates to or for the credit or the
account of the Borrowers or any other Credit Party against any Obligation of any
Credit Party now or hereafter existing, whether or not any demand was made under
any Loan Document with respect to such Obligation and even though such
Obligation may be unmatured. Each of the Agent, each Lender and each L/C Issuer
agrees promptly to notify the Borrower Representative and the Agent after any
such setoff and application made by such Lender or its Affiliates; provided,
however, that the failure to give such notice shall not affect the validity of
such setoff and application. The rights under this Section 9.11 are in addition
to any other rights and remedies (including other rights of setoff) that the
Agent, the Lenders, the L/C Issuer, their Affiliates and the other Secured
Parties, may have.

 

 

 
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(b)     Sharing of Payments, Etc. If any Lender, directly or through an
Affiliate or branch office thereof, obtains any payment of any Obligation of any
Credit Party (whether voluntary, involuntary or through the exercise of any
right of setoff or the receipt of any Collateral or “proceeds” (as defined under
the applicable UCC) of Collateral) other than pursuant to Article X and such
payment exceeds the amount such Lender would have been entitled to receive if
all payments had gone to, and been distributed by, the Agent in accordance with
the provisions of the Loan Documents, such Lender shall purchase for cash from
other Lenders such participations in their Obligations as necessary for such
Lender to share such excess payment with such Lenders to ensure such payment is
applied as though it had been received by the Agent and applied in accordance
with this Agreement (or, if such application would then be at the discretion of
the Borrowers, applied to repay the Obligations in accordance herewith);
provided, however, that (a) if such payment is rescinded or otherwise recovered
from such Lender or L/C Issuer in whole or in part, such purchase shall be
rescinded and the purchase price therefor shall be returned to such Lender or
L/C Issuer without interest and (b) such Lender shall, to the fullest extent
permitted by applicable Requirements of Law, be able to exercise all its rights
of payment (including the right of setoff) with respect to such participation as
fully as if such Lender were the direct creditor of the applicable Credit Party
in the amount of such participation. If a Non-Funding Lender receives any such
payment as described in the previous sentence, such Lender shall turn over such
payments to Agent in an amount that would satisfy the cash collateral
requirements set forth in subsection 1.11(e).

 

9.12     Counterparts. This Agreement may be executed in any number of
counterparts and by different parties in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Signature pages may be
detached from multiple separate counterparts and attached to a single
counterpart. Delivery of an executed signature page of this Agreement by
facsimile transmission or Electronic Transmission shall be as effective as
delivery of a manually executed counterpart hereof.

 

9.13     Severability; Facsimile Signature. The illegality or unenforceability
of any provision of this Agreement or any instrument or agreement required
hereunder shall not in any way affect or impair the legality or enforceability
of the remaining provisions of this Agreement or any instrument or agreement
required hereunder. Any Loan Document, or other agreement, document or
instrument, delivered by facsimile transmission shall have the same force and
effect as if the original thereof had been delivered.

 

9.14     Captions. The captions and headings of this Agreement are for
convenience of reference only and shall not affect the interpretation of this
Agreement.

 

9.15     Independence of Provisions. The parties hereto acknowledge that this
Agreement and other Loan Documents may use several different limitations, tests
or measurements to regulate the same or similar matters, and that such
limitations, tests and measurements are cumulative and must each be performed,
except as expressly stated to the contrary in this Agreement.

 

9.16     Interpretation. This Agreement is the result of negotiations among and
has been reviewed by counsel to the Agent, each Lender and other parties hereto,
and is the product of all parties hereto. Accordingly, this Agreement and the
other Loan Documents shall not be construed against the Lenders or the Agent
merely because of the Agent’s or Lenders’ involvement in the preparation of such
documents and agreements.

 

 

 
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9.17     No Third Parties Benefited. This Agreement is made and entered into for
the sole protection and legal benefit of the Borrowers, the Lenders, the L/C
Issuer, the Agent and, subject to the provisions of Section 8.11 hereof, each
other Secured Party, and their permitted successors and assigns, and no other
Person shall be a direct or indirect legal beneficiary of, or have any direct or
indirect cause of action or claim in connection with, this Agreement or any of
the other Loan Documents. Neither the Agent nor any Lender shall have any
obligation to any Person not a party to this Agreement or the other Loan
Documents.

 

9.18     Governing Law and Jurisdiction.

 

(a)     Governing Law. The laws of the State of New York shall govern all
matters arising out of, in connection with or relating to this Agreement,
including, without limitation, its validity, interpretation, construction,
performance and enforcement.

 

(b)     Submission to Jurisdiction. Any legal action or proceeding with respect
to any Loan Document may be brought in the courts of the State of New York
located in the City of New York, Borough of Manhattan, or of the United States
of America sitting in New York, New York for the Southern District of New York
and, by execution and delivery of this Agreement, each Borrower and each other
Credit Party executing this Agreement hereby accepts for itself and in respect
of its property, generally and unconditionally, the jurisdiction of the
aforesaid courts. The parties hereto (and, to the extent set forth in any other
Loan Document, each other Credit Party) hereby irrevocably waive any objection,
including any objection to the laying of venue or based on the grounds of forum
non conveniens, that any of them may now or hereafter have to the bringing of
any such action or proceeding in such jurisdictions.

 

(c)     [Intentionally Omitted].

 

(d)     Non-Exclusive Jurisdiction. Nothing contained in this Section 9.18 shall
affect the right of the Agent or any Lender to serve process in any other manner
permitted by applicable Requirements of Law or commence legal proceedings or
otherwise proceed against any Credit Party in any other jurisdiction.

 

9.19     Waiver of Jury Trial. THE PARTIES HERETO, TO THE EXTENT PERMITTED BY
LAW, WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING ARISING
OUT OF, IN CONNECTION WITH OR RELATING TO, THIS AGREEMENT, THE OTHER LOAN
DOCUMENTS AND ANY OTHER TRANSACTION CONTEMPLATED HEREBY AND THEREBY. THIS WAIVER
APPLIES TO ANY ACTION, SUIT OR PROCEEDING WHETHER SOUNDING IN TORT, CONTRACT OR
OTHERWISE.

 

 

 
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9.20     Entire Agreement; Release; Survival.

 

(a)     THE LOAN DOCUMENTS EMBODY THE ENTIRE AGREEMENT OF THE PARTIES AND
SUPERSEDE ALL PRIOR AGREEMENTS AND UNDERSTANDINGS RELATING TO THE SUBJECT MATTER
THEREOF AND ANY PRIOR LETTER OF INTEREST, COMMITMENT LETTER, CONFIDENTIALITY AND
SIMILAR AGREEMENTS INVOLVING ANY CREDIT PARTY AND ANY OF LENDER OR ANY L/C
ISSUER OR ANY OF THEIR RESPECTIVE AFFILIATES RELATING TO A FINANCING OF
SUBSTANTIALLY SIMILAR FORM, PURPOSE OR EFFECT OTHER THAN THE FEE LETTER. IN THE
EVENT OF ANY CONFLICT BETWEEN THE TERMS OF THIS AGREEMENT AND ANY OTHER LOAN
DOCUMENT, THE TERMS OF THIS AGREEMENT SHALL GOVERN (UNLESS SUCH TERMS OF SUCH
OTHER LOAN DOCUMENTS ARE NECESSARY TO COMPLY WITH APPLICABLE REQUIREMENTS OF
LAW, IN WHICH CASE SUCH TERMS SHALL GOVERN TO THE EXTENT NECESSARY TO COMPLY
THEREWITH).

 

(b)     In no event shall any Indemnitee be liable on any theory of liability
for any special, indirect, consequential or punitive damages (including any loss
of profits, business or anticipated savings). Each of each Borrower and each
other Credit Party signatory hereto hereby waives, releases and agrees (and
shall cause each other Credit Party to waive, release and agree) not to sue upon
any such claim for any special, indirect, consequential or punitive damages,
whether or not accrued and whether or not known or suspected to exist in its
favor.

 

9.21     Patriot Act. Each Lender that is subject to the Patriot Act hereby
notifies the Borrowers that pursuant to the requirements of the Patriot Act, it
is required to obtain, verify and record information that identifies each
Borrower, which information includes the name and address of each Borrower and
other information that will allow such Lender to identify each Borrower in
accordance with the Patriot Act.

 

 

 
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9.22     Replacement of Lender. Within forty-five days after: (i) receipt by the
Borrower Representative of written notice and demand from any Lender (an
“Affected Lender”) for payment of additional costs as provided in Sections 10.1,
10.3 and/or 10.6; (ii) any default by a Lender in its obligation to make Loans
hereunder after all conditions thereto have been satisfied or waived in
accordance with the terms hereof, provided such default shall not have been
cured; or (iii) any failure by any Lender to consent to a requested amendment,
waiver or modification to any Loan Document in which the Majority Revolving
Lenders, Supermajority Revolving Lenders or Majority Lenders, as applicable,
have already consented to such amendment, waiver or modification but the consent
of each Lender (or each Lender directly affected thereby, as applicable) is
required with respect thereto, the Borrowers may, at their option, notify the
Agent and such Affected Lender (or such defaulting or non-consenting Lender, as
the case may be) of the Borrowers’ intention to obtain, at the Borrowers’
expense, a replacement Lender (“Replacement Lender”) for such Affected Lender
(or such defaulting or non-consenting Lender, as the case may be), which
Replacement Lender shall be a Lender or otherwise be reasonably satisfactory to
the Agent. In the event the Borrowers obtain a Replacement Lender within
forty-five (45) days following notice of its intention to do so, the Affected
Lender (or defaulting or non-consenting Lender, as the case may be) shall sell
and assign its Loans and Commitments to such Replacement Lender, at par,
provided that the Borrowers have reimbursed such Affected Lender for its
increased costs for which it is entitled to reimbursement under this Agreement
through the date of such sale and assignment. In the event that a replaced
Lender does not execute an Assignment pursuant to Section 9.9 within five (5)
Business Days after receipt by such replaced Lender of notice of replacement
pursuant to this Section 9.22 and presentation to such replaced Lender of an
Assignment evidencing an assignment pursuant to this Section 9.22, the Borrowers
shall be entitled (but not obligated) to execute such an Assignment on behalf of
such replaced Lender, and any such Assignment so executed by the Borrowers, the
Replacement Lender and the Agent, shall be effective for purposes of this
Section 9.22 and Section 9.9. Notwithstanding the foregoing, with respect to a
Lender that is a Non-Funding Lender or an Impacted Lender, Agent may, but shall
not be obligated to, obtain a Replacement Lender (in consultation with the
Borrowers) and execute an Assignment on behalf of such Non-Funding Lender or
Impacted Lender at any time with three (3) Business Days’ prior notice to such
Lender (unless notice is not practicable under the circumstances) and cause such
Lender’s Loans and Commitments to be sold and assigned, in whole or in part, at
par. Upon any such assignment and payment and compliance with the other
provisions of Section 9.9, such replaced Lender shall no longer constitute a
“Lender” for purposes hereof; provided, any rights of such replaced Lender to
indemnification hereunder shall survive as to such replaced Lender.

 

9.23     Joint and Several. The Borrowers and Credit Parties are jointly and
severally liable for all of the Obligations. Without limiting the generality of
the foregoing, reference is hereby made to Article II of the Guaranty and
Security Agreement, to which the obligations of the Borrowers and Credit Parties
are subject.

 

9.24     Lender-Creditor Relationship. The relationship between the Agent, each
Lender and the L/C Issuer, on the one hand, and the Credit Parties, on the other
hand, is solely that of lender and creditor. No Secured Party has any fiduciary
relationship or duty to any Credit Party arising out of or in connection with,
and there is no agency, tenancy or joint venture relationship between the
Secured Parties and the Credit Parties by virtue of, any Loan Document or any
transaction contemplated therein.

 

9.25     Judgment Currency.

 

(a)     If, for the purposes of obtaining judgment in any court, it is necessary
to convert a sum due hereunder or under the Notes in any currency (the “Original
Currency”) into another currency (the “Other Currency”) the parties hereto
agree, to the fullest extent that they may effectively do so, that the rate of
exchange used shall be that at which in accordance with normal banking
procedures the Agent could purchase the Original Currency with the Other
Currency at noon (New York time), on the second Business Day preceding that on
which final judgment is given.

 

(b)     The obligation of a Borrower in respect of any sum due in the Original
Currency from it to any Secured Party hereunder or under the Notes held by such
Secured Party shall, notwithstanding any judgment in any Other Currency, be
discharged only to the extent that on the Business Day following receipt by such
Secured Party of any sum adjudged to be so due in such Other Currency such
Secured Party may in accordance with normal banking procedures purchase the
Original Currency with such Other Currency; if the amount of the Original
Currency so purchased is less than the sum originally due to such Secured Party
in the Original Currency, such Borrowers agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify such Secured Party against such
loss, and if the amount of the Original Currency so purchased exceeds the sum
originally due to any Secured Party in the Original Currency, such Secured Party
agrees to remit to such Borrowers such excess.

 

 

 
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9.26     Original Credit Agreement Superseded. As and to the extent set forth in
Section 11.2(g), on and after the Closing Date, the Original Credit Agreement is
superseded by this Agreement, which hereby renews, amends, restates and
modifies, but does not novate or extinguish, the obligations under the Original
Credit Agreement.

 

ARTICLE X - TAXES, YIELD PROTECTION AND ILLEGALITY

 

10.1     Taxes.

 

(a)     Except as otherwise provided in this Section 10.1, each payment by any
Credit Party under any Loan Document shall be made free and clear of all present
or future taxes, levies, imposts, deductions, stamp and other duties, value
added taxes, charges or withholdings and all liabilities with respect thereto
(and without deduction or withholding for or on account of any of them) in any
jurisdiction (collectively, but excluding the taxes set forth in clauses (i) and
(ii) below, the “Taxes”) other than for (i) taxes measured by net income
(including branch profits taxes) and franchise taxes imposed in lieu of net
income taxes, in each case imposed on any Secured Party as a result of a present
or former connection between such Person and the jurisdiction of the
Governmental Authority imposing such tax or any political subdivision or taxing
authority thereof or therein (other than such connection arising solely from any
Secured Party having executed, delivered or performed its obligations or
received a payment under, or enforced, any Loan Document) or (ii) taxes that are
directly attributable to the failure (other than as a result of a change in any
Requirement of Law) by the Agent or any Lender to deliver the documentation
required to be delivered pursuant to clause (f) below.

 

(b)     If any accounts for or on account of Taxes shall be required by law to
be deducted or withheld from or in respect of any amount payable under any Loan
Document to any Secured Party or if Taxes are payable by any Secured Party on
such amounts (i) such amount shall be increased as necessary to ensure that,
after all required deductions, withholdings or payment of Taxes are made
(including deductions, withholdings or Taxes applicable to any increases to any
amount under this Section 10.1), such Secured Party receives the amount it would
have received had no such deductions or withholdings been made or such Taxes
been payable, (ii) the relevant Credit Party shall make such deductions or
withholdings, (iii) the relevant Credit Party shall timely pay the full amount
deducted or withheld to the relevant taxing authority or other authority in
accordance with applicable Requirements of Law and (iv) within 30 days after
such payment is made, the relevant Credit Party shall deliver to the Agent an
original or certified copy of a receipt evidencing such payment; provided,
however, that no such increase shall be made with respect to, and no Credit
Party shall be required to indemnify any Secured Party pursuant to clause (d)
below for, withholding taxes to the extent that the obligation to withhold
amounts existed on the date that such Person became a “Secured Party” under this
Agreement in the capacity under which such Person makes a claim under this
clause (b), except in each case to the extent such Person is a direct or
indirect assignee (other than pursuant to Section 9.22) of any other Secured
Party that was entitled, at the time the assignment to such Person became
effective, to receive additional amounts under this clause (b).

 

 

 
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(c)     In addition, the Borrowers agree to pay, and authorize the Agent to pay
in their name, any stamp, documentary, excise or property tax, charges or
similar levies imposed by any applicable Requirement of Law or Governmental
Authority and all Liabilities with respect thereto (including by reason of any
delay in payment thereof), in each case arising from the execution, delivery or
registration of, or otherwise with respect to, any Loan Document or any
transaction contemplated therein (collectively, “Other Taxes”). The Swingline
Lender may, without any need for notice, demand or consent from the Borrowers or
the Borrower Representative, by making funds available to the Agent in the
amount equal to any such payment, make a Swing Loan to the Borrowers in such
amount, the proceeds of which shall be used by the Agent in whole to make such
payment on behalf of the Borrower. Within 30 days after the date of any payment
of any amounts under this Section 10.1 by any Credit Party, the Borrowers shall
furnish to the Agent, at its address referred to in Section 9.2, the original or
a certified copy of a receipt evidencing payment thereof to the extent that
payment was not made to a Secured Party.

 

(d)     The Borrowers shall reimburse and indemnify, within 30 days after
receipt of demand therefor (with copy to the Agent), each Secured Party for all
Taxes and Other Taxes (including any Taxes and Other Taxes imposed by any
jurisdiction on amounts payable under this Section 10.1) paid by such Secured
Party and any Liabilities arising therefrom or with respect thereto, whether or
not such Taxes or Other Taxes were correctly or legally asserted. A certificate
of the Secured Party (or of the Agent on behalf of such Secured Party) claiming
any compensation under this clause (d), setting forth the amounts to be paid
thereunder and delivered to the Borrower Representative with a copy to the
Agent, shall be conclusive, binding and final for all purposes, absent manifest
error. In determining such amount, the Agent and such Secured Party may use any
just and reasonable averaging and attribution methods.

