Exhibit 10.10

 

EXECUTION VERSION

 

 

 

$43,000,000

 

TERM LOAN CREDIT AGREEMENT

 

among

 

WALCO INTERNATIONAL, INC.,

 

as Borrower,

 

The Credit Parties (other than Borrower) from Time to Time Parties Hereto,

 

The Several Lenders from Time to Time Parties Hereto,

 

and

 

JPMORGAN CHASE BANK, N.A.,

 

as Administrative Agent

 

Dated as of November 10, 2010

 

 

 

 

J.P. MORGAN SECURITIES LLC, as Lead Arranger and Bookrunner

 

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TABLE OF CONTENTS

 

 

 

Page

 

 

 

1.

DEFINITIONS

1

 

 

 

 

 

1.1.

Certain Defined Terms

1

 

1.2.

Accounting Terms and Determinations

20

 

1.3.

UCC Changes

21

 

 

 

 

2.

TERM LOANS; TERM NOTES; PAYMENTS; PREPAYMENTS; INTEREST RATES

21

 

 

 

 

 

2.1.

Term Loan Commitments

21

 

2.2.

Term Loans

21

 

2.3.

Mandatory and Voluntary Prepayments

22

 

2.4.

Term Notes; Payments

25

 

2.5.

Application of Payments and Prepayments

25

 

2.6.

Interest Rates for Term Loans; Cash Interest and Principal Increases

26

 

2.7.

Pro-Rata Treatment

27

 

2.8.

Sharing of Payments, Etc.

27

 

2.9.

Recapture

28

 

2.10.

Original Issue Discount

28

 

 

 

 

3.

COLLATERAL

28

 

 

 

 

 

3.1.

Security Documents

28

 

3.2.

Filing and Recording

29

 

 

 

 

4.

CONDITIONS

29

 

 

 

 

5.

REPRESENTATIONS AND WARRANTIES

32

 

 

 

 

5.1.

Organization

32

 

5.2.

Financial Statements

32

 

5.3.

Enforceable Obligations; Authorization

32

 

5.4.

Other Debt

33

 

5.5.

Litigation

33

 

5.6.

Taxes

33

 

5.7.

No Material Misstatements

34

 

5.8.

Subsidiaries

34

 

5.9.

Representations by Others

34

 

5.10.

Permits, Licenses, Etc.

34

 

5.11.

ERISA

34

 

5.12.

Title to Properties; Possession Under Leases

34

 

5.13.

Assumed Names

35

 

5.14.

Investment Company Act

35

 

5.15.

Public Utility Holding Company Act

35

 

5.16.

Agreements

35

 

5.17.

Environmental Matters

36

 

5.18.

Solvency

36

 

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TABLE OF CONTENTS

(continued)

 

 

 

 

Page

 

 

 

 

 

5.19.

Status of Collateral

37

 

5.20.

Revolving Credit Agreement Debt

37

 

5.21.

Transactions with Related Parties

37

 

5.22.

Patents, Trademarks and Copyrights

37

 

 

 

 

6.

AFFIRMATIVE COVENANTS

37

 

 

 

 

 

6.1.

Businesses and Properties

37

 

6.2.

Taxes

38

 

6.3.

Financial Statements and Information

38

 

6.4.

Inspections; Field Examinations; Appraisals and Physical Counts

39

 

6.5.

Further Assurances

40

 

6.6.

Books and Records

40

 

6.7.

Insurance

40

 

6.8.

ERISA

41

 

6.9.

Use of Proceeds

41

 

6.10.

Guarantors, Joinder Agreements

42

 

6.11.

Notice of Events

42

 

6.12.

Environmental Matters

43

 

6.13.

End of Fiscal Year

44

 

6.14.

Pay Obligations and Perform Other Covenants

44

 

6.15.

Cash Dominion; Collection and Application of Accounts

44

 

6.16.

Accounts and Other Collateral Matters

46

 

6.17.

Agreements

46

 

6.18.

Post-Closing Covenants

46

 

 

 

 

7.

NEGATIVE COVENANTS

46

 

 

 

 

 

7.1.

Indebtedness

46

 

7.2.

Liens

48

 

7.3.

Contingent Liabilities

50

 

7.4.

Mergers, Consolidations and Dispositions and Acquisitions of Assets

51

 

7.5.

Nature of Business

53

 

7.6.

Transactions with Related Parties

53

 

7.7.

Investments, Loans

53

 

7.8.

ERISA Compliance

54

 

7.9.

Change in Accounting Method

55

 

7.10.

Redemption, Dividends, Issuance of Equity Interests, Distributions and
Restricted Payments

55

 

7.11.

Fixed Charge Coverage Ratio

55

 

7.12.

Leverage Ratio

55

 

7.13.

Capital Expenditures

56

 

7.14.

Sale of Accounts

56

 

7.15.

Sale and Lease-Back Transactions

57

 

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TABLE OF CONTENTS

(continued)

 

 

 

 

Page

 

 

 

 

 

7.16.

Change of Name or Place of Business

57

 

7.17.

Restrictive Agreements

57

 

7.18.

Modification or Waiver of Documents Governing Revolving Credit Debt

57

 

7.19.

Anti-Terrorism Laws

57

 

 

 

 

8.

EVENTS OF DEFAULT AND REMEDIES

58

 

 

 

 

8.1.

Events of Default

58

 

8.2.

Remedies Cumulative

61

 

 

 

 

9.

THE AGENT

61

 

 

 

 

9.1.

Appointment

61

 

9.2.

Delegation of Duties

61

 

9.3.

Exculpatory Provisions

62

 

9.4.

Reliance

62

 

9.5.

Notice of Defaults

62

 

9.6.

Agent in its Individual Capacity

63

 

9.7.

Indemnification

63

 

9.8.

Non-Reliance on Agent and Other Lenders

63

 

9.9.

Failure to Act

64

 

9.10.

Successor Agent

64

 

 

 

 

10.

MISCELLANEOUS

64

 

 

 

 

10.1.

No Waiver; Cumulative Remedies

64

 

10.2.

Notices

65

 

10.3.

Governing Law; Submission to Jurisdiction; Waivers

65

 

10.4.

Survival; Parties Bound

66

 

10.5.

Counterparts

66

 

10.6.

Limitation of Interest

66

 

10.7.

Survival

67

 

10.8.

Captions

67

 

10.9.

Expenses, Etc.

67

 

10.10.

Indemnification

68

 

10.11.

Amendments, Waivers, Etc.

69

 

10.12.

Successors and Assigns; Participations and Assignments

71

 

10.13.

Entire Agreement

74

 

10.14.

Severability

74

 

10.15.

Disclosures

74

 

10.16.

Requirements of Law

75

 

10.17.

Taxes

76

 

10.18.

Waiver of Claims

78

 

10.19.

Right of Setoff

78

 

10.20.

Waiver of Right to Jury Trial

78

 

iii

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TABLE OF CONTENTS

(continued)

 

 

 

 

Page

 

 

 

 

 

10.21.

Additional Provisions Regarding Collection of Accounts and other Collateral

78

 

10.22.

Construction

80

 

10.23.

Joint and Several Obligations

80

 

10.24.

Acknowledgements

80

 

10.25.

USA Patriot Act

81

 

10.26.

Confidentiality

81

 

10.27.

Financial Assistance Limitations

81

 

 

List of Exhibits:

 

 

 

 

 

Exhibit A - Term Note Form

 

 

Exhibit B - Officer’s Certificate Form

 

 

Exhibit C - Assignment and Assumption Form

 

 

 

 

 

List of Schedules:

 

 

 

 

 

Schedule 1.1(a) - Real Estate & Excluded Real Estate

 

 

Schedule 1.1(b) - Lender Commitment Schedule

 

 

Schedule 5.4 - Other Indebtedness Defaults

 

 

Schedule 5.5 — Litigation

 

 

Schedule 5.6 - Tax Disputes/Delayed Filings

 

 

Schedule 5.8 — Subsidiaries

 

 

Schedule 5.12 -Real Property Leases

 

 

Schedule 5.13 - Assumed Names

 

 

Schedule 5.16 - Other Indebtedness Listing

 

 

Schedule 5.17 - Environmental Disclosures

 

 

Schedule 5.21 — Existing Affiliate Transactions

 

 

Schedule 5.22 - Intellectual Property Listing

 

 

Schedule 6.15 - Bank Account Listing

 

 

Schedule 7.2 - Existing Liens

 

 

Schedule 7.6 - Existing Affiliate Transactions

 

 

Schedule 7.17 - Restrictive Agreements

 

 

iv

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TERM LOAN CREDIT AGREEMENT

 

THIS TERM LOAN CREDIT AGREEMENT (together with all amendments, modifications and
supplements hereto and restatements hereof, this “Agreement”) is made and
entered into as of November 10, 2010 by and among WALCO INTERNATIONAL, INC.
(“Borrower”), a Delaware corporation, EACH OF THE CREDIT PARTIES WHICH IS NOW OR
HEREAFTER A GUARANTOR HEREUNDER, EACH OF THE FINANCIAL INSTITUTIONS WHICH IS A
SIGNATORY HERETO OR WHICH MAY FROM TIME TO TIME BECOME A PARTY HERETO
(individually, a “Lender” and collectively, the “Lenders”) and JPMORGAN CHASE
BANK, N.A., as Administrative Agent for the Lenders (in such capacity, together
with its successors and assigns, the “Agent”).

 

W I T N E S S E T H:

 

THAT, in consideration of the mutual covenants, agreements and undertakings
herein contained, the parties hereto agree as follows:

 

1.                                       Definitions.

 

1.1.                              Certain Defined Terms.  Unless a particular
word or phrase is otherwise defined or the context otherwise requires,
capitalized words and phrases used in the Loan Documents have the meanings
provided below.

 

Accounts shall have the meaning set forth in Article 9 of the UCC.

 

Affiliate of any Person shall mean any other Person which controls or is
controlled by or under common control with such Person.  For purposes of this
definition, “control” (including “controlled by” and “under common control
with”) means the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of such Person through the
ownership of securities or by contract; provided that no Lender shall be an
Affiliate of the Borrower. Without limiting the generality of the foregoing,
control of the right to vote of five percent (5%) or more of all voting
securities of a Person or beneficial ownership of five percent (5%) of the
outstanding equity interests in such Person shall be deemed to be control for
purposes of compliance with the provisions of Section 7.6 hereof; provided,
however, that with respect to any key management employees of the Borrower,
control of the right to vote of five percent (5%) or greater, but less than
fifteen percent (15%), of all voting securities of the Parent and/or the
Borrower or beneficial ownership of five percent (5%) or greater, but less than
fifteen percent (15%), of the outstanding equity interests in the Parent and/or
the Borrower by such key management employee shall not be deemed to be control
for purposes of compliance with the provisions of Section 7.6 hereof.

 

Agent shall have the meaning specified in the preamble to this Agreement.

 

Annual Audited Financial Statements shall mean (a) the annual financial
statements of the Credit Parties and their Subsidiaries, including all notes
thereto, which statements shall include, on a Consolidated basis, a balance
sheet as of the end of such fiscal year and a statement of operations, a
retained earnings statement and a statement of cash flows for such fiscal year,
all setting forth in comparative form the corresponding figures from the
previous fiscal year and

 

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accompanied by a report and opinion of independent certified public accountants
with an accounting firm of national standing and with a reputation satisfactory
to the Agent, which report shall not contain any material qualification (and be
without comment as to the accountants’ opinion whether the Borrower is a “going
concern” or can continue to be a “going concern”), except that such report may
contain qualification with respect to new accounting principles mandated by the
Financial Accounting Standards Board (or its successor organization), and shall
state that such financial statements, in the opinion of such accountants,
present fairly, in all material respects, the financial position of such Person
as of the date thereof and the results of its operations and cash flows for the
period covered thereby in conformity with GAAP and (b) to the extent required by
the Agent, annual consolidating financial statements of the Credit Parties and
their Subsidiaries containing a balance sheet as of the end of such fiscal year
and a statement of operations for such fiscal year prepared in reasonable
detail.  Such statements shall be accompanied by a certificate of such
accountants that in making the appropriate audit and/or investigation in
connection with such report and opinion, such accountants did not become aware
of any Default or Event of Default with respect to any of the financial
covenants set forth in Sections 7.11, 7.12 and 7.13 hereof, or if in the opinion
of such accountant any such Default or Event of Default exists, a description of
the nature and status thereof.

 

Approved Fund shall mean any Person (other than a natural person) that is
engaged in making, purchasing, holding or investing in bank loans and similar
extensions of credit in the ordinary course of its business and that is
administered, advised or managed by (a) a Lender, (b) an Affiliate of a Lender
or (c) an entity or an Affiliate of an entity that administers, advises or
manages a Lender.

 

Assignee shall have the meaning specified in Section 10.12(c) hereof.

 

Assignment and Assumption shall have the meaning specified in
Section 10.12(c) hereof.

 

Blocked Person shall mean (i) a Person that is listed in the annex to, or is
otherwise subject to the provisions of, the Executive Order No. 13224; (ii) a
Person owned or controlled by, or acting for or on behalf of, any Person that is
listed in the annex to, or is otherwise subject to the provisions of, the
Executive Order No. 13224;  (iii) a Person or entity with which any Lender is
prohibited from dealing or otherwise engaging in any transaction by any
Anti-Terrorism Law; (iv) a Person or entity that commits, threatens or conspires
to commit or supports “terrorism” as defined in the Executive Order No. 13224; 
(v) a Person or entity that is named as a “specially designated national” on the
most current list published by the U.S. Treasury Department Office of Foreign
Asset Control at its official website or any replacement website or other
replacement official publication of such list, or (vi) a Person or entity who is
affiliated or associated with a Person or entity listed above.

 

Borrower shall have the meaning specified in the preamble of this Agreement.

 

Business Day shall mean any day when commercial banking institutions in New
York, New York, are open for the transaction of banking business.

 

Business Entity shall mean corporations, partnerships, limited liability
companies, joint ventures, joint stock associations, business trusts and other
business entities.

 

2

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Canadian Subsidiary shall mean any Subsidiary of that is organized and domiciled
in the Canada.

 

Capital Expenditures shall mean, with respect to any Person for any period, all
capital expenditures of such Person, on a Consolidated basis, for such period
(including without limitation, the aggregate amount of Capital Lease Obligations
incurred during such period which are required to be capitalized and reported as
a liability on the consolidated balance sheet of such Person), determined in
accordance with GAAP, consistently applied.  For the avoidance of doubt, the
term “Capital Expenditures” shall not include those items described in
Section 7.4(e)(7).

 

Capital Lease Obligations shall mean the obligations of a Person to pay that
portion of rent or other amounts constituting payments of principal under a
lease of (or other agreement conveying the right to use) real and/or personal
Property which obligations are required to be classified and accounted for as a
capital lease on a balance sheet of such Person under GAAP (including Statement
of Financial Accounting Standards No. 13 of the Financial Accounting Standards
Board, as amended), provided that for purposes of this Agreement, the amount of
such obligations shall be only the capitalized amount thereof, determined in
accordance with GAAP (including such Statement No. 13).

 

Cash Dividends shall mean, with respect to any Person for any period, all fixed
and calculable cash dividend payments actually made with respect to any Equity
Interests of such Person for such period.

 

Cash Interest Rate shall have the meaning specified in Section 2.6(a) hereof.

 

Cash Management Obligations shall mean any and all obligations and liabilities
of Borrower or any of its Subsidiaries to the Revolving Credit Agent or any of
the Revolving Credit Lenders, whether direct, indirect, joint, several, or joint
and several, arising under or in any way relating to or incurred in connection
with (a) any deposit accounts maintained by Borrower or any of its Subsidiaries
with the Revolving Credit Agent or any of the Revolving Credit Lenders or any of
their respective Affiliates, (b) any cash management services or treasury
administration services provided by the Revolving Credit Agent or any of the
Revolving Credit Lenders or any of their respective Affiliates (c) any
documentation relating thereto, or (d) any services or transactions relating
thereto, including without limitation, daylight overdraft exposure and credit
card, debit card and other similar products.

 

Change of Control shall mean the occurrence of any of the following at any time
after the Closing Date:

 

(a)                                  at any time any Person and/or its
respective Affiliates (other than Charlesbank and its Affiliates) shall either
(i) beneficially own in the aggregate, directly or indirectly, 35% or more of
the aggregate voting power of all issued and outstanding classes of Equity
Interests in the Parent having the right to elect Board of Directors of the
Parent, or (ii) have the right to cause enough of their nominees in the
aggregate to be elected or appointed, and remain serving at all times as, Board
of Directors of the Parent so as to constitute a majority of such Board of
Directors;

 

3

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(b)                                 at any time the Parent shall cease to own
directly, free and clear of all Liens (other than in favor of the Collateral
Agent for the ratable benefit of the Lenders and Liens permitted under
Section 7.2), both legal title to and beneficial ownership of 100% of all issued
and outstanding Equity Interests of the Borrower; provided, however, that a
transfer of the legal title to and beneficial ownership of Equity Interests of
the Borrower having no more than 10% of the aggregate voting power of all
classes of Equity Interests in the Borrower or 10% of the total economic equity
interests of the Borrower to management employees of the Borrower shall not
trigger a Change of Control; or

 

(c)                                  at any time (i) the Parent shall cease to
have the right to elect, directly or indirectly, by virtue of beneficial
ownership of Equity Interests of the Borrower, contract or otherwise, at least a
majority in number of the members of the Board of Directors of the Borrower or
(ii) less than a majority in number of the members of the Board of Directors of
the Borrower shall have been elected or appointed, directly or indirectly, by
the Parent.

 

As used above, “beneficially own” shall have the same meaning as defined in
Rules 13d-3 and 13d-5 of the Securities and Exchange Act of 1934, as amended, or
any successor provision thereto.

 

Charlesbank shall mean Charlesbank Equity Fund VI, Limited Partnership, a
Massachusetts limited partnership.

 

Closing Date shall mean the date on which each requirement of Section 4 is
satisfied or waived by the Agent.

 

Code shall mean the Internal Revenue Code of 1986, as amended, as now or
hereafter in effect, together with all regulations, rulings and interpretations
thereof or thereunder by the Internal Revenue Service.

 

Collateral shall mean all collateral and security as described in the Security
Documents.

 

Collateral Agent shall mean JPMorgan Chase Bank, N.A., in its capacity as the
collateral agent of the holders of the Revolving Credit Agreement Debt and the
Obligations with respect to the Collateral in accordance with and pursuant to
the terms of the Intercreditor Agreement, and any successor collateral agent
under the terms of the Intercreditor Agreement.

 

Consolidated shall mean, for any Person, as applied to any financial or
accounting term, such term determined on a consolidated basis in accordance with
GAAP (except as otherwise required herein) for such Person and all Subsidiaries
thereof.

 

Contingent Obligation shall mean, as to any Person, any obligation of such
Person guaranteeing the payment or performance of any Indebtedness, leases,
dividends or other obligations (collectively “primary obligations”) of any other
Person (the “primary obligor”), whether directly or indirectly, including
without limitation, any obligation of the Person for whom Contingent Obligations
is being determined, (a) to purchase any such primary obligation or other
property constituting direct or indirect security therefor, (b) assume or
contingently

 

4

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agree to become or be secondarily liable in respect of any such primary
obligation, (c) to advance or supply funds (i) for the purchase or payment of
any such primary obligation or (ii) to maintain working capital or equity
capital for the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (d) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such primary
obligation, or (e) otherwise to assure or hold harmless the owner of such
primary obligation against loss in respect thereof; provided, however, that the
term “Contingent Obligation” shall not include endorsements of checks or other
negotiable instruments in the ordinary course of business.

 

Contribution Agreement shall mean any Contribution Agreement executed by and
among the Borrower and its Subsidiaries and as the same may be further amended,
modified, supplemented, restated and joined in pursuant to a Joinder Agreement,
from time to time.

 

Credit Parties shall mean the Parent, the Borrower and the Subsidiary
Guarantors, and Credit Party shall mean any one of such Persons

 

Debt Service Expense shall mean, with respect to the Credit Parties for any
period, the aggregate of regularly scheduled principal payments of all Funded
Debt (including, without limitation, regularly scheduled principal payments of
the Term Loans and any mandatory principal payments of the Term Loans pursuant
to Section 2.3(a), but excluding any principal payments of the Revolving Loans
(as defined in the Revolving Credit Agreement) to the extent there is not an
equivalent permanent reduction in the Total Revolving Credit Commitment (as
defined in the Revolving Credit Agreement)), made or to be made by such Person
during such period, on a Consolidated basis, in accordance with GAAP,
consistently applied.

 

Default Rate shall mean the sum of the Total Interest Rate plus two percent (2%)
per annum.

 

Discontinued Operations shall mean, as of any day, operations of any Credit
Party or any of its Subsidiaries which have been discontinued, and which, as of
such day, have been fully terminated, disposed of or liquidated.

 

Dollars or $ shall mean lawful money of the United States of America.

 

Domestic Subsidiary shall mean any Subsidiary of that is organized and domiciled
in the Unites States of America.

 

EBITDA shall mean, with respect to the Credit Parties for any period, Net Income
for such period plus (a) without duplication and to only the extent deducted in
determining Net Income for such period, the sum of (i) Interest Expense,
(ii) federal, state and local income or franchise taxes, (iii) all amounts
attributable to depreciation and amortization expense, (iv) any extraordinary
charges, (v) customary and reasonable director’s fees and board expenses for
board of directors of the Credit Parties not to exceed $550,000 in the aggregate
during any fiscal year of the Credit Parties, and (vi) any other non-cash
charges (including without limitation, (A) the issuance of restricted stock or
stock options, (B) equity losses of Affiliates that are not a Subsidiary of any
Credit Party, and (C) all charges attributable to the use of the purchase

 

5

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accounting method), but excluding any non-cash charge in respect of an item that
was included in Net Income in a prior period and any non-cash charge that
relates to the write-down or write-off of Inventory, minus (b) without
duplication and to the extent included in Net Income, (i) any cash payments made
during such period in respect of non-cash charges described in clause
(a)(vii) taken in a prior period and (ii) any extraordinary gains and any
non-cash items of income, in each case of such Person for such period, computed
and calculated, without duplication, on a Consolidated basis and in accordance
with GAAP, consistently applied.

 

Eligible Assignee shall mean (i) a Lender, (ii) an Affiliate of a Lender,
(iii) an Approved Fund, or (iv) any other commercial lender, finance company,
insurance company, financial institution or fund reasonably acceptable to the
Agent and the Borrower; provided, however, that if an Event of Default has
occurred and is continuing, such approval by the Borrower shall not be required.

 

Environmental Claim shall mean any third party (including any Governmental
Authority) action, lawsuit, claim or proceeding (including claims or proceedings
at common law) which seeks to impose or alleges any liability for (i) pollution
or contamination by, or releases or threatened releases of, Hazardous Substances
into the air, surface water, ground water or land or the clean-up, abatement,
removal, remediation or monitoring of such pollution, contamination or Hazardous
Substances; (ii) generation, recycling, reclamation, handling, treatment,
storage, disposal or transportation of Hazardous Substances; (iii) exposure to
Hazardous Substances; (iv) the safety or health of employees or other Persons in
connection with any of the activities specified in any other subclause of this
definition; or (v) the manufacture, processing, distribution in commerce,
presence or use of Hazardous Substances.  An “Environmental Claim” includes a
common law action, as well as a proceeding to issue, modify or terminate an
Environmental Permit, or to adopt or amend a regulation, to the extent that such
a proceeding attempts to redress violations of the applicable permit, license,
or regulation as alleged by any Governmental Authority.

 

Environmental Liabilities shall mean all liabilities arising from any
Environmental Claim or Requirement of Environmental Law under any theory of
recovery, at law or in equity, and whether based on negligence, strict liability
or otherwise, including: remedial, removal, response, abatement, restoration
(including natural resources), investigative, or monitoring liabilities,
personal injury and damage to property, natural resources or injuries to
persons, and any other related costs, expenses, losses, damages, penalties,
fines or liabilities, including attorney’s fees and court costs.  Environmental
Liability shall mean any one of them.

 

Environmental Permit shall mean any permit, license, approval or other
authorization under any applicable law or regulation of the United States or of
any state, municipality or other subdivision thereof relating to pollution or
protection of health or the environment, including laws or regulations relating
to emissions, discharges, releases or threatened releases of pollutants,
contaminants, Hazardous Substances or toxic materials or wastes into ambient
air, surface water, ground water or land, or otherwise relating to the
manufacture, processing, distribution, recycling, presence, use, treatment,
storage, disposal, transport, or handling of wastes, pollutants, contaminants or
Hazardous Substances.

 

Equipment shall have the meaning set forth in Article 9 of the UCC.

 

6

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Equity Interests shall mean as to a Business Entity, all capital stock,
partnership interests, membership interests or other indicia of equity rights,
including without limitation, any warrants, options or other rights to acquire
such interests, issued by such Business Entity from time to time.

 

ERISA shall mean the Employee Retirement Income Security Act of 1974, as amended
from time to time, and all rules, regulations, rulings and interpretations
adopted by the Internal Revenue Service or the Department of Labor thereunder.

 

ERISA Affiliate shall mean any trade or business (whether or not incorporated)
which together with the Borrower or any Subsidiary of the Borrower would be
treated as a single employer under the provisions of Title I or Title IV of
ERISA.

 

Event of Default shall mean any of the events specified in Section 8.1 hereof or
otherwise specified as an Event of Default in any other Loan Document, provided
there has been satisfied any requirement in connection with any such event for
the giving of notice or the lapse of time, or both, and Default shall mean any
of such events, whether or not any such requirement for the giving of notice, or
the lapse of any applicable grace or curative period (if any), or both, has been
satisfied.

 

Excess Cash Flow shall mean, for any fiscal year of the Credit Parties, the
amount, if any, of (a) the sum, without duplication, of (i) Net Income for such
fiscal year, (ii) the amount of all non-cash charges (including depreciation and
amortization, but excluding any depreciation and amortization applicable to
Discontinued Operations) deducted in arriving at such Net Income, (iii) the
aggregate net amount of non-cash loss on the disposition of property by the
Credit Parties and their Subsidiaries during such fiscal year (other than sales
of Inventory in the ordinary course of business), but only to the extent
deducted in arriving at such Net Income, (iv) equity losses during such fiscal
year attributable to Affiliates that are not a Subsidiary of any Credit Party,
but only to the extent deducted in arriving at such Net Income, and
(v) decreases, if any, in Net Working Capital as of the end of such fiscal year
when compared to Net Working Capital at the beginning of such fiscal year, minus
(b) the sum, without duplication, of (i) the amount of all non-cash credits
included in arriving at such Net Income, (ii) the aggregate amount Unfinanced
Capital Expenditures of the Credit Parties and their Subsidiaries during such
fiscal year, (iii) Debt Service Expense for such fiscal year, (iv) all optional
prepayments of the Term Loans during such fiscal year, (v) the aggregate net
amount of non-cash gain on the disposition of Property by the Credit Parties and
their Subsidiaries during such fiscal year (other than sales of Inventory in the
ordinary course of business), but only to the extent included in arriving at
such Net Income, (vi) amounts used during such fiscal year to repurchase from
Charlesbank and/or any of its Affiliates the equity securities of the Parent to
the extent included within Permitted Affiliate Transactions, but only to the
extent included in arriving at such Net Income, (vii) equity gains during such
fiscal year attributable to Affiliates that are not a Subsidiary of any Credit
Party, but only to the extent included in arriving at such Net Income,
(viii) increases, if any, in Net Working Capital as of the end of such fiscal
year when compared to Net Working Capital at the beginning of such fiscal year,
and (ix) Cash Dividends during such fiscal year to the extent permitted under
Section 7.10.

 

Excess Interest Amount shall have the meaning attributed to such term in
Section 2.9 hereof.

 

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Excluded Real Estate shall mean each of the real Properties listed as “excluded
real estate” on Schedule 1.1(a).

 

Federal Funds Effective Rate shall mean, for any day, a rate per annum 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, as
published on the next succeeding Business Day by the Federal Reserve Bank of New
York, or, if such rate is not so published for any day which is a Business Day,
the average of the quotations for the day of such transactions received by the
Agent from three Federal funds brokers of recognized standing selected by it.

 

Financed Capital Expenditures shall mean (i) Capital Expenditures which are
financed at the time of purchase with Indebtedness otherwise permitted
hereunder, and (ii) Capital Lease Obligations to the extent the same constitute
Capital Expenditures otherwise permitted hereunder.

 

Fixed Charge Coverage Ratio shall mean, with respect to the Credit Parties and
their Subsidiaries for any period, the ratio of (a) EBITDA less (i) Unfinanced
Capital Expenditures less (ii) cash payments of federal, state and local income
or franchise taxes to (b) the sum of (i) Debt Service Expense (excluding any
mandatory principal payments of the Term Loans pursuant to Section 2.3(a)),
(ii) cash Interest Expense, and (iii) Unfinanced Cash Dividends, in each case of
such Person for the applicable period, computed and calculated on a Consolidated
basis in accordance with GAAP, consistently applied and without duplication. 
All components of the Fixed Charge Coverage Ratio shall be determined (1) on a
Consolidated basis for the twelve (12) most recent consecutive calendar months
ending on or prior to the date of determination and (2) in accordance with GAAP,
consistently applied.

 

Funded Debt shall mean, as to a particular Person at any particular time, the
sum of (a) all obligations for borrowed money (whether as a direct obligor on a
promissory note, bond, debenture or other similar instrument, as a reimbursement
obligor with respect to an issued letter of credit or similar instrument, as an
obligor under a Contingent Obligation in respect of borrowed money, or as any
other type of direct or contingent obligor), and (b) all Capital Lease
Obligations (other than the interest component of such obligations), each
calculated without duplication, on a Consolidated basis, and in accordance with
GAAP.

 

GAAP shall mean, as to a particular Person, those principles and practices
(a) which are recognized as such by the Financial Accounting Standards Board or
successor organization, and (b) which are consistently applied (or with respect
to which any change in principles and practice mandated by the Financial
Accounting Standards Board or successor organization are disclosed in writing to
the Agent) for all periods after the date hereof in a manner consistent with the
manner in which such principles and practices were applied to the most recent
audited financial statements of the relevant Person furnished to the Agent and
the Lenders prior to the Closing Date (or with respect to which any change in
principles and practice mandated by the Financial Accounting Standards Board or
successor organization are disclosed in writing to the Agent).

 

Global Amendment shall mean the Global Amendment and Reaffirmation of Collateral
Documents, dated as of the Closing Date, executed by and among the Credit
Parties, the Agent, the Collateral Agent and the Revolving Credit Agent.

 

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Governmental Authority shall mean any foreign governmental authority, the United
States of America, any state of the United States and any political subdivision
of any of the foregoing, and any agency, instrumentality, department,
commission, board, bureau, central bank, authority, court or other tribunal, in
each case whether executive, legislative, judicial, regulatory or
administrative, having jurisdiction over the Agent, any of the Lenders, any
Credit Party, any Subsidiary of any Credit Party, or their respective Property.

 

Grantor shall mean any Grantor, Assignor, Pledgor, Mortgagor or Debtor, as such
terms are defined in any of the Security Documents.

 

Guarantors shall mean each Domestic Subsidiary of the Borrower.  In no event
shall Inactive Subsidiaries shall be required to execute or join in a Guaranty
or any applicable Security Agreements except as required under the terms of
Section 6.10.

 

Guaranty shall mean each and every guaranty of the Obligations from time to time
executed and delivered to the Agent by any Guarantor, as amended supplemented,
modified, joined in pursuant to a Joinder Agreement and restated from time to
time.

 

Hazardous Substance shall mean any hazardous or toxic waste, substance or
product or material defined or regulated by any Requirements of Environmental
Law, including solid waste (as defined under The Resource Conservation and
Recovery Act or its regulations, as amended), petroleum and any fraction thereof
and any radioactive materials and waste.

 

Hedging Obligations of a Person shall mean any and all obligations of such
Person, whether absolute or contingent and howsoever and whensoever created,
arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (a) any and all
agreements, devices or arrangements designed to protect at least one of the
parties thereto from the fluctuations of interest rates, exchange rates or
forward rates applicable to such party’s assets, liabilities or exchange
transactions, including, but not limited to, dollar-denominated or
cross-currency interest rate exchange agreements, forward currency exchange
agreements, interest rate cap or collateral protection agreements, forward rate
currency or interest rate options, puts and warrants, and (b) any and all
cancellations, buy backs, reversals, terminations or assignments of any of the
foregoing.

 

Highest Lawful Rate shall mean, with respect to the Agent or any Lender, the
maximum nonusurious rate of interest permitted to be charged by, as applicable,
the Agent or such Lender under applicable laws (if any) of the United States or
any state from time to time in effect.

 

Inactive Subsidiaries shall mean each of the Subsidiaries listed as inactive on
Schedule 5.8.

 

Indebtedness shall mean, as to any Person, without duplication: (a) all
indebtedness (including principal, interest, fees and charges) of such Person
for borrowed money; (b) any other indebtedness which is evidenced by a bond,
debenture or similar instrument; (c) all Capital Lease Obligations of such
Person; (d) all obligations of such Person for the deferred purchase price of
Property or services (except current trade accounts payable arising in the
ordinary course of business and current accrued expenses, not the result of
borrowing, arising in the ordinary

 

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course of business); (e) all reimbursement obligations of such Person in respect
of outstanding letters of credit, acceptances and similar obligations created
for the account of such Person; (f) all indebtedness, liabilities, and
obligations secured by any Lien on any Property owned by such Person even though
such Person has not assumed or has not otherwise become liable for the payment
of any such indebtedness, liabilities or obligations secured by such Lien, but
only to the extent of the value of the Property subject to such Lien (or, if
less, the amount of the underlying indebtedness, liability or obligation);
(g) all Cash Management Obligations of such Person and net liabilities of such
Person in respect of Hedging Obligations (calculated on a basis satisfactory to
the Agent and in accordance with accepted practice); (h) all liabilities of such
Person in respect of unfunded vested benefits under any Plan; and (i) all other
indebtedness, liabilities and obligations of such Person which are required to
be included or listed in the liabilities section of such Person’s balance sheet
according to GAAP; provided, that such term shall not mean or include (1) any
Indebtedness in respect of which monies sufficient to pay and discharge the same
in full (either on the expressed date of maturity thereof or on such earlier
date as such Indebtedness may be duly called for redemption and payment) shall
be deposited with a depository, agency or trustee acceptable to the Agent in
trust for the payment thereof or (2) any operating leases entered into in the
ordinary course of business (to the extent such operating leases do not
constitute Capital Lease Obligations).

 

Interest Expense shall mean, for any period, the total interest expense of the
Credit Parties and their Subsidiaries, determined on a Consolidated basis in
accordance with GAAP, consistently applied, and shall in any event include,
without limitation, (a) the amortization or write-off of debt discounts, (b) the
amortization or write-off of all debt issuance costs, commissions, discounts and
other fees payable in connection with the incurrence, amendment or refinancing
of Indebtedness (including all commissions, discounts and other fees and charges
owed with respect to letters of credit and bankers’ acceptance financing),
(c) the portion of payments under Capital Lease Obligation allocable to interest
expense, and (d) net costs under Hedging Obligations in respect of interest
rates to the extent such net costs are allocable to such period in accordance
with GAAP.

 

Intercreditor Agreement shall mean the Intercreditor and Collateral Agency
Agreement, dated as of the Closing Date, by and among the Borrower, the other
Credit Parties, the Agent, the Collateral Agent, and the Revolving Credit Agent,
as the same may be amended, modified, supplemented, renewed, restated or
replaced in accordance with the terms of this Agreement.

 

Inventory shall have the meaning set forth in Article 9 of the UCC.

 

Investment shall mean the purchase or other acquisition of any securities or
Indebtedness of, or the making of any loan, advance, extension of credit,
transfer of Property or capital contribution to, or the incurring of any
Contingent Obligation in respect of the Indebtedness of, any Person.

 

Joinder Agreement shall mean any agreement, in Proper Form, executed by a
Subsidiary of any Credit Party from time to time in accordance with Section 6.10
hereof, pursuant to which such Subsidiary joins in the execution and delivery of
this Agreement, a Guaranty, the applicable Security Documents and the
Contribution Agreement.

 

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JPMorgan shall mean JPMorgan Chase Bank, N.A.

 

Legal Requirement shall mean any law, statute, ordinance, decree, requirement,
order, judgment, rule, regulation (or interpretation of any of the foregoing)
of, and the terms of any license or permit issued by, any Governmental
Authority.

 

Lender or Lenders shall have the meaning specified in the preamble of this
Agreement.

 

Leverage Ratio shall mean, with respect to the Credit Parties and their
Subsidiaries as of any date that the Leverage Ratio is calculated, the ratio of
(a) Funded Debt of the Credit Parties and their Subsidiaries as of such date to
(b)(i) EBITDA for the Credit Parties and their Subsidiaries for the applicable
calculation period.  For purposes of calculating the Leverage Ratio, the
components of the Leverage Ratio shall be determined on a Consolidated basis and
the EBITDA component shall be determined for the four most recent consecutive
fiscal quarters of the Credit Parties ending on or prior to the date of
determination.