 

(e)     Any Lender claiming any additional amounts payable pursuant to this
Section 10.1 shall use its reasonable efforts (consistent with its internal
policies and Requirements of Law) to change the jurisdiction of its lending
office if such a change would reduce any such additional amounts (or any similar
amount that may thereafter accrue) and would not, in the sole determination of
such Lender, be otherwise disadvantageous to such Lender.

 

 

 
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(f)     (i) Each Non-US Lender Party that, at any of the following times, is
entitled to an exemption from United States withholding tax or, after a change
in any Requirement of Law, is subject to such withholding tax at a reduced rate
under an applicable tax treaty, shall (w) on or prior to the date such Non-US
Lender Party becomes a “Non-US Lender Party” hereunder, (x) on or prior to the
date on which any such form or certification expires or becomes obsolete, (y)
after the occurrence of any event requiring a change in the most recent form or
certification previously delivered by it pursuant to this clause (i) and (z)
from time to time if requested by the Borrower Representative or the Agent (or,
in the case of a participant or SPV, the relevant Lender), provide the Agent and
the Borrower Representative (or, in the case of a participant or SPV, the
relevant Lender) with two completed originals of each of the following, as
applicable: (A) Forms W-8ECI (claiming exemption from US withholding tax because
the income is effectively connected with a US trade or business), W-8BEN or
W-8BEN-E (claiming exemption from, or a reduction of, US withholding tax under
an income tax treaty) and/or W-8IMY or any successor forms, (B) in the case of a
Non-US Lender Party claiming exemption under Sections 871(h) or 881(c) of the
Code, Form W-8BEN or W-8BEN-E (claiming exemption from US withholding tax under
the portfolio interest exemption) or any successor form and a certificate
substantially in the form of Exhibit 10.1(f)-I that such Non-US Lender Party is
not (1) a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (2) a
“10 percent shareholder” of the Borrowers within the meaning of Section
881(c)(3)(B) of the Code or (3) a “controlled foreign corporation” described in
Section 881(c)(3)(C) of the Code, (C) to the extent a Non-US Lender Party is not
the beneficial owner, executed copies of Form W-8IMY, accompanied by Form
W-8ECI, Form W-8BEN or W-8BEN-E, a certificate substantially in the form of
Exhibit 10.1(f)-II or Exhibit 10.1(f)-III, Form W-9, and/or other certification
documents from each beneficial owner, as applicable; provided that if the Non-US
Lender Party is a partnership and one or more direct or indirect partners of
such Non-US Lender Party are claiming the portfolio interest exemption, such
Non-US Lender Party may provide a certificate substantially in the form of
Exhibit 10.1(f)-IV on behalf of each such direct and indirect partner, or (D)
any other applicable document prescribed by the IRS certifying as to the
entitlement of such Non-US Lender Party to such exemption from United States
withholding tax or reduced rate with respect to all payments to be made to such
Non-US Lender Party under the Loan Documents. Unless the Borrower Representative
and the Agent have received forms or other documents satisfactory to them
indicating that payments under any Loan Document to or for a Non-US Lender Party
are not subject to United States withholding tax or are subject to such tax at a
rate reduced by an applicable tax treaty, the Credit Parties and the Agent shall
withhold amounts required to be withheld by applicable Requirements of Law from
such payments at the applicable statutory rate.

 

(ii)     Each US Lender Party shall (A) on or prior to the date such US Lender
Party becomes a “US Lender Party” hereunder, (B) on or prior to the date on
which any such form or certification expires or becomes obsolete, (C) after the
occurrence of any event requiring a change in the most recent form or
certification previously delivered by it pursuant to this clause (f) and (D)
from time to time if requested by the Borrower Representative or the Agent (or,
in the case of a participant or SPV, the relevant Lender), provide the Agent and
the Borrower Representative (or, in the case of a participant or SPV, the
relevant Lender) with two completed originals of Form W-9 (certifying that such
US Lender Party is entitled to an exemption from US backup withholding tax) or
any successor form.

 

 

 
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(iii)     Each Lender having sold a participation in any of its Obligations or
identified an SPV as such to the Agent shall collect from such participant or
SPV the documents described in this clause (f) and provide them to the Agent.

 

(iv)     If a payment made to a Non-U.S. Lender Party would be subject to United
States federal withholding Tax imposed by FATCA if such Non-U.S. Lender Party
fails to comply with the applicable reporting requirements of FATCA, such
Non-U.S. Lender Party shall deliver to Agent and the Borrower Representative any
documentation under any Requirement of Law or reasonably requested by Agent or
the Borrower Representative sufficient for Agent or the Borrowers to comply with
their obligations under FATCA and to determine that such Non-U.S. Lender Party
has complied with its obligations under FATCA or to determine the amount to
deduct and withhold from such payment. Solely for the purposes of this clause
(iv), “FATCA” shall include any amendments made to FATCA after the date of this
Agreement.

 

(g)     All amounts set out in, or expressed to be payable under, a Loan
Document by a Credit Party which (in whole or in part) constitute consideration
for a supply for value added tax purposes shall be deemed to be exclusive of any
value added tax which is chargeable on such a supply and, accordingly, if value
added tax is chargeable on any supply made to a Credit Party under a Loan
Document, that Credit Party shall pay to the relevant Person an amount equal to
the amount of such value added tax in addition to the underlying amount upon the
relevant Person providing a valid value added tax invoice to that Credit Party.
Where a Loan Document requires the Credit Party to reimburse any Person for any
costs or expenses or similar amounts, the Credit Party shall also at the same
time pay and indemnify the relevant Person against all value added tax incurred
by the relevant Person in respect of the costs or expenses or similar amounts to
the extent that the relevant Person reasonably determines that neither it nor
any other member of any group of which it is a member for value added tax
purposes is entitled to credit or repayment from the relevant tax authority in
respect of the value added tax.

 

10.2     Illegality. If after the date hereof any Lender shall determine that
the introduction of any Requirement of Law, or any change in any Requirement of
Law or in the interpretation or administration thereof, has made it unlawful, or
that any central bank or other Governmental Authority has asserted that it is
unlawful, for any Lender or its Lending Office to make LIBOR Rate Loans, then,
on notice thereof by such Lender to the Borrowers through the Agent, the
obligation of that Lender to make LIBOR Rate Loans shall be suspended until such
Lender shall have notified the Agent and the Borrower Representative that the
circumstances giving rise to such determination no longer exists.

 

(a)     Subject to clause (c) below, if any Lender shall determine that it is
unlawful to maintain any LIBOR Rate Loan, the Borrowers shall prepay in full all
LIBOR Rate Loans of such Lender then outstanding, together with interest accrued
thereon, either on the last day of the Interest Period thereof if such Lender
may lawfully continue to maintain such LIBOR Rate Loans to such day, or
immediately, if such Lender may not lawfully continue to maintain such LIBOR
Rate Loans, together with any amounts required to be paid in connection
therewith pursuant to Section 10.4.

 

 

 
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(b)     If the obligation of any Lender to make or maintain LIBOR Rate Loans has
been terminated, the Borrower Representative may elect, by giving notice to such
Lender through the Agent that all Loans which would otherwise be made by any
such Lender as LIBOR Rate Loans shall be instead Base Rate Loans.

 

(c)     Before giving any notice to the Agent pursuant to this Section 10.2, the
affected Lender shall designate a different Lending Office with respect to its
LIBOR Rate Loans if such designation will avoid the need for giving such notice
or making such demand and will not, in the judgment of the Lender, be illegal or
otherwise disadvantageous to the Lender.

 

10.3     Increased Costs and Reduction of Return.

 

(a)     If any Lender or L/C Issuer shall determine that, due to either (i) the
introduction of, or any change in, or in the interpretation of, any law or
regulation or (ii) the compliance with any guideline or request from any central
bank or other Governmental Authority (whether or not having the force of law),
in the case of either clause (i) or (ii) subsequent to the date hereof, there
shall be any increase in the cost to such Lender or L/C Issuer of agreeing to
make or making, funding or maintaining any LIBOR Rate Loans or of issuing or
maintain any Letter of Credit, then the Borrowers shall be liable for, and shall
from time to time, within thirty (30) days of demand therefor by such Lender or
L/C Issuer (with a copy of such demand to the Agent), pay to the Agent for the
account of such Lender or L/C Issuer, additional amounts as are sufficient to
compensate such Lender or L/C Issuer for such increased costs; provided, that
the Borrowers shall not be required to compensate any Lender or L/C Issuer
pursuant to this Section 10.3 for any increased costs incurred more than 180
days prior to the date that such Lender or L/C Issuer notifies the Borrower
Representative, in writing of the increased costs and of such Lender’s or L/C
Issuer’s intention to claim compensation thereof; provided, further, that if the
circumstance giving rise to such increased costs is retroactive, then the
180-day period referred to above shall be extended to include the period of
retroactive effect thereof.

 

(b)     If any Lender or L/C Issuer shall have determined that:

 

(i)     the introduction of any Capital Adequacy Regulation;

 

(ii)     any change in any Capital Adequacy Regulation;

 

(iii)     any change in the interpretation or administration of any Capital
Adequacy Regulation by any central bank or other Governmental Authority charged
with the interpretation or administration thereof; or

 

 

 
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(iv)     compliance by such Lender or L/C Issuer (or its Lending Office) or any
entity controlling the Lender or L/C Issuer, with any Capital Adequacy
Regulation;

 

affects the amount of capital required or expected to be maintained by such
Lender or L/C Issuer or any entity controlling such Lender or L/C Issuer and
(taking into consideration such Lender’s or such entities’ policies with respect
to capital adequacy and such Lender’s or L/C Issuer’s desired return on capital)
determines that the amount of such capital is increased as a consequence of its
Commitment(s), loans, credits or obligations under this Agreement, then, within
thirty (30) days of demand of such Lender or L/C Issuer (with a copy to the
Agent), the Borrowers shall pay to such Lender or L/C Issuer, from time to time
as specified by such Lender or L/C Issuer, additional amounts sufficient to
compensate such Lender or L/C Issuer (or the entity controlling the Lender or
L/C Issuer) for such increase; provided, that the Borrowers shall not be
required to compensate any Lender or L/C Issuer pursuant to this Section 10.3
for any amounts incurred more than 180 days prior to the date that such Lender
or L/C Issuer notifies the Borrower Representative, in writing of the amounts
and of such Lender’s or L/C Issuer’s intention to claim compensation thereof;
provided, further, that if the event giving rise to such increase is
retroactive, then the 180-day period referred to above shall be extended to
include the period of retroactive effect thereof.

 

(c)     Notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall
Street Reform and Consumer Protection Act and all requests, rules, guidelines or
directives thereunder or issued in connection therewith and (ii) all requests,
rules, guidelines or directives promulgated by the Bank for International
Settlements, the Basel Committee on Banking Supervision (or any successor or
similar authority) or the United States or foreign regulatory authorities, in
each case in respect of this clause (ii) pursuant to Basel III, shall, in each
case, be deemed to be a change in a Requirement of Law under Section 10.3(a)
above and/or a change in Capital Adequacy Regulation under Section 10.3(b)
above, as applicable, regardless of the date enacted, adopted or issued.

 

10.4     Funding Losses. The Borrowers agree to reimburse each Lender and to
hold each Lender harmless from any loss or expense which such Lender may sustain
or incur as a consequence of:

 

(a)     the failure of the Borrowers to make any payment or mandatory prepayment
of principal of any LIBOR Rate Loan (including payments made after any
acceleration thereof);

 

(b)     the failure of the Borrowers to borrow, continue or convert a Loan after
the Borrower Representative has given (or is deemed to have given) a Notice of
Borrowing or a Notice of Conversion/Continuation;

 

(c)     the failure of the Borrowers to make any prepayment after the Borrowers
have given a notice in accordance with Section 1.7;

 

 

 
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(d)     the prepayment (including pursuant to Section 1.8) of a LIBOR Rate Loan
on a day which is not the last day of the Interest Period with respect thereto;
or

 

(e)     the conversion pursuant to Section 1.6 of any LIBOR Rate Loan to a Base
Rate Loan on a day that is not the last day of the applicable Interest Period;

 

including any such loss or expense arising from the liquidation or reemployment
of funds obtained by it to maintain its LIBOR Rate Loans hereunder or from fees
payable to terminate the deposits from which such funds were obtained. Solely
for purposes of calculating amounts payable by the Borrowers to the Lenders
under this Section 10.4 and under subsection 10.3(a): each LIBOR Rate Loan made
by a Lender (and each related reserve, special deposit or similar requirement)
shall be conclusively deemed to have been funded at the LIBOR used in
determining the interest rate for such LIBOR Rate Loan by a matching deposit or
other borrowing in the interbank eurodollar market for a comparable amount and
for a comparable period, whether or not such LIBOR Rate Loan is in fact so
funded.

 

10.5     Inability to Determine Rates. If the Agent shall have determined in
good faith that for any reason adequate and reasonable means do not exist for
ascertaining the LIBOR for any requested Interest Period with respect to a
proposed LIBOR Rate Loan or that the LIBOR applicable pursuant to subsection
1.3(a) for any requested Interest Period with respect to a proposed LIBOR Rate
Loan does not adequately and fairly reflect the cost to the Lenders of funding
such Loan, the Agent will forthwith give notice of such determination to the
Borrower Representative and each Lender. Thereafter, the obligation of the
Lenders to make or maintain LIBOR Rate Loans hereunder shall be suspended until
the Agent revokes such notice in writing. Upon receipt of such notice, the
Borrower Representative may revoke any Notice of Borrowing or Notice of
Conversion/Continuation then submitted by it. If the Borrower Representative
does not revoke such notice, the Lenders shall make, convert or continue the
Loans, as proposed by the Borrower Representative, in the amount specified in
the applicable notice submitted by the Borrower Representative, but such Loans
shall be made, converted or continued as Base Rate Loans.

 

10.6     Reserves on LIBOR Rate Loans. The Borrowers shall pay to each Lender,
as long as such Lender shall be required under regulations of the Federal
Reserve Board to maintain reserves with respect to liabilities or assets
consisting of or including Eurocurrency funds or deposits (currently known as
“Eurocurrency liabilities”), additional costs on the unpaid principal amount of
each LIBOR Rate Loan equal to actual costs of such reserves allocated to such
Loan by such Lender (as determined by such Lender in good faith, which
determination shall be conclusive absent demonstrable error), payable on each
date on which interest is payable on such Loan provided the Borrower
Representative shall have received at least fifteen (15) days’ prior written
notice (with a copy to the Agent) of such additional interest from the Lender.
If a Lender fails to give notice fifteen (15) days prior to the relevant
Interest Payment Date, such additional interest shall be payable fifteen (15)
days from receipt of such notice; provided that no Lender shall make a claim for
any such additional insurance more than 180 days after such Lender has knowledge
of such additional interest.

 

 

 
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10.7     Certificates of Lenders. Any Lender claiming reimbursement or
compensation pursuant to this Article X shall deliver to the Borrower
Representative (with a copy to the Agent) a certificate setting forth in
reasonable detail the amount payable to such Lender hereunder and such
certificate shall be conclusive and binding on the Borrowers in the absence of
manifest error.

 

10.8     Survival. The agreements and obligations of the Borrowers in this
Article X shall survive the payment of all other Obligations.

 

ARTICLE XI - DEFINITIONS

 

11.1     Defined Terms. The following terms are defined in the Sections or
subsections referenced opposite such terms:

 

“Affected Lender”

9.22

“Aggregate Excess Funding Amount”

1.11(e)

“Average Daily Revolving Amount”

1.9(b)

“Borrower” and “Borrowers”

Preamble

“Borrower Representative”

1.14

“Collateral Agents”

Preamble

“Collateral Matters”

8.1(d)

“Commitment Increase”

1.1(b)

“Commitment Increase Cap”

1.1(b)

“Cone Jacquards Excess Proceeds”

1.8(f)

“Currency Overadvance”

1.1(b)

“Eligible Accounts”

1.12(b)

“Eligible Assignee”

1.1(b)

“Eligible Inventory”

1.13(b)

“Event of Default”

7.1

“Excess Asset Sale Proceeds”

1.8(e)

“Fee Letter”

1.9(a)

“Food Security Act Notice”

5.21(b)

“Increased Commitment Proposal”

1.1(b)

“Indemnified Matters”

9.6

“Indemnitee”

9.6

“Insured Accounts”

1.12

“Investments”

5.4

“ITG”

Preamble

“L/C Reimbursement Agreement”

1.1(c)

“L/C Reimbursement Date”

1.1(c)

“L/C Request”

1.1(c)

“L/C Sublimit”

1.1(c)

“Lender”

Preamble

“Letter of Credit Fee”

1.9(c)

“Maximum Lawful Rate”

1.3(d)

“Maximum Revolving Loan Balance”

1.1(b)

 

 
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“Non-Funding Lender”

1.11(b)

“Notice of Conversion/Continuation”

1.6(a)

“Original Credit Agreement”

Preamble

“Original Currency”

9.25(a)

“Other Currency”

9.25(a)

“Other Lender”

1.11(d)

“Other Taxes”

10.1(c)

“Overadvance”

1.1(b)

“Permitted Liens”

5.1

“Pre 3/31 Clause (A) Excess Proceeds”

1.8(e)

“Pre 3/31 Clause (B) Excess Proceeds”

1.8(e)

“Post 3/31 Clause (A) Excess Proceeds”

1.8(e)

“Post 3/31 Clause (B) Excess Proceeds”

1.8(e)

“Projections”

4.2(l)

“Register”

1.4(b)

“Restricted Payments”

5.11

“Replacement Lender”

9.22

“Revolving Loan Commitment”

1.1(b)

“Revolving Loan”

1.1(b)

“Sale”

9.9(a)

“Settlement Date”

1.11(b)

“Swing Loan”

1.1(d)(i)

“Swingline Request”

1.1(d)(ii)

“Tax Returns”

3.10

“Taxes”

10.1(a)

“Term Loan”

1.1(a)

“Term Loan Commitment”

1.1(a)

“Unused Commitment Fee”

1.9(b)

 

In addition to the terms defined elsewhere in this Agreement, the following
terms have the following meanings:

 

“Account” means, as at any date of determination, all “accounts” (as such term
is defined in the UCC) owned by any Borrower, including, without limitation, the
unpaid portion of the obligation of a customer of a Borrower in respect of
Inventory purchased by and shipped to such customer and/or the rendition of
services by a Borrower in the Ordinary Course of Business, as stated on the
respective invoice of a Borrower, net of any credits, rebates or offsets owed to
such customer.