 

Lien shall mean, with respect to any asset of any Person, (a) any mortgage,
pledge, charge, encumbrance, security interest, collateral assignment or other
lien or restriction of any kind on such asset, whether based on common law,
constitutional provision, statute or contract, (b) the interest of any vendor or
a lessor under any conditional sale agreement, title retention agreement or
capital lease relating to such asset, (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities, or (d) any other right of or arrangement with any creditor to have
such creditor’s claim satisfied out of such assets, or the proceeds therefrom,
prior to the general creditors of such Person owning such assets.

 

Loan Documents shall mean this Agreement, the Term Notes, the Security
Documents, the Guaranties, the Contribution Agreement, the Joinder Agreements,
the Intercreditor Agreement, all instruments, certificates and agreements now or
hereafter executed and delivered to the Agent and/or the Lenders in connection
with or pursuant to any of the foregoing and all amendments, modifications,
renewals, extensions, increases and rearrangements of, and substitutions for,
any of the foregoing.

 

Lockbox Agreement shall collectively mean one or more lockbox agreements
required by the Collateral Agent, in Proper Form, to be executed and delivered
to the Collateral Agent by the Borrower and each of its Subsidiaries required by
the Collateral Agent, together with all modifications and/or replacements
thereof which are approved in writing by the Collateral Agent, for purposes of
facilitating the collection of Accounts in accordance with the terms of
Section 6.15 hereof.  On or prior to the Closing Date, the Borrower and each of
its applicable Subsidiaries has executed and delivered to the Collateral Agent
one or more Lockbox Agreements in Proper Form.  No Inactive Subsidiary shall be
required to execute and deliver any Lockbox Agreement unless and until such
Inactive Subsidiary is required to become a Guarantor under the terms of
Section 6.10.

 

Material Adverse Effect shall mean a material adverse effect on (a) the
business, assets, property, or condition (financial or otherwise) of the Credit
Parties taken as a whole, (b) the ability of the Credit Parties to perform or
pay the Obligations in accordance with the terms hereof or of any other Loan
Document, (c) the validity or enforceability of this Agreement, any

 

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of the Term Notes or any other Loan Documents or the rights or remedies of the
Agent or the Lenders hereunder or thereunder, or (d) the validity or
enforceability of the Agent’s Lien on any material portion of the Collateral or
the priority of such Lien.

 

Monthly Unaudited Financial Statements shall mean the financial statements of
the Credit Parties and their Subsidiaries, including all notes thereto, which
statements shall include (a) a balance sheet as of the end of the respective
calendar month or fiscal quarter, as applicable, (b) a statement of operations
for such respective calendar month or fiscal quarter, as applicable, and for the
fiscal year to date, subject to normal year-end adjustments, all setting forth
in comparative form the corresponding figures for the corresponding period of
the preceding fiscal year and for the Credit Parties’ Consolidated projections
for such period and (c) a statement of cash flows for the fiscal year to date,
subject to normal year-end adjustments, setting forth in comparative form the
corresponding figures in the corresponding period of the preceding fiscal year
and for the Credit Parties’ Consolidated projections for such period, all
prepared in reasonable detail and in accordance with GAAP and certified by a
Responsible Officer of the Parent as fairly and accurately presenting in all
material respects the financial condition and results of operations of the
Credit Parties and their Subsidiaries, on a Consolidated basis, at the dates and
for the periods indicated therein.  The Monthly Unaudited Financial Statements
for the Credit Parties and their Subsidiaries shall be prepared on a
Consolidated basis, and to the extent required by the Agent, a consolidating
basis, the parties recognizing that such consolidating statements will be
prepared in accordance with GAAP only to the extent normal and customary.

 

Mortgages shall mean any mortgage, deed of trust or other agreement which
conveys or evidences a Lien in favor of the Collateral Agent, for the ratable
benefit of the Lenders and the Revolving Credit Lenders, on real property
(including the Real Estate, other than Excluded Real Estate) of any Domestic
Credit Party, including any amendment, modification or supplement thereto
(including, without limitation, the Global Amendment).

 

Net Income shall mean, for any period, the consolidated net income (or loss) of
the Credit Parties and their Subsidiaries, determined on a Consolidated basis in
accordance with GAAP; provided that there shall be excluded (a) the income (or
deficit) of any Person accrued prior to the date it becomes a Subsidiary of any
Credit Party or is merged into or consolidated with any Credit Party or any of
its Subsidiaries, (b) the income (or deficit) of any Person (other than a
Subsidiary of any Credit Party) in which any Credit Party or any of its
Subsidiaries has an ownership interest, except to the extent that any such
income is actually received by such Credit Party or such Subsidiary in the form
of dividends or similar distributions and (c) the undistributed earnings of any
Subsidiary of any Credit Party to the extent that the declaration or payment of
dividends or similar distributions by such Subsidiary is not at the time
permitted by the terms of any contractual obligation (other than under any Loan
Document) or any Legal Requirement applicable to such Subsidiary.

 

Net Proceeds shall mean, with respect to any event, (a) the cash proceeds
received in respect of such event including (i) any cash received in respect of
any non-cash proceeds (including any cash payments received by way of deferred
payment of principal pursuant to a note or installment receivable or purchase
price adjustment receivable or otherwise, but excluding any interest payments),
but only as and when received, (ii) in the case of a casualty, insurance
proceeds and (iii) in the case of a condemnation or similar event, condemnation

 

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awards and similar payments, net of (b) the sum of (i) all reasonable fees,
commissions and out-of-pocket expenses paid to third parties (other than
Affiliates) in connection with such event, (ii) in the case of a sale, transfer
or other disposition of an asset (including pursuant to a sale and leaseback
transaction or a casualty or a condemnation or similar proceeding), the amount
of all payments required to be made as a result of such event to repay
Indebtedness (other than Term Loans) secured by such asset or otherwise subject
to mandatory prepayment as a result of such event and (iii) the amount of all
taxes paid and the amount of any reserves established to fund contingent
liabilities reasonably estimated to be payable, in each case during the year
that such event occurred or the next succeeding year and that are directly
attributable to such event (as determined reasonably and in good faith by a
financial officer).

 

Net Working Capital shall mean, on any date of calculation thereof, the
remainder of (a) the aggregate amount of Eligible Accounts and Eligible
Inventory (valued, in each case, at the lower of cost or fair market value on a
first-in first-out basis) as determined in accordance with GAAP consistently
applied, minus (b) the Consolidated current liabilities of all Credit Parties
determined on such date in accordance with GAAP.

 

Non-Excluded Taxes shall have the meaning specified in Section 10.17(a) hereof

 

Non-U.S. Lender shall have the meaning specified in Section 10.17(d) hereof

 

Obligations shall mean, without duplication, all obligations, liabilities and
Indebtedness of the Borrower and the Guarantors with respect to the Security
Documents and all other Loan Documents, including without limitation, (i) the
principal of and interest on the Term Loans and (ii) the payment or performance
of all other obligations, liabilities and Indebtedness of the Borrower or the
Guarantors to the Agent and the Lenders hereunder, under the Term Notes, or
under any one or more of the other Loan Documents, including all fees, costs,
expenses and indemnity obligations hereunder and thereunder.  The Obligations
include interest (including post-petition interest, whether or not such interest
would be an allowable claim under any applicable bankruptcy or other similar
proceeding) and other obligations accruing or arising after (a) commencement of
any case under any bankruptcy or similar laws by or against the Borrower or any
Guarantor or (b) the personal liability of the Borrower or any Guarantor for the
Obligations shall be discharged or otherwise cease to exist by operation of law
or for any other reason.

 

Officer’s Certificate shall mean a certificate substantially in the form of
Exhibit B attached hereto.

 

OID shall have the meaning specified in Section 2.10 hereof.

 

Organizational Documents shall mean, with respect to a corporation, the
certificate of incorporation, articles of incorporation and bylaws of such
corporation; with respect to a limited partnership, the limited partnership
agreement and certificate of limited partnership of such limited partnership;
with respect to a joint venture, the joint venture agreement establishing such
joint venture; with respect to a limited liability company, the articles of
organization or certificate of formation and regulations or limited liability
company agreement of such limited liability company;  and with respect to a
trust, the instrument establishing such trust;  in each

 

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case including any and all modifications thereof as of the date of the Loan
Document referring to such Organizational Document and any and all future
modifications thereof which are materially adverse to the Lenders and which are
consented to by the Agent.

 

Other Taxes shall mean any and all present or future stamp or documentary taxes
or any other excise or property taxes, charges or similar levies arising from
any payment made hereunder or from the execution, delivery or enforcement of, or
otherwise with respect to, this Agreement or any other Loan Document.

 

Parent shall mean American Health International, Inc., a Delaware corporation.

 

Participant shall have the meaning specified in Section 10.12(b) hereof.

 

Parties shall mean all Persons other than the Agent, the Collateral Agent or any
Lender executing any Loan Documents.

 

Payment Dates shall mean the last Business Day of each March, June,
September and December prior to the Term Loan Maturity Date, and (2) the Term
Loan Maturity Date.

 

PBGC shall mean the Pension Benefit Guaranty Corporation.

 

Permitted Affiliate Transactions shall mean any of the following:
(a) transactions with or among any Credit Party and any wholly-owned Subsidiary
of any Credit Party that is a Guarantor; (b) reasonable and customary directors’
fees, reasonable and customary directors’ indemnifications and similar
arrangements for directors and officers of the Credit Parties or any of its
Subsidiaries entered into in the ordinary course of business, together with any
payments made under any such indemnification arrangements; (c) customary and
reasonable loans and advances to officers, directors and employees of the Credit
Parties or any of their Subsidiaries for travel, entertainment, moving and other
relocation expenses, in each case made in the ordinary course of business;
(d) the incurrence of intercompany Indebtedness permitted pursuant to
Section 7.1(g) hereof; and (e) other transactions, contracts or agreements
existing on the date of this Agreement and which are set forth on Schedule 7.6
attached hereto, together with any renewals and extensions of such existing
transactions, contracts or agreements, so long as such renewals and extensions
are upon terms and conditions substantially identical to the terms and
conditions set forth in such existing transactions, contracts and agreements (or
otherwise no less favorable to the applicable Credit Party and its Subsidiaries,
as applicable).

 

Permitted Investment Securities shall mean each of the following, to the extent
the same is pledged as additional Collateral hereunder and is subject to a first
priority perfected Lien in favor of the Collateral Agent for the ratable benefit
of the Lenders (including a control or dominion agreement from any applicable
Person in favor of the Agent that is in all respects satisfactory to the
Agent):  (a) readily marketable, direct obligations of the United States of
America or any agency or wholly owned corporation thereof which are backed by
the full faith and credit of the United States, maturing within one (1) year
after the date of acquisition thereof, (b) certificates of deposit, commercial
paper (if rated no lower than A-1/P-1) or other short-term direct obligations of
any domestic financial institution having capital and surplus in excess of
$5,000,000,000, maturing within six months after the date of acquisition
thereof, (c) money

 

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market funds having aggregate assets in excess of $5,000,000,000, and (d) other
Investments mutually agreed to in writing by the Borrower and the Agent.

 

Person shall mean any individual, corporation, business trust, unincorporated
organization or association, partnership, joint venture, limited liability
company, Governmental Authority or any other form of entity.

 

Plan shall mean any plan subject to Title IV of ERISA and maintained for
employees of the Borrower or of any member of a “controlled group of
corporations”, as such term is defined in the Code, of which the Borrower, any
of its Subsidiaries or any ERISA Affiliate it may acquire from time to time is a
part, or any such plan to which the Borrower, any of its Subsidiaries or any
ERISA Affiliate is required to contribute on behalf of its employees.

 

Prepayment Event means:

 

(a)                                  any sale, transfer or other disposition
(including pursuant to a sale and leaseback transaction) of any Property of the
Borrower or any Guarantor, other than dispositions of Inventory or collection of
Accounts (including license royalties, rebates and carbon offsets) in the
ordinary course of business; or

 

(b)                                 any casualty or other insured damage to, or
any taking under power of eminent domain or by condemnation or similar
proceeding of, any Property or asset of the Borrower or any Guarantor; or

 

(c)                              the incurrence by the Borrower or any Guarantor
of any Indebtedness, other than Indebtedness permitted under Section 7.1 or
permitted by the Required Lenders pursuant to Section 10.11.

 

Principal Increases shall have the meaning specified in Section 2.6(a) hereof.

 

Principal Office shall mean the principal office in New York, New York of the
Agent, or such other place as the Agent may from time to time by notice to the
Borrower designate.

 

Prohibited Transaction shall mean any non-exempt prohibited transaction set
forth in Section 406 of ERISA or Section 4975 of the Code.

 

Proper Form shall mean in form and substance satisfactory to the Agent, except
that as used in Section 4(g) hereof with respect to the Lenders, such term shall
mean in form and substance satisfactory to the Lenders.

 

Property shall mean any interest in any kind of property or asset, whether real,
personal or mixed, tangible or intangible.

 

Real Estate shall mean each of the real Properties listed on Schedule
1.1(a) attached hereto.

 

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Refinancing Indebtedness shall mean any Indebtedness of any Credit Parties or
any of its Subsidiaries issued in exchange for, or the net proceeds of which are
used to extend, refinance, renew, replace, defease or refund, other Indebtedness
of such Person, provided, that:

 

(a)                                  such Refinancing Indebtedness is incurred
only by such Persons who are obligors on the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded,

 

(b)                                 the principal amount of such Refinancing
Indebtedness does not exceed the then outstanding principal amount of the
Indebtedness so extended, refinanced, renewed, replaced, defeased or refunded;

 

(c)                                  the interest rate or rates to accrue under
such Refinancing Indebtedness do not exceed the lesser of (i) the interest rate
or rates then accruing on the Indebtedness so extended, refinanced, renewed,
replaced, defeased or refunded or (ii) the prevailing market interest rate or
rates which are then applicable to, and generally available for, Indebtedness
which is similar in type, amount, maturity and other terms to the Indebtedness
so extended, refinanced, renewed, replaced, defeased or refunded;

 

(d)                                 the maturities, amortization schedules,
covenants, defaults, remedies, subordination provisions (with respect to any
Subordinated Indebtedness), collateral security provisions (or absence thereof)
and other terms of such Refinancing Indebtedness are in each case the same or
more favorable to the applicable Credit Party and/or its applicable Subsidiaries
as those in the Indebtedness so extended, refinanced, renewed, replaced,
defeased or refunded;

 

(e)                                  no Default or Event of Default has occurred
and is continuing or would result from the issuance or origination of such
Refinancing Indebtedness;

 

(f)                                    if the Indebtedness that is extended,
refinanced, renewed, replaced, defeased or refunded was subordinated in right of
payment to the Obligations and/or priority as to the Liens of the Collateral
Agent for the ratable benefit of the Lenders, then the terms and conditions of
such Refinancing Indebtedness must include subordination terms and conditions
that are at least as favorable to the Agent and the Lenders as those that were
applicable to the extended, refinanced, renewed, replaced, defeased or refunded
Indebtedness; and

 

(g)                                 if the Indebtedness being refinanced is
subject to the Intercreditor Agreement, such Refinancing Indebtedness is either
(1) permitted under the terms of the Intercreditor Agreement and will remain
subject to the terms of the Intercreditor Agreement or (2) subject to an
intercreditor agreement on terms no less favorable to the Agent and the Lenders
as those contained in the Intercreditor Agreement.

 

Register shall have the meaning given to such term in Section 10.12(c).

 

Reportable Event shall mean a “reportable event” as defined in
Section 4043(c) of ERISA for which the notice requirement is not waived by the
regulations thereunder.

 

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Required Lenders shall mean Lenders having greater than 66.67% of the Total Term
Loan Commitment; provided that after termination of the Total Term Loan
Commitment, Required Lenders shall mean Lenders having greater than 66.67% of
the aggregate amount of the outstanding Term Loans; provided further, however,
if only two (2) Lenders are then parties to this Agreement, Required Lenders
shall mean both of such Lenders.

 

Requirements of Environmental Law shall mean all requirements imposed by any law
(including The Resource Conservation and Recovery Act, The Comprehensive
Environmental Response, Compensation, and Liability Act, the Clean Water Act,
the Clean Air Act, and any state analogues of any of the foregoing), rule,
regulation, or order of any Governmental Authority which relate to
(i) pollution, protection or clean-up of the air, surface water, ground water,
soils, or subsurface strata; (ii) solid, liquid or gaseous waste or Hazardous
Substance generation, recycling, reclamation, release, threatened release,
treatment, storage, disposal or transportation; (iii) exposure of Persons or
property to Hazardous Substances; (iv) the manufacture, presence, processing,
distribution in commerce, use, discharge, releases, threatened releases, or
emissions of Hazardous Substances into the environment; or (v) the storage of
any Hazardous Substances.  Requirement of Environmental Law shall mean any one
of them.

 

Responsible Officer shall mean, with respect to any Person, the chief executive
officer, the president, any vice president, the chief financial officer, the
controller or the treasurer of such Person.

 

Revolving Credit Agent shall mean JPMorgan Chase Bank, N.A., in its capacity as
administrative agent under the Revolving Credit Agreement, and any successor
administrative agent under the terms of the Revolving Credit Agreement.

 

Revolving Credit Agreement shall mean that certain Second Amended and Restated
Credit Agreement dated as of October 15, 2007, by and among the Credit Parties,
the Canadian Subsidiaries of the Parent parties thereto, the Revolving Credit
Lenders, the Revolving Credit Agent, JPMorgan Chase Bank, N.A., Toronto Branch,
as Canadian administrative agent, General Electric Capital Corporation, as
documentation agent and J.P. Morgan Securities Inc. as lead arranger and book
runner, as amended pursuant that certain First Amendment to Second Amended and
Restated Credit Agreement dated as of May 5, 2009, and that certain Second
Amendment to Second Amended and Restated Credit Agreement of even effective date
herewith, and as further amended, restated or otherwise modified from time to
time.

 

Revolving Credit Agreement Debt shall mean any indebtedness issued pursuant to
the Revolving Credit Agreement.

 

Revolving Credit Lenders shall mean the lenders party to the Revolving Credit
Agreement from time to time.

 

Security Agreements shall mean (a) the Amended and Restated Security Agreement
(Personal Property-Borrower), dated effective as of September 26, 2006, between
the Borrower and the Collateral Agent, for the ratable benefit of the Lenders
and the Revolving Credit Lenders, covering all Accounts, Inventory, Equipment
and all other tangible and intangible personal Property of the Borrower as more
particularly described therein, (b) the Amended and Restated

 

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Security Agreement (Personal Property-Domestic Subsidiaries), dated as of
September 26, 2006, between each of the Borrower’s Domestic Subsidiaries that is
a Guarantor and the Collateral Agent, for the ratable benefit of the Lenders and
the Revolving Credit Lenders, covering all Accounts, Inventory, Equipment and
other tangible and intangible personal Property of each of the Borrower’s
Domestic Subsidiaries that is a Guarantor as more particularly described
therein, as the same may have heretofore been joined in or hereafter be joined
in pursuant to a Joinder Agreement, (c) the Amended and Restated Pledge
Agreement, dated effective as of the September 26, 2006, between the Borrower
and the Collateral Agent, for the ratable benefit of the Lenders and the
Revolving Credit Lenders, covering (i) all issued and outstanding Equity
Interests in each of the Borrower’s direct Domestic Subsidiaries that is a
Guarantor and (ii) 65% of all issued and outstanding Equity Interests in Kane
and any other direct Subsidiary of the Borrower that is a not a Domestic
Subsidiary, (d) the Second Amended and Restated Pledge Agreement, dated
effective as of October 15, 2007, between the Parent and the Collateral Agent
for the ratable benefit of the Lenders and the Revolving Credit Lenders,
covering all issued and outstanding Equity Interests in the Borrower, (e) any
and all other security agreements, pledge agreements, collateral assignments or
other similar documents now or hereafter executed in favor of the Collateral
Agent, for the ratable benefit of the Lenders and the Revolving Credit Lenders,
as security for the payment or performance of any and/or all of the Obligations,
and (f) any amendment, modification, restatement or supplement of all or any of
the above-described agreements and assignments (including, without limitation,
the Global Amendment).

 

Security Documents shall mean the Security Agreements, the Mortgages, all
related financing statements and any and all other agreements, mortgages, deeds
of trust, chattel mortgages, security agreements, pledges, guaranties,
assignments of income, assignments of contract rights, assignments or pledges of
stock or partnership interests, standby agreements, subordination agreements,
undertakings and other instruments and financing statements now or hereafter
executed and delivered as security for the payment and performance of the
Obligations, as any of them may from time to time be amended, modified, restated
or supplemented.

 

Subordinated Indebtedness shall mean, with respect to any Credit
Party, Indebtedness subordinated in right of payment to the Credit Parties’
monetary Obligations on terms satisfactory to and approved in writing by the
Agent and the Required Lenders, in their discretion, so long as all other terms
thereof (including without limitation, regularly scheduled payments and
financial and negative covenants) are satisfactory to and approved in writing by
the Agent and the Required Lenders, in their discretion.

 

Subsidiary shall mean, as to a particular parent Business Entity, any Business
Entity of which more than fifty percent (50%) of the Equity Interests issued by
such Business Entity is at the time directly or indirectly owned by such parent
Business Entity or by one or more of its Affiliates.

 

Term Loan Commitment shall mean, as to any Lender, the obligation of such Lender
to make a Term Loan in a principal amount up to, but not exceeding, the amount
set forth as such Lender’s Term Loan Commitment in Schedule 1.1(b) attached
hereto.

 

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Term Loan Commitment Percentage shall mean, with respect to any Lender, the
ratio, expressed as a percentage, of such Lender’s Term Loan Commitment to the
Total Term Loan Commitment.

 

Term Loan Maturity Date shall mean the earlier of (a) November 10, 2015 and
(b) any date the Term Loan Maturity Date is accelerated by the Agent pursuant to
Section 8.1 hereof.

 

Term Loans shall mean the Term Loans made pursuant to Section 2.1 hereof.  Term
Loan shall mean any one of such Term Loans.

 

Term Notes shall mean the promissory notes, each substantially in the form of
Exhibit A attached hereto, of the Borrower evidencing the Term Loans, payable to
the order of the respective Lenders in the amount of each of said Lender’s Term
Loan Commitment, and all renewals, extensions, modifications, rearrangements and
replacements thereof, and substitutions therefor.  Term Note shall mean any one
of such promissory notes.

 

Total Interest Rate shall mean a per annum rate of interest equal to the sum of
the Cash Interest Rate and the applicable interest rate per annum attributable
to Principal Increases and OID.

 

Total Term Loan Commitment shall mean, on any day, the aggregate of all of the
Lenders’ Term Loan Commitments on such day.  As of the Closing Date, the Total
Term Loan Commitment is $43,000,000.

 

Transferee shall mean any Assignee or Participant.

 

Tri-Party Agreements shall collectively mean tri-party agreements, in Proper
Form, to be executed and delivered by and among the Collateral Agent, the
Borrower (and each of its Subsidiaries required by the Collateral Agent) and the
applicable financial institutions described in Schedule 6.15 attached hereto,
together with all modifications and/or replacements thereof which are approved
in writing by the Agent, for purposes of either (a) facilitating the collection
of Accounts in accordance with the terms of Section 6.15 hereof, to the extent
payments of Accounts are processed through cash management services (including
lockbox arrangements) provided by any such specified financial institution
and/or deposited in one or more accounts maintained by the Borrower or its
applicable Subsidiary with any such specified financial institution or
(b) evidencing control for purposes of perfection of the Collateral Agent’s
Lien, for the ratable benefit of the Lenders, against one or more deposit
accounts maintained by the Borrower or its applicable Subsidiary with any such
specified financial institution.  As of the Closing Date, Schedule 6.15 attached
hereto describes all such accounts to be covered by a Tri-Party Agreement and
specifies whether the applicable Tri-Party Agreement is for purposes of
facilitating the collection of Accounts or perfecting the Collateral Agent’s
Lien against such accounts.  The Borrower agrees that neither the Borrower nor
any of its Subsidiaries shall establish any additional deposit accounts
permitted to be maintained hereunder with a financial institution other than the
Collateral Agent unless such additional deposit accounts are covered by a
Tri-Party Agreement.

 

UCC shall mean the Uniform Commercial Code as in effect from time to time in the
State of New York or of any other state the laws of which are required as a
result thereof to be applied

 

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in connection with the attachment, perfection or priority of, or remedies with
respect to, the Collateral Agent’s or any Lender’s Lien on any Collateral.

 

Unfinanced Capital Expenditures shall mean all Capital Expenditures other than
Financed Capital Expenditures.

 

Unfinanced Cash Dividends shall mean, with respect to any Person for any period,
all Cash Dividends of such Person for such period that are not paid either from
net proceeds of the Term Loans or from net proceeds of any other permitted
Indebtedness of such Person incurred after November 10, 2009.

 

1.2.                              Accounting Terms and Determinations.  Except
where specifically otherwise provided:

 

(a)                                  The symbol “$” and the word “dollars” shall
mean lawful money of the United States of America.

 

(b)                                 Any accounting term not otherwise defined
shall have the meaning ascribed to it under GAAP.  If any of the Credit Parties
are required after the Closing Date to implement any change(s) in its accounting
principles and practice as a result of any changes in GAAP mandated by the
Financial Accounting Standards Board or successor organization, and if such
change(s) result in any material change in the method of calculation of the
Fixed Charge Coverage Ratio, Excess Cash Flow, Leverage Ratio and/or any other
financial covenant under this Agreement, then for all periods after the date of
implementation of such change(s) until one or more appropriate amendments of
this Agreement addressing such change(s) in GAAP are negotiated, executed and
delivered by the parties hereto in a form acceptable to all such parties, the
Fixed Charge Coverage Ratio, Excess Cash Flow, Leverage Ratio and/or such other
financial covenant, as applicable, shall be calculated hereunder utilizing GAAP
as in effect prior to such change(s).

 

(c)                                  Unless otherwise expressly provided, any
accounting concept and all financial covenants shall be determined on a
Consolidated basis, and financial measurements shall be computed without
duplication.

 

(d)                                 Wherever the term “including” or any of its
correlatives appears in the Loan Documents, it shall be read as if it were
written “including (by way of example and without limiting the generality of the
subject or concept referred to)”.

 

(e)                                  Wherever the word “herein” or “hereof” is
used in any Loan Document, it is a reference to that entire Loan Document and
not just to the subdivision of it in which the word is used.

 

(f)                                    References in any Loan Document to
Section numbers are references to the Sections of such Loan Document.

 

(g)                                 References in any Loan Document to Exhibits,
Schedules, Annexes and Appendices are to the Exhibits, Schedules, Annexes and
Appendices to such Loan

 

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Document, and they shall be deemed incorporated into such Loan Document by
reference.

 

(h)                                 Any term defined in the Loan Documents which
refers to a particular agreement, instrument or document shall also mean, refer
to and include all modifications, amendments, supplements, restatements,
renewals, extensions and substitutions of the same; provided, that nothing in
this subsection shall be construed to authorize any such modification,
amendment, supplement, restatement, renewal, extension or substitution except as
may be permitted by other provisions of the Loan Documents.

 

(i)                                     All times of day used in the Loan
Documents mean local time in New York, New York.

 

(j)                                     Defined terms may be used in the
singular or plural, as the context requires.

 

1.3.                              UCC Changes.  All terms used herein which are
defined in the UCC shall, unless otherwise provided, have the meanings ascribed
to them in the UCC, as in effect on the date of this Agreement and as hereafter
amended.  The parties intend that the terms used herein which are defined in the
UCC have, at all times, the broadest and most inclusive meanings possible. 
Accordingly, if the UCC shall in the future be amended or held by a court to
define any term used herein more broadly or inclusively than the UCC in effect
on the date of this Agreement, then such term as used herein shall be given such
broadened meaning. If the UCC shall in the future be amended or held by a court
to define any term used herein more narrowly, or less inclusively, than the UCC
in effect on the date of this Agreement, such amendment or holding shall be
disregarded in defining terms used in this Agreement.

 

2.                                       Term Loans; Term Notes; Payments;
Prepayments; Interest Rates.

 

2.1.                              Term Loan Commitments.  Subject to the terms
and conditions hereof, each Lender, severally and not jointly, agrees to make a
Term Loan to the Borrower on the Closing Date, but in no event on or after
5:00 p.m., Eastern Daylight Time, on the Closing Date, in a principal amount
equal to the amount of such Lender’s Term Loan Commitment.

 

2.2.                              Term Loans.

 

(a)                                  Subject to Section 4 hereof, the Term Loans
(i) shall be advanced and made ratably by the Lenders in accordance with the
Lenders’ respective Term Loan Commitments, and (ii) the Term Loans shall be made
by the Lenders on the Closing Date, but in no event on or after the Term Loan
Commitment Termination Date.

 

(b)                                 Each Lender shall make its Term Loan
available on the proposed dates thereof by causing its Applicable Lending Office
to pay the amount required to a deposit account designated and maintained by the
Borrower with JPMorgan in immediately available funds not later than 1:00 p.m.

 

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(c)                                  The obligations of the Lenders hereunder
are several and not joint; therefore, notwithstanding anything herein to the
contrary:  (i) no Lender shall be required to make a Term Loan in excess of such
Lender’s Term Loan Commitment; (ii) if a Lender fails to make its Term Loan as
or when required hereunder and the Borrower subsequently makes a repayment on
the Term Loans, such repayment shall be split among the non-defaulting Lenders
in accordance with their respective Term Loan Commitment Percentages until each
non-defaulting Lender has received its Term Loan Commitment Percentage of all of
the outstanding Term Loans, then the balance of such repayment shall be divided
among all of the Lenders in accordance with their respective Term Loan
Commitments; and (iii) the failure of any Lender to make any Term Loan shall not
in itself relieve any other Lender of its obligation to lend hereunder
(provided, that no Lender shall be responsible for the failure of any other
Lender to make a Term Loan such other Lender is obligated to make hereunder).

 

2.3.                              Mandatory and Voluntary Prepayments.

 

(a)                                  To the extent permitted by
Section 7.11(f) of the Revolving Credit Agreement and commencing with the fiscal
year ending June 30, 2011, the Borrower shall make a mandatory prepayment of the
Term Loans, to the extent the same are then outstanding, in an amount equal to
the lesser of (i) $4,000,000 or (ii)(A) fifty percent (50%) of Excess Cash Flow
for each fiscal year of the Credit Parties when the Leverage Ratio of the Credit
Parties and their Subsidiaries, on a Consolidated basis, is greater than 3.00 to
1.0 as of the end of such fiscal year, and (B) twenty-five percent (25%) of
Excess Cash Flow for each fiscal year of the Credit Parties when the Leverage
Ratio of the Credit Parties and their Subsidiaries, on a Consolidated basis, is
equal to or less than 3.00 to 1.0 at any time.  For purposes hereof, Excess Cash
Flow will be computed by the Borrower and be subject to the review and
reasonable approval of the Required Lenders, based on the Credit Parties’ Annual
Audited Financial Statements for the applicable fiscal year. The Borrower shall
submit such computation in reasonable detail to the Agent, along with the amount
of such resulting prepayment of the Terms Loans required by this subparagraph
(a) based on such calculations by the Borrower, at the same time the applicable
Annual Audited Financial Statements of the Credit Parties are delivered to and
received by the Agent in accordance with the terms of Section 6.3 hereof.  Upon
receipt of such payment, the Agent shall immediately apply such payment against
the Term Loans in accordance with the terms hereof, reserving any right to
require payment of any deficiency in such amount. Within ten (10) Business Days
after receipt by the Agent of such calculations of and payment by the Borrower,
the Agent, at the request of the Required Lenders, shall notify the Borrower in
writing of any error by the Borrower in the computation of the amount of the
prepayment of the Term Loans required by this subparagraph (a), and in the event
of any such error, the Borrower shall pay to the Agent any deficiency in the
amount of the requisite prepayment of the Term Loans within five (5) Business
Days after receipt of such notification from the Agent.  Any prepayments
required by this subparagraph (a) shall be applied to outstanding Term Loans. 
Any amount of the Term Loans prepaid in accordance with the provisions of this
subparagraph (a) may not be reborrowed.

 

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(b)                                 In the event and on each occasion that any
Net Proceeds are received by or on behalf of the Borrower or any Guarantor in
respect of any Prepayment Event (excluding, nevertheless, Net Proceeds in an
aggregate amount up to $3,000,000 received during the period from the Closing
Date through the Term Loan Maturity Date), the Borrower shall, immediately after
such Net Proceeds are received by the Borrower or any Guarantor, prepay the
First Lien Debt and/or the Obligations as set forth in Section 2.3(c) below in
an aggregate amount equal to 100% of such Net Proceeds; provided that, in the
case of any event described in clause (a) or (b) of the definition of
“Prepayment Event” with respect to any asset that is not Inventory or
Receivables (excluding, nevertheless, Net Proceeds in an aggregate amount up to
$3,000,000 received during the period from the Closing Date through the Term
Loan Maturity Date), if the Borrower shall deliver to the Agent a certificate of
a Responsible Officer to the effect that the Borrower intends to apply the Net
Proceeds from such event (or a portion thereof specified in such certificate),
within 180 days after receipt of such Net Proceeds, to acquire (or replace or
rebuild) real Property, Equipment or other tangible assets (excluding Inventory)
to be used in the business of the Borrower or the applicable Guarantor, and
certifying that no Event of Default has occurred and is continuing, and the Net
Proceeds specified in such certificate are deposited in a cash collateral
account under the dominion and control of the Collateral Agent, then such funds
shall be made available to the Borrower or the applicable Guarantor only for
reinvestment purposes in the absence of a continuing Event of Default and upon
written request by the Borrower or applicable Guarantor to the Collateral Agent
(with a copy to the Agent) for a release from the cash collateral account
specifying that the requested amount is to be used for reinvestment purposes
pursuant to this Section 2.3(b); provided further that (x) to the extent any
such Net Proceeds therefrom have not been so applied towards such reinvestment
purposes by the end of such 180-day period, or (y) an Event of Default shall
have occurred and be continuing for a period of at least 20 consecutive days, a
prepayment of the Revolving Credit Agreement Debt and/or the Obligations as set
forth in Section 2.3(c) below shall be required in an amount equal to such Net
Proceeds that have not previously been applied towards such reinvestment
purposes.

 

(c)                                  All such Net Proceeds received pursuant to
Section 2.3(b) as a result of a Prepayment Event (1) that are not reinvested in
accordance with the provisions of Section 2.3(b) or (2) with respect to any
Inventory or Receivables, shall be applied as follows:

 

(i)                                     subject to Section 2.3(c)(iii) below, if
the amounts are received as a result of a Prepayment Event described in clause
(a) or (b) of the definition thereof with respect to any Inventory or
Receivables, such amounts shall be applied (A) first, to any Revolving Credit
Agreement Debt without a corresponding reduction to the revolver commitments
under the Revolving Credit Agreement and if an Event of Default has occurred and
is continuing to cash collateralize outstanding letters of credit issued under
the Revolving Credit Agreement, and (B) second, to the Obligations;

 

(ii)                                  subject to Section 2.3(c)(iii) below, if
the amounts are received as a result of any Prepayment Event (other than a
Prepayment Event described in sub-clause (i) above), such amounts shall be
applied (A) first, to the Obligations, and (B) second, to any Revolving Credit
Agreement Debt without a corresponding reduction to the revolver

 

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commitments under the Revolving Credit Agreement and if an Event of Default has
occurred and is continuing to cash collateralize outstanding letters of credit
issued under the Revolving Credit Agreement; and

 

(iii)                               if amounts are received as a result of a
Prepayment Event that includes both (A) Inventory and/or Receivables and
(B) other assets, such amounts shall be applied as follows: (1) an amount equal
to the aggregate book value of such Inventory and Receivables subject to such
Prepayment Event shall be applied to any Revolving Credit Agreement Debt
outstanding under the Revolving Credit Agreement without a corresponding
reduction to the revolver commitments under the Revolving Credit Agreement and,
if an Event of Default has occurred and is continuing, to cash collateralize
outstanding letters of credit thereunder and (2) the remaining proceeds shall be
applied as follows: (a) first, to the Obligations, and (b) second, to any
Revolving Credit Agreement Debt without a corresponding reduction to the
revolver commitments under the Revolving Credit Agreement and if an Event of
Default has occurred and is continuing to cash collateralize outstanding letters
of credit issued under the Revolving Credit Agreement.

 

(d)                                 Upon the occurrence of a Change of Control,
the Term Loans (including Principal Increases) may be prepaid in full, but not
in part, so long as contemporaneously with such prepayment, all outstanding
Revolving Credit Agreement Debt is fully paid, all outstanding letters of credit
issued under the Revolving Credit Agreement are cash collateralized to the
reasonable satisfaction of the Revolving Credit Agent and all commitments under
the Revolving Credit Agreement are terminated. Any such prepayment of the Term
Loans shall be accompanied by (i) interest thereon to the date of prepayment and
(ii) a premium (as liquidated damages and not as a penalty and in addition to
all accrued and unpaid interest on the principal amount prepaid on the date of
prepayment) equal to the amount of such prepayment multiplied by one percent
(1%).

 

(e)                                  In addition to the mandatory or voluntary
prepayments described in Sections 2.3(a), 2.3(b) and 2.3(d), and to the extent
permitted by Section 7.11(f) of the Revolving Credit Agreement, the Borrower
may, upon at least three Business Days’ notice given to the Agent before
12:00 p.m. (Dallas, Texas time) stating the proposed date and aggregate
principal amount of the prepayment, and if such notice is given, the Borrower
shall, prepay the outstanding aggregate principal amount of the Term Loans
(including Principal Increases) in whole or ratably in part; provided, however,
that (i) each such partial prepayment shall be in a minimum aggregate principal
amount of $2,000,000 or an integral multiple of $500,000 in excess thereof, and
(ii) each such prepayment (whether full or partial) shall be accompanied by
(A) interest thereon to the date of prepayment and (B) the premium, if any,
required under the terms of Section 2.3(f) below.

 

(f)                                    All prepayments of the Term Loans (other
than prepayments described in Sections 2.3(a), 2.3(b) and 2.3(d) above) prior to
the third anniversary of the Closing Date shall be subject to an additional
premium (to be paid to the Lenders pro rata as liquidated damages and
compensation, and not as a penalty, for the costs of being prepared to make
funds available hereunder with respect to the Term Loans) equal to the

 

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amount of such prepayment multiplied by (i) three percent (3%), with respect to
prepayments made prior to the first anniversary of the Closing Date, (ii) two
percent (2%), with respect to prepayments made on or after the first anniversary
of the Closing Date, but prior to the second anniversary of the Closing Date and
(iii) one percent (1%), with respect to prepayments made on or after the second
anniversary of the Closing Date, but prior to the third anniversary of the
Closing Date.  On or after the third anniversary of the Closing Date, no
premiums shall be payable pursuant to this Section 2.3(f) in connection with any
prepayments of the Term Loans.

 

2.4.                              Term Notes; Scheduled Payments.

 

(a)                                  Subject to the provisions of Section 10.12
hereof relating to replacement and substitution of the Term Notes, the Term Loan
made by a Lender shall be evidenced by a single Term Note dated as of the
Closing Date, delivered and payable to such Lender in a principal amount equal
to such Lender’s Term Loan Commitment as of the Closing Date.

 

(b)                                 If not earlier prepaid in full, and to the
extent permitted by Section 7.11(f) of the Revolving Credit Agreement, the
aggregate principal balance of the Term Loans, as evidenced by the Term Notes,
shall be due and payable in quarterly installments of $107,500, each due on each
Payment Date, commencing on December 31, 2010.  To the extent not previously
paid, the aggregate outstanding principal balance of the Term Loans (including
all Principal Increases) shall be finally due and payable on the Term Loan
Maturity Date.

 

(c)                                  Subject to Section 10.6 hereof, the
Borrower hereby agrees to pay the accrued and unpaid interest on the unpaid
principal balance of the Term Loans (including all Principal Increases) on the
Payment Dates, commencing with the first of such dates to occur after the date
hereof.  After the Term Loan Maturity Date, accrued and unpaid interest on the
Term Loans shall be payable on demand.

 

2.5.                              Application of Payments and Prepayments.

 

(a)                                  Prepayments on the Term Loans, including
without limitation, prepayments in accordance with Sections 2.3 hereof, shall be
applied to payment of the aggregate unpaid principal amounts of the Term Notes
in inverse order of maturity, with the balance of any such prepayments, if any,
being applied to accrued interest.  Payments of accrued interest on each Term
Note in accordance with Section 2.4(c) hereof shall be applied to the aggregate
accrued interest then outstanding under the Term Notes.  Payments of regularly
scheduled installments of principal on each Term Note in accordance with
Section 2.4(b) hereof shall be applied to the aggregate principal amount
outstanding under the Term Notes in direct order of maturity, while payment by
the Borrower of the aggregate principal amount outstanding under the Term Notes
on the Term Loan Maturity Date shall be applied to principal.

 

(b)                                 All payments remitted to the Agent, and,
absent the existence of an Event of Default, all such payments not relating to
principal or interest of specific Term Loans,

 

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or not constituting payment of specific fees or other specific Obligations, and
all proceeds of Collateral received by the Agent, shall be applied, ratably,
subject to the provisions of this Agreement, first, to pay any fees, indemnities
or expense reimbursements then due to the Agent hereunder; second, to pay any
fees or expense reimbursements then due to the Lenders from any Credit Party;
third, to pay interest due in respect of all Term Loans; fourth, to pay or
prepay principal of the Term Loans; and fifth, to the payment of any other
Obligation due to the Agent or any Lender.

 

(c)                                  Each payment or prepayment received by the
Agent hereunder or under any Term Note for the account of a Lender shall be paid
promptly to such Lender, in immediately available funds.

 

(d)                                 All sums payable by the Borrower to the
Agent hereunder or pursuant to the Term Notes or any of the other Loan Documents
for its own account or the account of the Lenders shall be payable in United
States dollars in immediately available funds not later than 12:00 noon on the
date such payment or prepayment is due and shall be made without set-off,
counterclaim or deduction of any kind.  Any such payment or prepayment received
and accepted by the Agent after 12:00 noon shall be considered for all purposes
(including the payment of interest, to the extent permitted by law) as having
been made on the next succeeding Business Day.  All such payments or prepayments
shall be made at the Principal Office.  If any payment or prepayment becomes due
and payable on a day which is not a Business Day, then the date for the payment
thereof shall be extended to the next succeeding Business Day and interest shall
be payable thereon at the then applicable rate per annum during such extension.

 

2.6.                              Interest Rates for Term Loans; Cash Interest
and Principal Increases.

 

(a)                                  Subject to Section 10.6 hereof, interest on
the aggregate outstanding principal balance of the Term Loans shall accrue at
the rate of 14.25% per annum and be payable as follows: (i) 12.25% per annum on
the Term Loan (the “Cash Interest Rate”) shall be paid in cash in arrears on
each Payment Date; and (ii) 2.0% per annum shall be added automatically to the
unpaid principal amount of the Term Loans on each Payment Date (each such
addition, a “Principal Increase”); provided, that (1) all principal outstanding,
whether then due and payable, after the occurrence of an Event of Default which
has not been cured to the satisfaction of the Agent and the Required Lenders or
waived in writing by the Agent and the Required Lenders shall bear interest at
the Default Rate, which shall be due and payable upon demand, and (2) past due
principal and interest shall bear interest at the Default Rate, which shall be
payable on demand. Principal Increases shall be considered principal on the Term
Loans for all purposes, including, without limitation, calculation of interest
on subsequent Payment Dates.

 

(b)                                 All interest and fees will be computed on
the basis of a year of 360 days and actual days elapsed (including the first day
but excluding the last day) occurring in the period for which payable, unless
the effect of so computing shall be to cause the rate of interest to exceed the
Highest Lawful Rate.

 

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2.7.                              Pro-Rata Treatment.

 

(a)                                  Except to the extent otherwise provided
herein:  (a) each borrowing from the Lenders under Section 2.1 hereof shall be
made pro-rata, according to each Lender’s Term Loan Commitment Percentage as
applicable; and (b) each payment or prepayment by the Borrower of principal of
or interest on Term Loans shall be made to the Agent for the account of the
Lenders pro-rata in accordance with the respective unpaid principal amounts of
such Term Loans held by the Lenders.

 

(b)                                 Unless the Agent shall have been notified in
writing by any Lender prior to the Closing Date that such Lender will not make
the amount that would constitute such Lender’s Term Loan Commitment Percentage
of the Term Loans on the Closing Date available to the Agent at the Principal
Office, the Agent may assume that such Lender has made such amount available to
the Agent on such date, and the Agent may, in reliance upon such assumption and
subject to the terms and conditions of this Agreement, but shall not be
obligated to, make such amount available to the Borrower by depositing the same,
in immediately available funds, in a deposit account designated and maintained
by the Borrower with JPMorgan.  Any Lender failing to timely deliver its
requisite portion of the Term Loans shall deliver the same to the Agent as soon
as possible thereafter, together with interest on such amount for each day from
the due date for such payment to the date of payment by such Lender to the Agent
of such amount at a rate of interest per annum equal to the Federal Funds
Effective Rate for such period.  In addition, the Borrower hereby agrees that
upon demand by the Agent, the Borrower shall reimburse the Agent for any such
amount which any Lender has failed to timely deliver to the Agent, but which the
Agent may have previously made available to the Borrower in accordance with the
other provisions of this Section 2.7(b).

 

2.8.                              Sharing of Payments, Etc.  Each of the Credit
Parties agrees that, in addition to (and without limitation of) any right of
set-off, bankers’ lien or counterclaim a Lender may otherwise have, each Lender
shall be entitled, at its option, to offset balances held by it for the account
of any of the Credit Parties at any of its offices against any principal of or
interest on any of such Lender’s Term Loans to the Borrower hereunder, or any
other Obligation of the Borrower hereunder (regardless of whether such
Obligations of the Borrower are then due and regardless of whether such offset
balances are then due to the Borrower), in which case it shall promptly notify
the Borrower and the Agent thereof, provided, that such Lender’s failure to give
such notice shall not affect the validity thereof.  If a Lender shall obtain
payment of any principal of or interest on any Term Loan made by it under this
Agreement, or other obligation then due to such Lender hereunder, through the
exercise of any right of set-off (including, without limitation, any right of
set-off or lien granted under Section 10.19 hereof), banker’s lien, counterclaim
or similar right, or otherwise, it shall promptly purchase from the other
Lenders participations in the Term Loans made by, or the other obligations of
the Borrower hereunder of, the other Lenders in such amounts, and make such
other adjustments from time to time as shall be equitable to the end that all
the Lenders shall share the benefit of such payment (net of any expenses which
may be incurred by such Lender in obtaining or preserving such benefit) pro-rata
in accordance with their respective Term Loan Commitment Percentages.  To such
end all the Lenders shall make

 

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appropriate adjustments among themselves (by the resale of participations sold
or otherwise) if such payment is rescinded or must otherwise be restored.  Each
of the Credit Parties agrees, to the fullest extent it may effectively do so
under applicable law, that any Lender so purchasing a participation in the Loans
made by or other obligations hereunder of, the other Lenders may exercise all
rights of set-off, bankers’ lien, counterclaim or similar rights with respect to
such participation as fully as if such Lender were a direct holder of said Loans
or other obligations in the amount of such participation.  Nothing contained
herein shall require any Lender to exercise any such right or shall affect the
right of any Lender to exercise, and retain the benefits of exercising, any such
right with respect to any other indebtedness or obligation of the Borrower.

 

2.9.                              Recapture.  If on any Payment Date the Agent
does not receive for the account of one or more Lenders payment in full of
interest computed at the Total Interest Rate (computed without regard to any
limitation by the Highest Lawful Rate), because the Total Interest Rate exceeds
or has exceeded the Highest Lawful Rate applicable to such Lender(s), the
Borrower shall pay to the Agent for the account of such Lender(s), in addition
to interest otherwise required, on each Payment Date thereafter, the Excess
Interest Amount (calculated as of each such subsequent Payment Date); provided,
that in no event shall the Borrower be required to pay, for any computation
period, interest at a rate exceeding the Highest Lawful Rate applicable to such
Lender(s) during such period.  As used herein, the term “Excess Interest Amount”
shall mean, on any day, the amount by which (a) the amount of all interest which
would have accrued prior to such day on the outstanding principal of the Term
Notes of the applicable Lender (had the Total Interest Rate at all times been in
effect without limitation by the Highest Lawful Rate applicable to such
Lender(s)) exceeds (b) the aggregate amount of interest actually paid to the
Agent for the account of such Lender(s) on their respective Term Notes on or
prior to such day.

 

2.10.                        Original Issue Discount.  The Borrower and the
Lenders agree (i) that the Term Loans evidenced by the Term Notes are debt for
federal income tax purposes, (ii) that the Term Notes issued to each Lender
constitute a single debt instrument for purposes of Sections 1271 through 1275
of the Code and the Treasury Regulations thereunder (pursuant to Treasury
Regulations Section 1.1275-2(c)), (iii) that such debt instrument is and will be
issued with an original issue discount (“OID”) based upon the actual funding and
disbursement of ninety-eight percent (98%) of the face amount of each Term Note,
and that such debt instrument is described in Treasury Regulations
Section 1.1272-1(c)(2) and therefore is governed by the rules set out in
Treasury Regulations Section 1.1272-1(c), including Section 1.1272-1(c)(5), and
is not governed by the rules set out in Treasury Regulations Section 1.1275-4,
(iv) that any calculation by the Borrower regarding the amount of OID for any
accrual period on the Term Notes shall be subject to review and reasonable
approval of the Required Lenders, and (v) to adhere to this Agreement for
federal income tax purposes and not to take any action or file any tax return,
report or declaration inconsistent herewith.  The inclusion of this Section 2.10
is not an admission by any Purchaser that it is subject to United States
taxation.

 

3.                                       Collateral.

 

3.1.                              Security Documents.  The Term Loans and all
other Obligations shall be secured by the Collateral described in the Security
Documents and the Intercreditor Agreement, and the Agent and the Lenders are
entitled to the benefits thereof.  The Credit Parties shall duly execute and
deliver the Security Documents, all consents of third parties necessary to
permit the effective

 

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granting of the Liens created thereby, and other documents, all in Proper Form,
as may be reasonably required by the Collateral Agent to grant to the Collateral
Agent, for the ratable benefit of the Lenders and the Revolving Credit Lenders,
a valid, perfected and enforceable Lien on and security interest in the
Collateral (subject only to the Liens permitted under Section 7.2 hereof and
with the requisite priority described in the Intercreditor Agreement as between
the Lender and the Revolving Credit Lenders), including without limitation, any
and all original stock certificates, stock transfer powers, assignments and
other documents and instruments necessary or desirable under the laws of any
applicable jurisdiction with regard to the Equity Interests covered by any
Security Agreement.

 

3.2.                              Filing and Recording.  The Credit Parties
shall, at their sole cost and expense, cooperate with the Collateral Agent in
causing all financing statements, supplements to the existing Mortgages and
other Security Documents pursuant to this Agreement to be duly recorded and/or
filed or otherwise perfected in all places necessary to perfect the Liens of the
Collateral Agent, in the opinion of the Collateral Agent, and the Credit Parties
shall take such other actions as the Collateral Agent may reasonably request, in
order to perfect and protect the Liens of the Collateral Agent, for the ratable
benefit of the Lenders, in the Collateral.  Each of the Credit Parties, to the
extent permitted by law, hereby authorizes the Collateral Agent to file any
financing statement or other Security Document in respect of any Lien created
pursuant to the Security Documents which may at any time be required to perfect
such Liens or which, in the reasonable opinion of the Collateral Agent, may at
any time be desirable, although the same may have been executed only by the
Collateral Agent or, at the option of the Collateral Agent, to sign such
financing statement on behalf of any Credit Party, and file the same, and each
of the Credit Parties hereby irrevocably designates the Collateral Agent, its
agents, representatives and designees as its agent and attorney-in-fact for this
purpose.  In the event that any re-recording or refiling thereof (or the filing
of any statements of continuation or assignment of any financing statement) is
required to protect and preserve such Lien, the Credit Parties shall, at the
Credit Parties’ cost and expense, cause the same to be recorded and/or refiled
at the time and in the manner requested by the Collateral Agent.

 

4.                                       Conditions.  The obligation of the
Lenders to make the Term Loans is subject to the satisfaction of the following
conditions:

 

(a)                                  all representations and warranties of any
of the Credit Parties set forth in this Agreement and in any other Loan Document
shall be true and correct in all material respects with the same effect as
though made on and as of such date, except for (i) those representations and
warranties which relate only to the Closing Date and (ii) those changes in such
representations and warranties otherwise permitted by the terms of this
Agreement;

 

(b)                                 there shall have occurred no Material
Adverse Effect, after giving effect to the Term Loans;

 

(c)                                  no Default or Event of Default shall have
occurred and be continuing;

 

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(d)                                 if requested by the Agent, it shall have
received a certificate executed by a Responsible Officer of the Borrower as to
the compliance with subparagraphs (a) through (c) above;

 

(e)                                  the making of the Term Loans shall not be
prohibited by, or subject the Agent or any Lender to, any penalty or onerous
condition under any Legal Requirement; and

 

(f)                                    the Borrower shall have paid all legal
fees and other expenses of the type described in Section 10.9 hereof for which
invoices have been presented through the date of the Term Loans;

 

(g)                                 the Agent and the Lenders shall have
received the following which shall be duly executed and in Proper Form:

 

(1)                                  the Loan Documents executed by the
applicable Credit Parties;

 

(2)                                  a certificate of corporate resolutions and
incumbency executed by the Secretary or an Assistant Secretary of the Borrower
dated as of the date hereof, authorizing (i) the Borrower’s entering into the
transactions contemplated hereby and (ii) the delivery by the Borrower of the
Loan Documents to be executed and delivered by the Borrower;

 

(3)                                  a certificate of corporate resolutions and
incumbency executed by the Secretary or an Assistant Secretary of the Parent and
each of the Guarantors dated as of the date hereof, authorizing the Parent and
each of the Guarantors to (i) enter into the transactions contemplated hereby
and (ii) deliver the Loan Documents to be executed and delivered by the Parent
and each of the Guarantors;

 

(4)                                  certified copies of the Organizational
Documents of the Borrower, each of the Borrower’s Subsidiaries, and the Parent;

 

(5)                                  certificates from the Secretary of State or
other appropriate public official of the State of Delaware as to the continued
existence and good standing of the Borrower in the State of Delaware;

 

(6)                                  certificates from the Secretary of State or
other appropriate public official as to the continued existence and good
standing of the Parent and each of the Guarantors in its applicable State of
formation;

 

(7)                                  certificates from the appropriate public
officials of the States of Texas, California, Colorado, Florida, Idaho, Iowa,
Kansas, Nebraska, Oklahoma, Tennessee, Utah and Wisconsin for the Borrower as to
the good standing and qualification as a foreign corporation, to the extent it
is necessary to be qualified to do business as a foreign corporation in these
jurisdictions;

 

(8)                                  [intentionally omitted];

 

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(9)                                  copies of the following financial
information: (i) audited consolidated financial statements of the Parent and its
Subsidiaries for the two most recent fiscal years ended prior to the Closing
Date as to which such financial statements are available, (ii) unaudited interim
consolidated financial statements of the Parent and its Subsidiaries for each
quarterly period ended subsequent to the date of the latest financial statements
delivered pursuant to clause (i) of this paragraph and (iii) the most recent
projected income statement, balance sheet and cash flows for each of the
Parent’s fiscal years through June 30, 2015 (setting forth such projections on
both an annual basis and on a monthly basis for the fiscal year ending June 30,
2011 and on an annual basis only for the 2012 fiscal year);

 

(10)                            the Intercreditor Agreement;

 

(11)                            a payoff letter from Wells Fargo Bank, National
Association, indicating the amount of the obligations of the Credit Parties to
Wells Fargo Bank, National Association and certain other lenders under the Term
Loan Agreement dated as of August 10, 2007, as previously amended, and an
acknowledgment by Wells Fargo Bank, National Association (on behalf of itself
and such lenders) that upon receipt of such funds neither Wells Fargo Bank,
National Association nor any such lender will have any rights or interests under
the Security Documents or that certain Intercreditor and Collateral Agency
Agreement, dated as of August 10, 2007, by and among the Credit Parties, the
Revolving Credit Agent, the Collateral Agent and Wells Fargo Bank, National
Association, as previously amended;

 

(12)                            evidence that all legal (including tax
implications) and regulatory matters in connection with the Term Loans are
satisfactory to the Agent and the Lenders;

 

(13)                            a legal opinion from Goodwin Procter LLP, the
independent counsel for the Credit Parties, dated as of the Closing Date,
addressed to the Agent and acceptable in all respects to the Agent and the
Lenders in their sole reasonable discretion;

 

(14)                            certificates of insurance satisfactory to the
Collateral Agent in all respects evidencing the existence of all insurance
required to be maintained by the Borrower and its Subsidiaries pursuant to the
terms of this Agreement and the Security Documents;

 

(15)                            copies of all material employment agreements,
management fee agreements and tax sharing agreements with respect to any of the
Credit Parties which the Agent shall have requested;

 

(h)                                 payment by the Borrower to the Lenders, the
Agent and the Agent’s applicable Affiliates of all fees required to be paid
under the Loan Documents and all expenses required to be paid under the Loan
Documents for which invoices have been presented; and

 

(i)                                     receipt by the Agent and the Lenders of
all other Loan Documents and any other instruments or documents consistent with
the terms of this Agreement and relating

 

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to the transactions contemplated hereby as the Agent may reasonably request,
executed by the Credit Parties or any other Person required by the Agent.

 

5.                                       Representations and Warranties.

 

Each of the Credit Parties represents and warrants to the Agent and the Lenders,
as to itself and each other Credit Party, that:

 

5.1.                              Organization.  Each Credit Party is duly
organized, validly existing and in good standing under the laws of the state of
its incorporation or formation; has all power and authority under its
organizational documents to own its respective Property and assets and to
conduct its respective businesses as presently conducted; and is duly qualified
to do business and in good standing in each and every state jurisdiction where
its respective business requires such qualification, except for those
jurisdictions in which the failure to qualify and/or be in good standing would
not reasonably be expected to result in a Material Adverse Effect.

 

5.2.                              Financial Statements.

 

(a)                                  The Consolidated financial statements of
the Credit Parties and their Subsidiaries delivered to the Agent and the Lenders
in connection with this Agreement, including without limitation, (i) the Annual
Audited Financial Statements dated as of June 30, 2010 and (ii) the Monthly
Unaudited Financial Statements dated as of September 30, 2010, fairly present in
all material respects, in accordance with GAAP, the Consolidated financial
condition and the results of operations of the Credit Parties and their
Subsidiaries as of the dates and for the periods indicated, subject to year-end
audit adjustments and the absence of footnotes in the case of such unaudited or
any pro forma statements, and no Material Adverse Effect has occurred since the
dates of such financial statements.

 

(b)                                 The Credit Parties have heretofore furnished
to the Agent, for the calendar months from the projected Closing Date through
June 30, 2011 and for each fiscal year of the Credit Parties thereafter through
June 30, 2015, projected income statements, balance sheets and cash flows of the
Credit Parties and their Subsidiaries, on a Consolidated basis, together with
one or more schedules demonstrating prospective compliance with all financial
covenants contained in this Agreement, such projections disclosing all material
assumptions made by the Credit Parties in formulating such projections.  The
projections are based upon estimates and assumptions which the Credit Parties
believe are reasonable in light of the conditions which existed as of the time
the projections were made, have been prepared on the basis of the material
assumptions stated therein and reflect as of the Closing Date an estimate
believed reasonable by the Credit Parties as to the results of operations and
other information projected therein.

 

5.3.                              Enforceable Obligations; Authorization.  The
Loan Documents are legal, valid and binding obligations of the respective Credit
Parties executing and delivering the same, enforceable against such Credit
Parties in accordance with their respective terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium, and other similar laws
affecting creditors rights generally and by general equitable principles
regardless of whether

 

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considered in a proceeding in equity or at law.  The execution, delivery and
performance of the Loan Documents have all been duly authorized by all necessary
corporate, and if necessary shareholder, action; are within the power and
authority of each of the Credit Parties; do not and will not violate any Legal
Requirement material to the business, assets or operations of any of the Credit
Parties taken as a whole or the Organizational Documents of any of the Credit
Parties; do not and will not constitute a default under, any material agreement
or instrument by which any of the Credit Parties or any material portion of any
of the Credit Parties’ Property is bound or affected; and do not and will not
result in the creation of any Lien upon any Property of any of the Credit
Parties except as expressly contemplated therein.  All necessary approvals of
any Governmental Authority and all other requisite material permits,
registrations and consents for the performance have been obtained for the
delivery and performance of the Loan Documents.

 

5.4.                              Other Debt.  Except as set forth on Schedule
5.4 attached hereto, no Credit Party is in default in the payment of any other
Indebtedness or under any agreement, mortgage, deed of trust, security agreement
or lease to which it is a party, the result of which would or could reasonably
be expected to result in a Material Adverse Effect.

 

5.5.                              Litigation.  Except as set forth on Schedule
5.5 attached hereto, to the knowledge of the Credit Parties, there is no
litigation or administrative proceeding pending or threatened against, nor any
outstanding judgment, order or decree affecting, any of the Credit Parties or
any of their Subsidiaries before or by any Governmental Authority or arbitral
body as to which there is a reasonable possibility of an adverse determination
and which individually or in the aggregate have, or if adversely determined
could reasonably be expected to have, a Material Adverse Effect.  Except as set
forth on Schedule 5.5 attached hereto, as of the Closing Date there is no
litigation or administrative proceeding pending against, nor any outstanding
judgment, order or decree affecting, any of the Credit Parties or any of their
Subsidiaries before or by any Governmental Authority or arbitral body.  Except
as set forth on Schedule 5.5 attached hereto, none of the Credit Parties, nor
any of their Subsidiaries, is knowingly in material default with respect to any
judgment, writ, rule, regulation, order or decree of any Governmental Authority.

 

5.6.                              Taxes.  Except as set forth on Schedule 5.6
attached hereto, the Credit Parties and their Subsidiaries have filed all
federal, state, local or foreign tax returns required to have been filed by them
and paid all taxes shown thereon to be due, except those for which extensions
have been obtained, and except for those which are being contested in good faith
and by appropriate proceedings if adequate reserves with respect thereto are
maintained in accordance with GAAP.  There is no outstanding federal audit by
the Internal Revenue Service of the income tax returns of any of the Credit
Parties or any of their Subsidiaries claimed or raised in writing, and none of
the Credit Parties or any of their Subsidiaries have, as of the Closing Date,
any extension of time with respect to an assessment or deficiency relating to
any Federal tax return that is still in effect.  None of the Credit Parties or
any of their Subsidiaries have, as of the Closing Date, any extension of time
with respect to an assessment or deficiency relating to any state, local or
foreign tax return that is still in effect, other than extensions with respect
to tax liabilities where the failure by the applicable Credit Party to pay such
tax liabilities would not have a Material Adverse Effect.  None of the Credit
Parties or any of their Subsidiaries is a party to any tax sharing arrangement
with any Person (other than the affiliated group of which Walco Holdings is the
parent).

 

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5.7.                              No Material Misstatements.  No information,
report, financial statement, exhibit or schedule prepared and furnished by or on
behalf of any Credit Party to the Agent or any Lender in connection with this
Agreement or any other Loan Documents knowingly contains any material
misstatement of fact or knowingly omits to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading at the time prepared or furnished.

 

5.8.                              Subsidiaries.  As of the date hereof, the
Credit Parties have no Subsidiaries other than as listed on Schedule 5.8
attached hereto.  Except as expressly indicated on Schedule 5.8 attached hereto,
as of the Closing Date, each of the Subsidiaries listed on Schedule 5.8 is
wholly owned by the applicable Credit Party. As of the Closing Date, Schedule
5.8 sets forth (a) the jurisdiction of incorporation or organization of each
Subsidiary of the Credit Parties, and (b) the percentage of the applicable
Credit Party’s ownership of the Equity Interests of each Subsidiary of the
Credit Parties.

 

5.9.                              Representations by Others.  All
representations and warranties made by or on behalf of any of the Credit Parties
in any Loan Document shall constitute representations and warranties of the
Credit Parties hereunder.

 

5.10.                        Permits, Licenses, Etc.  Each of the Credit Parties
possess all material permits from each applicable Governmental Authority,
licenses from each applicable Governmental Authority, patents, patent rights,
trademarks, trademark rights, trade names, trade name rights and copyrights
which are reasonably required to conduct their respective businesses.

 

5.11.                        ERISA.  No Reportable Event has occurred with
respect to any Plan which, when taken together with all other such Reportable
Events for which liability is reasonably expected to occur, could reasonably be
expected to result in any material liability.  Each Plan complies in all
material respects with all applicable provisions of ERISA, and the Borrower or
each ERISA Affiliate have filed all reports required by ERISA and the Code to be
filed with respect to each Plan.  The Borrower does not have any knowledge of
any event which could reasonably be expected to result in a liability of the
Borrower or any ERISA Affiliate to the PBGC other than for applicable premiums. 
No accumulated funding deficiency (as defined in Section 302 of ERISA and
Section 412 of the Code), whether or not waived, exists with respect to any
Plan.  No event has occurred and no condition exists that could reasonably be
expected to constitute grounds for a Plan to be terminated under circumstances
which would cause the Lien provided under Section 4068 of ERISA to attach to any
Property of the Borrower or any ERISA Affiliate.  No event has occurred and no
condition exists that could reasonably be expected to cause the Lien provided
under Section 302 of ERISA or Section 412 of the Code to attach to any Property
of the Borrower or any ERISA Affiliate.

 

5.12.                        Title to Properties; Possession Under Leases.

 

(a)                                  Except as set forth on Schedule 5.12
attached hereto, the Credit Parties and each of their respective Subsidiaries
have good and marketable title to, or a valid leasehold interest in, all of
their respective Property and assets that are material to their respective
business taken as a whole shown on the most recent Consolidated balance sheet
for the Credit Parties and their Subsidiaries provided under the terms of
Section

 

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6.3(a) or Section 6.3(b), and all assets and Property that are material to their
respective business taken as a whole, acquired since the date of such respective
balance sheets, except for such Property as is no longer used or useful in the
conduct of their respective businesses or as have been disposed of in the
ordinary course of business or otherwise in accordance with this Agreement, and
except for minor defects in title that do not interfere with the ability of the
Credit Parties or any of their Subsidiaries to conduct their respective
businesses as now conducted, all such assets and Property are free and clear of
all Liens other than those permitted by Section 7.2 hereof.

 

(b)                                 Except as set forth on Schedule 5.12
attached hereto, the Borrower and each of its Subsidiaries have no knowledge of
any material default under any material leases to which any of them is a party
and under which any of them is in occupancy, except where non-compliance does
not affect the Borrower’s or such Subsidiary’s use or occupancy thereof, as
applicable, and all such material leases are in full force and effect.  Schedule
5.12 attached hereto sets forth each of such leases of real Property in
existence as of the Closing Date, and upon the request of the Agent, the
Borrower will provide the Agent with complete and correct copies of all of such
leases of real Property then in effect.

 

5.13.                        Assumed Names.  As of the Closing Date, neither the
Borrower, nor any of its Subsidiaries, is currently conducting its business
under any assumed name or names, except as set forth on Schedule 5.13 attached
hereto. Upon written request by the Agent, the Borrower shall promptly furnish
the Agent with a then current listing of all assumed names that the Borrower
and/or any of its Subsidiaries is then utilizing in conducting their respective
businesses.

 

5.14.                        Investment Company Act.  None of the Credit Parties
or any of their Subsidiaries is an investment company within the meaning of the
Investment Company Act of 1940, as amended.

 

5.15.                        Public Utility Holding Company Act.  None of the
Credit Parties or any of their Subsidiaries is a “public utility company,” or an
“affiliate” or a “subsidiary company” of a “public utility company,” or a
“holding company,” or a “subsidiary company” of a “registered holding company,”
or an “affiliate” of a “registered holding company” as such terms are defined in
the Public Utility Holding Company Act of 1935, as amended (“PUHCA”).

 

5.16.                        Agreements.  Schedule 5.16 attached hereto is a
complete and correct list, as of the Closing Date, of (i) all credit agreements
or indentures for borrowed money and capitalized leases to which any of the
Credit Parties or any of their Subsidiaries is a party and all Property of any
of the Credit Parties or any of their Subsidiaries subject to any Lien securing
such Indebtedness or capitalized lease obligation, (ii) each letter of credit
and guaranty to which any of the Credit Parties or any of their Subsidiaries is
a party, (iii) all other material instruments in effect as of the date hereof
providing for, evidencing, securing or otherwise relating to any Indebtedness
for borrowed money of any of the Credit Parties or any of their Subsidiaries
(other than the Indebtedness hereunder), and (iv) all obligations of any of the
Credit Parties or any of their Subsidiaries to issuers of appeal bonds issued
for account of any Credit Party or any of its Subsidiaries.  The Borrower shall,
upon, request by the Agent, deliver to the Agent and the

 

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Lenders a complete and correct copy of all such credit agreements, indentures,
capitalized leases, letters of credit, guarantees and other instruments
described in Schedule 5.16 or arising after the date hereof, including any
modifications or supplements thereto, as in effect on the date hereof.

 

5.17.                        Environmental Matters.  Except as disclosed on
Schedule 5.17 attached hereto or in any of the environmental assessments or
studies described on Schedule 5.17 attached hereto, to the Credit Parties’
knowledge: (a) each of the Credit Parties and their Subsidiaries are in material
compliance with all limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules and timetables contained in
any applicable Requirement of Environmental Law or Environmental Permit
reasonably necessary to the conduct of any material aspect of the business of
any Credit Party or any of its Subsidiaries; (b) each of the Credit Parties and
their Subsidiaries (i) have obtained and maintained in effect all Environmental
Permits reasonably necessary to the conduct of any material aspect of the
business of any Credit Party or any of its Subsidiaries, (ii) along with their
respective Properties (whether leased or owned) have been and are in material
compliance with all applicable Requirements of Environmental Law and
Environmental Permits, (iii) along with their respective Properties (whether
leased or owned) are not subject to any material (A) Environmental Claims or
(B) Environmental Liabilities arising from or based upon any act, omission,
event, condition or circumstance occurring or existing on or prior to the date
hereof, and (iv) have not received individually or collectively any notice of
any material violation or alleged material violation of any Requirements of
Environmental Law or Environmental Permit or any Environmental Claim in
connection with their respective Properties; and (c) none of the Credit Parties
or any of their Subsidiaries has actual knowledge of any material violation of
any applicable Requirements of Environmental Law and Environmental Permits by,
or of any material Environmental Claims or Environmental Liabilities arising
against, any of the prior owners or operators and predecessors in interest with
respect to any of the Credit Parties’ or any of their Subsidiaries’ respective
Property.

 

5.18.                        Solvency.

 

(a)                                  Immediately after the consummation of the
transactions contemplated hereunder to occur on the Closing Date, (i) the fair
value of the assets of each Credit Party, at a fair valuation, will exceed its
debts and liabilities, subordinated, contingent or otherwise; (ii) the present
fair saleable value of the property of each Credit Party will be greater than
the amount that will be required to pay the probable liability of its debts and
other liabilities, subordinated, contingent or otherwise, as such debts and
other liabilities become absolute and matured; (iii) each Credit Party will be
able to pay its debts and liabilities, subordinated, contingent or otherwise, as
such debts and liabilities become absolute and matured; and (iv) each Credit
Party will not have unreasonably small capital with which to conduct the
business in which it is engaged as such business is now conducted and is
proposed to be conducted after the Closing Date.

 

(b)                                 No Credit Party intends to, or will permit
any of its Subsidiaries to, and no Credit Party believes that it or any of its
Subsidiaries will, incur debts beyond its ability to pay such debts as they
mature, taking into account the timing of and amounts of cash to be received by
it or any such Subsidiary and the timing of the amounts of cash to be payable on
or in respect of its Indebtedness or the Indebtedness of any such Subsidiary.

 

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5.19.                        Status of Collateral.  The Credit Parties are and
shall be the sole owners, free and clear of all Liens except in favor of the
Collateral Agent or otherwise permitted under Section 7.2 hereunder, of and
fully authorized to sell, transfer, pledge and/or grant a security interest in
all of the Collateral (other than Excluded Collateral, as defined in the
applicable Security Documents).

 

5.20.                        Revolving Credit Agreement Debt.  The Revolving
Credit Agreement constitutes the valid and binding obligation of the applicable
Credit Parties, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, and moratorium laws and other laws
affecting creditors’ rights generally and by general principles of equity
regardless of whether considered in a proceeding in equity or at law.  The
Credit Parties have no knowledge that any of the representations and warranties
contained in the Revolving Credit Agreement were not true and correct in all
material respects on and as of the date given or, except as consented to by the
Agent in writing or otherwise disclosed in writing to the Agent prior to the
Closing Date, that any of the material terms thereof have been modified, amended
or waived other than as permitted under Section 7.18.

 

5.21.                        Transactions with Related Parties.  Except as set
forth on Schedule 7.6 attached hereto, any and all transactions, contracts, or
other agreements existing on the Closing Date which have been entered into by
and among any Credit Party and any officer, director, shareholder or Affiliate
of any of the Credit Parties (other than Permitted Affiliate Transactions), has
been entered into and made upon terms and conditions not less favorable to the
applicable Credit Parties than those terms which could have been obtained from
wholly independent and unrelated sources.