 

“Account Debtor” means the customer of a Borrower who is obligated on or under
an Account.

 

“Acquisition” means any transaction or series of related transactions for the
purpose of or resulting, directly or indirectly, in (a) the acquisition of all
or substantially all of the assets of a Person, or of any business or division
of a Person, (b) the acquisition of in excess of fifty percent (50%) of the
Stock and Stock Equivalents of any Person or otherwise causing any Person to
become a Subsidiary of a Borrower, or (c) a merger or consolidation or any other
combination with another Person.

 

 

 
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“Activation Notice” means a notice delivered by the Agent to a depository,
securities intermediary or commodities intermediary to forward immediately all
amounts in the applicable account as directed by the Agent.

 

“AEC Purchaser” means Asheboro Elastics Corporation d/b/a AEC Narrow Fabrics (or
an affiliate thereof).

 

“Affiliate” means, as to any Person, any other Person which, directly or
indirectly, is in control of, is controlled by, or is under common control with,
such Person. A Person shall be deemed to control another Person if the
controlling Person possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of the other Person, whether
through the ownership of voting securities, by contract or otherwise. Without
limitation, any director, executive officer or beneficial owner of ten percent
(10%) or more of the Stock (either directly or through ownership of Stock
Equivalents) of a Person shall for the purposes of this Agreement, be deemed to
control the other Person. Notwithstanding the foregoing, (i) neither the Agent
nor any Lender and (ii) no WLR Affiliate, in either case, shall be deemed an
“Affiliate” of any Credit Party or of any Subsidiary of any Credit Party.

 

“Affirmation Agreement” means that certain Affirmation Agreement dated as of the
Closing Date by and among the Credit Parties and the Agent, as the same may be
amended, supplemented, restated or otherwise modified from time to time.

 

“Agent” means GE Capital in its capacity as administrative agent for the Lenders
hereunder, and any successor administrative agent appointed pursuant to Section
8.9.

 

“Aggregate Revolving Loan Commitment” means the combined Revolving Loan
Commitments of the Lenders, which shall be in the amount of $85,000,000, as such
amount may be increased or reduced from time to time pursuant to this Agreement.

 

“Aggregate Term Loan Commitment” means the combined Term Loan Commitments of the
Lenders, which shall be in the amount of $13,274,770.00 as of the Tenth
Amendment Effective Date and which shall be reduced as the Term Loan is repaid.

 

“Applicable Commitment Fee Percentage” means the percentage in effect from time
to time as set forth below, determined on the first Business Day of each Fiscal
Month based upon Usage for the immediately preceding Fiscal Month:

 

Usage

Applicable Commitment Fee Percentage

> 50%

0.250%

< 50%

0.375%

 

 

 
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The Applicable Commitment Fee Percentage shall be adjusted from time to time
upon delivery to Agent of the monthly financial statements for the last calendar
month of each fiscal quarter required to be delivered pursuant to Section 4.1
accompanied by a written calculation of the Average Adjusted Availability
certified on behalf of the Borrowers by a Responsible Officer of the Borrower
Representative as of the end of the fiscal month for which such financial
statements are delivered. If such calculation indicates that the Applicable
Commitment Fee Percentage shall increase or decrease, then on the first day of
the calendar month following the date of delivery of such financial statements
and written calculation the Applicable Commitment Fee Percentage shall be
adjusted in accordance therewith; provided, however, that if the Borrowers shall
fail to deliver any such financial statements for any such fiscal month by the
date required pursuant to Section 4.1, then, at Agent’s election, effective as
of the first day of the calendar month following the end of the fiscal month
during which such financial statements were to have been delivered, and
continuing through the first day of the calendar month following the date (if
ever) when such financial statements and such written calculation are finally
delivered, the Applicable Commitment Fee Percentage shall be conclusively
presumed to equal the highest Applicable Commitment Fee Percentage specified in
the pricing table set forth above.

 

In the event that any financial statement or Compliance Certificate delivered
pursuant to Sections 4.1 or 4.2 is inaccurate, and such inaccuracy, if
corrected, would have led to the imposition of a higher Applicable Commitment
Fee Percentage for any period than the Applicable Commitment Fee Percentage
applied for that period, then (i) the Borrowers shall immediately deliver to
Agent a corrected financial statement and a corrected Compliance Certificate for
that period, (ii) the Applicable Commitment Fee Percentage shall be determined
based on the corrected Compliance Certificate for that period, and (iii) the
Borrowers shall immediately pay to Agent (for the account of the Revolving
Lenders that hold the Revolving Loan Commitments at the time such payment is
received, regardless of whether those Revolving Lenders held the Revolving Loan
Commitments during the relevant period) the accrued additional interest owing as
a result of such increased Applicable Commitment Fee Percentage for that period.
This paragraph shall not limit the rights of Agent or the Lenders with respect
to subsection 1.3(c) and Article VII hereof, and shall survive the termination
of this Agreement until the payment in full in cash of the aggregate outstanding
principal balance of the Loans.

 

“Applicable Margin” means the applicable LIBOR margin or Base Rate margin in
effect from time to time as set forth below, determined on the first Business
Day of each Fiscal Month based upon the Average Adjusted Availability during the
immediately preceding Fiscal Month:

 

Average Adjusted Availability

LIBOR Margin

Base Rate Margin

< $20,000,000

3.00%

2.00%

>$20,000,000 but < $30,000,000

2.75%

1.75%

>$30,000,000

2.50%

1.50%

 

 
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The Applicable Margin shall be adjusted from time to time upon delivery to Agent
of the monthly financial statements for the last calendar month of each fiscal
quarter required to be delivered pursuant to Section 4.1 accompanied by a
written calculation of the Average Adjusted Availability certified on behalf of
the Borrowers by a Responsible Officer of the Borrower Representative as of the
end of the fiscal month for which such financial statements are delivered. If
such calculation indicates that the Applicable Margin shall increase or
decrease, then on the first day of the calendar month following the date of
delivery of such financial statements and written calculation the Applicable
Margin shall be adjusted in accordance therewith; provided, however, that if the
Borrowers shall fail to deliver any such financial statements for any such
fiscal month by the date required pursuant to Section 4.1, then, at Agent’s
election, effective as of the first day of the calendar month following the end
of the fiscal month during which such financial statements were to have been
delivered, and continuing through the first day of the calendar month following
the date (if ever) when such financial statements and such written calculation
are finally delivered, the Applicable Margin shall be conclusively presumed to
equal the highest Applicable Margin specified in the pricing table set forth
above. Notwithstanding anything herein to the contrary, Swing Loans may not be
LIBOR Rate Loans.

 

In the event that any financial statement or Compliance Certificate delivered
pursuant to Sections 4.1 or 4.2 is inaccurate, and such inaccuracy, if
corrected, would have led to the imposition of a higher Applicable Margin for
any period than the Applicable Margin applied for that period, then (i) the
Borrowers shall immediately deliver to Agent a corrected financial statement and
a corrected Compliance Certificate for that period, (ii) the Applicable Margin
shall be determined based on the corrected Compliance Certificate for that
period, and (iii) the Borrowers shall immediately pay to Agent (for the account
of the Lenders that hold the Commitments and Loans at the time such payment is
received, regardless of whether those Lenders held the Commitments and Loans
during the relevant period) the accrued additional interest owing as a result of
such increased Applicable Margin for that period. This paragraph shall not limit
the rights of Agent or the Lenders with respect to subsection 1.3(c) and Article
VII hereof, and shall survive the termination of this Agreement until the
payment in full in cash of the aggregate outstanding principal balance of the
Loans.

 

“Appraisal” means, as applicable, (i) the appraisal delivered to the Agent prior
to the Closing Date setting forth the Net Orderly Liquidation Value of
Inventory, Net Orderly Liquidation Value of Equipment and fair market value of
real Property, and (ii) any appraisal in form and substance reasonably
satisfactory to the Agent delivered to the Agent pursuant to Sections 4.2(k) or
(n).

 

“Approved Fund” means, with respect to any Lender, any Person (other than a
natural Person) that (a) (i) is or will be engaged in making, purchasing,
holding or otherwise investing in commercial loans and similar extensions of
credit in the ordinary course of its business or (ii) temporarily warehouses
loans for any Lender or any Person described in clause (i) above and (b) is
advised or managed by (i) such Lender, (ii) any Affiliate of such Lender or
(iii) any Person (other than an individual) or any Affiliate of any Person
(other than an individual) that administers or manages such Lender.

 

 

 
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“Assignment” means an assignment agreement entered into by a Lender, as
assignor, and any prospective assignee thereof and accepted by the Agent, in
substantially the form of Exhibit  11.1(a).

 

“Attorney Costs” means and includes all reasonable fees and disbursements of any
law firm or other external counsel.

 

“Availability” means, as of any date of determination, the amount by which (a)
the “Borrowing Base” (as calculated pursuant to the Borrowing Base Certificate
but excluding for purposes of the definition of Availability, any amounts
included in the calculation of the “Borrowing Base” pursuant to clauses (I)(d)
and (I)(e) of the definition thereof) in effect from time to time less the sum
of (x) the aggregate amount of Letter of Credit Obligations plus (y) outstanding
Swing Loans exceeds (b) the aggregate outstanding principal balance of Revolving
Loans.

 

“Average Adjusted Availability” means on any date of determination (such date,
the “Determination Date”), average Availability for the thirty (30) calendar
days preceding the Determination Date, or in the case of an Investment,
Permitted Acquisition, Capital Expenditure or asset disposition, pro forma
average Availability for the thirty (30) calendar days preceding the closing
date of such Investment, Permitted Acquisition, Capital Expenditure or asset
disposition, determined as if such Investment, Permitted Acquisition, Capital
Expenditure or asset disposition had occurred immediately prior to that thirty
(30) calendar day period.

 

“Banamex Facility” means, collectively, the Long Term Mortgage Loan Agreement
among Burlington Morelos, the guarantors party thereto and Banco Nacional de
Mexico, S.A., as lender, and the Factoring Discount Line Operating Agreement
among Parras Cone, as borrower, the surety parties party thereto and Banco
Nacional de Mexico, S.A., as lender, including extensions, replacements,
increases and refinancings thereof provided that any Indebtedness thereunder or
under any such extension, replacement, increase or refinancing shall be without
recourse to any Credit Party.

 

“Bank Product” means any of the following products or services extended to any
Credit Party by any Person that was a Lender on the Closing Date or any such
Lender’s Affiliate (in each case, only for so long as such Lender (i) remains a
Lender hereunder, (ii) is not a Non-Funding Lender and (iii) has not sold, in
one or more transactions and to one or more Persons, participations in or to all
of its rights and obligations under the Loan Documents (including all its rights
and obligations with respect to the Term Loan, Revolving Loans and Letters of
Credit) pursuant to Section 9.9 of this Agreement or otherwise): (a) cash
management services, including automatic clearinghouse, controlled disbursement,
depository, electronic fund transfer, information reporting, lockbox, overdraft,
stop payment and/or wire transfer services and (b) commercial credit card and
merchant card services.

 

 

 
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“Bankruptcy Code” means the Federal Bankruptcy Reform Act of 1978 (11 U.S.C.
§101, et seq.), as amended and in effect from time to time and the regulations
issued from time to time thereunder.

 

“Base Rate” means, at any time, a rate per annum equal to the higher of (a) the
rate last quoted by The Wall Street Journal as the “Prime Rate” in the United
States or, if The Wall Street Journal ceases to quote such rate, the highest per
annum interest rate published by the Federal Reserve Board in Federal Reserve
Statistical Release H.15 (519) (Selected Interest Rates) as the “bank prime
loan” rate or, if such rate is no longer quoted therein, any similar rate quoted
therein (as determined by the Agent) or any similar release by the Federal
Reserve Board (as determined by the Agent), (b) the sum of 3.0% per annum and
the Federal Funds Rate and (c) the sum of (x) LIBOR, as defined herein,
calculated for each such day based on an Interest Period of three months
determined two (2) Business Days prior to such day, plus (y) the excess of the
Applicable Margin for LIBOR Rate Loans over the Applicable Margin for Base Rate
Loans, in each instance, as of such day. Any change in the Base Rate due to a
change in any of the foregoing shall be effective on the effective date of such
change in the Prime Rate, the Federal Funds Rate or LIBOR.

 

“Base Rate Loan” means a Loan that bears interest based on the Base Rate.

 

“Benefit Plan” means any employee benefit plan as defined in Section 3(3) of
ERISA (whether governed by the laws of the United States or otherwise) to which
any Credit Party incurs or otherwise has any obligation or liability, contingent
or otherwise.

 

“Borrowing” means a borrowing hereunder consisting of Loans made to or for the
benefit of the Borrowers on the same day by the Lenders pursuant to Article I.

 

“Borrowing Availability” means, as of any date of determination, the lesser of
(a) the Aggregate Revolving Loan Commitment then in effect and (b) the Borrowing
Base (as calculated pursuant to the Borrowing Base Certificate) then in effect.

 

“Borrowing Base” means, as of any date of determination by the Agent, from to
time to time, an amount equal to

 

(I) the sum of:

 

(a) 85% of the US Dollar Equivalent of the book value of Eligible Accounts
(other than Insured Accounts);

 

(b) the lesser of (i) 75% of the US Dollar Equivalent of the book value of
Insured Accounts and (ii) $5,000,000;

 

(c) the least of (i) 65% of the book value (valued at the lower of cost or
market) of Eligible Inventory, (ii) 85% of the book value (valued at the lower
of cost or market) of Eligible Inventory multiplied by the then current NOLV
Factor and (iii) an amount equal to 50% of the Borrowing Base (excluding for
purposes of this subclause (I)(c)(iii) only, clauses (I)(d) and (I)(e) of the
definition of Borrowing Base);

 

 

 
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(d) [Intentionally Omitted]; and

 

(e) (i) prior to the expiration or termination of, or full draw by Agent of
amounts available under, the WLR/RBS Letter of Credit II, an amount equal to the
greater of (x) zero and (y) the maximum face amount of the WLR/RBS Letter of
Credit II as of such date less the aggregate amount funded to Agent under the
WLR/RBS Letter of Credit II and (ii) from and after the expiration or
termination of, or full draw by Agent of amounts available under, the WLR/RBS
Letter of Credit II, zero,

 

less (II) such Reserves as may be imposed by the Agent in accordance with the
terms of this Agreement.

 

“Borrowing Base Certificate” means a certificate of the Borrower Representative,
on behalf of the Borrowers, in substantially the form of Exhibit 11.1(b) hereto,
duly completed by a Responsible Officer of the Borrower Representative.

 

“Burlington IP Sale” means the Disposition contemplated by the Trademark
Assignment attached to the Seventh Amendment as Exhibit A.

 

“Burlington Morelos” means Burlington Morelos, S.A. de C.V.

 

“Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks in Chicago, Illinois or New York, New York are authorized or
required by law to close and, if the applicable Business Day relates to any
LIBOR Rate Loan, a day on which dealings are carried on in the London interbank
market.

 

“Canadian Dollars” and “C$” each means lawful currency of Canada.

 

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

 

“Capital Expenditures” means all expenditures during any measuring period for
any fixed asset or improvements or replacements, substitutions, or additions
thereto that have a useful life of more than one year and are required to be
capitalized under GAAP.

 

“Capital Lease” means any leasing or similar arrangement which, in accordance
with GAAP, is classified as a capital lease.

 

“Capital Lease Obligations” means all monetary obligations of any Credit Party
or any Subsidiary of any Credit Party under any Capital Leases.