 

5.22.                        Patents, Trademarks and Copyrights.  Schedule 5.22
hereto sets forth a true, accurate and complete listing, as of the date hereof,
of all patents, registered trademarks and copyrights, and applications therefor,
of each of the Credit Parties and each of their Subsidiaries as of the Closing
Date.  Except as created or permitted under the Loan Documents, no Lien exists
with respect to the interest of any Credit Party or any of its Subsidiaries in
any such patents, registered trademarks or copyrights or applications therefor,
and no Credit Party or any of its Subsidiaries has transferred or subordinated
any interest it may have in such patents, registered trademarks and copyrights
and applications therefor.  The Borrower shall, from time to time as necessary,
deliver to the Agent an updated Schedule 5.22 to this Agreement, together with a
certificate of a Responsible Officer of the Borrower certifying that the
information set forth on such schedule is true, correct and complete as of such
date, which schedule may be used to prepare additional Security Agreements, if
necessary.

 

6.                                       Affirmative Covenants.

 

Until the Obligations shall have been paid in full, each Credit Party executing
this Agreement covenants and agrees, jointly and severally with all of the
Credit Parties, to perform and observe (and cause each of its Subsidiaries to
perform and observe) each and all of the following covenants and agreements:

 

6.1.                              Businesses and Properties.  At all times:
(a) do or cause to be done all things necessary to obtain, preserve, renew and
keep in full force and effect the rights, licenses, permits,

 

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franchises, patents, copyrights, trademarks and trade names material to the
conduct of its businesses; (b) maintain and operate such businesses in the same
general manner in which they are presently conducted and operated, provided that
the foregoing shall not prohibit any merger, consolidation, liquidation,
dissolution or any discontinuance or sale of such business permitted under
Section 7.4; (c) comply in all material respects with all Legal Requirements
applicable to the operation of such businesses whether now in effect or
hereafter enacted (including without limitation, all Legal Requirements relating
to public and employee health and safety and all Environmental Laws) and with
any and all other Legal Requirements; and (d) keep and maintain all Property
material to the conduct of such businesses in good repair, working order and
condition, ordinary wear and tear excepted, and from time to time make, or cause
to be made, all necessary repairs, renewals, additions, improvements and
replacements thereto necessary in order that the business carried on in
connection therewith may be properly conducted at all times.

 

6.2.                              Taxes.  Pay and discharge promptly when due
(giving effect to all extensions of time permitted by the applicable
Governmental Authority) all taxes, assessments and governmental charges or
levies imposed upon it or upon its income or profits or in respect of its
Property, before the same shall become delinquent or in default, as well as all
lawful claims for labor, materials and supplies or otherwise, which, if unpaid,
might give rise to Liens upon such properties or any part thereof (except as
otherwise permitted by Section 7.2 hereof), unless being contested in good faith
by appropriate proceedings and as to which adequate reserves in an amount not
less than the aggregate amount secured by such Liens have been established in
accordance with GAAP; provided, however, that such contested amounts giving rise
to such Liens shall be immediately paid upon commencement of any procedure or
proceeding to foreclose any of such Liens unless the same shall be validly
stayed by a court of competent jurisdiction or a surety bond, which is
satisfactory in all respects to the Agent, is delivered to the Agent for the
ratable benefit of the Lenders in an amount no less than such contested amounts.

 

6.3.                              Financial Statements and Information.  Furnish
to the Agent each of the following:

 

(a)                                  as soon as available and in any event
within ninety (90) days after the end of each fiscal year of the Credit Parties,
Annual Audited Financial Statements of the Credit Parties and their
Subsidiaries;

 

(b)                                 as soon as available and in any event within
thirty (30) days after the end of each calendar month, Monthly Unaudited
Financial Statements of the Credit Parties and their Subsidiaries;

 

(c)                                  concurrently with the financial statements
provided for in Subsections 6.3(a) and 6.3(b) hereof, (1) an Officer’s
Certificate, signed by a Responsible Officer of applicable Credit Party, and
(2) if applicable, a written certificate in Proper Form, identifying each
Subsidiary which is otherwise required by the provisions of Section 6.10 hereof
to become a Guarantor at the request of the Agent, but which has not yet done so
as of the date of such certificate, and providing an explanation of the reasons
why each such Subsidiary is not a Guarantor, signed by a Responsible Officer of
the applicable Credit Party;

 

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(d)                                 as soon as available and in any event within
five (5) Business Days after the date of issuance thereof (if any such audit
report or management letter is ever issued), any (1) interim or special audit
report made by independent accountants of the books of the Credit Parties or any
of their Subsidiaries or (2) management letter prepared by the independent
public accountants who reported on the financial statements provided for in
Subsection 6.3(a) above, with respect to the internal audit and financial
controls of the Credit Parties and their Subsidiaries;

 

(e)                                  as soon as available and in any event
within thirty (30) days prior to the commencement of each fiscal year of the
Credit Parties, management-prepared Consolidated financial projections of the
Credit Parties and their Subsidiaries for the immediately following three
(3) fiscal years (setting forth such projections on both an annual basis and on
a monthly basis for the upcoming fiscal year and on an annual basis only for the
two (2) fiscal years thereafter), such projections to be prepared and submitted
in such format and detail as reasonably requested by the Agent; and

 

(f)                                    such other information relating to the
financial condition, operations and business affairs of any Credit Party or any
of its Subsidiaries as from time to time may be reasonably requested by the
Agent.

 

6.4.                              Inspections; Field Examinations; Appraisals
and Physical Counts.

 

(a)                                  Upon reasonable notice (which may be
telephonic notice), at all reasonable times and as often as the Agent may
request, permit any authorized representative designated by the Agent, including
without limitation, any consultant engaged by the Agent, together with any
authorized representatives of any Lender desiring to accompany the Agent, to
visit and inspect the Properties and financial records of the Credit Parties and
to make extracts from such financial records and permit any authorized
representative designated by the Agent (together with any accompanying
representatives of any Lender) to discuss the affairs, finances and condition of
the Credit Parties with any Responsible Officer and the Credit Parties’
independent public accountants, as applicable.  The Agent agrees that it shall
schedule any meeting with any such independent public accountant through the
Borrower, and a Responsible Officer of the Borrower shall have the right to be
present at any such meeting.

 

(b)                                 The Agent and any of its consultants shall
each have the right to examine (and any authorized representatives of any Lender
shall have the right to accompany the Agent during any such examination), as
often as they may request, the existence and condition of the Accounts, books
and records of the Borrower and its Subsidiaries and to review their compliance
with the terms and conditions of this Agreement and the other Loan Documents,
subject to governmental confidentiality requirements.  They shall also have the
right to verify with any and all customers of the Borrower and its Subsidiaries
the existence and condition of the Accounts, as often as they may require,
without prior notice to or consent of the Borrower or any of its Subsidiaries. 
Without in any way limiting the foregoing, the Agent, and any of its consultants
shall have the right to (i) conduct field examinations of the Borrower and its
Subsidiaries operations at the Borrower’s expense as often as they may request
and (ii) to order and obtain an appraisal

 

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of the Collateral by an appraisal firm satisfactory to the Agent, and any of
their consultants as often as they may request.  Without in any way limiting the
foregoing, the Borrower agrees to cooperate and to cause its Subsidiaries to
cooperate in all respects with the Agent, and any of their consultants in
connection with any and all inspections, examinations and other actions taken by
them pursuant to this Section 6.4.  The Borrower hereby agrees to promptly pay,
upon demand by the Agent (or the applicable Lender, if appropriate), any and all
fees and expenses incurred by the Agent or any Lender in connection with any
inspection, examination, appraisal or review permitted by the terms of this
Section 6.4; provided, however, that so long as no Default or Event of Default
is continuing, the Borrower shall only be obligated to pay for (x) two field
examinations during each consecutive 12-month period (limited to the prevailing
rate then charged for field examinations, which is initially anticipated to be
$850.00 per day per examiner, plus all out-of-pocket expenses of the relevant
examiner related to such filed examinations), (y) one Collateral appraisal
(other than the initial field examinations and appraisals for any Accounts,
Equipment and/or Inventory acquired through an acquisition or other Investment
permitted under the terms of this agreement, it being agreed that the Borrower
shall be obligated to pay for each such initial field examination and/or
appraisal, as applicable, conducted with respect to each such acquisition or
Investment); provided further, however, that the Borrower shall only be
obligated to pay or reimburse such fees and expenses of any Lender other than
the Agent to the extent incurred by such Lender after the occurrence of any
Default or Event of Default which has not been cured to the satisfaction of the
Agent or waived in writing by the Agent and the Required Lenders.

 

6.5.                              Further Assurances.  Upon request by the
Agent, promptly execute and deliver any and all other and further agreements and
instruments and take such further action as may be reasonably requested by the
Agent to (a) cure any defect in the execution and delivery of any Loan Document
or more fully to describe particular aspects of any of the Credit Parties’
agreements set forth in the Loan Documents or so intended to be, (b) to carry
out the provisions and purposes of this Agreement an the other Loan Documents,
and (c) grant, preserve, protect and perfect the first priority Liens created or
intended to be created by the Security Documents in the Collateral.

 

6.6.                              Books and Records.  Maintain financial records
and books in accordance with accepted financial practice and GAAP.

 

6.7.                              Insurance.

 

(a)                                  Keep its insurable Properties adequately
insured at all times by financially sound and reputable insurers.

 

(b)                                 Maintain such other insurance, to such
extent and against such risks, including fire and other risks insured against by
extended coverage and employee liability, as is customary with companies
similarly situated and in the same or similar businesses, provided, however,
that such insurance shall insure the Property of the Borrower and each of its
Subsidiaries against all risk of physical damage, including without limitation,
loss by fire, explosion, theft, fraud and such other casualties as may be

 

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reasonably satisfactory to the Agent, but in no event at any time in an amount
less than the replacement value of the Collateral.

 

(c)                                  Maintain in full force and effect worker’s
compensation coverage and public liability insurance against claims for personal
injury or death or property damage occurring upon, in, about or in connection
with its operations and with the use of any Properties owned, occupied or
controlled by the Borrower or any of its Subsidiaries, in such amounts as the
Agent shall reasonably deem necessary.

 

(d)                                 Maintain such other insurance as may be
required by law or as may be reasonably requested by the Agent for purposes of
assuring compliance with this Section 6.7.

 

All insurance covering tangible personal Property subject to a Lien in favor of
the Agent for the benefit of the Lenders granted pursuant to the Security
Documents shall provide that, in the case of each separate loss, the full amount
of insurance proceeds shall be payable to the Agent and shall further provide
for at least 30 days’ prior written notice to the Agent of the cancellation or
substantial modification thereof.

 

6.8.                              ERISA.  At all times, except where a failure
to comply with any of the following, individually or in the aggregate, would or
could reasonably be expected to result in a material obligation or liability of
any Credit Party: (a) make contributions to each Plan in a timely manner and in
an amount sufficient to comply with the minimum funding standards requirements
of ERISA; (b) immediately upon acquiring knowledge of (i) any Reportable Event
in connection with any Plan for which no administrative or statutory exemption
exists or (ii) any Prohibited Transaction in connection with any Plan, that
could result in the imposition of material damages or a material excise tax on
the Borrower or any Subsidiary thereof, furnish the Agent a statement executed
by a Responsible Officer of the Borrower or such Subsidiary setting forth the
details thereof and the action which the Borrower or any such Subsidiary
proposes to take with respect thereto and, when known, any action taken by the
Internal Revenue Service with respect thereto; (c) notify the Agent promptly
upon receipt by the Borrower or any Subsidiary thereof of any notice of the
institution of any proceedings or other actions which may result in the
termination of any Plan by the PBGC and furnish the Agent with copies of such
notice; (d) pay when due, or within any applicable grace period allowed by the
PBGC, all required premium payments to the PBGC; (e) furnish the Agent with
copies of the annual report for each Plan filed with the Internal Revenue
Service not later than ten (10) days after the Agent requests such report;
(f) furnish the Agent with copies of any request for waiver of the funding
standards or extension of the amortization periods required by Sections 303 and
304 of ERISA or Section 412 of the Code promptly after the request is submitted
to the Secretary of the Treasury, the Department of Labor or the Internal
Revenue Service, as the case may be; and (g) pay when due all installment
contributions required under Section 302 of ERISA or Section 412 of the Code or
within 10 days of a failure to make any such required contributions when due
furnish the Agent with written notice of such failure.

 

6.9.                              Use of Proceeds.  Subject to the terms and
conditions contained herein, use the proceeds of the Term Loans for
(a) refinancing the exiting obligations of the Credit Parties to Wells Fargo
Bank, National Association and certain other lenders under the Term Loan

 

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Agreement dated as of August 10, 2007, as previously amended, and (b) financing
transaction fees incurred by the Credit Parties in connections with the
negotiation and closing of the credit facility evidenced by this Agreement; 
provided, that no proceeds of any Term Loan shall be used (w) for the purpose of
purchasing or carrying directly or indirectly any margin stock as defined in
Regulation U (“Reg U”) of the Board of Governors of the Federal Reserve System,
(x) for the purpose of reducing or retiring any Indebtedness which was
originally incurred to purchase or carry any such margin stock, (y) for any
other purpose which would cause such Loan to be a “purpose credit” within the
meaning of Reg U and (z) for any purpose which would constitute a violation of
Reg U or of Regulations G, T or X of the Board of Governors of the Federal
Reserve System or any successor regulation of any thereof or of any other rule,
statute or regulation governing margin stock from time to time.

 

6.10.                        Guarantors, Joinder Agreements.  Promptly inform
the Agent of the creation or acquisition of any Subsidiary of any Credit Party
or the commencement of any business operations by any Inactive Subsidiary after
the Closing Date and, within thirty (30) days after the written request of the
Agent delivered in accordance with Section 10.2 below, cause (a) each such
Subsidiary that is a Domestic Subsidiary to become a Guarantor by execution and
delivery to the Agent, for the ratable benefit of the Lenders, of a Guaranty or
a Joinder Agreement (if a Joinder Agreement is requested by the Agent in lieu of
a Guaranty), (b) a first priority perfected security interest (subject to the
terms of the Intercreditor Agreement) to be granted to the Collateral Agent, for
the ratable benefit of the Lenders, in all of the Equity Interests of such
Subsidiary owned by any Credit Party or any of its other Subsidiaries if such
newly acquired or created Subsidiary or previously Inactive Subsidiary is a
Domestic Subsidiary, or if such newly acquired or created Subsidiary or
previously Inactive Subsidiary is not a Domestic Subsidiary, then not more than
sixty-five percent (65%) of all issued and outstanding Equity Interests of such
Subsidiary shall be pledged as Collateral pursuant to the foregoing pledge
requirement for Equity Interests, (c) cause each such Subsidiary that is a
Domestic Subsidiary to grant to the Collateral Agent a security interest
securing the Obligations, for the ratable benefit of the Lenders (subject only
to (i) the Intercreditor Agreement, (ii) Liens permitted under Sections
7.2(b) and (e) as to Accounts and Permitted Investment Securities which do not
have priority over the Lien of the Collateral Agent for the ratable benefit of
the Lenders, (ii) Liens permitted under Section 7.2 as to all other Collateral
which do not have priority over the Lien of the Collateral Agent for the ratable
benefit of the Lenders, and (iii) purchase money Liens existing as of the date
of acquisition by Borrower or any other Subsidiary of the Borrower of such newly
acquired Subsidiary, if applicable) in all Accounts, Inventory, Equipment,
general intangibles and other tangible and intangible personal Property owned at
any time by such Subsidiary and all products and proceeds thereof (subject to
similar exceptions as set forth in the Security Documents), and (d) cause such
Subsidiary to deliver to the Agent such related certificates, legal opinions and
documents (including Organizational Documents) as the Agent may reasonably
require; provided, however, that any Subsidiary that is not a Domestic
Subsidiary shall not be required to become a Guarantor or grant any Liens
hereunder.  To the extent reasonably feasible, all of the foregoing requirements
shall be affected by the execution and delivery of a Joinder Agreement in a form
acceptable to the Agent.

 

6.11.                        Notice of Events.  Notify the Agent within one
(1) Business Day after any Responsible Officer of any of the Credit Parties
acquires knowledge of the occurrence of, or if any of the Credit Parties causes
or intends to cause, as the case may be, any of the following: (i)

 

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the institution of any lawsuit, administrative proceeding or investigation
affecting any Credit Party or any of its Subsidiaries, including without
limitation, any audit by the Internal Revenue Service, the adverse determination
under which could reasonably be expected to have a Material Adverse Effect;
(ii) any development or change in the business or affairs of any Credit Party or
any of its Subsidiaries which has had or which is likely to have, in the
reasonable judgment of any Responsible Officer of any of the Credit Parties, a
Material Adverse Effect; (iii) any Event of Default or Default, together with a
reasonably detailed statement by a Responsible Officer on behalf of the Borrower
of the steps being taken to cure the effect of such Event of Default or Default;
(iv) the occurrence of a default or event of default by any Credit Party or any
of its Subsidiaries under any agreement or series of related agreements to which
it is a party, which default or event of default could reasonably be expected to
have a Material Adverse Effect; (v) any material violation by, or investigation
of any Credit Party or any of its Subsidiaries in connection with any actual or
alleged material violation of any Legal Requirement imposed by the Environmental
Protection Agency, the Occupational Safety and Health Administration or any
other Governmental Authority which has or is likely to have, in the reasonable
judgment of any Responsible Officer of any Credit Party, a Material Adverse
Effect; (vi) any significant change in the accuracy of any material
representations and warranties of the any Credit Party or any of its
Subsidiaries in this Agreement or any other Loan Document (including without
limitation, the representations and warranties in Section 5.20(b)); (vii) the
delivery of any written notice of default or event of default to any Credit
Party by any Revolving Credit Lender; and (viii) any amendment or modification
of the Loan Documents (as defined in the Revolving Credit Agreement), such
notice to be accompanied by copies of the actual amendment or modification
documents; and (ix) any of the following:  (1) the occurrence of a Reportable
Event with respect to any Plan; (2) the institution of any steps by the
Borrower, any ERISA Affiliate, the PBGC or any other Person to terminate any
Plan; (3) the institution of any steps by the Borrower or any ERISA Affiliate to
withdraw from any Plan; (4) a Prohibited Transaction in connection with any
Plan; (5) any material increase in the contingent liability of the Borrower or
any Subsidiary of the Borrower with respect to any post-retirement welfare
liability; or (6) the taking of any action by, or the threatening of the taking
of any action by, the Internal Revenue Service, the Department of Labor or the
PBGC with respect to any of the foregoing.

 

6.12.                        Environmental Matters.  Without limiting the
generality of Section 6.1(c) hereof, (a) comply in all material respects with
all material limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules and timetables contained in any applicable
Requirement of Environmental Law, or Environmental Permit; (b) obtain and
maintain in effect all Environmental Permits reasonably necessary to the conduct
of any material aspect of its business; and (c) keep its Property free of any
Environmental Claims or Environmental Liabilities, other than Environmental
Claims or Environmental Liabilities, contingent or otherwise, disclosed in
Schedule 5.17 attached hereto or any of the environmental assessments or studies
described in Schedule 5.17 attached hereto.  In the event that any Credit Party
or any of its Subsidiaries receives any demand or claim from any Person,
including without limitation, any Governmental Authority, asserting the
liability of any Credit Party or any of its Subsidiaries as a result of any
Environmental Liabilities or requesting or requiring that any Environmental
Liabilities be remediated by any Credit Party or any of its Subsidiaries, such
Credit Party agrees to promptly take action and thereafter diligently pursue the
same to completion in a manner necessary to cause the applicable Environmental
Liabilities to be remediated as soon as reasonably possible in accordance with
all applicable Requirements of

 

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Environmental Law.  Each Credit Party, jointly and severally with all other
Credit Parties, hereby indemnifies and agrees to hold the Agent and the Lenders
harmless from and against any and all liability, loss, damage, suit, action or
proceeding arising out of its respective business or the business of any of its
Subsidiaries, pertaining to any Environmental Liabilities, including without
limitation, claims of any Governmental Authority or any other Person arising
under any Requirement of Environmental Law; provided, that the foregoing
indemnity shall not apply to the extent, but only to the extent the applicable
liability, loss, damage, suit, action or proceeding is caused by the willful
misconduct, knowing and willful breach of any Loan Document or gross negligence
of the party seeking indemnification.

 

6.13.                        End of Fiscal Year.  Cause each of its fiscal years
to end on June 30th of the applicable year.

 

6.14.                        Pay Obligations and Perform Other Covenants.  Make
full and timely payment of the Obligations, whether now existing or hereafter
arising, as and when due and payable, duly comply with all of the terms and
covenants contained in this Agreement and in each of the other Loan Documents at
all times and places and in the manner set forth therein, and except for the
filing of continuation statements and the making of other filings by the
Collateral Agent as secured party or assignee, at all times take all actions
necessary to maintain the Liens and security interests provided for under or
pursuant to this Agreement and the Security Documents as valid perfected first
priority Liens on the Collateral intended to be covered thereby (subject to the
terms of the Intercreditor Agreement and subject only to the Liens expressly
permitted by Section 7.2 hereof) and supply all information to the Collateral
Agent necessary for such maintenance.

 

6.15.                        Cash Dominion; Collection and Application of
Accounts.

 

(a)                                  At the Borrower’s own cost and expense,
arrange (and cause each of its Subsidiaries to arrange) for remittances on all
Accounts to be made (i) directly to one or more lockboxes designated by the
Collateral Agent under the terms of the Lockbox Agreement, or (ii) in such other
manner as the Agent may direct.  Unless the procedures discussed in
Section 6.15(b) below are then in effect, and in any event, at all times that no
Revolving Credit Agreement Debt is outstanding, (1) the proceeds of all Accounts
collected through such lockboxes or any other manner shall not be required to be
remitted to the Collateral Agent for application to the Revolving Credit
Agreement Debt and for other disbursements approved by the Collateral Agent as
set forth in Section 6.15(b) below, but instead shall be available for
unrestricted use by the Borrower, subject to the other terms of this Agreement
(including without limitation, the negative covenants of Section 7), so long as
any collected cash proceeds not applied against the Revolving Credit Agreement
Debt or otherwise utilized as permitted hereby, remain pledged as Collateral
hereunder (i.e., invested as Permitted Investment Securities or held in JPMorgan
deposit accounts or other accounts covered by a Tri-Party Agreement) and (2) the
Collateral Agent shall not cause any funds then available in any deposit account
covered by any Tri-Party Agreement evidencing control for purposes of perfection
of the Collateral Agent’s Lien (as opposed to facilitating the collection of
Accounts) to be transferred or paid to the Collateral Agent for any purpose.

 

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(b)                                 If (i) a Default or Event of Default shall
occur, (ii) average Availability (under and as defined in the Revolving Credit
Agreement) during any consecutive thirty (30) day period shall be less than
$20,000,000, or (iii) Availability (under and as defined in the Revolving Credit
Agreement) shall be less than $15,000,000 at any time, then all remittances on
all Accounts processed through the lockboxes and received by the Collateral
Agent in accordance with Section 6.15(a) shall at all times thereafter be
promptly deposited in one or more controlled disbursement or other accounts
designated by the Collateral Agent, subject to withdrawal by the Collateral
Agent only, as hereinafter provided and in connection therewith, the Collateral
Agent and JPMorgan are irrevocably authorized to cause all remittances on all
Accounts received by the Collateral Agent or JPMorgan from whatever means,
whether pursuant to the Lockbox Agreement, any Tri-Party Agreement or otherwise,
to be promptly deposited in such account or accounts designated by the
Collateral Agent.  All remittances and payments that are deposited and received
by the Collateral Agent in accordance with the foregoing provisions of this
Section 6.15(b) will be applied by the Collateral Agent on the same day received
(or on the next Business Day in the case of remittances and payments received
after 11:00 a.m.) to reduce the outstanding balance of the Revolving Credit
Agreement Debt, subject to the continued accrual of interest for one
(1) Business Day (or two Business Days in the case of remittances and payments
received after 11:00 a.m.) on the Revolving Credit Agreement Debt balances paid
by such remittances and payments and in any event subject to final collection in
cash of the item deposited.

 

(c)                                  Once the procedures described in
Section 6.15(b) above are implemented in accordance with the terms thereof, such
procedures shall continue in effect at all times thereafter unless and until
(i) the applicable Default or Event of Default shall have been cured to the
satisfaction of the Agent, or (ii) average Availability (under and as defined in
the Revolving Credit Agreement) during any subsequent thirty (30) day
consecutive day period is greater than $30,000,000, as the case may be.

 

(d)                                 Notwithstanding any provision to the
contrary in this Section 6.15, the Borrower and its Subsidiaries shall be
permitted to have from time to time local depository accounts maintained with
financial institutions other than JPMorgan for local remittances, payroll, trust
and escrow services of the Borrower and its Subsidiaries in the ordinary course
of business, with not more than $500,000 in the aggregate being permitted to be
held in all such local depository or remittance accounts at any one time,
provided in each case all such accounts remain subject to a Tri-Party Agreement
and which such permitted amounts in such accounts shall not be subject to
periodic sweeps to a controlled disbursement account with the Collateral Agent
unless an Event of Default then exists.

 

(e)                                  As long as the procedures implemented under
Section 6.15(b) above are in effect and are continuing, and except as otherwise
permitted under Section 6.15(d) above, the Borrower and its Subsidiaries shall
cause all payments, if any, received by the Borrower or any of its Subsidiaries
on account of Accounts which are not forwarded directly to the above-described
lockbox(es) or accounts (whether in the form of cash, checks, notes, drafts,
bills of exchanges, money orders or otherwise) to be promptly deposited in the
form received (but with any endorsements of the Borrower or the

 

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applicable Subsidiary necessary for deposit or collection) in the account or
accounts designated by the Collateral Agent in accordance with the provisions of
Section 6.15(a) above.

 

6.16.                        Accounts and Other Collateral Matters.  Maintain
books and records pertaining to the respective Collateral owned by any Credit
Party in detail, form and scope as the Agent shall reasonably require. Each
Credit Party will, promptly after any of its Responsible Officers learns
thereof, report to the Collateral Agent any material loss or destruction of, or
substantial damage to, any of the Collateral, and any other matters materially
affecting the value, enforceability or collectibility of any of the Collateral. 
If any amount payable under or in connection with any Account is evidenced by a
promissory note or other instrument, as such terms are defined in the Uniform
Commercial Code, such promissory note or instrument shall be promptly pledged,
endorsed, assigned and delivered to the Collateral Agent as additional
Collateral if the original principal amount of such promissory note or
instrument is $50,000 or greater.  No Credit Party shall redate, or allow any of
its Subsidiaries to redate, any invoice or sale or without written notice to the
Collateral Agent, make or allow to be made sales on extended dating beyond that
customary in the industry. No Credit Party nor any of its Subsidiaries shall be
entitled to pledge the Agent’s or any Lender’s credit on any purchases or for
any purpose whatsoever.

 

6.17.                        Agreements.  Promptly after Agent’s request, the
Borrower shall deliver or cause to be delivered to the Agent copies of all
material employment agreements, management fee agreements, tax sharing
agreements, loan agreements, notes and other documentation evidencing any
Indebtedness of any Credit Party or any of its Subsidiaries which the Agent may
request.

 

6.18.                        Post-Closing Covenants.

 

(a)                                  Delivery of Mortgage Supplements.  Within
sixty (60) days after the Closing Date, Borrower shall execute and deliver (or
cause to be executed and delivered) to the Agent, in Proper Form, all
supplements to any and all Mortgages required by the Agent in order to confirm
that the Obligations (and not just the Revolving Credit Agreement Debt) are
secured by all of the Mortgages.

 

(b)                                 [Reserved]

 

7.                                       Negative Covenants.

 

Until the Obligations shall have been paid in full, each Credit Party executing
this Agreement covenants and agrees, jointly and severally with all of the
Credit Parties, that it will not do (and will not suffer or permit any of its
Subsidiaries, if any, to do) any of the following:

 

7.1.                              Indebtedness.  Create, incur, suffer or permit
to exist, or assume or guarantee or become or remain liable with respect to any
Indebtedness, absolute, contingent, or otherwise, except the following:

 

(a)                                  Indebtedness to the Lenders and the Agent
pursuant hereto;

 

(b)                                 Indebtedness secured by Liens permitted by
Section 7.2 hereof;

 

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(c)                                  Purchase money Indebtedness (including the
amount of any Capital Lease Obligations required to be capitalized and included
as a liability on the consolidated balance sheet of the Borrower and its
Subsidiaries) incurred to finance Capital Expenditures (to the extent otherwise
permitted hereunder);

 

(d)                                 The Revolving Credit Agreement Debt, with no
renewals, extensions or increases of any thereof being permitted (other than
“payments-in-kind” of accrued and unpaid interest), unless the same has been
approved in writing by the Agent and the Required Lenders or, in the case of the
Revolving Credit Agreement Debt, the same is expressly permitted under the terms
of the Intercreditor Agreement;

 

(e)                                  Other liabilities or Indebtedness existing
on the date of this Agreement and set forth on Schedule 5.16 attached hereto;

 

(f)                                    Current accounts payable and unsecured
current liabilities (including current accrued expenses), not the result of
borrowings, to vendors, suppliers, landlords, lessors and persons providing
services, for expenditures on ordinary trade terms for goods and services
normally required by the Borrower or any of its Subsidiaries in the ordinary
course of business;

 

(g)                                 Indebtedness of any Guarantor to the
Borrower or to any other Guarantor, or the Indebtedness of the Borrower to any
Guarantor, provided that no such Indebtedness may be cancelled, compromised or
otherwise discounted in any respect without the written consent of the Required
Lenders;

 

(h)                                 Current and deferred taxes and other
assessments and governmental charges (to the extent permitted by
Section 7.2(e) hereof).

 

(i)                                     Cash Management Obligations incurred
under the Revolving Credit Agreement and related documents, and customary and
prudent Hedging Obligations entered into with Revolving Credit Lenders for the
sole purpose of protecting the Borrower and its Subsidiaries against
fluctuations in interest rates, currency exchange rates and similar risks, so
long as such Hedging Obligations are not speculative in nature and are incurred
in the normal course of business and consistent with industry practices;

 

(j)                                     Refinancing Indebtedness, to the extent
the same relates to any Indebtedness permitted by Sections 7.1(c) and
7.1(e) hereof;

 

(k)                                  Contingent Liabilities permitted pursuant
to Section 7.3;

 

(l)                                     Indebtedness arising under any
performance or surety bond entered in the ordinary course of business;

 

(m)                               Unsecured Indebtedness assumed, acquired or
incurred pursuant to any acquisition permitted under Section 7.4(e)(7),
provided, that (1) all such Indebtedness constitutes Subordinated Indebtedness
and (2) the aggregate principal amount of all such Indebtedness assumed,
acquired or incurred, together with the cash purchase price paid, in connection
with all such acquisitions permitted under Section 7.4(e)(7) does not

 

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exceed in the aggregate during the period from September 26, 2006 through the
Term Loan Maturity Date the applicable aggregate consideration limits set forth
in Section 7.4(e)(7);

 

(n)                                 Indebtedness incurred to finance the
purchase or maintenance of publicly-tradable securities owned by any Credit
Party, so long as (1) such Indebtedness is secured by all such securities, and
(2) such Indebtedness does not exceed $500,000 in the aggregate at any one time
outstanding;

 

(o)                                 Subordinated Indebtedness of Parent,
provided, that accrued and unpaid interest on such Indebtedness shall only be
payable in the form of “payments-in-kind”; and

 

(p)                                 Other Indebtedness in an aggregate amount
not to exceed at any one time outstanding the difference between $3,000,000 and
the principal amount of Indebtedness then outstanding and permitted under
Section 7.1(n).

 

The Agent, the Lenders and each Credit Party agree that, notwithstanding
anything contained in Section 7.1(g) or in any other provision contained in this
Agreement which may appear to be to the contrary, the payment of any and all
Indebtedness permitted by Sections 7.1(g) hereof, including without limitation,
all Indebtedness, now or hereafter outstanding and owing by any Credit Party to
another Credit Party under the Contribution Agreement (together with any and all
Liens from time to time securing the same as permitted by
Section 7.2(i) hereof), is hereby made and at all times hereafter shall be
inferior and subordinate in all respects to the Obligations from time to time
owing to the Agent or any Lender pursuant hereto and to any Lien against any
Collateral from time to time now or hereafter securing any of such Obligations
pursuant to the terms hereof and the Security Documents.  Each of the Credit
Parties agrees to execute and deliver on its own behalf, and to cause to be
executed and delivered by and on behalf of any of its Subsidiaries, any and all
subordination agreements, in form and content reasonably acceptable to the Agent
or the Collateral Agent, which they may hereafter require to further evidence
the subordination of the payment of the Indebtedness permitted by
Section 7.1(g) above, and the Liens permitted by Section 7.2(i) and any such
contractual, statutory or constitutional landlord’s Liens held by the Borrower.

 

7.2.                              Liens.  Create or suffer to exist any Lien
upon any of its Property (including without limitation, Equity Interests in any
Credit Party’s Subsidiaries) now owned or hereafter acquired, or acquire any
Property upon any conditional sale or other title retention device or
arrangement or any purchase money security agreement; provided, however, that
the Credit Parties and their Subsidiaries (or any of them) may create or suffer
to exist:

 

(a)                                  Liens in effect on the date hereof and
which are described on Schedule 7.2 attached hereto, provided, that the Property
covered thereby does not increase in scope and such Liens may not be renewed and
extended, unless the same relate to Refinancing Indebtedness permitted by
Section 7.1(e) above;

 

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(b)                                 Liens against the Collateral in favor of the
Collateral Agent for the ratable benefit of the Lenders as security for the
Obligations and the Revolving Credit Agreement Debt;

 

(c)                                  Liens incurred and pledges and deposits
made in the ordinary course of business in connection with workers’
compensation, unemployment insurance, old-age pensions and other social security
benefits (not including any lien described in Section 412(m) of the Code);

 

(d)                                 Liens imposed by law, such as carriers’,
warehousemen’s, mechanics’, materialmen’s, vendors’ and landlords’ liens and
other similar liens, incurred in good faith in the ordinary course of business
and securing obligations which are incurred in the ordinary course of business
and are not overdue for a period of more than 30 days or which are being
contested in good faith by appropriate proceedings pursued in good faith and as
to which the Borrower or any of its Subsidiaries, as the case may be, shall, to
the extent required by GAAP, consistently applied, have set aside on its books
adequate reserves;

 

(e)                                  Liens securing the payment of taxes,
assessments and governmental charges or levies (excluding any Lien imposed
pursuant to any of the provisions of ERISA), that are not delinquent, are
permitted by Section 6.2 hereof, or are being diligently contested in good faith
by appropriate proceedings and as to which adequate reserves have been
established in accordance with GAAP; provided, however, that the aggregate
amount of overdue taxes being diligently contested in good faith at any one time
secured by such Liens shall not exceed $1,000,000;

 

(f)                                    Zoning restrictions, easements, licenses,
reservations, provisions, covenants, conditions, waivers, restrictions on the
use of property or minor irregularities of title (and with respect to leasehold
interests, mortgages, obligations, liens and other encumbrances incurred,
created, assumed or permitted to exist and arising by, through or under a
landlord or owner of the leased property, with or without consent of the lessee)
which do not in the aggregate materially detract from the value of its property
or assets or materially impair the use thereof in the operation of its business;

 

(g)                                 Liens securing the performance of bids,
tenders, leases, contracts (other than for the repayment of borrowed money),
statutory obligations, surety, customs and appeal bonds and other obligations of
like nature, incurred as an incident to and in the ordinary course of business;

 

(h)                                 Purchase money Liens securing the
Indebtedness permitted by Section 7.1(c) above, provided, as a result of the
creation of any such Lien, (i) no Default or Event of Default shall have
occurred and is continuing, (ii) the principal amount of such Lien does not
exceed 100% of the purchase price of the asset acquired with such permitted
Indebtedness plus accrued interest on such Indebtedness plus protective advances
made by the holder of such permitted Indebtedness, and (iii) such Lien shall not
apply to any other Property other than the asset acquired with such purchase
money Indebtedness;

 

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(i)                                     Liens in favor of the Borrower or any
Guarantor securing any Indebtedness permitted pursuant to Sections
7.1(g) hereof;

 

(j)                                     Liens on fixed assets securing
Indebtedness permitted to be assumed, acquired or incurred in connection with
acquisitions permitted under Section 7.4(e)(7), provided, (i) the applicable
Lien existed on the applicable Property prior to the acquisition thereof by the
Borrower or any Subsidiary or existed on any Property of any Person that becomes
a Subsidiary of the Borrower after the date hereof prior to the time such Person
becomes a Subsidiary, (ii)  the applicable Lien shall not apply to any other
Property of the Borrower or any Subsidiary, and (iii) the applicable Lien shall
secure only those obligations which it secures on the date of the applicable
acquisition or the date such Person becomes a Subsidiary, as the case may be;

 

(k)                                  Liens consisting of bankers’ liens and
rights of setoff, but only to the extent permitted under any applicable
Tri-Party Agreements, and in each case, arising by operation of law, and Liens
on documents presented in letter of credit drawings; and

 

(l)                                     Liens on securities securing
Indebtedness to the extent permitted in accordance with Section 7.1(n).

 

(m)                               Liens on the assets of any Canadian Subsidiary
of the Borrower in favor of JPMorgan Chase Bank, N.A., Toronto Branch, as
Canadian collateral agent, for the ratable benefit of the Canadian revolving
credit lenders, as security for the Canadian obligations under the Revolving
Credit Agreement.

 

Provided, however, notwithstanding anything contained above in this Section 7.2
to the contrary, if any of the permitted Liens are of the type that are being
contested in good faith by appropriate proceedings as to the Borrower or any of
its Subsidiaries, the Indebtedness giving rise to such contested Lien(s) must be
immediately paid upon commencement of any foreclosure process or proceeding with
respect to such Lien(s) unless the same shall be effectively stayed or a surety
bond with respect thereto (which is satisfactory in all respects to the Agent),
is posted.

 

7.3.                              Contingent Liabilities.  Create, incur, suffer
or permit to exist, directly or indirectly, any Contingent Obligations, other
than:

 

(a)                                  The Obligations of each Guarantor to the
Agent and the Lenders under the terms of any Guaranty;

 

(b)                                 The guarantees by any Credit Party of the
Borrower of the Revolving Credit Agreement Debt;

 

(c)                                  Any Contingent Obligations of the Borrower
under any Hedging Obligations permitted by Section 7.1(i) above;

 

(d)                                 The guarantees by the Borrower of any
Indebtedness of any other Credit Party or by any Credit Party of any
Indebtedness of the Borrower if such Indebtedness so guaranteed is permitted
under the terms of Section 7.1 above;

 

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(e)                                  Endorsements of negotiable instruments for
deposit or collection or similar transactions in the ordinary course of
business;

 

(f)                                    Obligations in respect of letters of
credit under the Revolving Credit Agreement;

 

(g)                                 Agreements evidencing any Hedging
Obligations to the extent permitted by Section 7.3(c); and

 

(h)                                 obligations relating to Liens permitted
under Sections 7.2(c), 7(d), 7(e), 7(f) or 7(g).

 

7.4.                              Mergers, Consolidations and Dispositions and
Acquisitions of Assets.  In any single transaction or series of related
transactions, directly or indirectly:

 

(a)                                  Wind up its affairs, liquidate or dissolve;

 

(b)                                 Be a party to any merger or consolidation;

 

(c)                                  Sell, convey, lease, transfer or otherwise
dispose of all or any portion of the assets (except for (1) the sale of
Inventory in the ordinary course of business for fair and adequate consideration
and (2) the sale of equipment, fixtures and other assets in accordance with the
terms of Section 7.4(e)(5) below) of the Borrower and/or its Subsidiaries, or
agree to take any such action;

 

(d)                                 Sell, assign, pledge, transfer or otherwise
dispose of, or in any way part with control of, any Equity Interests of any of
its Subsidiaries or any Indebtedness or obligations of any character of any of
its Subsidiaries, or permit any such Subsidiary to do so with respect to any
Equity Interests of any other Subsidiary or any Indebtedness or obligations of
any character of the Borrower or any of its Subsidiaries, or permit any of its
Subsidiaries to issue any additional Equity Interests other than to the Borrower
or any wholly-owned Subsidiary of the Borrower; or

 

(e)                                  Purchase or otherwise acquire, directly or
indirectly, in a single transaction or a series of related transactions, all or
a substantial portion of the assets of any Person or any shares of Equity
Interests of, or similar interest in, any Person;

 

provided, however that notwithstanding the foregoing, any of the following
described actions may be undertaken, so long as no Default or Event of Default
then exists or would exist immediately after giving effect to the applicable
event:

 

(1)                                  Intentionally Omitted;

 

(2)                                  any Subsidiary of the Borrower may merge or
consolidate with the Borrower or any other Subsidiary of the Borrower, provided,
that if one or more of the entities so merging or consolidating was a Guarantor,
and if the surviving entity is not the Borrower or is not yet a Guarantor, such
surviving entity must become a Credit Party simultaneously with such merger by
executing and delivering to the Agent a Joinder

 

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Agreement, together with all requested Security Documents, as required at such
time by the Collateral Agent, appropriately completed in Proper Form;

 

(3)                                  any of the Borrower’s Subsidiaries may
sell, lease, transfer or otherwise dispose of any of its assets to the Borrower
or any other Subsidiary of the Borrower, provided, that if the entity selling,
leasing, transferring or otherwise disposing of its assets is a Guarantor, and
if the entity to whom the sale, lease, transfer or other disposition was made is
not the Borrower or is not yet a Guarantor, such entity must become a Credit
Party simultaneously with the consummation of such lease, transfer or
disposition by executing and delivering to the Agent a Joinder Agreement,
together with all requested Security Documents, as required at such time by the
Collateral Agent, appropriately completed in Proper Form;

 

(4)                                  any Subsidiary of the Borrower may be
dissolved or liquidated, so long as such dissolution or liquidation results in
all assets of such Subsidiary being owned by the Borrower or a Subsidiary;
provided, that if the entity dissolving or liquidating is a Guarantor, and if
the entity to whom all assets of such dissolving or liquidating entity are
transferred is not the Borrower or is not yet a Guarantor, such entity to whom
such assets are being transferred must become a Credit Party simultaneously with
the consummation of such dissolution or liquidation by executing and delivering
to the Agent a Joinder Agreement, together with all requested Security
Documents, as required at such time by the Collateral Agent, appropriately
completed in Proper Form;

 

(5)                                  the Borrower and its Subsidiaries may
(i) sell, exchange or otherwise dispose of Permitted Investment Securities in
the ordinary course of business; (ii) terminate, surrender or sublease a lease
of real Property by the Borrower or any of its Subsidiaries in the ordinary
course of business; (iii) sell Equipment that is obsolete, worn out or no longer
needed in the business of the Borrower or any of its Subsidiaries; (iv) enter
into sale-leaseback transactions relating to Property having a fair market value
not to exceed $1,000,000 in the aggregate during the period from October 15,
2007 through the Term Loan Maturity Date; and (v) sell any other fixed assets
(including real Property, equipment and fixtures) having a fair market value not
to exceed $1,000,000 in the aggregate during the period from November 10, 2010
through the Term Loan Maturity Date; provided that all proceeds of any of the
foregoing (other than Section 7.4(e)(5)(ii) above) shall be paid to the
Collateral Agent for application to outstanding Loans (as defined in the
Revolving Credit Agreement) or Obligations, to the extent then outstanding, in
accordance with the terms of the Intercreditor Agreement;

 

(6)                                  to the extent any Collateral is sold or
otherwise disposed of as permitted by this Section 7.4, such Collateral shall be
sold or otherwise disposed of free and clear of the Liens of the Security
Documents and the Collateral Agent shall take such actions, including executing
and filing appropriate releases, as are appropriate in connection therewith, and
no approval of any of Lenders shall be required therefor; and

 

(7)                                  the Borrower and/or any other Credit Party
may purchase or otherwise acquire, directly or indirectly, in a single
transaction or a series of related transactions, all or a substantial portion of
the assets of any Person or all or a majority of

 

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issued and outstanding shares of Equity Interests of, or similar interest in,
any Person, so long as (a) immediately after giving effect to the applicable
purchase or acquisition, no Default or Event of Default exists (including
without limitation, the Credit Parties are in compliance with the Fixed Charge
Coverage Ratio and Leverage Ratio requirements of Sections 7.11 and 7.12, tested
on a pro forma basis assuming that such purchase or acquisition had occurred at
the beginning of the four (4) most recent consecutive fiscal quarters of the
Credit Parties ending on or immediately prior to the date of such purchase or
acquisition), (b) the aggregate purchase price paid (including without
limitation, any Indebtedness permitted to be assumed, acquired or incurred by
the Borrower and/or any of its Subsidiaries in connection therewith under
Section 7.1(m)) for all such purchases and acquisitions does not exceed
$60,000,000 in the aggregate during the period from November 10, 2010 through
the Term Loan Maturity Date for all such other purchases and acquisitions and
(c) if the purchase price paid (including without limitation, any Indebtedness
permitted to be assumed, acquired or incurred by the Borrower and/or any of its
Subsidiaries in connection therewith under Section 7.1(m)) exceeds $15,000,000
in the aggregate, the Required Lenders shall have consented in writing to such
purchase or acquisition; and

 

(8)                                  The Credit Parties may make Investments to
the extent permitted by Section 7.7.

 

7.5.                              Nature of Business.  Materially change the
nature of its business or enter into any business (or at any time own, directly
or indirectly, a majority of the Equity Interests of any entity which is engaged
in any business) which is substantially different from the business in which the
Borrower and its Subsidiaries are engaged in as of the Closing Date.

 

7.6.                              Transactions with Related Parties.  Except for
any Permitted Affiliate Transactions, enter into or be a party to any other
transaction, contract or agreement of any kind with any officer, director,
shareholder, partner, employee or Affiliate of any Credit Party (including,
without limitation, the purchase from, sale to or exchange of property with, or
the rendering of any service by or for, any such Person), unless such
transaction, contract or agreement is in the ordinary course of and pursuant to
the reasonable requirements of the Borrower’s or any of its Subsidiaries’
business and is made upon fair and reasonable terms and conditions not less
favorable to such Person than those which could have been obtained in a
comparable transaction from wholly independent and unrelated sources.

 

7.7.                              Investments, Loans.  Make, directly or
indirectly, any loan or advance to or have any Investment in any Person, or make
any commitment to make such loan, advance or Investment, except:

 

(a)                                  Equity Interests of any Credit Party
acquired or issued in accordance with the other provisions of this Agreement,
including without limitation, the provisions of Section 6.10 above, or Equity
Interests of any other Subsidiary of any Credit Party with the prior written
consent of the Agent;

 

(b)                                 Permitted Investment Securities;

 

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(c)                                  loans otherwise permitted by the provisions
of Section 7.1(g) above;

 

(d)                                 loans to employees of the Borrower or any
Subsidiary made in the ordinary course of business, so long as the aggregate
amount of all such loans outstanding at any time does not exceed $100,000;

 

(e)                                  Investments of the Borrower and the other
Credit Parties permitted under the terms of Section 7.4(e)(7);

 

(f)                                    Investments consisting of Guarantees
permitted by Section 7.3(d);

 

(g)                                 Investments consisting of deferred payment
obligations in connection with sales of assets permitted under
Section 7.4(e)(5); and

 

(h)                                 Other Investments, including joint venture
interests in non-Subsidiary entities, in the aggregate amount not to exceed
$5,000,000, provided that such Investments have been approved by the Agent, such
approval not to be unreasonably withheld if the aggregate amount of such
Investments does not exceed $5,000,000 in the aggregate during the period from
November 10, 2010 through the Term Loan Maturity Date.

 

7.8.                              ERISA Compliance.

 

(a)                                  At any time engage in any Prohibited
Transaction with respect to a Plan which could reasonably be expected to result
in a material liability; or permit any Plan to be terminated in a manner which
could result in the imposition of a Lien on any Property of the Borrower or any
of its Subsidiaries pursuant to ERISA.

 

(b)                                 Engage in any transaction in connection with
which the Borrower or any Subsidiary thereof would or could reasonably be
expected to be subject to either a material civil penalty assessed pursuant to
the provisions of Section 502 of ERISA or a material tax imposed under the
provisions of Section 4975 of the Code.

 

(c)                                  Terminate any Plan in a “distress
termination” under Section 4041 of ERISA, or take any other action which could
reasonably be expected to result in a material liability of the Borrower or any
Subsidiary thereof to the PBGC.

 

(d)                                 Fail to make payment when due of all amounts
which, under the provisions of any Plan, the Borrower or any Subsidiary thereof
is required to pay as contributions thereto, or, with respect to any Plan,
permit to exist any material “accumulated funding deficiency” (within the
meaning of Section 302 of ERISA and Section 412 of the Code), whether or not
waived, with respect thereto.

 

(e)                                  Adopt an amendment to any Plan requiring
the provision of security under Section 307 of ERISA or Section 401(a)(29) of
the Code.

 

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7.9.                              Change in Accounting Method.  Make or permit
any change in accounting method or financial reporting practices except as may
be required by GAAP, as in effect from time to time.

 

7.10.                        Redemption, Dividends, Issuance of Equity
Interests, Distributions and Restricted Payments.  At any time, other than any
Permitted Affiliate Transactions:

 

(a)                                  Redeem (whether as a result of mandatory or
optional redemption obligations or rights), purchase, retire or otherwise
acquire, directly or indirectly, any of its Equity Interests, any warrants or
other similar instruments or set aside any amount for any such purpose;

 

(b)                                 Declare or pay, directly or indirectly,
(i) any dividend or fund any redemption, purchase, retirement or other
acquisition of its Equity Interests, except (1) dividends paid to the Borrower
or any Guarantor which is a direct parent of the Subsidiary paying the dividend
(with Cash Dividends to the Parent not being permitted to be paid at any time),
and (2) non-cash dividends paid to the holders of any Equity Interests of the
Borrower or the Parent in the form of additional Equity Interests of the
Borrower or the Parent, as applicable, or (ii) any management, consulting or
monitoring fees to any Affiliate of the Borrower or the Parent or any officer,
director, shareholder, partner or employee of any Affiliate of the Borrower or
the Parent, except management or consulting fees paid to the Borrower or any
Guarantor (with no management or consulting fees to be paid to the Parent);

 

(c)                                  Issue any additional Equity Interests in
the Borrower, except for Equity Interests issued to the Parent;

 

(d)                                 Make any other distribution of any Property,
cash, securities or a combination thereof, with respect to (whether by reduction
of capital or otherwise) any Equity Interests except as permitted in
Section 7.10(b) above;

 

(e)                                  Set apart any money for a sinking fund or
other analogous fund for any dividend or other distribution on its Equity
Interests or for any redemption, purchase, retirement, or other acquisition of
any of its Equity Interests; or

 

(f)                                    Redeem (whether as a result of mandatory
or optional redemption obligations or rights), purchase, defease or retire for
value, or make any principal payment or prepayment on, any Subordinated
Indebtedness prior to the Term Loan Maturity Date.

 

7.11.                        Fixed Charge Coverage Ratio.  Permit the Fixed
Charge Coverage Ratio of the Credit Parties and their Subsidiaries, on a
Consolidated basis, to be less than 1.10 to 1.0 at any time.

 

7.12.                        Leverage Ratio.  Permit the Leverage Ratio of the
Credit Parties and their Subsidiaries, on a Consolidated basis, to be greater
than the applicable ratio set forth below as of the end of the applicable fiscal
quarter of the Credit Parties:

 

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PERIOD

 

TOTAL DEBT
LEVERAGE RATIO

 

 

 

Fiscal quarter ending December 31, 2010

 

6.75 to 1.0

 

 

 

Fiscal quarter ending March 31, 2011

 

6.75 to 1.0

 

 

 

Fiscal quarter ending June 30, 2011

 

6.75 to 1.0

 

 

 

Fiscal quarter ending September 30, 2011

 

6.25 to 1.0

 

 

 

Fiscal quarter ending December 31, 2011

 

6.25 to 1.0

 

 

 

Fiscal quarter ending March 31, 2012

 

6.00 to 1.0

 

 

 

Fiscal quarter ending June 30, 2012

 

5.75 to 1.0

 

 

 

Fiscal quarter ending September 30, 2012

 

5.75 to 1.0

 

 

 

Fiscal quarter ending December 31, 2012

 

5.50 to 1.0

 

 

 

Fiscal quarter ending March 31, 2013

 

5.50 to 1.0

 

 

 

Fiscal quarter ending June 30, 2013

 

4.50 to 1.0

 

 

 

Fiscal quarter ending September 30, 2013

 

4.50 to 1.0

 

 

 

Fiscal quarter ending December 31, 2013

 

4.50 to 1.0

 

 

 

Fiscal quarter ending March 31, 2014

 

4.25 to 1.0

 

 

 

Fiscal quarter ending June 30, 2014

 

4.00 to 1.0

 

 

 

Each fiscal quarter ending on or after September 30, 2014

 

3.75 to 1.0

 

7.13.                        Capital Expenditures.  Permit the Credit Parties
and their Subsidiaries, on a Consolidated basis, to make or incur Capital
Expenditures (not including in the definition of Capital Expenditures for this
purpose any Capital Expenditures included in any future acquisition permitted
under Section 7.4(e)(7)) in excess of $5,000,000 in the aggregate during each
fiscal year.

 

7.14.                        Sale of Accounts.  Sell, assign, discount (other
than customary and reasonable discounts in the ordinary course of business),
transfer or otherwise dispose of any Accounts, promissory notes, drafts or trade
acceptances or other rights to receive payment held by it, with or without
recourse.

 

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7.15.                        Sale and Lease-Back Transactions.  Except as
otherwise permitted under Section 7.4(e)(5)(iv), enter into any arrangement,
directly or indirectly, with any Person whereby any Credit Party or any of its
Subsidiaries shall sell or transfer any Property, real or personal, which is
used or useful in its business, whether now owned or hereafter acquired, and
thereafter rent or lease such Property or other Property which such Credit Party
or such Subsidiary intends to use for substantially the same purpose or purposes
as the Property being sold or transferred.

 

7.16.                        Change of Name or Place of Business.  Permit any
Credit Party or any of its Subsidiaries to change its address, name,
jurisdiction of organization, location of its chief executive office or
principal place of business or the place it keeps its material books and
records, unless such Credit Party has (a) notified the Agent and the Collateral
Agent of such change in writing at least thirty (30) days before the effective
date of such change, (b) taken such action, reasonably satisfactory to the
Collateral Agent, to have caused the Liens against all Collateral in favor of
the Collateral Agent for the ratable benefit of the Lenders to be at all times
fully perfected and in full force and effect and (c) delivered such certificates
from Governmental Authorities as the Agent may require substantiating such name
change.

 

7.17.                        Restrictive Agreements.  Other than as imposed by
law, identified on Schedule 7.17, or provided in this Agreement, the Revolving
Credit Agreement, directly or indirectly agree to restrict or condition (a) the
payment of any dividends or other distributions to the Borrower or any of its
Subsidiaries; (b) the payment of any Indebtedness owed to the Borrower or any of
its Subsidiaries; (c) the making of any loans or advances to the Borrower or any
of its Subsidiaries; or (d) the transfer of any of its properties or assets to
the Borrower or any of its Subsidiaries.

 

7.18.                        Modification or Waiver of Documents Governing
Revolving Credit Debt.  Request, join in or otherwise consent to any
modification, amendment or waiver of any material term of the Revolving Credit
Agreement, except as expressly permitted under the terms of the Intercreditor
Agreement.

 

7.19.                        Anti-Terrorism Laws.  (a)           Knowingly
conduct any business or engage in any transaction or dealing with any Blocked
Person, including the making or receiving any contribution of funds, goods or
services to or for the benefit of any Blocked Person.

 

(a)                                  Knowingly deal in, or otherwise engage in
any transaction relating to, any property or interests in property blocked
pursuant to the Executive Order No. 13224.

 

(b)                                 Knowingly engage in or conspire to engage in
any transaction that evades or avoids, or has the purpose of evading or
avoiding, or attempts to violate, any of the prohibitions set forth in the
Executive Order No. 13224, the USA PATRIOT Act or any other Anti-Terrorism Law.

 

The Borrower shall, and shall cause each other Credit Party to, deliver to Agent
any certification or other evidence requested from time to time by the Agent in
its sole discretion, confirming such Credit Party’s compliance with this
Section 7.19.

 

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8.                                       Events of Default and Remedies.

 

8.1.                              Events of Default.  If any of the following
events shall occur and be continuing, then the Agent may (and, if directed by
the Required Lenders, shall), by written notice (or facsimile notice) to the
Borrower, take any or all of the following actions at the same or different
times: (1) accelerate the Term Loan Maturity Date and declare the Term Notes and
all other Obligations then outstanding to be, and thereupon the Term Notes and
all other Obligations shall forthwith become, immediately due and payable,
without further notice of any kind, notice of intention to accelerate,
presentment and demand or protest, or other notice of any kind all of which are
hereby expressly WAIVED by the Borrower; and (2) terminate all or any portion of
the Term Loan Commitments and exercise any and all other rights pursuant to the
Loan Documents or available under applicable law:

 

(a)                                  The Borrower shall fail to pay or prepay
any Obligation (including principal, interest, fees or any other amount) as and
when due and payable, whether at the due date thereof (by acceleration, lapse of
time or otherwise) or at any date fixed for prepayment thereof in accordance
with the other provisions of this Agreement; or

 

(b)                                 An Event of Default (as defined in the
Revolving Credit Agreement) shall occur, or the Borrower or any of its
Subsidiaries (i) shall fail to pay when due, or within any applicable period of
grace, any other Indebtedness (excluding the Revolving Credit Agreement Debt and
Indebtedness outstanding hereunder) aggregating in excess of $400,000 in
principal amount unless such payment is being contested in good faith (by
appropriate proceedings) and adequate reserves have been provided therefor, or
(ii) shall default (beyond any applicable grace and curative periods) in any
other manner with respect to any other Indebtedness (excluding the Revolving
Credit Agreement Debt and Indebtedness outstanding hereunder) aggregating in
excess of $400,000 in principal amount if the effect of any such default or
Event of Default shall be to accelerate or to permit the holder of any such
other Indebtedness, at its option, to accelerate the maturity of such
Indebtedness prior to the stated maturity thereof; or

 

(c)                                  Any representation or warranty made or
deemed made by the Borrower or any Guarantor in connection with any Loan
Document or in any certificate, report, notice or financial statement furnished
at any time in connection with this Agreement shall prove to have been
incorrect, false or misleading in any material respect when made or deemed to
have been made; or

 

(d)                                 Except as provided in Sections 8.1(a) or
8.1(e), Default shall occur in the punctual and complete performance or
observance of any covenant, condition or agreement to be observed or performed
on the part of the Borrower, any of its Subsidiaries or the Parent pursuant to
the terms of any provision of this Agreement or any other Loan Document, and
such Default remains uncured five (5) Business Days after the earlier to occur
of (1) the Agent giving written notice of such Default to the Borrower or
(2) any Responsible Officer of the Borrower or any of its Subsidiaries acquired
actual knowledge of the existence of such Default; or

 

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(e)                                  Default shall occur in the punctual and
complete performance or observance of any covenant, condition or agreement to be
observed or performed on the part of any Credit Party or any of its Subsidiaries
pursuant to the terms of Section 6.2, Section 6.9, Section 6.11 or Article 7
hereof; or

 

(f)                                    Final judgment or judgments (or any
decree or decrees for the payment of any fine or any penalty) for the payment of
an uninsured money award in excess of $750,000 in the aggregate shall be
rendered against any Credit Party or any of its Subsidiaries and the same shall
remain undischarged and unpaid for a period of thirty (30) days during which
execution shall not be effectively stayed or bonded; or

 

(g)                                 Any Credit Party or any of its Subsidiaries
shall have concealed, removed, or permitted to be concealed or removed, any part
of its Property, with intent to hinder, delay or defraud its creditors or any of
them, or made or suffered a transfer of any of its Property which is or could
reasonably be expected to be fraudulent under any bankruptcy, fraudulent
conveyance or similar law; or

 

(h)                                 Any of the following shall occur where such
occurrence could reasonably be expected to result in any material liability of
any Credit Party: (1) a Reportable Event shall have occurred with respect to a
Plan; (2) the filing by the Borrower, any ERISA Affiliate, or an administrator
of any Plan of a notice of intent to terminate such Plan under the provisions of
Section 4041 of ERISA; (3) the receipt of notice by the Borrower, any ERISA
Affiliate or an administrator of a Plan that the PBGC has instituted proceedings
to terminate (or appoint a trustee to administer) such a Plan; (4) any other
event or condition exists which might reasonably be expected to, in the opinion
of the Agent, constitute grounds under the provisions of Section 4042 of ERISA
for the termination of or the appointment of a trustee to administer any Plan by
the PBGC; (5) a Plan shall fail to maintain a minimum funding standard required
by Section 412 of the Code for any plan year or a waiver of standard is granted
under the provisions of Section 412(d) of the Code; (6) the Borrower or any
ERISA Affiliate has incurred, or is likely to incur, a liability under the
provisions of Section 4062, 4063, 4064 or 4201 of ERISA; (7) the Borrower or any
ERISA Affiliate fails to pay the full amount of an installment required under
Section 412(m) of the Code; (8) any Prohibited Transaction involving any Plan;
or (9) the occurrence of any other event or condition with respect to any Plan
which would constitute an event of default or default under any other material
agreement entered into by the Borrower or any ERISA Affiliate; or

 

(i)                                     This Agreement, any Term Note, any of
the Security Documents or any other Loan Documents, or any material provision
thereof, shall for any reason cease to be, or shall be asserted by any Credit
Party, not to be, a legal, valid and binding obligation of any Credit Party,
enforceable in accordance with its terms, or the Lien purported to be created by
any of the Security Documents shall for any reason cease to be, or be asserted
by any Credit Party not to be, a valid, first priority perfected Lien (subject
to the terms of the Intercreditor Agreement) against any material portion of the
Collateral (except to the extent otherwise permitted under this Agreement or any
of the Security Documents); or

 

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(j)                                     The Borrower or any of its Subsidiaries
which is a party to the Lockbox Agreement or any Tri-Party Agreement fails to
perform and observe, and/or cause to be performed and observed, all material
covenants, provisions and conditions to be performed, discharged and observed by
the Borrower or any such Subsidiary under the terms of the Lockbox Agreement or
any Tri-Party Agreement; or

 

(k)                                  Any financial institution which is a party
to any Tri-Party Agreement fails to perform and observe, and/or cause to be
performed and observed, all material covenants, provisions and conditions to be
performed, discharged and observed by such financial institution under the terms
of any Tri-Party Agreement and such failure remains uncured (or such defaulting
financial institution and applicable Tri-Party Agreement is not replaced by the
Borrower with a substitute financial institution and replacement Tri-Party
Agreement both reasonably acceptable to the Agent) five (5) Business Days after
the Collateral Agent gives written notice of such failure to the Borrower; or

 

(l)                                     A Change of Control shall occur; or

 

(m)                               Any Credit Party or any of its Subsidiaries
shall suffer any writ of attachment or execution or any similar process to be
issued or levied against it or any substantial part of its Property having an
aggregate value in excess of $750,000 which is not released, stayed, bonded or
vacated within thirty (30) days after its issue or levy.

 

In addition, if any of the following events shall occur, then (1) the Term
Notes, and all other Obligations then outstanding and payable hereunder shall
automatically, without demand, presentment, protest, notice of intent to
accelerate, notice of acceleration or other notice to any Person of any kind,
all of which are hereby expressly WAIVED by the Borrower, become immediately due
and payable and (2) all Term Loan Commitments shall be immediately and
automatically terminated.

 

(n)                                 Any Credit Party or any of its Subsidiaries
shall commence a voluntary proceeding seeking liquidation, reorganization, or
other relief with respect to itself or its debts under any bankruptcy,
insolvency, or other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian, or other similar
official of it or a substantial part of its property or shall consent to any
such relief or to the appointment of or taking possession by any such official
in an involuntary case or other proceeding commenced against it or shall make a
general assignment for the benefit of creditors or shall generally fail to pay
its debts as they become due or shall take any corporate action to authorize any
of the foregoing; or

 

(o)                                 An involuntary proceeding shall be commenced
against any Credit Party or any of its Subsidiaries seeking liquidation,
reorganization, or other relief with respect to it or its debts under any
bankruptcy, insolvency, or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian, or other
similar official for it or a substantial part of its property, and such
involuntary proceeding shall remain undismissed and unstayed for a period of 60
days; or

 

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(p)                                 Any involuntary order shall be entered in
any proceeding against any Credit Party or any of its Subsidiaries decreeing the
dissolution, liquidation or split-up thereof, and such order shall remain in
effect for sixty (60) days; or

 

(q)                                 Any Credit Party or any of its Subsidiaries
shall admit in writing its inability to pay its debts as they become due or fail
generally to pay its debts as they become due.

 

8.2.                              Remedies Cumulative.  No remedy, right or
power conferred upon the Agent or any Lender is intended to be exclusive of any
other remedy, right or power given hereunder or now or hereafter existing at
law, in equity, or otherwise, and all such remedies, rights and powers shall be
cumulative.

 

9.                                       The Agent.

 

9.1.                              Appointment.  Each Lender hereby irrevocably
designates and appoints the Agent as the agent of such Lender under this
Agreement and the other Loan Documents, and each such Lender irrevocably
authorizes the Agent, in such capacity, to take such action on its behalf under
the provisions of this Agreement and the other Loan Documents and to exercise
such powers and perform such duties as are expressly delegated to the Agent by
the terms of this Agreement and the other Loan Documents, together with such
other powers as are reasonably incidental thereto.   Notwithstanding any
provision to the contrary elsewhere in this Agreement, the Agent shall not have
any duties or responsibilities, except those expressly set forth herein, or any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the Agent    In
any foreclosure proceeding concerning any collateral for the Term Notes, each
holder of a Term Note if bidding for its own account or for its own account and
the accounts of other Lenders is prohibited from including in the amount of its
bid an amount to be applied as a credit against its Term Note or the Term Notes
of the other Lenders, instead such holder must bid in cash only. However, in any
such foreclosure proceeding, the Agent may (but shall not be obligated to)
submit a bid for all Lenders (including itself) in the form of a credit against
the Term Notes of all of the Lenders, and the Agent or its designee may (but
shall not be obligated to), with the consent of the Required Lenders, accept
title to such collateral for and on behalf of all Lenders.  The Lenders hereby
empower, authorize and direct the Agent, on behalf of the Lenders, to execute
and deliver this Agreement, the other Loan Documents, the Intercreditor
Agreement and all related agreements, certificates, documents, or instruments as
shall be necessary or appropriate to effect the purposes of the Loan Documents. 
Each Lender agrees that any action taken by the Agent in accordance with the
terms of this Agreement, the Intercreditor Agreement or the other Loan
Documents, and the exercise by the Agent of its powers set forth therein or
herein, together with such other powers that are reasonably incidental thereto,
shall be binding upon all of the Lenders.  Notwithstanding anything herein or in
any other Loan Document to the contrary, to the extent there is a conflict
between this Agreement and any other Loan Document concerning the provisions of
this Section 9, this Agreement shall govern and control.

 

9.2.                              Delegation of Duties.  The Agent may execute
any of its duties under this Agreement and the other Loan Documents by or
through agents or attorneys in fact and shall be

 

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entitled to advice of counsel concerning all matters pertaining to such duties. 
The Agent shall not be responsible for the negligence or misconduct of any
agents or attorneys in fact selected by it with reasonable care.

 

9.3.                              Exculpatory Provisions.  Neither Agent nor any
of its officers, directors, employees, agents, advisors, attorneys in fact or
affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document, INCLUDING PURSUANT TO ITS OWN NEGLIGENCE (except to the
extent that any of the foregoing are found by a final and nonappealable decision
of a court of competent jurisdiction to have resulted from its or such Person’s
own gross negligence or willful misconduct), or (ii) responsible in any manner
to any of the Lenders for any recitals, statements, representations or
warranties made by any Credit Party or any officer thereof contained in this
Agreement or any other Loan Document or in any certificate, report, statement or
other document referred to or provided for in, or received by the Agents under
or in connection with, this Agreement or any other Loan Document or for the
value, validity, effectiveness, genuineness, enforceability or sufficiency of
this Agreement or any other Loan Document or for any failure of any Credit Party
a party thereto to perform its obligations hereunder or thereunder.  The Agent
shall not be under any obligation to any Lender to ascertain or to inquire as to
the observance or performance of any of the agreements contained in, or
conditions of, this Agreement or any other Loan Document, or to inspect the
properties, books or records of any Credit Party.

 

9.4.                              Reliance.   The Agent shall be entitled to
rely, and shall be fully protected in relying, upon any instrument, writing,
resolution, notice, consent, certificate, affidavit, letter, telecopy or email
message, statement, order or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons and upon advice and statements of legal counsel (including counsel to
Holdings or the Borrower), independent accountants and other experts selected by
the Agent.  The Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless a written notice of assignment, negotiation or
transfer thereof shall have been filed with the Agent.  The Agent shall be fully
justified in failing or refusing to take any action under this Agreement or any
other Loan Document unless it shall first receive such advice or concurrence of
the Required Lenders (or, if so specified by this Agreement, all Lenders) as it
deems appropriate or it shall first be indemnified to its satisfaction by the
Lenders against any and all liability and expense that may be incurred by it by
reason of taking or continuing to take any such action.  The Agent shall in all
cases be fully protected in acting, or in refraining from acting, under this
Agreement and the other Loan Documents in accordance with a request of the
Required Lenders (or, if so specified by this Agreement, all Lenders), and such
request and any action taken or failure to act pursuant thereto shall be binding
upon all the Lenders and all future holders of the Term Loans

 

9.5.                              Notice of Defaults.  The Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default unless the Agent has received written notice from a Lender or a Credit
Party referring to this Agreement, describing such Default or Event of Default
and stating that such notice is a “notice of default”.  In the event that the
Agent receives such a notice, the Agent shall give notice thereof to the
Lenders.  The Agent shall take such action with respect to such Default or Event
of Default as shall be reasonably directed by the Required Lenders (or, if so
specified by this Agreement, all Lenders); provided that unless and

 

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until the Agent shall have received such directions, the Agent may (but shall
not be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable in the
best interests of the Lenders

 

9.6.                              Agent in Its Individual Capacity.  Agent and
its Affiliates may make loans to, accept deposits from and generally engage in
any kind of business with any Credit Party (and any of its Affiliates) as though
Agent were not Agent hereunder, and the Agent may accept fees and other
consideration from any Credit Party (in addition to the fees heretofore agreed
to between the Borrower or any other Credit Party and the Agent) for services in
connection with this Agreement or otherwise without having to account for the
same to the Lenders.  With respect to its Term Loan Commitments or the Term
Loans, if any, made by it in its capacity as a Lender hereunder, Agent shall
have the same rights and powers under this Agreement and the other Loan
Documents as any Lender and may exercise the same as though it were not Agent,
and the terms “Lender” and “Lenders” shall include Agent in its individual
capacity.

 

9.7.                              Indemnification.  The Lenders agree to
indemnify the Agent, its Affiliates and their respective officers, directors,
employees, affiliates, agents, advisors and controlling persons (each, an “Agent
Indemnitee”)  (to the extent not reimbursed by the Borrower and/or the other
Credit Parties and without limiting the obligation of the Credit Parties to do
so), ratably according to their respective Term Loan Commitments, from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind
whatsoever that may at any time (whether before or after the payment of the Term
Loans) be imposed on, incurred by or asserted against such Agent Indemnitee in
any way relating to or arising out of, the Term Loan Commitments, this
Agreement, any of the other Loan Documents or any documents contemplated by or
referred to herein or therein or the transactions contemplated hereby or thereby
or any action taken or omitted by such Agent Indemnitee under or in connection
with any of the foregoing (INCLUDING THE CONSEQUENCES OF THE NEGLIGENCE OF SUCH
INDEMNIFIED PERSON); provided that no Lender shall be liable for the payment of
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements that are found by a
final and nonappealable decision of a court of competent jurisdiction to have
resulted from such Agent Indemnitee’s gross negligence or willful misconduct. 
The agreements in this Section shall survive the payment of the Term Loans and
all other amounts payable hereunder.

 

9.8.                              Non-Reliance on Agent and Other Lenders.  Each
Lender expressly acknowledges that neither the Agents nor any of their
respective officers, directors, employees, agents, advisors, attorneys in fact
or Affiliates have made any representations or warranties to it and that no act
by the Agent hereafter taken, including any review of the affairs of a Credit
Party or any Affiliate of a Credit Party, shall be deemed to constitute any
representation or warranty by the Agent to any Lender.  Each Lender represents
to the Agents that it has, independently and without reliance upon the Agent or
any other Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness of the
Credit Parties and their affiliates and made its own decision to make its Term
Loans hereunder and enter into this Agreement.  Each Lender also represents that
it will, independently and without reliance upon the Agent or any other Lender,
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and

 

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decisions in taking or not taking action under this Agreement and the other Loan
Documents, and to make such investigation as it deems necessary to inform itself
as to the business, operations, property, financial and other condition and
creditworthiness of the Credit Parties and their affiliates.  Except for
notices, reports and other documents expressly required to be furnished to the
Lenders by the Agent hereunder, the Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of any Credit Party or any affiliate
of a Credit Party that may come into the possession of the Agent or any of its
officers, directors, employees, agents, attorneys in fact or affiliates.

 

9.9.                              Failure to Act.  Notwithstanding anything
herein to the contrary, the Agent shall not be required to advance its own funds
or otherwise incur financial liability in the performance of its duties or the
exercise  of its rights under the Loan Documents and shall in all cases be fully
justified in failing or refusing to act hereunder and thereunder unless it shall
receive further assurances to its satisfaction by the Lenders of their
indemnification obligations under Section 9.7 hereof and by the Credit Parties
of their indemnification obligations hereunder against any and all liability and
expense which may be incurred by it by reason of taking or continuing to take
any such action.