 

“Cash Equivalents” means any of the following:

 

(i)     securities issued or directly and fully guaranteed or insured by the
United States of America or any agency or instrumentality thereof (provided that
the full faith and credit of the United States of America is pledged in support
thereof) and securities that are the direct obligations of any Member State of
the European Union, which at the time of acquisition thereof, was not targeted
for sanctions by the Office of Foreign Assets Control of the United States
Department of the Treasury so long as the full faith of and credit of such
nation is pledged in support thereof, in each case having maturities of not more
than one year from the date of acquisition;

 

 

 
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(ii)     US Dollar denominated time deposits, certificates of deposit and
bankers’ acceptances of (x) any Lender, (y) any domestic or foreign commercial
bank of recognized standing having capital and surplus in excess of $500,000,000
or (z) any bank (or the parent company of such bank) whose short-term commercial
paper rating from S&P is at least A-1, A-2 or the equivalent thereof or from
Moody’s is at least P-1, P-2 or the equivalent thereof or an equivalent rating
from a comparable foreign rating agency (any such bank, an “Approved Bank”), in
each case with maturities of not more than 180 days from the date of
acquisition;

 

(iii)     commercial paper issued by any Lender or Approved Bank or by the
parent company of any Lender or Approved Bank and commercial paper issued by, or
guaranteed by, any industrial or financial company with a short-term commercial
paper rating of at least A-1 or the equivalent thereof by S&P or at least P-1 or
the equivalent thereof by Moody’s or an equivalent rating from a comparable
foreign rating agency, or guaranteed by any industrial company with a long-term
unsecured debt rating of at least A or A2, or the equivalent of each thereof,
from S&P or Moody’s, as the case may be, and in each case maturing within 180
days after the date of acquisition or an equivalent rating from a comparable
foreign rating agency;

 

(iv)     fully collateralized repurchase agreements entered into with any Lender
or Approved Bank having a term of not more than 30 days and covering securities
described in clause (i) above;

 

(v)     investments in money market funds substantially all the assets of which
are comprised of securities of the types described in clauses (i) through (iv)
above;

 

(vi)     investments in money market funds access to which is provided as part
of “sweep” accounts maintained with a Lender or an Approved Bank;

 

(vii)     investments in industrial development revenue bonds that (A) “re-set”
interest rates not less frequently than quarterly, (B) are entitled to the
benefit of a remarketing arrangement with an established broker dealer, and (C)
are supported by a direct pay letter of credit covering principal and accrued
interest that is issued by an Approved Bank; and

 

 

 
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(viii)     investments in pooled funds or investment accounts consisting of
investments of the nature described in the foregoing clause (vii).

 

“Cash Flow” means EBITDA for the applicable period of measurement less
Unfinanced Capital Expenditures.

 

“Closing Date” means the date on which all conditions precedent set forth in
Section 2.1 are satisfied or waived by the Agent and all Lenders.

 

“Code” means the Internal Revenue Code of 1986, and regulations promulgated
thereunder.

 

“Collateral” means all Property and interests in Property and proceeds thereof
now owned or hereafter acquired by any Credit Party who has granted a Lien to
the Agent, in or upon which a Lien now or hereafter exists in favor of any
Lender or the Agent for the benefit of the Agent, Lenders and other Secured
Parties, whether under this Agreement or under any other Collateral Documents.

 

“Collateral Documents” means, collectively, the Guaranty and Security Agreement,
the Affirmation Agreement, the Mortgages, each Control Agreement and all other
security agreements, pledge agreements, patent and trademark security
agreements, lease assignments, guarantees and other similar agreements, and all
amendments, restatements, modifications or supplements thereof or thereto, by or
between any one or more of any Credit Party, any of their respective
Subsidiaries or any other Person pledging or granting a lien on Collateral or
guaranteeing the payment and performance of the Obligations, and any Lender or
the Agent for the benefit of the Agent, the Lenders and other Secured Parties
now or hereafter delivered to the Lenders or the Agent pursuant to or in
connection with the transactions contemplated hereby or prior hereto in
connection with the transactions contemplated by the Original Credit Agreement,
and all financing statements (or comparable documents now or hereafter filed in
accordance with the UCC or comparable law) against any such Person as debtor in
favor of any Lender or the Agent for the benefit of the Agent, the Lenders and
the other Secured Parties, as secured party, as any of the foregoing may be
amended, restated and/or modified from time to time.

 

“Commitment” means, for each Lender, the sum of its Revolving Loan Commitment
and its Term Loan Commitment.

 

“Commitment Percentage” means, as to any Lender, the percentage equivalent of
such Lender’s Revolving Loan Commitment or Term Loan Commitment, divided by the
Aggregate Revolving Loan Commitment or Aggregate Term Loan Commitment, as
applicable; provided that after the Term Loan has been funded, Commitment
Percentages shall be determined for the Term Loan by reference to the
outstanding principal balance thereof as of any date of determination rather
than the Commitments therefor; provided, further, that following acceleration of
the Loans, such term means, as to any Lender, the percentage equivalent of the
principal amount of the Loans held by such Lender, divided by the aggregate
principal amount of the Loans held by all Lenders.

 

 

 
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“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et
seq.).

 

“Cone Jacquards Purchase Agreement” means that certain Asset Purchase Agreement,
by and among Jacquards, Denim, ITG and Abercrombie Textiles, LLC, dated as of
March 31, 2011.

 

“Contingent Obligation” means, as to any Person, any direct or indirect
liability, contingent or otherwise, of that Person: (i) with respect to any
Indebtedness, lease, dividend or other obligation of another Person if the
primary purpose or intent of the Person incurring such liability, or the primary
effect thereof, is to provide assurance to the obligee of such liability that
such liability will be paid or discharged, or that the holders of such liability
will be protected (in whole or in part) against monetary loss with respect
thereto; (ii) with respect to any letter of credit issued for the account of
that Person or as to which that Person is otherwise liable for reimbursement of
drawings; (iii) under any Rate Contracts; (iv) to make take-or-pay or similar
payments if required regardless of nonperformance by any other party or parties
to an agreement; or (v) for the obligations of another Person through any
agreement to purchase, repurchase or otherwise acquire such obligation or any
Property constituting security therefor, to provide funds for the payment or
discharge of such obligation or to maintain the solvency, financial condition or
any balance sheet item or level of income of another Person. The amount of any
Contingent Obligation shall be equal to the amount of the obligation so
guaranteed or otherwise supported or, if not a fixed and determined amount, the
maximum amount so guaranteed or supported.

 

“Contractual Obligations” means, as to any Person, any provision of any security
issued by such Person or of any agreement, undertaking, contract, indenture,
mortgage, deed of trust or other instrument, document or agreement to which such
Person is a party or by which it or any of its Property is bound.

 

“Control Agreement” means a tri-party deposit account, securities account or
commodities account control agreement by and among the applicable Credit Party,
the Agent and the depository, securities intermediary or commodities
intermediary, and each in form and substance reasonably satisfactory in all
respects to the Agent and in any event providing to the Agent “control” of such
deposit account, securities or commodities account within the meaning of
Articles 8 and 9 of the UCC.

 

“Conversion Date” means any date on which the Borrowers convert a Base Rate Loan
to a LIBOR Rate Loan or a LIBOR Rate Loan to a Base Rate Loan.

 

“Copyrights” means all rights, title and interests (and all related IP Ancillary
Rights) arising under any Requirement of Law in or relating to copyrights and
all mask work, database and design rights, whether or not registered or
published, all registrations and recordations thereof and all applications in
connection therewith.

 

“Credit Parties” means ITG, each other Borrower and each other Person (i) which
executes this Agreement as a “Credit Party,” (ii) which executes a guaranty of
the Obligations, (iii) which grants a Lien on all or substantially all of its
assets to secure payment of the Obligations and (iv) all of the Stock of which
is pledged to the Agent for the benefit of itself and Lenders. 

 

 

 
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“Default” means any event or circumstance which, with the giving of notice, the
lapse of time, or both, would (if not cured or otherwise remedied during such
time) constitute an Event of Default.

 

“Disposition” means (a) the sale, lease, conveyance or other disposition of
Property pursuant to Sections 5.2(b), 5.2(f)(iv), 5.2(f)(v), 5.2(j), 5.2(k),
5.2(l), 5.2(m), 5.2(n) or 5.2(o) or otherwise with the consent of Majority
Lenders, and (b) the sale or transfer by a Borrower or any Subsidiary of a
Borrower of any Stock or Stock Equivalent issued by any Subsidiary of a Borrower
and held by such transferor Person.

 

“Dollars”, “dollars” and “$” each mean lawful money of the United States of
America.

 

“Domestic” means, with respect to any Borrower, Credit Party or Subsidiary of a
Borrower or Credit Party, that such Borrower, Credit Party or Subsidiary is
incorporated or otherwise organized under the laws of a state of the United
States of America.

 

 

 
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“EBITDA” means net income (or loss) for the applicable period of measurement of
Borrowers and their wholly-owned Subsidiaries on a consolidated basis determined
in accordance with GAAP, but minus without duplication (a) the income (or loss)
of any Person which is not a Wholly-Owned Subsidiary of a Borrower, except to
the extent of the amount of dividends or other distributions actually paid to a
Borrower or any of its Wholly-Owned Subsidiaries in cash by such Person during
such period and the payment of dividends or similar distributions by that Person
is not at the time prohibited by operation of the terms of its charter or of any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Person; (b) the income (or loss) of any Person
accrued prior to the date it becomes a Subsidiary of a Borrower or is merged
into or consolidated with a Borrower or any of its Subsidiaries or that Person’s
assets are acquired by a Borrower or any of its Subsidiaries; (c) the proceeds
of any life insurance policy; (d) non-cash gains or losses from the sale,
exchange, transfer or other disposition of Property or assets not in the
Ordinary Course of Business of the Borrowers and their Subsidiaries, and related
tax effects in accordance with GAAP; and (e) any other extraordinary or
non-recurring gains or losses of a Borrower or its Subsidiaries (excluding for
purposes of this clause (e), any extraordinary or non-recurring gains or losses
related to expenses incurred, charged or paid in connection with the ITG Merger
Litigation (as referenced in ITG’s public filings, the “ITG Merger Litigation”),
and related tax effects in accordance with GAAP in an amount not to exceed
$2,000,000 for any period of measurement ending after the Tenth Amendment
Effective Date plus, without duplication, (i) all amounts deducted in
calculating net income (or loss) for depreciation or amortization for such
period; (ii) interest expense (less interest income) deducted in calculating net
income (or loss) for such period; (iii) all accrued taxes on or measured by
income to the extent deducted in calculating net income (or loss) for such
period; (iv) all non-cash LIFO expenses (or minus non-cash LIFO income),
non-cash restructuring charges (or minus non-cash restructuring gains) or
non-cash purchase accounting adjustments for such period; (v) all non-cash
losses or expenses (or minus non-cash income or gain) included or deducted in
calculating net income (or loss) for such period including, without limitation,
any non-cash loss or expense (or income or gain) due to the application of FASB
ASC 815-10 regarding hedging activity, FASB ASC 350 regarding impairment of good
will, FASB ASC 480-10 regarding accounting for financial instruments with debt
and equity characteristics, non-cash foreign currency exchange losses (or minus
gains) and non-cash expenses deducted as a result of any grant of Stock or Stock
Equivalents to employees, officers or directors, but excluding any non-cash loss
or expense (x) that is an accrual of a reserve for a cash expenditure or payment
to be made, or anticipated to be made, in a future period or (y) relating to a
write-down, write off or reserve with respect to Accounts and Inventory; (vi) if
positive, the net amount of (A) the sum of (x) all cash received by a Borrower
for fees and other intercompany billings charged to affiliates in a prior period
that were accrued but not received during such prior period plus (y) fees and
other intercompany billings charged to a Borrower by one of its affiliates
during such period but not paid in cash during such period less (B) the sum of
(x) fees and other intercompany billings charged by a Borrower to affiliates
that are accrued but not received during such period plus (y) fees and other
intercompany billings charged to a Borrower by one of its affiliates in a prior
period that were accrued but not paid during such prior period that are paid in
cash during such period (provided that, (I) for purposes of determining EBITDA
for any measurement period that includes one or more months ending after January
1, 2012 but on or prior to December 31, 2012, the aggregate amount that shall be
added back to net income pursuant to this clause (vi) for each such month during
such measurement period shall equal the aggregate amount of expenses incurred by
ITG in connection with the “ITG Merger Litigation” during such month plus
$400,000 and (II) for purposes of determining EBITDA for any measurement period
ending after January 1, 2013, the aggregate amount that shall be added back to
net income pursuant to this clause (vi) for each month during such measurement
period shall not exceed the aggregate amount of expenses incurred by ITG in
connection with the “ITG Merger Litigation” during such month); and (vii) for
any measurement period that includes one or more months ending after January 1,
2012 but on or prior to December 31, 2012, expenses incurred by ITG during each
such month during such measurement period in connection with the “ITG Merger
Litigation”. From and after the occurrence of any Specified Sale, EBITDA shall
be calculated in a manner such that the applicable Specified Sale shall be
deemed to have occurred as of the first day of the most recently ended twelve
month period ending as of the last day of the fiscal month immediately preceding
the date of occurrence of such Specified Sale (or to the extent such Specified
Sale occurs on the last day of a fiscal month, the twelve month period ending as
of such date).

 

 

 
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“Eighth Amendment Effective Date” has the meaning assigned to such term in that
certain Amendment No. 8 to Credit Agreement dated as of December 20, 2012 among
Borrowers, the other Credit Parties signatory thereto, Agent and the Lenders
signatory thereto.

 

“Electronic Transmission” means each document, instruction, authorization, file,
information and any other communication transmitted, posted or otherwise made or
communicated by e-mail or E-Fax, or otherwise to or from an E-System or other
equivalent service.

 

“Eleventh Amendment Effective Date” means August 27, 2014.

 

“Eligible Countries” means the United States, Canada, any Member State of the
European Union, any state which is a signatory to the North American Free Trade
Agreement or Central America Free Trade Agreement, Colombia, Brazil, Jordan,
Turkey, Egypt, Bangladesh, India, Israel, People’s Republic of China, South
Korea, Vietnam, Nicaragua, Sri Lanka, South Africa and such other countries as
may be requested by the Borrower Representative and approved by the Agent, such
approval not to be unreasonably withheld (unless the Agent notifies the Borrower
Representative that any of the aforementioned countries cannot be an “Eligible
Country” due to any Lender’s lending restrictions (as determined by Agent in
good faith)).

 

“Environmental Laws” means all present and future Requirements of Law and
Permits imposing liability or standards of conduct for or relating to the
regulation and protection of human health, safety, the environment and natural
resources, and including public notification requirements and environmental
transfer of ownership, notification or approval statutes in any jurisdiction, in
each case, that are applicable to the Credit Parties or their Subsidiaries.

 

“Environmental Liabilities” means all Liabilities (including costs of Remedial
Actions, natural resource damages and required costs and expenses of
investigation and feasibility studies) that may be imposed on, incurred by or
asserted against any Credit Party or any Subsidiary of any Credit Party as a
result of, or related to, any claim, suit, action, investigation, proceeding or
demand by any Person, whether based in contract, tort, implied or express
warranty, strict liability, criminal or civil statute or common law or
otherwise, arising under any Environmental Law or in connection with any
environmental, health or safety condition or with any Release and resulting from
the ownership, lease, sublease or other operation or occupation of property by
any Credit Party or any Subsidiary of any Credit Party, whether on, prior or
after the date hereof.

 

“Equipment” means “equipment” as such term is defined in the UCC.

 

“Equipment Finance Contract” means any document, instrument or agreement
evidencing Operating Leases, Capital Leases or equipment financing arrangements
and any guarantees of, or security for, any of the foregoing.

 

“Equipment Finance Contract Amount” has the meaning specified in the definition
of Secured Rate Contract.

 

“ERISA” means the Employee Retirement Income Security Act of 1974.

 

“ERISA Affiliate” means, collectively, any Credit Party and any Person under
common control or treated as a single employer with, any Credit Party, within
the meaning of Section 414(b), (c), (m) or (o) of the Code.

 

 

 
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“ERISA Event” means any of the following: (a) a reportable event described in
Section 4043(b) of ERISA (or, unless the 30-day notice requirement has been duly
waived under the applicable regulations, Section 4043(c) of ERISA) with respect
to a Title IV Plan; (b) the withdrawal of any ERISA Affiliate from a Title IV
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; (c) the
complete or partial withdrawal of any ERISA Affiliate from any Multiemployer
Plan; (d) with respect to any Multiemployer Plan, the filing of a notice of
reorganization, insolvency or termination (or treatment of a plan amendment as
termination) under Section 4041A of ERISA; (e) the filing of a notice of intent
to terminate a Title IV Plan (or treatment of a plan amendment as termination)
under Section 4041 of ERISA; (f) the institution of proceedings to terminate a
Title IV Plan or Multiemployer Plan by the PBGC; (g) the failure to make any
required contribution to any Title IV Plan or Multiemployer Plan when due; (h)
the imposition of a lien under Section 412 of the Code or Section 302 or 4068 of
ERISA on any property (or rights to property, whether real or personal) of any
ERISA Affiliate; (i) the failure of a Benefit Plan or any trust thereunder
intended to qualify for tax exempt status under Section 401 or 501 of the Code
or other Requirements of Law to qualify thereunder; and (j) any other event or
condition that might reasonably be expected to constitute grounds under Section
4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Title IV Plan or Multiemployer Plan or for the imposition of any
liability upon any ERISA Affiliate under Title IV of ERISA other than for PBGC
premiums due but not delinquent.

 

“Euros” or “€” means European Euros.

 

“Event of Loss” means, with respect to any Property, any of the following: (a)
any loss, destruction or damage of such Property; or (b) any condemnation,
seizure or taking, by exercise of the power of eminent domain or otherwise, of
such Property, or confiscation of such Property or the requisition of the use of
such Property.