 

9.10.                        Successor Agent.  The Agent may resign as Agent
upon 10 days’ notice to the Lenders and the Borrower.  If the Agent shall resign
as Agent under this Agreement and the other Loan Documents, then the Required
Lenders shall appoint from among the Lenders a successor agent for the Lenders,
which successor agent shall (unless an Event of Default shall have occurred and
be continuing) be subject to approval by the Borrower (which approval shall not
be unreasonably withheld or delayed), whereupon such successor agent shall
succeed to the rights, powers and duties of the Agent, and the term “Agent”
shall mean such successor agent effective upon such appointment and approval,
and the former Agent’s rights, powers and duties as Agent shall be terminated,
without any other or further act or deed on the part of such former Agent or any
of the parties to this Agreement or any holders of the Term Loans.  If no
successor agent has accepted appointment as Agent by the date that is 10 days
following a retiring Agent’s notice of resignation, the retiring Agent’s
resignation shall nevertheless thereupon become effective, and the Lenders shall
assume and perform all of the duties of the Agent hereunder until such time, if
any, as the Required Lenders appoint a successor agent as provided for above. 
After any retiring Agent’s resignation as Agent, the provisions of this
Section 9 and of Sections 10.9 and 10.10 shall continue to inure to its benefit.

 

10.                                 Miscellaneous.

 

10.1.                        No Waiver; Cumulative Remedies.  No waiver of any
Default or Event of Default shall be deemed to be a waiver of any other Default
or Event of Default.  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
or under the other Loan Documents 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 and the Agent or any Lender shall operate as a waiver of any right
or power of the Agent or any Lender.  No notice to or demand on any Credit Party
or any other Person shall entitle any Credit Party or any other Person to any

 

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other or further notice or demand in similar or other circumstances. The rights,
remedies, powers and privileges herein provided are cumulative and not exclusive
of any rights, remedies, powers and privileges provided by law

 

10.2.                        Notices.  Except as otherwise expressly permitted
hereunder or under any other Loan Document, all notices, requests and demands to
or upon the respective parties hereto to be effective shall be in writing
(including by telecopy), and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made when delivered, or three Business Days
after being deposited in the mail, postage prepaid, or, in the case of telecopy
notice, when received, addressed in each case to the intended recipient at the
“Address for Notices” specified below its name on the signature pages hereof, or
as set forth in an administrative questionnaire delivered to the Agent in the
case of any Lender not originally a signatory hereto, or to such other address
as may be hereafter notified by the respective parties hereto; provided,
however, that with any such change in address of any Credit Party only being
effective ten (10) Business Days after such change of address has been deemed
given in accordance with the provisions hereof.  Notices and other
communications to the Lenders hereunder may be delivered or furnished by
electronic communications pursuant to procedures approved by the Agent; provided
that the foregoing shall not apply to notices pursuant to Section 2 unless
otherwise agreed by the Agent and the applicable Lender.  The Agent or the
Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it; provided that approval of such procedures may be
limited to particular notices or communications.

 

10.3.                        Governing Law; Submission To Jurisdiction; Waivers.

 

(a)                                  UNLESS OTHERWISE SPECIFIED THEREIN, EACH
LOAN DOCUMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK (OTHER THAN THE CONFLICTS OF LAWS PRINCIPLES THEREOF) AND
THE UNITED STATES OF AMERICA.

 

(b)                                 Each of the Credit Parties hereby
irrevocably and unconditionally:

 

(i)                                     submits for itself and its Property in
any legal action or proceeding relating to this Agreement and the other Loan
Documents to which it is a party, or for recognition and enforcement of any
judgment in respect thereof, to the non-exclusive general jurisdiction of the
courts of the State of New York, the courts of the United States for the
Southern District of New York, and appellate courts from any thereof;

 

(ii)                                  consents that any such action or
proceeding may be brought in such courts and waives any objection that it may
now or hereafter have to the venue of any such action or proceeding in any such
court or that such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same;

 

(iii)                               agrees that service of process in any such
action or proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage prepaid, to
Holdings or the Borrower, as the case may be at

 

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its address set forth in Section 10.2 or at such other address of which the
Agent shall have been notified pursuant thereto;

 

(iv)                              agrees that nothing herein shall affect the
right to effect service of process in any other manner permitted by law or shall
limit the right to sue in any other jurisdiction; and

 

(v)                                 waives, to the maximum extent not prohibited
by law, any right it may have to claim or recover in any legal action or
proceeding referred to in this Section any special, exemplary, punitive or
consequential damages.

 

10.4.                        Survival; Parties Bound.  All representations,
warranties, covenants and agreements made by or on behalf of any Credit Party in
connection herewith shall survive the execution and delivery of the Loan
Documents and shall not be affected by any investigation made by any Person. 
The term of this Agreement shall be until the termination or lapse of all Term
Loan Commitments, the final maturity of each Term Note, and the payment of all
amounts due under the Loan Documents.

 

10.5.                        Counterparts.  This Agreement may be executed in
several identical counterparts, and by the parties hereto on separate
counterparts, and each counterpart, when so executed and delivered, shall
constitute an original instrument, and all such separate counterparts shall
constitute but one and the same instrument.

 

10.6.                        Limitation of Interest.  The Borrower, the other
Credit Parties and the Lenders intend to strictly comply with all applicable
laws, including applicable usury laws, if any.  Accordingly, the provisions of
this Section 10.6 shall govern and control over every other provision of this
Agreement or any other Loan Document which conflicts or is inconsistent with
this Section, even if such provision declares that it controls.  As used in this
Section, the term “interest” includes the aggregate of all charges, fees,
benefits or other compensation which constitute interest under applicable law,
provided, that, to the maximum extent permitted by applicable law, (a) any
non-principal payment shall be characterized as an expense or as compensation
for something other than the use, forbearance or detention of money and not as
interest, and (b) all interest at any time contracted for, reserved, charged or
received shall be amortized, prorated, allocated and spread, in equal or in
unequal parts during the full term of the Term Loans and the Term Loan
Commitments so that interest for the entire term does not exceed the Highest
Lawful Rate.  In no event shall the Borrower, any other Credit Party or any
other Person be obligated to pay, or the Agent or any Lender have any right or
privilege to reserve, receive or retain, (Y) any interest in excess of the
maximum amount of nonusurious interest permitted under the laws of the United
Stales or of any state, if any, which are applicable to the Agent or such
Lender, respectively, or (Z) total interest in excess of the amount which the
Agent or such Lender could lawfully have contracted for, reserved, received,
retained or charged had the interest been calculated for the full term of the
Term Loans at the Highest Lawful Rate, if any, applicable to the Agent or such
Lender.  None of the terms and provisions contained in this Agreement or in any
other Loan Document which directly or indirectly relate to interest shall ever
be construed without reference to this Section 10.6, or be construed to create a
contract to pay any Lender for the use, forbearance or detention of  money at an
interest rate in excess of the Highest Lawful Rate applicable to such Lender. 
If the term of any Term Loans or the Term

 

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Notes is shortened by reason of acceleration of maturity as a result of any
Default or Event of Default or by any other cause, or by reason of any required
or permitted prepayment, and if for that (or any other) reason the Agent or any
Lender at any time is owed or receives (and/or has received) interest in excess
of interest calculated at the Highest Lawful Rate applicable to the Agent or
such Lender, then and in any such event all of any such excess interest owed to
or received by the Agent or such Lender shall be canceled automatically as of
the date of such acceleration, prepayment or other event which produces the
excess, and, if such excess interest has been paid to the Agent or such Lender,
it shall be credited pro tanto against the then-outstanding principal balance of
the Obligations to the Agent or such Lender, effective as of the date or dates
when the event occurs which causes it to be excess interest, until such excess
is exhausted or all of such principal has been fully paid and satisfied,
whichever occurs first, and any remaining balance of such excess shall be
promptly refunded to its payor.

 

10.7.                        Survival of Certain Obligations.  The obligations
of the Borrower or any other Credit Party, as applicable, under Sections 10.9,
10.10 and 10.17 hereof shall survive the repayment of the Term Loans and all
other Obligations, the termination of the Term Loan Commitments.

 

10.8.                        Captions.  The headings and captions appearing in
the Loan Documents have been included solely for convenience and shall not be
considered in construing the Loan Documents.

 

10.9.                        Expenses, Etc.

 

(a)                                  The Borrower agrees to pay or reimburse on
demand of the Agent the following: (i) the reasonable fees, expenses,
disbursements and other charges of any legal counsel engaged by the Agent each
Lender other than the Agent in connection with (i) the preparation, execution
and delivery of this Agreement (including the exhibits and schedules hereto) and
the Loan Documents and the making of the Term Loans hereunder and (ii) any
modification, supplement or waiver of any of the terms of this Agreement or any
other Loan Document; (ii) all out-of-pocket costs and expenses (including the
fees, disbursements and other charges of counsel (including the allocated fees
and expenses of in-house counsel) to the Agent and of separate counsel for each
Lender other than the Agent), in connection with any Default or Event of Default
or the enforcement of or preservation of any rights under this Agreement or any
other Loan Documents; (iii) all transfer, stamp, documentary or other similar
taxes, assessments or charges levied on or against the Agent or any Lender by
any governmental or revenue authority in respect of this Agreement or any other
Loan Document; and (iv) expenses of due diligence incurred by the Agent prior to
or as of the Closing Date and the Borrower agrees to pay or reimburse on demand
the Agent for all out-of-pocket costs, expenses, taxes, assessments and other
charges incurred by the Agent in connection with any filing, registration,
recording or perfection of any security interest contemplated by this Agreement
or any other Loan Document.

 

(b)                                 Except as otherwise expressly limited
elsewhere in this Agreement or in any other Loan Document, the Borrower shall
pay (i) all reasonable, documented out-of-pocket expenses incurred by the Agent
or itsr Affiliates, including the reasonable fees,

 

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charges and disbursements of counsel for the Agent in connection with the
syndication and distribution (including, without limitation, via the internet or
through a service such as Intralinks) of the credit facilities provided for
herein, the preparation and administration of the Loan Documents or any
amendments, modifications or waivers of the provisions of the Loan Documents
(whether or not the transactions contemplated hereby or thereby shall be
consummated), and (ii) all out-of-pocket expenses incurred by the Agent, the
Collateral Agent, or any Lender, including the fees, charges and disbursements
of any counsel (including the allocated fees and expenses of in-house counsel)
for the Agent and of separate counsel for each Lender other than the Agent in
connection with the enforcement, collection or protection of its rights in
connection with the Loan Documents, including its rights under this Section, or
in connection with the Loans made hereunder, including all such out-of pocket
expenses incurred during any workout, restructuring or negotiations in respect
of such Term Loans.  Expenses being reimbursed by the Borrower under this
Section include, without limiting the generality of the foregoing, costs and
expenses (subject to express limitations set forth elsewhere in this Agreement
or in any other Loan Document) incurred in connection with:

 

(1)                                  appraisals;

 

(2)                                  field examinations and the preparation of
appraisal, field examination or audit reports based on the fees charged by a
third party retained by the Agent or the internally allocated fees for each
Person employed by the Agent with respect to each field examination;

 

(3)                                  lien and title searches and title
insurance;

 

(4)                                  environmental reviews;

 

(5)                                  taxes, fees and other charges for recording
the mortgages, filing financing statements and continuations, and other actions
to perfect, protect, and continue the Collateral Agent’s Liens;

 

(6)                                  sums paid or incurred to take any action
required of any Credit Party under the Loan Documents that such Credit Party
fails to pay or take; and

 

(7)                                  forwarding loan proceeds, collecting checks
and other items of payment, and establishing and maintaining the accounts and
lockboxes, and costs and expenses of preserving and protecting the Collateral.

 

10.10.                  Indemnification.   .Each Credit Party, jointly and
severally with all other Credit Parties, hereby agrees to indemnify the Agent,
the Lenders and each Affiliate thereof and their respective directors, officers,
employees, advisors and agents from, and hold each of them harmless against, any
and all losses, liabilities (including Environmental Liabilities), claims
(including Environmental Claims), damages, penalties, actions, judgments or
suits of any kind or nature whatsoever to which any of them may become subject,
insofar as such losses, liabilities, claims, damages, penalties, actions,
judgments or suits arise out of or result from any (a) actual or proposed use by
the Borrower or any other Credit Party of the proceeds of any extension of
credit by any Lender hereunder, (b) breach by any Credit Party of this Agreement
or any other

 

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Loan Document, (c) violation of, noncompliance with or liability by any Credit
Party or any of its Subsidiaries under  any law, rule, regulation or order
including any Requirements of Environmental Law, (d) Liens or security interests
granted on any Property pursuant to or under the Loan Documents, to the extent
resulting from any Hazardous Substance located in, on or under any such
Property, (e) ownership by the Lenders or the Agent of any Property following
foreclosure under the Loan Documents, to the extent such losses, liabilities,
claims or damages arise out of or result from any Hazardous Substance, located
in, on or under such Property prior to or at the time of such foreclosure,
including losses, liabilities, claims or damages which are imposed upon Persons
under laws relating to or regulating Hazardous Substances, solely by virtue of
ownership, (f) any Lender or the Agent being deemed an operator of any such
Property by a court or other regulatory or administrative agency or tribunal or
other third party, to the extent such losses, liabilities, claims or damages
arise out of or result from any Hazardous Substance, petroleum, petroleum
product or petroleum waste located in on or under such Property at or prior to
the date of any foreclosure thereon under the Loan Document, or
(g) investigation, litigation or other proceeding (including any threatened
investigation or proceeding) relating to any of the foregoing (including any
proceeding brought by any Credit Party against the Agent, any Lender and/or
their respective Affiliates), and each Credit Party, jointly and severally with
all other Credit Parties, agrees to reimburse the Agent and each Lender, and
each Affiliate thereof and their respective directors, officers, employees,
counsel, advisors and agents, upon demand for any out-of-pocket expenses
(including reasonable legal fees and expenses) incurred in connection with any
such investigation or proceeding, AND WHETHER ANY SUCH LOSS, LIABILITY, CLAIM OR
DAMAGE RESULTS FROM THE NEGLIGENCE OF ANY SUCH INDEMNIFIED PERSON; but excluding
any such losses, liabilities, claims, damages or expenses incurred by a Person
or any Affiliate thereof or their respective directors, officers, employees,
counsel or agents by reason of (i) the gross negligence or willful misconduct of
or willful and knowing breach of any Loan Document by such Person, affiliate,
director, officer, employee or agent as determined and found by a final and
nonappealable decision of a court of competent jurisdiction or (ii) ownership or
operation of any Property by the Lenders or the Agent following foreclosure
under the Loan Documents to the extent, but only to the extent, such losses,
liabilities, etc. are attributable to the post-foreclosure actions of the Lender
or the Agent.  Promptly after receipt by an indemnified person of notice of any
claim or the commencement of any action, such indemnified person shall, if any
claim in respect thereof is to be made against any Credit Party under this
Section 10.10, notify the such Credit Party in writing of the claim or the
commencement of that action. All amounts due under this Section 10.10 shall be
payable not later than 10 days after written demand therefor.  The Credit
Parties shall not be liable for any settlement of any such claim or action
involving the payment of monetary damages effected without its written consent
not to be unreasonably withheld.  If any such claim or action shall be brought
against an indemnified person, it shall notify the applicable Credit Parties
thereof, and such Credit Parties shall be entitled to participate in the joint
defense thereof.

 

10.11.                  Amendments, Waivers, Etc.

 

(a)                                  Neither this Agreement, any other Loan
Document, nor any terms hereof or thereof may be waived amended, supplemented or
modified except in accordance with the provisions of this Section 10.11.  The
Required Lenders and each Credit Party to the relevant Loan Document may, or,
with the written consent of the Required Lenders, the

 

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Agent and each Credit Party to the relevant Loan Document may, from time to
time, (i) enter into written amendments, supplements or modifications hereto and
to the other Loan Documents for the purpose of adding any provisions to this
Agreement or the other Loan Documents or changing in any manner the rights of
the Lenders or of the Credit Parties hereunder or thereunder or (ii) waive, on
such terms and conditions as the Required Lenders or the Agent, as the case may
be, may specify in such instrument, any of the requirements of this Agreement or
the other Loan Documents or any Default or Event of Default and its
consequences; provided, however, that no such waiver and no such amendment,
supplement or modification shall (i) reduce or forgive the principal amount or
extend the final scheduled date of maturity of any Term Loan, extend the
scheduled date of any amortization payment in respect of any Term Loan, reduce
the stated rate of any interest or fee payable hereunder (except (x) in
connection with the waiver of applicability of the Default Rate interest rates
(which waiver shall be effective with the consent of the Required Lenders) and
(y) that any amendment or modification of defined terms used in the financial
covenants in this Agreement shall not constitute a reduction in the rate of
interest or fees for purposes of this clause (i)) or extend the scheduled date
of any payment thereof, or increase the amount or extend the expiration date of
any Lender’s Term Loan Commitment, in each case without the written consent of
each Lender directly affected thereby; (ii) eliminate or reduce the voting
rights of any Lender under this Section 10.11 without the written consent of
such Lender; (iii) reduce any percentage specified in the definition of Required
Lenders, consent to the assignment or transfer by the Borrower of any of its
rights and obligations under this Agreement and the other Loan Documents,
release the Borrower from its obligation under the Loan Documents or any
Guarantor from its obligation under its Guaranty (except as otherwise permitted
herein or in the other Loan Documents), in each case without the written consent
of all Lenders; (iv) change any provision contained in Sections 2.2(c), 2.5,
2.7, 2.8 or 10.10 hereof or this Section 10.11 or Section 10.16 hereof, without
the written consent of each Lender directly affected thereby; (v) except as
otherwise expressly provided herein, including without limitation, in
Section 10.11(b) or in any Security Document, release any of the Collateral
without the written consent of each Lender, and (vi) amend, modify or waive any
provision of Section 9 or any other provision of any Loan Document that affects
the Agent without the written consent of the Agent.  Any such waiver and any
such amendment, supplement or modification shall apply equally to each of the
Lenders and shall be binding upon the Credit Parties, the Lenders, the Agent and
all future holders of the Term Loans.  In the case of any waiver, the Credit
Parties, the Lenders and the Agent shall be restored to their former position
and rights hereunder and under the other Loan Documents, and any Default or
Event of Default waived shall be deemed to be cured and not continuing; but no
such waiver shall extend to any subsequent or other Default or Event of Default,
or impair any right consequent thereon.

 

(b)                                 The Lenders hereby irrevocably authorize the
Agent, at its option and in its sole discretion, to release any Liens granted to
the Agent by the Credit Parties on any Collateral (i) upon the termination of
the all Term Loan Commitments, and payment and satisfaction in full in cash of
all Term Loans and other Obligations, (ii) constituting Property being sold or
disposed of if the Credit Party disposing of such Property certifies to the
Agent that the sale or disposition is made in compliance with the terms of this
Agreement (and the Agent may rely conclusively on any such certificate, without
further

 

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inquiry), (iii) constituting Property leased to a Credit Party under a lease
which has expired or been terminated in a transaction permitted under this
Agreement, or (iv) as required to effect any sale or other disposition of such
Collateral in connection with any exercise of remedies of the Agent and the
Lenders pursuant to Article 8.  Except as provided in the preceding sentence or
in Section 7.4(e)(5), the Agent will not release any Liens on Collateral without
the prior written authorization of the Required Lenders; provided that, the
Collateral Agent may in its discretion, release its Liens on Collateral valued
in the aggregate not in excess of $1,000,000 during any calendar year without
the prior written authorization of the Required Lenders.  Any such release shall
not in any manner discharge, affect, or impair the Obligations or any Liens
(other than those expressly being released) upon (or obligations of the Credit
Parties in respect of) all interests retained by the Credit Parties, including
the proceeds of any sale, all of which shall continue to constitute part of the
Collateral.

 

10.12.                  Successors and Assigns; Participations and Assignments.

 

(a)                                  This Agreement shall be binding upon and
inure to the benefit of the Borrower, the other Credit Parties, the Agent, the
Collateral Agent and the Lenders and their respective successors and permitted
assigns, provided that the undertaking of the Lenders hereunder to make Term
Loans to the Borrower shall not inure to the benefit of any successor of the
Borrower. Neither the Borrower nor any Credit Party may assign or transfer any
of its rights or obligations hereunder without the prior written consent of all
of the Lenders (and any attempted assignment or transfer by any Credit Party
without such consent shall be null and void), and no Lender may assign or
otherwise transfer its rights or obligations hereunder except in accordance with
this Section 10.12.  Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than (i) the parties hereto, their
respective successors and assigns permitted hereby, (ii) any participant of a
Lender (to the extent provided in subparagraph (b) below), and (iii) to the
extent expressly set forth herein, the Affiliates of the Agent and each of the
Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement.

 

(b)                                 (i)  Any Lender may, without the consent of
the Borrower or the Agent, sell participations to one or more banks or other
entities (a “Participant”) in all or a portion of such Lender’s rights and
obligations under this Agreement (including all or a portion of its Commitments
and the Term Loans owing to it); provided that (A) such Lender’s obligations
under this Agreement shall remain unchanged, (B) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (C) the Borrower, the Agent, the Issuing Lender and the other Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender’s rights and obligations under this Agreement.  Any agreement pursuant to
which a Lender sells such a participation shall provide that such Lender shall
retain the sole right to enforce this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement; provided that such
agreement may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, modification or waiver that (1) requires
the consent of each Lender directly affected thereby pursuant to the proviso to
the second sentence of Section 10.11 and (2) directly

 

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affects such Participant.  Subject to paragraph (c)(ii) of this Section, the
Borrower agrees that each Participant shall be entitled to the benefits of
Sections 10.16 and 10.17 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to paragraph (b) of this Section. 
To the extent permitted by law, each Participant also shall be entitled to the
benefits of Section 10.19 as though it were a Lender, provided such Participant
shall be subject to Section 10.19 as though it were a Lender.

 

(ii)  A Participant shall not be entitled to receive any greater payment under
Sections 10.16 and 10.17 than the applicable Lender would have been entitled to
receive with respect to the participation sold to such Participant, unless the
sale of the participation to such Participant is made with the Borrower’s prior
written consent.  Any Participant that is a Non-U.S. Lender shall not be
entitled to the benefits of Section 10.17 unless such Participant complies with
Section 2.8.

 

(c)                                  (i)  Subject to the conditions set forth in
paragraph (c)(ii) below, any Lender may assign to one or more assignees (each,
an “Assignee”) all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Term Loan Commitment and or Term
Loans at the time owing to it) with the prior written consent of:

 

(A) the Borrower (such consent not to be unreasonably withheld), provided that
no consent of the Borrower shall be required for an assignment to a Lender, an
Affiliate of a Lender, an Approved Fund or, if an Event of Default under
Section 8(a) or (f) has occurred and is continuing, any other Person; and

 

(B) the Agent (such consent not to be unreasonably withheld), provided that no
consent of the Agent shall be required for an assignment of all or any portion
of a Term Loan to a Lender, an Affiliate of a Lender or an Approved Fund.

 

(ii)                                  Assignments shall be subject to the
following additional conditions:

 

(A) except in the case of an assignment to a Lender, an Affiliate of a Lender or
an Approved Fund or an assignment of the entire remaining amount of the
assigning Lender’s Term Loan Commitment or Term Loans owing to it, the amount of
the Term Loan Commitment or the Term Loans of the assigning Lender subject to
each such assignment (determined as of the date the Assignment and Assumption
with respect to such assignment is delivered to the Agent) shall not be less
than $5,000,000 unless each of the Borrower and the Agent otherwise consent,
provided that (1) no such consent of the Borrower shall be required if an Event
of Default has occurred and is continuing and (2) such amounts shall be
aggregated in respect of each Lender and its Affiliates or Approved Funds, if
any;

 

(B) (1) the parties to each assignment shall execute and deliver to the Agent an
Assignment and Assumption (each an “Assignment and Assumption”), in the form
attached hereto as Exhibit C, with blanks appropriately completed, together with
a processing and recordation fee of $3,500 and (2) the assigning Lender shall
have paid in full any amounts owing by it to the Agent; provided that, (i) no
such processing and recording fee shall be payable in connection with an
assignment to a Lender, an Affiliate

 

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of a Lender or an Approved Fund of a Lender, (ii) only one fee shall be payable
in connection with simultaneous assignments by a Lender to related Approved
Funds and (iii) no such fee shall be payable in connection with assignments
during the ten Business Days following the Closing Date; and

 

(C)                                the Assignee, if it shall not be a Lender,
shall deliver to the Agent an administrative questionnaire in which the Assignee
designates one or more credit contacts to whom all syndicate-level information
(which may contain material non-public information about the Borrower and its
Affiliates and their related parties or their respective securities) will be
made available and who may receive such information in accordance with the
assignee’s compliance procedures and applicable laws, including Federal and
state securities laws.

 

(iii)                               Subject to acceptance and recording thereof
pursuant to paragraph (c)(iv) below, from and after the effective date specified
in each Assignment and Assumption, the Assignee thereunder shall be a party
hereto and, to the extent of the interest assigned by such Assignment and
Assumption, have the rights and obligations of a Lender under this Agreement,
and the assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and Assumption, be released from its obligations
under this Agreement (and, in the case of an Assignment and Assumption covering
all of the assigning Lender’s rights and obligations under this Agreement, such
Lender shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 10.9, 10.10, 10.16 and 10.17).  Any assignment or transfer
by a Lender of rights or obligations under this Agreement that does not comply
with this Section 10.12 shall be treated for purposes of this Agreement as a
sale by such Lender of a participation in such rights and obligations in
accordance with paragraph (b) of this Section.

 

(iv)                              The Agent, acting for this purpose as an agent
of the Borrower, shall maintain at one of its offices a copy of each Assignment
and Assumption delivered to it and a register for the recordation of the names
and addresses of the Lenders, and the Term Loan Commitments of, and principal
amount of the Term Loans owing to, each Lender pursuant to the terms hereof from
time to time (the “Register”).  The entries in the Register shall be conclusive,
and the Borrower, the Agent and the Lenders may treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement, notwithstanding notice to the contrary.

 

(v)                                 Upon its receipt of a duly completed
Assignment and Assumption executed by an assigning Lender and an Assignee, the
Assignee’s completed administrative questionnaire (unless the Assignee shall
already be a Lender hereunder), the processing and recordation fee referred to
in paragraph (c)(ii)(B) of this Section and any written consent to such
assignment required by paragraph (c)(i) of this Section, the Agent shall accept
such Assignment and Assumption and record the information contained therein in
the Register.  No assignment shall be effective for purposes of this Agreement
unless it has been recorded in the Register as provided in this paragraph.

 

(vi)                              Contemporaneously with the receipt by the
Borrower of an Assignment and Assumption and the applicable surrendered Term
Note(s), the Borrower, at its own

 

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expense, shall execute and deliver to the Agent in exchange for the surrendered
Term Note(s), a new Term Note payable to the order of the applicable Assignee in
an amount equal to the applicable Term Loan Commitment, or Term Loans, assumed
by it pursuant to such Assignment and Assumption and, if the assigning Lender
has retained Term Loan Commitment or Term Loans hereunder, a new Term Note to
the order of the assigning Lender in an amount equal to the applicable Term
Loans retained by it hereunder.  Such new Term Notes shall be in an aggregate
principal amount equal to the aggregate principal amount of such surrendered
Term Note(s), shall be dated the effective date of such Assignment and
Assumption and shall otherwise be in substantially the form of the surrendered
Term Note(s).  Such surrendered Term Note shall be marked canceled and returned
to the Borrower..

 

(d)                                 Any Lender may, in connection with any
assignment or participation or proposed assignment or participation pursuant to
this Section 10.12, disclose to the assignee or participant or proposed assignee
or participant, any information relating to any Credit Party and/or any of its
Subsidiaries furnished to such Lender by or on behalf of such Credit Party or
such applicable Subsidiary.

 

(e)                                  Any Lender may at any time pledge or assign
a security interest in all or any portion of its rights under this Agreement to
secure obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest; provided that no such pledge
or assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or Assignee for such Lender
as a party hereto..

 

10.13.                  Entire Agreement.  This Agreement and the other Loan
Documents embody the entire agreement and understanding among the Credit
Parties, the Agent and the Lenders relating to the subject matter hereof and
supersedes all prior proposals, agreements and understandings relating to the
subject matter hereof.  Any conflict between the provisions of this Agreement
and the provisions of any other Loan Documents shall be governed by the
provisions of this Agreement.  The Credit Parties certify that they are relying
on no representation, warranty, covenant or agreement except for those set forth
in this Agreement and the other Loan Documents of even date herewith.

 

10.14.                  Severability.  Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

 

10.15.                  Disclosures.  Every reference in the Loan Documents to
disclosures of the Borrower or any other Credit Party to the Agent and the
Lenders in writing, to the extent that such references refer to disclosures at
or prior to the execution of this Agreement, shall be deemed strictly to refer
only to written disclosures delivered to the Agent and the Lenders in an orderly
manner prior to or concurrently with the execution hereof.

 

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10.16.                  Requirements of Law.

 

(a)                                  If the adoption of or any change in any
Legal Requirement or in the interpretation or application thereof or compliance
by any Lender with any request or directive (whether or not having the force of
law) from any central bank or other Governmental Authority made subsequent to
the date hereof:

 

(i)  shall subject any Lender to any tax of any kind whatsoever with respect to
this Agreement or any Term Loan made by it, or change the basis of taxation of
payments to such Lender in respect thereof (except for Non-Excluded Taxes
covered by Section 10.17 and changes in the rate of tax on the overall net
income of such Lender);

 

(ii)  shall impose, modify or hold applicable any reserve, special deposit,
compulsory loan or similar requirement against assets held by, deposits or other
liabilities in or for the account of, advances, loans or other extensions of
credit by, or any other acquisition of funds by, any office of such Lender that
is not otherwise included in the determination of the Eurodollar Rate; or

 

(iii)    shall impose on such Lender any other condition;

 

and the result of any of the foregoing is to increase the cost to such Lender,
by an amount that such Lender deems to be material, of making, converting into,
continuing or maintaining its Term Loans, or to reduce any amount receivable
hereunder in respect thereof, then, in any such case, the Borrower shall
promptly pay such Lender, upon its demand, any additional amounts necessary to
compensate such Lender for such increased cost or reduced amount receivable.  If
any Lender becomes entitled to claim any additional amounts pursuant to this
paragraph, it shall promptly notify the Borrower (with a copy to the Agent) of
the event by reason of which it has become so entitled.

 

(b)                                 If any Lender shall have determined that the
adoption of or any change in any Legal Requirement regarding capital adequacy or
in the interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on such Lender’s or such corporation’s capital as a
consequence of its obligations hereunder to a level below that which such Lender
or such corporation could have achieved but for such adoption, change or
compliance (taking into consideration such Lender’s or such corporation’s
policies with respect to capital adequacy) by an amount deemed by such Lender to
be material, then from time to time, after submission by such Lender to the
Borrower (with a copy to the Agent) of a written request therefor, the Borrower
shall pay to such Lender such additional amount or amounts as will compensate
such Lender or such corporation for such reduction.

 

(c)                                  A certificate as to any amounts payable
pursuant to this Section 10.16 submitted by any Lender to the Borrower (with a
copy to the Agent) shall be conclusive in the absence of manifest error. The
Borrower shall pay such Lender the amount shown

 

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as due on any such certificate within five days after such Lender delivers such
certificate.  In preparing such certificate, such Lender may employ such
assumptions and allocations of costs and expenses as it shall in good faith deem
reasonable and may use any reasonable averaging and attribution method.  
Notwithstanding anything to the contrary in this Section, the Borrower shall not
be required to compensate a Lender pursuant to this Section for any amounts
incurred more than nine months prior to the date that such Lender notifies the
Borrower of such Lender’s intention to claim compensation therefor; provided
that, if the circumstances giving rise to such claim have a retroactive effect,
then such nine-month period shall be extended to include the period of such
retroactive effect.  The obligations of the Borrower pursuant to this
Section shall survive the termination of this Agreement and the payment of the
Term Loans and all other amounts payable hereunder.

 

10.17.                  Taxes.

 

(a)                                  All payments made by the Borrower under
this Agreement shall be made free and clear of, and without deduction or
withholding for or on account of, any present or future income, stamp or other
taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now
or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority, excluding net income taxes and franchise taxes (imposed
in lieu of net income taxes) imposed on the Agent or any Lender as a result of a
present or former connection between the Agent or such Lender and the
jurisdiction of the Governmental Authority imposing such tax or any political
subdivision or taxing authority thereof or therein (other than any such
connection arising solely from the Agent or such Lender having executed,
delivered or performed its obligations or received a payment under, or enforced,
this Agreement or any other Loan Document).  If any such non-excluded taxes,
levies, imposts, duties, charges, fees, deductions or withholdings
(“Non-Excluded Taxes”) or Other Taxes are required to be withheld from any
amounts payable to the Agent or any Lender hereunder, the amounts so payable to
the Agent or such Lender shall be increased to the extent necessary to yield to
the Agent or such Lender (after payment of all Non-Excluded Taxes and Other
Taxes) interest or any such other amounts payable hereunder at the rates or in
the amounts specified in this Agreement, provided, however, that the Borrower
shall not be required to increase any such amounts payable to any Lender with
respect to any Non-Excluded Taxes (i) that are attributable to such Lender’s
failure to comply with the requirements of paragraph (d) or (e) of this
Section or (ii) that are United States withholding taxes imposed on amounts
payable to such Lender at the time such Lender becomes a party to this
Agreement, except to the extent that such Lender’s assignor (if any) was
entitled, at the time of assignment, to receive additional amounts from the
Borrower with respect to such Non-Excluded Taxes pursuant to this paragraph.

 

(b)                                 In addition, the Borrower shall pay any
Other Taxes to the relevant Governmental Authority in accordance with applicable
law.

 

(c)                                  Whenever any Non-Excluded Taxes or Other
Taxes are payable by the Borrower, as promptly as possible thereafter the
Borrower shall send to the Agent for its own account or for the account of the
relevant Lender, as the case may be, a certified

 

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copy of an original official receipt received by the Borrower showing payment
thereof.  If the Borrower fails to pay any Non-Excluded Taxes or Other Taxes
when due to the appropriate taxing authority or fails to remit to the Agent the
required receipts or other required documentary evidence, the Borrower shall
indemnify the Agent and the Lenders for any incremental taxes, interest or
penalties that may become payable by the Agent or any Lender as a result of any
such failure.

 

(d)                                 Each Lender (or Transferee) that is not a
“U.S. Person” as defined in Section 7701(a)(30) of the Code (a “Non-U.S.
Lender”) shall deliver to the Borrower and the Agent (or, in the case of a
Participant, to the Lender from which the related participation shall have been
purchased) two copies of either U.S. Internal Revenue Service Form W-8BEN or
Form W-8ECI, or, in the case of a Non U.S. Lender claiming exemption from U.S.
federal withholding tax under Section 871(h) or 881(c) of the Code with respect
to payments of “portfolio interest” and a Form W-8BEN, or any subsequent
versions thereof or successors thereto, properly completed and duly executed by
such Non-U.S. Lender claiming complete exemption from, or a reduced rate of,
U.S. federal withholding tax on all payments by the Borrower under this
Agreement and the other Loan Documents.  Such forms shall be delivered by each
Non-U.S. Lender on or before the date it becomes a party to this Agreement (or,
in the case of any Participant, on or before the date such Participant purchases
the related participation).  In addition, each Non-U.S. Lender shall deliver
such forms promptly upon the obsolescence or invalidity of any form previously
delivered by such Non U.S. Lender.  Each Non-U.S. Lender shall promptly notify
the Borrower at any time it determines that it is no longer in a position to
provide any previously delivered certificate to the Borrower (or any other form
of certification adopted by the U.S. taxing authorities for such purpose). 
Notwithstanding any other provision of this paragraph, a Non-U.S. Lender shall
not be required to deliver any form pursuant to this paragraph that such
Non-U.S. Lender is not legally able to deliver.

 

(e)                                  A Lender that is entitled to an exemption
from or reduction of non-U.S. withholding tax under the law of the jurisdiction
in which the Borrower is located, or any treaty to which such jurisdiction is a
party, with respect to payments under this Agreement shall deliver to the
Borrower (with a copy to the Agent), at the time or times prescribed by
applicable law or reasonably requested by the Borrower, such properly completed
and executed documentation prescribed by applicable law as will permit such
payments to be made without withholding or at a reduced rate, provided that such
Lender is legally entitled to complete, execute and deliver such documentation
and in such Lender’s judgment such completion, execution or submission would not
materially prejudice the legal position of such Lender.

 

(f)                                    If the Agent or any Lender determines, in
its sole discretion, that it has received a refund of any Non-Excluded Taxes or
Other Taxes as to which it has been indemnified by the Borrower or with respect
to which the Borrower has paid additional amounts pursuant to this
Section 10.17, it shall pay over such refund to the Borrower (but only to the
extent of indemnity payments made, or additional amounts paid, by the Borrower
under this Section 10.17 with respect to the Non-Excluded Taxes or Other Taxes
giving rise to such refund), net of all out-of-pocket expenses of the Agent or
such

 

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Lender and without interest (other than any interest paid by the relevant
Governmental Authority with respect to such refund); provided, that the
Borrower, upon the request of the Agent or such Lender, agrees to repay the
amount paid over to the Borrower (plus any penalties, interest or other charges
imposed by the relevant Governmental Authority) to the Agent or such Lender in
the event the Agent or such Lender is required to repay such refund to such
Governmental Authority. This paragraph shall not be construed to require the
Agent or any Lender to make available its tax returns (or any other information
relating to its taxes which it deems confidential) to the Borrower or any other
Person.

 

10.18.                  Waiver of Claims.  Each Credit Party hereby waives and
releases the Agent and all Lenders from any and all claims or causes of action
which the Borrower may own, hold or claim in respect of any of them as of the
date hereof.

 

10.19.                  Right of Setoff.  The Lenders each are hereby authorized
at any time and from time to time, without notice to any Credit Party (any such
notice being expressly waived by each Credit Party), to setoff and apply any and
all deposits (general or special, time or demand, provisional or final, whether
or not such setoff results in any loss of interest or other penalty, and
including without limitation all certificates of deposit) at any time held, and
any other funds or property at any time held, and other Indebtedness at any time
owing by the Agent or such Lender to or for the credit or the account of any
such Credit Party against any and all of the Obligations irrespective of whether
or not any of the Obligations are then due and irrespective of whether or not
Agent or such Lender shall have made any demand under this Agreement, the Term
Notes or any other Loan Document.  Each Credit Party also hereby grants to Agent
and to each of the Lenders a security interest in and hereby transfers, assigns,
sets over, and conveys to the Agent and to each of the Lenders, as security for
payment of all Obligations, all such deposits, funds or property of any such
Credit Party or Indebtedness of the Agent or any Lender to any such Credit
Party. Should the right of the Agent or any Lender to realize funds in any
manner set forth hereinabove be challenged and any application of such funds be
reversed, whether by court order or otherwise, the Lenders shall make
restitution or refund to such Credit Party, pro rata in accordance with their
respective Term Loan Commitment Percentages.  Each Lender agrees to promptly
notify the Borrower and the Agent after any such setoff and application,
provided that the failure to give such notice will not affect the validity of
such setoff and application.  The rights of the Agent and the Lenders under this
Section are in addition to other rights and remedies (including without
limitation other rights of setoff) which the Agent or the Lenders may have. 
This Section is subject to the terms and provisions of Section 2.8 hereof.

 

10.20.                  Waiver of Right to Jury Trial.  EXCEPT AS PROHIBITED BY
APPLICABLE LAW, EACH PARTY HERETO HEREBY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT, THE NOTES, ANY OF THE OTHER LOAN
DOCUMENTS OR ANY TRANSACTIONS EVIDENCED THEREBY.

 

10.21.                  Additional Provisions Regarding Collection of Accounts
and other Collateral.

 

(a)                                  Each Credit Party hereby designates and
constitutes the Collateral Agent or the Collateral Agent’s designee as such
Credit Party’s attorney-in-fact with power to

 

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endorse such Credit Party’s name upon any notes, acceptances, checks, drafts,
money orders or other evidence of payment of any Accounts or any other
Collateral that may come into its possession; to sign or endorse such Credit
Party’s name on any invoice, bill of lading or other title or ownership
documents relating to any Accounts or Inventory, drafts against any customers of
any Credit Party, assignments and verifications of Accounts and notices to
customers of any Credit Party; to send verifications of Accounts; and to notify
the U.S. Postal Service authorities to change the address for delivery of mail
addressed to any Credit Party to such address as the Collateral Agent may
designate.  All acts of said attorney or designee are hereby ratified and
approved by each Credit Party, and said attorneys or designee shall not be
liable for any acts of omission or commission, for any error of judgment or for
any mistake of fact or law, provided that the Agent or its designee shall not be
relieved of liability to the extent it is determined by a final judicial
decision that its act, error or mistake constituted gross negligence or willful
misconduct or willful and knowing breach of any Loan Document.  The power of
attorney granted under this subparagraph is coupled with an interest and is
irrevocable until all of the Obligations are paid in full and this Agreement and
the Term Loan Commitments are terminated.

 

(b)                                 The Collateral Agent, without notice to or
consent of any Credit Party, at any time after the occurrence and during the
continuation of an Event of Default, (i) may sue upon or otherwise collect,
extend the time. of payment of, or compromise or settle for cash, credit or
otherwise upon any terms, any of the Accounts or any instruments or insurance
applicable thereto and/or release any account debtor thereon; (ii) is authorized
and empowered to accept or direct shipments of Inventory and accept the return
of the goods represented by any of the Accounts; and (iii) shall have the right
to receive, endorse, assign and/or deliver in its name or the name of any Credit
Party any and all checks, drafts and other instruments for the payment of money
relating to the Accounts, and each Credit Party hereby waives notice of
presentment, protest and non-payment of any instrument so endorsed.

 

(c)                                  Nothing herein contained shall be construed
to constitute any Credit Party as agent of the Collateral Agent for any purpose
whatsoever, and the Collateral Agent shall not be responsible or liable for any
shortage, discrepancy, damage, loss or destruction of any part of the Collateral
wherever the same may be located and regardless of the cause thereof (except to
the extent it is determined by a final judicial decision that the Collateral
Agent’s or a Lender’s act or omission constituted gross negligence of willful
conduct or willful and knowing breach of any Loan Document).  The Collateral
Agent and the Lenders shall not, under any circumstances or in any event
whatsoever, have any liability for any error or omission or delay of any kind
occurring in the settlement, collection or payment of any of the Accounts or any
instrument received in payment thereof or for any damage resulting therefrom
(except to the extent it is determined by a final judicial decision that the
Collateral Agent’s or such Lender’s error, omission or delay constituted gross
negligence or willful misconduct or willful and knowing breach of any Loan
Document).  The Collateral Agent and the Lenders do not, by anything herein or
in any assignment or otherwise, assume any Credit Party’s obligations under any
contract or agreement assigned to the Collateral Agent or the

 

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Lender, and the Collateral Agent and the Lenders shall not be responsible in any
way for the performance by any Credit Party of any of the terms and conditions
thereof.

 

(d)                                 Upon the occurrence and during the
continuation of any Event of Default: (i) if any of the Accounts includes a
charge for any tax payable to any governmental tax authority, the Collateral
Agent is hereby authorized (but in no event obligated) in its discretion to pay
the amount thereof to the proper taxing authority for, the account of any Credit
Party and to charge or any Credit Party’s account therefor; and (ii) the
Borrower shall notify the Collateral Agent if any Accounts include any tax due
to any such taxing authority and, in the absence of such notice, the Collateral
Agent shall have the right to retain the full proceeds of such Accounts and
shall not be liable for any taxes that may be due from any Credit Party by
reason of the sale and delivery creating such Accounts.

 

(e)                                  Upon the occurrence and continuation of any
Event of Default, the Collateral Agent may at any time and from time to time
employ and maintain in the premises of any Credit Party a custodian selected by
the Collateral Agent who shall have full authority to do all acts necessary to
protect the Collateral Agent’s and Lenders’ interests and to report to the
Collateral Agent thereon.  Each Credit Party hereby agrees to cooperate with any
such custodian and to do so whatever the Collateral Agent may reasonably request
to preserve the Collateral.  All costs and expenses incurred by the Collateral
Agent by reason of the employment of the custodian shall be charged to the
Borrower’s account and added to the Obligations.

 

10.22.                  Construction.  Each Credit Party, the Agent and each
Lender acknowledge that each of them has had the benefit of legal counsel of its
own choice and has been afforded an opportunity to review this Agreement and the
other Loan Documents with its legal counsel and that this Agreement and the
other Loan Documents shall be construed as if jointly drafted by the parties
hereto.

 

10.23.                  Joint and Several Obligations.  Notwithstanding anything
to the contrary contained herein or in any other Loan Documents, each Credit
Party acknowledges that it and the other Credit Parties are jointly and
severally responsible for their respective agreements, covenants,
representations, warranties and obligations contained and set forth in this
Agreement or in any other Loan Document to which the applicable Credit Party is
a party.

 

10.24.                  Acknowledgements.  Each Credit Party hereby acknowledges
that:

 

(a)                                  it has been advised by counsel in the
negotiation, execution and delivery of this Agreement and the other Loan
Documents;

 

(b)                                 neither the Agent, the Collateral Agent nor
any Lender has any fiduciary relationship with or duty to any Credit Party
arising out of or in connection with this Agreement or any of the other Loan
Documents, and the relationship between Agent, Collateral Agent and Lenders, on
one hand, and the Credit Parties, on the other hand, in connection herewith or
therewith is solely that of debtor and creditor; and

 

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(c)                                  no joint venture is created hereby or by
the other Loan Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Lenders or among any Credit Parties and the
Lenders.

 

10.25.                  USA Patriot Act.  Each Lender hereby notifies the
Borrower that pursuant to the requirements of the USA Patriot Act (Title III of
Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it may be
required to obtain, verify and record information that identifies the Borrower,
which information includes the name and address of the Borrower and other
information that will allow such Lender to identify the Borrower in accordance
with the Act.

 

10.26.                  Confidentiality.  The Agent and each Lender agrees to
keep confidential all non-public information provided to it by any Credit Party,
the Agent or any Lender pursuant to or in connection with this Agreement that is
financial statements or designated by the provider thereof as confidential;
provided that nothing herein shall prevent the Agent or any Lender from
disclosing any such information (a) to the Agent, any other Lender or any
Affiliate thereof, (b) subject to an agreement to comply with the provisions of
this Section or to any actual or prospective transferee, (c) to its employees,
directors, agents, attorneys, accountants and other professional advisors or
those of any of its Affiliates, (d) upon the request or demand of any
Governmental Authority, (e) in response to any order of any court or other
Governmental Authority or as may otherwise be required pursuant to any Legal
Requirement, (f) if requested or required to do so in connection with any
litigation or similar proceeding, (g) that has been publicly disclosed, (h) to
the National Association of Insurance Commissioners or any similar organization
or any nationally recognized rating agency that requires access to information
about a Lender’s investment portfolio in connection with ratings issued with
respect to such Lender, or (i) in connection with the exercise of any remedy
hereunder or under any other Loan Document.

 

10.27.                  Financial Assistance Limitations. Notwithstanding any
provision of this Agreement or any of the other Loan Documents to the contrary,
no Canadian Subsidiary or other non-Domestic Subsidiary will ever be deemed or
required to become a Credit Party, nor shall any of the assets of any Canadian
Subsidiary or non-Domestic Subsidiary be deemed or required to be Collateral for
any Obligations.

 

[Remainder of Page Left Blank Intentionally]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date set forth above.

 

 

JPMORGAN CHASE BANK, N.A.,

 

as Agent and as a Lender

 

 

 

By:

/s/ Michael Lister

 

Name:

Michael Lister

 

Title:

Managing Director

 

 

 

 

 

Address for Payments:

 

 

 

JPMorgan Chase Bank, N.A.

 

Attn: Latanya D. Driver

 

JP Morgan Loan Services

 

10 South Dearborn, 7th Floor

 

Chicago, Illinois 60603-7073

 

Telephone: (312) 385-7073

 

Facsimile: (888) 266-8058

 

 

 

 

 

Payment Instructions:

 

Pay to:

JPMorgan Chase Bank, N.A.

 

ABA No.:

021000021

 

Acct. No.:

9008113381C3614

 

Ref:

WALCO Int’l

 

 

 

Other Notices as Agent (for financial reporting):

 

 

 

JPMorgan Chase Bank, N.A.

 

Attn: Scott harvey

 

2200 Ross Avenue, 3rd Floor

 

Dallas, Texas 75201

 

Telephone: (214) 965-3003

 

Facsimile: (214) 965-2044

 

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

 

 

WALCO INTERNATIONAL, INC.,

 

a Delaware corporation, as Borrower

 

 

 

By:

/s/ William F. Lacey

 

Name:

William F. Lacey

 

Title:

Sr. V.P. & CFO

 

 

 

 

 

Address for Notices:

 

Walco International, Inc.

 

7 Village Circle, Suite 200

 

Westlake, Texas 76262

 

Attention: William F. Lacey

 

Facsimile: (817) 601-6094

 

 

 

With a copy to:

 

Mark D. Smith, Esq.

 

Goodwin Procter LLP

 

Exchange Place

 

53 State Street

 

Boston, MA 02109

 

 

 

and

 

 

 

Animal Health International, Inc

 

Attn: Legal Department

 

7 Village Circle, Ste 200

 

Westlake, TX 76262

 

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

 

 

ANIMAL HEALTH INTERNATIONAL, INC.,

 

a Delaware corporation, as Parent

 

 

 

By:

/s/ Damian Olthoff

 

Name:

Damian Olthoff

 

Title:

General Counsel & Secretary

 

 

 

Address for Notices:

 

c/o Walco International, Inc.

 

7 Village Circle, Suite 200

 

Westlake, Texas 76262

 

Attention: William F. Lacey

 

Facsimile: (817) 601-6094

 

 

 

With a copy to:

 

Mark D. Smith, Esq.

 

Goodwin Procter LLP

 

Exchange Place

 

53 State Street

 

Boston, MA 02109

 

 

 

and

 

 

 

Animal Health International, Inc

 

Attn: Legal Department

 

7 Village Circle, Ste 200

 

Westlake, TX 76262

 

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

 

 

AMERICAN LIVESTOCK SUPPLY, INC.,

 

a Delaware corporation, as a Guarantor

 

 

 

By:

/s/ Damian Olthoff

 

Name:

Damian Olthoff

 

Title:

Secretary

 

 

 

Address for Notices:

 

c/o Walco International, Inc.

 

7 Village Circle, Suite 200

 

Westlake, Texas 76262

 

Attention: William F. Lacey

 

Facsimile: (817) 601-6094

 

 

 

With a copy to:

 

Mark D. Smith, Esq.

 

 

 

Goodwin Procter LLP

 

Exchange Place

 

53 State Street

 

Boston, MA 02109

 

 

 

and

 

 

 

Animal Health International, Inc

 

Attn: Legal Department

 

7 Village Circle, Ste 200

 

Westlake, TX 76262

 

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

 

 

WALCO TEXAS ANIMAL HEALTH, LLC,

 

a Texas limited liability company, as a Guarantor

 

 

 

By:

Walco International, Inc.

 

 

Sole Member

 

 

 

 

By:

/s/ William F. Lacey

 

Name:

William F. Lacey

 

Title:

Sr. V.P. & CFO

 

 

 

 

 

Address for Notices:

 

c/o Walco International, Inc.

 

7 Village Circle, Suite 200

 

Westlake, Texas 76262

 

Attention: William F. Lacey

 

Facsimile: (817) 601-6094

 

 

 

With a copy to:

 

Mark D. Smith, Esq.

 

Goodwin Procter LLP

 

Exchange Place

 

53 State Street

 

Boston, MA 02109

 

 

 

and

 

 

 

Animal Health International, Inc

 

Attn: Legal Department

 

7 Village Circle, Ste 200

 

Westlake, TX 76262

 

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

 

 

HAWAII MEGA-COR., INC.,

 

a Hawaii corporation, as a Guarantor

 

 

 

 

 

By:

/s/ Damian Olthoff

 

Name:

Damian Olthoff

 

Title:

Secretary

 

 

 

Address for Notices:

 

c/o Walco International, Inc.

 

7 Village Circle, Suite 200

 

Westlake, Texas 76262

 

Attention: William F. Lacey

 

Facsimile: (817) 601-6094

 

 

 

With a copy to:

 

Mark D. Smith, Esq.

 

Goodwin Procter LLP

 

Exchange Place

 

53 State Street

 

Boston, MA 02109

 

 

 

and

 

 

 

Animal Health International, Inc

 

Attn: Legal Department

 

7 Village Circle, Ste 200

 

Westlake, TX 76262

 

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

 

EXHIBIT A

 

FORM OF TERM NOTE

 

TERM NOTE

 

$

 

, 2010

 

FOR VALUE RECEIVED, WALCO INTERNATIONAL, INC., a Delaware corporation (herein
called “Borrower”), promises to pay to the order of [                  ] (herein
called “Payee”), at the banking office of JPMorgan Chase Bank, N.A., acting in
its capacity as Agent under the Credit Agreement (as defined below) (together
with its successors and assigns in such capacity being herein called “Agent”),
located at 2200 Ross Avenue, 3rd Floor, Dallas, Texas 75201, or at such other
place as Agent may hereafter designate in writing, in immediately available
funds and in lawful money of the United States of America, the principal sum of
                                      Dollars ($                       ), (or
the unpaid balance of all principal advanced against this note, if that amount
is less), together with interest on the unpaid principal balance of this note
from time to time outstanding until maturity at the rate or rates provided for
in the Credit Agreement and interest on all past due amounts, both principal and
accrued interest, at the Default Rate; provided, that for the full term of this
note, the interest rate produced by the aggregate of all sums paid or agreed to
be paid to the holder of this note for the use, forbearance or detention of the
debt evidenced hereby shall not exceed the Highest Lawful Rate, if any,
applicable to Payee.

 

If, for any reason whatever, the interest paid or received on this note during
its full term produces a rate which exceeds the Highest Lawful Rate, if any,
applicable to Payee, the holder of this note shall refund to the payor or, at
the holder’s option, credit against the principal of this note such portion of
said interest as shall be necessary to cause the interest paid on this note to
produce a rate equal to the Highest Lawful Rate, if any, applicable to Payee. 
All sums paid or agreed to be paid to the holder of this note for the use,
forbearance or detention of the indebtedness evidenced hereby shall, to the
extent permitted by applicable law, be amortized, prorated, allocated and spread
in equal parts throughout the full term of this note, so that the interest rate
is uniform throughout the full term of this note.

 

This note has been issued pursuant to the terms of a Term Loan Credit Agreement
(which, as it may have been or may be amended, restated, modified or
supplemented from time to time, is herein called the “Credit Agreement”) dated
as of November       , 2010, by and among Borrower, Agent, Payee, each of the
Credit Parties which is now or hereafter a Guarantor thereunder, and certain
other signatory financial institutions named therein or which may be a party
thereto from time to time, to which reference is made for all purposes.  This
note is a Term Note under the terms of the Credit Agreement, and the single
advance against this note by Payee or other holder hereof, payments and
prepayments hereunder and acceleration hereof shall be governed by the Credit
Agreement. Capitalized words and phrases used herein and not defined herein and
which are defined in the Credit Agreement shall have the same meanings herein as
are ascribed to them in the Credit Agreement.

 

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

 

The unpaid principal balance of this note at any time shall be the total of all
principal lent or advanced against this note less the sum of all principal
payments and permitted prepayments made on this note by or for the account of
Borrower.  All loans and advances and all payments and permitted prepayments
made hereon may be endorsed by the holder of this note on the schedule which is
attached hereto (and hereby made a part hereof for all purposes) or otherwise
recorded in the holder’s records; provided, that any failure to make notation of
(a) any advance shall not cancel, limit or otherwise affect Borrower’s
obligations or any holder’s rights with respect to that advance, or (b) any
payment or permitted prepayment of principal shall not cancel, limit or
otherwise affect Borrower’s entitlement to credit for that payment as of the
date received by the holder.

 

Borrower and any and all co-makers, endorsers, guarantors and sureties severally
waive notice (including, but not limited to, notice of intent to accelerate and
notice of acceleration, notice of protest and notice of dishonor), demand,
presentment for payment, protest, diligence in collecting and the filing of suit
for the purpose of fixing liability and consent that the time of payment hereof
may be extended and re-extended from time to time without notice to any of
them.  Each such person agrees that his, her or its liability on or with respect
to this note shall not be affected by any release of or change in any guaranty
or security at any time existing or by any failure to perfect or maintain
perfection of any lien against or security interest in any such security or the
partial or complete unenforceability of any guaranty or other surety obligation,
in each case in whole or in part, with or without notice and before or after
maturity.

 

THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK (OTHER THAN THE CONFLICTS OF LAWS PRINCIPLES THEREOF) AND THE
UNITED STATES OF AMERICA FROM TIME TO TIME IN EFFECT.

 

 

WALCO INTERNATIONAL, INC.,

 

a Delaware corporation

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

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

 

EXHIBIT B

 

OFFICER’S CERTIFICATE

 

Date:

 

[Name and address of Lender

or Agent, as the case may be]

 

Attention:

 

Re:                               Financial Statements Required under Term Loan
Credit Agreement (as the same may have been amended, modified and restated from
time to time, the “Credit Agreement”) dated as of November       , 2010, by and
among Walco International, Inc., the financial institutions party thereto from
time to time, each of the Credit Parties which is now or hereafter a Guarantor
thereunder, and JPMorgan Chase Bank, N.A., as Agent

 

Ladies and Gentlemen:

 

Capitalized words and phrases used herein and not defined herein and defined in
the Credit Agreement are used herein with the same meanings as are assigned to
them in the Credit Agreement.

 

The undersigned hereby certifies, warrants and represents to the addressee named
above that to the best knowledge of the undersigned:

 

(1)                                  He or she is the duly appointed and acting
[Insert title of executing Responsible Officer] of Borrower;

 

(2)                                  The attached financial statements dated as
of  were prepared in conformity with GAAP consistently applied, subject only to
normal and customary adjustments, and present fairly the financial position of
Parent and its Subsidiaries, on a Consolidated and, if applicable, a
consolidating basis, as of the date thereof and the results of its operations
for the period covered thereby.

 

(3)                                  The following constitute true, correct and
complete financial calculations, in accordance with the applicable provisions of
the Credit Agreement (it being understood and agreed that some of such
applicable provisions of the Credit Agreement may cause such financial
calculations to not be in accordance with GAAP), for the Parent and its
Subsidiaries, on a Consolidated basis, as of the end of the period covered by
the attached financial statements:

 

(a)                                  FIXED CHARGE COVERAGE RATIO:

 

(i)

EBITDA (see calculation below):

$

 

 

 

 

 

(ii)

Unfinanced Capital Expenditures:

$

 

 

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

 

(iii)

cash payments of federal, state, and local income or franchise taxes:

$

 

 

 

 

 

(iv)

[Line (i) less Line (ii) less Line (iii)]:

$

 

 

 

 

 

(v)

Debt Service Expense:

$

 

 

 

 

 

(vi)

cash Interest Expense:

$

 

 

 

 

 

(vii)

Unfinanced Cash Dividends

$

 

 

 

 

 

(viii)

[Line (v) plus Line (vi) and Line (vii)]:

$

 

 

 

 

 

(ix)

Actual Fixed Charge Coverage Ratio [ratio of Line (iv) to Line (viii)]:

 

      to 1.00

 

 

 

 

(x)

Required Fixed Charge Coverage Ratio:

 

[1.00] to 1.00

 

(b)                                 LEVERAGE RATIO:

 

(i)

Fund Debt:

$

 

 

 

 

 

(ii)

EBITDA (see calculation below):

$

 

 

 

 

 

(iii)

Actual Leverage Ratio [ratio of Line (i) to Line (ii)]:

 

       to 1.00

 

 

 

 

(iv)

Required Leverage Ratio:

 

[          ] to 1.00

 

(c)                                  CAPITAL EXPENDITURES:

 

(i)

Actual Capital Expenditures for current fiscal year:

 

$

                   

 

 

 

 

(ii)

Maximum Allowed Capital Expenditures each fiscal year:

 

$

[6,000,000]

 

(d)                                 EBITDA:

 

(i)

Net Income:

$

 

 

 

 

 

(ii)

Interest Expense:

$

 

 

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

 

(iii)

Federal, state and local income and franchise taxes:

$

 

 

 

 

 

(iv)

depreciation and amortization expense:

$

 

 

 

 

 

(v)

any extraordinary charges:

$

 

 

 

 

 

(vi)

customary and reasonable director’s fees and board expenses for board of
directors of the Credit Parties:

$

 

 

 

 

 

(vii)

amounts used to repurchasefrom Charlesbank and/or any of its Affiliates the
equity securities of the Parent to the extent included within PermittedAffiliate
Transactions:

$

 

 

 

 

 

(viii)

any other non-cash charges (including without limitation, (A) the issuance of
restricted stock or stock options, (B) equity losses of Affiliates that are not
a Subsidiary of any Credit Party, and (C) all charges attributable to the use of
the purchase accounting method), but excluding any non-cash charge in respect of
an item that was included in Net Income in a prior period and any non-cash
charge that relates to the write-down or write-off of Inventory:

$

 

 

 

 

 

(ix)

[Sum of Lines (i) through (viii)]:

$

 

 

 

 

 

(x)

cash payments made during such period in respect of non-cash charges described
in clause (viii)above taken in a prior period:

$

 

 

 

 

 

(xi)

any extraordinary gains and any non-cash items of income:

$

 

 

 

 

 

(xii)

[Line (x) plus Line (xi)]:

$

 

 

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

 

(xiii)

Actual EBITDA [Line (ix)minus Line (xii)]

$

 

 

(4)                                  The undersigned hereby certifies to his or
her best knowledge as follows:

 

(a)                                  each representation or warranty of the
Credit Parties set forth in the Credit Agreement or any other Loan Document is
true and correct in all material respects on and as of the date hereof with the
same effect as though such representations and warranties had been made on and
of this date, except for (i) those representations and warranties which relate
only to the Closing Date or (ii) such changes in the representations and
warranties otherwise permitted by the terms of the Credit Agreement; and

 

(b)                                 no Event of Default or Default under the
Credit Agreement has occurred and is still continuing.

 

 

 

 

Name:

 

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

 

EXHIBIT C

 

ASSIGNMENT AND ASSUMPTION

 

ASSIGNMENT AND ASSUMPTION

 

This Assignment and Assumption (the “Assignment and Assumption”) is dated as of
the Effective Date set forth below and is entered into by and between [Insert
name of Assignor] (the “Assignor”) and [Insert name of Assignee] (the
“Assignee”).  Capitalized terms used but not defined herein shall have the
meanings given to them in the Credit Agreement identified below  (as amended,
the “Credit Agreement”), receipt of a copy of which is hereby acknowledged by
the Assignee.  The Standard Terms and Conditions set forth in Annex 1 attached
hereto are hereby agreed to and incorporated herein by reference and made a part
of this Assignment and Assumption as if set forth herein in full.

 

For an agreed consideration, the Assignor hereby irrevocably sells and assigns
to the Assignee, and the Assignee hereby irrevocably purchases and assumes from
the Assignor, subject to and in accordance with the Standard Terms and
Conditions and the Credit Agreement, as of the Effective Date inserted by the
Agent as contemplated below (i) all of the Assignor’s rights and obligations in
its capacity as a Lender under the Credit Agreement and any other documents or
instruments delivered pursuant thereto to the extent related to the amount and
percentage interest identified below of all of such outstanding rights and
obligations of the Assignor under the respective facilities identified below
(including any letters of credit, guarantees, and swingline loans included in
such facilities) and (ii) to the extent permitted to be assigned under
applicable law, all claims, suits, causes of action and any other right of the
Assignor (in its capacity as a Lender) against any Person, whether known or
unknown, arising under or in connection with the Credit Agreement, any other
documents or instruments delivered pursuant thereto or the loan transactions
governed thereby or in any way based on or related to any of the foregoing,
including contract claims, tort claims, malpractice claims, statutory claims and
all other claims at law or in equity related to the rights and obligations sold
and assigned pursuant to clause (i) above (the rights and obligations sold and
assigned pursuant to clauses (i) and (ii) above being referred to herein
collectively as the “Assigned Interest”).  Such sale and assignment is without
recourse to the Assignor and, except as expressly provided in this Assignment
and Assumption, without representation or warranty by the Assignor.

 

1.

 

Assignor:

 

 

 

 

 

 

 

 

 

2.

 

Assignee:

 

 

 

 

 

 

 

[and is an Affiliate/Approved Fund of [identify Lender](1)]

 

 

 

 

 

3.

 

Borrower:

 

Walco International, Inc.

 

 

 

 

 

4.

 

Agent:

 

JPMorgan Chase Bank, N.A., as the administrative agent under the Credit
Agreement

 

 

 

 

 

5.

 

Credit Agreement:

 

The $43,000,000 Term Loan Credit Agreement dated as of                , 2010,
among Walco International, Inc., the Lenders parties thereto, JPMorgan Chase
Bank, N.A., as Agent

 

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

(1)  Select as applicable.

 

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

 

6.                                       Assigned Interest:

 

Aggregate Amount of 
Total Term Loan 
Commitment/Term Loans 
for all Lenders

 

Amount of Total Term 
Loan Commitment/Term 
Loans Assigned

 

Percentage Assigned of Total 
Term Loan 
Commitment/Term Loans(2)

 

$

 

 

$

 

 

 

%

$

 

 

$

 

 

 

%

$

 

 

$

 

 

 

%

 

Effective Date:                                   , 20       [TO BE INSERTED BY
AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE
REGISTER THEREFOR.]

 

The Assignee agrees to deliver to the Agent a completed Administrative
Questionnaire in which the Assignee designates one or more credit contacts to
whom all syndicate-level information (which may contain material non-public
information about the Borrower, the Credit Parties and their Related Parties or
their respective securities) will be made available and who may receive such
information in accordance with the Assignee’s compliance procedures and
applicable laws, including Federal and state securities laws.

 

The terms set forth in this Assignment and Assumption are hereby agreed to:

 

 

ASSIGNOR

 

 

 

[NAME OF ASSIGNOR]

 

 

 

 

 

By:

 

 

Title:

 

 

 

 

 

ASSIGNEE

 

 

 

[NAME OF ASSIGNEE]

 

 

 

 

 

By:

 

 

Title:

 

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

(2)  Set forth, to at least 9 decimals, as a percentage of the Total Term Loan
Commitment/Term Loans of all Lenders thereunder.

 

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

 

[Consented to and](3) Accepted:

 

 

 

JPMORGAN CHASE BANK, N.A.,

 

as Agent

 

 

 

By

 

 

Title:

 

 

 

 

 

[Consented to:](4)

 

 

 

WALCO INTERNATIONAL, INC.,

 

as Borrower

 

 

 

By

 

 

Title:

 

 

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

(3)  To be added only if the consent of the Agent is required by the terms of
the Credit Agreement.

(4)  To be added only if the consent of the Borrower is required by the terms of
the Credit Agreement.

 

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

 

ANNEX 1

 

TERM LOAN CREDIT AGREEMENT

 

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

 

1.  Representations and Warranties.

 

1.1  Assignor.  The Assignor (a) represents and warrants that (i) it is the
legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest
is free and clear of any lien, encumbrance or other adverse claim and (iii) it
has full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby; and (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with the
Credit Agreement or any other Loan Document, (ii) the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Loan
Documents or any collateral thereunder, (iii) the financial condition of the
Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in
respect of any Loan Document or (iv) the performance or observance by the
Borrower, any of its Subsidiaries or Affiliates or any other Person of any of
their respective obligations under any Loan Document.

 

1.2.  Assignee.  The Assignee (a) represents and warrants that (i) it has full
power and authority, and has taken all action necessary, to execute and deliver
this Assignment and Assumption and to consummate the transactions contemplated
hereby and to become a Lender under the Credit Agreement, (ii) it satisfies the
requirements, if any, specified in the Credit Agreement that are required to be
satisfied by it in order to acquire the Assigned Interest and become a Lender,
(iii) from and after the Effective Date, it shall be bound by the provisions of
the Credit Agreement as a Lender thereunder and, to the extent of the Assigned
Interest, shall have the obligations of a Lender thereunder, (iv) it has
received a copy of the Credit Agreement, together with copies of the most recent
financial statements delivered pursuant to Section 5.2 thereof, as applicable,
and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into this Assignment and
Assumption and to purchase the Assigned Interest on the basis of which it has
made such analysis and decision independently and without reliance on the Agent
or any other Lender, and (v) if it is a Non-US Lender, attached to the
Assignment and Assumption is any documentation required to be delivered by it
pursuant to the terms of the Credit Agreement, duly completed and executed by
the Assignee; and (b) agrees that (i) it will, independently and without
reliance on the Agent, the Assignor or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Loan
Documents, and (ii) it will perform in accordance with their terms all of the
obligations which by the terms of the Loan Documents are required to be
performed by it as a Lender.

 

2.  Payments.  From and after the Effective Date, the Agent shall make all
payments in respect of the Assigned Interest (including payments of principal,
interest, fees and other amounts) to the Assignor for amounts which have accrued
to but excluding the Effective Date and to the Assignee for amounts which have
accrued from and after the Effective Date.

 

3.  General Provisions. This Assignment and Assumption shall be binding upon,
and inure to the benefit of, the parties hereto and their respective successors
and assigns.  This Assignment and Assumption may be executed in any number of
counterparts, which together shall constitute one instrument.  Delivery of an
executed counterpart of a signature page of this Assignment and Assumption by
facsimile shall be effective as delivery of a manually executed counterpart of
this Assignment and

 

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

 

Assumption.  This Assignment and Assumption shall be governed by, and construed
in accordance with, the law of the State of New York.

 

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

 

SCHEDULE 1.1(A)
REAL ESTATE

 

1.               550 East Frye Road, Suite I
Chandler, Arizona 85225
(Maricopa County)

 

2.               1203 N. Imperial Avenue
El Centra, CA 92243
(Imperial County)
[Borrower is in the process of selling this property.]

 

3.               303 8th Avenue
Greeley, Colorado 80631
(Weld County)

 

4.               Main & Lafayette Streets
343 W. Main Street
Mayo, Florida 32066
(Lafayette County)

 

5.               10418 Main Street
Thonotosassa, Florida 33592
(Hillsborough County)

 

6.               203 4th Avenue West
P.O. Box 1275
Twin Falls, Idaho 83301
(Twin Falls County)

 

7.               1210 East Trail Street
P.O. Box 1635
Fort Dodge Road
Dodge City, Kansas 67801
(Ford County)

 

8.               3390 W. Jones Avenue
P.O. Box 475
Garden City, Kansas 67846
(Finney County)

 

9.               3490 Jones Avenue
Garden City, Kansas 67846
(Finney County)

 

10.         1449-A West Old Highway 40
Salina, Kansas 67401
(Salina County)

 

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

 

11.         1517 Highway 54 N.E.
P.O. Box 827
Guymon, Oklahoma 73942
(Texas County)

 

12.         7100 West Reno Avenue
Oklahoma City, Oklahoma 73127
(Oklahoma County)

 

13.         1601 East Rice Street
Sioux Falls, South Dakota 57103
(Minnehaha County)

 

14.         2840 Vanocker Road
P.O. Box 849
Sturgis, South Dakota 57785
(Meade County)

 

15.         310 S. Manhattan (1 acre empty lot)
Amarillo, Texas 79104
(Potter County)

 

16.         2912 SE 3rd Avenue
P.O. Box 30428
Amarillo, Texas 79104
(Potter County)

 

17.         9602 South Washington Street
Amarillo, Texas 79118
(Randall County)

 

18.         25 Dupree Drive
P.O. Box 1440
Buda, Texas 78610
(Hays County)

 

19.         806 West 7th Street
P.O. Box 245
Dalhart, Texas 79022
(Dallas County)

 

20.         2112 Jo Drive
DeSoto, Texas 79022
(Dallas County)

 

21.         11199 Rojas Drive
El Paso, Texas 75115
(El Paso County)

 

11

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

 

22.         3054 W. Washington Street
Highway 377 West
P.O. Box 954
Stephenville, Texas 76401
(Erath County)

 

23.         2921 Central Freeway North
P.O. Box 3098
Wichita Falls, Texas 76306
(Wichita County)

 

24.         640 and 620 South Main Street
Spanish Fork, UT 84660
(Utah County)
NOTE: Borrower received notice from UTDOT in April 2009 that all or a portion of
this property may be required for a public roadway project.

 

Third Party Rights to Use or Occupy Owned Properties

 

1.                                       On July 27, 2004, Borrower entered into
an Agreement with Newport Laboratories, Inc. (“Newport”) whereby Borrower agreed
to allow Newport to use specified assets (specifically CAVL’s customer list, a
portion of the Amarillo facility, specified equipment, and the “CAVL” name
except in establishing any vendor accounts) in return for a royalty on all
vaccine sales by Newport to CAVL customers existing on March 1, 2004.  In
conjunction with the lease described above, Newport has the right to use a
portion of the property located at 9602 South Washington Street, Amarillo, TX.

 

12

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

 

SCHEDULE 1.1(B)

 

TERM LOAN COMMITMENTS

 

Lender

 

Commitment

 

 

 

 

 

 

JPMorgan Chase Bank, N.A.