 

“Excess Availability” means, as of any date of determination, the amount by
which (a) the Borrowing Availability then in effect exceeds (b) the sum of (w)
aggregate outstanding principal balance of Revolving Loans plus (x) the
aggregate amount of Letter of Credit Obligations plus (y) outstanding Swing
Loans.

 

“Excluded Equity Issuance” means the private issuance of any of (a) Stock or
Stock Equivalents by ITG to management or employees of a Credit Party under any
employee stock option or stock purchase plan or other employee benefits plan in
existence from time to time, (b) Stock or Stock Equivalents by a Wholly-Owned
Subsidiary of a Borrower to a Borrower or another Wholly-Owned subsidiary of a
Borrower constituting an Investment permitted hereunder, (c) Stock or Stock
Equivalents by a Wholly-Owned Subsidiary of ITG to ITG or another Wholly-Owned
Subsidiary of ITG constituting an Investment permitted hereunder, (d) Stock or
Stock Equivalents by ITG and (e) Stock or Stock Equivalents by a Foreign
Subsidiary of such Foreign Subsidiary to qualify directors where required
pursuant to a Requirement of Law or to satisfy other requirements of applicable
law, in each instance, with respect to the ownership of Stock of Foreign
Subsidiaries.

 

 

 
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“Excluded Subsidiary” means any Person referred to in the last sentence of the
definition of “Subsidiary”; provided that the Agent shall have consented to such
Person having been designated as an “Excluded Subsidiary”, such consent not to
be unreasonably withheld or delayed.

 

“Excluded Swap Obligation” means, with respect to a Credit Party, each Swap
Obligation as to which, and only to the extent that, such Credit Party’s
guaranty of or grant of a Lien as security for such Swap Obligation is or
becomes illegal under the Commodity Exchange Act because such Credit Party does
not constitute an “eligible contract participant” as defined in the Commodity
Exchange Act (determined after giving effect to any keepwell, support or other
agreement for the benefit of such Credit Party and all guarantees of Swap
Obligations by other Credit Parties) when such guaranty or grant of Lien becomes
effective with respect to the Swap Obligation. If a Rate Contract governs more
than one Swap Obligation, only the Swap Obligation(s) or portions thereof
described in the foregoing sentence shall be Excluded Swap Obligation(s) for the
applicable Credit Party.

 

“Extended Terms Accounts” means Accounts owing by the Account Debtors listed on
Part B of Schedule 1.12 and designated therein as Extended Terms Account
Debtors.

 

“E-Fax” means any system used to receive or transmit faxes electronically.

 

“E-Signature” means the process of attaching to or logically associating with an
Electronic Transmission an electronic symbol, encryption, digital signature or
process (including the name or an abbreviation of the name of the party
transmitting the Electronic Transmission) with the intent to sign, authenticate
or accept such Electronic Transmission.

 

“E-System” means any electronic system, including Intralinks® and any other
Internet or extranet-based site, whether such electronic system is owned,
operated or hosted by the Agent, any of its Related Persons or any other Person,
providing for access to data protected by passcodes or other security system.

 

“FATCA” means Sections 1471, 1472, 1473 and 1474 of the Code, as of the date of
this Agreement (or any amended or successor version that is substantively
comparable and not materially more onerous to comply with), current or future
United States Treasury Regulations promulgated thereunder and published guidance
with respect thereto, any agreements entered into pursuant to Section 1471(b)(1)
of the Code and any applicable intergovernmental agreements with respect
thereto.

 

“Federal Funds Rate” means, for any day, the rate per annum (rounded upward to
the nearest 1/100th of 1%) equal to the weighted average of the rates on
overnight Federal Funds transactions with members of the Federal Reserve System
arranged by Federal Funds brokers on such day, as published by the Federal
Reserve Bank of New York on the Business Day next succeeding such day, provided
that if no such rate is so published on such next succeeding Business Day, the
Federal Funds Rate for such day shall be the average rate quoted to the Agent on
such day on such transactions as determined by the Agent in a commercially
reasonable manner.

 

 

 
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“Federal Reserve Board” means the Board of Governors of the Federal Reserve
System, or any entity succeeding to any of its principal functions.

 

“First Tier Foreign Subsidiary” means a Foreign Subsidiary more than fifty
percent (50%) of the voting Stock (directly or through ownership of Stock
Equivalents) of which are held directly by a Borrower or indirectly by a
Borrower through one or more Domestic Subsidiaries.

 

“Fixed Charge Coverage Ratio” means Cash Flow divided by Fixed Charges.

 

“Fixed Charges” means Net Interest Expense plus (a) scheduled principal payments
of Indebtedness during such period plus (b) taxes on or measured by income paid
or payable in cash during such period plus (c) Restricted Payments paid in cash
during such period (excluding dividends from Subsidiaries of a Borrower to a
Borrower or other Subsidiaries of a Borrower). From and after the occurrence of
any Specified Sale, Fixed Charges shall be calculated in a manner such that the
applicable Specified Sale shall be deemed to have occurred as of the first day
of the most recently ended twelve month period ending as of the last day of the
fiscal month immediately preceding the date of occurrence of such Specified Sale
(or to the extent such Specified Sale occurs on the last day of a fiscal month,
the twelve month period ending as of such date).

 

“Flood Certificate” means a “Standard Flood Hazard Determination Form” of the
Federal Emergency Management Agency and any successor Governmental Authority
performing a similar function.

 

“Flood Program” means the National Flood Insurance Program created by the U.S.
Congress pursuant to the National Flood Insurance Act of 1968, the Flood
Disaster Protection Act of 1973, the National Flood Insurance Reform Act of 1994
and the Flood Insurance Reform Act of 2004, in each case as amended from time to
time, and any successor statutes.

 

“Flood Zone” means areas having special flood hazards as described in the
National Flood Insurance Act of 1968, as amended from time to time, and any
successor statute. 

 

“Food Security Act” means the Food Security Act, 7 U.S.C. §1631.

 

“Foreign” means, with respect to any Subsidiary of a Credit Party, that such
Subsidiary is not a US Subsidiary.

 

“Fourth Amendment Effective Date” has the meaning assigned to such term in that
certain Consent and Amendment No. 4 to Credit Agreement dated as of December 27,
2011 among Borrowers, the other Credit Parties signatory thereto, Agent and the
Lenders signatory thereto.

 

 

 
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“GAAP” means generally accepted accounting principles in the United States set
forth from time to time in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board (or
agencies with similar functions of comparable stature and authority within the
accounting profession), which are applicable to the circumstances as of the date
of determination.

 

“Governmental Authority” means any nation or government, any state or other
political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.

 

“Greige Goods” means woven fabric that requires only finishing steps such as
dyeing.

 

“Guarantor” means any Subsidiary of ITG that is a party to the Guaranty and
Security Agreement.

 

“Guaranty and Security Agreement” means that certain Guaranty and Security
Agreement, dated as of the Original Closing Date, in form and substance
reasonably acceptable to the Agent and Borrowers, made by the Credit Parties in
favor of the Agent, for the benefit of the Secured Parties, as the same may be
amended, restated and/or modified from time to time.

 

“Hazardous Materials” means any substance, material or waste that is classified,
regulated or otherwise characterized under any Environmental Law as hazardous,
toxic, a contaminant or a pollutant or by other words of similar meaning or
regulatory effect, including petroleum or any fraction thereof, asbestos,
polychlorinated biphenyls and radioactive substances.

 

“Holdco Debt” means unsecured Indebtedness incurred by ITG or any Holding
Company of ITG that is not secured by the assets of, or guaranteed by, any
Credit Party.

 

“Holding Company” means in relation to ITG any limited liability company or
corporation in respect of which it is a Subsidiary and that owns no material
assets other than the Stock or Stock Equivalents of ITG.

 

“Impacted Lender” means any Lender that fails to provide Agent, within three (3)
Business Days following Agent’s written request, satisfactory assurance that
such Lender will not become a Non-Funding Lender.

 

 

 
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“Indebtedness” of any Person means, without duplication: (a) all indebtedness
for borrowed money; (b) all obligations issued, undertaken or assumed as the
deferred purchase price of Property or services (other than trade payables
entered into in the Ordinary Course of Business); (c) the face amount of all
letters of credit issued for the account of such Person and without duplication,
all drafts drawn thereunder and all reimbursement or payment obligations with
respect to letters of credit, surety bonds and other similar instruments issued
by such Person; (d) all obligations evidenced by notes, bonds, debentures or
similar instruments, including obligations so evidenced incurred in connection
with the acquisition of Property, assets or businesses; (e) all indebtedness
created or arising under any conditional sale or other title retention
agreement, or incurred as financing, in either case with respect to Property
acquired by the Person (even though the rights and remedies of the seller or
bank under such agreement in the event of default are limited to repossession or
sale of such Property); (f) all Capital Lease Obligations; (g) the principal
balance outstanding under any synthetic lease, off-balance sheet loan or similar
off balance sheet financing product; (h) all obligations, whether or not
contingent, to purchase, redeem, retire, defease or otherwise acquire for value
any of its own Stock or Stock Equivalents (or any Stock or Stock Equivalent of a
direct or indirect parent entity thereof) prior to the date that is 180 days
after the Revolving Termination Date, valued at, in the case of redeemable
preferred Stock, the greater of the voluntary liquidation preference and the
involuntary liquidation preference of such Stock plus accrued and unpaid
dividends; (i) all indebtedness referred to in clauses (a) through (h) above
secured by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien upon or in Property
(including accounts and contracts rights) owned by such Person, even though such
Person has not assumed or become liable for the payment of such indebtedness;
and (j) all Contingent Obligations described in clause (i) of the definition
thereof in respect of indebtedness or obligations of others of the kinds
referred to in clauses (a) through (i) above.

 

“Insolvency Proceeding” means (a) any case, action, application or proceeding
before any court or other Governmental Authority relating to bankruptcy,
reorganization, insolvency, voluntary arrangement, scheme of arrangement,
moratorium administration, liquidation, receivership, dissolution, winding-up or
relief of debtors and/or the appointment of any Person or officer in connection
therewith, or (b) any general assignment for the benefit of creditors,
composition, marshaling of assets for creditors, or other, similar arrangement
in respect of its creditors generally or any substantial portion of its
creditors; in each case in (a) and (b) above, undertaken under US Federal, state
or foreign law, including the Bankruptcy Code.

 

“Intellectual Property” means all rights, title and interests in or relating to
intellectual property and industrial property arising under any Requirement of
Law and all IP Ancillary Rights relating thereto, including all Copyrights,
Patents, Trademarks, Internet domain names, Trade Secrets and IP Licenses in any
jurisdiction.

 

“Intercreditor Agreement” means that certain Sixth Amended and Restated
Subordination and Intercreditor Agreement dated as of March 29, 2013 by and
among WLR Recovery Fund IV, L.P., as collateral agent on behalf of the
Subordinated Creditors (as defined therein), GE Capital, as agent for the
Lenders, and ITG, as amended, amended and restated, supplemented, modified or
replaced from time to time.

 

“Interest Payment Date” means, (a) with respect to any LIBOR Rate Loan (other
than a LIBOR Rate Loan having an Interest Period of six (6) months) the last day
of each Interest Period applicable to such Loan, (b) with respect to any LIBOR
Rate Loan having an Interest Period of six (6) months, the last day of each
three (3) month interval and, without duplication, the last day of such Interest
Period, and (c) with respect to Base Rate Loans (including Swing Loans) the
first day of each calendar month (starting with May 1, 2011).

 

 

 
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“Interest Period” means, with respect to any LIBOR Rate Loan, the period
commencing on the Business Day such Loan is disbursed or continued or on the
Conversion Date on which a Base Rate Loan is converted to the LIBOR Rate Loan
and ending on the date one, two, three or six months thereafter, as selected by
the Borrower Representative in its Notice of Borrowing or Notice of
Conversion/Continuation; provided that:

 

(a)     if any Interest Period pertaining to a LIBOR Rate Loan would otherwise
end on a day which is not a Business Day, that Interest Period shall be extended
to the next succeeding Business Day unless the result of such extension would be
to carry such Interest Period into another calendar month, in which event such
Interest Period shall end on the immediately preceding Business Day;

 

(b)     any Interest Period pertaining to a LIBOR Rate Loan that begins on the
last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the calendar month at the end of
such Interest Period; and

 

(c)     no Interest Period for the Term Loan shall extend beyond the last
scheduled payment date therefor, and no Interest Period for any Revolving Loan
shall extend beyond the Revolving Termination Date.

 

“Inventory” means all of the “inventory” (as such term is defined in the UCC) of
the Borrowers, including, but not limited to, all merchandise, raw materials,
parts, supplies, work-in-process and finished goods intended for sale, together
with all the containers, packing, packaging, shipping and similar materials
related thereto, and including such inventory as is temporarily out of a
Borrower’s custody or possession, including inventory on the premises of others
and items in transit.

 

“Investors” shall have the meaning ascribed thereto in the Support Agreement.

 

“IP Ancillary Rights” means, with respect to any other Intellectual Property, as
applicable, all foreign counterparts to, and all divisionals, reversions,
continuations, continuations-in-part, reissues, reexaminations, renewals and
extensions of, such Intellectual Property and all income, royalties, proceeds
and Liabilities at any time due or payable or asserted under or with respect to
any of the foregoing or otherwise with respect to such Intellectual Property,
including all rights to sue or recover at law or in equity for any past, present
or future infringement, misappropriation, dilution, violation or other
impairment thereof, and, in each case, all rights to obtain any other IP
Ancillary Right.

 

“IP License” means all Contractual Obligations (and all related IP Ancillary
Rights), granting any right, title and interest in or relating to any
Intellectual Property.

 

 

 
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“IRS” means the Internal Revenue Service of the United States and any successor
thereto.

 

“Issue” means, with respect to any Letter of Credit, to issue, extend the
expiration date of, renew (including by failure to object to any automatic
renewal on the last day such objection is permitted), increase the face amount
of, or reduce or eliminate any scheduled decrease in the face amount of, such
Letter of Credit, or to cause any Person to do any of the foregoing. The terms
“Issued” and “Issuance” have correlative meanings.

 

“Joint Ventures” means, collectively, Summit Yarn Holding I, Inc., a Delaware
corporation, Summit Yarn Holding II, Inc., a Delaware corporation, Summit Yarn
LLC, a North Carolina limited liability company, Cone Denim (Jiaxing) Limited, a
corporation organized under the laws of China, ITG – Phong Phu Limited Company,
a joint venture organized under the laws of Vietnam, Iskone Denim Pazarlama,
A.S., a joint venture formed under the laws of Turkey, and any other Person that
is not a Wholly-Owned Subsidiary and in which a Credit Party or a Subsidiary of
a Credit Party owns any Stock or Stock Equivalent and that Borrower
Representative notifies Agent as being a “Joint Venture” and Agent consents
thereto (such consent not to be unreasonably withheld).

 

“L/C Issuer” means GE Capital or a Subsidiary thereof or a Lender or other bank
or other legally authorized Person selected by or acceptable to the Agent and
ITG, in such Person’s capacity as an issuer of Letters of Credit hereunder.

 

“L/C Reimbursement Obligation” means, for any Letter of Credit, the obligation
of the Borrowers to the L/C Issuer thereof, as and when matured, to pay all
amounts drawn under such Letter of Credit.

 

“Lending Office” means, with respect to any Lender, the office or offices of
such Lender specified as its “Lending Office” beneath its name on the applicable
signature page hereto, or such other office or offices of such Lender as it may
from time to time notify the Borrower Representative and the Agent.

 

“Letter of Credit” means documentary or standby letters of credit issued for the
account of the Borrowers by L/C Issuers, and bankers’ acceptances issued by a
Borrower, for which the Agent and Lenders have incurred Letter of Credit
Obligations.

 

“Letter of Credit Obligations” means all outstanding obligations incurred by the
Agent and Lenders at the request of the Borrowers or the Borrower
Representative, whether direct or indirect, contingent or otherwise, due or not
due, in connection with the issuance of Letters of Credit by L/C Issuers or the
purchase of a participation as set forth in Section 1.1(c) with respect to any
Letters of Credit. The amount of such Letter of Credit Obligations shall equal
the maximum amount that may be payable by the Agent and Lenders thereupon or
pursuant thereto.

 

“Liabilities” means all claims, actions, suits, judgments, damages, losses,
liability, obligations, responsibilities, fines, penalties, sanctions, costs,
fees, taxes, commissions, charges, disbursements and expenses, in each case of
any kind or nature (including interest and penalties accrued thereon or as a
result thereof), whether joint or several, whether or not indirect, contingent,
consequential, actual, punitive, treble or otherwise.

 

 

 
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“LIBOR” means for each Interest Period, the higher of (a) the offered rate per
annum for deposits of Dollars for the applicable Interest Period that appears on
Reuters Screen LIBOR01 Page as of 11:00 A.M. (London, England time) two (2)
Business Days prior to the first day in such Interest Period, and (b) the
offered rate per annum for deposits of Dollars for an Interest Period of three
months (or six months for Interest Periods of six months) that appears on
Reuters Screen LIBOR01 Page as of 11:00 A.M. (London, England time) two (2)
Business Days prior to the first day in such Interest Period. If no such offered
rate exists, such rate will be the rate of interest per annum, as determined by
the Agent (rounded upwards, if necessary, to the nearest 1/100 of 1%) at which
deposits of Dollars in immediately available funds are offered at 11:00 A.M.
(London, England time) two (2) Business Days prior to the first day in such
Interest Period by major financial institutions reasonably satisfactory to the
Agent in the London interbank market for such Interest Period for the applicable
principal amount on such date of determination.