 

$

43,000,000

 

 

 

 

 

 

Total Commitments

 

$

43,000,000

 

 

13

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

 

SCHEDULE 5.4

 

OTHER DEBT

 

None

 

14

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

 

SCHEDULE 5.5

 

LITIGATION

 

Bill Risinger d/b/a Risinger Farms v. Intervet, Inc., Friona Industries, Walco
International, Inc., et al; Cause No. CJ-2003-372; State of Texas, District
Court, Jackson County [Originally filed on September 23, 2003].  Plaintiff, Bill
Risinger d/b/a Risinger Farms alleged negligence, manufacture and sale of a
defective product, failure to properly test a product in compliance with
industry standards, and delivery of a “bad batch” of vaccine.  Claim resulted
from damages alleged to have been incurred incident to the use of a vaccine
manufactured and marketed by Intervet and sold to the Plaintiff by Hi-Pro Animal
Health, a division of Friona Industries, L. P. (“Friona”) in July, 2001.  Walco
was joined in the lawsuit after its acquisition of Friona’s Hi-Pro Animal Health
division.  Zurich, Intervet’s insurer has indemnified and defended Walco. 
Plaintiff is attempting to certify this case as a class action lawsuit.  This
case is currently in the discovery phase and the pleadings allege damages “in
excess of $10,000.”

 

Korniak v. Norbrook Industries USA, Inc., et al.; Cause No 37D01-0903-CT-133,
State of Indiana, Jasper Superior Court [Filed on March 23, 2009].  Plaintiff
and his spouse allege negligence, strict liability, breach of duty to warn,
breach of implied warranty of merchantability, and loss of spousal consortium. 
Claim resulted from personal injuries alleged to have incurred incident to an
explosion associated with an endectocide manufactured by either First Priority
or Norbrook Industries, and distributed under a Walco brand.  Walco believes
that the endectocide was not a Walco product, and is seeking dismissal with
prejudice.  Plaintiff claims that he repackaged the product into a competing
product packaging prior to the incident.  This case is currently in the
discovery phase.  Walco’s exposure in this matter is limited to its self
insurance retention of $50,000.

 

Walco International, Inc. v. CSR Summitt, Inc.; Cause No. 342 244265 10; State
of Texas, District Court, Tarrant County [Originally filed on March 15, 2010]. 
Walco, to secure favorable venue, filed seeking declaratory relief against CSR
in response to repeated threats of litigation by CSR.  CSR’s threats arise out
of a memorandum distributed by Walco to Walco’s customers regarding CSR’s sale
of Walco branded products in violation of applicable state laws.  This case is
currently in the discovery phase.

 

This Schedule does not include open insurance claims or other claims covered by
insurance.

 

15

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

 

SCHEDULE 5.6

 

TAXES DISPUTES/DELAYED FILINGS

 

None

 

16

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

 

SCHEDULE 5.8
SUBSIDIARIES

 

Credit Party

 

Subsidiary and Jurisdiction 
of Incorporation or 
Organization

 

Percentage of the Credit 
Party’s Ownership of the 
Equity Interests of the 
Subsidiary

Walco International, Inc. (Borrower), a Delaware corporation

 

Walco do Brasil Produtos Veterinarios Ltda., a Brazilian corporation*

 

Credit Party owns 999 quotas; Luis Eduardo Schoueri owns 1 quota

 

 

Walco Mexico, S.A. De C.V., a Mexican corporation*

 

Credit Party owns 9,999 shares; Jose Francisco Hinojosa Cuellar owns 1 share

 

 

American Livestock and Pet Supply, Inc., a Delaware corporation

 

100%

 

 

Walco Texas Animal Health, LLC, a Texas limited liability company

 

100%

 

 

KVSL Financing L.P., an Alberta corporation

 

99% Borrower
1% Walco Texas Animal Health LLC

 

 

Kane Veterinary Supplies Ltd., an Alberta corporation

 

100%

 

 

Hawaii Mega-Cor., Inc., a Hawaii corporation

 

100%

 

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

*                 Inactive.  Information provided is based on records available
to the Borrower that may be incomplete and/or outdated.

 

Inactive Subsidiaries

 

1.               Walco do Brasil Productos Veterinarios Ltda., a Brazilian
corporation

2.               Walco Mexico, S.A. De C.V., a Mexican corporation

3.               KVSL Financing L.P., an Alberta corporation

 

17

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

 

SCHEDULE 5.12
REAL PROPERTY LEASES

 

Tenant Name

 

Landlord Name

 

City

 

State

 

Zip Code

 

Lease 
Date

 

Address

 

 

 

 

 

 

 

 

 

 

 

 

 

Kane Veterinary Supplies, Ltd.

 

WAM City West GP, Inc.

 

Edmonton

 

AB

 

T5S2W2

 

06/01/04

 

11204/11212 - 186th St., NW

Walco International, Inc.

 

Roger Dunn

 

Boaz

 

AL

 

35950

 

05/01/00

 

990 River Oaks Road

Walco International, Inc.

 

Oscar M. Hall Marital Trust

 

Springdale

 

AR

 

72764-4628

 

04/01/10

 

1202 ESI Drive

Walco International, Inc.

 

Oscar M. Hall Marital Trust

 

Springdale

 

AR

 

72764-4628

 

04/01/10

 

1204 ESI Drive

Walco International, Inc.

 

Paul E. Blackmer, D.V.M. and Bonnie Blackmer Revocable Trust, dated 4/3/87

 

Bakersfield

 

CA

 

93314

 

11/17/06

 

830 & 900 Enos Lane

Walco International, Inc.

 

Paul E. Blackmer, D.V.M. and Bonnie Blackmer Revocable Trust, dated 4/3/87

 

Bakersfield

 

CA

 

93314

 

04/01/09

 

830 & 900 Enos Lane (New Warehouse)

Walco International, Inc.

 

Rockefeller Drive Investments L.P.

 

Ceres

 

CA

 

95307

 

06/25/03

 

1910 Rockefeller Drive

Walco International, Inc.

 

Industry Way Properties, LLC

 

El Centro

 

CA

 

92243

 

05/10/10

 

1099 Industry Way

Walco International, Inc.

 

Safari Industrial Corporation

 

Ontario

 

CA

 

91761-8009

 

04/01/04

 

1906 E. Cedar Avenue

Walco International, Inc.

 

Andrew F. & Beverly Ann Giambroni, Trustees of the

 

Red Bluff

 

CA

 

96080

 

09/01/98

 

115 Metzger Road

Walco International, Inc.

 

Tucker B. Partners, LLC

 

Visalia

 

CA

 

93792

 

03/08/07

 

8711 W. Doe Avenue

Walco International, Inc.

 

Walker, LLC

 

Okeechobee

 

FL

 

34974

 

06/01/03

 

2300 Northwest 9th St.

Hawaii Mega-Cor., Inc.

 

INJ, LLC

 

Aiea

 

HI

 

96701

 

01/01/05

 

99-940 Iwaena Street

Hawaii Mega-Cor., Inc.

 

GAC Investment, L.L.C.

 

Aiea

 

HI

 

96817

 

07/24/08

 

99-045 Koaha Way

Walco International, Inc.

 

Glenn & Delsa Bertelmann

 

Kamuela

 

HI

 

96743

 

01/01/08

 

64-879 Mamalahoa Hwy.

Walco International, Inc.

 

Oasis Enterprises LLC

 

Kawaihae

 

HI

 

96743

 

07/09/09

 

61-3788 Maluokalani Place

Walco International, Inc.

 

GF Land Partnership

 

Spencer

 

IA

 

51301

 

07/15/06

 

1401 38th Avenue W

Walco International, Inc.

 

Col-Tan LLC

 

Caldwell

 

ID

 

83605

 

10/19/06

 

321 N. 21st Avenue

Walco International, Inc.

 

Retiremen, LLC

 

Twin Falls

 

ID

 

83301

 

12/25/07

 

201 -5th Avenue West

Walco International, Inc.

 

Garden City Leasing Company LLC

 

Garden City

 

KS

 

67846

 

01/10/05

 

3997 West Jones Ave.

Walco International, Inc.

 

Diana Jenkens

 

Scott City

 

KS

 

67871

 

08/15/07

 

700 E. Fifth Street

Walco International, Inc.

 

Keith & Darla Van

 

St. John

 

KS

 

67576

 

07/01/08

 

106 West Third

 

18

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

 

 

 

Doren

 

 

 

 

 

 

 

 

 

 

Walco International, Inc.

 

BFCO, Inc.

 

Wichita

 

KS

 

67213

 

11/01/01

 

3031 W. Pawnee, Ste 400

Walco International, Inc.

 

Camary Properties L.L.C.

 

Hammond

 

LA

 

70405

 

04/01/05

 

1215 E.Morris St., Suite Al

Walco International, Inc.

 

D & D Investments, L.L.C.

 

Great Falls

 

MT

 

59401

 

05/01/10

 

1520 River Drive North

Walco International, Inc.

 

Warrren & JoAnn Edwards

 

Marshville

 

NC

 

28103

 

11/01/09

 

531 B East Main Street

Walco International, Inc.

 

Daniel C. Porter

 

Dickinson

 

ND

 

58601

 

06/01/97

 

2540 4th Street East

Walco International, Inc.

 

Panhandle Gren, Inc.

 

Gering

 

NE

 

69341

 

04/01/93

 

2840 N. 10th Street

Walco International, Inc.

 

Borley Moving & Storage, Inc. a Nebraska corporation

 

Hastings

 

NE

 

6801-6052

 

01/01/07

 

120 S. Lincoln

Walco International, Inc.

 

Mutual Southport, LLC, a Nebraska limited liability company

 

La Vista (Omaha)

 

NE

 

68138

 

10/20/10

 

12702 Westport Parkway

Walco International, Inc.

 

Accurate Communicators, LLC, Sublessor

 

Omaha

 

NE

 

68102

 

09/13/10

 

2215 Harney Street

Walco International, Inc.

 

David Brown and Teresa Brown

 

Wisner

 

NE

 

68791

 

04/01/03

 

1615 Avenue E

Walco International, Inc.

 

DRSS, LLC

 

Clovis

 

NM

 

88101

 

07/02/07

 

5000 E. Mabry Drive

Walco International, Inc.

 

Joe W. Bevers

 

Roswell

 

NM

 

88201

 

12/01/01

 

1709-1713 S.E. Main

Walco International, Inc.

 

Dan Urquart

 

Fallon

 

NV

 

89406

 

11/01/91

 

150 Industrial Way

Walco International, Inc.

 

Charles Rose & Ross Zimmerman

 

Winnemucca

 

NV

 

89445

 

11/01/02

 

4320 W Winnemucca Blvd.

Walco International, Inc.

 

Woodward Livestock Auction, Inc.

 

Woodward

 

OK

 

73801

 

01/01/06

 

900 N. Lakeview

Kane Veterinary Supplies, Ltd.

 

McCordick Glove & Safety, Inc.

 

Cambridge

 

ON

 

N1R7L2

 

04/01/10

 

75 Cowansview Rd.

Walco International, Inc.

 

C.J.S. Properties

 

Clackamas

 

OR

 

97015

 

11/30/88

 

15760 S E 130th Street

Walco International, Inc.

 

High Properties [Temporary storage]

 

Lancaster

 

PA

 

17601

 

11/01/10

 

1701 Hempstead R., Ste. 103

Walco International, Inc.

 

High Properties [Pending]

 

Lancaster

 

PA

 

17601

 

Pending

 

1817 Colonial Village Lane

Walco International, Inc.

 

West Sioux Company

 

Sioux Falls

 

SD

 

75104

 

07/01/10

 

1105 North Cliff Avenue

Kane Veterinary Supplies, Ltd.

 

SPI Marketing Group, Inc.

 

Saskatoon

 

SK

 

S7L 6H2

 

06/23/08

 

502 - 45th Street West, Room 212

Hawaii Mega-Cor., Inc.

 

Tak Hop Ltd. Co.

 

Taipei

 

TI

 

 

 

08/01/05

 

575 Linsen N. Road, Ste. 602

Walco International, Inc.

 

A. L. Dougherty -Tennessee, LLC

 

Memphis (Hickory Hill Rd)

 

TN

 

38141

 

02/01/07

 

4605 Hickory Hill Road

Walco International, Inc.

 

Christopher R. Folk

 

Memphis (Raines Rd)

 

TN

 

38175

 

06/28/99

 

4869 E. Raines Road

 

19

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

 

Walco International, Inc.

 

Abilene Auction, Inc.

 

Abilene

 

TX

 

79601

 

09/01/05

 

3265 Judge Ely Blvd.

Walco International, Inc.

 

Rudloff Brick & Tire Sales, Inc.

 

Brenham

 

TX

 

77833

 

10/01/07

 

1005 Farmers Road

Walco International, Inc.

 

Peeples Family, LTD

 

Dalhart

 

TX

 

79022

 

07/01/06

 

1721 E. 16th Street

Walco International, Inc.

 

Francis Rojas, Ltd.

 

El Paso

 

TX

 

79935

 

09/01/05

 

11220 Rojas Dr.

Walco International, Inc.

 

Tarrant County Limited Partnership

 

Grapevine

 

TX

 

76051

 

06/05/02

 

1240 Texas Trail, #106

Walco International, Inc.

 

Maurice N. Waters

 

Hereford

 

TX

 

79045

 

07/01/94

 

200 West First Street

Walco International, Inc.

 

Workman Enterprises, Inc.

 

Nacogdoches

 

TX

 

75961

 

10/16/09

 

1409 South University Dr.

Walco International, Inc.

 

South Texas Commercial Builders, LLC

 

Pleasanton

 

TX

 

79935

 

07/20/07

 

1375 J-R Boulevard

Walco International, Inc.

 

Mac Family Partnership, Ltd., a TX LP

 

Stephenville

 

TX

 

76401

 

07/01/05

 

3058 W. Washington St.

Walco International, Inc.

 

RJN Properties, LTD

 

Uvalde

 

TX

 

78801

 

10/02/02

 

1412 N. Getty St.

Walco International, Inc.

 

Maguire Partners -Solana Limited Partnership

 

Westlake -Solana

 

TX

 

76262

 

06/01/05

 

7 Village Circle, Ste. 200

Walco International, Inc.

 

Dairy Farmers of America, Inc.

 

Amalga (Cache Valley)

 

UT

 

84335

 

01/02/02

 

6350 North 2150 West

Walco International, Inc.

 

Broken Arrow, LLC

 

Sunnyside

 

WA

 

98944

 

01/01/05

 

1654 South 1st Street

Walco International, Inc.

 

Triple R Associates, LLC

 

Madison

 

WI

 

53708

 

12/15/97

 

613 Atlas Avenue

 

20

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

 

SCHEDULE 5.13
ASSUMED NAMES

 

Walco International, Inc., d/b/a:

 

AHI - West

Agripharm Products

DVM Resources

Farm & City Supply

Farm City Animal Supply

Farm City Supply

First Companion

Glovet

Hi Plains Animal Health

Holt Products division of Walco International, Inc.

M & M Supply Company of Florida

Paragon Logistics

RR Olson

Rose Feed and Livestock Supply

RXV Products

Southeast Beef

Sunwest Industries

Veterinarian’s Outlet

Veterinary Logistics Services

Visalia Animal Health

Walco Feed Additives

Walco Resource Management

Walco Technologies

Walco/Vet Outlet

Westlake Cattle Company

 

Hawaii Mega-Cor., Inc., d/b/a:

 

HMC

Pacific Learning Institute

 

Kane Veterinary Supplies Ltd., d/b/a:

 

Kane Pet Supplies

Walco Canada Animal Health

Western Veterinary Supplies

 

21

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

 

SCHEDULE 5.16

 

OTHER INDEBTEDNESS

 

1.                                       Term Loan Credit Agreement made and
entered into as of the date hereof by and among Walco International, Inc., each
of the credit parties which is now or hereafter a guarantor thereunder from time
to time, each of the financial institutions which is a signatory thereto or
which may from time to time become a party thereto, and JPMorgan Chase Bank, N.
A., as Administrative Agent for such financial institutions.

 

2.                                       Letter of Credit, issued on December
28, 2005 to Aetna Life Insurance Company in the amount of $132,677.

 

3.                                       Letter of Credit, issued on January 20,
2005, as amended on January 5, 2009, to Employers Insurance of Wasau, a Mutual
Company, H.O. Financial in the amount of $400,000.

 

4.                                       Letter of Credit, issued on November
15, 2009, as amended on August 18, 2010, to Royal Bank of Canada in the amount
of $298,874.

 

5.                                       Two capitalized leases of Hawaii
Mega-Cor., Inc. for two forklifts, with a remaining balance of $4,397 as of
September 30, 2010.

 

22

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

 

SCHEDULE 5.17

 

ENVIRONMENTAL MATTERS

 

None

 

23

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

 

SCHEDULE 5.21

 

TRANSACTIONS WITH RELATED PARTIES

 

None

 

24

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

 

SCHEDULE 5.22
INTELLECTUAL PROPERTY

 

United States Trademark & Service Mark Registrations

 

Trademark/Service Mark

 

Registration
No.

 

Filing Date

 

Issuance
Date

AFTER-BIRTH

 

2,655,779

 

02/28/01

 

12/03/02

AGRI BLOCK

 

3,106,174

 

12//14/04

 

06/20/06

AGRI-MAX

 

3,513,596

 

12/11/07

 

10/07/08

AGRIPHARM (standard character)

 

3,060,223

 

02/09/05

 

02/21/06

AMERICAN LIVESTOCK AND PET SUPPLY

 

3,678,104

 

02/03/09

 

09/01/09

ANEM-X (stylized)

 

2,448,175

 

10/16/98

 

05/01/01

ANIMALHEALTHPROS

 

3,810,810

 

11/25/09

 

06/29/10

BIMUSAL

 

3,453,478

 

11/05/07

 

06/24/08

BOVI FRESH

 

3,160,513

 

01/26/05

 

10/17/06

BOVI-PLAZ

 

2,906,705

 

11/18/03

 

11/30/04

BP-1

 

2,957,103

 

12/19/03

 

05/31/05

CANINE IMUNO-VAX

 

2,980,723

 

11/26/02

 

08/02/05

CHLORADINE

 

3,608,454

 

08/06/08

 

04/21/09

CLINDA-GUARD

 

3,471,728

 

12/10/07

 

07/22/08

COCCICOR

 

1,698,740

 

07/24/91

 

07/07/92

COCCI-CURE

 

3,353.117

 

12/14/06

 

12/11/07

COMEBACK

 

2,255,087

 

12/08/97

 

06/22/99

COVERT

 

2,647,268

 

12/18/00

 

11/05/02

D/TOX/BESC

 

2,935,544

 

03/31/03

 

03/22/05

DERMALOG

 

2,580,432

 

03/16/01

 

06/11/02

DEXASONE

 

2,857,871

 

12/20/02

 

06/29/04

DIA-ROBE

 

3,357,579

 

01/17/06

 

12/18/07

DUO PEN

 

962,500

 

05/08/72

 

07/03/73

EP-1

 

3,626,630

 

10/17/08

 

05/26/09

EQUI-BUTE

 

3,517,087

 

12/15/06

 

10/14/08

EQUI-DEX APPLE

 

3,022,062

 

05/06/04

 

11/29/05

EQUI-DEX CHERRY

 

3,033,106

 

05/06/04

 

12/20/05

EQUI-MINTIC SPR

 

2,958,000

 

02/26/03

 

05/31/05

EQUI-SPIRIN

 

3,471,468

 

12/05/07

 

07/22/08

EQUI-THRUSH

 

2,950,022

 

05/16/03

 

05/10/05

EXALT

 

2,456,199

 

06/21/99

 

05/29/01

EXCELLENCE IN ANIMAL HEALTH

 

3,371,052

 

01/29/03

 

01/15/08

EXILE

 

3,350.287

 

06/14/06

 

12/04/07

EXIT

 

2,058,430

 

02/12/96

 

04/29/97

E-Z TEAR

 

3,140,682

 

05/17/05

 

09/05/06

FIRST COMPANION

 

2,392,486

 

10/11/96

 

10/10/00

FIRST IMPRESSIONS

 

3,184,678

 

02/23/05

 

12/12/06

 

25

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

 

Trademark/Service Mark

 

Registration
No.

 

Filing Date

 

Issuance
Date

GAUGE

 

2,644,536

 

12/22/00

 

10/29/02

GOOD START

 

1,955,002

 

03/29/95

 

02/06/96

INTERACTIVE MANAGER

 

3,645,160

 

06/24/08

 

06/23/09

INTESTI-SORB

 

3,457,734

 

11/05/07

 

07/01/08

IVERMAX

 

2,733,324

 

08/25/02

 

07/01/03

JUST LIKE MOM

 

3,146,768

 

01/26/05

 

09/19/06

K-9 WORM BE GONE

 

3,552,983

 

12/20/07

 

12/30/08

KETA-STHETIC

 

1,915,956

 

10/17/94

 

09/05/95

LAXADE

 

3,453,471

 

11/05/07

 

06/24/08

LUBISEPTOL

 

1,837,664

 

07/23/93

 

05/31/94

MASTI-VAX

 

3,158,750

 

01/12/06

 

10/17/06

MINERAL MAX

 

3,245,245

 

02/11/03

 

05/22/07

MIRACLE

 

3,634,539

 

10/20/08

 

06/09/09

MIRACLE FLX PELLETS

 

3,033,104

 

05/06/04

 

12/20/05

MIRACLE FLX SOLUTION

 

3,022,061

 

05/06/04

 

11/29/05

MIRACLE HOOF

 

3,033,105

 

05/06/04

 

12/20/05

MIRACLE SAND OUT

 

3,314,318

 

02/07/06

 

10/16/07

MIRACLE SHEEN

 

3,219,922

 

04/14/06

 

03/20/07

MIRACLE WEIGHT GAIN

 

3,158,755

 

01/17/06

 

10/17/06

NASAL-VAX

 

2,701,501

 

12/28/01

 

03/25/03

NEOVET

 

1,063,116

 

08/25/76

 

04/12/77

NUTRI-SORB

 

2,978,920

 

06/10/03

 

07/26/05

OCTAGON LOGO

 

3,176,970

 

06/12/85

 

11/28/06

ORIGIN

 

2,453,950

 

06/21/99

 

05/22/01

OTO SOOTHE

 

2,656,711

 

02/05/02

 

12/03/02

OUTLAST

 

3,363,446

 

12/05/05

 

01/01/08

OXY-MYCIN

 

1,087,993

 

08/17/77

 

03/28/78

PARAGON

 

2,069,515

 

05/31/96

 

06/10/97

PEN-AQUEOUS

 

3,457,740

 

11/05/07

 

07/01/08

PERFECT COAT

 

3,074,544

 

05/07/04

 

03/28/06

PRAZI-Q

 

3,461,962

 

11/19/07

 

07/08/08

PRO-SHIELD

 

3,391,029

 

03/14/07

 

03/04/08

PROTO-PLAN

 

3,749,642

 

07/13/09

 

02/16/10

RANCH PACK

 

3,299,010

 

03/23/05

 

09/25/07

RE-NU

 

3,088,524

 

05/07/04

 

05/02/06

REPRESSOR-E

 

3,453,469

 

11/05/07

 

06/24/08

RXV

 

1,408,163

 

06/12/85

 

09/09/86

RXV PRODUCTS

 

1,376,847

 

06/12/85

 

01/07/86

SCOURVAX

 

2,716,602

 

09/13/01

 

05/13/03

STEP ONE

 

3,436,780

 

10/20/06

 

05/27/08

STEP TWO

 

3,436,778

 

10/20/06

 

05/27/08

SUPPRESSOR

 

2,012,726

 

02/27/95

 

10/29/96

 

26

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

 

Trademark/Service Mark

 

Registration
No.

 

Filing Date

 

Issuance
Date

SUPRA-SULFA

 

1,064,285

 

11/07/75

 

04/26/77

SURE-START

 

3,453,476

 

11/05/07

 

06/24/08

TETNI-VAX

 

2,730,779

 

06/24/03

 

06/24/03

TRIPLE-HISTAMINE

 

2,129,878

 

06/10/96

 

01/20/98

VETALYTE PLUS

 

3,638,441

 

10/17/08

 

06/16/09

VITA-JEC

 

969,052

 

08/02/72

 

09/25/73

WI/WALCO (and design)

 

2,193,857

 

11/04/97

 

10/06/98

WI WALCO TECHNOLOGIES EXCELLENCE IN ANIMAL MANAGEMENT

 

3,356,214

 

03/14/06

 

12/18/07

WORM FREE

 

3,295,878

 

08/06/07

 

09/18/07

WORM-RID

 

3,581,442

 

11/20/07

 

02/24/09

 

United States Trademark Applications

 

Trademark/Service Mark

 

Serial No.

 

Filing Date

AGRI-DINE

 

77-874054

 

11/17/09

AGRI-LUBE

 

77-926096

 

02/02/10

BOVI CAPS

 

85-118773

 

08/30/10

CEFTI-JEC

 

78-869869

 

11/11/09

MIRACLE VITE

 

77-814809

 

08/29/09

MONSTERVET.COM

 

85-018085

 

04/21/10

MONSTERVET.COM

 

85-018095

 

04/21/10

NITRO ZONE

 

77-798374

 

08/06/09

THERAPROPHEN

 

85-013680

 

04/14/10

 

United States Patents (owned)

 

Patent

 

Patent Number

 

Filing 
Date

 

Issuance 

Date

“Accurate Metering and Control System and Method for Livestock Feeding
Operation.”

 

5,424,957

 

10/07/93

 

06/13/95

 

State Trademark Registrations (Hawaii Mega-Cor., Inc.)

 

Trademark/Service Mark

 

Registration No.

 

Issue Date

 

State

FETCHIT HAWAII

 

4071421

 

03/18/09

 

Hawaii

 

27

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

 

Canadian Trademark Registrations (Kane Veterinary Supplies, Ltd.)

 

Trademark/Service Mark

 

Registration No.

 

Issue Date

SPLASH AQUA

 

TMA693799

 

08/09/07

PRODUCERS CHOICE

 

TMA401882

 

08/28/92

KANE VETERINARY SUPPLIES

 

TMA405457

 

11/27/92

SUPPRESSOR

 

TMA709962

 

03/19/08

NOROMYCIN

 

TMA709964

 

03/19/08

NOROVET

 

TMA713705

 

05/06/08

 

Patent Applications (US)

 

Patent Title

 

Application 
No.

 

Filing Date

CALF BOTTLE

 

10995452

 

11/23/04

CALF NIPPLE (Design)

 

29341513

 

08/06/09

CALF NIPPLE (Utility)

 

12370325

 

02/12/09

 

Canadian Patent Applications

 

Patent Title

 

Application 
No.

 

Filing Date

CALF NIPPLE (Design)

 

131787

 

08/11/09

CALF NIPPLE (Utility)

 

498772

 

01/25/10

 

28

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

 

SCHEDULE 6.15

 

FINANCIAL INSTITUTIONS AND ACCOUNTS

 

Credit Party

 

Financial Institution

Animal Health International, Inc.

 

JP Morgan Chase

Walco International, Inc.

 

The City National Bank & Trust

Walco International, Inc.

 

US Bank

Walco International, Inc.

 

Wells Fargo Bank

Walco International, Inc.

 

Lafayette County State Bank

Walco International, Inc.

 

Regions Bank

Walco International, Inc.

 

Western State Bank

Walco International, Inc.

 

Western State Bank

Walco International, Inc.

 

The Citizens Natl Bank of Wisner

Walco International, Inc.

 

MidFirst Bank

Walco International, Inc.

 

Sunflower Bank

Walco International, Inc.

 

Texas Bank

Walco International, Inc.

 

JP Morgan Chase

Walco International, Inc.

 

JP Morgan Chase

Walco International, Inc.

 

JP Morgan Chase

Walco International, Inc.

 

JP Morgan Chase

Walco International, Inc.

 

JP Morgan Chase

Walco International, Inc.

 

JP Morgan Chase

Walco International, Inc.

 

JP Morgan Chase

Walco International, Inc.

 

JPMorgan Chase

Walco International, Inc

 

Bank of Hawaii

Hawaii Mega-Cor., Inc.

 

Central Pacific Bank

Hawaii Mega-Cor., Inc.

 

Central Pacific Bank

Hawaii Mega-Cor., Inc.

 

Central Pacific Bank

Hawaii Mega-Cor., Inc.

 

Central Pacific Bank

Hawaii Mega-Cor., Inc.

 

Central Pacific Bank

Walco International, Inc. FBO KVSL Financing LP

 

JP Morgan Chase

Kane Veterinary Supplies Ltd.

 

Scotiabank

Kane Veterinary Supplies Ltd.

 

Scotiabank

Kane Veterinary Supplies Ltd.

 

Scotiabank

Kane Veterinary Supplies Ltd.

 

Scotiabank

HMC - Taiwan

 

Bank of Taiwan

HMC - Taiwan

 

Bank of Taiwan

HMC - Taiwan

 

Bank of Taiwan

 

29

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

 

SCHEDULE 7.2

 

LIENS

 

None

 

30

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

 

SCHEDULE 7.6

 

PERMITTED AFFILIATE TRANSACTIONS

 

1.                                       Employment Agreement by and between
Borrower and James C. Robison, effective as of May 1, 1997, as amended.

 

2.                                       Employment Agreement by and between
Borrower and William F. Lacey, effective as of August 15, 2003, as amended.

 

3.                                       Employment Agreement by and between
Borrower and Damian Olthoff, effective as of April 1, 2006, as amended.

 

4.                                       Employment Agreement by and between
Borrower and Kathy Hassenpflug, effective as of March 10, 2000, as amended.

 

5.                                       The property leased by Borrower at 2300
Northwest 9th Street, Okeechobe, Florida is owned by Walker, LLC, an entity
controlled by Borrower’s employee, Emory Walker.

 

6.                                       Business Management Agreement between
W&W Supply Company of Florida, Inc. and Borrower dated as of May 1, 2003.  Emory
Walker, an employee of Borrower, is the proprietor of W&W Supply Company of
Florida.

 

7.                                       Animal Health International, Inc.
Amended and Restated 2007 Stock Option and Incentive Plan.

 

8.                                       Indemnification Agreements with
Directors & Officers as follows:

 

James C. Robison, dated January 25, 2007, as amended
Michael Eisenson, dated January 29, 2007, as amended
Mark Rosen, dated January 29, 2007, as amended
Brandon White, dated January 29, 2007, as amended
Ronald G. Steinhart, dated January 30, 2007, as amended
David W. Biegler, dated January 25, 2007, as amended
William F. Lacey, dated January 25, 2007, as amended
Damian Olthoff, dated January 25, 2007, as amended
Kathy C. Hassenpflug, dated January 25, 2007, as amended
Jerry W. Pinkerton, dated May 7, 2008, as amended
E. Thomas Corcoran, dated May 7, 2008, as amended

 

9.                                       Borrower has severance agreements in
place with the following individuals:

 

Last
Name

 

First
Name

 

Agreement
w/Severance

 

Date
Signed

Acker

 

Glenn

 

6 months

 

12/14/00

Adams

 

Dale

 

6 months

 

11/19/02

Aldax

 

Mark

 

6 months

 

03/01/00

 

31

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

 

Allgood

 

Judy

 

6 months

 

12/11/00

Anshutz

 

Mike

 

6 months

 

12/28/00

Badgett

 

Mark

 

6 months

 

12/11/00

Bagnall

 

Brian

 

12 months

 

12/05/00

Bisgard

 

Todd

 

6 months

 

12/05/00

Borelli

 

Dario

 

6 months

 

12/06/00

Borges

 

Frank

 

6 months

 

02/29/00

Broadstreet

 

Kerr

 

6 months

 

06/21/02

Bunker

 

Joel

 

6 months

 

07/05/02

Burnham

 

Dave

 

6 months

 

11/16/02

Callahan

 

Ken

 

6 months

 

12/08/00

Caron

 

Brian

 

6 months

 

10/12/07

Clark

 

Bruce

 

6 months

 

02/28/00

Damm

 

Tim

 

6 months

 

10/12/07

DeWeese

 

Mark

 

6 months

 

02/29/00

Dorethy

 

Darron

 

6 months

 

06/25/02

Duchscher

 

Terry

 

6 months

 

10/12/07

Edling

 

Craig

 

6 months

 

03/01/00

Edmonson

 

David

 

6 months

 

11/14/02

Evangelo

 

John

 

6 months

 

02/29/00

Evangelo

 

Joseph

 

6 months

 

03/01/00

Fanjul

 

Roger

 

6 months

 

09/03/03

Fennell

 

Kevin

 

6 months

 

02/29/00

Fien

 

Arnie

 

6 months

 

02/28/00

Furumoto

 

Michiko

 

6 months

 

10/19/06

Goodwin

 

Ken

 

6 months

 

02/05/02

Greydanus

 

Conrad

 

6 months

 

03/06/00

Grigar

 

James

 

6 months

 

06/03/02

Griggs

 

Paula

 

6 months

 

08/27/01

Grothusen

 

Todd

 

6 months

 

09/25/00

Haluza

 

Gary

 

6 months

 

10/12/07

Harris

 

Doug

 

12 months

 

02/03/00

Hassenpflug

 

Kathy

 

12 months

 

03/10/00

Hetzel

 

Fred

 

6 months

 

02/25/00

Hiraga

 

Gary

 

6 months

 

10/19/06

Hirsbrunner

 

Richard

 

6 months

 

03/08/02

Hoffman

 

Cliff

 

6 months

 

10/11/07

Howse

 

Grant

 

6 months

 

10/12/07

Hsu

 

Jason

 

6 months

 

10/11/06

Hyde

 

Jeffrey

 

12 months

 

06/18/09

Kamrath

 

Kevin

 

6 months

 

02/04/02

Kaye

 

Jon

 

6 months

 

03/01/00

Kim

 

Henry

 

6 months

 

03/13/07

Kleine

 

Cody

 

6 months

 

12/06/00

Knight

 

Keith

 

6 months

 

03/08/00

Konechne

 

Rich

 

6 months

 

11/14/02

 

32

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

 

Krause

 

Paul

 

12 months

 

02/24/00

Kurash

 

Alvin

 

6 months

 

10/11/07

Leedell

 

Darren

 

6 months

 

10/11/07

Lewis

 

Clint

 

6 months

 

03/09/00

Lindley

 

Loyd

 

6 months

 

02/12/02

Long

 

James

 

6 months

 

09/14/01

Marquis

 

Tracy

 

6 months

 

02/24/00

Marshall

 

Cheryl

 

6 months

 

03/10/00

Middleton

 

Mark

 

12 months

 

02/04/00

Miller

 

David

 

6 months

 

06/20/01

Moomaw, III

 

Henry

 

12 months

 

06/22/09

Moorman

 

James

 

6 months

 

06/09/00

Morris

 

David

 

6 months

 

03/01/00

Moses

 

John

 

6 months

 

02/25/00

Neace

 

Irene

 

3 months

 

09/15/09

Nicoletti

 

Mike

 

6 months

 

10/11/07

Nishibun

 

Trenton

 

6 months

 

11/25/08

Ogle

 

Scott

 

6 months

 

12/07/00

Olsson

 

Steve

 

6 months

 

10/12/07

Powers

 

Roger

 

6 months

 

03/07/00

Richards

 

Mark

 

6 months

 

06/21/02

Riepma

 

Ellen

 

6 months

 

03/06/00

Salmans

 

Keith

 

6 months

 

03/02/00

Sarver

 

Paul

 

12 months

 

03/06/00

Schafer

 

Greg

 

6 months

 

02/12/02

Sehl

 

Thomas

 

6 months

 

02/28/00

Snyder

 

Jim

 

6 months

 

11/21/00

Sommer

 

Tim

 

12 months

 

02/04/00

Spurlock

 

Larry

 

12 months

 

02/26/00

Swafford

 

Uarda

 

6 months

 

12/07/00

Taylor

 

Terry

 

6 months

 

02/28/00

Tiexeira

 

Johnny

 

6 months

 

11/22/02

Turnage

 

Diana

 

6 months

 

12/03/00

Van Doren

 

Keith

 

6 months

 

03/07/00

Van Dyke

 

Patricia

 

6 months

 

03/06/00

Van Mil

 

Ed

 

6 months

 

10/11/07

Vander Meer

 

Rick

 

6 months

 

02/29/00

VanderVoort

 

Jeff

 

6 months

 

03/10/00

Von Mertz

 

Allison

 

6 months

 

11/22/02

Wagner

 

John

 

6 months

 

10/12/07

Walston

 

Rodney E.

 

6 months

 

02/27/00

Waniya

 

Wesley

 

6 months

 

10/19/06

Weeter

 

Jim

 

6 months

 

03/07/00

Wheeler

 

Dan

 

6 months

 

11/14/02

White

 

Raymond

 

6 months

 

03/04/00

Williams

 

Jeff

 

12 months

 

01/31/00

 

33

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

 

Williams

 

Johnny

 

6 months

 

02/28/00

Wilson

 

Dick

 

6 months

 

03/04/00

Yamaguchi

 

Ross

 

6 months

 

10/10/06

Yamashito

 

Derek

 

6 months

 

12/10/08

 

34

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

 

SCHEDULE 7.17

 

RESTRICTIVE AGREEMENTS

 

None

 

35

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