 

“LIBOR Rate Loan” means a Loan that bears interest based on LIBOR.

 

“Lien” means any mortgage, deed of trust, pledge, hypothecation, charge,
assignment, charge or deposit arrangement, encumbrance, lien (statutory or
otherwise) or preference, priority or other security interest or preferential
arrangement of any kind or nature whatsoever (including those created by,
arising under or evidenced by any conditional sale or other title retention
agreement, the interest of a lessor under a Capital Lease, any financing lease
having substantially the same economic effect as any of the foregoing, or the
filing of any financing statement naming the owner of the asset to which such
lien relates as debtor, under the UCC or any comparable law), but not including
the interest of a lessor under a lease which is not a Capital Lease.

 

“Loan” means an extension of credit by a Lender to the Borrowers pursuant to
Article I, and may be a Base Rate Loan or a LIBOR Rate Loan.

 

“Loan Documents” means this Agreement, the Notes, the Fee Letter, the Collateral
Documents, the Mexican Sale Agreement, the Noteholder Subordination Agreement
and all documents delivered to the Agent and/or any Lender in connection with
any of the foregoing.

 

“Majority Lenders” means, at any time, Lenders then holding (a) at least
fifty-one percent (51%) of the sum of the Aggregate Revolving Loan Commitments
then in effect plus the aggregate unpaid principal balance of Term Loans then
outstanding or (b) if the Aggregate Revolving Loan Commitments have been
terminated, at least fifty-one percent (51%) of the aggregate unpaid principal
amount of all Loans and Letter of Credit Obligations.

 

“Majority Revolving Lenders” means, at any time, Lenders then holding (a) at
least fifty-one percent (51%) of the Aggregate Revolving Loan Commitments of all
Lenders or (b) if the Aggregate Revolving Loan Commitments have been terminated,
at least fifty-one percent (51%) of the aggregate unpaid principal amount of
Revolving Loans and Letter of Credit Obligations.

 

 

 
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“Management Agreement” means that certain Management Agreement to be entered
into and delivered to Agent between WLR and ITG, in form and substance
reasonably acceptable to Agent.

 

“Margin Stock” means “margin stock” as such term is defined in Regulation T, U
or X of the Federal Reserve Board.

 

“Material Adverse Effect” means: (a) a material adverse change in, or a material
adverse effect upon, the operations, business, Properties or condition
(financial or otherwise) of the Credit Parties and the Subsidiaries taken as a
whole; (b) a material impairment of the ability of any Credit Party to perform
in any material respect its obligations under any Loan Document; or (c) a
material adverse effect upon (i) the legality, validity, binding effect or
enforceability of any Loan Document, or (ii) the perfection or priority of any
Lien relating to a material portion of the Collateral granted to the Lenders or
to the Agent for the benefit of the Secured Parties under any of the Collateral
Documents.

 

“Material Environmental Liabilities” means Environmental Liabilities exceeding
the US Dollar Equivalent of $1,000,000 in the aggregate.

 

“Member States of the European Union” means those states which are as of the
date hereof, and other states which shall from time to time become, member
states of the European Union.

 

“Mexican Sale Agreement” means the Receivables Sale Agreement dated as of the
Original Closing Date between Parras Cone and Denim.

 

“Mortgage” means any deed of trust, leasehold deed of trust, mortgage, leasehold
mortgage, deed to secure debt, leasehold deed to secure debt or other document
creating a Lien on real Property or any interest in real Property.

 

“Multiemployer Plan” means any multiemployer plan, as defined in Section
4001(a)(3) of ERISA, as to which any ERISA Affiliate incurs or otherwise has any
obligation or liability, contingent or otherwise.

 

“Narricot Letter of Intent” means that certain Letter of Intent dated May 30,
2014, a copy of which was provided to the Agent on or prior to the Eleventh
Amendment Effective Date.

 

“Narricot Sale” has the meaning assigned to such term in Section 5.2(n).

 

“Net Interest Expense” means gross interest expense for such period paid or
required to be paid in cash (including all commissions, discounts, fees and
other charges in connection with letters of credit and similar instruments) for
the Borrowers and their Subsidiaries on a consolidated basis less the interest
income for such period.

 

 

 
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“Net Issuance Proceeds” means, in respect of any issuance of debt or equity,
cash proceeds (including cash proceeds as and when received in respect of
non-cash proceeds received or receivable in connection with such issuance), net
of underwriting discounts and reasonable out-of-pocket costs and expenses paid
or incurred in connection therewith in favor of any Person.

 

“Net Orderly Liquidation Value” means the cash proceeds of Inventory, Equipment
or real Property, as applicable, which could be obtained in an orderly
liquidation (net of all liquidation expenses, costs of sale, operating expenses
and retrieval and related costs), as determined pursuant to the most recent
Appraisal delivered to the Agent.

 

“Net Proceeds” means proceeds in cash, checks or other cash equivalent financial
instruments (including Cash Equivalents) as and when received by the Person
making a Disposition and insurance proceeds received on account of an Event of
Loss, net of: (a) in the event of a Disposition (i) the direct costs, fees and
expenses relating to such Disposition, (ii) sale, use or other transaction taxes
or income or gain taxes paid or payable as a result thereof, and (iii) amounts
required to be applied to repay principal, interest and prepayment premiums and
penalties on Indebtedness secured by a Lien on the asset which is the subject of
such Disposition and (b) in the event of an Event of Loss, (i) all money
actually applied to repair or reconstruct the damaged Property or Property
affected by the condemnation or taking, (ii) all of the costs and expenses
reasonably incurred in connection with the collection of such proceeds, award or
other payments, and (iii) any amounts retained by or paid to parties having
superior rights to such proceeds, awards or other payments.

 

“Ninth Amendment Effective Date” has the meaning assigned to such term in that
certain Limited Waiver and Amendment No. 9 to Credit Agreement dated as of March
12, 2013 among Borrowers, the other Credit Parties signatory thereto, Agent and
the Lenders signatory thereto.

 

“Non-Funding Lender” means any Lender that has (a) failed to fund any payments
required to be made by it under the Loan Documents within two (2) Business Days
after any such payment is due (excluding expense and similar reimbursements that
are subject to good faith disputes), (b) given written notice (and the Agent has
not received a revocation in writing), to a Borrower, the Agent, any Lender, or
the L/C Issuer or has otherwise publicly announced (and the Agent has not
received notice of a public retraction) that such Lender believes it will fail
to fund payments or purchases of participations required to be funded by it
under the Loan Documents or one or more other syndicated credit facilities, (c)
failed to fund, and not cured, loans, participations, advances, or reimbursement
obligations under one or more other syndicated credit facilities, unless subject
to a good faith dispute, or (d) any Lender that has (i) become subject to a
voluntary or involuntary case under the Bankruptcy Code or any similar
bankruptcy laws, (ii) a custodian, conservator, receiver or similar official
appointed for it or any substantial part of such Person’s assets, or (iii) made
a general assignment for the benefit of creditors, been liquidated, or otherwise
been adjudicated as, or determined by any Governmental Authority having
regulatory authority over such Person or its assets to be, insolvent or
bankrupt, and for clause (d), and the Agent has determined that such Lender is
reasonably likely to fail to fund any payments required to be made by it under
the Loan Documents.

 

 

 
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“Non-US Lender Party” means each of the Agent, each Lender, each L/C Issuer,
each SPV and each participant, in each case that is not a United States person
under and as defined in Section 7701(a)(30) of the Code.

 

“NOLV Factor” means, as of the date of the Appraisal most recently received by
the Agent, the quotient of the Net Orderly Liquidation Value divided by the net
book value (valued at the lower of cost or market) of Eligible Inventory,
Equipment or real Property, as applicable, expressed as a percentage. The NOLV
Factor will be increased or reduced promptly upon receipt by the Agent of each
updated Appraisal.

 

“Note” means any Term Note, Revolving Note or Swing Line Note and “Notes” means
all such Notes.

 

“Notice of Borrowing” means a notice given by the Borrower Representative to the
Agent pursuant to Section 1.5, in substantially the form of Exhibit 11.1(c)
hereto.

 

“Obligations” means all Loans and other Indebtedness, advances, debts,
liabilities, obligations, covenants and duties owing by any Credit Party to any
Lender, the Agent, any L/C Issuer, any Secured Swap Provider or any other Person
required to be indemnified, that arises under any Loan Document or Secured Rate
Contract or with respect to Bank Products, whether or not for the payment of
money, whether arising by reason of an extension of credit, loan, guaranty,
indemnification or in any other manner, whether direct or indirect (including
those acquired by assignment), absolute or contingent, due or to become due, now
existing or hereafter arising and however acquired; provided, that Obligations
of a Credit Party shall not include its Excluded Swap Obligations.

 

“Operating Lease” means any leasing or similar arrangement, which is not a
Capital Lease.

 

“Ordinary Course of Business” means, in respect of any transaction involving any
Credit Party or any Subsidiary of any Credit Party, the ordinary course of such
Person’s business, as conducted by any such Person consistent with past practice
and undertaken by such Person in good faith and not for purposes of evading any
covenant or restriction in any Loan Document.

 

“Organization Documents” means, any of the following, as applicable, (a) for any
corporation, the certificate or articles of incorporation, the bylaws, any
certificate of determination or instrument relating to the rights of preferred
shareholders of such corporation, and any shareholder rights agreement, (b) for
any partnership, the partnership agreement and, if applicable, certificate of
limited partnership, (c) for any limited liability company, the operating
agreement and articles or certificate of formation and (d) any other document
setting forth the manner of election or duties of the officers, directors,
managers or other similar persons, or the designation, amount or relative
rights, limitations and preference of the Stock of a Person.

 

 

 
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“Original Closing Date” means December 29, 2006.

 

“Paid in Full” means as to any of the Obligations, the final payment and
satisfaction in full in immediately available funds of all of such Obligations
(or in the case of Letter of Credit Obligations, cash collateralized in a manner
satisfactory to L/C Issuer), and the termination of the Commitments, in each
case, of each Lender (but not including for this purpose (i) the refinancing or
replacement of the Obligations owing to or Commitments of the Lenders, (ii) Bank
Products, to the extent cash collateralized or otherwise subject to other
arrangements, in either case, satisfactory to the applicable Bank Product
provider and (iii) Secured Rate Contracts, to the extent cash collateralized or
otherwise subject to other arrangements, in either case, satisfactory to the
applicable Secured Swap Provider). All references to “Paid in Full” means all
amounts owing in respect of the Obligations referred to, including any
principal, interest, fees, costs, expenses and other amounts owed to Lenders
which would accrue and become due but for the commencement of any case under the
United Sates Bankruptcy Code or any similar statute, whether or not such amounts
are allowed or allowable in whole or in part in such a case. If after receipt of
any payment of, or proceeds of collateral applied to the payment of, any of the
Obligations, any Lender is required to surrender or return such payment or
proceeds to any person for any reason, then the Obligations intended to be
satisfied by such payment or proceeds shall be reinstated and continue as if
such payment or proceeds had not been received by such holder.

 

“Parras Cone” means Parras Cone de Mexico, S.A. de C.V, a Mexican stock limited
liability company.

 

“Patents” means all rights, title and interests (and all related IP Ancillary
Rights) arising under any Requirement of Law in or relating to letters patent
and applications therefor.

 

“Patriot Act” means the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, P.L.
107-56, as amended.

 

“PBGC” means the United States Pension Benefit Guaranty Corporation and any
successor thereto.

 

“Permits” means, with respect to any Person, any permit, approval,
authorization, license, registration, certificate, concession, grant, franchise,
variance or permission from, and any other Contractual Obligations with, any
Governmental Authority, in each case whether or not having the force of law and
applicable to or binding upon such Person or any of its property or to which
such Person or any of its property is subject.

 

 

 
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“Permitted Acquisition” means the Acquisition by a Borrower or any Wholly-Owned
Subsidiary of a Borrower of (i) substantially all of the assets of a Target,
which assets are located in an Eligible Country or such other countries with
Agent’s consent (which shall not be unreasonably withheld) or (ii) 100% of the
Stock and Stock Equivalents of a Target to the extent that each of the following
conditions shall have been satisfied:

 

(a)     to the extent the Acquisition will be financed in whole or in part with
the proceeds of any Loan, the conditions set forth in Section 2.2 shall have
been satisfied at the time of the funding of any such Loan;

 

(b)     the Borrowers shall have furnished to the Agent and Lenders at least ten
(10) Business Days (or such shorter period of time as the Agent may consent
(such consent not to be unreasonably withheld)) prior to the consummation of
such Acquisition (1) a description of the terms and conditions of such
Acquisition and, at the request of the Agent, such other information and
documents that the Agent may request, including, without limitation, executed
counterparts of the respective agreements, documents or instruments pursuant to
which such Acquisition is to be consummated, any schedules to such agreements,
documents or instruments and all other material ancillary agreements,
instruments and documents to be executed or delivered in connection therewith,
(2) copies of such other agreements, instruments and other documents relating to
such Acquisition as the Agent reasonably shall request and (3) in the case of
any Acquisition in which the cash consideration paid is in excess of the US
Dollar Equivalent of $5,000,000 in the aggregate, pro forma financial statements
of ITG and its Subsidiaries after giving effect to the consummation of such
Acquisition;

 

(c)     the Borrowers and their Subsidiaries (including any new Subsidiary)
shall execute and deliver the agreements, instruments and other documents
required by Section 4.13;

 

(d)     such Acquisition shall have been approved by the board of directors (or
other similar body) and/or the stockholders or other equityholders of the
Target;

 

(e)     no Default or Event of Default shall then exist or would exist after
giving effect thereto;

 

(f)     after giving effect to such Acquisition, Average Adjusted Availability
shall not be less than $30,000,000; and

 

(g)     the Target shall be in a line of business permitted by Section 5.12.

 

“Permitted Investor” means any of WLR, WLR Recovery Fund II, LP, WLR Recovery
Fund III, LP, WLR Recovery Fund IV, LP and WLR-GS MasterCo-Investments, L.P.

 

“Permitted Secured Note Payments” shall have the meaning ascribed to the term
“Permitted Subordinated Debt Payments” in the Intercreditor Agreement.

 

 

 
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“Person” means an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture or Governmental Authority.

 

“Phong Phu Asset Sale” has the meaning assigned to such term in Section 1.8(h).

 

“Pledged Collateral” has the meaning specified in the Guaranty and Security
Agreement and shall include any other Collateral required to be delivered to the
Agent pursuant to the terms of any Collateral Document.

 

“Pounds Sterling” and “£” each means lawful currency of the United Kingdom.

 

“Prior Indebtedness” means the Indebtedness and obligations specified on
Schedule 11.1(a) hereto.

 

“Pro Forma EBITDA” means, with respect to any Target, EBITDA for such Target for
the most recent twelve (12) month period for which financial statements are
available at the time of determination thereof, adjusted by verifiable expense
reductions, including excess owner compensation, if any, which are expected to
be realized, in each case calculated by the Borrowers reasonably acceptable to
the Agent.

 

“Property” means any interest in any kind of property, asset or undertaking,
whether real, personal or mixed, and whether tangible or intangible.

 

“Rate Contracts” means (i) swap agreements (as such term is defined in Section
101 of the Bankruptcy Code), (ii) any other agreements or arrangements designed
to provide protection against fluctuations in interest or currency exchange
rates and (iii) any other agreements or arrangements designed to hedge against
fluctuations in the cost of raw materials entered into in the ordinary course of
business in connection with the operation of a Person’s business.

 

“Related Persons” means, with respect to any Person, each Affiliate of such
Person and each director, officer, employee, agent, trustee, representative,
attorney, accountant and each insurance, environmental, legal, financial and
other advisor (including those retained in connection with the satisfaction or
attempted satisfaction of any condition set forth in Article II) and other
consultants and agents of or to such Person or any of its Affiliates.

 

“Releases” means any release, threatened release, spill, emission, leaking,
pumping, pouring, emitting, emptying, escape, injection, deposit, disposal,
discharge, dispersal, dumping, leaching or migration of Hazardous Material into
or through the environment.

 

“Remedial Action” means all actions required to (a) clean up, remove, treat or
in any other way address any Hazardous Material in the indoor or outdoor
environment, (b) prevent or minimize any Release so that a Hazardous Material
does not migrate or endanger or threaten to endanger public health or welfare or
the indoor or outdoor environment or (c) perform pre remedial studies and
investigations and post-remedial monitoring and care with respect to any
Hazardous Material.

 

 

 
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“Requirement of Law” means, as to any Person, any law (statutory or common),
ordinance, treaty, rule, regulation, order, policy, other legal requirement or
determination of an arbitrator or of a Governmental Authority in any
jurisdiction, in each case applicable to or binding upon such Person or any of
its Property or to which such Person or any of its Property is subject.

 

“Reserves” means, with respect to the Borrowing Base (a) reserves established by
the Agent and the Collateral Agents from time to time against Eligible Accounts
and Eligible Inventory pursuant to Exhibit 11.1(b) and (b) such other reserves
against Eligible Accounts, Eligible Inventory, Availability or Excess
Availability that the Agent may, in its reasonable credit judgment, establish
from time to time (including, for the avoidance of doubt, other reserves with
respect to Equipment Finance Contracts and Bank Products). Without limiting the
generality of the foregoing, Reserves established (i) to ensure the payment of
accrued interest expenses or Indebtedness and (ii) with respect to the portion
of accounts payable that are not current within their respective terms shall be
deemed to be a reasonable exercise of the Agent’s credit judgment.

 

“Responsible Officer” means the chief executive officer or the president of a
Borrower or the Borrower Representative, as applicable, or any other officer
having substantially the same authority and responsibility; or, with respect to
compliance with financial covenants or delivery of financial information, the
chief financial officer, the treasurer or the controller of a Borrower or the
Borrower Representative, as applicable, or any other officer having
substantially the same authority and responsibility.

 

“Revolving Lender” means each Lender with a Revolving Loan Commitment (or if the
Revolving Loan Commitments have terminated, who hold Revolving Loans and, if
applicable, participations in Swing Loans.)

 

“Revolving Note” means a promissory note of the Borrowers payable to the order
of a Lender in substantially the form of Exhibit 11.1(d) hereto, evidencing
Indebtedness of such Borrowers under the Revolving Loan Commitment of such
Lender.

 

“Revolving Termination Date” means the earlier to occur of: (a) December 18,
2019 (or, if any Secured Note Indebtedness remains outstanding on March 1, 2019,
then the earlier of (i) December 18, 2019 and (ii) the date that is 91 days
prior to the maturity date of the Secured Note Indebtedness); and (b) the date
on which the Aggregate Revolving Loan Commitment shall terminate in accordance
with the provisions of this Agreement.

 

“Second Amendment Effective Date” has the meaning assigned to such term in that
certain Amendment No. 2 to Credit Agreement dated as of June 17, 2011 among
Borrowers, the other Credit Parties signatory thereto, Agent and the Lenders
signatory thereto.

 

 

 
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“Secured Note Documents” means (i) the Secured Note Purchase Agreement, (ii) the
Initial Notes (as defined in the Secured Note Purchase Agreement as in effect on
the date hereof), any “PIK Notes” (as defined in the Initial Notes) and any such
notes issued in substitution for the Initial Notes pursuant to Section 14 of the
Secured Note Purchase Agreement and (iii) the Amended and Restated Pledge
Agreement dated as of April 15, 2008 made by ITG in favor of Clearlake Capital
Partners, LLC, as collateral agent on behalf of the Secured Note Purchasers.

 

“Secured Note Indebtedness” means Subordinated Indebtedness incurred pursuant to
the Secured Note Documents subject to and in accordance with the requirements of
the Intercreditor Agreement, the aggregate outstanding principal amount of which
as of the Closing Date is equal to $123,741,838.40.

 

“Secured Note Purchase Agreement” means the Senior Subordinated Note Purchase
Agreement, dated as of June 6, 2007 (as amended by Amendment No. 1 to Note
Purchase Agreement, dated as of April 15, 2008, Amendment No. 2 to Senior
Subordinated Note Purchase Agreement, dated as of December 24, 2008, Amendment
No. 3 to Senior Subordinated Note Purchase Agreement, dated as of December 22,
2009, Amendment No. 4 to Senior Subordinated Note Purchase Agreement, dated as
of March 16, 2011, and Amendment No. 5 to Senior Subordinated Note Purchase
Agreement, dated as of March 30, 2011 and as otherwise amended, supplemented,
restated or otherwise modified from time to time in accordance with the
Intercreditor Agreement) among ITG and the Secured Note Purchasers, pursuant to
which, among other things, ITG issued and sold to the Secured Note Purchasers
those certain Initial Notes (as defined in the Secured Note Purchase Agreement
as in effect on the date hereof) in accordance with and pursuant to the terms
and provisions of the Senior Note Purchase Agreement.

 

“Secured Note Purchasers” means CCP F, L.P., WLR Recovery Fund IV, L.P., WLR
Recovery Fund III, L.P. and WLR IV Parallel ESC, L.P.

 

“Secured Party” means the Agent, each Lender, each L/C Issuer, each other
Indemnitee and each other holder of any Obligation of a Credit Party, including
each Secured Swap Provider.

 

“Secured Rate Contract” means (i) any Rate Contract between a Borrower and the
counterparty thereto, which (x) has been provided or arranged by GE Capital or
an Affiliate of GE Capital, or (y) Agent has acknowledged in writing constitutes
a “Secured Rate Contract” hereunder and (ii) any Equipment Finance Contract
between a Borrower and the counterparty thereto for which the applicable Secured
Swap Provider and the applicable Borrower must have provided written notice to
Agent (which written notice Agent shall provide to the Lenders) of (x) the
existence of such Equipment Finance Contract, (y) the maximum principal dollar
amount (or analogous dollar amount in the case of a lease transaction) of
obligations arising thereunder (“Equipment Finance Contract Amount”), and (z) if
requested by Agent, the methodology to be used by such parties in determining
the Equipment Finance Contract Amount owing from time to time, which, in the
case of the foregoing clauses (y) and (z) shall be reasonably acceptable to
Agent; provided that, at any time, the maximum aggregate principal dollar amount
(or analogous dollar amount in the case of a lease transaction) of obligations
arising under all Equipment Finance Contracts constituting Secured Rate
Contracts at such time shall in no event exceed $5,000,000.

 

 

 
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“Secured Swap Provider” means (i) a Lender or an Affiliate of a Lender (or a
Person who was a Lender or an Affiliate of a Lender at the time of execution and
delivery of a Rate Contract or an Equipment Finance Contract, as the case may
be) who has entered into a Secured Rate Contract with a Borrower, or (ii) a
Person with whom Borrower has entered into a Secured Rate Contract provided or
arranged by GE Capital, GE CF Trust, GE TF Trust or an Affiliate of GE Capital,
and any assignee thereof.

 

“Seventh Amendment” means that certain Consent and Amendment No. 7 to Credit
Agreement dated as of July 25, 2012 among the Borrowers, the other Credit
Parties party thereto, Agent and the Lenders.

 

“Sixth Amendment Effective Date” has the meaning assigned to such term in that
certain Amendment No. 6 to Credit Agreement dated as of June 14, 2012 among
Borrowers, the other Credit Parties signatory thereto, Agent and the Lenders
signatory thereto.

 

“Solvent” means, with respect to any Person as of any date of determination,
that, as of such date: (a) the value of the assets of such Person (both at fair
value and present fair saleable value) is greater than the total amount of
liabilities (including contingent and unliquidated liabilities) of such Person;
(b) such Person is generally able to pay all liabilities of such Person as such
liabilities mature, (c) such Person does not have unreasonably small capital;
and (d) in the case of any person incorporated in England and Wales only, a
Person that is not “unable to pay its debts”. In this context, “unable to pay
its debts” means that there are no grounds on which such Person would be deemed
unable to pay its debts (as defined in Section 123(1) of the Insolvency Act 1986
of England Wales (as amended by the Enterprise Act 2002 of England and Wales) on
the basis that the words “proved to the satisfaction of the court” are deemed
omitted from sections 123(1)(e) and 123(2) of that Act) or on which a court
would be satisfied that the value of such Person’s assets is less than the
amount of its liabilities, taking into account its contingent and prospective
liabilities (as such term would be construed for the purposes of Section 123(2)
of the Insolvency Act 1986 of England and Wales (as amended by the Enterprise
Act 2002 of England and Wales)). The amount of contingent or unliquidated
liabilities (such as litigation, guaranties and pension plan liabilities) at any
time shall be computed as the amount that, in light of all the facts and
circumstances existing at the time, represents the amount that can be reasonably
be expected to become an actual or matured liability.  

 

“Specified Receivables” means U.S. dollar denominated receivables originated by
ITG or any Subsidiary and due from VF Corporation or one of its Scheduled
Affiliates (as defined in the Specified Receivables Purchase Agreement).

 

 

 
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“Specified Receivables Purchase Agreement” means that certain SCF Supplier
Receivables Purchase Agreement (U.S.), dated as of March 4, 2011, among ITG,
certain of its Subsidiaries and Bank of America, N.A., as such agreement may be
amended from time to time in a manner not adverse to the Agent and the Lenders.

 

“Specified Sales” means the Narricot Sale and the Summit Sale.

 

“Specified Secured Notes” means the Initial Notes and PIK Notes held by the
Subordinated Tranche A Purchasers (as defined in the Intercreditor Agreement)
and each of their permitted successors and assigns.

 

“Specified WLR/RBS LC II Event” means the occurrence of any of the following:

 

(i)      delivery of written notice by Agent and/or Lenders to WLR Recovery Fund
IV, L.P. indicating that it or they have elected to accelerate the Obligations
pursuant to Section 7.2 or otherwise;

 

(ii)      an Event of Default under Section 7.1(f), Section 7.1(g), Section
7.1(m) or Section 7.1(n) has occurred and is continuing;

 

(iii)     either (x) the amount of Eligible Inventory, as reported in the most
recently delivered Borrowing Base Certificate, is less than or equal to
$10,000,000 in the aggregate (determined by reference to the lesser of fair
market value or cost) or (y) an Event of Default shall have occurred as a result
of a failure to comply with Section 4.2(h);

 

(iv)     the Revolving Termination Date;

 

(v)     Excess Availability (as determined by Agent in its sole and absolute
discretion), as of any date of determination, is less than $5,000,000; or

 

(vi)     the expiration or termination date of the WLR/RBS Letter of Credit II
(whether as a result of non-renewal, non-extension or otherwise) being less than
30 days from the then current date.

 

“SPV” means any special purpose funding vehicle identified as such in a writing
by any Lender to the Agent.

 

“Stated Term Loan Maturity Date” means January 1, 2017.

 

“Stock” means all shares of capital stock (whether denominated as common stock
or preferred stock), equity interests, shares, beneficial, partnership or
membership interests, joint venture interests, participations or other ownership
or profit interests in or equivalents (regardless of how designated) of or in a
Person (other than an individual), whether voting or non-voting.

 

“Stock Equivalents” means all securities convertible into or exchangeable for
Stock or any other Stock Equivalent and all warrants, options or other rights to
purchase, subscribe for or otherwise acquire any Stock or any other Stock
Equivalent, whether or not presently convertible, exchangeable or exercisable.

 

 

 
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“Subordinated Indebtedness” means unsecured (other than with respect to the
Secured Note Indebtedness which may be secured to the extent otherwise permitted
hereby) Indebtedness held by Persons that are not Affiliates of the Credit
Parties subordinated in right of payment to the Obligations, which may provide
for a cap on the principal amount of the Obligations equal to $105,500,000 plus
ten percent (10%) of such amount (or $120,500,000 plus 10% of such amount if the
Revolving Loan Commitments are increased in accordance herewith) and such
Indebtedness is subject to the following terms: (a) no cross-default to the
Obligations but may be subject to cross-acceleration; (b) the sole financial
covenant, if any, is at least ten percent (10%) less restrictive than the
financial covenant set forth herein; (c) basket amount qualifications in
negative covenants and events of default are at least ten percent (10%) larger
than those contained herein; (d) the maturity date is no earlier than twelve
months after the later of the Revolving Termination Date and the final scheduled
installment payment date for the Term Loan; (e) interest payable in cash does
not exceed twelve percent (12%) per annum, payable quarterly or semi-annually;
(f) no principal amortization until the maturity thereof; (g) permanent payment
blockage in the event of a payment default with respect to the Obligations; (h)
one hundred and eighty (180) day payment blockage with respect to a covenant
default under this Agreement; (i) not more than one payment blockage period with
respect to a covenant default during any period of 360 days; (j) one hundred and
twenty (120) day standstill period for enforcement of remedies, subject to
termination upon a bankruptcy filing by a Credit Party or enforcement actions by
Agent; (k) holders of such Indebtedness may have the right to file and vote
their claims in bankruptcy, subject to the right of Agent to file proofs of
claim if the holders of such Indebtedness fail to do so in a timely manner; and
(l) any limitations on amendments to this Agreement are limited to (i) caps on
increases in the principal amount as set forth above, (ii) 200 basis point
increases in per annum interest margins (excluding any applicable default rate)
(iii) extensions of the Revolving Termination Date or final scheduled
installment payment date of the Term Loan, in either case not to exceed three
(3) years and (iv) no amendment that directly prohibits payment of such
Indebtedness.

 

“Subordinated Indebtedness Document” means all agreements and documents relating
to any Subordinated Indebtedness.

 

“Subordination Agreement” means a subordination agreement between Agent, the
Person providing the Subordinated Indebtedness or WLR Subordinated Indebtedness,
as applicable, the applicable Credit Party or Subsidiary of any Credit Party, on
terms reasonably acceptable to Agent.

 

“Subsidiary” of a Person means any corporation, association, limited liability
company, partnership, joint venture or other business entity of which more than
fifty percent (50%) of the voting Stock (in the case of Persons other than
corporations), is owned or controlled directly or indirectly by such Person, or
one or more of the Subsidiaries of such Person, or a combination thereof.
Notwithstanding anything to the contrary contained herein, a “Subsidiary” of ITG
or a Credit Party shall in no event include any Subsidiary of Denim which is a
company organized under the laws of Mexico, the Joint Ventures or Subsidiaries
of a Credit Party that are not themselves Credit Parties and that have been
designated as Excluded Subsidiaries in a notice from Borrower Representative to
Agent.

 

 

 
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“Summit Letter of Intent” means that certain Letter of Intent dated June 6,
2014, a copy of which was provided to the Agent on or prior to the Eleventh
Amendment Effective Date.

 

“Summit Sale” has the meaning assigned to such term in Section 5.2(o).

 

“Supermajority Revolving Lenders” means, at any time, Lenders then holding (a)
at least seventy-five percent (75%) of the Aggregate Revolving Loan Commitments
of all Lenders or (b) if the Aggregate Revolving Loan Commitments have been
terminated, at least seventy-five percent (75%) of the aggregate unpaid
principal amount of Revolving Loans and Letter of Credit Obligations.

 

“Support Agreement” means that certain Sixth Amended and Restated Support
Agreement dated as of December 18, 2014 by and among the Investors, ITG and
Agent, as amended, supplemented, modified or replaced from time to time.

 

“Swap Obligations” means, with respect to a Credit Party, its obligations under
a Rate Contract that constitutes a “swap” within the meaning of Section 1a(47)
of the Commodity Exchange Act.

 

“Swingline Commitment” means $15,000,000.

 

“Swingline Lender” means, each in its capacity as Swingline Lender hereunder, GE
Capital or, upon the resignation of GE Capital as the Agent hereunder, any
Lender (or Affiliate or Approved Fund of any Lender) that agrees, with the
approval of the Agent (or, if there is no such successor Agent, the Majority
Revolving Lenders) and the Borrowers, to act as the Swingline Lender hereunder.

 

“Swingline Note” means a promissory note of the Borrowers payable to the order
of a Lender in substantially the form of Exhibit 11.1(e) hereto, evidencing
Indebtedness of such Borrowers under the Swingline Commitment of such Lender.

 

“Target” means any Person or business unit or asset group of any other Person
acquired or proposed to be acquired in an Acquisition.

 

“Tax Affiliate” means, (a) each Credit Party and their Subsidiaries and (b) any
Affiliate of a Credit Party with which such Credit Party files or is eligible to
file consolidated, combined or unitary tax returns.

 

“Tenth Amendment Effective Date” has the meaning assigned to such term in that
certain Limited Waiver and Amendment No. 10 to Credit Agreement dated as of
March 29, 2013 among Borrowers, the other Credit Parties signatory thereto,
Agent and the Lenders signatory thereto.

 

 

 
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“Term Note” means a promissory note of the Borrowers payable to a Lender, in
substantially the form of Exhibit 11.1(f) hereto, evidencing the Indebtedness of
the Borrowers to such Lender resulting from the Term Loan made to the Borrowers
by such Lender or its predecessor(s).

 

“Third Amendment Effective Date” has the meaning assigned to such term in that
certain Limited Waiver and Amendment No. 3 to Credit Agreement dated as of
November 14, 2011 among Borrowers, the other Credit Parties signatory thereto,
Agent and the Lenders signatory thereto.

 

“Title IV Plan” means a pension plan subject to Title IV of ERISA, other than a
Multiemployer Plan, to which any ERISA Affiliate incurs or otherwise has any
obligation or liability, contingent or otherwise.

 

“Trade Secrets” means all right, title and interest (and all related IP
Ancillary Rights) arising under any Requirement of Law in or relating to trade
secrets.

 

“Trademark” means all rights, title and interests (and all related IP Ancillary
Rights) arising under any Requirement of Law in or relating to trademarks, trade
names, corporate names, company names, business names, fictitious business
names, trade styles, service marks, logos and other source or business
identifiers and, in each case, all goodwill associated therewith, all
registrations and recordations thereof and all applications in connection
therewith.

 

“UCC” means the Uniform Commercial Code as in effect from time to time in the
State of New York.

 

“Unfinanced Capital Expenditures” means, for purposes of calculating Cash Flow,
the aggregate of all expenditures during any measuring period for any fixed
asset or improvements or replacements, substitutions, or additions thereto that
have a useful life of more than one year and are required to be capitalized
under GAAP, less (a) the Net Proceeds from Dispositions and/or Events of Loss
which a Borrower is permitted to reinvest pursuant to subsection 1.8(c) and
which are included above; (b) to the extent included above, expenditures
financed with cash proceeds from the issuance (including capital contributions)
of Stock and Stock Equivalents; (c) the portion of Capital Expenditures financed
under Capital Leases or other Indebtedness (Indebtedness, for this purpose, does
not include drawings under the Revolving Loan Commitment). From and after the
occurrence of any Specified Sale, Unfinanced Capital Expenditures shall be
calculated in a manner such that the applicable Specified Sale shall be deemed
to have occurred as of the first day of the most recently ended twelve month
period ending as of the last day of the fiscal month immediately preceding the
date of occurrence of such Specified Sale (or to the extent such Specified Sale
occurs on the last day of a fiscal month, the twelve month period ending as of
such date); and (d) in the case of the fiscal year ending December 31, 2015, up
to $5,000,000 of all such expenditures for any fixed asset or improvements or
replacements, substitutions, or additions thereto with respect to (x) not less
than 18 looms for Cone Denim Yecapixtla, a sectional warper for SCFTI, a tenter
frame for Burlington and a critical systems and high business risk information
technology system and (y) such other projects as determined by the Borrower
Representative (provided that the amount of all such expenditures reducing
Unfinanced Capital Expenditures pursuant to this clause (d)(y) shall not exceed
$1,000,000), in each case, that have a useful life of more than one year and are
required to be capitalized under GAAP.

 

 

 
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“United States” and “US” each means the United States of America.

 

“Usage” means, as of any date of determination, the average of:

 

(a) the daily balances of the Aggregate Revolving Loan Commitment during the
preceding Fiscal Month, less

 

(b) the sum of (i) the daily balance of all Revolving Loans plus (ii) the daily
amount of Letter of Credit Obligations, plus (iii) the daily balance of all
outstanding Swing Loans, in each case, during the preceding Fiscal Month.

 

“US Dollar Equivalent” means, with respect to any amount denominated in Dollars,
such amount of Dollars, and with respect to any amount denominated in a currency
other than Dollars, the amount of Dollars, as of any date of determination, into
which such other currency (as the context may require) can be converted in
accordance with prevailing exchange rates, as determined in accordance herewith.

 

“US Lender Party” means each of the Agent, each Lender, each L/C Issuer, each
SPV and each participant, in each case that is a United States person under and
as defined in Section 7701(a)(30) of the Code.

 

“Wholly-Owned Subsidiary” means any Subsidiary in which (other than directors’
qualifying shares required by law) one hundred percent (100%) of the Stock and
Stock Equivalents, at the time as of which any determination is being made, is
owned, beneficially and of record, by any Credit Party, or by one or more of the
other Wholly-Owned Subsidiaries, or both.

 

“Withdrawal Liabilities” means, at any time, any liability incurred (whether or
not assessed) by any ERISA Affiliate and not yet satisfied or paid in full at
such time with respect to any Multiemployer Plan pursuant to Section 4201 of
ERISA.

 

“WLR” means WL Ross & Co., LLC, a Delaware limited liability company.

 

“WLR Affiliate” means any Person, other than ITG and any of ITG’s Subsidiaries
or any Person in which ITG directly or indirectly owns ten percent (10%) or more
of the outstanding equity interests, that would constitute an Affiliate
hereunder solely because such Person is controlled by WLR or any fund managed by
WLR, or because WLR or any fund managed by WLR directly or indirectly owns ten
percent (10%) or more of the outstanding equity interests of such Person.

 

 

 
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“WLR Last-Out Participation Agreement” means that certain Last-Out Participation
Agreement dated as of the Fourth Amendment Effective Date among the Lenders
party thereto, WLR Recovery Fund IV, L.P. and Agent.

 

“WLR Participations” has the meaning assigned to such term in the WLR Last-Out
Participation Agreement.

 

“WLR Phong Phu Indebtedness” has the meaning assigned to such term in Section
5.9(i).

 

“WLR Phong Phu Guaranty” means that certain Amended and Restated Guaranty of
Payment dated as of June 17, 2011 by ITG in favor of WLR Recovery Fund IV, LP,
as such agreement may be amended, supplemented or otherwise modified from time
to time in a manner acceptable to the Agent in its sole discretion.

 

“WLR Subordinated Indebtedness” means unsecured Indebtedness provided by one or
more Permitted Investors, subordinated in right of payment to the Obligations
providing no limitation on the amount of the Obligations and such Indebtedness
is subject to the following terms: (a) no cross-default to the Obligations but
may be subject to cross-acceleration; (b) no financial covenants; (c) negative
covenants will be limited to those set forth in this Agreement and will be
automatically amended or waived in lock-step with any amendment or waiver of
corresponding covenants in this Agreement; (d) the maturity date is no less than
twelve months after the later of the Revolving Termination Date or the final
scheduled installment payment date for the Term Loan; provided, that if the
later of the Revolving Termination Date or the final scheduled installment
payment date for the Term Loan is extended, such maturity date will also be
extended for a corresponding period; (e) interest on any such Indebtedness is
only paid by the issuance of payment-in-kind notes payable at maturity; (f) no
principal amortization until maturity; (g) permanent standstill until the
Obligations (including successive refinancings thereof) are paid in full; (h)
holders of such Indebtedness retain the right to file and vote their claims in
bankruptcy, subject to the right of Agent to file proofs of claims if the
holders of such Indebtedness fail to do so in a timely manner; and (i) the
holders of such Indebtedness have no rights to consent to amendments or waivers
to this Agreement of the other Loan Documents.

 

“WLR Subordinated Indebtedness Documents” means all agreements and documents
relating to any WLR Subordinated Indebtedness.

 

 

 
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“WLR/RBS Letter of Credit II” means (A) prior to the Eighth Amendment Effective
Date, (x) an evergreen standby letter of credit in form and substance
satisfactory to Agent that (i) is issued by RBS Citizens, N.A. in an amount
equal to $20,000,000, (ii) names GE Capital, in its capacity as Agent for itself
and the Lenders, as the beneficiary thereof, and (iii) names WLR Recovery Fund
IV, L.P. as the applicant, which letter of credit shall have been delivered in
original copy to Agent on or prior to the Fourth Amendment Effective Date, as
amended from time to time, or (y) any replacement evergreen standby letter of
credit that names GE Capital, in its capacity as Agent for itself and the
Lenders, as the beneficiary thereof, and WLR Recovery Fund IV, L.P. as the
applicant, which letter of credit shall have been issued in accordance with
Section 1 of the Support Agreement and which letter of credit shall have been
delivered in original copy to Agent, (B) from and after the Eighth Amendment
Effective Date but prior to the Ninth Amendment Effective Date, an irrevocable
standby letter of credit in form and substance satisfactory to Agent (the
“Replacement WLR/RBS Letter of Credit II”) that (i) is issued by RBS Citizens,
N.A. in an amount equal to $20,000,000, (ii) names GE Capital, in its capacity
as Agent for itself and the Lenders, as the beneficiary thereof, and (iii) names
WLR Recovery Fund IV, L.P. as the applicant, which letter of credit shall have
been delivered in original copy to Agent on or prior to the Eighth Amendment
Effective Date and (C) from and after the Ninth Amendment Effective Date, (x) an
evergreen standby letter of credit in form and substance satisfactory to Agent
(the “Second Replacement WLR/RBS Letter of Credit II”) that (i) is issued by RBS
Citizens, N.A. in an amount equal to $20,000,000 (as such amount may be reduced
in accordance with the Support Agreement), (ii) names GE Capital, in its
capacity as Agent for itself and the Lenders, as the beneficiary thereof, and
(iii) names WLR Recovery Fund IV, L.P. as the applicant, which letter of credit
shall have been delivered in original copy to Agent on or prior to the Ninth
Amendment Effective Date, as amended from time to time, or (y) any replacement
evergreen standby letter of credit that names GE Capital, in its capacity as
Agent for itself and the Lenders, as the beneficiary thereof, and WLR Recovery
Fund IV, L.P. as the applicant, which letter of credit shall have been issued in
accordance with Section 1 of the Support Agreement and which letter of credit
shall have been delivered in original copy to Agent.

 

11.2     Other Interpretive Provisions.

 

(a)     Defined Terms. Unless otherwise specified herein or therein, all terms
defined in this Agreement or in any other Loan Document shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto. The meanings of defined terms shall be equally applicable to
the singular and plural forms of the defined terms. Terms (including
uncapitalized terms) not otherwise defined herein and that are defined in the
UCC shall have the meanings therein described.

 

(b)     The Agreement. The words “hereof”, “herein”, “hereunder” and words of
similar import when used in this Agreement or any other Loan Document shall
refer to this Agreement or such other Loan Document as a whole and not to any
particular provision of this Agreement or such other Loan Document; and
subsection, section, schedule and exhibit references are to this Agreement or
such other Loan Documents unless otherwise specified.

 

(c)     Certain Common Terms. The term “documents” includes any and all
instruments, documents, agreements, certificates, indentures, notices and other
writings, however evidenced. The term “including” is not limiting and means
“including without limitation.”

 

(d)     Performance; Time. Whenever any performance obligation hereunder or
under any other Loan Document (other than a payment obligation) shall be stated
to be due or required to be satisfied on a day other than a Business Day, such
performance shall be made or satisfied on the next succeeding Business Day. In
the computation of periods of time from a specified date to a later specified
date, the word “from” means “from and including”; the words “to” and “until”
each mean “to but excluding”, and the word “through” means “to and including.”
If any provision of this Agreement or any other Loan Document refers to any
action taken or to be taken by any Person, or which such Person is prohibited
from taking, such provision shall be interpreted to encompass any and all means,
direct or indirect, of taking, or not taking, such action.

 

 

 
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(e)     Contracts. Unless otherwise expressly provided herein or in any other
Loan Document, references to agreements and other contractual instruments,
including this Agreement and the other Loan Documents, shall be deemed to
include all subsequent amendments, thereto, restatements and substitutions
thereof and other modifications and supplements thereto which are in effect from
time to time, but only to the extent such amendments and other modifications are
not prohibited by the terms of any Loan Document.

 

(f)     Laws. References to any Requirement of Law are, except as otherwise
provided with respect to FATCA, to be construed as including all statutory and
regulatory provisions related thereto or consolidating, amending, replacing,
supplementing or interpreting the statute or regulation.

 

(g)     Interrelationship with the Original Credit Agreement.

 

(i)     This Agreement is intended to amend and restate the provisions of the
Original Credit Agreement and, except as expressly modified herein, all of the
terms and provisions of the Original Credit Agreement shall continue to apply
for the period prior to the Closing Date, including any determinations of
payment dates, interest rates, compliance with covenants and other obligations,
accuracy of representations and warranties, Events of Default or any amount that
may be payable to the Agent or the Lenders (or their assignees or replacements
hereunder). From and after the Closing Date, all references in the Notes and the
other Loan Documents to (i) the “Credit Agreement” shall be deemed to include
references to this Agreement and (ii) the “Lenders” or a “Lender”, “Collateral
Agent” or to “Agent” shall mean such terms as defined in this Agreement. As to
all periods occurring on or after the Closing Date, all of the covenants set
forth in the Original Credit Agreement shall be of no further force and effect
(with respect to such periods), it being understood that all obligations of the
Borrowers under the Original Credit Agreement shall be governed by this
Agreement from and after the Closing Date.

 

(ii)     The Borrowers, the Agent and the Lenders acknowledge and agree that all
principal, interest, fees, costs, reimbursable expenses and indemnification
obligations accruing or arising under or in connection with the Original Credit
Agreement which remain unpaid and outstanding as of the Closing Date shall be
and remain outstanding and payable as an obligation under this Agreement and the
other Loan Documents.

 

 

 
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11.3     Accounting Terms and Principles. All accounting determinations required
to be made pursuant hereto shall, unless expressly otherwise provided herein, be
made in accordance with GAAP (other than with respect to FASB Accounting
Standards Codification 840 (leases), which shall be construed in accordance with
GAAP as of the Closing Date), provided that if the Borrowers notify the Agent
that the Borrowers wish to amend any covenant in Article VI to eliminate the
effect of any change in GAAP that occurs after the Closing Date on the operation
of such covenant (or if the Agent notifies the Borrowers that the Majority
Lenders wish to amend Article VI for such purpose), then the Borrowers’
compliance with such covenant shall be determined on the basis of GAAP in effect
immediately before the relevant change in GAAP became effective, until either
(i) such notice is withdrawn or (ii) such covenant is amended in a manner
satisfactory to the Borrowers, the Agent and the Majority Lenders, with the
Borrowers, the Agent and the Majority Lenders agreeing to enter into
negotiations to amend any such covenant immediately upon receipt from any party
entitled to send such notice.

 

11.4     Payments. The Agent may set up standards and procedures to determine or
redetermine the equivalent in Dollars of any amount expressed in any currency
other than Dollars and otherwise may, but shall not be obligated to, rely on any
determination made by any Credit Party or any L/C Issuer. Any such determination
or redetermination by the Agent shall be conclusive and binding for all
purposes, absent manifest error. No determination or redetermination by any
Secured Party or any Credit Party and no other currency conversion shall change
or release any obligation of any Credit Party or of any Secured Party (other
than the Agent and its Related Persons) under any Loan Document, each of which
agrees to pay separately for any shortfall remaining after any conversion and
payment of the amount as converted. The Agent may round up or down, and may set
up appropriate mechanisms to round up or down, any amount hereunder to nearest
higher or lower amounts and may determine reasonable de minimis payment
thresholds.

 

[Balance of page intentionally left blank; signature page follows.]

 

 

 

 
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by their duly authorized officers as of the day and year
first above written.

 

 

 

BORROWERS:

 

INTERNATIONAL TEXTILE GROUP, INC.

BURLINGTON INDUSTRIES LLC

CONE JACQUARDS LLC

CONE DENIM LLC

CARLISLE FINISHING LLC

SAFETY COMPONENTS FABRIC

   TECHNOLOGIES, INC.

 

 

By:                                                                  

Name:

Title:

 

NARRICOT INDUSTRIES LLC

 

By: International Textile Group, Inc., its sole member

 

 

By:                                                                  

Name:

Title:

 

 

Address for notices:

 

804 Green Valley

Greensboro, North Carolina 27408

Attention: General Counsel

Facsimile: (336) 379-6972

 

Address for wire transfers:

 

Bank: Bank of America, NA

Account Name: International Textile Group, Inc

ABA #: 026009593

Account #: 3752206418

 

 

 

 
Signature Page of Amended and Restated Credit Agreement 

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

 

 

IN WITNESS WHEREOF, the following parties hereto have caused this Agreement in
their capacity as Credit Parties and not as Borrowers to be duly executed and
delivered by their duly authorized officers as of the day and year first above
written.

 

 

 

OTHER CREDIT PARTIES:

 

APPAREL FABRICS PROPERTIES, INC.

BURLINGTON INDUSTRIES V, LLC

CONE ADMINISTRATIVE AND SALES LLC

CONE INTERNATIONAL HOLDINGS II, INC.

INTERNATIONAL TEXTILE GROUP ACQUISITION GROUP LLC

BURLINGTON WORLDWIDE INC.

CONE DENIM WHITE OAK LLC

CONE INTERNATIONAL HOLDINGS, INC.

CONE ACQUISITION LLC

WLR CONE MILLS IP, INC.

 

 

By: ________________________________

Name:

Title:

 

 

VALENTEC WELLS, LLC

By: International Textile Group, Inc.,its sole member

 

By: ________________________________

Name:

Title:

 

 
Signature Page of Amended and Restated Credit Agreement

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

 

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by their duly authorized officers as of the day and year
first above written.

 

GENERAL ELECTRIC CAPITAL CORPORATION,

as the Agent, L/C Issuer, Swingline Lender and as a Lender

By: ________________________________
Title: Its Duly Authorized Signatory

Address for Notices:

General Electric Capital Corporation

10 Riverview Drive

Danbury, CT 06810

Attn: International Textiles Group, Account Officer

Facsimile: (203) 749-4307 

 

With a copy to: 

General Electric Capital Corporation

10 Riverview DriveDanbury, CT 06810

Attn: General Counsel-Corporate Lending

Facsimile: (203) 749-4562  

 

 

Address for payments:

Payment To: Deutsche Bank Trust Company Americas

Account Name: GECC CFS CIF Collection A/C

ABA Number: 021-001-033

Account Number: 50-279-513

Reference: CFN # 8683/ITG-SCI

 

 

 
Signature Page of Amended and Restated Credit Agreement

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by their duly authorized officers as of the day and year
first above written

 

 

 

THE PRIVATEBANK AND TRUST COMPANY, as a Lender

 

 

By: _________________________

Name:

Title:

 

 

 

Address for notices:

 _________________________

 _________________________

 _________________________

Attn:                                                  

Fax:                                                    

Email:                                                 

 

 

Lending office: 

 _________________________

_________________________

 _________________________

Attn:                                                  

Fax:                                                    

Email:                                                 

 

 

 

 
Signature Page of Amended and Restated Credit Agreement

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

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by their duly authorized officers as of the day and year
first above written

 

 

BANK OF AMERICA, N.A., as a Lender

 

 

By: _________________________

Name:

Title:

 

 

Address for notices:

 _________________________

 _________________________

 _________________________

Attn:                                                  

Fax:                                                    

Email:                                                 

 

 

Lending office: 

 _________________________

_________________________

 _________________________

Attn:                                                  

Fax:                                                    

Email:                                                 

 

 

 

 

 

Signature Page of Amended and Restated Credit Agreement